The Court of Appeal was presented with a difficult problem: is it fair to make someone pay $326,000 in attorney’s fees when they only received an award of $71,000? Historically, the “American rule” is that each party pays their own attorney’s fees, while the “British rule” is that the losing party has to pay the other party’s attorney fees as well as its own. This has been modified in some cases by statute, such as the statute the plaintiff referred to here, which says that in a contract case the losing party has to pay the prevailing party’s “reasonable attorneys fees.”
The court found that even though the tenants sued the landlord for some traditional torts, they also sued claiming that the landlord breached the implied warranty of habitability that has been made a part of any residential rental contract. “In sum, the claim for breach of warranty of habitability was on the contract. So, too, the claim for constructive eviction.” So the tenants are entitled to receive reasonable attorney’s fees.
That being decided, the next issue is whether or not it was “reasonable” for the tenants to spend $320,000 to win $71,000.
The Court of Appeal found that the trial judge is in the best position to determine whether the fees requested are reasonable, and only if the judge abuses his/her discretion will it be overturned on appeal. Here, the judge made a specific finding that the fees were reasonable, and the appellate court did not find that he abused his discretion in doing so. The landlord not only had to pay Christie and Justin $71,000 in damages, but also $326,475 attorney’s fees. It would have been far cheaper to just fix the property in the first place. Landlords, pay attention!
Hjelm v. Prometheus Real Estate Group, Inc., decided September 9, 2016.
That being decided, the next issue is whether or not it was “reasonable” for the tenants to spend $320,000 to win $71,000.
The Court of Appeal found that the trial judge is in the best position to determine whether the fees requested are reasonable, and only if the judge abuses his/her discretion will it be overturned on appeal. Here, the judge made a specific finding that the fees were reasonable, and the appellate court did not find that he abused his discretion in doing so. The landlord not only had to pay Christie and Justin $71,000 in damages, but also $326,475 attorney’s fees. It would have been far cheaper to just fix the property in the first place. Landlords, pay attention!
Hjelm v. Prometheus Real Estate Group, Inc., decided September 9, 2016.
