• Pleading A Claim For Recovery of Attorney's Fees
  • January 24, 2014 | Author: David V. Kramer
  • Law Firm: Dressman Benzinger LaVelle psc - Crestview Hills Office
  • In an earlier blog, the importance of having an award of attorney's fees included in a judgment rather than treating it as a recoverable cost that may be resolved after entry of judgment was discussed. This post raises the more preliminary issue of pleading a claim for attorney's fees. The Kentucky Court of Appeals held in a 2011 case that, in order to recover attorney's fees according to a statute, a party must make a claim for fees in the body of its pleading. See O'Rourke v. Lexington Real Estate Company LLC, 365 S.W.3d 584, 587 (Ky. App. 2011). In reversing the trial court's award of attorney's fees to a landlord for recovery under a lease agreement, the Court held that merely including a request for attorney's fees as an item of recovery in the ad damnum clause of the complaint, a routine pleading practice for many litigators, is not sufficient to state a claim for attorney's fees under statutes governing leases of real property. The decision implies that the same rule governs a claim for attorney's fees based on a contract and even suggests that the rule applies when entitlement to fees is premised on equitable grounds under the common law.

    In light of that holding, the best practice for a party making a claim for recovery of attorney's fees is to include either a separate count for attorney's fees in the pleading (whether a complaint, counterclaim, cross-claim, or third-party complaint) or a separate paragraph making the claim for fees in the count to which the request for fees is related. In either event, the party should specify the legal grounds for the claim (statutory, contractual, and/or equitable). If a party seeking attorney's fees has omitted a claim for such fees from its pleading and merely listed a request for fees under the prayer for relief, the party may seek to amend the pleading under CR 15.

    The holding in O'Rourke did not specifically state that it is necessary to plead a claim for an equitable award of attorney's fees based on Kentucky common law, such as Batson v. Clark, 980 S.W.2d 566 (Ky. App. 1998). On the other hand, it appears that the plaintiff in O'Rourke sought an equitable award of fees as an alternative to its claim for fees under Kentucky landlord-tenant statutes. O'Rourke distinguished Batson and held that the trial court does not have discretion to make an equitable award of fees where a controlling statute provides a limited basis for awarding fees (i.e., willful conduct of the opponent) that is not applicable to the facts of the case. The Court then held that the landlord's failure to plead a claim for fees was an alternative basis deny recovery of fees, and it did not limit this holding to a request for fees made pursuant to statute or contract. In light of that holding, it appears that even a claim for fees based on equitable principles should be pled with particularity. However, a party might assert that its equitable entitlement to recover attorney's fees arose after the pleading stage, or even at trial, such that pleading the equitable claim beyond the routine request for fees should not be required. Rather than making such an argument, a party that did not include a specific claim for attorney's fees in its pleading should consider seeking leave to amend its pleading to include the claim. Of course, equitable awards of attorney's fees are rarely made by Kentucky trial courts, which generally hold firm to the precept that parties to litigation must bear their own attorney's fees in the absence of entitlement under a statute or contract (the so-called "American Rule").

    Finally, the holding in O'Rourke v. Lexington Real Estate Co. does not necessarily indicate that Kentucky is moving toward a stricter or more technical pleading standard than the traditional "fair notice" standard that has been the rule in Kentucky for decades and that the federal courts had long followed until the adoption of the more rigorous Twombly/Iqbal standards by the U.S. Supreme Court in recent years. The Court in O'Rourke specifically noted that it did not believe adequate notice of the claim for attorney's fees was provided by a request made in the prayer for relief. To date, the only Kentucky case specifically citing Twombly or Iqbal was Espinosav. Jefferson/Louisville Metro Govt., 2009 WL 277488 (Ky. App. 2009), an unpublished decision of the Court of Appeals that cited Iqbal with approval and relied on it in part in affirming dismissal of a complaint for failure to state a claim. (See CR 76.28(4)(c) concerning citation of unpublished opinions.)