One of the most common questions a client asks when considering whether to file a lawsuit is “can I get an award for attorney fees?” The answer to this question is a very unsatisfying “maybe.”
As a general rule, in the American legal system, parties each pay their own attorney fees. Utah follows the “American rule” regarding legal fees, with the exception that legal fees can be awarded if allowed by a specific contract provision or statute, or if it can be proven that the other party asserted claims or defenses in bad faith.
Even so, an award of attorney fees is not always a given. Even if authorized by a contract or statute, the right to an award extends only to the prevailing party. Determining who prevailed in litigation can often be difficult, especially when the parties assert claims against each other and the parties obtain mixed results.
Under Utah precedent, trial courts are tasked with identifying the prevailing party in a litigation by applying a “common sense flexible and reasoned approach to determine which party, if any, is the prevailing party.” Fisher v. Davidhizar, 2021 UT App 38, ¶ 30, 491 P.3d 110, 117. Under this approach, “the court not only considers which party obtained the net judgment, but also applies several ‘common sense factors.’” Id. These factors include, “(1) contractual language, (2) the number of claims, counterclaims, cross-claims, etc., brought by the parties, (3) the importance of the claims relative to each other and their significance in the context of the lawsuit considered as a whole, and (4) the dollar amounts attached to and awarded in connection with the various claims.” R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 25, 40 P.3d 1119, 1127. Further confusing the issue is Utah case law holding that “in some circumstances both parties may be considered to have prevailed.” R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 24, 40 P.3d 1119, 1126. Ultimately, Utah law “leave[s] it to the trial courts’ discretion to decide which additional common sense perspectives are most appropriate to consider,” in determining the prevailing party in a litigation.” A.K. & R. Whipple Plumbing & Heating v. Guy, 2004 UT 47, ¶ 26, 94 P.3d 270, 277.
As can be seen from this case law, determining who is entitled to an award of attorney fees after litigation is often a confusing, uncertain, and difficult task with no guaranties. The takeaway . . . if you decide to sue, don’t expect an award of attorney fees. That way, if you recover your attorney fees, its a bonus!