Recovering Post-Judgment Attorney’s Fees – A Practice Pointer for Transaction and Litigation Counsel
By: Thomas M. Lombardo
Most of us know that obtaining a judgment is often much easier than recovering actual dollars. Unless your defendant’s insurer is responsible for payment of the judgment, or your defendant is a “deep pocket” with multiple bank accounts that can be hit with third-party citations, the hard work has just begun. Consequently, it is important for all transactional, litigation, and collections attorneys to remember three critical steps to ensure that your client’s post-judgment attorney’s fees for collection activity are recoverable on top of the judgment itself.
Step One: Drafting the Contract
Post-judgment attorney’s fees are only recoverable if there is a legal basis providing for same. Therefore, attorneys drafting contracts for their business clients must be sure to include clear language which provides for the successful plaintiff to recover not only its reasonable costs and attorney’s fees from bringing a successful lawsuit, but also its collection-related legal fees and expenses. Poilevey v. Spivack, 368 Ill. App. 3d 412 (1st Dist. 2006). Without such a provision, post-judgment legal fees will not be recoverable in contract disputes. For this same reason, it is critical for litigators to carefully examine contractual attorney’s fee provisions before telling a client whether they might be able to recover some or all of their legal fees and expenses in a successful lawsuit.
Step Two: The Judgment
Litigators must also pay close attention to the language in their judgments if they plan to seek post-judgment attorney’s fees at a later date. If there is a contractual provision that provides for collection-related attorney’s fees, the judgment should reduce the already-incurred legal fees and costs to a specific dollar amount and award same. The judgment should also be entered with a provision that allows reasonable attorney’s fees, costs, and post-judgment interest incurred after the date of the judgment. This way, the judgment contemplates future conduct and as such the circuit court retains jurisdiction to enforce same and to rule on later petitions for attorney’s fees. Tobias v. Lake Forest Partners, LLC, 2012 IL App (1st) 110502-U, citing Director of Insurance ex rel. State v. A and A Midwest Rebuilders, Inc., 383 Ill. App. 3d 721 (2nd Dist. 2008).
Step Three: The Petition
After a judgment is entered and the successful plaintiff incurs collection-related attorney’s fees, a petition should be filed in the circuit court requesting that those post-judgment attorney’s fees be added to the judgment award. Id. Furthermore, collections attorneys must be aware that any liens created by enforcement mechanisms, such as citations or wage garnishments, will not include post-judgment attorney’s fees that were not reduced to an already-entered judgment. Therefore, it may be wise to bring several petitions as the legal fees mount from time to time during the collection phase, and to reissue citations and other lien-creating enforcement papers each time the judgment is increased. This will ensure that the post-judgment fee portion of your judgment is not second-in-time, or subordinate, to later secured or judgment creditors. Tobias v. Lake Forest Partners, LLC, 402 Ill. App. 3d 484 (1st Dist. 2010).
Recalcitrant judgment debtors often make the enforcement of judgments difficult, time-consuming, and expensive for successful plaintiffs. But with careful planning and meticulous practice, post-judgment attorney’s fees may not only be recoverable by successful commercial litigants, those fees might even exceed the original fee award.