Are You Entitled to Recover Your Attorney’s Fees in a Construction Defect Case?

In Colorado, the prevailing party at trial or arbitration is not automatically entitled to recover their attorney’s fees. In fact, only specific circumstances allow for such a recovery. Since attorney’s fees can add up quickly during the course of litigation, knowing whether your case falls within one of the specific circumstances is important to know before proceeding with your case.

In a construction defect case, attorney’s fees are typically awarded in one of two ways:

The first way is if a contract between the parties to the lawsuit provides for an award of attorney’s fees. Many contract will have a specific provision addressing attorney’s fees. It is important to review this language prior to signing any contract or initiating any litigation. Contractual attorney’s fees provisions generally fall into three categories.

• The first category are bilateral provisions which provide for an award of attorney’s fees to the prevailing party.
• The second category are unilateral provisions which provide for an award of attorney’s fees to only one party. Generally, unilateral provisions favor the party that drafted the contract. In the context of a construction contract, this may mean that only the contractor can recover attorney’s fees.
• The third category is essentially the same as having no provision as it provides that each party will bear their own attorney’s fees.

The second way to recover an award of attorney’s fees is if an award is provided by statute. Whether such a statute applies to your case will depend on the legal claims you can prove. If your case is only for breach of contract or simple negligence, then it may be that no statutes apply. However, construction cases do often involve the violation of statutes in addition to breach of contract and negligence. The following are some statutes commonly seen in construction cases. A violation of any of these statutes can allow for an award of attorney’s fees.

• The Trust Fund statute, C.R.S. § 38-22-127, requires that all funds disbursed to any contractor or subcontractor under any construction contract or job must be held in trust for the payment of those working or supplying materials to the construction project.
• The Colorado Consumer Protections Act, C.R.S. § 6-1-1101, et seq., prohibits deceptive trade practices that have an impact on the general public.
• The Excessive Mechanic’s Lien statue, C.R.S. § 38-22-128, prohibits the filing of a mechanic’s lien that is greater than what is actually owed.
• There is also C.R.S. § 13-17-102 which provides for attorney’s fees if a lawsuit or claim is found to be frivolous, vexatious, or groundless.

Finally, in cases where an award of exemplary damages are justified, including cases of fraud, willful and wanton conduct, or reckless disregard, the court can consider attorney costs in determining the amount of the award[i].

Because of the many nuances and considerations, it is important do discuss the facts of your case with an attorney before embarking on a construction case. Contact the experienced attorneys at Jorgensen, Brownell & Pepin, P.C. to discuss your options. Telephone and video conferences are currently available.

This blog is intended to provide general information and, therefore, should not be treated as legal advice. You should contact a qualified attorney for questions about legal issues.

[i] See Beebe v. Pierce, 521 P.2d 1263 (Colo. 1974); Davies v. Bradley, 676 P.2d 1242, 1246 (Colo. App. 1983)