Construction Law

Award of Statutory Attorney?s Fees Disallowed in the Absence of a Formal Fee Agreement

By Ryan McCabe

    In the case of Williamson v. Middleton, an employee and employer came to an agreement that the employer owed the employee $906.62 in back commission at the time of the employee?s departure from the employer?s business. After starting a new job, the employee continued seeking the commission and enlisted the service of a close friend and lawyer that had previously assisted the employee in an unrelated matter free of charge. The employee and lawyer decided they would agree on a fee at the conclusion of the case.

    The employer sued the employee alleging fraud, constructive fraud, breach of fiduciary duty, and violation of the South Carolina Unfair Trade Practices Act. The employee answered by denying all allegations and counterclaiming for the $906.62 in commissions and sanctions under the South Carolina Frivolous Proceedings Act. The employer?s breach of fiduciary duty claim was the only one that made it past summary judgment, but the jury ultimately decided in favor of the employee, awarding the $906.62 in commissions and since the award was under a statutory provision, it allowed the employee to recover treble damages, costs, and actual and reasonable attorney?s fees. The trial court upheld this ruling, including $35,000 in attorney?s fees despite a lack of a fee agreement because of their personal and long-standing relationship.

    However, the Court of Appeals reversed holding that in South Carolina attorney?s fee are only awardable by contract or by statute. Even though the statute involved in this dispute allowed attorney?s fee, the court found that since there was no fee agreement, there were no attorney?s fees. In conclusion, the Court of Appeals ruled that in order for there to be an award of attorney?s fees, there must be a fee agreement in place between the attorney and his client. 
    
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Full post as published by The South Carolina Construction Law Blog on July 01, 2008 (boomark / email).