1.3 Type of Cases Where Attorney Fees Awarded Pursuant to Statute

• Library: Attorney Fees and Sanctions - Virginia and Federal Courts (Virginia CLE) (2016 Ed.)

1.3 TYPE OF CASES WHERE ATTORNEY FEES AWARDED PURSUANT TO STATUTE

1.301 Prevailing Party.

A. "Prevailing Party" Defined. A party is a "prevailing party" and entitled to an award of attorney fees "if he succeeds on 'any significant issue in litigation which achieves some of the benefit [he] sought in bringing

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suit." ²³ "Prevailing party" is a "party in whose favor a judgment is rendered, regardless of the amount of damages awarded." ²⁴ "Prevailing party" is the "successful party." ²⁵ There is no prevailing party in a nonsuited action. ²⁶ When a nonsuited action is refiled, there is no basis to seek the fees incurred in the prior action because they are distinct actions and no party prevailed in the prior action. ²⁷

B. Examples of Prevailing Parties Statutes.

1. Virginia Consumer Protection Act. Under the Virginia Consumer Protection Act, codified at section 59.1-207.14 of the Virginia Code,

[a]ny consumer who suffers loss by reason of a violation of any provision of this chapter may bring a civil action to enforce such provision. Any consumer who is successful in such an action or any defendant in any frivolous action brought by a consumer shall recover reasonable attorney fees, expert witness fees and court costs incurred by bringing such actions.

Consumers that prevail on allegations of fraud are entitled to recover attorney fees in addition to any punitive damages the jury may award. Attorney fees serve a separate purpose of encouraging private enforce-ment. ²⁸ Where a statute provides for recovery of "reasonable" fees, the court will apply the seven Chawla v. BurgerBusters, Inc. factors to determine reasonableness. ²⁹

The ratio of attorney fees to recovery is not necessarily relevant under fee-shifting statutes because those statutes are designed to encourage private enforcement of the statute. Attorneys should not be penalized for pursuing cases in which the potential monetary recovery is small. As long as the value of services rendered by counsel is significant and successful in

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achieving a favorable outcome, and other factors are satisfied, fees may be awarded. ³⁰

2. Business Conspiracy. Section 18.2-500 of the Virginia Code authorizes recovery of treble damages and attorney fees if a business is injured by a violation of section 18.2-499 (combinations to injure others in their reputation, trade, business, or profession). ³¹

3. Derivative Actions by Partners. Section 50-73.65 of the Virginia Code provides that a defendant in a derivative action may recover reasonable expenses, including attorney fees, if a plaintiff did not fairly and adequately represent the interests of the limited partners and the partnership in enforcing the rights of the partnership. ³² When limited partners prevail in a derivative suit, they should recover reasonable fees from the fund awarded to the partnership. The remainder of that fund would then go directly to the partnership. ³³

4. Motor Vehicle Warranty Enforcement Act. Consumers who prevail against a car manufacturer under the Motor Vehicle Warranty Enforcement Act ³⁴ still must show that attorney fees requested are reasonable. In Nedelka v. KIA Motors of America, Inc., ³⁵ reviewing the relevant Chawla factors, the court found that the amount sought was excessive in light of the fact that the vehicle's defective condition was uncontested and did not require expert testimony. The work rendered by the consumers' counsel was typical of the efforts required of a litigator in preparation for trial; the case was not complex, but the services were invaluable to the consumers, who recovered the full amount sought. In addition, the rates charged were typical of those charged by attorneys of similar experience and expertise in the area. The court reduced the request of $46,360 to a total recovery of $23,850 plus $79 as costs and $3,530 for the expert witness fee incurred in prosecuting the claim for attorney fees.

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In Iuorno v. Ford Motor Co., ³⁶ because the plaintiff was successful in achieving a settlement on his Lemon Law claim, he was entitled to attorney fees up to the point of the settlement. However, the action to recover attorney fees subsequent to the settlement violated the Virginia rule that attorney fees generally are not recoverable.

A prevailing plaintiff is entitled to recover reasonable attorney fees, expert witness fees, and court costs incurred by bringing a Lemon Law action. In O'Neil v. Chrysler Corp., ³⁷ the court considered reasonableness factors pursuant to Rule 1.5 of the Virginia Rules of Professional Conduct and found that the requested fee was reasonable considering the work performed, the skill required, and the results obtained and granted that portion of the motion. However, counsel and expert witness fees incurred solely in the collection of attorney fees after a Lemon Law case had settled and paralegal time were not collectable. Similarly, recoverable costs do not include fees of court reporters, mileage reimbursement, copies, postage, faxes, certified mail or Federal Express.

5. Condominium Ownership Compliance. Section 55-79.53(A) of the Virginia Code provides that

The declarant, every unit owner, and all those entitled to occupy a unit shall comply with all lawful provisions of this chapter and all provisions of the condominium instruments. Any lack of such compliance shall be grounds for an action or suit to recover sums due, for damages or injunctive relief, or for any other remedy available at law or in equity, maintainable by the unit owners' association, or by its executive organ or any managing agent on behalf of such association, or, in any proper case, by one or more aggrieved unit owners on their own behalf or as a class action. A unit owners' association shall have standing to sue in its own name for any claims or actions related to the common elements as provided in subsection B of § 55-79.80. Except as provided in subsection B, the prevailing party shall be entitled to recover reasonable attorney fees, costs expended in the matter, and interest on the judgment as provided in § 8.01-382. This section shall not preclude an action against the unit owners' association and authorizes the recovery, by the prevailing party in any such action, of reasonable attorney

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fees, costs expended in the matter, and interest on the judgment as provided in § 8.01-382 in such actions.

The statute authorizes two types of litigation: (i) actions for failure to comply with provisions of condominium act or the condominium instruments and (ii) actions by unit owners' associations bringing suit in their own name to assert claims or to defend against claims. Plain language of the code section requires "an award of attorneys' fees and costs to the prevailing party in both types of litigation authorized by the statute." ³⁸ Under section 55-79.53, the "prevailing party" should be equated with a "successful party." ³⁹

Party defendants are limited to "the declarant, every unit owner, and all those entitled to occupy a unit." ⁴⁰ The board of directors of an owners' association is not the declarant, nor is it entitled to occupy a unit. Therefore, the board cannot be liable for attorney fees under the statute. ⁴¹

The court weighs factors to determine the reasonableness of a request for attorney fees. In 313 Freemason v. Freemason Assocs., ⁴² the condominium association prevailed in suit against corporate builder for defects in condos. The court found that the fees of $111,456 requested were reasonable given the overall amount of recovery they had been pursuing— $380,000 in compensatory and $150,000 in punitive damages. Because the fee request was fully supported by time records and by expert testimony, it was not unreasonable, but the court reduced the fees to $61,213 because the association's attorney represented other plaintiffs in suits against the defendants, and some of the fees were incurred on behalf of those clients. ⁴³

6. Property Owners' Association Act. Section 55-515(A) of the Property Owners' Association Act ⁴⁴ provides that:

Every lot owner, and all those entitled to occupy a lot shall comply with all lawful provisions of this chapter and all

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provisions of the declaration. Any lack of such compliance shall be grounds for an action or suit to recover sums due, for damages or injunctive relief, or for any other remedy available at law or in equity, maintainable by the association, or by its board of directors or any managing agent on behalf of such association, or in any proper case, by one or more aggrieved lot owners on their own behalf or as a class action. Except as provided in subsection B, the prevailing party shall be entitled to recover reasonable attorney fees, costs expended in the matter, and interest on the judgment as provided in § 8.01-382. This section shall not preclude an action against the association and authorizes the recovery, by the prevailing party in any such action, of reasonable attorney fees, costs expended in the matter, and interest on the judgment as provided in § 8.01-382 in such actions.

The prevailing party in a suit for home owners' association dues "shall be entitled to recover reasonable attorney fees [and] costs." ⁴⁵

When a home owners' association exceeds its authority under the bylaws and The Property Owners Association Act by assigning parking spaces and divesting homeowners of common ownership of the land without following bylaw voting protocol, the unit owners are entitled to attorney fees and costs under section 55-515 as prevailing parties in the suit. ⁴⁶

7. Religious Freedom. Section 57-2.02(B) of the Virginia Code states that "[n]o government entity shall substantially burden a person's free exercise of religion" and that a person whose religious exercise has been burdened may not recover monetary damages in an administrative or judicial proceeding against government for violating the individual's religious freedom, but the prevailing party may...