Oftentimes our lawyers in Charleston, South Carolina are asked if a client can collect their attorney’s fees if they win their case. In South Carolina, attorney’s fees can only be recovered by contract, statute, or (less commonly) for “equitable indemnification.” For example, if you have a contract to do XY and Z with someone for payment, and the contract provides that if you sue to enforce it, you will be entitled to an award of attorney’s fees, then the court will honor those terms. Various statutes also allow claims for recovery of attorney’s fees. For example, in family court, a spouse can collect attorney’s fees. Other statutes which include an award of attorney’s fees are unfair trade practices, unpaid wages, and mechanic’s liens.
Attorney’s Fees for Equitable Indemnification
Equitable indemnification is different from than a standard claim for attorney’s fees. In cases involved attorney’s fees pursuant to a contract or a statute, a party is requesting its attorney’s fees incurred in suing the wrongdoer. In most equitable indemnification cases, the plaintiff gets sued in another case due to the actions of the wrongdoer. The plaintiff then sues the wrongdoer and seeks to recover the attorney’s fees incurred in defending the first suit. One example is the case of McCoy v. Miles. In McCoy, an owner of property used this property as a service station. After the property became contaminated due to the owner’s use and after DHEC had begun investigating the matter, the owner sold the property to some buyers. The owner/seller didn’t disclose any of the environmental issues to the buyers. Later, an adjoining property owner sued the buyers because the contamination damaged the adjoining land. The buyers then cross-sued the original owner/seller, claiming that the original owner/seller was responsible for the contamination damage and claiming the original owner/seller should pay the buyer’s attorney’s fees in defending the lawsuit by the adjoining property owner. The South Carolina Supreme Court held that the buyers were entitled to recover their attorney’s fees and defense costs from the original owner/seller. To reach its decision, the Court utilized the test that had been good in South Carolina for many years. Under this test, the party seeking indemnification must first show that the attorney’s fees and costs must be the natural and necessary consequence of the defendant’s act.” Second, “in order to sustain a claim for equitable indemnity, the existence of some special relationship between the parties must be established.” The court cited to previous cases finding “special relationship” in situations involving contractors and found that the seller-purchaser relationship was sufficient for a claim for equitable indemnification.
Attorney’s Fees for an Appeal in South Carolina
Until recently, it was questionable whether a party could also collect their attorney’s fees for having to respond to an appeal. Now, the South Carolina Supreme Court has answered that question – a party can collect their attorney’s fees for an appeal too.
In Austin v. Stokes-Craven, the car purchaser won an award against a car dealership in Charleston, South Carolina that included a claim under the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (known as the “Dealer’s Act”). The Dealer’s Act makes it unlawful for automobile dealerships to “engage in any action which is arbitrary, in bad faith, or unconscionable and which causes damage to any of the parties or to the public.” If the purchaser of an automobile is able to prove a case under the Dealer’s Act, he or she may recover his or her attorney’s fees.
After the car purchaser won at trial, the car dealership appealed and lost. The South Carolina Supreme Court decided in the car buyer’s favor including a decision that the car buyer should be entitled to recover his attorney’s fees. The case was then sent back (remanded) to the trial court to calculate an award of attorney’s fees. On remand, the trial judge awarded the car purchaser actual damages and punitive damages. However, the trial court only award the purchaser’s trial-level attorney’s fees and did not include any attorney’s fees stemming from the appeal the dealership raised. Ultimately, this issue went back on appeal to the South Carolina Supreme Court that ruled that the car buyer could recover his appellate fees as well. The Court then ordered the trial judge to “conduct a hearing to determine what amount of appellate and post-appellate fees should be awarded to [the car buyer].”
The Court’s opinion in Austin refers to claims under the Dealer’s Act, but it may also provide guidance and precedent for other statutory attorney’s fees cases. Perhaps the most influential aspect of Austin is that it will make defendants think twice about filing appeals that have little merit. The threat that they may have to pay additional attorney’s fees if they lose their appeal may be enough for them to admit wrongdoing after a case makes it that far.
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