Are contractual attorney fees governed by choice of law provisions? 1600 Barberry Lane 8 LLC v. Cottonwood Residential O.P. LP Explained

The Utah Supreme Court resolved an important choice of law question in 1600 Barberry Lane 8 LLC v. Cottonwood Residential O.P. LP, determining whether contractual attorney fee provisions are substantive or procedural for choice of law analysis.

Background and Facts

Barberry owned interests in a Georgia apartment complex and entered into a Property Management Agreement with Daymark, which contained a choice of law provision requiring Georgia law to govern the agreement. The contract included an attorney fee provision allowing the prevailing party to recover fees in disputes “between Property Manager and the Tenants in Common.” After Cottonwood allegedly took over management duties, Barberry sued for breach of contract and other claims. The district court dismissed the case and awarded Cottonwood attorney fees under the contract provision.

Key Legal Issues

The central issue was whether contractual attorney fee claims are substantive matters governed by the contractually chosen state’s law, or procedural matters governed by the forum state’s law. This determination would control whether Utah’s Reciprocal Fee Statute or Georgia’s contract interpretation rules applied to the fee award.

Court’s Analysis and Holding

The Utah Supreme Court held that contractual attorney fee claims are substantive in nature. The court reasoned that such provisions “create the right to seek attorney fees and define who may seek attorney fees under the contract,” making them part of the parties’ substantive rights and obligations rather than mere procedural mechanisms. Following this analysis, the court applied Georgia law to interpret the fee provision and affirmed the award based on Georgia’s judicial admissions doctrine, which prevented Barberry from contradicting its complaint allegations that Cottonwood was the property manager.

Practice Implications

This decision significantly impacts contract drafting and litigation strategy. Practitioners must now consider how the chosen state’s substantive law will affect attorney fee recovery when negotiating choice of law clauses. The ruling also reinforces the importance of careful pleading, as parties may be bound by factual allegations in their complaints under the chosen jurisdiction’s judicial admissions rules. For Utah practitioners, this clarifies that contractual fee provisions will be governed by the chosen state’s contract interpretation principles rather than Utah’s procedural fee statutes.