Will a Maine court make the losing side pay our fees under this clause?
Only if a contract term or a statute says so, and in two settings the statute overrides whatever the contract says, each with a reach narrower than it looks. Maine follows the American Rule: "parties are responsible for their own attorney fees absent a statutory or contractual provision stating otherwise", and "[g]enerally, the prevailing party in a breach of contract action is not entitled to attorney fees absent a provision in the contract requiring payment of such fees". Both sentences come from Foremost Insurance Co. v. Levesque, which then declined to apply them: the same opinion goes on "However, with respect to insurance contracts, we have declared that an insurer may be liable for an insured's attorney fees", extended that exception to a declaratory judgment action brought by an insurer "seeking a declaration that it has no duty to indemnify", and affirmed a fee award against the insurer over a dissent. Two Maine statutes displace the parties' bargain outright. Under the construction prompt-payment act, 10 M.R.S. § 1118(4), "[n]otwithstanding any contrary agreement, the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter must be awarded reasonable attorney's fees ... together with expenses". Under the Unfair Trade Practices Act, 5 M.R.S. § 213(2), a court that finds a § 207 violation "shall, in addition to other relief ... and irrespective of the amount in controversy", award the petitioner reasonable fees and costs, but § 213(1) gives that private action only to a person who bought or leased "primarily for personal, family or household purposes", so a commercial buyer has no claim to it at all.
The trap
Each override is wider than it looks in one direction and narrower in another, and the narrow side is where fee claims die. Wider: in Fortney & Weygandt, Inc. v. Lewiston DMEP IX, LLC the Law Court affirmed use of the "common core of facts" rule under the prompt-payment statute, so a contractor's recoverable fees were not confined to time spent directly on the prompt-payment counts. Narrower, in the same case: the Court VACATED the award relating to the subcontractor claims and remanded, entering judgment "affirmed in part and vacated in part". The common-core rule is not a licence to bill the whole file. Narrower again, under the UTPA: § 213(1-A) requires that "[a]t least 30 days prior to the filing of an action for damages, a written demand for relief ... must be mailed or delivered to any prospective respondent", and a claimant who rejects a tender of settlement or an offer of judgment and then does no better "may not recover attorney's fees or costs incurred after the more favorable tender of settlement or offer of judgment". Kilroy v. Northeast Sunspaces, Inc. lost on both halves: the offer of judgment cut off fees from its date, and because the 30-day demand was insufficient the Law Court held "[t]he trial court did not abuse its discretion when it found the lack of notice significant and denied fees to Kilroy" and affirmed. The demand step has one exception worth knowing before a fee claim is abandoned: "The demand requirement of this subsection does not apply if the claim is asserted by way of counterclaim or cross claim." On the construction side, note what § 1118 permits before building a claim on it: "Nothing in this chapter prevents an owner, contractor or subcontractor from withholding payment in whole or in part ... in an amount equalling the value of any good faith claims", and a payment "is not deemed to be wrongfully withheld if it bears a reasonable relation to the value of any claim held in good faith". A withholding inside that description is not a late payment, and conversely, where the withholding IS wrongful, § 1118(2) adds a penalty of "1% per month of all sums for which payment has wrongfully been withheld" on top of damages. A drafter who writes "each party bears its own fees" into a Maine construction subcontract has written a term § 1118(4) reads out.
18 authorities
The words that state the rule
The so-called American Rule provides that parties are responsible for their own attorney fees absent a statutory or contractual provision stating otherwise. Union Mut. Fire Ins. Co. v. Town of Topsham, 441 A.2d 1012, 1017 (Me.1982). However, with respect to insurance contracts, we have declared that an insurer may be liable for an insured's attorney fees in a declaratory judgment action in which the insured or the insurer seeks to establish the insurer's duty to defend and a comparison of the complaint with the policy demonstrates potential liability within the coverage of the policy.
The words that state the rule
Generally, the prevailing party in a breach of contract action is not entitled to attorney fees absent a provision in the contract requiring payment of such fees.
The words that state the rule
We are persuaded that we should extend the rule announced in Union Mutual and Gibson to declaratory judgment actions by an insurer seeking a declaration that it has no duty to indemnify. When an insured prevails after incurring legal fees to defend a suit brought by its insurer, policy reasons support the allowance of attorney fees to the insured. Unsuccessful litigation filed by an insurer against its insured subjects the insured to significant costs that may render victory for the insured on the indemnification issue meaningless. In that case, the insured will be in no better position than he would be without having purchased insurance.
The words that state the rule
Because Levesque incurred attorney fees when he successfully defended against Foremost's declaratory judgment action on the duty to indemnify, the Superior Court properly awarded Levesque attorney fees. The entry is: Judgment affirmed.
- statute10 M.R.S. § 1118enactment date not established
The words that state the rule
Notwithstanding any contrary agreement, the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter must be awarded reasonable attorney's fees in an amount to be determined by the court or arbitrator, together with expenses.
- statute10 M.R.S. § 1118enactment date not established
The words that state the rule
If arbitration or litigation is commenced to recover payment due under the terms of this chapter and it is determined that an owner, contractor or subcontractor has failed to comply with the payment terms of this chapter, the arbitrator or court shall award an amount equal to 1% per month of all sums for which payment has wrongfully been withheld, in addition to all other damages due and as a penalty.
- statute10 M.R.S. § 1118enactment date not established
The words that state the rule
A payment is not deemed to be wrongfully withheld if it bears a reasonable relation to the value of any claim held in good faith by the owner, contractor or subcontractor against which an invoicing contractor, subcontractor or material supplier is seeking to recover payment.
- statute5 M.R.S. § 213enactment date not established
The words that state the rule
If the court finds, in any action commenced under this section that there has been a violation of section 207 , the petitioner shall, in addition to other relief provided for by this section and irrespective of the amount in controversy, be awarded reasonable attorney's fees and costs incurred in connection with said action.
- statute5 M.R.S. § 213enactment date not established
The words that state the rule
Any person who purchases or leases goods, services or property, real or personal, primarily for personal, family or household purposes and thereby suffers any loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 207 or by any rule or regulation issued under section 207, subsection 2 may bring an action either in the Superior Court or District Court for actual damages, restitution and for such other equitable relief, including an injunction, as the court determines to be necessary and proper. There is a right to trial by jury in any action brought in Superior Court under this section.
- statute5 M.R.S. § 213enactment date not established
The words that state the rule
At least 30 days prior to the filing of an action for damages, a written demand for relief, identifying the claimant and reasonably describing the unfair and deceptive act or practice relied upon and the injuries suffered, must be mailed or delivered to any prospective respondent at the respondent's last known address. A person receiving a demand for relief, or otherwise a party to any litigation arising from the claim that is the subject of the court action, may make a written tender of settlement or, if a court action has been filed, an offer of judgment.
- case2022 ME 5Fortney & Weygandt, Inc. v. Lewiston DMEP IX, LLCMe.decided 2022read it at the source ↗
The words that state the rule
As discussed below, the court did not err in using the “common core of facts” rule to review F&W’s requested attorney fees and expenses under the prompt payment statute. Furthermore, we affirm the court’s application of the “common core of facts” rule and the resulting award of attorney fees and expenses relating to F&W’s contract claims and GBT’s counterclaims and affirmative defenses, including NHD’s fees and expenses.
- case2022 ME 5Fortney & Weygandt, Inc. v. Lewiston DMEP IX, LLCme-medecided 2022read it at the source ↗
The words that state the rule
We affirm the court’s award of attorney fees and expenses relating to F&W’s contract claims and GBT’s counterclaims and affirmative defenses, including NHD’s fees, as having been generated either directly from or within the “common core of facts” of the prompt payment claims, and we affirm the court’s finding that the requested attorney fees and expenses were reasonable.
- case2022 ME 5Fortney & Weygandt, Inc. v. Lewiston DMEP IX, LLCme-medecided 2022read it at the source ↗
The words that state the rule
as well as the attorney fees and expenses associated with this appeal. The entry is: Judgment affirmed in part and vacated in part. Remanded for further proceedings consistent with this opinion.
The words that state the rule
The governing statute, section 213(1-A), is clear: Kilroy may not recover attorney fees from Northeast incurred after August 22, 2005, the date of the offer of judgment, because the amount he obtained in court was less than the amount he was offered.
The words that state the rule
We view the lack of notice as a factor that the court should take into consideration in exercising its discretion regarding the request for attorney fees. The trial court did not abuse its discretion when it found the lack of notice significant and denied fees to Kilroy. The entry is: Judgment affirmed.
- statute5 M.R.S. § 213enactment date not established
The words that state the rule
The demand requirement of this subsection does not apply if the claim is asserted by way of counterclaim or cross claim.
- statute10 M.R.S. § 1118enactment date not established
The words that state the rule
Nothing in this chapter prevents an owner, contractor or subcontractor from withholding payment in whole or in part under a construction contract in an amount equalling the value of any good faith claims against an invoicing contractor, subcontractor or material supplier, including claims arising from unsatisfactory job progress, defective construction or materials, disputed work or 3rd-party claims.
- statute5 M.R.S. § 213enactment date not established
The words that state the rule
If the judgment obtained in court by a claimant is not more favorable than any rejected tender of settlement or offer of judgment, the claimant may not recover attorney's fees or costs incurred after the more favorable tender of settlement or offer of judgment.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.