Background
Mark and Susan Galloway, acting as trustees of their trust, entered an exclusive sales-listing agreement with CBRE Inc. and Howard Lichtig for a 65-acre property in Middleburg Heights. The agreement provided that the prevailing party in litigation relating to the agreement could recover reasonable attorney fees, costs, expert fees, and related expenses.
After the property was sold, the Galloways sued the CBRE parties. They later refiled claims for breach of contract, negligence, negligent misrepresentation, and fraud. The CBRE parties did not assert a counterclaim or otherwise seek contractual fees in their answer or during the case. Following a bench trial, the trial court entered final judgment for the CBRE parties. They then moved for fees, costs, and expenses, and the trial court awarded $1,135,558.38 in fees and $121,487.40 in costs and expenses.
The Court’s Holding
The Eighth District vacated the fee award. A request for attorney fees, costs, and expenses under the parties’ contract was a compulsory counterclaim because it arose from the same agreement and underlying dispute. The CBRE parties had to assert that claim before final judgment, rather than for the first time afterward.
The court held that the trial court lost jurisdiction over new merits-related claims after entering final judgment. Contractual fees were not a collateral matter akin to contempt or sanctions. Civ.R. 59(B)’s deadline for fee motions did not create a substantive right to raise a previously unasserted contractual fee claim after judgment, and the appellate court’s prior remand to resolve the motion did not establish jurisdiction.
Key Takeaways
- A contractual prevailing-party fee demand must be asserted during the case as a claim or compulsory counterclaim.
- A trial court cannot award contractual fees first requested after final judgment when no such claim was pending before judgment.
- Postjudgment fee procedures do not cure the failure to plead a contractual fee claim before final judgment.
Why It Matters
The decision distinguishes contractual fee-shifting claims from collateral postjudgment matters such as sanctions. Litigants seeking fees under a contract should plead the request before final judgment, even if the amount cannot be determined until a prevailing party is established.