Business owners who find themselves in litigation often worry about paying the associated attorney’s fees and wondering whether they can make their adversary pay the attorney’s fees. As discussed in a prior blog post, the default rule is that win or lose, each party pays its own fees for legal services.
Among the exceptions to the default rule are situations where an adversary acts in bad faith or engages in behavior later deemed stubbornly litigious. Whether that exception applies is a determination to be made by a judge or jury after the case.
Another exception may be invoked when the elements of Georgia’s Offer of Settlement statute are met, which we blogged about here.
The Offer of Settlement and Attorney’s Fees
If a party makes a proper Offer of Settlement, the Offer is not accepted, and then the offering party beats its Offer of Settlement at trial by more than 25%, the offering party is entitled to recover the attorney’s fees it incurred from the time the Offer is rejected through trial.
Whether attorney’s fees are to be awarded in this context is less discretionary (albeit not entirely so) than under the bad faith doctrine discussed above. If the Offer of Settlement was rejected, and then the offeror beat it by 25% at trial, the default rule is that the offering party recovers its attorney’s fees from the adversary.
So, what happens if party is entitled to fees under both the bad faith doctrine and the Offer of Settlement statute? Is the prevailing party entitled to recover attorney’s fees twice?
Court Case Awards Attorney’s Fees
In the recent Georgia case of Junior v. Graham, Junior sued Graham for injuries arising out of an automobile accident. Before trial, Junior made an Offer of Settlement of $600,000, which Graham rejected by ignoring it. At trial, Junior was awarded just under $5,000,000 in compensatory damages.
The jury also found that Graham had acted in bad faith and awarded Junior an additional $1,250,000 in attorney’s fees. After trial, Junior then moved for an additional award of attorney’s fees given that his Offer of Settlement was ignored, and he beat that offer at trial by far more than 25%.
While acknowledging that the prerequisites for an attorney’s fees award had been met under the Offer of Settlement statute, the trial court declined to award them, finding that Junior had already been awarded attorney’s fees and was not entitled to recover them twice.
On appeal, the Georgia Court of Appeals agreed, but clarified that if only a portion of the attorney’s fees incurred by a party is awarded under one statute, the previously unrecovered fees could possibly be recovered under another statute or theory.
There are many ways to increase the chances of recovering attorney’s fees from an adversary in court and experienced counsel can help you do so. Please let us know if we can help.
Healthy business relationships are an essential component of business success. When disputes cause business relationships to sour, declining productivity and revenues are sure to follow. Bill works with business owners to bring successful and efficient resolution to a wide variety.