There are two main ways that a lawsuit might provide a way for a party to get back their attorney’s fees and costs from another party. One way is that there is a particular law or statute which gives you the right to seek your attorney’s fees and costs from the other side. The second way is for a contract that has an attorney’s fees and costs clause awarding a party who prevails in the lawsuit their attorney’s fees and costs.
Do I get paid as the lawsuit goes for my attorney’s fees and costs so I can pay my lawyer first?
No, generally you do not get your attorney’s fees and costs paid up front. Generally speaking, it is only after the lawsuit is either settled (if parties agree to attorney’s fees and costs) or after a final resolution that one can seek attorney’s fees and costs.
What is the legal basis for getting attorney’s fees and costs under a contract?
Under California Civil Code §1717(a) provides, in pertinent part:
In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. … Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit.
How do I know if I am the prevailing party in the lawsuit so I may seek my attorney’s fees and costs?
Where an attorney fee clause provides for an award of fees incurred in enforcing the contract, the prevailing party is entitled to fees for any action “on the contract,” whether incurred offensively or defensively. Turner v. Schultz (2009) 175 Cal. App. 4th 974, 980.
Determination of “prevailing party” for the purpose of reciprocal attorney’s fees in California is guided by the California Supreme Court’s decision in Hsu v. Abbara (1995) 9 Cal. 4th 863, 876. In deciding whether there is a “party prevailing on the contract,” the trial court is to compare the relief awarded on the contract claim or claims with the parties’ demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by “a comparison of the extent to which each party has succeeded and failed to succeed in its contentions.” When the results of the litigation on the contract claims are not mixed—that is, when the court’s decision is purely good news for one party and bad for the other—the trial court has no discretion to deny attorney’s fees to the successful party. Id. at 875–76.
For example, if a party is seeking positive money in their Complaint and get what they sought, then they have prevailed and will be able to seek their attorney’s fees and costs if there is an contractual basis or statutory basis for attorney’s fees and costs.
You may also be able to seek prejudgment interest on amounts owed.
Under Civil Code §3287(b), when the damages are certain or capable of being calculated, then a person can get prejudgment interest:
Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.
But can you explain that in plain English?
Sure. What this means is a damages amount that is based upon something concrete, not emotional or arbitrary. One example, is that if a party is required to pay rent under a lease agreement and the rent is specified in the lease agreement, then clearly the rent is a certain amount. In those cases, that means you can get interest from prior to the judgment.
