WHEN IS A PARTY ENTITLED TO AN AWARD OF ATTORNEYS’ FEES ON APPEAL?
Sometimes the black letter law passed by the legislature is unclear. The legislature can’t anticipate every possible fact scenario when they pass a law, so it lay to the courts to interpret the law and give guidance to what it means. This interpretation is called case law. When the court decides a certain meeting to the law it essentially answers a legal question. Lawyers and other courts then can rely on that ruling when they have a similar issue in their case. The following case answers the question above.
Snider v. American Family Mutual Insurance Co., 297 Kan. 157, 298 P.3d 1120 (2013).
This case addresses the following issue:
When is a party entitled to an award of attorneys’ fees on appeal?
“A Kansas court may not award attorney fees unless a statute authorizes the award or there is an agreement between the parties allowing attorney fees.” Id. at 162. This case dealt with an odd application of a fee-shifting statute: is an attorney entitled to fees incurred appealing a decision that solely denies an award of attorneys’ fees? Id. at 160. The court found that a party is a prevailing party, entitled to fees, even if the only point being appealed is the award (or failure to award) attorneys’ fees. Id. at 161. However, a prevailing party must comply with Kansas Rule 7.07(b) to be awarded appellate fees. Id.
In this case, the Plaintiff filed a claim with his insurance company concerning stolen equipment and tools. Id. at 160. The insurance company had wrongfully denied his claim. Id. Section 40-908 allows for a prevailing insured to recover attorneys’ fees for actions to enforce insurance contracts, such as the one Plaintiff filed. Id. The Plaintiff filed suit against the company, but the trial court initially ruled for the insurance company. Id. Plaintiff appealed and the Kansas Court of Appeals reversed, declaring that the Plaintiff was entitled to judgment in his favor. Id. Despite winning the appeal, the Plaintiff did not file a motion for appellate attorneys’ fees. Id. The trial court awarded only $5,000 in fees, finding that Plaintiff could not receive fees for filing an appeal because Plaintiff had not prevailed at the trial level. Id. This lead Plaintiff to appeal again, this time solely on the issue of failure to award sufficient attorneys’ fees. Id.
The court first determined that Rule 7.07(b), which requires a party seeking attorneys’ fees based upon an appeal to file a motion with the appellate court following oral argument, applied to all fee-shifting statutes, including Section 40-908. Id. at 163. Plaintiff had failed to follow this procedure, and thus, had forfeited his right to attorneys’ fees for the first appeal. Id. at 168. However, that was only the first of Plaintiff’s many “prevailing” decisions. Id.
The court then moved onto the award of attorneys’ fees based upon the second appeal to the Court of Appeals. Id. The court noted that it was appropriate to consider the Plaintiff a prevailing party, even if the only appeal was based upon the fees awarded. Id. at 170. This is because the decision to award fees is mandatory, so long as the party prevails. Id. However, the amount of fees to award is up to the court to determine. Id. at 171. These amounts will only be altered if found to be “arbitrary, fanciful, or unreasonable or based on an error of law.” Id. The Court of Appeals had adjusted the fees awarded, and the court did not find these adjustments arbitrary or otherwise improper. Id.
Are attorney fees appropriate when a dispute between an insurance company and an insured involves an issue of first impression?
Can an attorney ever owe a fiduciary duty to an unrepresented third party?
If attorney’s fees are authorized by statute for one claim but not all claims in a lawsuit does the court still award attorney’s fees?