Collateral Litigation Exception American Rule

One of the narrow exceptions to the American Rule — that each side is responsible for his/her own attorney fees win or lose — is the collateral litigation exception. “[W]here the natural and proximate result of a breach of duty is to involve the wronged party in collateral litigation,” attorney fees are available. Johnson v. Mercantile Trust Co. National Ass’n, 510 S.W.2d 33, 40 (Mo. 1974).  For this exception to apply, “the plaintiff must have incurred attorney’s fees in a different cause of action, involving a different party, caused by a breach of duty by the defendant.” Collier v. Manring, 309 S.W.3d 848, 853 (Mo. App. W.D. 2010).

There are three components to this exception; (1) the collateral litigation was the natural and proximate result oft he defendant’s wrong or breach of duty, (2) the fees were necessarily and in good faith incurred to protect the plaintiff rom injury, (3) and the fees were reasonable. Ohlendorf v. Feinstein, 697 S.W.2d 553, 556 (Mo. App. E.D. 1985).