V. Recovery of Fees and Costs

• Library: South Carolina Foreclosure Law Manual (2021 Ed.)

V. Recovery of Fees and Costs

The average foreclosure defendant cannot afford to present a defense, no matter how meritorious the claim. Private attorneys should be aware that federal and state statutes in many cases are fee generating if the borrower prevails.

A. Federal Statutory Law Violations Generally Use TILA Fee-Shifting Statute

1. Entitlement Under Federal Law

Under the attorney's fees sections of the TILA,²⁰⁶ consumers are entitled to recover attorney's fees in "any successful action." The award is mandatory; however, the court has discretion over its size. An action may be considered successful even if the consumer obtains only "some relief under the merits of his claim."²⁰⁷

2. Amount

As stated above, the amount of the award is discretionary. However, fees cannot be limited by the amount of the consumer's damage recovery.²⁰⁸

3. Formula

"Allowable hours times an hourly rate" which may be adjusted up or down by court. The Fourth Circuit's approach can be found in Diamond Star Building Corp. v. Sunset Builders, Inc.²⁰⁹

Allowable hours:

a. Do not include excessive, non-productive or duplicative time.
b. Does not include time that cannot be supported with contemporaneous billing records, or where records exist but are vague.
c. In general, best practice is to bill as you would any hourly client.

4. Hourly Rate

a. Prevailing rate in community for attorneys of similar skill and experience.
b. Of lesser significance is customary rate, agreed upon rate, or contingent fee agreement.²¹⁰
c. Adjustment: an argument can be made for upward (or downward) adjustment of hourly fee multiplied by the number of hours, or can be adjusted sua sponte by court in its discretion.

5. Fee Petition Required

a. Must make a written fee application within 14 days after judgment and notify opponent that fees will be sought.²¹¹
b. Burden on consumer's attorney to justify request via documentation.
c. Other party must submit evidence, not merely argument, to overcome the "lodestar" presumption.²¹²
d. The attorney must have a signed fee agreement and must keep detailed records of time spent and work performed on a case.

Detailed discussion of steps to successful fee application can be found in NCLC's Consumer Law Pleadings Number One, Chapter 11 (1994).

The language of the TILA grants the consumer, not the attorney, the right to any award of fees.²¹³ The consumer and the attorney should sign a detailed written fee agreement that recites that attorney's fees are potentially...