Opinion ID: 768108
Heading Depth: 1
Heading Rank: 3

Heading: The Attorney Fee Award

Text: 21 The district court ruled that, as part of Farmers Union's obligation under the indemnity clause, it must pay BN for the attorney fees that BN incurred on the Cahill litigation after October 29, 1992, the date at which BN properly tendered defense of the suit to Farmers Union. Because state law governs the availability of attorney fees in diversity cases where no conflicting federal statute or court rule applies, we apply North Dakota law to this issue. See Grabinski v. Blue Springs Ford Sales, Inc., 203 F.3d 1024, 1027-28(8th Cir.2000). We review the court's interpretation of state law de novo, see St. Paul Fire & Marine Ins. Co. v. Schrum, 149 F.3d 878, 880 (8th Cir. 1998), and its decision to award attorney fees for an abuse of discretion, see Dodson v. Woodmen of the World Life Ins. Soc'y, 109 F.3d 436, 440 (8th Cir. 1997). 22 Farmers Union first contends that the terms of the indemnity clause do not support an award of attorney fees to BN. We disagree. The general rule in North Dakota is that attorney fees are recoverable when provided for by contract or statute. See Hoge v. Burleigh City Water Management Dist., 311 N.W.2d 23, 31 (N.D. 1981). An indemnity clause that does not specifically refer to attorney fees provides a sufficient contractual basis for an award of attorney fees, provided the terms of the clause are sufficiently broad to evidence an intent that the clause encompass a wide-range of losses. See id. at 31; compare Minex Resources, Inc. v. Morland, 518 N.W.2d 682, 684-85, 689 (N.D. 1994) (affirming attorney fee award under hold harmless provision of indemnity clause) with Barsness v. Gen. Diesel & Equip. Co., 422 N.W.2d 819, 825-27 (N.D. 1988) (disallowing attorney fees under restrictive indemnity clause that limited indemnity to losses arising from specified acts). Because the indemnity clause at issue here provides that Farmers Union will indemnify BN for losses resulting from any act or omission of Farmers Union, we are convinced that the terms of the clause are sufficiently comprehensive to support an award of attorney fees. 23 Farmers Union next contends that the district court abused its discretion in awarding BN attorney fees because BN's tender of defense of the Cahill suit was untimely. To supports its claim, Farmers Union relies upon Diebold, Inc. v. Roadway Express, Inc., in which a Minnesota court found that a tender of defense four weeks prior to trial was untimely because it deprived the party to whom defense was tendered the opportunity to participate in the litigation. 538 N.W.2d 150, 152 (Minn.App. 1995). Here, Farmers Union had ample time to effectively participate in the Cahill suit. BN tendered defense of the suit to Farmers Union more than one year before summary judgment motions were filed and the case was settled. Furthermore, at the time of tender BN had incurred only $14,656 of the $89,958 in attorney fees that it incurred in the Cahill action. Farmers Union therefore had the opportunity to become involved in the Cahill suit early in the litigation and in sufficient time to protect its interests. See, e.g., Acceptance Ins. Co. v. SDC, Inc., 952 F. Supp. 644, 647 (E.D. Mo. 1997); Ford Motor Co. v. Bendix Corp., 268 N.W.2d 305, 307 (Mich.App. 1978). Accordingly, we believe that the district court did not abuse its discretion in awarding BN attorney fees and costs. 24 The judgment is affirmed.