It’s often a long-shot in PA to get the opposing party to pay your attorney fees for civil litigation. Ordinarily, each party pays their own attorney fees in Pennsylvania. Only two exceptions exist. The first: the parties have agreed — via a contract — that one party must pay the other’s attorney fees. The other: consumer protection law applies. Let’s talk about an agreement to pay the other side’s attorney fees, first.
Attorney Fee Provision in Construction Contracts
When it comes to new building construction, the builder or contractor often drafts the contract, making it so only the builder or contractor can recover his attorney fees relative to any dispute. This is legal. But it takes us to the next exception, which creates a massive opportunity for any consumer — the owner or purchaser of property for a private or recreational (non-commercial) purpose — namely, consumer protection law.
Consumer Protection Trump Card Against a Builder
Pennsylvania has two consumer protection laws that govern the improvement of property: the Home Improvement and Consumer Protection Law (HICPA), which only applies to home improvement, not new home construction. The other statute is more broad and applies to both home improvement and new home construction. This is PA’s Unfair Trade Practices and Consumer Protection Law, (UTPCPL), see 73 P.S. §201-1 – 201-9.2. The UTPCPL expressly allows the consumer to recover an award for his reasonable attorney fees and costs. Not all conduct by a home builder amounts to “unfair trade practices.” However, the effect of the UTPCPL’s cost-shifting provision can be dramatic.
PA Western PA Federal Judge Enters $318K Attorney Fee Against Builder
In Catena v. NVR, Inc. the Plaintiffs entered into a contract for new home construction with Defendant NVR, Inc., which built a home at issue containing numerous defects, allegedly, in breach of contract. Plaintiffs also alleged — and proved — violations of the UTPCPL against the Defendant-builder. A jury awarded the Plaintiffs $146,462.40 in actual damages relative to the building defects.
Here’s where it gets interesting.
U.S. District Judge Marilyn J. Horan of the Western District of Pennsylvania determined that the UTPCPL’s cost-shifting provision applied in favor of the plaintiff-consumer. As such, Judge Horan awarded the Plaintiffs $318,131 for Plaintiff’s attorney fees, $12,894.53 for Plaintiff’s records costs, and $27,640.86 in expert fees.
Proportion of Attorney Fees Relative to Actual Damages
Judge Horan noted the proportionality of actual damages to the attorney fee award. In fact, the attorney fee portion was 2.17 times the amount of compensatory damage. This, however, was of no consequence to Judge Horan, who opined:
Given the complex nature of the construction and engineering aspects, plus the multitude of defects involved in this case, the attorney fees accrued were warranted and proportionate. The damages, as determined at trial, involved multiple and significant construction defects and repeated failures to correct, the proof of which necessitated significant litigation expenses to the Plaintiffs.”
Let’s Get Started!
Not all judges would agree with Judge Horan’s holding in Catena v. NVR, Inc., above. However, a consumer protection claim must be taken seriously as against a builder, developer, or contractor engaging in home improvement, given the fee-shifting provisions in UTPCPL and HICPA. Contact a Pittsburgh lawyer at our firm for a consultation.
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