Our contract gives only us attorney fees if we win. Does that hold up in Washington?
No. In any action on a contract or lease entered into after September 21, 1977 that specifically provides for attorneys' fees and costs incurred to enforce its provisions to be awarded to one of the parties, the prevailing party, whether or not it is the party specified in the contract, is entitled to reasonable attorneys' fees in addition to costs and necessary disbursements. The fees the section provides cannot be waived by the parties, and a contract provision waiving them is void. As used in that section, "prevailing party" means the party in whose favor final judgment is rendered. The Supreme Court of Washington reads the section the same way: it "is not a fee-shifting statute", its purpose "is to make unilateral contract provisions bilateral", and that language "must be read into a contract that awards fees to one party any time an action occurs, regardless of whether that party prevails or whether there is a final judgment" (Wachovia SBA Lending, Inc. v. Kraft). Because "a 'voluntary dismissal' is not a final judgment", a defendant left with one is not a prevailing party under this section.
The trap
A one-way fee clause drafted to favour the drafter becomes, by statute, a two-way clause: the counterparty who wins gets fees too. A second clause trying to waive that reciprocity is itself void. 'Prevailing party' is tied to final judgment, and the Supreme Court has held that a plaintiff's voluntary dismissal without prejudice under CR 41 is not one. In Wachovia the defendant had already defeated the lender's summary judgment motion when the lender dismissed voluntarily, and she still got no fees, because "[a] voluntary dismissal leaves the parties as if the action had never been brought"; the lender was denied fees too, since "where neither party prevails with a final judgment, neither party is entitled to attorney fees". Two limits cut the other way. The section "is not a fee-shifting statute", so it is not a tool against a weak case. And the Court reads Walji as holding that the statutory definition of prevailing party "could not be imposed where there was already a bilateral contract": the final-judgment definition comes with the correction of a one-sided clause, not as a general definition of winning in every contract case.
8 authorities
- statuteRCW 4.84.330enactment date not established
The words that state the rule
In any action on a contract or lease entered into after September 21, 1977, where such contract or lease specifically provides that attorneys' fees and costs, which are incurred to enforce the provisions of such contract or lease, shall be awarded to one of the parties, the prevailing party, whether he or she is the party specified in the contract or lease or not, shall be entitled to reasonable attorneys' fees in addition to costs and necessary disbursements. Attorneys' fees provided for by this section shall not be subject to waiver by the parties to any contract or lease which is entered into after September 21, 1977. Any provision in any such contract or lease which provides for a waiver of attorneys' fees is void. As used in this section "prevailing party" means the party in whose favor final judgment is rendered.
The words that state the rule
RCW 4.84.330 is not a fee-shifting statute. A fee-shifting statute is designed to “punish frivolous litigation and encourage meritorious litigation.” Brand v. Dep’t of Labor & Indus., 139 Wn.2d 659, 667 , 989 P.2d 1111 (1999). By its plain language, the purpose of RCW 4.84.330 is to make unilateral contract provisions bilateral. The statute ensures that no party will be deterred from bringing an action on a contract or lease for fear of triggering a one-sided fee provision. It does so by expressly awarding fees to the prevailing party in a contract action. It further protects its bilateral intent by defining a prevailing party as one that receives a final judgment. This language must be read into a contract that awards fees to one party any time an action occurs, regardless of whether that party prevails or whether there is a final judgment.
The words that state the rule
In ordinary usage, a “final judgment” is “[a] court’s last action that settles the rights of the parties and disposes of all issues in controversy ....” Black’s Law Dictionary 859 (8th ed. 2004). By this well-accepted definition, a “voluntary dismissal” is not a final judgment. A voluntary dismissal leaves the parties as if the action had never been brought. Beckman v. Wilcox, 96 Wn. App. 355, 359 , 979 P.2d 890 (1999); State v. Taylor, 150 Wn.2d 599, 602 , 80 P.3d 605 (2003). No substantive issues are resolved, and the plaintiff may refile the suit. Because a voluntary dismissal is not a final judgment rendered in favor of the defendant, the Court of Appeals correctly concluded that Kraft cannot be considered a prevailing party under RCW 4.84.330.
The words that state the rule
The mutuality intended by the statute means that where neither party prevails with a final judgment, neither party is entitled to attorney fees.
The words that state the rule
Marassi attributed this general rule to Walji , but Walji made no such statement. Walji merely held that the statutory definition of “prevailing party” under RCW 4.84.330 could not be imposed where there was already a bilateral contract. Walji, 57 Wn. App. at 287-88 .
The words that state the rule
After moving unsuccessfully for summary judgment, Wachovia voluntarily dismissed its suit against Kraft without prejudice under CR 41. Kraft asked for attorney fees and costs, which the trial court denied.
The words that state the rule
RCW 4.84.330 is designed to make a unilateral attorney fees provision bilateral when a contracting party receives a final judgment. We hold that a voluntary dismissal is not a final judgment as contemplated under RCW 4.84.330, and Kraft is therefore not entitled to attorney fees. We further hold that the trial court properly dismissed Wachovia’s suit without prejudice. Finally, we deny Wachovia’s request for attorney fees. We affirm the Court of Appeals.
- statuteRCW 4.84.270enactment date not established
The words that state the rule
The defendant, or party resisting relief, shall be deemed the prevailing party within the meaning of RCW 4.84.250, if the plaintiff, or party seeking relief in an action for damages where the amount pleaded, exclusive of costs, is equal to or less than the maximum allowed under RCW 4.84.250, recovers nothing, or if the recovery, exclusive of costs, is the same or less than the amount offered in settlement by the defendant, or the party resisting relief, as set forth in RCW 4.84.280. [ 1980 c 94 s 2; 1973 c 84 s 3.]
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.