Opinion
No. 2-829 / 02-0247
Filed February 12, 2003
Appeal from the Iowa District Court for Polk County, Richard G. Blane, II, Judge.
The defendant appeals a district court ruling awarding attorney fees to the plaintiffs on their action against the defendant for breach of contract and negligence. AFFIRMED AND REMANDED WITH INSTRUCTIONS.
Thomas Fisher of Hogan Fisher, P.L.C., Des Moines, for appellant.
Thomas Levis and Matthew Brick of Brick, Gentry, Bowers, Swartz, Stoltze, Schuling Levis, P.C., Des Moines, for appellee.
Considered by Sackett, C.J., and Miller and Eisenhauer, JJ.
The defendant, Regency Builders, Inc. (Regency), appeals a district court ruling awarding the plaintiffs attorney fees in their action against the defendant for faulty construction of the floor in their new home. Regency argues attorney fees are not authorized for breaches of implied and express warranties. The plaintiffs request an award of appellate attorney fees. We affirm and remand with instructions.
I. Background Facts and Proceedings. The parties stipulated that on February 1, 1992, Michael and Mary O'Malia entered into a written purchase agreement with Regency to construct a new home. Regency orally provided the O'Malias with an express oral warranty that the house would be free from defects for one year from the date of possession. Regency also warranted that the home would be free from structural defects. Soon after the parties closed on the purchase, the O'Malias discovered structural defects in the floor joists. The O'Malias requested Regency to perform the necessary repairs, and Regency advised them to file a claim under the homeowner's warranty program. The O'Malias filed a warranty claim.
On May 1, 2000, the O'Malias filed an action against Regency for breach of contract and negligence. Subsequent to the filing of the action, the warranty program paid the O'Malias $6975 on their warranty claim. Regency ultimately made the necessary repairs, and the only remaining issue was payment of attorney fees. The parties stipulated the O'Malias incurred attorney fees and expenses of $10,605.93. The district court awarded the O'Malias attorney fees of $11,558.43, including the fees incurred in prosecuting the action and an additional $952.50 for fees incurred in enforcing the attorney fee provisions of the purchase agreement. Regency has appealed.
II. Scope of Review. Our scope of review on an award of legal fees is for errors at law. Gabelmann v. NFO, Inc., 606 N.W.2d 339, 342 (Iowa 2000). In awarding attorney fees, the district court is afforded broad, but not unlimited, discretion. Id. We will reverse an award of attorney fees only when the court rests its discretionary ruling on grounds that are unreasonable or untenable. Id. III. Attorney Fees. Generally attorney fees are not allowable in the absence of statute or an agreement by the party to be charged. D.M.H. by Hefel v. Thompson, 577 N.W.2d 643, 648 (Iowa 1998). Iowa Code section 625.22 (2001) authorizes the payment of attorney fees when a judgment is recovered on a written contract containing an agreement to pay attorney fees. Regency, however, contends the O'Malias' action was based on claims of breach of warranties, therefore no attorney fees are authorized. The O'Malias maintain their claim for attorney fees was based on the language of the purchase agreement.
Paragraph 6(c) of the purchase agreement provides that the new construction "shall have the warranties implied by law, specifically made by suppliers of materials/appliances, or specifically tendered by the contractor." Paragraph 14 of the purchase agreement provides:
If the Sellers fail to fulfill this agreement they will pay the Broker the commission in full. The Buyers shall have the right to have all payments returned, and/or to proceed by any action at law or equity, and the Sellers agree to pay costs and reasonable attorney fees, and a receiver may be appointed.
Paragraph 18 of the agreement provides that "[t]his agreement shall survive the closing."
We agree with the district court that based on the ordinary meaning of the wording contained in the purchase agreement, the O'Malias were entitled to attorney fees. See Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999) (language in a contract must be interpreted according to its commonly accepted and ordinary meaning). Regency's argument the O'Malias are not entitled to attorney fees because they claimed fees under a breach of warranty theory has no merit since any breach of express or implied warranties was itself a breach of the terms of the purchase agreement. Regency provided the O'Malias with an express warranty the home would be free from defects. The purchase agreement also provided the home's construction was covered by all implied warranties. Paragraph 14 of the purchase agreement specifically provided that if Regency breached its terms, it would be liable for attorney fees. Paragraph 18 of the purchase agreement provided that its terms would survive the closing of the sale. The purchase agreement required Regency to construct the home in a workmanlike manner. The parties stipulated there was a defect in the floor's construction, a breach of Regency's pledge to provide a defect-free home. While Regency contracted with a third party to provide the O'Malias with a written warranty, their liability for fees under the purchase agreement was not extinguished.
We therefore conclude the district court did not abuse its discretion in awarding the O'Malias attorney fees in the amount of $11,558.43. The O'Malias also request an award of appellate attorney fees. They have not, however, filed any affidavits in support of such an award. We conclude appellate attorney fees are appropriate in the present case, and we remand this issue to the district court to make findings and conclusions regarding the appropriate amount of appellate attorney fees.