Can I Recover My Attorney’s Fees?

There is a widely held belief in the business and real estate community that the party that “wins” its lawsuit is entitled to recover all of their attorney’s fees.  And nearly as often, this belief is incorrect.

Whether a particular client is able to recover their attorney’s fees and costs depends on the facts of the situation, the type of case involved, the amount in controversy, what the relevant contracts provide for, and the applicable statutory and case law.  If you have gathered that the answer to “Can I recover my attorney’s fees?” is complex, you are right.  Nonetheless, there are some general rules of the road that should help you know at least which questions to ask.

The best place to find the answer to your question is in any contract between the parties.  In real estate transactions the place to look is the Purchase and Sale Agreement.  Among those of you involved in Property Management, look to your leases and rental agreements.  Generally speaking, courts will enforce contractual clauses relating to attorney’s fees.  In Washington, courts will even read into a clause awarding fees to only one party, to provide fees to either side, depending on who prevails.

If your contracts are silent on the issue of fees, unless you fit into some of the other categories described below, the most you will be able to recover is $125 in “statutory” attorney’s fees.  This has a severe impact on whether you decide to pursue a claim or not.  After all, who wants to spend $10,000 in fees going to trial over a $25,000 septic disaster, only to find they must pay their own fees.  This effectively reduces your award from $25,000 to $15,000, leaving you still $10,000 behind.

Unfortunately, some of the standardized Purchase and Sale Agreements do not contain attorney’s fee clauses.  Examine your documents carefully.  If necessary, talk with your brokerage’s attorney regarding ways to modify the form for use in a particular situation.

If there is no attorney’s fee clause in your contract, then look to the statutes.  The law of our state, otherwise known as the Revised Code of Washington, contains numerous special provisions for the award of attorney’s fees, as well as one general rule.  The best examples of such special provisions relating to real estate are The Consumer Protection Act (RCW 19.86), and the Residential Landlord/Tenant Act (RCW 19.18).  Both contain clear language awarding attorney’s fees to injured parties, depending upon the matter being sued upon.  Another place to look is RCW 4.84.250, which awards fees to the “prevailing party” regardless of what type of case it is.  Instead, it is tied to the amount in controversy.  If it is less than $10,000, the prevailing party is entitled to request its fees.  This chapter also spends a great deal of time defining how you determine who is “the prevailing party.”  In its short form, you are considered the prevailing party if you are awarded more at trial then the settlement offer made prior to trial.  The Court sees these settlement offers only after the trial.

Finally, there is a good “catch all” clause for attorneys’ fees, found in RCW 4.84.080, which awards $125 in “statutory attorney’s fees” to the prevailing party.  This statute is sorely out of date.  Nevertheless, it is still in effect, and remains the statute of choice for such non-contract/non monetary recovery cases, such as boundary line disputes and quiet title actions.

The third source of authority for recovery of attorney’s fees and costs is judge-made law.  Over the years, the courts have found some cases so obnoxious that they will allow attorney’s fees even though not provided for in contract or statute.  An example of this type of case is malicious prosecution.  For real estate cases, a more relevant example would be the Court Rules adopted by our state Supreme Court.  Under CR11, a court has the authority to sanction parties and their attorneys for bringing “frivolous” (i.e. stupid) cases.

This brief overview is designed to let you know this issue of attorney fee recovery is a complex one.  Do not fall prey to the idea that, “Of course I can recover my fees, I have a great case.”  Always look to your contract first, and then the applicable statutes and judge-made rules and law.  Once you have this information in hand, you can then make an informed decision on whether you wish to move forward with your case.

Published August 1997

This article contains information of general interest, and is not intended to be, nor should it be relied upon as a substitute for specific legal advice.