School of Government The University of North Carolina at Chapel Hill© 2004 Attorney Fees in Civil Cases Mark Weidemaier District Court Judges Fall Conference September 29 – October 1, 2004

School of Government The University of North Carolina at Chapel Hill© 2004 G.S Type of suit – Personal injury, “property damage” – Insured/beneficiary v. insurance co. if unwarranted refusal to pay claim if – “Judgment for recovery of damages” is $10,000 or less To whom? – Attorney for “litigant obtaining a judgment for damages”

School of Government The University of North Carolina at Chapel Hill© 2004 Required findings: 1.Whether to award fees 2.Reasonableness of fee award

School of Government The University of North Carolina at Chapel Hill© 2004 Required findings: Whether to award fees: 1.Settlement offers before action instituted 2.Offers of judgment, and whether “judgment finally obtained” was more favorable 3.Whether defendant unjustly exercised superior bargaining power 4.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

School of Government The University of North Carolina at Chapel Hill© 2004 Required findings: Reasonableness of fee: 1.time and labor expended 2.the skill required 3.customary fee for like work 4.the experience or ability of the attorney

School of Government The University of North Carolina at Chapel Hill© 2004 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?

School of Government The University of North Carolina at Chapel Hill© 2004 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? YES

School of Government The University of North Carolina at Chapel Hill© 2004 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 Defining “judgment for the recovery of damages”... “Judgment for the recovery of damages” <= $10000?

School of Government The University of North Carolina at Chapel Hill© 2004 Defining “judgment for the recovery of damages”... 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

School of Government The University of North Carolina at Chapel Hill© 2004 “Judgment for the recovery of damages”... Computing: Contemplates only compensatory damages Includes prejudgment interest but probably not discretionary costs

School of Government The University of North Carolina at Chapel Hill© 2004 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?

School of Government The University of North Carolina at Chapel Hill© 2004 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? NO

School of Government The University of North Carolina at Chapel Hill© 2004 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

School of Government The University of North Carolina at Chapel Hill© 2004 Who is entitled to recover...? 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?

School of Government The University of North Carolina at Chapel Hill© 2004 Who is entitled to recover...? 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

School of Government The University of North Carolina at Chapel Hill© 2004 What fees may D recover? Not entirely clear; best rule: — Counterclaim only, unless — Work overlaps; work on defense furthers counterclaim

School of Government The University of North Carolina at Chapel Hill© 2004 G.S 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

School of Government The University of North Carolina at Chapel Hill© 2004 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.”

School of Government The University of North Carolina at Chapel Hill© 2004 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

School of Government The University of North Carolina at Chapel Hill© 2004 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

School of Government The University of North Carolina at Chapel Hill© 2004 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 (for now)

School of Government The University of North Carolina at Chapel Hill© 2004 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? Rule 68: What is the “judgment finally obtained”...?

School of Government The University of North Carolina at Chapel Hill© 2004 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? Rule 68: What is the “judgment finally obtained”...? Y, if fees are awarded

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” Includes verdict + court costs and interest accrued before and after offer Includes pre- and post-offer attorney fees (if awarded)

School of Government The University of North Carolina at Chapel Hill© 2004 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...

School of Government The University of North Carolina at Chapel Hill© 2004 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... $1800

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” 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?

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” 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.”

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” 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.” Y

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” 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.” Y N

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800 $2100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800 $2100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800 $2100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800 $2100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What is “judgment finally obtained?” Rule 68: Compare “J.F.O.” to offer... $1800 $2100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What if court does not award fees?” Rule 68: Compare “J.F.O.” to offer... $1800

School of Government The University of North Carolina at Chapel Hill© 2004 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? What if court does not award fees?” Rule 68: Compare “J.F.O.” to offer... $1800 $1100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What if court does not award fees?” Rule 68: Compare “J.F.O.” to offer... $1800 $1100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What if court does not award fees?” Rule 68: Compare “J.F.O.” to offer... $1800 $1100

School of Government The University of North Carolina at Chapel Hill© 2004 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? What if court does not award fees?” Rule 68: Compare “J.F.O.” to offer... $1800 $1100

School of Government The University of North Carolina at Chapel Hill© 2004 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: Compare “J.F.O.” to offer... $1800 So, how much will judgment actually be?

School of Government The University of North Carolina at Chapel Hill© 2004 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: Compare “J.F.O.” to offer... $1800 So, how much will judgment actually be? $800

School of Government The University of North Carolina at Chapel Hill© 2004 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: Compare “J.F.O.” to offer... $1800 So, how much will judgment actually be? $800

School of Government The University of North Carolina at Chapel Hill© 2004 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: Compare “J.F.O.” to offer... $1800 So, how much will judgment actually be? $800

School of Government The University of North Carolina at Chapel Hill© 2004 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: Compare “J.F.O.” to offer... $1800 So, how much will judgment actually be? $800

School of Government The University of North Carolina at Chapel Hill© 2004 Rule 68 – steps: 1.Calculate “judgment finally obtained” Includes verdict + costs and interest accrued before and after offer 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)

School of Government The University of North Carolina at Chapel Hill© 2004 Appeal Stays further proceedings in trial court “upon the judgment appealed from, or upon the matter embraced therein.” G.S 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