Monday, December 12, 2005
Does a contract provision allowing for “all collection costs”
include attorneys’ fees? No, according
to a recent Illinois appellate decision.
Pursuant to a contract, a cleaning company performed services
for an apartment building. When the
building did not pay for the services, the cleaning company tried to
collect. Eventually, after repeated
collection efforts, the building paid for the services. However, the parties went to court over
attorneys’ fees. The contract, which was
prepared by the cleaning company, included a provision stating, “If the undersigned fails to pay for services rendered and
collection efforts become necessary, the undersigned agrees to be responsible
for all collection costs incurred.” (emphasis added).
The cleaning company argued that the contract provision
allowing for “all collection costs” included attorneys’ fees. On the other hand, the building argued that
the contract did not specifically provide a basis for awarding attorneys' fees. The court agreed with the building, holding
that, because Illinois is an “American Rule” jurisdiction, the “all collection costs” provision was
not sufficiently specific to encompass attorneys’ fees.
Negro Nest, LLC, v. Mid-Northern Management, Inc. (Dec. 1,
2005 Ill. App.
[Meredith R. Miller]