school of government the university of north carolina at chapel hill© 2004 attorney fees in civil...

School of GovernmentThe University of North Carolina at Chapel Hill © 2004

Attorney Fees in Civil Cases

Mark Weidemaier

District Court Judges Fall ConferenceSeptember 29 – October 1, 2004


G.S. 6-21.1• Type of suit

– Personal injury, “property damage”– Insured/beneficiary v. insurance co. if unwarranted refusal to pay claimif

– “Judgment for recovery of damages” is $10,000 or less

• To whom?– Attorney for “litigant obtaining a judgment for damages”


Required findings:

1. Whether to award fees2. Reasonableness of fee award


Required findings:Whether to award fees:

1. Settlement offers before action instituted2. Offers of judgment, and whether “judgment

finally obtained” was more favorable3. Whether defendant unjustly exercised superior

bargaining power4. Context in which the dispute arose (in suits

against insurer)5. Timing of settlement offers 6. Amount of any settlement offers compared to jury

verdict


Required findings:

Reasonableness of fee:1. time and labor expended2. the skill required3. customary fee for like work4. the experience or ability of the attorney


Defining “judgment for the recovery of damages” . . .

P sues D for injuries after automobile accident. Jury verdict for P:

– $8500 in compensatory damages– $2500 in punitive damages

“Judgment for the recovery of damages <= $10000?



P sues D for injuries after automobile accident. Jury verdict for P:

– $8500 in compensatory damages– $2500 in punitive damages

“Judgment for the recovery of damages <= $10000?

YES


Jury verdict for P:– $8500 in compensatory damages– $2500 in punitive damages

Assume P also receives:– $1000 in prejudgment interest (G.S. 24-5)– $750 in taxable costs


“Judgment for the recovery of damages” <= $10000?



Jury verdict for P:– $8500 in compensatory damages– $2500 in punitive damages

Assume P also receives:– $1000 in prejudgment interest (G.S. 24-5)– $750 in taxable costs

“Judgment for the recovery of damages” <= $10000?

YES


“Judgment for the recovery of damages” . . .

Computing:

•Contemplates only compensatory damages

• Includes prejudgment interest but probably not discretionary costs


Who is entitled to recover . . .?

P sues D for breach of termite inspection contract, alleges $5000 damage to home. Verdict for P = $5000. P moves for fees. D objects that suit is not a “personal injury or property damage suit.”

May court award fees?



P sues D for breach of termite inspection contract, alleges $5000 damage to home. Verdict for P = $5000. P moves for fees. D objects that suit is not a “personal injury or property damage suit.”

May court award fees? NO


No fees in breach of contract cases.

Negligent performance of contract?– injury occurs to person or property of someone

other than promisee

– personal injury to promisee, or other property of promisee damaged

– promisor owed duty as a matter of law (common carriers)

– willful injury or conversion



After car accident, P sues D for personal injury. D counterclaims for damage to car. Jury finds P was negligent and awards D $2500.

Is D entitled to fees?



After car accident, P sues D for personal injury. D counterclaims for damage to car. Jury finds P was negligent and awards D $2500.

Is D entitled to fees? YES


What fees may D recover?

•Not entirely clear; best rule:

— Counterclaim only, unless

— Work overlaps; work on defense furthers counterclaim


G.S. 6-21.1 summary •Computing

– Contemplates only compensatory damages– Includes prejudgment interest but probably

not discretionary costs

•To whom? – includes counterclaims (attorney for “litigant

obtaining a judgment for damages”)

•For what?– Prosecuting successful claims only, unless work

overlaps with or furthers successful claim


Rule 68 Offer of Judgment

Permits party defending against a claim to make an offer of judgment for specified amount, “with costs then accrued.” If “judgment finally obtained” is not more favorable than offer, “the offeree must pay the costs incurred after the making of the offer.”


Rule 68 – steps:

1. Calculate “judgment finally obtained”

2. Determine amount of offer

3. Compare “judgment finally obtained” to offer

4. If “judgment finally obtained” is not more favorable, plaintiff pays costs incurred after offer


Rule 68: What is the “judgment finally obtained” . . .?

P declines offer of “$5000 inclusive of any and all costs, fees, and interest.” Jury returns verdict awarding P $500.

– At time of offer, P’s court costs were $200 and accrued interest was $50

– After trial, P’s costs total $500 and accrued interest is $100

What is the “judgment finally obtained by P?”

$750$500 $1100



P declines offer of “$5000 inclusive of any and all costs, fees, and interest.” Jury returns verdict awarding P $500.

– At time of offer, P’s court costs were $200 and accrued interest was $50

– After trial, P’s costs total $500 and accrued interest is $100

What is the “judgment finally obtained by P?”

$750$500 $1100 (for now)


P declines offer of “$5000, inclusive of any and all costs, fees, and interest.”

– Verdict = $500– Court costs = $500– Prejudgment interest = $100

P seeks attorney fee of $5000.

Is “judgment finally obtained” > offer?



P declines offer of “$5000, inclusive of any and all costs, fees, and interest.”

– Verdict = $500– Court costs = $500– Prejudgment interest = $100

P seeks attorney fee of $5000.

Is “judgment finally obtained” > offer?


Y, if fees are awarded


Rule 68 – steps:1. Calculate “judgment finally obtained”

• Includes verdict + court costs and interestaccrued before and after offer

• Includes pre- and post-offer attorney fees (if awarded)


P declines offer of “$1000, plus costs, interest, and fees accrued as of the date of this offer.”

Verdict is $500, plus:

– $500 in court costs ($250 pre-offer)

– $100 interest ($50 pre-offer)

– $1000 attorney fee ($500 pre-offer)

How much is offer?

Rule 68: Determine amount of offer . . .







How much is offer?

Rule 68: Determine amount of offer . . .

$1800



• Includes verdict + costs and interest accrued before and after offer

• Includes pre- and post-offer attorney fees.

2. Determine amount of offer• Is offer for a lump sum?






• “$5000 for all damages, attorney fees taxable as costs, and the remaining costs accrued at the time this offer is filed.”

• “$5000 together with all costs then accrued.”







• “$5000 together with all costs then accrued.” Y







• “$5000 together with all costs then accrued.” YN







How much is offer?

What is “judgment finally obtained?”

Rule 68: Compare “J.F.O.” to offer . . .

$1800







How much is offer?

What is “judgment finally obtained?”


$1800

$2100







How much is offer?

What if court does not award fees?”


$1800







How much is offer?

What if court does not award fees?”


$1800

$1100







How much is offer?


$1800So, how much will judgment actually be?







How much is offer?


$1800So, how much will judgment actually be?$800




• Includes pre- and post-offer attorney fees (if awarded)

2. Determine amount of offer• Is offer a lump sum offer?

3. Is “judgment finally obtained” more favorable than offer?

4. If no, plaintiff pays costs incurred after offer• May still recover pre-offer interest, costs, and fees (if

awarded)


Appeal

• Stays further proceedings in trial court “upon the judgment appealed from, or upon the matter embraced therein.” G.S. 1-294.

• Likely divests court of jurisdiction to consider fees motion (see handout)

• Possible exception where motion filed after rendition of judgment, but before entry

• Fees are generally available for appeal & post-trial motions

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