NCJC, Inc. v. WMG, L.C.
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The Supreme Court affirmed the decision of the court of appeals reversing in part the ruling of the district court that Plaintiff was the prevailing party entitled to fees, holding that when a plaintiff recovers less at trial than the amount of a rejected offer to confess judgment, Iowa Code 677.10.bars recovery of the plaintiff's attorney fees incurred after the offer.
The parties litigated claims over the breach of a farm lease entitling the "prevailing party" to recover reasonable attorney fees. Plaintiff's presuit demand was $190,564, and Defendant made a pretrial offer to confess judgment for $75,000. Plaintiff rejected the offer. The case proceeded to trial, and the jury awarded Plaintiff just over $41,000. Both sides sought attorney fees, and the district court granted them to Plaintiff. The court of appeals reversed in part, holding that a plaintiff recovering less than the amount of the offer to confess cannot recover postoffer attorney attorney fees that are taxed as costs under Iowa Code 625.25. The Supreme Court affirmed, holding (1) prevailing party contractual fees are considered "costs" when determining the effect of an offer to confess judgment; and (2) Iowa Code sections 677.10 and 625.22 operated together to preclude recover of Plaintiff's attorney fees incurred after it rejected the offer to confess judgment.
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