Utah Court Upholds Award for In House Counsel’s Legal Time.

Archives Attorney Fee Award For In-House Counsel Upheld

SOFTSOLUTIONS, INC. V. BRIGHAM YOUNG UNIVERSITY, No. 981481 (Utah Sup. Ct., 5/19/00)

Arbitral awards of attorney fees relating to time spent by in-house counsel are appropriate, but should be based on a cost-plus rate, rather than a market-rate formula.

The primary issues on appeal in this Award challenge by Softsolutions deal with whether the Arbitrator in this software royalty dispute decided issues not submitted for disposition in the joint agreement of the parties.

We focused on the attorney fee issues, but the decision has other interesting facets. BYU, the licensor of the software, won $1.7 million from Softsolutions, the distributor-licensee of the software, plus $115,000 in attorney fees. Softsolutions lost in its attempt to vacate or modify the Award at the trial court level and was assessed an additional $28,987.50 in attorney fees for post-Award litigation.

This Court upholds the Award in full and, on the attorney fee issue, states: “…we are persuaded by the ample authority from other jurisdictions that a successful litigant who is not primarily engaged in providing legal services may recover attorney fees when represented by salaried in-house counsel. Such an award is still limited to those occasions when the contract between the parties, a statute, or other rule of law otherwise entitles a party to recover attorney fees….”

The Court disagrees, however, with the use of a formula based on market rates for outside counsel. The Arbitrator’s determination stands, because it is not irrational, but the trial court’s assessment of $28,897.50 has to be re-calculated.

On remand, the trial court should take into account the proportionate share of the in-house attorney’s salary and benefits, plus an allocation for overhead, including “costs of office space, support staff, office equipment and supplies, law library and continuing legal education, and similar expenses.” (SAC Ref. No. 00-22-003).


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