REVISED October 6, 2011

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                             United States Court of Appeals
                                                                      Fifth Circuit

                                                                  FILED
                                  No. 10-60266                   July 19, 2011

                                                                 Lyle W. Cayce
WAL-MART STORES, INCORPORATED,                                        Clerk

                                            Plaintiff–Appellee

v.

QORE, INC.,

                                            Defendant–Appellant



                 Appeal from the United States District Court
                   for the Northern District of Mississippi


Before GARZA, STEWART, and HAYNES, Circuit Judges.
EMILIO M. GARZA, Circuit Judge:
      Qore, Inc. appeals from the district court’s award of attorney’s fees to Wal-
Mart Stores, Inc. The court’s $810,000 fee award ordered Qore to reimburse
Wal-Mart for nearly all the attorney’s fees it incurred in prosecuting this case.
The award included reimbursement for those legal fees incurred by Wal-Mart on
its unsuccessful claims, as well as Wal-Mart’s attorney’s fees for claims brought
against third parties, one of which was absolved of all liability at trial. This
appeal requires us to determine whether, under Mississippi law, the contractual
agreement between Wal-Mart and Qore permits for an award of attorney’s fees,
                                  No. 10-60266

and if so, whether the district court’s $810,000 fee award was an abuse of
discretion.
                                       I
      Wal-Mart hired three firms to assist with the design and construction of
a new store in Starkville, Mississippi. The land on which the store was to be
built contained a layer of clay just below the surface that was prone to expand
when subjected to moisture. Wal-Mart retained a geotechnical services firm,
Qore, Inc., to investigate the land and provide a design that would allow for
construction on the site. Under this agreement (“the geotechnical services
contract”), Qore furnished a preliminary design for preparation and construction
of a subsurface base—a buffer of fill-type material placed between the expansive
clay and the surface—that would protect against any problems due to the clay
and ensure a minimum design life of twenty years for the buildings and
pavement placed on the surface.
      At the same time, Wal-Mart retained a civil engineering firm, Sain
Associates, Inc. (“Sain”), to provide a critical appraisal of Qore’s design and
recommendations. If Sain was satisfied with the design, it was to prepare the
final plans and specifications to be used for site preparation, including the
subsurface grade and base, as well as the final plans to be used in constructing
the building and pavement (including the parking areas).
      Lastly, Wal-Mart retained a general contractor, Shannon, Strobel &
Weaver Construction & Engineers, Inc. (“SSW”), to actually construct the
building and pavement as specified by Sain’s plans. By separate agreement
(“the testing and inspection contract”), Wal-Mart retained Qore to serve as the
testing and inspection firm during construction to make sure that the plans and
specifications prepared by Sain were followed.
      Two and a half years after all parties finished their work and the new
store opened, Wal-Mart began observing signs of stress and failure within the
building and parking lot. Wal-Mart sued all three contracting firms for breaches

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of contract and negligence, seeking over $11.8 million in damages—$5.35 million
for the cost of repairing the building and parking lot, and $6.5 million for the
diminished value of the new building.
      After a twelve-day trial, the district court charged the jury with assessing
liability and damages in three categories: damage to the building, damage to the
parking lot, and diminution in the building’s value. On the issue of damage to
the building, the jury found Qore and SSW both liable, assigning 10% of fault to
Qore and 90% of fault to SSW. The jury awarded damages in the amount of
$486,000 on this issue. Qore was responsible for $48,600 of this amount.
      For damage to the parking lot, the jury found SSW 50% liable and Wal-
Mart 50% liable. The jury awarded Wal-Mart approximately $1.6 million in
damages here. Discounting for Wal-Mart’s contributory negligence, SSW was
responsible for roughly $797,500 of the total damages award on this claim.
      And on the issue of diminution in building value, the jury found that none
of the three contracting firms were liable, and thus, no damages were awarded
in this category.
      The jury rejected all claims of liability brought against Sain. The jury also
determined that Qore’s 10% liability on the building repair claim was
attributable entirely to its work performed under the testing and inspection
contract. The jury attributed no fault to Qore for its work completed under the
geotechnical services contract.
      Both of the contracts between Wal-Mart and Qore discussed attorney’s
fees. The geotechnical services contract provided that: “Each party shall bear
its own expenses of litigation (including without limitation attorneys’ fees),
without regard to which is the prevailing party.” But the testing and inspection
contract included an indemnification clause that covered attorney’s fees:
      The Testing and Inspection Firm [Qore] further agrees to indemnify
      and hold Wal-Mart free and harmless from any claim, demand, loss,
      damage, or injury (including Attorney’s fees) caused by any



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                                        No. 10-60266

      negligent act or omission by the Testing and Inspection Firm, its
      agents, servants, or employees.
This contract provision is the focal point in this appeal.
       By post-trial motion, Wal-Mart sought to recover from Qore all its
attorney’s fees incurred in this litigation—on all claims, successful and
unsuccessful, and against all parties—which amounted to $990,000. In ruling
on the motion, the district court opined that “[i]t might appear . . . [that]
attributing the entirety of that $990,000 to Qore, who is only liable for $48,600
in damages is unreasonable. However, attributing the whole of the reasonable
attorney’s fees to Qore is supported by Fifth Circuit case law.”1 The district
court granted Wal-Mart’s request for attorney’s fees, but reduced the award to
$810,000 by adjusting the lodestar rate and reducing for some excessive billing.
This appeal followed.
                                               II
       Qore asks us to vacate the district court’s fee award on three grounds.
First, it argues that the indemnity provision at issue does not apply in this first-
party dispute between Wal-Mart and Qore, but is instead limited to claims
brought against Wal-Mart by third parties. Second, Qore claims that Mississippi
law precludes an award of attorney’s fees because Wal-Mart did not present
competent evidence by which to allocate its fee request between successful and
unsuccessful claims. Third, Qore maintains that the district court erred in
holding it liable for the entirety of Wal-Mart’s attorney’s fees for all matters
related to this litigation.2 We note that Qore’s second and third assignments of


       1
         Here, the court was referring to our decision in Cobb v. Miller, 

(5th Cir.
1987), a case involving the Civil Rights Attorney’s Fees Awards Act, 42 U.S.C. § 1988. As
discussed below, the parties dispute whether Cobb applies in this private contract dispute.
       2
         Qore makes three arguments in support of this last claim: (1) the award erroneously
included Wal-Mart’s litigation fees for pursuing claims under the geotechnical services
contract, which expressly precluded recovery of attorney’s fees; (2) the award included Wal-
Mart’s attorney’s fees for time spent pursuing a claim that the jury found was 50% attributable
to Wal-Mart’s own negligence, which is prohibited by Mississippi law; and (3) the award makes
no adjustment for the relatively modest result obtained by Wal-Mart.

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                                  No. 10-60266

error present the same basic question: whether, under the facts presented here,
Wal-Mart’s recovery of attorney’s fees should be limited to those claims upon
which it prevailed against Qore at trial.
                                          A
      The district court’s interpretation of a contract is a question of law that we
review de novo. See A & F Props., LLC v. Madison Cnty. Bd. of Supervisors, 

, 301 (Miss. 2006); Nolan v. Golden Rule Ins. Co., 

, 992
(5th Cir. 1999). In conducting our review, we examine the record independently
and under the same standards that guided the district court. See 

. “This broad standard of review includes the initial determination
of whether the contract is ambiguous.” Am. Totalisator Co. v. Fair Grounds
Corp., 

, 813 (5th Cir. 1993).
      In this diversity case, where Mississippi law supplies the rule of decision,
“[s]tate law controls both the award of and the reasonableness of fees awarded.”
Mathis v. Exxon Corp., 

, 461 (5th Cir. 2002). Thus, we review the
district court’s award of attorney’s fees for an abuse of discretion, “such as
misapplication of the law or an unreasonable decision in light of the
alternatives.” Cruse v. Nunley, 

, 944 (Miss. 1997); see also Deer
Creek Constr. Co. v. Peterson, 

, 1173 (Miss. 1982) (“We will not
reverse the trial court on the question of attorney’s fees unless there is a
manifest abuse of discretion in making the allowance.”). The district court’s
discretion “must be exercised within the bounds of applicable state law, and fee
awards which contravene state law cannot be upheld on appeal.” Shelak v.
White Motor Co., 

, 1072 (5th Cir. 1981). The court’s conclusions
of law underlying the fee award are reviewed de novo. See Navigant Consulting,
Inc. v. Wilkinson, 

, 297 (5th Cir. 2007).
                                          B
      Qore contends that the indemnity provision in the testing and inspection
contract only applies to actions brought against Wal-Mart by independent third-

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                                   No. 10-60266

parties. Relying on common law indemnity rules, Qore argues that the provision
does not authorize an award of attorney’s fees in this first-party dispute between
Wal-Mart and Qore. Qore acknowledges that in Mississippi parties can contract
for broader indemnity rights than those encompassed by common law indemnity
rules, but it argues that the parties did not do so here. In response, Wal-Mart
maintains that the plain language of the indemnity provision provides for those
attorney’s fees incurred in any case, whether brought by one of the contracting
parties or otherwise, to the extent that Qore’s negligence precipitated the
underlying suit. The district court applied a plain reading of the testing and
inspection contract and found that, as a threshold matter, it allowed for recovery
of Wal-Mart’s reasonable attorney’s fees. We agree.
        Under Mississippi law, where the words of a contract are clear and explicit
and lead to no absurd consequences, the intent of the parties must be sought
within the four corners of the document and cannot be explained or contradicted
by extrinsic evidence. See Madison 

. “Only if the
contract is unclear or ambiguous can a court go beyond the text to determine the
parties’ true intent.” Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc., 

, 752–53 (Miss. 2003). Mere disagreement about the meaning of a
contract provision does not make it ambiguous as a matter of law. See Cherry
v. Anthony, Gibbs, Sage, 

, 419 (Miss. 1987).
        Here, an objective reading of the testing and inspection contract’s
indemnity provision is sufficient to resolve this claim. The contract provides
that:
        The Testing and Inspection Firm [Qore] further agrees to indemnify
        and hold Wal-Mart free and harmless from any claim, demand, loss,
        damage, or injury (including Attorney’s fees) caused by any
        negligent act or omission by the Testing and Inspection Firm, its
        agents, servants, or employees.
Under this provision, Qore agrees to indemnify Wal-Mart, inter alia, for any loss,
including attorney’s fees, caused by Qore’s negligence in performing work under


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the contract. As the district court explained, there is a jury finding that Qore
was negligent, that that negligence caused “loss, damage, or injury” to Wal-Mart,
and that Wal-Mart was forced to sue Qore to recover. Whether the amount of
attorney’s fees generated by the litigation and awarded by the district court is
erroneous is a secondary question, which we address next. But on the threshold
question of whether attorney’s fees were permitted in this first-party dispute, we
find, like the district court, that the testing and inspection contract’s plain
language allowed for recovery of attorney’s fees here.
      The district court analyzed three Mississippi cases in deciding this issue.
See Turner v. Terry, 

(Miss. 2001); Morgan v. U.S. Fid. & Guar. Co.,

(Miss. 1966); Cain v. Cain, 

(Miss. Ct. App. 2007).
Each case involved the question now before us: whether the parties had
expressly contracted for recovery of attorney’s fees in first-party indemnity
actions. Wal-Mart and Qore dispute the persuasive value of each case, with good
cause: these appear to be the only Mississippi cases to have addressed this
question. But the case law provides little help here, given that Turner, Morgan,
and Cain construed contract language quite different than the indemnity
provision in the testing and inspection contract. We agree with the district court
that the language at issue here is more akin to that considered in Turner and
Morgan than in Cain, but this is incidental. Because we find that the plain
language of the testing and inspection contract allows for recovery of attorney’s
fees, we need not conduct an extended case analysis other than to note that no
Mississippi case governs.
      Qore invites our attention to the indemnity provision in the geotechnical
services contract and argues that the differences between the indemnity clauses
in the two contracts shed light on how the testing and inspection contract should
be interpreted. Applying Mississippi law, however, we will only turn to the
discretionary “canons” of contract construction if the contract is unclear or
ambiguous. See Pursue Energy Corp. v. Perkins, 

, 352 (Miss.

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                                  No. 10-60266

1990). Because there is nothing unclear or ambiguous about the indemnity
provision at issue here, or that otherwise suggests it should be limited to third-
party claims, we will not look beyond the testing and inspection contract to
determine the parties’ intent.
                                        C
      Next, Qore contends that in light of Wal-Mart’s multiple claims against
multiple parties, only one of which was successful as to Qore, the district court’s
fee award should be vacated because Wal-Mart failed to present competent
evidence by which to allocate its legal fees among successful and unsuccessful
claims as required by Mississippi law. Specifically, Qore complains that the
district court’s $810,000 fee award erroneously reimburses Wal-Mart for its
attorney’s fees incurred in pursuit of claims:
      !   against SSW and Sain (which the jury found not liable on any claim);
      !   for damages that the jury later attributed to Wal-Mart’s own
          negligence (on the damage-to-the-parking-lot claim);
      !   on the damage-to-the-parking-lot and diminution-in-building-value
          claims (for which the jury found Qore not liable); and
      !   for negligent design under the geotechnical services contract (which
          explicitly barred the recovery of attorney’s fees).
Qore maintains that Wal-Mart’s recovery is limited to those fees incurred in
prosecuting the single claim upon which it prevailed against Qore, i.e., fees spent
proving Qore’s fractional share of liability on the building repair claim, and that
Wal-Mart’s attorney’s fees on the matters described above are not recoverable
as a matter of state law.
      In Mississippi, attorney’s fees may only be awarded where provided for by
contract or statute, or where the losing party’s conduct was outrageous enough
to warrant punitive damages. See Warren v. Derivaux, 

, 739
(Miss. 2008). “The fixing of reasonable attorney’s fees is a matter ordinarily left
within the sound discretion of the trial court . . . .” Gilchrist Tractor Co. v.
Stribling, 

, 418 (Miss. 1966). The award “must be supported by

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credible evidence, however, and may not be plucked out of the air.” Young v.
Huron Smith Oil Co., 

, 40 (Miss. 1990) (citing Carter v. Clegg, 

, 1192–93 (Miss. 1990)); see also Romney v. Barbetta, 

,
962 (Miss. Ct. App. 2004) (although “a case [may be] appropriate for the award
of attorney’s fees, the actual award of attorney’s fees is still dependent upon
specific proof”). “When a party fails to present competent evidence to determine
attorney’s fees, the award may be denied.” 

.
                                          1
      In Hopton Building Maintenance, Inc. v. United Parcel Service, Inc., the
Mississippi Supreme Court considered an indemnity provision that required one
defendant (Hopton) to indemnify another defendant (UPS) with respect to all
“claims, liabilities, loss and expense of any liability imposed by law.” 

, 1013 (Miss. 1990). In Hopton, after the plaintiff’s personal injury suit was
tried and resulted in a verdict for the defendants, the trial court granted UPS’s
post-trial motion for attorney’s fees—to be paid by Hopton pursuant to the
indemnity provision. 

common law indemnity requisite that
“there must be legal liability before a claim of indemnity arises,” 

court reversed, finding that because both defendants prevailed in the case, UPS
was never faced with any claim or liability “imposed by law,” and thus, was not
entitled to indemnification for its expenses incurred in defending the suit,
including attorney’s fees. 

      Here, the attorney’s fee provision in the testing and inspection contract
entitled Wal-Mart to reimbursement for those attorney’s fees “caused by any
negligent act or omission” on the part of Qore in performing work under the
contract. Qore’s duty to reimburse Wal-Mart for its reasonable attorney’s fees
was limited accordingly to those fees proximately and legally “caused by” Qore’s
negligence, and the matter of causation could only be addressed once the jury
made findings on the issue of Qore’s negligence. Until then, Qore’s legal liability
remained latent for indemnification purposes. See 

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                                         No. 10-60266

(“[T]here must be legal liability before a claim of indemnity arises.”). Because
Wal-Mart’s indemnification rights were derivative of Qore’s negligent acts or
omissions, i.e., the fault allocated to Qore on the building repair claim, Qore is
only liable for the reasonable attorney’s fees Wal-Mart incurred in enforcing
those rights. All other fees were not “caused by” Qore within the meaning of the
testing and inspection contract, and could not be awarded thereunder.3 Wal-
Mart’s recovery should have been limited to those attorney’s fees incurred in
proving Qore’s liability on the building repair claim.
       Wal-Mart relies on Mauck v. Columbus Hotel Co. for the proposition that,
in Mississippi, a party seeking indemnity for attorney’s fees is entitled to recover
those fees incurred while proceeding against third parties “entangled in the
litigation.” See 

, 273 (Miss. 1999). But Mauck announced no such
standard, and no court has interpreted it in this way.
       In Mauck, the Columbus Hotel Company (“lessor” or “Columbus”) brought
an action in contract against Mauck and others (“the lessees”) for breach of a
long-term lease agreement. 

. The agreement provided that

       3
         The Court of Appeals of Mississippi has twice written on this issue on similar facts.
In A & F Properties, LLC v. Lake Caroline, Inc., 

(Miss. Ct. App. 2000), the
court was faced with a contract provision covering attorney’s fees. After determining that “the
parties were entitled only to the fees for enforcing the specific contract provisions on which they
prevailed,” the court reversed and rendered the jury’s award of attorney’s fees because
“[n]either bill was itemized in a way to determine what charges were billed on each issue.” 

(emphasis added). Finding this lack of evidentiary specificity inadequate as a matter
of law, the court set aside the jury’s fee awards. 

and Mechanical Contractors of Memphis, Inc. v. Tim Mote Plumbing, LLC,

(Miss. Ct. App. 2007), the Court of Appeals again addressed a contract dispute
in which the court found that the attorney’s fee clause entitled the moving party “to
reimbursement only for fees incurred enforcing the claim upon which it prevailed.” 

The court looked to whether the record contained sufficient evidence to distinguish
reimbursable from non-reimbursable fees and found that it did not: “None of the [proffered]
items describe the nature of the attorney’s fees in such a way that we can determine which
expenses relate to which claims.” 

The Court of Appeals found that the
movant’s failure of proof barred any award of attorney’s fees.

      We remand to the district court to determine the sufficiency of Wal-Mart’s evidence in
support of its attorney’s fee request.

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                                   No. 10-60266

upon breach, the lessees would be responsible for “all expenses occasioned by
[lessor] by reason of [lessees’] breach, including reasonable attorney’s fees.” 

Shortly after the suit was filed, two of the lessees’ creditors intervened
to protect their security interests in the lease, which they had acquired from the
lessees. 

273. After a trial, the chancellor found that the lessees had,
in fact, breached the lease agreement. 

Later, Columbus moved for
expenses and attorney’s fees, including those fees dedicated to litigating against
the two intervenors. 

      After noting that Columbus would not have had to litigate against the
third party intervenors had it not been for the lessee’s breach of contract, the
Mauck court held that Columbus was entitled to recover its attorney’s fees for
litigating against them. 

(“[I]t is clear that but for [the] breach there
would have been no need for [Columbus] to become entangled in the litigation
with” the intervenors.). But the Mississippi Supreme Court did not announce
an “entanglement in the litigation” standard in Mauck, as Wal-Mart suggests.
To the contrary, Mauck’s end result was based on the lease agreement itself,
which explicitly allowed Columbus to recover “all expenses occasioned by reason
of [lessee’s] breach, including reasonable attorney’s fees.” 

(“The
contract right to recover . . . includes those costs incurred in defending against
the intervenors as a result of the [lessees’] breach.”). The contract language in
Mauck was far broader than the indemnity provision at issue in this case.
                                        2
      In ruling on Wal-Mart’s motion for attorney’s fees, the district court opined
that “[o]n the surface it appeared Wal-Mart had overreached in bringing so
many claims against three different parties. However, deeper reflection shows
that a small claim against Qore could not have been brought without this larger
production.” The court then explained why, under our decision in Cobb v. Miller,

(5th Cir. 1987), a reduction in fees on account of Wal-Mart’s
several unsuccessful claims was not required:

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                                     No. 10-60266

      Where different claims can easily be separated plaintiffs should only
      recover attorney’s fees for successful claims. Under Fifth Circuit
      law attorney’s fees should not be reduced to a pro rata share where
      there are multiple defendants and interlocking claims that can not
      be easily separated. [citing 

.]
      In this case the court finds that the claims can not be easily
      separated. . . . The damages to one part of the property are
      inherently linked to damages to the adjoining parts of the property.
      As such, the court finds the two claims unsuccessfully brought
      against Qore do not create the need to reduce the damages award.
This case differs from Cobb in meaningful ways, however.
      First, Qore was found not liable on two of three claims submitted to the
jury. Therefore, the relevant question is whether these claims were inextricably
tied to the one claim for which Qore was found liable, such that the district court
was within its discretion in choosing not to partition attorney’s fees among Wal-
Mart’s successful and unsuccessful claims.4 Compare 

(“[T]he claims against the different defendants do not arise from a course of
conduct that is easily differentiated on the basis of each defendant.”), with 

(“We express no opinion on the propriety of reducing an attorney’s
fees award based upon the number of defendants liable where each defendant’s
course of conduct can be easily differentiated.”). We conclude that Wal-Mart’s
successful and unsuccessful claims were readily capable of partition for fee
award purposes.
      Wal-Mart’s attorney’s fees could have been easily segregated along two
lines: those fees incurred in proving liability relating to planning and design,
and those fees dedicated to proving liability relating to construction. Only Sain
and Qore were involved in planning and designing the Starkville store. The jury
found Sain not liable on any claim in this case, and Qore’s work at the planning
and design stage was performed under the geotechnical services contract, for


      4
        Whether Wal-Mart’s successful and unsuccessful claims were inextricably tied is a
question of fact.

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                                  No. 10-60266

which the jury also found no fault. By comparison, the jury’s liability findings
related to the store’s construction, where SSW and Qore were the only two
defendants involved. Qore’s work at this stage of the project was, of course,
governed by the testing and inspection contract. Wal-Mart’s successful and
unsuccessful claims were not so interwoven that the district court could not have
differentiated among Wal-Mart’s attorney’s fees incurred in prosecuting the
various claims and defendants. The district court clearly erred in finding
otherwise.
      Second, Cobb involved a fee award under the Civil Rights Attorney’s Fees
Awards Act, 42 U.S.C. § 1988, which authorizes courts to award reasonable
attorney’s fees to prevailing parties in any action to enforce provisions of the
federal civil rights laws. See 

. As the Supreme Court has
recognized repeatedly, § 1988 carries particular legislative intent to encourage
private enforcement. See, e.g., Fox v. Vice, No. 10-114, 563 U.S. __, 2011 U.S.
LEXIS 4182, at *53–54 (June 6, 2011) (“When a plaintiff succeeds in remedying
a civil rights violation, . . . he serves as a private attorney general, vindicating
a policy that Congress considered of the highest priority.”) (internal quotation
marks and citation omitted); City of Riverside v. Rivera, 

, 574 (1986)
(“Unlike most private tort litigants, a civil rights plaintiff seeks to vindicate
important civil and constitutional rights that cannot be valued solely in
monetary terms.”); Hensley v. Eckerhart, 

, 444 n.4 (1983) (“[T]he
public as a whole has an interest in the vindication of rights conferred by the
statutes enumerated in § 1988, over and above the value of a civil rights remedy
to a particular plaintiff.”) (Brennan, J., concurring in part and dissenting in
part). Our holding in Cobb, where we awarded the § 1988 plaintiffs–appellants
enhanced attorney’s fees, was predicated on this legislative intent. 

–35. But Cobb has no application in this private claim for attorney’s fees
sounding in Mississippi contract law. The district court’s reliance on Cobb in



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                                 No. 10-60266

informing the court’s fee award calculus was error; the court’s award cannot
stand. See 

.
                                       III
      Having found that the testing and inspection contract was the only basis
for an award of attorney’s fees, we conclude that the district court’s fee award
was an abuse of discretion. We VACATE the award of attorney’s fees and
REMAND for further proceedings consistent with this opinion.




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