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Helena Chemical Co. v. Torian

United States District Court, E.D. Arkansas, Western Division

April 26, 2018

HELENA CHEMICAL COMPANY PLAINTIFF
v.
EMMET P. TORIAN, JR., Individually and as Trustee of the Emmet P. Torian, Jr. Revocable Trust Declaration Dated 7/10/2000; and JOSEPH G. TORIAN DEFENDANTS

          ORDER

          D.P. Marshall Jr. United States District Judge

         Helena Chemicars motion for attorney's fees and costs, No 27, is partly granted and partly denied.

         First, on the motion to compel. Brother Miller granted the motion. This happened early in the case. Rule of Civil Procedure 37(a)(5)(A) makes a fee award the presumptive result unless an exception applies. None does here: Helena Chemical tried without success to get the trust papers without a court order; the Torians' partial production, made after the motion to compel was filed, didn't address all the documents; the Torians' resistance was not substantially justified - these documents were discoverable, though not dispositive, on the title/judgment lien issues; and a fee award is not unjust in the circumstances presented. Arnold v. ADT Security Services, Inc., 627 F.3d 716, 720 (8th Cir. 2010).

         Second, on the contract claim against Joseph. The Court is disappointed that none of the parties notified it about the auction. Here's the timeline:

• 29 September 2017 Motion for partial summary judgment against Joseph ripened;
• 8 December 2017 Farm sold at auction;
• 8 January 2018 Court granted motion against Joseph;
• 16 January 2018 Helena Chemical moved for fees and costs;
• 18 January 2018 Farm sale closed; and
• 30 January 2018 Judgment in No. 4:15-cv-324-DPM satisfied.

         It's unclear exactly when Helena Chemical learned about the sale. Payment of the underlying judgment mooted this case, but that happened three weeks or so after the Court ruled against Joseph. The Court doesn't have the documents about the auction or the resulting sale. It's thus unclear whether the deal was locked in-made with so much certainty that the Court could hold that the successful bid in December mooted the case.

         In the statute's word, did Helena Chemical "prevail" against Joseph in these peculiar circumstances? ARK. CODE Ann. § 16-22-308. No. The Court has found no Arkansas precedent supporting a fee award in the unusual circumstances presented. See generally HOWARD W. Brill & Christian H. Brill, 1 Arkansas Practice Series: Law of DAMAGES § 11 (6th ed. 2014). It's clear that Helena Chemical is not entitled to entry of judgment against Joseph. The company won its motion, but the sale-facilitated satisfaction of the underlying obligation prevents the Court from reducing Helena Chemical's win to judgment. This was a damages case, not one for injunctive relief, where a fee is sometimes available after the defendant voluntarily changes course, essentially giving the plaintiff the result it sought. E.g., Koppel v. Wein, 743 F.2d 129, 135 (2d Cir. 1984). Helena Chemical's motion, and eventual win, against Joseph was a spur to the sale, the closing, and the satisfaction. But, the Court predicts that the Arkansas Supreme Court would hold that Helena Chemical did not prevail here, within the meaning of § 16-22-308, because it didn't get any money from Joseph out of this case.

         Helena Chemical also says, in passing, that it's entitled to fees pursuant to the parties' security agreement because of Joseph's breach of the July 2016 mediation agreement. The mediation agreement provided that Joseph and Emmet would give a security interest in certain farm equipment, and Helena Chemical's lawyer would prepare the document. This was eventually done. No 5-7 at 2-5. The October 2016 security agreement addresses attorney's fees-both for equipment-related litigation and, perhaps, for any breach of the underlying mediation agreement. Here are the terms:

         6. That Grantors shall be in default under this Agreement upon the happening of any of ...


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