Opinion ID: 1057676
Heading Depth: 1
Heading Rank: 6

Heading: All Costs and Expenses

Text: Plaintiffs, while acknowledging the general application of the American rule, argue that the contractual language all costs and expenses of any suit or proceeding is sufficient to justify an award of attorney fees in this case. In particular, Plaintiffs argue that by including the word all to describe the costs and expenses of litigation a defaulting party must pay, the parties to the contract intended [9] that the contractual language of Paragraph 9 encompasses attorney fees, which are a necessary cost[] and expense[ ] of any suit or proceeding. To support this argument, Plaintiffs rely on this Court's discussion in Cobb v. Stewart, 225 Tenn. 85, 463 S.W.2d 693, 695 (1971), which defined the word all [a]s inclusive and embrac[ing] [every item it describes] unless excepted therefrom by descriptive words. Plaintiffs' reliance on the Cobb definition of all, however, does not assist Plaintiffs in demonstrating that all costs and expenses specifically and expressly provides for attorney fees because all only describes costs and expenses. The term costs has not generally been construed to encompass attorney fees. See Ranger Const. Co. v. Prince William County School Bd., 605 F.2d 1298, 1303 (4th Cir.1979) (stating that `costs' are quite different from and do not include `attorney's fees') (citing Nat'l Union Indem. Co. v. R.O. Davis, Inc., 393 F.2d 897, 900 (5th Cir.1968)); Holcomb v. Cagle, 277 S.W.3d 393, 397 (Tenn.Ct.App.2008) (app. for perm. app. denied) (holding that the contractual language to hold plaintiffs harmless from any cost, loss, damage, or expense arising solely out of any failure of the Tenant to comply with any of the requirements or provisions of th[e] Ground Lease did not explicitly provide for the recovery of attorney fees incurred in enforcing its provisions) (emphasis added); Marshall v. Sevier County, 639 S.W.2d 440, 443 (Tenn.Ct.App.1982) (noting that historically, the term `cost' has not been interpreted to include attorney's fees). The term expenses, however, has been less frequently addressed. After reviewing the case law of this state and other jurisdictions, we take this opportunity to clarify that the term expenses, without more, also does not include an award of attorney fees. See Holcomb, 277 S.W.3d at 397 (holding that the contractual language to hold plaintiffs harmless from any cost, loss, damage, or expense arising solely out of any failure of the Tenant to comply with any of the requirements or provisions of th[e] Ground Lease did not explicitly provide for the recovery of attorney fees incurred in enforcing its provisions) (emphasis added); Fiorito v. Goerig, 27 Wash.2d 615, 179 P.2d 316, 318 (1947) (The term `costs' is synonymous with the term `expense.' Costs are allowances to a party for the expense incurred in prosecuting or defending a suit, and the word `costs' in the absence of statute or agreement does not include counsel fees; in other words, counsel fees are not costs or recoverable expenses incurred in prosecuting or defending a suit, either in suits in equity or actions at law.) This Court has adhered strictly to the guiding principle that the American rule, prohibiting an award of attorney fees, will apply unless a contract specifically and expressly creates a right to recover attorney fees or some other recognized exception to the American rule is present. See, e.g., Pullman Standard, 693 S.W.2d at 338. The only way parties to a contract have been able to specifically and expressly create a right to recover attorney fees has been by incorporating the phrase including reasonable attorney fees or some other similar, yet equally specific, contractual language. Compare Brunswick Acceptance Co. v. MEJ, LLC, No. E2007-01819-COA-R3-CV, 2008 WL 4648350, at  (Tenn.Ct.App. Oct. 21, 2008) (app. for perm. app. denied Apr. 27, 2009) (upholding an award of attorney fees where the contractual language provided for the recovery of all costs and expenses, including reasonable attorney's fees, incurred in enforcing the agreement), and ABC Painting Co. v. White Oaks Apartments of Hermitage, No. M2006-00280-COA-R3-CV, 2007 WL 14250, at  (Tenn.Ct.App. Jan. 2, 2007) (upholding an award of attorney fees where the contractual language provided for all costs and expenses of any legal action . . . including but not limited to, reasonable attorney's fees), with Kultura, 923 S.W.2d at 540 (holding that the term any loss does not include an award for attorney fees), and Holcomb, 277 S.W.3d at 397 (holding that the contractual language to hold plaintiffs harmless from any cost, loss, damage, or expense arising solely out of any failure of the Tenant to comply with any of the requirements or provisions of th[e] Ground Lease did not explicitly provide for the recovery of attorney fees incurred in enforcing its provisions). Accordingly, if the parties intend to create contractually a right to recover attorney fees, the contractual language must specifically and expressly articulate this intent and not merely provide for recovery of costs and expenses. Adhering to this bright-line rule provides certainty in contracting and is warranted by the public policy considerations supporting the American rule. See House, 245 S.W.3d at 377.