AN I RECOVER MY ATTORNEY FEES IN A QUIET TITLE LAWSUIT?
Yes, but only in certain circumstances. In most states, the winning party can potentially recover attorney fees in a quiet title lawsuit. Alternatively, a property owner can potentially recover the cost of a quiet title action based on a warranty of title or a contractual provision. To determine whether you qualify, review the recovery options discussed below.
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Recovery Option 1: Recovering Attorney Fees in a Contested Quiet Title Action.
NOTE: This article is based on Oklahoma law, but the same general rules apply in most cases.
Generally, each party to a lawsuit pays for his or her own attorney fees. To recover attorney fees, you must fit into a special exception that requires the losing party to pay the winning party's attorney fees. This is called “fee-shifting.” In a contested quiet title action, the prevailing party can potentially recover attorney fees by following a very specific set of rules. Specifically, the prevailing party must send a demand letter to the losing party before filing a quiet title lawsuit. The demand letter gives the other party a chance to settle the ownership dispute outside of court. This pre-litigation demand letter must satisfy a very specific and detailed set of statutory criteria. (See 12 Okla. Stat. Section 12-1141.3) If a party sends a pre-litigation demand letter that satisfies the criteria, then that party can potentially collect attorney fees and costs in the subsequent quiet title lawsuit. (See 12 Okla. Stat. Section 12-1141.5) In other words, a party can “trigger” the fee-shifting provision by sending a pre-litigation demand letter to the other party.
Before triggering the fee-shifting provision, remember that fee-shifting works in both directions. If you trigger the attorney fee provisions and then lose the lawsuit, the other party can collect attorney fees and costs from you. Once a party triggers the fee-shifting statute, both parties stand to win (or lose) their attorney fees in the quiet title action. In this way, fee-shifting raises the stakes for both parties to the lawsuit. So, before sending a pre-litigation demand letter that triggers the fee-shifting provision, carefully consider the risks and rewards of fee-shifting. It's a two-way street.
Recovery Option 2: Warranty of Title or Contractual Obligation.
In an uncontested quiet title action, you cannot recover fees from the “losing party”, because no such party exists. However, your attorney fees might fall within a warranty of title or a contractual remedy. Who did you buy the property from? Does your deed contain a warranty? Do you have a purchase agreement or a contract with your buyer? Your deed or contract may contain certain promises about the state of title. Based on these promises, your seller might be obligated to pay for your quiet title action. Establishing a claim against an upstream owner can be difficult, so consult with an attorney about your rights. A warranty or contractual provision can potentially eliminate 100% of your quiet title action cost.
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