                      MISSOURI COURT OF APPEALS
                          WESTERN DISTRICT


KANSAS CITY LIVE BLOCK 139                )
RETAIL, LLC,                              )   WD78786 and
                                          )   WD78912
                  Respondent,             )
   v.                                     )   OPINION FILED:
                                          )
FRAN'S K.C. LTD, ET AL.,                  )   August 9, 2016
                                          )
                   Appellants.            )


            Appeal from the Circuit Court of Jackson County, Missouri
                    Honorable Robert Michael Schieber, Judge

                             Before Division One:
        Anthony Rex Gabbert, P.J., Thomas H. Newton, and Alok Ahuja, JJ.


        Fran’s K.C. Ltd., Mr. Hak Joon Kim, and 1482111 Ontario Inc. (Collectively

Fran’s) appeals a judgment denying their request for a jury trial, awarding liquidated

damages, awarding late charges, and awarding attorney fees. Fran’s entered into a

lease agreement with Kansas City Live Block 139 Retail, LLC (KC Live) for

premises in the Kansas City Power & Light District. The lease contained provisions

addressing the payment of rent, liquidated damages, late charges for past due rent,

and the payment of attorney fees in case of litigation. Mr. Kim and 1482111 Ontario

Inc. are guarantors on the lease. The issues on appeal include claims of trial court

error in denying Fran’s request for a jury trial, awarding liquidated damages and late
charges to KC Live, and awarding attorney fees to KC Live. We affirm in part and

reverse in part.

                       Factual and Procedural Background

       Appellant, Mr. Kim, owns and operates a few Fran’s Restaurants in Canada.

Respondent, KC Live, is a Cordish Co. entity that functions as a landlord for tenants

within the Kansas City Power & Light District.              After meetings between

representatives for Fran’s and KC Live, KC Live provided a letter of intent with

potential lease terms to Fran’s. This letter included a three-year corporate guaranty

and a rolling guaranty of one year’s base rent for the fourth and fifth year. Mr. Kim

had indicated that he would not sign a personal guaranty.

       In February 2009, Fran’s, as a tenant, and KC Live, as a landlord, executed a

ten-year lease for the premises.    At this time, Mr. Kim also signed a guaranty

unconditionally guaranteeing the prompt and full payment of all rent and performance

of all obligations under the lease by Fran’s.    By a notice of possession, KC live

notified Fran’s that the 120-calendar day fixturing period began on February 26,

2009. Under section 321 of the lease, the rent commencement date was June 27,

2009, the day after the start of the fixturing period. Fran’s opened on October 15,

2009. On May 5, 2010, the parties signed a lease amendment negotiated in respo nse

to a dispute between the parties with respect to: (a) the rent commencement date; (b)

the date Fran’s actually opened; (c) whether Fran’s was required to pay liquidated

damages under the terms of the lease for the period of time between the rent

commencement date and the date Fran’s actually opened; and (d) whether KC Live




                                          2
was required to pay Fran’s the full lease incentive payment in light of Fran’s failure

to open on time.

      Under section 201(d), Fran’s agreed to pay minimum rent for the first year of

the term in the amount of $217,920 annually and $18,160 monthly.              For each

following lease year the minimum rent increased by the greater of (i) the increase in

the Consumer Price Index or (ii) two and one-half percent (2.5%) cumulatively.

Under section 301, Fran’s also agreed to pay additional rent which includes a

common     area    maintenance   charge,   taxes,   promotional   charges   and   extra

charges/uncontrollable common area maintenance.           In section 2605, the lease

addresses the protocol for recovery and compensation of late rent.          In addition,

section 2602(vii) addresses the procedure if Fran’s fai led to conduct business on the

premises for more than three (3) consecutive business days. The lease also requires

that, if KC Live filed suit against Fran’s for any reason, Fran’s would pay KC Live its

reasonable attorney fees and costs for litigation, which are stipulated, “if suit is for

past due Rent and/or money damages,” to be not less than fifteen percent (15%) of

the monies awarded to KC Live.

      KC Live sent Fran’s notices of default on April 1, May 25, July 24, October

18, November 17, and December 15, 2011, and January 11, and February 22, 2012.

As of March 10, 2015, all appropriate credits were awarded to Fran’s , leaving Frans’s

with an outstanding balance of $3,596,557.89 owed to KC Live under the Lease.

After a September 2012 bench trial, KC Live was awarded possession of the

premises. To re-let the premises in first-class rentable condition, KC Live had to give

the subsequent tenant a $400,000 tenant finish allowance and permission to use the



                                           3
trade fixtures left on the premises by Fran’s. In September 2013, KC Live filed its

first amended petition, which included causes of action for breach of the lease and

breach of the guaranty.       Fran’s, answer and counterclaim to KC Live’s petition

included causes of action for fraud in the inducement, negligent misrepresentation,

breach of the lease, and conversion. Following a March 2015 bench trial, the trial

court entered judgment against Fran’s, jointly and severally, in the amount of

$3,596,577.89. The trial court also determined that KC Live was entitled to attorney

fees and costs under the terms of the parties’ lease and awarded KC Live attorney

fees and costs in the amount of $863,706.70. This appeal follows.

                                       Legal Analysis

         In the first point, Fran’s argues that the trial court erred in denying its request

for a jury trial because the jury trial waivers in the lease and guaranty do not apply to

the tort claims asserted in its counterclaims.

         “The interpretation of a lease agreement is a question of law, to which the

general rules of contract construction apply.” Langdon v. United Restaurants, Inc.,

105 S.W.3d 882, 887 (Mo. App. W.D. 2003). “We review the language of a lease de

novo” to give effect to the parties intentions. Stratman v. Wagner, 427 S.W.3d 915,

919 (Mo. App. S.D. 2014); “The intent of the parties is to be based upon the terms of

the contract alone and not on extrinsic evidence unless the contract language is

ambiguous.” Langdon, 105 S.W.3d at 887.

         The right of a jury trial is a constitutionally guaranteed personal right that may

be waived. Malan Realty Inv’rs, Inc. v. Harris, 953 S.W.2d 624, 625-26 (Mo. banc

1997).



                                              4
       Section 37 of the lease states:

              To induce landlord and tenant to enter into this lease, landlord
       and tenant each hereby waive any right to a trial by jury of any or all
       issues arising in any action or proceeding between landlord and tenant
       or their successors, assigns, personal or legal representatives and heirs
       under or in connection with this lease or any of its provisions. This
       waiver is knowingly, intentionally and voluntarily made by landlord and
       tenant, and landlord and tenant each acknowledge that neither landlord
       nor tenant nor any person acting on behalf of landlord or tenant has
       made any representations of fact to induce this waiver of trial by jury or
       in any way to modify or nullify its effect. Landlord and Tenant each
       further acknowledge that he, she or it has had the opportunity to discuss
       this lease with legal counsel.

Fran’s argues that its first two counter claims asserting fraud in the inducement and

negligent misrepresentation do not arise under the lease. Fran’s relies on a series of

arbitration cases for support.    Specifically, Fran’s relies on Missouri & Northern

Arkansas Railroad Co., Inc. v. Branson Scenic Railway, Inc., 3 S.W.3d 869, 871 (Mo.

App. S.D. 1999), stating that for a claim to be related to a contract “it must, at the

very least, raise some issue the resolution of which requires a reference to our

construction of some portion of the…[c]ontract.” The court, however, also explained

that, to determine if the claim was “in connection with” the language of the

arbitration agreement, the analysis “requires an examination of the connection

between the …claims and the …[a]greement to determine if the claims raise some

issue that requires a reference to or construction of some portion of the [a]greement.”

Id.   The court concluded that no connection existed betwee n the claims and the

agreement because “[n]one of the pleadings make any reference to the Operating

Agreement.”    Id. Here, Fran’s provides numerous facts that relate directly to the

lease in a section titled “Facts Applicable to All Counts.” The facts from this section

are also expressly incorporated into the Fraud in the inducement and negligent

                                           5
misrepresentation counts.     In addition, paragraphs 28-29 and 52-53 of Fran’s

counterclaim allege that one of KC Live’s misrepresentations was a personal

assurance by Blake Cordish that Mr. Kim’s personal guarantee would not be required

as a lease condition. The only way the truth or falsity of Cordish’s assurance could

be determined would be by reviewing the terms of the lease and associated

documents.

       Fran’s counterclaims also contain detailed allegations that KC Live engaged in

a “predatory leasing scheme” that involved enticing a new tenant to agree to

exorbitant rent and other oppressive lease terms, making misrepresentations to the

prospective new tenant concerning potential revenues, ousting the new tenant after

the inevitable failure of its operation, and then renting the space (including the prior

tenant’s build-out and installed fixtures) to a new entity, which was often a Cordish

affiliate.   Fran’s answer expressly alleged, in both its fraudulent inducement and

negligent misrepresentation counterclaims, that the misrepresentations at issue were

part of this “predatory leasing scheme.” Fran’s contention that KC Live engaged in a

“predatory leasing scheme” necessarily required review of the terms of the lease, and

Fran’s offered expert testimony at trial to substantiate its claim that the lease terms

were unreasonable and oppressive.

       The circuit court’s resolution of the fraud and negligent misrepresentati on

counterclaims required reference to the terms of the lease in an additional respect. In

its judgment, the circuit court found that Fran’s had no right to rely on any alleged

pre-contractual misrepresentations by KC Live, because the lease contained

provisions attesting that KC Live had made no representations, and that Fran’s had



                                           6
“satisfied itself of all its concerns, if any, by conducting an independent investigation

into all prior information provided by (or statements made by) Landlord or its

agents.”

         Therefore, Fran’s fraudulent inducement and negligent misrepresentation

claims necessarily required reference to, and construction of, the terms of the lease.

It is clear that the claims of fraud and negligent misrepresentation are intertwined

with the lease, thus classifying them as “in connection with” as explained in Missouri

& Northern Arkansas Railroad Co., Inc., 3 S.W.3d at 871. We conclude, therefore,

that Fran’s waived its right to a jury trial by accepting the trial waiver provision

within the lease. Point one is denied.

         In the second point, Fran’s argues that the trial court’s liquidated damages

award to KC Live was erroneous because KC Live failed to prove any actual damages

and treble rent was not a reasonable estimate of potential damages. Therefore, Fran’s

argues that the liquidated damages for the time the premises were dark constitutes an

impermissible penalty.

         Liquidated damages clauses are valid and enforceable while penalty clauses

are not. City of Richmond Heights v. Waite, 280 S.W.3d 770, 776 (Mo. App. E.D.

2009).     “A penalty provision specifies a punishment for default, while liquidated

damages are provided as a measure of compensation that, at the time of contracting,

the parties agree will represent damages in the event of a breach.” Id. “For a damage

clause to be valid as setting liquidated damages, the amount fixed as damages must

be a reasonable prediction for the harm caused by the breach and the harms must be

of a kind difficult to estimate accurately.” Id. “In determining whether an agreement



                                           7
sets forth liquidated damages or a penalty, this Court looks to the intent of the parties

as determined from the contract as a whole.” Id. “The provision must be fixed on the

basis of compensation, or else it is construed as a penalty clause primarily designed

to compel performance.” Id. See Grand Bissell Towers, Inc. v. Joan Gagnon Enters.,

Inc., 657 S.W.2d 378, 379 (Mo. App. E.D. 1983) (discussing Missouri’s adoption of

the Restatement of Contracts rules for determining if liquidated damages are actually

a penalty.)

       The liquidated damages clause at issue states:

              If Tenant fails to conduct its business operations at the Premises
       during the Minimum Store hours for more than three (3) consecutive
       business days, it is agreed and understood that Landlord shall have been
       deprived of an important right under this Lease and, as a result thereof,
       shall suffer damages in an amount which is not readily ascertainable;
       therefore, in addition to, and not in lieu of, any other remedies which
       Landlord has under this Lease, at law or in equity, Landlord shall have
       the right to collect as liquidated damages (and not as a penalty) three (3)
       times the Rent due for each month, or portion thereof, that suc h
       discontinuance shall persist. Notwithstanding the foregoing in this
       Section 2602 (vii), Tenant shall not be deemed to have failed to be open
       for business if Tenant closes (a) for inventory (provided that such
       closing for inventory does not exceed 48 hours in any twelve (12) month
       period), (b) for Christmas Day, New Year’s Day, Labor Day, Memorial
       Day or Independence Day, or (c) during the period in which the
       Premises are untenantable due to a fire or other casualty provided
       Tenant diligently pursues repairs and reopening.

       In Missouri, a plaintiff must show the existence of actual harm or damages

before a “liquidated damages clause can be triggered.” Grand Bissell Towers, Inc.,

657 S.W.2d at 379.     Thus, “‘[i]f,…, it is clear that no loss at all has occurred, a

provision fixing a substantial sum as damages is unenforceable.’        The showing of

harm or damage necessary to trigger the liquidated damages clause need not to be a

precise dollar amount but simply a showing that some harm or damage did in fact



                                           8
occur.” Id. at n.3. (internal citations omitted). Although proof of actual damages is

required to trigger a liquidated damages clause, “[l]iquidated and actual damages

generally may not be awarded as compensation for the same injury.”          Warstler v.

Cibrian, 859 S.W.2d 162, 165 (Mo. App. W.D. 1993).           “Further, ‘where parties

especially provide or stipulate for liquidated damages, such liquidated damages take

the place of any actual damages suffered and any recovery for breach is limited to the

amount so agreed upon.’” Id. (quoting Trans World Airlines, Inc. v. Travelers Indem.

Co., 262 F.2d 321, 325[1] (8th Cir. 1959)).

      Here, Fran’s acknowledges that KC Live proved it was harmed because Fran’s

failed to pay the full amount of rent owed.      Default of this nature, however, is

governed by lease subsections 2602(i) and (ii).     To prove the existence of actual

damages so as to trigger the liquidated damages clause, KC Live needs to show that

Fran’s “fail[ed] to conduct its business operations at the Premises during the

minimum store hours for more than three (3) consecutive business days.” At trial,

KC Live’s representative, Mr. Robert Fowler, testified that the premises were dark in

November 2012, after Fran’s closed, until July 2013.        He further testified that,

although it is possible to calculate the difference in rent between what the new tenant

is paying and what Fran’s would have paid under the lease, “you don’t have the

ability to calculate how much of that loss, how much of the lower rent you got was

caused by the fact that the store was dark.”      Therefore, the unquantifiable harm

stemming from the vacancy was clearly shown and effectively triggers the liquidated

damages clause. See Paragon Group, Inc. v. Ampleman, 878 S.W.2d 878, 881 (Mo.

App. E.D. 1994) (“Missouri courts have consistently held actual damages for breach



                                           9
of real estate sales contracts are uncertain and difficult to prove… [w]hile the amount

of rent due under the lease is easily measurable, it is hard to say how long the

apartment will be vacant or how much time, expense and energy will be e xpended to

re-let the premises. It is also difficult to estimate whether or how many prospective

long-term tenants were turned away while the leasing tenant occupied the premises or

how this damaged the landlord.”).

      The validity of the liquidated damages clause hinges on the reasonableness of

the requested damages. For a liquidated damages clause to be valid, the requested

amount must be “so fixed [as] a reasonable forecast of just compensation for the harm

that is caused by the breach.” Grand Bissell Towers, Inc., 657 S.W.2d at 379 (quoting

Restatement (Second) of Contracts, § 339).         Thus, the damages “must not be

unreasonably disproportionate to the amount of harm anticipated when the contract

was made.” Burst v. R.W. Beal & Co., Inc., 771 S.W.2d 87, 90 (Mo. App. E.D. 1989).

Under Missouri law, liquidated damages upheld as reasonable provide compensation

for a fraction of the total amount owed under the contract. Luna v. Smith, 861 S.W.2d

775, 779 n.3 (Mo. App. S.D. 1993) (“[T]he amounts of the inventory calculations [at

issue in this case] are 3.61 percent and 3.55 percent, respectively, of the total monthly

rental payments that the lease agreement would have produced had plaintiff not

terminated it. The liquidated damages that were upheld in Sides Construction Co. v.

City of Scott City, supra, were 3.029 percent of the total amount of the contract. In

Stein v. Bruce, 366 S.W.2d 732, 737 (Mo. App. 1963), 10 percent of the purchase

price was determined to be a reasonable provision for liquidated damages. See also

Highland Inns Corp. v. Am. Landmark Corp., 650 S.W.2d 667, 674 (Mo. App. W.D.



                                           10
1983), which upheld an award of $10,000 based upon a liquidated damages provision

where there was evidence of loss from $50,000 to $200,000 on a transaction in which

the purchase price was $950,000.”). When examining the March 10, 2015, Tenant

Summary for Fran’s, it is clear that the property was vacant from November 12, 2012,

until July 9, 2013.          During this period, rent, certain utilities, fees and taxes were

charged at a rate of $33,521.25 for December 2012 and $32,576.48 monthly for

January through June 2013. 1              For this time period, Fran’s was charged liquidated

damages of $60,104.11 for November 13, 2012, through November 30, 2012;

$98,982.87 for December 2012; and $97,729.45 monthly for January 2013- July

2013.       Therefore, instead of awarding a portion of the contract term as a

compensatory amount, the contract calls for an award of 300% of the contract amount

in addition to the rent already awarded. Further, due to the unpredictable nature of

the damages suffered because of the vacancy of the premises, no testimony was

provided to indicate that an award of 300% of the contract amount is in fact

proportionate to the anticipated harm.                 Contrarily, KC Live’s testimony explaining

this provision indicates that the award is for three times the amount of rent in

addition to the payment of base rent.                    Due to this award calculation, Fran’s is

responsible for paying the treble damages as well as the base rent owed because of

the breach, meaning it is paying excess compensation for the actual harm suffered.

Because of the inflation between the potential damages caused by harm and the

amount requested under the contract, it is clear that this provision functions to

compel performance via penalty instead of simply providing just compensation.


1
 For July 2013, the liquidated damages awarded were prorated to represent the dark period of July 1, 2013- July 9
2013.

                                                        11
Therefore, this provision is unenforceable under Missouri law. Thus, we grant point

two and reduce the trial court’s judgment to eliminate the award of damages under

this provision.

      As previously explained,” [a] penalty provision specifies a punishment for

default.” City of Richmond Heights, 280 S.W.3d at 776. “The provision must be

fixed on the basis of compensation, or else it is construed as a penalty clause

primarily designed to compel performance.”          Id.   Thus, an enforceable late-fee

provision must be a “reasonable prediction for the harm caused by the breach.”

Phillips v. Missouri TLC, LLC, 468 S.W.3d 398, 407-08 (Mo. App. S.D. 2015).

      As to the third point, Section 2605 states:

              If Tenant fails to pay any Rent in accordance with the provisions
      of this Lease when such Rent becomes due and payable as specified in
      Section 711, Tenant shall pay to Landlord a late charge equal to the
      greater of five percent (5%) of the amount due or Two Hundred Fifty
      Dollars ($250.00) for each month that such Rent remains unpaid, and, in
      addition, such unpaid Rent shall bear interest at the Lease Interest Rate.
      Such late charge and interest shall constitute Additional Rent hereunder
      immediately due and payable. If payments have been accelerated
      pursuant to Section 2602(iv) or Section 2602(v) above, all Additional
      Rent due under any provision of this Lease, including, but not limited
      to, all charges and interest, shall be due and payable immediately.

      Fran’s argues that the trial court’s award of late charges to KC Live was

erroneous because KC Live failed to prove any actual damages and the late charge is

not a reasonable estimate of potential damages. Fran’s asserts that KC Live failed to

introduce evidence showing that it incurred any actual damages over and above the

time value of money for which the ten percent (10%) interest compensated. In this

case, the determination of the nature and scope of damages KC Live suffered is a

question of fact to be determined by the trial court. In turn, its determination binds



                                          12
the appellate court unless there is no substantial evidence to support it. Norcomo

Corp. v. Franchi Constr. Co., Inc., 587 S.W.2d 311, 317 (Mo. App. E.D. 1979). As

stated in its judgment, the trial court determined that “KC Live sent Fran’s Notices of

Default on April 1, 2011, May 25, 2011, July 22, 2011, October 18, 2011, November

17, 2011, December 15, 2011, January 11, 2012, and February 22, 2012.” 2 Relying

on Star Development Corp. v. Urgent Care Assocs., Inc., 429 S.W.3d 487, 492-93

(Mo. App. W.D. 2014) KC Live argues that, as to these notices, it was “forced to

incur lost time and resources in conjunction with administrative tasks” which is

sufficient to support the award of late charges. We disagree.

        Although a fifteen percent (15%) late charge was upheld in Star Development

Corp., the lease provision at issue in that case differs from the provision here. In Star

Development Corp., this Court explained that, when analyzing a late-charge

provision, for it to be deemed valid,

             “[t]he provision must be fixed on the basis of compensation,
      otherwise it is construed as a penalty clause designed primarily to compel
      performance. While the label the parties attach to a provision is not
      conclusive, it is a circumstance to be considered when deciding whether
      the provision is to be considered liquidated damages or a penalty.”

429 S.W.3d at 492. (internal citations omitted). The contested provision expressly

“indicated that the late charge was intended to compensate Star Development for the

administrative expenses it would incur if Urgent Care failed to pay the rent on time.”

Id. Thus, the unambiguous lease language was a clear indicator of the parties ’ intent.

Id.    In addition, Star Development offered testimony outlining the extensive

administrative efforts expended in relation to Urgent Care’s past-due status. Id. at


2
  The judgment refrains from making factual findings on the damages incurred from the lost time and resources
expended in executing these administrative tasks.

                                                    13
693. Consequently, this Court held that “[g]iven the difficulty of estimating [Star

Development’s] actual harm due to these unknown variables at the time the leas e was

made, the 15% late charge to which Urgent Care expressly agreed was a reasonable

forecast of damages to compensate [Star Development] for its administrative efforts.”

Id. It is also significant that, in Star Development Corp., the late fee was a one-time

charge of 15% of the delinquent rental amount, whereas in this case the 5% late fee

was calculated monthly and would be compounded by the assessment of an additional

5% late fee, calculated on the entire amount of the rental arrearage. The 15% late fee

in Star Development Corp. ranged between $470 and $506 per delinquent payment,

429 S.W.3d at 493; in this case, due to the compounding feature, the late fee

ballooned from less than $600 in the first month it was assessed (December 2011), to

more than $46,000 per month in the final month (February 2015). The total late fee

assessed by the circuit court was $1,069,779.40; this exceeded the unpaid rent of

$937,203.44, and was more than five times the total interest ass essed of $197,034.16.

The late-fee provision of the present lease is wholly unlike the late fee upheld in Star

Development Corp.

      We also note that KC Live failed to show that it suffered any substantial

damages from Fran’s default not already compensated by other contractual

provisions. In its brief, KC Live identifies only two administrative actions that it

undertook in response to Fran’s default: sending eight default letters (which KC Live

notes were “typewritten and . . . sent to Defendants via certified mail”); and

generating “e-mails attached to a number of the letters from KC Live to Defendants

inquiring about the status of the late payments.” KC Live asserts that the trial court’s



                                          14
ruling upholding the late-fee provision is correct because, like the landlords in Star

Development Corp., the company incurred lost time and resources in relation to the

necessary administrative tasks required to collect late rent. The late charge provision

here, unlike the provision in Star Development Corp., does not expressly state that

the fee is designed to compensate KC Live for these administrative expenses.

Furthermore, to accurately analyze a lease provision, we must look at the contract as

a whole. Star Development Corp., 429 S.W.3d at 492. Here, the lease includes an

additional provision explaining that the common area maintenance costs paid by the

tenants includes an administrative fee. 3

         At trial, Mr. Nick Benjamin, a witness for KC Live, testified that “the twenty

percent administrative fee, is a back-of-house overhead more specifically related to

the amount of accounting time that is necessary to monitor and put together ledgers,

deal with organization coding, etc.” Therefore, any minimal administrative fees

incurred in relation to the late payments would appear to have been compensated, in

whole or in part, by the 20% administrative fee. Given that compensation for the

administrative fees that KC Live asserts the late-charges provision addresses are also

compensated for by the administrative-fee provision, the late-charges provision

appears to compel performance rather than compensate for damages.                                         It is also

significant that, in the event of default, KC Live is also entitled to recover interest on

any unpaid rent and its attorney fees if it is required to file an action to enforce its



3
 Section 1003 states, “[t]he term ‘Common Area Maintenance Costs’ means any and all costs and expenses of any
kind incurred by Landlord in managing, maintaining, repairing, replacing, improving, operating and insuring the
Common Areas, the Project, all improvements within the Project, without limitation, and an amount equal to twenty
percent (20%) of the Common Area Maintenance Costs as an administrative fee. Common Area Maintenance Costs
shall also include any reasonable allocation of any of the foregoing types of costs applicable to the Project and all or
portions of the Development.”

                                                          15
rights. These contractual remedies would also serve to compensate KC Live for any

harms it suffered as a result of rental delinquencies.

      The lease authorized KC Live to recover interest at “[a]n annual rate of interest

equal to the lesser of (i) the maximum rate of interest permitted in the State of

Missouri, or (ii) eighteen percent (18%).”      At trial, KC Live argued that it was

entitled to 10% annual interest under this provision, which it contended was “the

maximum rate of interest permitted in the State of Missouri.” Yet, although KC Live

took the position that “the maximum rate of interest permitted” in Missouri was 10%,

the late-fee provision (which compounds monthly) produces an additional charge of

almost 80% on an annual basis.

      Therefore, this provision is not a valid liquidated damages clause and is

instead an unenforceable penalty. See Phillips, 468 S.W.3d at 407-08 (“Here, Lender

presented no evidence suggesting that he suffered any damage from Borrower’s

default that would not be covered by his other contractual claims…Given the

availability of these other means of recovering his damages, nothing in the evidence

before the trial judge suggests that [the contractually stipulated late fee] was a

‘reasonable prediction for the harm caused by the breach’ or that there was some

other ‘harm’ that was ‘of a kind difficult to estimate accurately.’” (quoting City of

Richmond Heights, 280 S.W.3d at 776)). Therefore, we grant point three and reduce

the trial court’s judgment to eliminate the award of damages under the late-charges

provision.




                                           16
      In the fourth point, Fran’s asserts that the attorney fee awards should be

reversed or reduced dependent on this Court’s decision on the merits of points one,

two, and three. We agree.

      “Absent statutory authority or contractual agreement, each litigant , with few

exceptions, must bear the expense of his or her own attorne y’s fees.”            Link v.

Kroenke, 909 S.W.2d 740, 747 (Mo. App. W.D. 1995). “If a contract provides for the

payment of attorney’s fees in the enforcement of a contract provision, the trial court

must award them to the prevailing party.” Howe v. ALD Servs., Inc., 941 S.W.2d 645,

652 (Mo. App. E.D. 1997); see Ken Cucchi Constr., Inc. v. O’Keefe, 973 S.W.2d 520,

528 (Mo. App. E.D. 1998) (“However, even if the contract is silent on the issue, a

party may only recover its fees under a contract provision if it is a prevailing party.”);

see also Brown v. Brown-Thill, 437 S.W.3d 344, 350 n.4 (Mo. App. W.D. 2014) (The

contract did “not specifically require that ‘the responding party’ in the non -arbitral

proceeding prevail in that proceeding.”      Instead, “[t]hat (implied) condition” was

satisfied by the party’s success in preventing the confirmation of the arbitration

award and the relegation of related matters.) “A prevailing party is the party

prevailing on the main issue in dispute, even though not necessarily to the extent of

its original contention.” Miller v. Gammon & Sons, Inc., 67 S.W.3d 613, 625 (Mo.

App. W.D. 2001).

      Section 2701 of the lease states:

             Should Landlord file suit against Tenant for any reason,
      including, but not limited to, a suit for possession of the Premises,
      payment of Rent, damages, or to enforce or interpret the provisions of
      this Lease, Tenant shall reimburse Landlord for its reasonable attorneys’
      fees and cost of litigation, which are stipulated, if suit is for past due



                                           17
       Rent and/or money damages, to be not less than fifteen percent (15%) of
       the monies awarded to Landlord.

       As previously stated, this Court has denied point one on the merits. Because

the contract entitles KC Live to an award of attorney fees and KC Live was the

prevailing party on this point, the attorney fee awards as to this matter were well

within the trial court’s discretion.

       The attorney fee awards in connection with the liquidated damages and late

charges, however, should be reduced. Because these provisions are unenforceable

penalty provisions, KC Live is not the prevailing party in their enforcement and ,

therefore, may not receive attorney fees connected to these provisions. See Hoag v.

McBride & Son Inv. Co., Inc., 967 S.W.2d 157, 175 (Mo. App. E.D. 1998) (Here, the

plaintiffs’ primary allegation was the vesting of title of 9.5 acres of land.       The

“plaintiffs’ prevailed only on their claim that CSSC had created a covenant in the 9.5

acre site in favor of the Riverwood landowners. Plaintiffs’ were unsuccessful on their

remaining five claims.” Therefore, “the trial court did not err in concluding that the

plaintiffs were not entitled to their attorney fees as the prevailing party.”); see also

Rental Co., LLC v. Carter Grp., Inc., 399 S.W.3d 63, 67 (Mo. App. W.D. 2013) (“The

prevailing party is the party that ‘obtains a judgment from the court, regardless of the

amount of damages.’…Here, the trial court ruled in favor of Carter Group on Rental

Company’s breach of contract claims. One way the trial court could properly find

that Rental Company could be awarded attorney fees would be under the exception to

the general rule for recovery of attorney fees pursuant to a contractual provision.

However, Rental Company was not the prevailing party for the breach of contract

claims as to each promissory note containing such contractual provision.          Thus,

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attorney fees were not properly recoverable by Rental Company under the co ntractual

provision exception.”   Accordingly, the trial court erred in awarding attorney fees

related to the liquidated damages and late charges provisions . On remand, the trial

court should reassess the award of attorney fees and reduce the award in alignment

with the lease provision.

      In the fifth point on appeal, Fran’s argues that KC Live failed to allocate

between fees incurred on its contract and tort claims. Relatedly, Fran’s contends that

the lease permits recovery only where the landlord files suit against the t enant and

thus does not permit recovery of fees incurred to defend counterclaims or monitor

third party claims. We disagree.

      Trial courts are considered experts on the topic of awarding attorney fees.

O’Brien v. B.L.C. Ins. Co., 768 S.W.2d 64, 71 (Mo. banc 1989). Trial courts may

therefore award attorney fees without the aid of evidence. Walsh v. City of Kansas

City, 481 S.W.3d 97, 113 (Mo. App. W.D. 2016); see also Essex Contracting, Inc. v.

Jefferson Cnty., 277 S.W.3d 647, 656-57 (Mo. banc 2009). Accordingly, the failure

to allocate or segregate is generally not fatal to the prevailing party’s award of

attorney fees. Magruder v. Pauley, 411 S.W.3d 323, 336-37 (Mo. App. W.D. 2013);

see also Envtl. Energy Partners, Inc. v. Siemens Bldg. Techs., Inc.,178 S.W.3d 691,

711-12 (Mo. App. S.D. 2005).

      Fran’s cites Funding Systems Leasing Corp. v. King Louie International, Inc.,

597 S.W.2d 624 (Mo. App. W.D. 1979), to support its position that allocation among

claims is a requirement when attorney fees are recoverable.       In King Louie, the

prevailing party supplied “no proof of any allocation” regarding fees associated with



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defending its claims against one party and enforcing its claims against another. King

Louie, 597 S.W.2d at 637. In this case, however, KC Live went beyond what was

required by submitting billing records that detailed its fees, services, and comparable

rates.   The trial court also set forth the calculations underlying its award.       More

importantly, however, King Louie is inapplicable to cases such as this one where “the

damages against each defendant . . . are identical and indivisible.”          Brockman v.

Soltysiak, 49 S.W.3d 740, 746 (Mo. App. E.D. 2001), overruled on other grounds,

Badahman v. Catering St. Louis, 395 S.W.3d 29, 40 (Mo. banc 2013).

         Fran’s argument hinges on its contention that KC Live’s affirmative claims for

breach     of   the   lease,   and   Fran’s   counterclaims   for   fraud   and   negligent

misrepresentation, were entirely separate from one another.          But this assertion is

inaccurate.       Fran’s asserted fraudulent procurement, and unconscionability, as

affirmative defenses to KC Live’s contract claims.                  (We presume      Fran’s

“unconscionability” defense relied on similar facts to the “predatory leasing scheme”

it alleged in its counterclaim.). Fees for litigating Fran’s affirmative defenses plainly

fall within the contractual fee-shifting provision.

         Fran’s also argues that the lease permits recovery only when the landlord files

suit against the tenant. As such, Fran’s asserts that KC Live may not recover attorney

fees incurred in conjunction with the counterclaims. In general, “[a] party cannot

litigate tenaciously and then be heard to complain about the time necessarily spent

overcoming its vigorous defense.” Weitz Co. v. MH Washington, 631 F.3d 510, 530

(8th Cir. 2011) (quoting Williams v. Fin. Plaza, Inc., 78 S.W.3d 175, 187 (Mo. App.

W.D. 2002)). In Weitz, the eighth Circuit applied Missouri law and determined that



                                              20
the prevailing party could recover attorney fees on counterclaims—even if the party

had failed to prevail on those specific claims. 631 F.3d at 518. Here, Fran’s brought

two tort counterclaims, fraud in the inducement and negligent misrepresentation. As

previously explained, the claims at issue are not independent because they arise from

the lease. Therefore, attorney fees associated with counterclaims may be granted if

permitted by the language of the lease.

      Section 2701 of the lease specifically provides that “[s]hould Landlord file suit

against Tenant for any reason . . . Tenant shall reimburse Landlord for its reasonable

attorneys' fees and cost of litigation. . . .” Litigation means “[t]he process of carrying

on a lawsuit.” Lawsuit, Black’s Law Dictionary (10 th Edition 2014). As such, the

defense of counterclaims and associated costs fall directly within this lease provision.

      In sum, KC Live provided sufficient information for allocation , and the

language of the lease permits recovery on fees for claims arising from the lease.

Point five is denied.

                                      Conclusion

      The trial court was correct in ruling that Fran’s waived its right to a jury trial

on its counterclaims by accepting the lease provision waiving the right to a jury trial.

The trial court was incorrect in ruling that the liquidated damages clause relating to

the cessation of business operations for three consecutive days was valid. The trial

court also erred in ruling that the late charges provision was a valid liquidated

damages provision because this provision is designed to compel performance as

evidenced by the fact that the harm it claims to compensate is compensated by

another lease provision.    Therefore, we grant these points and remand to the trial



                                           21
court where the judgment should be reassessed and reduced to reflect the removal of

damages awarded under these provisions.       The award of attorney fees relating to

these provisions must also be reversed and recalculated.



                                              /s/ THOMAS H. NEWTON
                                              Thomas H. Newton, Judge


Gabbert, P.J., and Ahuja, J. concur.




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