#attorneyfee

[saltyexpertnut-blog]

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[centrawilliams]

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[cpapartners]

Lesson From The Tax Court: Taxpayer Who Got $1.6m Assessment Reduced To $170k Not Entitled To Costs (TaxProf Blog) - To get awards of costs and attorneys fees under §7430, a taxpayer must be a “prevailing party.” Taxpayers who jump that hurdle then face a bunch of other requirements, such as a net worth requirement, a very strict administrative exhaustion requirement and, most difficult of all, the requirement that the IRS’s position in the proceeding was not substantially justified 

[willdenham-blog1]

Attorney’s Fees in Texas Business Litigation: Who Wins What?

In today’s market, the costs of business litigation in Texas are significant. Lawyer fees often eclipse the amount in controversy.  And for many of our clients who are new to litigation, the first question is: If we win, can we get our attorney’s fees back?  In other words, if the other side is wrong (as we way), can we make them pay our legal bills?

It is a common assumption that the winner in a lawsuit should recover the amounts expended for litigation.  This seems inherently fair to many of our less experienced clients.  Often, these clients believe (understandably) that the “loser should pay.”  And that is, in fact, the rule in several countries, including the U.K.

Texas Follows the American Rule: Generally, Litigants Pay Their Own Way.

But Texas follows the American rule: Litigants must pay their own legal costs - no matter what the outcome - unless there is a contract, statute, or other grounds for forcing the opposing party to do so.  In other words, the general rule is that you are responsible for your own legal fees, whether you win or lose.

But the caveats are important.  They highlight the most common grounds for obtaining an award of attorney’s fees in a successful commercial case.  Let’s briefly look at the first two of these exceptions: the “contract” exception, and the “statutory” exception.

Texas’s First Big Exception: Parties Can Contract Their Way to an Award.

First, if there is a contract, then the parties are generally free to decide (and agree upon) whether and how any party can win attorney’s fees in a dispute.  Lawyers often talk about this as an “allocation of risk” or “fee-shifting”.  This is accomplished according to the words and terms of the contract.

For instance, a contract may state simply: “Any party who prevails in a dispute against the other party concerning this agreement is entitled to--and shall be awarded--all of its attorney’s fees, costs, and expenses in litigation.”  Or the contract may go the other way: “The parties agree that no matter who prevails in any dispute concerning this agreement, no party shall ever be entitled to attorney’s fees, costs, and expenses and shall only be entitled to its actual damages.”

But these provisions, no matter how “plain” they may sound, can bring up their own difficulties.  For instance, it can sometimes be difficult to determine who prevails.  Let’s say that a seller sues for breach-of-contract and the buyer sues back (brings a counterclaim) for deceptive trade practices--and the jury agrees that both claims succeed?  What if both parties are awarded just $1--can that justify a fee award of $100,000?  Or what if the jury awards amounts that simply cancel each other out? 

Likewise, what happens when you have a verbal contract?  Verbal contracts are sometimes enforceable and sometimes not.  When they are, should you still be entitled to an award of attorney’s fees under the contract (assuming that the parties in fact agreed to that)?  Technically, the answer may be yes.  But good luck convincing a judge or jury that the parties had that understanding.

Texas’s Second Big Exception: Statutes, Especially Texas Civil Practices & Remedies Code Section 38.001.

Second, the Legislature has the power to make exceptions to the general American rule.  These statutory carve-outs are extremely varied.  For instance, the Texas Legislature has allowed successful litigants to win back their attorney’s fees in cases involving residential security deposits, deceptive trade practices, and human trafficking.

Section 38.001: The Basics.

But the most common statute relied on business litigation cases in Texas is Texas Civil Practice and Remedies Code, Section 38.001.  Almost invariably, one party to a commercial dispute in Houston will name this statute as a basis for recovering its attorney’s fees.

According to this provision, a person may seek reimbursement for attorneys’ fees if the underlying claim falls within certain categories, including:

● Services and labor; ● Materials; ● Fees related to overcharging for freight, or lost or damaged freight; ● Fatalities or injuries to livestock; ● A sworn account; or, ● An agreement, whether written or oral.

In other words, almost every time the parties had a contract, they can rely on Section 38.001 as a way for recovering their attorney’s fees.  (As noted above, the parties can agree to waive their rights under this statute by agreeing not to an award of attorney’s fees for the prevailing party.)

Section 38.001: A Few Twists.

Section 38.001 is not always as straightforward as litigants would imagine.

First, there are procedural hurdles for recovering fees under this section.  In other words, the payment for attorneys’ fees is not automatic.  Among other things, it is necessary for the claimant to have legal representation, and the claim for fees must be presented to the opposing party or an authorized agent.  In legal jargon, the claim must be “presented” properly.

Second, a person can only obtain attorney’s fees from an “individual or corporation.”  Texas courts have recently concluded that this language actually excludes other types of business organizations, such as LLCs and partnerships.  That means that the best defense for many corporate defendants facing an attorney’s fees request is, “Section 38.001 doesn’t apply to me.”

Somewhat amazingly, this defense seems to hold water, as both state and federal courts in Texas have concluded that Section 38.001 should be narrowly construed to include only individuals (persons) and corporations (”Inc.’s”).  Indeed, to hold a corporation liable for attorneys’ fees while not requiring payment from limited liability companies and partnerships seems to defy logic. As a result, a Texas state representative proposed legislation in 2016 via House Bill 744 that the statute be amended to include other types of legal entities. The measure passed the House in March 2017, but there is no assurance that the law will make it on the books in Texas.

Discuss Your Attorney’s Fees Question with a Texas Business Litigation Lawyer.

Whether you’re involved in a breach-of-contract, fiduciary duty, or deceptive trade practices case, you ought to know whether you can win your attorney’s fees back.  (It’s also nice to know if the other side can win its fees back, too.)  To do that, call us to help you.  Will Denham and Drucker Hopkins, LLP have the experience and knowledge to take on all types of business litigation matters.  You can also reach our legal team directly by calling our Houston, Texas office at 713-352-8888.  

Friendly disclaimer: Nothing in this post is to be construed as legal advice or as establishing an attorney-client relationship.

[suitedgladiators]

ABAJournal

Manatt Phelps & Phillips claims that it is entitled to share in a $10 million settlement in a case handled by a former partner who jumped to Brown Rudnick. Manatt Phelps sued earlier this month in Washington, D.C., Superior Court. https://t.co/9et6JDlKe1 #attorneyfees pic.twitter.com/zAgrlM16Xn

— ABA Journal (@ABAJournal) March 19, 2019

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[dilworth1986]

#business #MCA #instagood #benifits #roadsideassistance #Canada #Unitedstates #statewide #instagram #instagreat #bailbonds #hospitalbenifits #attorneyfees #muchmore #benifits #Texas #Tennessee #thesouth #thenorth #east #west #midwest #noworries #whiletraveling #travel coverage #discounts

[iplawleaders]

Clearer statement on the awards of #attorneyfee in #patent #infringement #lawsuits: tinyurl.com/qcbsdga #ip http://click-to-read-mo.re/p/5864

[cpapartners]

Sometimes taxpayers best the IRS. Sometimes they win at the administrative stage and sometimes they have to go to court. In both situations, however, §7430 allows taxpayers to recover reasonable costs, including attorneys fees. Each stage must be analyzed separately.

[cpapartners]

Lesson From The Tax Court: It Takes More Than Winning To Get the IRS to Pay Attorneys Fees (TaxProf Blog) - It’s always nice to beat the IRS in court. It is even sweeter when you can also make the IRS pay your attorneys fees. But that is not so easy, even when you win. 

[suitedgladiators]

ABAJournal

Manatt Phelps sues Brown Rudnick for share of contingency in former partner's case. https://t.co/8rC1AT69hQ #AttorneyFees

— ABA Journal (@ABAJournal) March 19, 2019

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[suitedgladiators]

ABAJournal

Lawsuit accuses Morrison & Foerster of a "billing feeding frenzy." https://t.co/LIWaPSGbwj #LawFirms #billing #attorneyfees

— ABA Journal (@ABAJournal) February 20, 2019

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[suitedgladiators]

ABAJournal

U.S. District Judge Lucy Koh in #California has refused to approve a class action settlement in litigation for a series of #Yahoo data breaches, citing a lack of transparency & the possibility of “unreasonably high” attorney fees. https://t.co/tAZRPZcYLQ #attorneyfees #databreach

— ABA Journal (@ABAJournal) January 31, 2019

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[suitedgladiators]

ABAJournal

Judge in #Yahoo data breach case criticizes "unreasonably high" attorney fees. https://t.co/tAZRPZcYLQ #attorneyfees #internetlaw #privacylaw

— ABA Journal (@ABAJournal) January 30, 2019

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[suitedgladiators]

ABAJournal

A Southern #California lawyer says a dispute over $300 in unpaid wages cost him about $100,000. #TrialsandLitigation #attorneyfees #SouthernCalifornia #SoCalhttps://t.co/Mrb22cED35

— ABA Journal (@ABAJournal) January 10, 2019

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[suitedgladiators]

ABAJournal

A special master who reviewed billing in $300M case recommends a significant refund: judge. #attorneyfees https://t.co/rAMKAHuMbK via @ABAJournal. pic.twitter.com/7LX51Mfq5A

— ABA Journal (@ABAJournal) June 4, 2018

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[suitedgladiators]

ABAJournal

"What made you think I wanted 53 firms churning on this case?" asks a #California judge after 49 firms were recently added to those representing plaintiffs in a #data-breach case. #attorneyfees https://t.co/J3oWqckOjW via @ABAJournal. pic.twitter.com/TKLe2mREJw

— ABA Journal (@ABAJournal) February 8, 2018

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