Without fail, my clients will always ask, “Can I recover attorney fees from the dirt bag I am suing?” (Okay, maybe not in these exact, polite terms).
My answer is always the same: “Maybe.”
In Utah, and every other state, each party is typically responsible for their own attorney fees. There are exceptions. For example, you can recover attorneys’ fees if a statute says so or if a party files or defends a lawsuit in bad faith. Most often, however, attorneys’ fees are awarded based on a contract or agreement.
Most contracts contain a generic attorneys’ fees provision, similar to this:
“In the event of any breach of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs from the other party.”
Usually, these generic provisions will do the trick. Sometimes, however, courts refuse to award attorney fees because these generic provisions are not clear (e.g., who is the “prevailing party”) or may not apply to your suit (e.g., you are suing for tort, but the agreement only allows you to recover for a breach of the contract).
For example, assume “A” sues “B” for 1 million dollars for breach of contract. “B” offers to settle the case early on for 100,000 dollars. “A” refuses to settle. Both parties spend tens of thousands of dollars litigating the case and the jury ultimately awards “A” ten thousand dollars. Who is the “prevailing party”? “A” technically “won,” right? But it received significantly less than the amount it demanded. Is “A” actually the prevailing party?
Attorneys’ fees provisions matter. All too frequently, parties unnecessarily end up paying their own attorney fees—or even worse, are forced to pay their opponent’s fees—because they either failed to include an attorney fee provision in their contracts or failed to carefully draft it.
The solution: Before entering into a contract make sure you have a well-thought, intentional attorneys’ fees provision, not a generic provision that may not be enforceable and will leave you paying the bill.
Not sure where to begin? Give us a call.