Opinion ID: 1973264
Heading Depth: 1
Heading Rank: 6

Heading: The Attorney Fees Awarded.

Text: The district court ordered an award of attorney fees against Minnesota Fire for the amounts paid by the Vinton bank in defending against Pearson's claims. Because Minnesota Fire does not insure the Vinton bank, this was error. There has been no showing that Talen personally paid any portion of the fees incurred in defending Pearson's claims. Consequently, no fee award with respect to that litigation may be forthcoming from Minnesota Fire. Because the role in which Talen was acting was an issue of disputed fact, we are satisfied that Minnesota Fire may not be found guilty of bad faith in refusing to defend against the Pearson claims. Bellville v. Farm Bureau Ins. Co., 702 N.W.2d 468, 474 (Iowa 2005); Wetherbee v. Econ. Fire & Cas. Co., 508 N.W.2d 657, 661-62 (Iowa 1993). However, under Minnesota law, which was adequately pleaded and proved in this action, Minnesota Fire is liable for the attorney fees incurred by Talen in pursuing the present action irrespective of the absence of bad faith. Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 420 (Minn.1997); Am. Standard Ins. Co. v. Le, 551 N.W.2d 923, 926 (Minn.1996); Morrison v. Swenson, 274 Minn. 127, 142 N.W.2d 640, 647 (1966). It is clear, however, that the Minnesota Supreme Court, in so holding, has limited the amount of attorney fees that may be recovered to whatever expense he [the insured] has been compelled to incur in asserting his rights. Morrison, 142 N.W.2d at 647; accord Le, 551 N.W.2d at 926. This means that Talen may only seek reimbursement of the actual amount of attorney fees and reasonable and necessary litigation expenses paid or incurred in pursuing the present litigation. The district court computed Talen's attorney-fee award on an hourly basis for all of the hours expended in the litigation. In fact, Talen and his attorneys in the present litigation had entered into a contractual arrangement in which Talen was billed and paid fees at an hourly rate up to a certain point and thereafter a contingent-fee arrangement was in effect. The district court's attorney-fee award is vacated and the case remanded for a computation of the attorney fees and reasonable and necessary litigation expenses for which Talen is made responsible under the existing attorney-fee agreement with his counsel. The recovery of fees from Minnesota Fire shall be limited to those amounts.