Opinion ID: 1137013
Heading Depth: 1
Heading Rank: 5

Heading: the award against moses for aleut's costs and fees

Text: In addition to ordering Moses to pay the fees incurred by the shareholders, the court required him to pay Aleut's costs and fees in defense of the action. As we have indicated, Moses and Aleut were represented by the same attorney and no claims of any nature were filed by Aleut against Moses. We have stated that the prevailing party to a suit is the one who successfully prosecutes the action or successfully defends against it . . .. Buza v. Columbia Lumber Co., 395 P.2d 511, 514 (Alaska 1964). Here, the corporation neither successfully prosecuted an action against Moses nor successfully defended an action prosecuted by Moses. Accordingly, it could not prevail over him. Under some circumstances a party may be considered to have prevailed over another even though neither has filed a claim. For example, in State v. Walsh & Co., 575 P.2d 1213 (Alaska 1978), a third-party defendant was awarded fees against the plaintiff who had not alleged any direct claim against the third party. The outcome of the litigation depended on whether the third-party defendant had paid the plaintiff, so that they were aligned in opposition. Here, however, Moses and the corporation were not aligned on opposing sides of the controversy. They used the same attorney and had the same goal. Thus, Walsh is inapplicable. Even if it did not prevail directly over Moses, the corporation argues that the award was proper as indemnification for the wrongs committed. [29] Moses concedes that if an indemnification suit were brought and won by the corporation, it would be entitled to reasonable attorney's fees incurred in the defense of the shareholders' suit. [30] Moses points out that no such suit was brought. In Heritage v. Pioneer Brokerage & Sales, Inc., 604 P.2d 1059 (Alaska 1979), the Heritages sued Pioneer, the retailer from whom they had purchased a mobile home, and Moduline Industries, Inc., the manufacturer, alleging defects. Pioneer cross-claimed against Moduline. Judgment was entered for the defendants, and they were awarded costs and attorney's fees against the Heritages. Pioneer was separately awarded costs and full fees against Moduline less whatever amount was to be paid Pioneer by the Heritages. This award was made after the court had directed a verdict for Pioneer on the issue of its right to indemnity against Moduline for any damages that Pioneer might suffer as a result of the litigation. We held: [W]here indemnification is required, and the indemnitor has been given proper notice of the pending litigation and an adequate opportunity to undertake its duty to defend, the indemnitee is entitled to recover full costs and attorney's fees for the expenses of its successful defense of the action giving rise to the claim for indemnity. Id. at 1067 (footnote omitted). [31] Here Moses contends that he has not been given an opportunity to defend against an indemnity claim. He states that others within the hierarchy of the Aleut Corporation may be at fault for the invalid financial contents of the letter soliciting proxies. Regardless of the trial court's or our views as to the likelihood of Moses being successful in the defense of an indemnity claim, he is entitled to his day in court. It was error to award Aleut indemnification for its costs and fees in defense of the suit brought by shareholders. In conclusion, we affirm in part the court's award of costs and fees in favor of Aleut against Moses for the shareholders' costs and fees assessed against Aleut. [32] We hold, however, that the court erred in awarding full fees against Moses; in including in the award the fees of Attorneys Smith and Taylor; and in ordering Moses to indemnify Aleut for its costs and fees incurred in defense of the action. AFFIRMED in part, REVERSED in part, and REMANDED. CONNER and MATTHEWS, JJ.