Contracts in the Rearview Mirror

"Costs and expenses" Are Not Attorney's Fees

HourglassIf you (or your client) had a contract that provided that "all costs and expenses of any suit or proceeding shall be assessed against the defaulting party…", and you won the lawsuit against the defaulting party, would you be able to recover the attorney's fees you paid your lawyer? Answer: No. In Cracker Barrel Old Country Store v. Epperson, 284 S.W.3d 303, 306 (Tenn. 2009), the Supreme Court of Tennessee held that such language did not suffice to allow the prevailing party in a lawsuit to recover attorney's fees.

"Statute of Limitation or Other Similar Time Bar" Does Not Include a Statute of Repose

Besides statutes of limitation, there is another type of statute (time trap) that can bar some party who has legal claims against another party. Those types of statutes are called "statutes of repose." Like statutes of limitation, statutes of repose require that a claim be filed with a court within a certain period of time or else, the claim will be absolutely barred. How do statues of repose differ from statutes of limitation? Whereas, in some cases, the running of a statute of limitation may not start until a party knows about his or her claim, statutes of repose typically don't have any wiggle room. They set a time by which a claim must be filed regardless of when the party holding the claim should have been aware of it.

A party who has a claim, but would like time to evaluate its claim or would like time to try to resolve it without filing a lawsuit, may be very prudent to ask a party against whom it has the claim to execute a "Tolling Agreement." In a Tolling Agreement, the party against whom a potential claim may exist agrees that, if the matter can't be worked out and a lawsuit must be filed, that party will not rely on a statute of limitation or statute of repose to try and defeat the claim of the party holding the claim. Such agreements can give parties time to negotiate or to see how important events unfold without the party who has the potential claims being forced to file a lawsuit to beat a filing deadline.

In Montgomery v. Wyeth, 580 F.3d 455, 465 (6th Cir.2009), the party holding the claim sought to rely on language in the tolling agreement between the parties by which the defendant waived any defense based on "any statute of limitation or similar time bar…." That language does not, obviously, specifically mention the statute of repose. The defendant in that case pounced on that omission, and the court decided in favor of the defendant. The Court held that, if the plaintiff intended for the defendant to toll the statute of repose, the plaintiff should have specifically mentioned the statute of repose in the tolling agreement. Ouch.

You should not rely on any of the articles above until you have obtained the opinion of a lawyer. The law is too complex and legal outcomes are too dependent on the unique facts of each case for you to be able to rely on the above advice/opinions/articles without obtaining the opinion of a lawyer who is familiar with the facts of your particular case. There are many exceptions to general rules of law and there may be an exception to the general legal rules discussed above. You will not and cannot know if some important exception might apply to your situation until you have consulted with a lawyer about the particular facts of your case. This newsletter is not intended to be and should not be relied upon as legal advice. This newsletter is protected by copyright, but material appearing herein may be reproduced or translated with appropriate credit.