Federated Capital Corp. v. Haner
2015 UT App 132
| Utah Ct. App. | 2015Background
- Haner obtained an Advanta business credit card governed by a written Agreement that allowed assignment, selected Utah law/venue, and contained an attorney-fee provision allowing collection costs and attorney fees.
- Advanta charged off Haner’s account and later sold the charged-off account to Federated Capital Corporation.
- Federated sued Haner in Utah more than five years after acquiring the account; a default judgment was entered, later set aside, and Haner moved for summary judgment.
- The district court granted Haner summary judgment on statute-of-limitations grounds, dismissing Federated’s claim without reaching the merits.
- Haner requested attorney fees under Utah’s reciprocal attorney fee statute (Utah Code § 78B-5-826) based on the Agreement’s fee provision; the district court denied fees, concluding their award would unjustly enrich Haner.
- On appeal, the Utah Court of Appeals reversed and remanded, directing the district court to award Haner reasonable reciprocal attorney fees for the district court proceedings and on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court properly denied Haner attorney fees under Utah’s reciprocal attorney fee statute despite her prevailing on statute-of-limitations grounds | Federated argued district court reasonably exercised discretion to deny fees to avoid an unjust windfall to Haner because fee award would leave her better off (no liability plus fees paid by Federated) | Haner argued the statute and contract entitlement require fees be awarded absent compelling reasons to deny; winning on statute-of-limitations does not defeat fee recovery | Court held fees should ordinarily be awarded under the statute in accordance with the contract unless compelling reasons exist; denying fees because the plaintiff won on statute-of-limitations or based on disputed pleadings was not a sufficient basis; reversed and remanded for award of reasonable fees in district court and on appeal |
Key Cases Cited
- Fericks v. Lucy Ann Soffe Trust, 100 P.3d 1200 (Utah 2004) (whether attorney fees recoverable is question of law)
- Bilanzich v. Lonetti, 160 P.3d 1041 (Utah 2007) (reciprocal-fee statute permits court discretion and should be guided by statute’s leveling purpose)
- Dixie State Bank v. Bracken, 764 P.2d 985 (Utah 1988) (calculation of reasonable attorney fees reviewed for abuse of discretion)
- Soffe v. Ridd, 659 P.2d 1082 (Utah 1983) (contract provisions for attorney fees should ordinarily be honored absent compelling reasons)
- Saunders v. Sharp, 818 P.2d 574 (Utah Ct. App. 1991) (where contract provides for attorney fees, such fees are awarded as a matter of legal right)
- Jensen v. IHC Hosp., Inc., 944 P.2d 327 (Utah 1997) (purpose of statutes of limitations explained)
- Giles v. Mineral Res. Int’l, Inc., 338 P.3d 825 (Utah Ct. App. 2014) (prevailing party entitled to reasonable appellate attorney fees when contract or statute so provides)