One question we frequently hear from our clients is “can I get attorney fees?” Unfortunately, the answer to this question is, it depends. The main reason for the uncertainty surrounding the ability to obtain attorney fees is due to the fact that our legal system follows what is known as the American Rule. The American Rule is a deviation away from the old common law rule (known as the English Rule), which required the losing party of a particular matter to pay the winning party’s attorney fees. However, under the American Rule, the presumption is that both parties pay their own attorney fees, regardless of the outcome. There are, of course, exceptions to this rule, and with that little history lesson in mind, we can now look at four ways you may be able to recover attorney fees on appeal.
Contractual Agreement. One of the more common provisions found in contractual agreements (like the contract to finance your car) is a provision that provides for attorney fees in the event of a breach of contract. For example, say Seller X and Buyer Y enter into a contract for the sale of goods, and the contract also contains a provision that states, “if either party breaches, the party enforcing the contract will be entitled to attorney fees.” This provision will most likely be held up in court because courts try to honor parties’ ability to contract. In addition, not only will this provision allow a party to obtain attorney fees at the trial court level, our Court of Appeals has consistently found that “[w]hen a contract provides that attorney’s fees are recoverable, appellate attorney’s fees may also be awarded.”1 Thus, if the loser on appeal pays the legal fees if there is a contractual provision for such.
Statutory Provision. The next way to obtain appellate attorney fees is through specific statutory provisions. Most statutes do not provide for an award of fees. However, there is a statutory provision that allows a party to recover attorney fees in all civil matters brought in bad faith. In order to obtain attorney fees, an individual must convince the court that the other party either: (1) brought the action or defense on a claim or defense that is frivolous, unreasonable, or groundless; or (2) continued to litigate the action or defense after the party’s claim or defense clearly became frivolous, unreasonable, or groundless; or (3) litigated in bad faith.2 Thus, if the loser appeals and loses, then the trial court’s attorney fee award is upheld because of the frivolous litigation in the trial court. If the Court of Appeals reverses the trial court’s ruling the case was frivolous, then the attorney’s fees award does not stand.
Appellate Rules. The third option comes in Indiana Rule of Appellate Procedure 66. Specifically, the rule provides that the Court of Appeals may assess damages, including attorney’s fees, if an appeal is “frivolous or in bad faith.” The Court of Appeals is limited in awarding attorney’s fees under this rule “to situations when an appeal is permeated with meritlessness, bad faith, and frivolity, harassment, vexatiousness or purpose of delay.”3 There are two categories for seeking appellate attorney’s fees under this rule, which are “substantive” and “procedural” bad faith claims.4 Whether you can proceed under a “substantive” or “procedural” bad faith claim is extremely fact-sensitive, and too lengthy for a blog. What is important to know is there are two categories claims fall under when seeking attorney fees under this rule if a litigant is abusing the appellate process. If you feel an appeal is being brought in bad faith, you may be able to seek an award of appellate attorney’s fees. Your counsel will know.
Disparity of Income. A final way an individual can obtain appellate attorney fees is due to the disparity of income of the parties in domestic cases, such as paternity or divorce cases. As has long been interpreted, “a trial court may order a party in a dissolution proceeding to pay a reasonable portion of the other party’s attorney’s fees, after considering the parties’ resources, economic condition, ability to engage in gainful employment and earn income, and other factors bearing on the reasonableness of the award.”5 The purpose of this rule is to ensure that a party in a dissolution proceeding who could not otherwise afford an attorney is able to retain representation.6 A trial court can award attorney fees before an appeal has begun, or after the appeal has finished assisting the party with the lower income to participate in the appellate process.
Ultimately, whether you can obtain appellate attorney fees is a fact-sensitive analysis and limited to a few circumstances. There are no hard and fast rules entitling you to attorney fees, and remember, the general rule is that each party is responsible for their own fees. However, there are exceptions, as outlined above. Appeals can be long and drawn-out processes, and not to mention, costly. Obtaining skilled counsel is key to relieving some of the burden that comes with the appellate process. This blog was written by attorneys at Ciyou & Dixon, P.C. who handle appeals of all types throughout the state. It is written and posted for general educational purposes and is not to be construed as legal advice or solicitation for services. It is an advertisement.
