Law firm that represented itself in action for attorneys fees can recover attorney fees for cost of action

Law Reporter, May 2001

Gold, Weems, Bruser, Sues & Rundell v. Metal Sales Mfg. Corp., 236 F.3d 214 (5th Cir. 2000).

The Fifth Circuit Court of Appeals held that a law firm that represented itself in an action for attorney fees can recover attorney fees for the cost of the action.

Here, Metal Sales hired a law firm to represent it in a lawsuit. Metal Sales prevailed and paid the firm half of its claimed fee. The firm made a formal demand for the remainder under the state's Open Account Statute, La. Rev. Stat. Ann.(sec) 9:2781, then sued for the fees. A trial court granted plaintiff summary judgment and awarded it fees. The Fifth Circuit affirmed the award on appeal. Plaintiff then sought attorney fees for the appeal, which the trial court also granted. Defendant appealed, arguing that attorney fees cannot be awarded under the Open Account Statute to a firm representing itself. Defendant claimed that statutes allowing for the recovery of attorney fees contemplate an expenditure of funds. In this case, defendant said, plaintiff did not pay fees because it represented itself.

Affirming the award, the Fifth Circuit noted that (sec)9:2781 provides that any person failing to pay an open account is liable to the claimant for reasonable attorney fees for the prosecution and collection of the claim. The case cited by defendant-which held that recovery of attorney fees is not available to attorneys who represent themselves-- is distinguishable from this case, the court said. First, (sec)9:2781 was not at issue in that case, the court explained. Other case law discussing the statute allowed awards of attorney fees to firms representing themselves. Second, the case cited by defendant did not involve a situation where attorney fees were sought by an incorporated law firm that hired one of its own employees to bring the action, the court said.

The court also noted that U.S. Supreme Court case law supports plaintiffs recovery of fees. In Kay v. Ehrler, 499 U.S. 432 (1991), the Court distinguished between individual and entity claimants, finding that an organization that represents itself, unlike individual attorneys representing themselves, is always represented by counsel and, thus, there is always an attorney-client relationship. Consequently, even if the statute required both a lawyer and a client-which it does not-such a requirement would be met, entitling plaintiff to collect attorney fees.

Plaintiffs Counsel

J. Kendall Rathburn, Alexandria, La.