Windmill Distributing Co. v. Hartford Fire Insurance Co.
A court may construe ambiguous contract terms concerning the collection of reasonable attorneys' fees for the "prevailing party" against the party that drafted a contract. The plaintiff sued the Hartford Fire Insurance Co., alleging that the defendant breached its duty to defend the plaintiff in the underlying suit. The District Court granted Hartford Fire Insurance Co.'s motion for summary judgment. Hartford Fire Insurance requested reasonable attorneys' fees and costs. The parties' contract provided, "In any litigation or arbitration between the parties, the prevailing party shall be entitled to reasonable attorney's fees and all costs of proceeding incurred in enforcing this Agreement." The parties disagreed about the definition of the word "enforcing" in the contract. The District Court found that the word "enforcing," which is defined as "to give force or effect to" or "to compel obedience," was ambiguous. The word could indicate that the party who sues to obtain compliance with the contract is entitled, if successful, to collect attorneys' fees and costs. Or it could indicate that the party who defends is enforcing the contract and entitled to collect attorneys' fees and costs, if the defendant prevails. Ambiguous contract terms are construed against the party that drafted the contract, which was Hartford Fire Insurance. "Because the Defendant drafted the Claim Agreement," wrote the District Court, "the Court construes the fee shifting provision against Defendant to hold that the provision at issue does not entitle Defendant to recover attorney's fees and costs as Defendant did not bring a suit to compel compliance with the terms of the Claim Agreement but merely defended such a suit by the Plaintiff." The court denied Hartford Fire Insurance Company's motion for attorneys' fees and costs.