Attorney Fees - Issue 1

The general rule in Illinois is that in the absence of a statute or an agreement the successful litigant in a civil action may not recover attorney fees or the ordinary expenses of litigation from his adversary. Touchdown Sportswear, Inc. v. Hickory Point Mall Co., 165 Ill. App. 3d 72, 73, 518 N.E.2d 647, 648 (1987). Whether attorneys’ fees are recoverable, and the extent of the fees recoverable, will depend on the terms of the contract, i.e., the lease. “Illinois follows the ‘American rule,’ which prohibits prevailing parties from recovering their attorney fees from the losing party, absent express statutory or contractual provisions.” Sandholm v. Kuecker, 962 N.E.2d 418, 435 (Ill. 2012). “Provisions in contracts for the awards of attorney fees and cost . . . are an exception to the rule.” Touchdown Sportswear, Inc. v. Hickory Point Mall Co., 518 N.E.2d 647, 648 (Ill. App. Ct. 1987) (citing Abdul-Karim v. First Fed. Sav. & Loan Ass’n of Champaign, 462 N.E.2d 488, 494 (Ill. 1984)) (affirming award of attorneys’ fees under lease).

Even though the “better practice” is to reserve the issue of attorneys’ fees before closing the proofs, where fees were pleaded and are an entitlement to the prevailing party, , at least one court has found that the failure to reserve the issue does not bar a petition for attorneys’ fees that is filed within 30 days of judgment. See Touchdown Sportswear, 518 N.E.2d at 648. Most equipment finance forms include an agreement by the customer that it will be responsible for and pay all litigation, collection and other enforcement costs, including all related attorney’s fees and other legal costs.  Although some financing customers might propose that the documents include a “prevailing party provision”, whereby the prevailing party in a dispute arising under a contract is entitled to attorney’s fees, financing providers often resist this change especially if the customer’s payment obligations are absolute and unconditional.