Court Opinion

ID: 8374463
Source: CourtListenerOpinion
Date Created: 2022-10-19 15:03:56.64977+00
Date Added: 2024-06-11T16:46:19.115952
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                   No. 21-1511
                             Filed October 19, 2022

SUSAN A. GUGE and PEGGY McDONALD,
    Plaintiffs-Appellees,

vs.

KASSEL ENTERPRISES, INC., CRAIG L. KASSEL and DEBRORAH M.
KASSEL,
    Defendants-Appellants,

and

KASSEL FARMS, INC. and GREAT OAKS FARMS, INC.,
     Defendants.
________________________________________________________________

      Appeal from the Iowa District Court for Palo Alto County, Charles Borth,

Judge.

      Defendants appeal district court rulings following a remand in corporate-

dissolution litigation. AFFIRMED.

      Thomas D. Hanson of Dickinson, Mackaman, Tyler & Hagen P.C., Des

Moines, for appellants.

      Mark C. Feldmann, Justin E. LaVan, and Benjamin J. Kenkel of Bradshaw,

Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.

      Heard by Vaitheswaran, P.J., Ahlers, J., and Mullins, S.J.*

      *Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2022).
                                         2

MULLINS, Senior Judge.

       Following district court proceedings in this corporate-dissolution litigation,

the supreme court partially reversed and remanded to the district court to

determine and apply a discount rate for transaction costs as part of the fair-value

determination of corporate shares. The defendants—Kassell Enterprises, Inc. and

Craig and Deborah Kassel—appeal two district court rulings following that remand,

the first being the court’s determination and application of the discount rate, and

the second being the court’s award of appellate attorney fees to the plaintiffs—

Susan Guge and Peggy McDonald. As to the first ruling, the defendants argue

they were deprived of their right to appear, present evidence, and be heard

following remand, and the court erred in its credibility assessments as to the expert

witnesses. As to the second, they argue the court was without jurisdiction to award

appellate attorney fees and the court abused its discretion in entering the award.

I.     Background Facts and Proceedings

       The supreme court recently summarized the background facts and litigation

between these parties as follows:

               Lawrence and Georgia Kassel owned a family farming
       operation that they incorporated in 1977 under the name Kassel
       Enterprises, Inc. They had three children: Susan Guge, Peggy
       McDonald, and Craig Kassel. Lawrence passed away in 2005;
       Georgia in 2017. Through a series of gifts of stock during their lives,
       bequests in their wills after their deaths, and Craig’s purchase of
       additional shares from his mother after his father's death, Lawrence
       and Georgia ultimately transferred all of the corporation’s stock to
       their children. At the time this lawsuit arose, Susan and Peggy each
       owned 23.75% of the corporation’s shares and Craig the remaining
       52.5%.
               After Georgia’s death, Susan and Peggy filed a lawsuit
       against Craig, Craig’s wife, two of Craig’s separately-owned
       corporations, and Kassel Enterprises. Count I of the lawsuit sought
       judicial dissolution of Kassel Enterprises under Iowa Code
                                    3

section 490.1430(1)(b)(2) (2018) (for “illegal, oppressive, or
fraudulent” conduct) and section 490.1430(1)(b)(4) (for waste or
misapplication of corporate assets). Five additional claims, counts II
through VI, sought money damages based on claims for breach of
fiduciary duty, fraud, breach of contract, third-party beneficiary rights,
and civil conspiracy. The defendants denied the claims and added
three counterclaims against Susan and Peggy.
        Kassel Enterprises invoked Iowa Code section 490.1434,
electing to purchase Susan and Peggy’s shares for fair value in lieu
of a judicial dissolution of the corporation. Because the parties failed
to reach their own agreement on the fair value of the shares within
sixty days, the district court set the matter for a hearing to determine
the fair value of Susan and Peggy’s shares for the buyout. See Iowa
Code § 490.1434(4) (requiring the district court, upon application of
any party, to determine the fair value of the petitioner’s shares if the
parties are unable to reach an agreement within sixty days).
        In the interim, the parties filed motions for summary judgment
on the other claims in the case. Before the summary judgment
hearing, Susan and Peggy voluntarily dismissed all of their claims
against the defendants in counts II through VI except for part of their
breach of fiduciary duty claim in count II against Craig and his wife.
Craig and his wife likewise dismissed one of their counterclaims.
        The district court used an asset-based method to calculate the
fair value of the shares. It started with the parties’ agreed valuation
of the corporation’s total assets ($5,804,403), then subtracted the
corporation’s total liabilities ($22,046), to arrive at a total shareholder
equity of $5,782,357. Dividing the total shareholder equity amount
by the number of outstanding shares (847), the district court
determined that the fair value of each share was $6826.87. Susan
and Peggy each owned 201.165 shares, so their respective
shareholdings totaled $1,373,327. The district court didn’t apply any
discounts urged by Craig for transaction costs or tax liabilities for
built-in gains associated with a hypothetical sale of corporate assets,
and it didn’t apply any additions as urged by Susan and Peggy based
on Craig’s alleged waste and misapplication of corporate assets.
The district court granted Susan and Peggy’s request for an award
of reasonable fees and expenses of their attorneys and expert
witnesses under Iowa Code section 490.1434(5) of $93,620.74 and
$6540, respectively. The district court directed the purchase of
Susan and Peggy’s stock through an installment plan payable over
five years and secured by personal guarantees from Craig and his
wife and the shares of stock. See Iowa Code § 490.1434(5)
(authorizing the court to order payment in installments and to provide
security to assure payment).
        In its ruling on the motions for summary judgment, the district
court ruled in Craig’s favor on count II, finding that the claims of
wrongdoing by Craig and his wife required a finding of injury to
                                          4

       Kassel Enterprises as a corporate entity, not injury to Susan and
       Peggy as individual shareholders, and thus were “derivative” claims.
       Determining that the substantive and procedural requirements for
       bringing derivative claims had not been met, the district court
       dismissed count II. The district court ruled in Susan and Peggy’s
       favor on Craig’s counterclaims for equitable setoff and unjust
       enrichment.
               No party appeals any summary judgment ruling, but both
       sides appeal the district court’s determination of fair value. Craig
       argues the district court erred in determining the fair value of Susan
       and Peggy’s shares without any discount for transaction costs or
       built-in gain taxes, and in awarding their attorney fees and expert
       expenses against the corporation. In a cross-appeal, Susan and
       Peggy argue that the district court erred in failing to increase the fair
       value of their shares based on Craig’s alleged waste and
       misapplication of Kassel Enterprises’ assets.

Guge v. Kassel Enter., Inc., 962 N.W.2d 764, 768–70 (Iowa 2021).

       On appeal, the supreme court found the district court should have

“reduce[d] the asset values to account for the costs to liquidate Kassel Enterprises’

assets” and reversed on this issue. Id. at 772. The court noted “both parties’

experts agreed that a deduction for transaction costs based on a hypothetical

liquidation of Kassel Enterprises’ assets should have been included; they simply

disagreed on the amount.” Id. at 771. Specifically, Craig’s expert reached a

discount rate of 8%, while Susan and Peggy’s expert reached a lower rate of 3%,

with “[t]he difference largely reflect[ing] a disagreement about a hypothetical

commission rate for the sale of the farmland.” Id. Because the supreme court

found “the record lacking in sufficient detail . . . to make this important

determination,” it remanded “for the district court to determine and apply the
                                         5

appropriate deduction of transaction costs to the value of the corporation’s assets

in setting the fair value of Susan and Peggy’s shares.” Id. at 772.1

       On September 17, shortly after the issuance of procedendo, the district

court entered an order, in which it rejected the defendants’ previously raised claim

that they “are entitled to the opportunity to be heard and present evidence and

argument on remand,” concluding the supreme court was simply without the district

court’s credibility determinations as to the expert opinions. Based on the evidence

previously presented, the district court found Susan and Peggy’s expert’s discount

rate of 3% to be more credible and reduced the fair value of Susan and Peggy’s

shares accordingly.

       Then, on October 11, Susan and Peggy filed an application for appellate

attorney fees in the amount of $57,161.00, asserting their defense of the prior

appeal was reasonably necessary and they were the successful parties on appeal.

Craig resisted, characterizing the application as an untimely motion under Iowa

Rule of Civil Procedure 1.904(2) and arguing there was no basis for the district

court to award appellate attorney fees on remand. In response, Susan and Peggy

argued the court had authority to award appellate attorney fees.

       On October 18, Craig appealed the court’s September 17 ruling. In a

supplemental resistance to plaintiffs’ request for an award of appellate attorney

1 The supreme court affirmed on all remaining issues. Specifically, the court
“decline[d] to adjust for the built-in tax consequences . . . in determining the fair
value of Susan and Peggy’s shares.” Guge, 964 N.W.2d at 773. The court also
rejected Susan and Peggy’s claims relating to waste and misapplication of
corporate assets. See id. at 775. As to taxing of attorney fees and expert costs
against the corporation, the supreme court found no abuse of discretion. Id.
at 777.
                                        6

fees, Craig pointed out a request for appellate attorney fees was raised by Susan

and Peggy on appeal, the supreme court did not address the request, and the

supreme court did not remand on that issue.

       Following a hearing in December, the court entered its ruling on appellate

attorney fees. Considering the fees already awarded, the issues raised on appeal,

the relative success of the parties on appeal, and the lack of detail in the fee

itemization, the court awarded Susan and Peggy attorney fees in the amount of

$14,290.25. Craig likewise appealed that ruling. The supreme court granted

Craig’s motion to consolidate the appeals and transferred the matter to this court

for resolution.

II.    Standard of Review

       We normally review equity cases such as this one de novo. Id. at 770.

However, we review the district court’s compliance with a remand mandate from

an appellate court for legal error. See State v. Pearson, 876 N.W.2d 200, 204

(Iowa 2016); City of Okoboji v. Iowa Dist. Ct., 744 N.W.2d 327, 330 (Iowa 2008);

Kuhlmann v. Persinger, 154 N.W.2d 860, 864 (Iowa 1967). Concerning credibility

determinations, we give particular weight to the district court’s assessments. See

Guge, 962 N.W.2d at 770. We review awards of attorney fees for correction of

“erroneous applications of the law” and “for an abuse of discretion,” which occurs

“only when the court rests its ruling on grounds that are clearly unreasonable or

untenable.” NevadaCare, Inc. v. Dep’t of Human Servs., 783 N.W.2d 459, 469

(Iowa 2010).
                                          7

III.   Analysis

       A.     Fair-Value Determination

              1.      Scope of remand

       The defendants argue the district court “erred in multiple ways” as to its

remand ruling on transaction costs. First, the defendants argue “the district court

failed to implement the mandate pursuant to the letter and spirit of the supreme

court’s opinion by refusing to allow [defendants] to appear, present evidence and

be heard.” As touched on above, the supreme court stated the following in its initial

appellate decision:

       The district court, having determined that no transaction costs should
       be included in calculating the value of corporate assets, stopped
       short of making any finding about the deduction that we’ve now
       determined must be applied. We find the record lacking in sufficient
       detail for us to make this important determination. “[W]hen essential
       to effectuate justice, an equity case may be remanded for such
       further proceedings as the circumstances may require.” Dee v.
       Collins, 235 Iowa 22, 28, 15 N.W.2d 883, 887 (1944). We thus
       remand for the district court to determine and apply the appropriate
       deduction of transaction costs to the value of the corporation’s assets
       in setting the fair value of Susan and Peggy’s shares.

Guge, 962 N.W.2d at 772 (alteration in original).

       Homing in on the supreme court’s statement that it found “the record lacking

in sufficient detail for [it] to make this important determination,” the defendants

assert the district court, in reaching its decision, relied on the same record that was

before the supreme court that the supreme court found insufficient to decide the

issue, save the district court’s credibility determinations on the competing opinions

of the experts. The defendants also submit the supreme court did not specifically

prohibit the district court from receiving further evidence, and so the supreme court

must have “expected the district court to allow additional evidence.” Long story
                                          8

short, the defendants contend the record the supreme court found insufficient to

decide the issue “can only be cured by the presentation of additional evidence.”

       As the supreme court has stated:

               It is a fundamental rule of law that a trial court is required to
       honor and respect the rulings and mandates by appellate courts in a
       case. A mandate to the district court contained in a decision of this
       court becomes the law of the case on remand, and a district court
       that misconstrues or acts inconsistently with the mandate acts
       illegally by failing to apply the correct rule of law or exceeding its
       jurisdiction. Moreover, a district court on remand is limited to do the
       special thing authorized by this court in its opinion, and nothing else.
               When presented with a mandate on remand, the district
       court’s first task is to determine the precise action directed to be
       performed by the appellate court. In doing so, the court must not
       read the mandate in a vacuum, but must consider the full opinion of
       the appellate court and the circumstances the opinion embraces. In
       other words, [t]he rationale of the appellate court opinion must be
       examined to uncover the intent of the appellate court.

Pearson, 876 N.W.2d at 204 (alteration in original) (internal citations and quotation

marks omitted). “Any action contrary to or beyond the scope of the mandate is null

and void.” State v. O’Shea, 634 N.W.2d 150, 158 (Iowa Ct. App. 2001). If the

remand order limits the issues to be determined, the trial court on remand is

prohibited from considering other issues or new matters. In re Marriage of Davis,

608 N.W.2d 766, 769 (Iowa 2000).

       In its opinion, the supreme court observed the district court found

transaction costs should not be deducted in reaching a determination of fair value

despite the fact that “both parties’ experts agreed that a deduction for transaction

costs based on a hypothetical liquidation of Kassel Enterprises’ assets should have

been included.” Guge, 962 N.W.2d at 771. The court then surveyed the figures

proposed by the experts and the variables they relied upon to reach those figures.

Id. at 771–72. Being persuaded by the opinion of both parties’ experts that a
                                          9

discount for hypothetical transaction costs should have been included, the court

decided reversal on this issue was warranted. Id. at 772. Immediately before

finding “the record lacking in sufficient detail” for the supreme court to go ahead

and decide the issue, the supreme court noted the district court “stopped short of

making any finding about the deduction that [the supreme court] determined must

be applied,” other than the district court’s conclusion “that no transaction costs

should be included.” Id. Then the court noted “an equity case,” such as this one

“may be remanded for such further proceedings as the circumstances may

require.” Id. (quoting Dee, 15 N.W.2d at 887). Following the supreme court’s

signal to the Dee opinion, that court specifically delineated the further proceedings

the circumstances required—receipt of evidence that was not before the supreme

court due to the trial court’s refusal to receive such evidence. See 15 N.W.2d at

887.

       In this case, the supreme court did not complain it was without evidence it

needed to make the determination, like it did in Dee, it only specifically noted the

district court “stopped short of making any finding about the deduction.” Guge,

962 N.W.2d at 772. Such a finding by the district court on the deduction that must

be applied would unquestionably turn on the district court’s credibility

determinations as to the competing experts, which the supreme court would have

readily deferred to had the district court reached the issue instead of stopping

short. See State v. Jacobs, 607 N.W.2d 679, 685 (Iowa 2000) (“When a case

evolves into a battle of experts, we, as the reviewing court, readily defer to the

district court’s judgment as it is in a better position to weigh the credibility of the

witnesses.”). To be sure, the court had previously noted it would give particular
                                          10

weight to the district court’s credibility determinations. Guge, 962 N.W.2d at 770.

But because the district court concluded no deduction should be applied, a

credibility determination was not made.

       From our review, the insufficiency of the record cited by the supreme court

was a lack of a determination on this issue by the district court. After all, the

“supreme court is ‘a court of review, not of first view.’” Plowman v. Fort Madison

Cmty. Hosp., 896 N.W.2d 393, 413 (Iowa 2017) (quoting Cutter v. Wilkinson, 544

U.S. 709, 718 n.7 (2005)) (reversing summary judgment but declining to decide an

issue not decided by the district court when the district court granted summary

judgment and did not decide issues that would have been necessary to decide had

summary judgment not been granted). Finally, like the Dee court, the Guge court

also provided simple instructions on remand that the circumstances here require,

“for the district court to determine and apply the appropriate deduction.” 962

N.W.2d at 772. That is exactly what the district court did here, and any non-

collateral actions beyond that would have been null and void. See O’Shea, 634

N.W.2d at 158.

       We reject the defendants’ claim that the remand order mandated that they

be provided an opportunity to appear, present evidence, and be heard. So we

affirm the district court’s decision to rule on the issue without further hearing.

              2.     Credibility Assessment

       Next, the defendants argue “the district court’s credibility assessment was

baseless and erroneous.” The defendants first appear to complain about the

brevity of the plaintiffs’ expert’s opinion. They also claim that his opinion on real
                                         11

estate commissions “was tied to the time[2] of the hearing and even then

represented no investigation of the current ‘market’ or practice of real estate sales

companies.” Next, the defendants argue plaintiff’s expert, Anthony Wagner, “had

not investigated the information relating to the purported 2% real estate

commission.” Lastly, the defendants argue “Wagner’s suggestion of one percent

for ‘remaining closing costs’ had no evidentiary support.” The defendants submit

their expert conducted a “proper investigation” that should have been given more

weight.

       The record from the fair-value hearing contains the following on the

transaction cost deduction.    In a March 29, 2019 document authored by the

plaintiffs’ expert, Anthony Wagner, he explained the concept of a liquidation

discount based on a forced liquidation of assets, which would include “various

selling costs incurred by the business, such as appraisal fees, real estate

commissions, auction fees and legal costs.”

       The defendants’ expert, Brian Crotty, submitted an appraisal report, dated

April 29, 2019, in which he utilized an asset-based approach and opined sales

costs from liquidation should be considered and “[i]f the Company sold the real

property it would likely incur transaction costs for broker fees and other

transactional costs. We have estimated those costs to be 8% of the appraised

value of the assets.”

2See Iowa Code § 490.1301(3)(a) (defining “fair value” to mean “the value of the
corporations shares” “[i]mmediately before the effectiveness of the corporate
action to which shareholders object”).
                                          12

       In a supplemental document dated May 29, 2019,3 Wagner opined as

follows concerning anticipated costs of liquidation:

               I am informed the terms of a court approved auctioneer’s fees
       would be 2% plus out of pocket costs for the sale of the jointly held
       farm ground. I would anticipate the total costs of liquidation would
       be 3% of the net assets of the company. The additional 1%, or
       approximately $57,824, would be sufficient to cover any remaining
       closing costs, including advertising, updating abstracts, legals costs
       for the conveyance documents, and closing agents’ fees.

Then, in August 2019, Crotty submitted a supplemental report.             Therein, he

asserted Wagner’s 3% transaction cost deduction was flawed based on Crotty’s

“understanding” that the auctioneer agreed to a discounted rate. That “rebuttal

report” did not otherwise meaningfully challenge Wagner’s opinion.

       In his testimony at the fair-value hearing, Crotty testified he considered

“partial or full liquidation of the company in order to include discounts for potential

sales costs.” As to those sales costs, he contacted two independent companies—

Hertz Farm Management and Peoples Company—“who gave . . . a very wide

range and was described to . . . be anywhere from 6 to 10 percent depending on

the size of the parcel, how quickly things wanted to be sold, and time for market.”

Then, “due to other sales costs potentially being included in there, whether it’s

legal, accounting, property taxes, [Crotty] ended up choosing the midpoint of that

range, or 8 percent.” Yet, Crotty agreed he is not an expert on transaction costs,

and he basically acknowledged his criticism of Wagner’s position, that it involved

3 While the defendants seem to argue this letter was not a report and was “in no
way in conformity with Iowa R. Civ. P. 1.500(2) or Iowa R. Evid. 5.703,” they appear
to agree error was not preserved on their motion to strike because it was never
ruled upon. Furthermore, at the fair-value hearing, the document was offered into
evidence by defendants’ counsel and was admitted without objection.
                                         13

a discounted rate, was based on something he “ha[d] been told” but did not know

“for a fact.”

        In his testimony, Wagner agreed with Crotty that the fair-value

determination should contemplate asset liquidation. As to the deduction he arrived

at, he testified he has two other clients going through the auction process involving

seven properties ranging from $800,000.00 and $3,000,000.00, and the auction

company’s flat rate was 3%. He also considered the auction of another parcel the

parties were involved with, in which the auctioneer’s price was 2% “plus some

additional fees.”

        In its ruling following remand and procedendo, the district court recognized

the variability in Crotty’s opinion, which Crotty himself characterized as a “very

wide range” depending on certain factors. The court also highlighted Wagner’s

identified flat rate of 3% based on the auction of several other parcels with lower

property values than the assets in play here, and the fact that Crotty acknowledged

the higher land value that was in play would provide more room to negotiate that

rate. The court found Wagner’s 3% was bolstered by the recent sale of land

involving the parties at a rate of 2% plus some variable fees.

        On our review, we find the district court’s credibility assessment between

the experts is supported by the record. While the defendants complain about the

brevity of Wagner’s opinion, Crotty’s position on the transaction costs was no more

bountiful than Wagner’s. As to the defendants’ complaint that Wagner’s opinion

was tied to the time of the hearing and did not include an investigation of current

market practices, neither was Crotty’s assessment on transaction costs specifically

tied to immediately before the action commenced, other than his passive statement
                                         14

in his reports that his entire “appraisal opinion” was based on the fair value as of

May 16, 2018, and Wagner did rely on auction costs in other recent transactions.

Turning to the complaints that Wagner did not thoroughly investigate the other sale

involving the 2% and there was no evidentiary support for other variable costs

being an additional 1%, the defendants ignore another piece of the puzzle, that

Wagner considered the sale of several other parcels that had a flat rate of 3%,

which the district court appears to have found the most persuasive, as do we.

       Finding the district court’s credibility finding supported by the record, we

reject the defendants’ challenge to the district court’s credibility assessment and,

by extension, its fair-value determination.4

       B.     Appellate Attorney Fees

       The defendants argue “the district court had no jurisdiction to award

appellate attorney fees on remand and in any case abused its discretion in doing

so.”

              1.     Jurisdiction or authority

       On the jurisdictional piece, which can also be considered a question of

authority, the defendants point out that, in the initial appeal before the supreme

court, the plaintiffs’ requested appellate attorney fees, the supreme court did not

entertain the request,5 and the supreme court did not include consideration of

appellate attorney fees in its remand mandate.

4 In reaching this finding, we have also considered the defendants’ claims that the
district court’s credibility assessment and Wagner’s testimony are “nonsensical,”
which they raise in a separate heading of their brief.
5 From our review of the plaintiffs’ initial and reply briefs and our experience with

fee requests on appeal, it is most likely that the supreme court overlooked the
requests, as the requests in both briefs were passively made in a brief statement
                                           15

       We have addressed a situation in which appellate attorney fees were not

requested on appeal, “the opinion was silent on the issue,” and there was no

direction from the supreme court for the district court to consider appellate attorney

fees following its affirmation of the district court. See generally Simon Seeding &

Sod, Inc. v. Dubuque Human Rts. Comm’n, No. 17-1987, 2018 WL 4361000 (Iowa

Ct. App. Sept. 12, 2008). There are two technical differences in the case before

us. The first difference is that, here, the plaintiffs did forward a request for appellate

attorney fees on appeal. However, that difference is not meaningful given the lack

of substance in the request, the fact that the supreme court did not address it, and

the resulting likely conclusion that the request was overlooked.              The other

difference is that there was no remand directive in Simon Seeding because the

supreme court affirmed, whereas here the supreme court gave a remand directive

for a determination of fair value that did not include consideration of appellate

attorney fees.

       After the issuance of procedendo in Simon Seeding, the plaintiff applied for

attorney fees, and the district court denied the application, concluding it had no

authority to grant the application absent a directive from the appellate court. Id.

at *1. The plaintiff appealed, contending “the district court ‘retain[ed] jurisdiction to

proceed as to issues collateral to and not affecting the subject matter of the

appeal.’” Id. (alteration in original). We surveyed a number of cases of the type of

in the conclusion section, with no free-standing, substantive portion of the briefs
being dedicated to plaintiffs’ request for appellate attorney fees. This conclusion
is made even more likely given the fact that the supreme court did not address
appellate attorney fees after it provided a detailed analysis on the award of trial
attorney and expert fees.
                                         16

which attorney-fee awards, including appellate attorney fees, are available to

determine whether the district court had authority to award appellate attorney fees

following an appellate decision.    See id. at *1–2.    Those cases included the

Schaffer v. Frank Moyer Construction, Inc. appeals. See generally 628 N.W.2d 11

(Iowa 2001) (Schaffer II); 563 N.W.2d 605 (Iowa 1997) (Schaffer I). In Schaffer I,

the supreme court reversed and remanded for further proceedings consistent with

its opinion on the issues it considered, which did not include appellate attorney

fees. See 563 N.W.2d at 608. Following the remand, despite the fact that “the

remand order did not explicitly direct the district court to consider an award of

appellate attorney fees,” Simon Seeding, 2018 WL 4361000, at *2, the district court

entered one anyway, a decision that was subsequently challenged in Schaffer II.

See 628 N.W.2d at 14, 22. The supreme court rejected that challenge, ruling that

when a statute “permits[6] appellate attorney fees and given [the] current practice

of allowing the district court to award such fees, . . . the district court did have

authority to award appellate attorney fees.” Id. at 23. Following the Schaffer

appeals and others, we found the district had jurisdiction to consider the collateral

request for appellate attorney fees incurred in the first Simon Seeding appeal.

2018 WL 4361000, at *2.

       Simon Seeding and the cases it relies upon are instructive here. Schaffer I

concluded with the supreme court not weighing in on appellate attorney fees and

not specifically directing that the issue be considered on remand.          Had the

6 While the defendants attempt to distinguish cases in which awards are mandatory
from cases in which awards are discretionary, based on the language used by the
supreme court, the question is whether a statute “permits” an award. Awards are
permitted whether they are mandatory or discretionary.
                                          17

supreme court done so, whether by appellate disposition or remand, their input

would have become the law of the case. See id. at *2 n.2. Yet, the district court

awarded appellate attorney fees on remand without being directed to do so, which

the supreme court found it had authority to do in Schaffer II. When the supreme

court does not weigh in on the issue by providing its own disposition or ordering it

to be considered on remand, it remains an issue collateral to the remand order that

is fair game on remand. See id. Because that is the state of affairs in this case,

we conclude the district court had authority to entertain the plaintiffs’ application

for appellate attorney fees.

              2.     Exercise of discretion

       As to the award itself, the defendants first complain the court “gave no

reason for exercising his discretion other th[an] he had awarded such fees below.”

Yet, they go on to agree the court noted its considerations that “an appropriate

reduction should be made for unsuccessful claims and claims for which fees are

not recoverable,” whether the hours expended were reasonable, and whether the

plaintiffs’ counsel submitted “inadequate documentation.” They also agree the

court specifically considered the relative successes of the parties on appeal and

the lack of detail in the fee affidavit submitted by counsel. But they argue the lack

of specificity in the itemization should have made the court unable to justify a fee

award, the application was “very late,” and the district court “ignored the ‘better

practice’ of giving the appellate court the prerogative of determining whether

appellate fees should be awarded.”

       In determining the award of appellate attorney fees to the plaintiffs, the court

considered the facts that the plaintiffs were already awarded $93,620.74 in trial
                                         18

attorney fees7; the appeal involved an issue of first impression; both parties found

some success on appeal with success going to the plaintiffs on two issues and

success going to the defendants on two issues; and the fee affidavit lacks detail,

“which can commonly be expected considering the nature of appellate litigation.”

Based on its considerations, the court granted the plaintiffs appellate attorney fees

in the amount of $14,290.25, as opposed to $57,161.00 as requested in the

application.

        “A fee award will be reversed only on ‘grounds that are clearly unreasonable

or untenable.’” Guge, 962 N.W.2d at 777 (citation omitted). While the defendants

forward generalized, unspecific complaints, their only real complaint is that the fee

itemization lacked detail.    But the district court’s decision shows this was

meaningfully taken into consideration, in conjunction with other factors, all

culminating in the court’s heavy reduction of the plaintiffs’ fee request. On our

review, we are unable to conclude the award was based on grounds that are clearly

unreasonable or untenable, so we affirm.

IV.     Conclusion

        Finding no cause for reversal on the issues properly presented for our

review, we affirm.

        AFFIRMED.

7   This award was affirmed by the supreme court. Guge, 962 N.W.2d at 777.