Page:Scottsdale Insurance Co. v. Morrow Valley Land Co.pdf/4

 a duty to indemnify appellee and acted in bad faith in denying appellee's request to defend and indemnify, finding that there were genuine issues of material fact on both claims.

On April 12, 2011, appellee filed a motion for supplementary relief, requesting attorney's fees and expenses related to its defense of the lawsuit. Appellee requested attorney's fees for three firms or attorneys: (1) $87,397.90 in fees and expenses incurred by the Leader, Bulso & Nolen Firm, of Nashville, Tennessee; (2) $4,077.89 in fees and expenses incurred by Steven Palley with Howrey, LLP, of Washington, D.C.; and (3) $72,033.24 in fees and expenses incurred by David Stubbs, General Counsel of Morrow Valley, of Lincoln, Arkansas. On April 15, 2011, Scottsdale filed a motion for Rule 54(b) certification and to stay the action pending appeal.

The circuit court held two hearings, and on June 16, 2011, the court issued two orders – one order addressing the two pending motions (Fee Order) and one amended and substituted order granting and denying summary judgment in part (Amended Order). The Fee Order agreed to grant appellee's legal fees and expenses as to the first two firms, but the court declined to award attorney's fees based on Stubbs's representation. In its June 16, 2011 Fee Order, the court stated that it would not award fees charged by Stubbs because Stubbs was in-house counsel for Morrow Valley, as well as other entities owned by Richard Latta; he was paid a salary for his role as in-house counsel; the evidence did not show that the fees Stubbs charged were related to the duty to defend and were unrelated to his capacity and role as in-house counsel; and the evidence did not show that the fees were reasonable and customary.