Will an Iowa court make the losing side pay our fees under the contract's fee clause?
On the statute's terms, yes. When judgment is recovered upon a written contract containing an agreement to pay an attorney fee, the court shall allow and tax as part of the costs a reasonable attorney fee to be determined by the court (Iowa Code § 625.22(1)). The Supreme Court described that section in Van Sloun v. Agans Bros., Inc. as meaning that when attorney fees are permitted under a contract provision, the court is permitted to tax a reasonable amount of those fees as a part of costs. Van Sloun also recorded the ground rule, crediting Thorn v. Kelley: "The right to recover attorney fees as costs does not exist at common law." and, in Iowa, fees are not allowed "in the absence of a statute or agreement expressly authorizing it. In order [for fees to be] taxed the case must come clearly within the terms of the statute or agreement." Section 625.23 then scales and caps what § 625.22 allows, at half the sum if the action is commenced and the claim paid off before return day and three fourths if paid after return day but before judgment, "but no fee shall be allowed in any case if an action has not been commenced, or expense incurred, nor shall any greater sum be allowed, any agreement in the contract to the contrary notwithstanding." The fee allowed under §§ 625.22 and 625.23 shall not be taxed in any case unless it appears by affidavit of the attorney that there is not and has not been an agreement between the attorney and the client or any other person, express or implied, for any division or sharing of the fee to be taxed, though "This limitation does not apply to a practicing attorney engaged with the attorney as an attorney in the cause", and the affidavit must be filed before any fees are taxed, and when fees are taxed they are only in favour of a regular attorney and as compensation for services actually rendered in the action (§ 625.24).
The trap
Three conditions a fee clause cannot supply for itself. Section 625.22(1) is keyed to a judgment recovered upon a WRITTEN contract containing a fee agreement, so its words do not reach an oral contract or a fee sought where no judgment on the contract was recovered. Section 625.23 then overrides the clause's own figure: no greater sum than the chapter allows, "any agreement in the contract to the contrary notwithstanding", and no fee at all "if an action has not been commenced, or expense incurred". And § 625.24 makes the fee-splitting affidavit a precondition to taxing the fee, filed before the taxing, a step that is easy to miss because it has nothing to do with the contract. Do not read that last condition as self-executing, because Van Sloun did not. The fee claimant there never filed the affidavit and the trial-level award STOOD: "Because the filing of the affidavit goes to the authority of the court, it may be waived.", the objecting party had not objected below, and "The attorney’s fees were properly taxed as costs." The same omission still defeated the fees on appeal, where the objection was live: "This objection has not been waived and we are, therefore, without authority to tax the attorney’s fees as costs." So the affidavit is the fee claimant's own risk, and the opponent has to object below to get the benefit of its absence. The section is about fees taxed as costs, and it fixes the amount as one the court determines to be reasonable, not the amount the clause names.
9 authorities
- statuteIowa Code § 625.22enactment date not established
The words that state the rule
When judgment is recovered upon a written contract containing an agreement to pay an attorney fee, the court shall allow and tax as a part of the costs a reasonable attorney fee to be determined by the court.
- statuteIowa Code § 625.24enactment date not established
The words that state the rule
The attorney fee allowed in sections 625.22 and 625.23 shall not be taxed in any case unless it appears by affidavit of the attorney that there is not and has not been an agreement between the attorney and the attorney’s client or any other person, express or implied, for any division or sharing of the fee to be taxed.
- statuteIowa Code § 625.24enactment date not established
The words that state the rule
This limitation does not apply to a practicing attorney engaged with the attorney as an attorney in the cause.
- statuteIowa Code § 625.24enactment date not established
The words that state the rule
The affidavit shall be filed prior to any attorney fees being taxed. When fees are taxed, they shall be only in favor of a regular attorney and as compensation for services actually rendered in the action.
The words that state the rule
Iowa Code section 625.22 declares that when attorney fees are permitted under a contract provision, the court is permitted to tax a reasonable amount of those fees as a part of costs.
- statuteIowa Code § 625.23enactment date not established
The words that state the rule
If action is commenced and the claim paid off before return day, the amount shall be one-half of the sum above provided, and if it is paid after the return day but before judgment, three-fourths of said sum; but no fee shall be allowed in any case if an action has not been commenced, or expense incurred, nor shall any greater sum be allowed, any agreement in the contract to the contrary notwithstanding.
The words that state the rule
The right to recover attorney fees as costs does not exist at common law. Thorn v. Kelley, 257 Iowa 719, 726 , 134 N.W.2d 545, 548 (1965). In Iowa, they are not allowed “in the absence of a statute or agreement expressly authorizing it. In order [for fees to be] taxed the case must come clearly within the terms of the statute or agreement.”
The words that state the rule
Because the filing of the affidavit goes to the authority of the court, it may be waived. Klinge, 725 N.W.2d at 16 . Superior Staffing had the opportunity to object but failed to do so. Had Superior Staffing objected, the failure to file the affidavit could have been easily cured. Having failed to object at the district court, Superior Staffing has waived its objection. The attorney’s fees were properly taxed as costs.
The words that state the rule
Although a party entitled to attorney fees under a contract may be entitled to reasonable attorney fees on appeal, see Beckman v. Kitchen, 599 N.W.2d 699, 702 (Iowa 1999), Agans Brothers has still not filed the affidavit required under Iowa Code section 625.24. Superior Staffing continues to object to the taxing of attorney fees because of this failure. This objection has not been waived and we are, therefore, without authority to tax the attorney’s fees as costs. Agans Brothers’ request for attorney fees on appeal is denied.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.