The Right To Attorneys Fees

Law Talk

Typically, in order to collect attorneys fees after being successful in litigation, attorneys fees must be in the agreement between the parties. However, there are some laws that allow for attorneys fees. In this case, the Court allowed attorneys fees to a third party.

A homeowner sued a subcontractor, as a third party beneficiary for breach of contract over custom cabinetry that the subcontractor failed to bid and install in the owners home. In this case, the owner was suing someone with whom he did not have a contract that allowed for attorneys fees. There was a contract that allowed for attorneys fees but that was between the homeowner and the prime contractor, rather that the homeowner and the subcontractor.

Clearly, an owner can sue a subcontractor for negligence, arguing that the subcontractor did not do the work in accordance with accepted trade standards or the plans and specifications. However, that cause of action would not allow for attorneys fees. In this case, there was an attorney's fees agreement between the owner and the prime contractor but not with the subcontractor.

The Court allowed attorneys fees to the owner using the argument that he was a third party beneficiary under the contract. Among other things, the court stated that it was expressly made for his benefit and the agreement reflected that. He was clearly a party and the contract was made for his benefit because it expressly named him in the reference line and the cabinets were being built for his home. The owner understood who the subcontractor was going to be. Further, on a couple of occasions, the owner paid the subcontractor directly.

Based on this set of facts, the court concluded that the owner was a third party beneficiary to the contract and was therefore entitled to the rights under the contract including attorney's fees.

This is a rare case and situation. One should not bank on being able to recover attorneys fees from a non party who is not a third party beneficiary.