Can a broker avoid attorney fee liability after joining a lawsuit to cure standing issues? Wing v. Code Explained

In Wing v. Code, the Utah Court of Appeals addressed whether a principal broker who joined a lawsuit solely to cure standing defects could avoid personal liability for attorney fees under a contractual provision he had successfully used to recover fees against another defendant.

Background and Facts

This case arose from a dispute over a real estate sales commission under a For Sale By Owner Agreement (FSBO). The original plaintiffs sued to recover their commission but faced repeated challenges that they lacked standing to sue without a principal broker. In response, Hilary “Skip” Wing, a licensed principal broker, joined as a plaintiff. Wing maintained he joined only to cure the standing defect, not because he was personally a party to the FSBO. Wing ultimately prevailed against defendant Schvaneveldt and recovered attorney fees under the FSBO’s fee provision, but lost against defendant Cathy Code, who then sought her attorney fees under the same provision.

Key Legal Issues

The court addressed three main issues: (1) whether Wing could be personally liable under the Reciprocal Fee Statute and FSBO when he claimed he was not a party to the agreement; (2) whether Wing sued only in a representative capacity; and (3) whether Wing should avoid liability because Utah law allegedly prevented him from seeking attorney fees under the FSBO.

Court’s Analysis and Holding

The court applied the principle from Hooban v. Unicity Int’l, Inc. that an action is “based upon” a contract under Utah’s Reciprocal Fee Statute when a party asserts the writing’s enforceability as a basis for recovery. Wing’s position was actually weaker than the losing party in Hooban because Wing had successfully enforced the contract and recovered attorney fees under it. The court rejected Wing’s argument that he sued only in a representative capacity, finding insufficient evidence in the record to support this claim. Finally, the court held that Wing “must accept the natural consequences of naming himself as a plaintiff,” regardless of his reasons for joining the lawsuit.

Practice Implications

This decision serves as a cautionary tale for practitioners considering adding parties solely to cure procedural defects. When parties join litigation and invoke contractual attorney fee provisions to recover fees, they cannot selectively avoid liability under those same provisions when they lose against other parties. The court’s reasoning emphasizes that litigation strategy choices have consequences that extend beyond the immediate procedural problem being solved.