Can we recover our attorney fees if we win a contract case? For most of my practicing career, I have had to answer that very common client question with a "no" or "probably not." In 2011, the General Assembly passed NCGS 6-21.6, which authorizes reciprocal attorney fee provisions in business contracts - so now for those of us in the business litigation field the answer to that client question may very well be "yes." Construction lawyers, though, have long been able to give at least a "maybe" answer to that question where the plaintiff's complaint seeks to enforce a lien or bond claim, under the provisions of NCGS 44A-35 that allow for the winner to recover attorneys fees (in the judge's discretion) under the right circumstances.
Whatever the statutory basis of an attorney fees award, what exactly does the judge need to include in the order regarding the reasonableness of the amount? There had been some debate about this issue before the recent Court of Appeals decision of Browns Builders Supply v. Johnson, but the opinion written by Judge Dillon has now clarified the law supporting these awards. As far as factors go, four is the number we shall count, and the number of the counting shall be four. (I have thus set up a series of jokes for Monty Python fans, which they can now gleefully perform while the rest of us read on.)
The plaintiff in Brown prevailed on its lien claim, then sought attorney fees under Chapter 44A. The trial judge awarded attorney fees and make certain findings to support the amount of the award. Arguing the findings insufficient under Supreme Court precedent, the defendant appealed. In 1995, the Supreme Court had affirmed per curiam the Court of Appeals decision in NC Department of Corrections v. Myers, requiring the amount of an attorney fees award to be justified by findings in the order as to 1) the time and labor expended by the attorney, 2) the skill required to perform the legal services, 3) the customary fee for like legal work, and 4) the experience or ability of the attorney. However, in 1992, the Supreme Court in Dyer v. State of NC had approved of an order for fees that did not include express findings about the ability of the attorney or the customary fee for like work. To resolve this tension in the precedent, Judge Dillon reasoned that given the number of decisions since 1995 applying the four-factor test outlined in Myers, this more stringent and more recent test must be the law. Because the order in Brown did not check the boxes for all four factors, the case was remanded to the trial court to make the relevant findings.
((For those readers who still have in their inbox last month's Resource, pull it back up and compare/contrast how this decision dealt with incongruent precedent versus how the Graham case about continuing trespass was decided. You will find it interesting.))
Synopsis provided by David W. Hood, Patrick Harper & Dixon, LLP
