Collection of Attorney’s Fees
In many instances litigation can be an expensive process. The Wright Law Group will take the time to create a realistic plan of action to address your needs while taking into account your budget. One thing that needs to be taken into consideration in any case is the payment of attorney’s fees. Many people mistakenly believe that the justice system provides that the winner in any court battle will be awarded their attorney’s fees. This is simply not the case, unless certain contract provisions or statutes permit otherwise.
When it comes to understanding whether or not a person is entitled to an award of attorneys fees there are two basic schemes: The English Rule (“loser pays”) and the American Rule (“every man for himself”). Many states, including Nevada, generally follow the “American Rule,” which provides that absent statutory authority or a contractual agreement between the parties, each party to litigation must bear its own attorney’s fees and may not recover those fees from an adversary.
There are some exceptions to the American Rule that are premised on underlying equitable or policy considerations. An award of attorney’s fees may be based on the court’s inherent authority to sanction serious misconduct in the judicial proceeding. Courts may also award fees as sanctions where litigation is instituted or unnecessarily prolonged through a party’s oppressive, vexatious, capricious, wanton, or bad-faith conduct, or where a claim is frivolous, unreasonable or without foundation. Bad Faith exists when a party litigates with the purpose of intentional harassment or unreasonable delay.
Generally, parties are free to provide for attorney’s fees by an express contractual provision. In fact, Nevada Statutes specifically state that the courts will not disturb such agreements. No one ever consciously enters into an agreement with the belief that they will end up in court. However, reality is quite different and many parties to contracts do find themselves as adversaries in arbitration or trial. Therefore, it is important that you have an attorney review any contract, particularly any provisions allowing for the recovery of costs or attorney’s fees, before you sign it.
Statutory Award of Attorney’s Fees
The compensation of an attorney for his or her services is typically governed by agreement between the client and the attorney and the courts will generally not interfere with such an agreement, and, lacking an agreement the parties are generally left to pay their own attorney’s fees. However, there are some circumstances where the Nevada Courts are permitted to award attorney’s fees to the prevailing party.
One such exception is a statute allowing the court to make an award of attorney’s fees to a prevailing party when the prevailing party has not recovered more than $20,000 or without regard to the recovery sought, when the court finds that the claim, counterclaim, cross-claim or third-party complaint of defense of the opposing party was brought or maintained without reasonable ground or to harass the prevailing party. Strangely, the Nevada Supreme Court has interpreted this statute to mean that the “prevailing party” is one who is awarded some sum of money. Thus, under this rule, a defendant who wins his case is still not considered a prevailing party. Other devises such as an offer of judgment would have to be employed (see below).
Another exception is when it is appropriate for the court to award attorney’s fees to impose sanctions or to punish or deter frivolous or vexatious claims and defenses. This is based on the belief that such claims and defenses overburden limited judicial resources, hinder the timely resolution of meritorious claims and increase the costs of engaging in business and providing professional service to the public. A claim or defense is frivolous or groundless where no rational argument can be advanced in its support, or it is not supported by any credible evidence or a reasonable person could not have expected its success.
There are some other rare instances where a prevailing party may claim his attorneys’ fees as damages, but this is generally only he has been forced into litigating a claim with a third party because of the action of the present adverse party.
Generally, the prevailing party to a suit is the one who successfully prosecutes the action or successfully defends against it, prevailing on the merits of the main issue. For purposes of awarding costs the trial court must look at the lawsuit as a whole to determine which party was the “winner” and which the “loser.” The determination is not a matter of mechanical measurement based solely on the amount of a party’s recovery. Rather, the court will analyze each claim of each party separately. The determination of a successful party is based upon success upon the merits, not upon damages.
Offers of Judgement
Even though the American Rule dictates that, without a contract or statute providing otherwise, the parties are left to pay their own attorneys fees, there are certain procedures that can be taken by an experienced attorney that can result in an award of attorney’s fees and costs being awarded to their client. One such procedure is called an “Offer of Judgment.”
The Rule relating to Offers of Judgment provides that at any time during the course of litigation, up to ten days before the trial, either party may serve a written offer to allow judgment to be taken in accordance with the terms and conditions of the offer. The judgment can be in favor or against the party making the offer.
If the other party accepts the offer of judgment they must do so within 10 days after the service of the offer by providing written notice that the offer is accepted. The offer and notice of acceptance together with proof of service will get filed with the court and the judgment will be entered according to the terms of the offer. The court will allow costs unless the terms of the offer preclude an award of costs. The judgment will be designated a compromised settlement. Once the amount of the offer of judgment is paid, the party against whom it is filed may obtain a dismissal of the claim, rather than a judgment.
If the offer of judgment is not accepted within 10 days after service, it will be considered rejected and deemed withdrawn. If the party that rejects an offer fails to obtain a more favorable judgment they cannot recover any costs or attorney’s fees and cannot recover interest for the period after the service of the offer and before the judgment. Further, and the person rejecting the offer must pay the offering party’s post-offer costs, applicable interest on the judgment from the time of the offer to the time of entry of the judgment and reasonable attorney’s fees incurred by the offering party from the time of the offer.
The offer of judgment is not filed and not revealed to the court until after it has made its decision on the merits of this case. This is so that the offer does not cloud the judgment of the court and no party is prejudiced for having attempted to settle the case.
There has been much litigation simply over the interpretation of the rules governing the recovery of one’s attorneys’ fees and needless to say, the law is complex and requires an experienced attorney to properly navigate them and strategize their proper implementation.
“Costs” are out-of-pocket expenses other than attorneys’ fees. Costs that can be awarded by the court include, filing fees, reporters fees for depositions, including a reporter’s fee for one copy of each deposition, juror’s fees and expenses, together with reasonable compensation of an officer appointed during jury deliberations, fees for witnesses at trial, pretrial hearings and deposing witnesses, unless the court finds that the witness was called at the instance of the prevailing party without reason or necessity, reasonable fees of not more than five expert witnesses in an amount of not more than $1500 for each witness, unless the court allows a larger fee after determining that the circumstance surrounding the experts testimony were of such necessity as to require the larger fee, Reasonable fees for necessary interpreters, the fee of any sheriff or licensed process server for the delivery or service of any summons or subpoena used in the action, compensation for the official reporter or reporter pro tempore, reasonable costs for any bond or undertaking required as part of the action, fees for court bailiff or deputy marshal who was required to work overtime, reasonable costs for photocopies, reasonable costs for postage, reasonable costs for travel and lodging incurred taking depositions and conducting discovery, and any other reasonable and necessary expense incurred in connection with the action, including reasonable and necessary expenses for computerized service for legal research.
These costs can be considerable. A skilled and experienced attorney can make the difference in whether or not your case is successful. The Wright Law Group, P.C. has more than 20 years commercial litigation experience and is well equipped to assist you in handling your case. Please call us at 702-405-0001 to schedule a consultation.