Want Your Attorneys’ Fees Back?

Want your attorneys’ fees back?  Put it in writing!

     Many business owners are unaware of the rules governing the recovery of attorneys’ fees expended by them to enforce their rights.  For the uninitiated, the “American Rule” applies to recovery of attorneys’ fees – it allows for the recovery of fees in only two situations: (1) where there is a statute (state or federal) applicable to your dispute that allows for an award of attorneys’ fees, such as Minnesota Statute Section 322B.38, or (2) where the parties agree in writing that in the event of a dispute the prevailing party shall be entitled to an award of attorneys’ fees from the other party (a “Fees Clause”).  Barring sanctions for the way the lawsuit is being handled or prosecuted, that’s it.

     What that means is that if you are doing business with someone and you do not have a written contract with them or the written contract you have does not have a Fees Clause, you are likely out of luck with respect to getting your attorneys’ fees reimbursed from the other side, even if you win.  That is because many of the disputes that arise in business are based on “common law,” not statutes (e.g., a party breached a contract, they did not violate a statute), and even if a statute was violated, not all statutes allow for an award of attorneys’ fees to the prevailing party.  Thus, you could find yourself embroiled in a business dispute, hire a lawyer, and win your case, but not be awarded a reimbursement of your attorneys’ fees because the American Rule does not allow such an award in your particular case.  So, even if you won everything in your case and recovered all of your damages, if you may feel like your victory was not complete because your recovery was eroded by what it cost you to get there.

     So, what is the solution?  Put your agreements in writing!  And include a Fees Clause in the contract.  While it is not practical (or even possible) to put every agreement you may have in your business in writing, there are people and entities with whom you have important arrangements, or with whom more significant dollars are at stake, that mandate you put the agreement in writing.

     Daniels & Wymore, PLLC is here to assist you in identifying which arrangements ought to be in writing and will draft contracts for your needs that not only makes sense, but include provisions that work to protect you in the event something goes wrong.  Call Christopher M. Daniels, Esq., at (763) 201-1209 to help you put together a written agreement to accomplish your business objectives.

     Finally, a practice pointer – if you are presented with a written contract drafted by the other side, and it does not contain a Fees Clause – proceed with caution!  It is a red flag that could indicate that the other side thinks that if anyone is likely to breach a contract, it is them.  Thus, they do not want you to be able to sue them for a breach of the contract, and get paid your attorneys’ fees incurred to enforce the contract.  While this is not always the case when a Fees Clause is missing, it should make you investigate further.  One thing you can do is request that a Fees Clause be added to the contract.  If that is refused, you should seriously consider whether you want to get into a business deal with them.

Law Clerk!

Erich Hartmann is a third-year law student at William Mitchell College of Law and helps the firm out, on a part time basis, with legal research and legal writing.  Erich brings a sharp logical mind, boundless curiosity, and an ability to lower the over cost of litigation and transactional work for our clients.  Please help us welcome  Erich to the firm!

Firm Welcomes Angie Bolden

Daniels & Wymore, PLLC gives a warm welcome to Angie Bolden, our new Office Manager.  Angie has years of experience in managing large offices in the real estate field and will be throwing herself at the daunting task of managing our office.  You will recognize her by her ready smile, no nonsense responses, and constant organizing.  Please join us and welcoming her to the team!

We Win!

David Wymore of Daniels & Wymore, PLLC successfully argued before the Minnesota Court of Appeals, that HIPAA (the Health Insurance Portability and Accountability Act) is not preempted by a Minnesota state law that criminalizes and confers liability on those that negligently or intentionally disseminate health records.

     His efforts before the Minnesota Court of Appeals also led to new case law in Minnesota; that the posting of private information on the internet can confer liability on the poster regardless of how many people view the information.  This new law will likely open up new avenues for those who have been harmed by malicious posting of true, but private information on sites like MySpace and Facebook.

     For a gloss on this decision, please follow this link to read an article published by the Star Tribune.  For the decision itself, please follow this link

Steps to Avoid Costly Litigation

Dec 8th 2009
Filed Under : industry

Steps to Avoid Costly Litigation

     Anyone who has been through the litigation process, whether you are an attorney or party, can attest to the fact that litigation is not an inexpensive process.  In fact, that is why in my practice as a litigator I see the vast majority of any lawsuit which crosses my desk settle.  Sure there are the occasional “stubborn” cases caused by unreasonable attorneys or irrational parties, but even taking those cases into consideration, the overwhelming majority of business litigation cases settle.  Why?  If it is not based upon the merits of your case or the other side’s case, the answer is the cost of litigation.  The cost of litigation, particularly discovery and dispositive motions, have become the driving force in settling cases.   I often hear from clients who had previous experience with the litigation process with other firms state that they were shocked at not only the cost of litigation, but the time it took to secure the end result, whether by settlement or trial.

     Our system of civil justice is founded on the notion that society benefits as a whole if courts or juries resolve disputes if people cannot settle a disagreement or claim among themselves. However, people frequently do not realize how time consuming and complex a legal claim can be and how long it may take to resolve a claim or a lawsuit.  To get to a resolution can cost a substantial amount of money.  While some costs may not be avoidable, it is possible to protect yourself before litigation and during the litigation process to maximize the value of the money you have to spend.

     Whether contracting in your business or personal life, you must make sure that you put your entire understanding in writing.  While it may not be possible to put every agreement you may have in writing, there are people and entities with whom you have important arrangements, or with whom more significant dollars are at stake, that mandate you put those agreements in writing.   A written contract need not be complex, but there are certain provisions that should always be contemplated and wrtitten carefully.

     Probably the most important of these protective provisions is the Attorneys’ Fees clause.  A Fees clause is a statement in your contract that provides you the ability to recoup your attorneys’ fees in a situation where the party you contracted with does not fulfill their obligations.  Many business owners are unaware of the rules governing the recovery of attorneys’ fees expended by them to enforce their rights.  Often, the only way for a party in a lawsuit to collect their attorneys’ fees is if such an award is provided for by statute or where the parties agree to such a provision in writing.

Another important protective provision is to provide for ADR.  Alternative Dispute Resolution (“ADR”) processes are alternative methods of helping people resolve legal problems before going to court.  ADR often involves an independent third person, called a “neutral” who tries to help resolve or narrow the areas of conflict.  The use of ADR early in a case can result in the more efficient, cost-effective resolution of disputes with greater satisfaction to the parties.  A great majority of the civil cases filed in Minnesota state courts are settled by using ADR.  Minnesota courts recognize the effectiveness of ADR as a tool for settling disputes, and in fact most Minnesota courts order ADR is some form.

     As your legal counsel we can not only help to create a solid contract or legal document that protects all of your company’s interest, but if litigation is inevitable we pride ourselves in providing upfront advice and counseling on the costs and the predicted path of the litigation.  We will also work with you to come up with the most effective and efficient strategy to maximize every dollar you and your business spends in either drafting your contracts or going through litigation.  By apply this approach to counseling our clients we can help take the surprise out of the process.

     If you have any questions, or would like to set up a free consultation, please call Jesse H. Kibort of Daniels & Wymore, PLLC at (763) 201-1215 or write him an e-mail at jkibort@dnwlawfirm.com.  The Twin Cities law firm of Daniels & Wymore, PLLC offers two locations for consultation at 1100 One Financial Plaza, 120 South Sixth Street, Minneapolis, Minnesota 55402, and 3165 Fernbrook Lane North, Plymouth, Minnesota 55447.  This article is a general discussion of certain legal matters and is not intended as legal advice.  Readers are encouraged to contact competent legal counsel if they have specific legal questions or concerns about their businesses.