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A federal appeals court nixed competing $2.7 million and $1.3 million attorney fee and cost requests in a contract dispute between beverage companies that generated just more than $1 million in judgments. 

On April 5, in Southern Wine and Spirits v. Mountain Valley Spring Co., the U.S. Court of Appeals for the Eighth Circuit affirmed Western District of Arkansas Judge Jimm Larry Hendren’s March 2012 denial of attorney fees to either side.

The Eighth Circuit agreed with Hendren that the case produced no "prevailing party" because each side won "sizable jury awards by prevailing on significant issues."

The underlying case was a contract dispute between bottled water company Mountain Valley and regional distributor. Southern won a $819,000 judgment against Mountain Valley for breach of contract and breach of an implied covenant of good faith and fair dealing, plus an extra $42,000 for Mountain Valley’s failure to pay an account.

Mountain Valley won an $183,000 judgment against Southern on its breach of an implied covenant of good faith and fair dealing counterclaim.

Southern sought $2.7 million in fees and costs for its lawyers at Texarkana’s Haltom & Doan and its of-counsel firm, Los Angeles-based Korshak, Kracoff, Kong & Sugano.

Mountain Valley’s lawyers at the Rose Law Firm in Little Rock, Ark., countered with a request for $1.3 million in fees and costs if the court awarded fees to Southern.

Judge Raymond Gruender, joined by judges Bobby Shepherd and Roger Wollman, wrote that, "where the district court declined to find even that Southern was a prevailing party, Southern asserts no facts to support its contention that it merited an award of attorney’s fees."

He went on conclude: "Because we affirm the denial of attorney’s fees to Southern, we need not discuss Mountain Valley’s protective claim for its own attorney’s fees."

Amanda Wofford, a Rose Law partner who argued for Mountain Valley, said, "We’re very pleased with the result. We think it was the right result for our client."

"A verdict of that magnitude against Mountain Valley in its hometown in Arkansas is no small feat," said Haltom & Doan partner Jennifer Doan, who argued for Southern.

"It is unfortunate that the Eighth Circuit declined to award attorney fees. However, given the large amount of the verdict, those fees were not necessary to bring justice to Southern Wine and Mountain Valley’s former customers. Southern Wine believes in the principle that business partners should keep their promises," Doan said.

Sheri Qualters can be contacted at squalters@alm.com.

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