Attorney Fees – Exception to the “American Rule”

American Rule

Attorney’s Fees

We previously wrote here about the ability to recover attorney’s fees in a lawsuit. As we noted, the “American Rule” generally states that a party must pay his own fees, although there are several exceptions.

This post addresses another exception that has been recognized in other states but that Mississippi courts do not appear to have ruled upon yet (although some case law appears to recognize the general principle).

The “tort of another” exception.

The Restatement (Second) of Torts § 914(2) states:

“One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action.”

This exception has also been called the “third party litigation exception.” The attorney’s fees incurred in the third party suit are simply considered another form of damages.

The concept is simple. If a tortfeasor creates a situation where a party has to litigate with a third party as the result of that tort, that party can recover its attorney’s fees incurred in that lawsuit from the tortfeasor.

Mississippi courts do not appear to have expressly adopted this doctrine. The Mississippi Supreme Court has, however, held that attorney’s fees could be recovered as damages by a grantee of a warranty deed in a suit against the grantor when the grantee had to hire a lawyer to clear his title.

The Court also recognized the ability of an insured to recover fees incurred in defending a liability suit when the insurance company wrongfully refused to provide a defense.

Proving attorney’s fees.

To recover fees under the exceptions discussed in our prior post, a party usually files a post-trial motion.

“It is proper for the trial court to hold a hearing after the trial of the case to hear evidence on the issue of attorney’s fees.” Missala Marine Services, Inc. v. Odom, 861 So.2d 290, 296 (Miss. 2003).

To recover attorney’s fee under the tort of another exception, however, it is likely that the amount and reasonableness of such have to be established at trial.

Panter Law Firm, PLLC, 7736 Old Canton Road, Suite B, Madison, MS 39110