Opinion ID: 2552191
Heading Depth: 3
Heading Rank: 1

Heading: In-House Counsel Fees

Text: ¶ 41 In Utah, attorney fees are awardable only if authorized by statute or by contract. Dixie State Bank v. Bracken, 764 P.2d 985, 988. If a contract provides for attorney fees, the award is allowed only in accordance with the terms of the contract. Id. In this case, the parties' Agreement provided for reasonable attorney fees. [3] Attorney fees are also authorized by the Utah Arbitration Act, section 78-31a-16 of the Utah Code. [4] ¶ 42 Softsolutions maintains that our decisions in Jones, Waldo, Holbrook & McDonough v. Dawson, 923 P.2d 1366 (Utah 1996), and Smith v. Batchelor, 832 P.2d 467 (Utah 1992), prohibit awarding attorney fees to BYU because BYU was represented by in-house counsel. Essentially, Softsolutions argues that our decisions in Jones, Waldo and Batchelor stand for a blanket prohibition of attorney fee awards to pro se litigants, thus precluding BYU from obtaining attorney fees as a matter of law. ¶ 43 In Batchelor, we held that a pro se attorney-litigant is not entitled to recover attorney fees for successful litigation. See Batchelor, 832 P.2d at 473. Likewise in Jones, Waldo, we held that a pro se law firmlitigant could not recover attorney fees in enforcing an agreement. See Jones, Waldo, 923 P.2d at 1375. In refusing to award attorney fees in these cases, we focused on the important fact that the litigants were both in the business of providing legal services and thus did not incur attorney fees as a lay individual or nonlegal organization would. See Jones, Waldo, 923 P.2d at 1375 (stating [i]t is by no means self-evident that the time a lawyer spends on his own case represents fees `incurred'). That is, neither the law firm nor the attorney-litigant actually paid or became liable to pay consideration in exchange for legal representation and thus did not incur attorney fees in the action. It was not the fact that they were pro se that precluded them from recovery. Rather, it was the fact that they were lawyers representing themselves, and therefore did not incur attorney fees. ¶ 44 This case is different. BYU is represented in this matter without the aid of outside legal counsel. However, BYU is not an organization primarily engaged in providing legal services, and as such, the issue is whether a nonlegal organization can recover attorney fees when it uses the services of salaried in-house counsel. We hold in the affirmative. ¶ 45 There are no prior Utah cases directly on point. However, we are persuaded by the ample authority from other jurisdictions that a successful litigant who is not primarily engaged in providing legal services may recover attorney fees when represented by salaried in-house counsel. [5] Such an award is still limited to those occasions when the contract between the parties, a statute, or other rule of law otherwise entitles a party to recover attorney fees, but removes the previously perceived distinction between in-house and private counsel. ¶ 46 This rule is a reasonable means of compensating an organization for legal expenses it actually incurred, unlike the litigants in Jones, Waldo and Batchelor. That is, BYU, as a nonlegal entity, was required to pay consideration for the legal services received from its in-house counsel in the form of salary and other costs of employment. The litigants in Jones, Waldo and Batchelor did not actually pay or become liable to pay consideration in exchange for representation. We hold that BYU, as the successful party, was entitled to attorney fees for the legal services of its in-house counsel.