Prevailing party and attorney fees

 A person from Washington outlined the following scenario to ask (1) whether attorney fees would be awarded, and, (2) if so, how they would be calculated:

- Two parties agreed that the following clause will apply in the event of a lawsuit: 

"The prevailing party shall have the right to collect from the other party its reasonable costs and necessary disbursements and attorney' s fees incurred in enforcing this Agreement."

- The plaintiff filed suit. He was awarded only half of the amount he claims the defendant owes to him.

- The defendant alleges plaintiff's negligence caused defendant's costs to exceed the amount for which the plaintiff filed suit.

The limited information in this scenario suggests that the plaintiff is entitled to attorney fees. But it is important for people to become aware that agreeing to provisions about attorney fees is tremendously risky. Those provisions always should be avoided. The "American rule" that by default each party bears his own attorney fees puts the US legal system on a more evolved position than most of its counterparts worldwide, and it is against one's best interest to decline that tenet when entering an agreement.

The language of the aforementioned clause resembles RCW 4.84.330. Absent any other details, it seems reasonable to adopt the "spirit" of that statute and its definition of "prevailing party": "the party in whose favor final judgment is rendered". Accordingly, the first question requires identifying who is to be considered the prevailing party in a court dispute where only half of the amount the plaintiff requested was awarded: Did the plaintiff prevail for having obtained an award? or did the defendant prevail for preventing the plaintiff from being granted the full amount he sought? This is equivalent to asking whether the glass is half full or half empty.

Black's Law Dictionary cites case law reflecting that "prevailing party" is the party "prevailing on the main issue, even though not to the extent of his original contention". This clarification favors interpreting the glass as being half full. One recent application of that principle is Franciscan Alliance Inc. v. Metzman, 192 N.E.3d 957, 961 (2022) (affirming the award of full fees to the prevailing party notwithstanding that the adversary defeated one of the three claims). This suggests that the prevailing party in the outlined scenario is likely entitled to at least a portion of attorney fees, provided that the relief obtained in court is pursuant to the main issue(s) underlying the lawsuit.

Blackburn v. Goettel-Blanton, 898 F.2d 95 (1990) reflects that a provision intended for contract claims would be unavailing for non-contractual claims: "[A] strong argument might have been made that the inflated tort claims, not the relatively minor contract claim, were the focus of plaintiffs' lawsuit". But making that distinction is the non-prevailing party's responsibility: "As defendant did not raise any of these arguments, we do not consider them". Although the outlined scenario nowhere indicates that the claims are not contractual, this point is brought up here because the parties should always be prepared to litigate this issue.

Having determined who the prevailing party is, the next issue is about quantifying the award of attorney fees. Heide Urness Law, PLLC, v. Vertical Raise, LLC (Washington COA, July 24, 2023) cites Washington case law indicating this matter entails what is known as the "lodestar method", "determining that the number of hours and hourly rate are reasonable [and] exclud[ing] any wasteful or duplicative hours". The Blackburn case reflects that legislation in jurisdictions such as Hawaii sets  additional constraints to the amount of attorney fees that may be awarded. This does not seem to be the case under Washington law.

The defendant's argument about plaintiff's alleged negligence might be relevant for quantifying the award of attorney fees, since that issue pertains to the requirement of reasonableness to which courts are expected to adhere. For instance, Franciscan at 969 lists as criteria whether a case "required extensive time and labor, involved complex legal and factual issues, and that this litigation was "highly adversarial" and included multiple rounds of summary judgment, an unsuccessful mediation, and discovery disputes". However, it is also in a client's best interest to learn how to scrutinize his own attorney's decisions. An excess of one's attorney fees might have more to do with one's attorney misconduct or incompetence than with the adversary's negligence. In that case, fees are likely unreasonable and therefore not covered by a provision that explicitly refers to reasonable fees. The lack of details in the outlined scenario precludes providing some guidance on that issue.

Interestingly, the Blackburn court indulged in criticism at the parties for how "[a] minor dispute that long ago should have been resolved by the parties without the help of lawyers has been transformed into an attorney-fee-generating machine". That criticism seems misdirected as well as hypocritical to the extent the court ignores the attorneys' evident fault and financial incentive for the spiral of vexation in the court proceedings. For instance, it is obvious that "removing the case to federal court [...] and heaping on every conceivable procedural and substantive defense" is not something that would occur to --let alone by done by-- a layman party with no legal background. That pattern of litigation decisions and unnecessary obstacles is indicative of an attorney's violation of his legal and professional obligation to discourage and avoid wasteful litigation. This duty is not just toward the attorney's client, but also on grounds of "judicial economy" that courts like to mention quite often. The Blackburn court criticizes the clients alleged intransigence but plays a blind eye on those who profit from, encourage, and know how to operate that "attorney-fee-generating machine": both parties' attorneys, who ironically are also called "officers of the court".

Even if litigants are lucky enough to have their dispute decided by honest, competent judiciary, the Blackburn opinion showcases how a clause on attorney fees can be detrimental to both parties:

- A clause intended only for "the relatively minor contract claim" ended up being applied to "inflated tort claims", something that the attorney for the non-prevailing party ought --and, according to the court opinion, he failed-- to point out.

- Even the prevailing party is at risk of bearing much of his own attorney fees anyway because of statutory constraints and/or because not all the fees are necessarily reasonable.