Contributor: Lee Grossman
Recovering Attorney’s Fees
One of the most popular questions I get at the start of every litigation case is: “Does the other side have to pay my attorney’s fees if I win?” In some instances, the ability to recover attorney’s fees may factor into the client’s desire to pursue full-blown litigation. If attorney’s fees are not recoverable in a case, the cost of attorney’s fees paid by the client may end up higher than the amount of damages recovered by winning in the lawsuit.
The American Rule
North Dakota generally applies the American Rule for attorney’s fees. Rocky Mountain Steel Foundations, Inc. v. Brockett Company, LLC, 2019 ND 252, ¶ 9, 934 N.W.2d 531. This is an assumption by the court that each party to a lawsuit will pay its own attorney’s fees, regardless of who wins and who loses. Id. Prevailing parties (the winners) are not allowed to recover attorney’s fees unless authorized by statute or by contract. Id.
Determining the prevailing party in a lawsuit is based on the merits of the case, not the amount of damages. Dowhan v. Brockman, 2001 ND 70, ¶ 11, 624 N.W.2d 690. If opposing parties have asserted claims against each other, and each of the parties prevail on some of the claims against the other, there may not be a single prevailing party who is entitled to attorney’s fees. Id. The prevailing party is most often the one who wins its claims without losing any claims to the opposing party. Full attorney’s fees may still be awarded to the prevailing party even if the amount of attorney’s fees exceeds the amount of damages recovered. See e.g., Cass County Joint Water Resource District v. Erickson, 2018 ND 228, 918 N.W.2d 371 (damages for eminent domain action were awarded to landowner in the amount of $48,200, while attorney’s fees were awarded in the amount of $114,346.37).
Attorney’s Fees By Statute
There are several statutes in North Dakota that allow one party to recover its attorney’s fees. As with everything in the law, there are always exceptions. This is by no means an exhaustive list of every statute that permits the recovery of attorney’s fees:
- N.D.C.C. § 27-08.1-04. If a plaintiff brings a small claims action against the defendant, and the defendant elects to remove the case from small claims court to district court, the plaintiff is entitled to attorney’s fees if the plaintiff prevails.
- N.D.C.C. § 28-26-01(2). In civil actions, if the court finds a claim for relief was frivolous, it may award reasonable attorney’s fees to the prevailing party.
- N.D.C.C. § 28-26-31. In civil actions, if the court finds pleadings were not made in good faith, it may award reasonable attorney’s fees to the prevailing party.
- N.D.C.C. § 32-15-32. The landowner in an eminent domain case may recover reasonable attorney’s fees for all judicial proceedings.
- N.D.C.C. § 35-24-19. In any action to enforce a lien on well or pipeline construction, the prevailing party is entitled to recover reasonable attorney’s fees, provided that no costs may be taxed against the owner if at least 10 days prior to trial, the owner paid to the court the maximum liability under the original contract.
- N.D.C.C. § 35-27-24.1. In any action to enforce a construction lien, the owner who successfully contests the validity or accuracy of a construction lien may be awarded all costs and reasonable attorney’s fees. The lien claimant is not afforded the same right.
Attorney’s Fees By Contract
Parties who enter contracts with each other can include provisions that determine who is entitled to recover attorney’s fees if there is a dispute arising from the contract. If there is no statute that allows the recovery of attorney’s fees, the contracting parties must have an attorney’s fees award provision written into the contract in order for the court to award attorney’s fees to the prevailing party. Many standard form construction contracts, like those provided by AIA or ConsensusDocs, already include attorney’s fees provisions.
One exception to contractual attorneys’ fees is that any provision for attorney’s fees is void in a note, mortgage, or other instrument related to debt. N.D.C.C. § 28-26-04.
If you are contemplating litigation or are already in the middle of litigation and have questions, please contact us!