Opinion ID: 1436053
Heading Depth: 2
Heading Rank: 2

Heading: The Award of Fees and Costs

Text: [¶ 8] The trial court awarded Lee $60,813.69 for attorney fees and costs incurred during the first appeal, from November 13, 2002, through July 31, 2003. These expenses related to the costs of the appeal in Lee I. Scotia argues that (1) the award was erroneous because the original appeal dealt only with establishing the right to indemnity and those fees and costs are not subject to the indemnification agreement; (2) if Lee were entitled to any fees and costs, the fees and costs should have been apportioned; (3) Lee recovered costs that were not related to the counterclaim; and (4) the fees were unreasonable. We review the Superior Court's determination of attorney fees for an abuse of discretion. Lee I, 2003 ME 78, ¶ 18, 828 A.2d at 215. [¶ 9] A claim for attorney fees and costs under an indemnification agreement is limited to those expenses incurred in the defense of the claim indemnified against and does not extend to costs incurred in establishing the right of indemnity. Chadwick-BaRoss, Inc. v. Martin Marietta Corp., 483 A.2d 711, 717 (Me.1984). Scotia argues that it did not appeal its failed counterclaims. Instead, it was only defending against Lee's right to the indemnity claim, and therefore fees and costs should not have been awarded. [¶ 10] The documents supporting the appeal in Lee I demonstrate that Scotia both defended against Lee's indemnity claim and appealed its failed counterclaims, and therefore, it was not erroneous for the trial court to award fees to Lee. In its brief for the Lee I appeal, Scotia asked us to: (1) vacate the jury's verdict of waiver and hold that, as a matter of law, Scotia did not waive its counterclaims against Lee; (2) hold that Scotia is entitled to a new trial on its counterclaims; (3) reverse the trial court's orders relating to Lee's Motion for Attorney's Fees and hold that, as a matter of law, Scotia's bylaws do not entitle Lee to recover any attorney's fees or costs. [¶ 11] Because Lee was required to respond to Scotia's appeal of the counterclaim verdict, and not simply the question of indemnification, the award of fees was not erroneous. [¶ 12] Additionally, Scotia argues that the fees should have been evenly apportioned. It maintains that, because Lee's attorney's time records commingle the time spent on (1) defending against Scotia's counterclaim; (2) the indemnification issue; and (3) Lee's cross-appeal, Lee should be awarded only one-third of the total fees because he can only recover for expenses incurred in defending against the counterclaim. [¶ 13] In Lee I, we affirmed the trial court's determination that the `inextricably intertwined' nature of the complaint and the counterclaim during the trial, along with the manner in which Scotia presented its counterclaims, justified the nonapportionment of the attorney fees. Lee I, 2003 ME 78, ¶ 20, 828 A.2d at 215. Here, the issues surrounding the counterclaim, the duty to indemnify, and the cross-appeal were similarly `inextricably intertwined' because they hinged on the interpretation of the bylaws. Because of the blended nature of the issues, the trial court did not abuse its discretion when it refused to apportion the supplemental attorney fees. [¶ 14] The costs associated solely with the cross-appeal, however, should not have been awarded to Lee. The costs were $120 for a filing fee for the cross-appeal, and $1163.50 for the transcript of the jury's damage award. In the original order for attorney fees and costs, the trial court deducted expenses that related solely to the complaint, id. ¶ 17, 828 A.2d at 215, and we affirmed this approach, id. ¶ 20, 828 A.2d at 215. These costs relate solely to Lee's cross-appeal on the issue of damages. [¶ 15] Lee's attorney spent approximately three hours responding to a post-trial demand by Scotia for the proceeds of an insurance policy from Pacific-Life Insurance Company. The trial court awarded Lee $600 in attorney fees for this time. The right to the proceeds of the policy was based on a claim of conversion, and the conversion claim was not litigated in the action. This $600 did not relate to the appeal. [¶ 16] The award to Lee also included attorney fees and costs associated with the investigation of the tax consequences of the original attorney fee award. According to the billing statement, Lee's attorney spent an hour and one-half working on tax issues regarding award of attorney fees. Attorney fees in the amount of $292.50 for this activity did not relate to the appeal. [¶ 17] Scotia maintains that the 200 hours that Lee's attorney spent on the appeal were unreasonable because the issues had already been researched, briefed, and argued during the trial. In Lee I, we upheld the trial court's finding that the amount of time spent by Lee's attorney at the trial was reasonable because of the manner in which the counterclaim was litigated. See id. It is logical that a trial that required an enormous amount of time would result in an appeal that required an enormous amount of time. Although the trial court did not oversee the appeal, it still is in the best position to observe the litigation as a whole, see id., and its implicit finding that the fees were reasonable was not an abuse of discretion. The entry is: Judgment amended to reduce the total award by $2176. As modified, the judgment is affirmed.