There are two forms of attorney’s fees that may be awarded in a dissolution proceeding: need-based fees and conduct-based fees.
In regard to need based fees, Minnesota law provides that a Court shall award attorney’s fees and costs where the moving party demonstrates that the fees are necessary for a good faith assertion of that party’s rights, and that they will not contribute unnecessarily to the length and expense of litigation. See Minn. Stat. § 518.14 Subd. 1. The party claiming need-based fees must also show that the party from whom fees are sought has the ability to pay. Id.
More specifically, Minnesota law dictates that a Court shall award need-based attorney’s fees in a dissolution action where: 1) the fees are necessary for a good faith assertion of the party’s rights and will not contribute unnecessarily to the length and expense of litigation, 2) the party from whom fees are sought has the means to pay them, and 3) that the party seeking fees does not have the means to pay them. Minn. Stat. § 518.14, subd. 1. Central to a need-based award of attorney’s fees is the need of one party balanced against the other’s ability to pay. Meyers v. Meyers, 409 N.W. 2d 532, 535 (Minn. Ct. App. 1987).
It should be noted that even where need is demonstrated, need-based fees may be denied where, “[m]uch of [a party’s] attorney’s fee liability was the product of unnecessary litigation that did not rise to the level of good faith.” Peterka v. Peterka, 675 N.W. 2d 353, 360 (Minn. Ct. App. 2004). However, an award of attorney’s fees may be made regardless of whether the party requesting fees is likely to prevail in their claims. See O’Neil v. O’Neil, 210 N.W. 2d 237 (Minn. 1973).
Nevertheless, in addition to insufficient income, an inability to pay may be shown where the supposed ability is premised solely on the liquidation of capital assets. See Beck v. Kaplan, 566 N.W. 2d 723 (Minn. 1997) (award of attorney’s fees not an abuse of discretion where wife would be required to liquidate the limited capital assets available to her for her retirement), see also Karg v. Karg, 418 N.W. 2d 198 (Minn. Ct. App. 1988) (award of attorney’s fees was appropriate where paying attorney’s fees would require wife to liquidate a substantial portion of her property award and husband had greater ability to pay).
Moreover, where there is a wide discrepancy in the parties’ incomes and the other party’s ability to pay has been shown, a Court may abuse its discretion if it does not award a party attorney’s fees. See, Petschel v. Petschel, 406 N.W. 2d 604 (Minn. Ct. App. 1987) (remanding for an award of attorney’s fees where one party lacked an employment history or sufficient assets), see also Nash v. Nash, 388 N.W. 2d 777 (Minn. Ct. App. 1986) (trial court abused its discretion in failing to award attorney’s fees where wife could not pay her monthly expenses and had incurred substantial debt); Cummings v. Cummings, 376 N.W. 2d 726 (Minn. Ct. App. 1985) (trial court abused its discretion where it awarded wife only 25% of fees and costs where husband had substantial non marital assets).