Can the winner recover attorney's fees on this Connecticut contract claim, and does a one-way fee clause bind only the consumer?
Only if a contract or statute provides for them: under the well established American rule attorney's fees are not available to a prevailing party unless provided by contract or statute (Meadowbrook Center v. Buchman). In a consumer contract or lease entered into on or after October 1, 1979 (money, property or services primarily for personal, family or household purposes) that makes the consumer pay the commercial party's attorney's fee, § 42-150bb makes the clause run both ways: a fee 'shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease.' In Centrix Management Co. v. Fosberg (2024) the court held trial courts have discretion to award the prevailing consumer a reasonable fee when it is not practicable to base the award on the contractual terms governing the commercial party's recovery. Because the trial court had made no such threshold determination, the Supreme Court vacated the fee award and remanded for a new hearing.
The trap
A consumer form that caps or fixes the landlord's or lender's fee does not necessarily cap the consumer's award: § 42-150bb sizes the consumer's fee 'as far as practicable' on the commercial party's terms, and Centrix lets the court depart when that is not practicable. The statute's own 'Except as hereinafter provided' points to a second departure that the court does not have to find: § 42-150bb bars any fee to a commercial party represented by its own salaried employee, and in an action in which the consumer is entitled to a fee and the commercial party is so represented, the consumer's fee 'shall be in a reasonable amount regardless of the size of the fee provided in the contract or lease for either party'. The commercial party's own contractual fee is separately limited: under § 42-150aa the holder of such a consumer contract or lease (entered into on or after October 1, 1979) may not collect attorney's fees for a salaried-employee attorney or before a lawsuit is commenced, and where a lawsuit claiming money damages is commenced by an attorney who is not its salaried employee may collect 'not more than fifteen per cent of the amount of any judgment which is entered'. Both sections reach only contracts and leases for personal, family or household purposes; a business-to-business fee clause gets no reciprocity from it.
7 authorities
The words that state the rule
Under the well established "American rule," attorney's fees are not available to a prevailing party unless provided by contract or statute.
- statuteConn. Gen. Stat. § 42-150bbenactment date not established
The words that state the rule
Whenever any contract or lease entered into on or after October 1, 1979, to which a consumer is a party, provides for the attorney's fee of the commercial party to be paid by the consumer, an attorney's fee shall be awarded as a matter of law to the consumer who successfully prosecutes or defends an action or a counterclaim based upon the contract or lease.
- statuteConn. Gen. Stat. § 42-150bbenactment date not established
The words that state the rule
Except as hereinafter provided, the size of the attorney's fee awarded to the consumer shall be based as far as practicable upon the terms governing the size of the fee for the commercial party. No attorney's fee shall be awarded to a commercial party who is represented by its salaried employee. In any action in which the consumer is entitled to an attorney's fee under this section and in which the commercial party is represented by its salaried employee, the attorney's fee awarded to the consumer shall be in a reasonable amount regardless of the size of the fee provided in the contract or lease for either party.
- statuteConn. Gen. Stat. § 42-150bbenactment date not established
The words that state the rule
For the purposes of this section, “commercial party” means the seller, creditor, lessor or assignee of any of them, and “consumer” means the buyer, debtor, lessee or personal representative of any of them. The provisions of this section shall apply only to contracts or leases in which the money, property or service which is the subject of the transaction is primarily for personal, family or household purposes.
- caseConn. S.C. 20927 (July 18, 2024)Centrix Management Co., LLC v. FosbergConn.decided 2024
The words that state the rule
Although we conclude that trial courts have discretion to award a prevailing consumer reasonable attorney’s fees pursuant to § 42-150bb when the court determines that it is not practicable to base the award upon the contractual terms governing the commercial party’s recovery, in the present case, the trial court did not make this threshold determination. Accordingly, we vacate the trial court’s award of attor- ney’s fees and remand the case with direction to con- duct a new hearing on the defendant’s motion for attorney’s fees consistent with this opinion.
- statuteConn. Gen. Stat. § 42-150aaenactment date not established
The words that state the rule
The holder of any contract or lease entered into on or after October 1, 1979, the subject of which is money, property or services intended to be used primarily for personal, family or household purposes and which contains a provision for payment of attorney's fees of a creditor, seller or lessor, shall not receive, claim or collect any payment for attorney's fees (1) for an attorney who is a salaried employee of such holder or (2) prior to the commencement of a lawsuit.
- statuteConn. Gen. Stat. § 42-150aaenactment date not established
The words that state the rule
If a lawsuit in which money damages are claimed is commenced by an attorney who is not a salaried employee of the holder of a contract or lease subject to the provisions of this section, such holder may receive or collect attorney's fees, if not otherwise prohibited by law, of not more than fifteen per cent of the amount of any judgment which is entered.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.