ANCHORAGE, Alaska, a Municipal Corporation, Appellant, v. David T. McCABE and Janet W. McCabe, Edward B. Carlstrom, Appellees.
No. 2737
Supreme Court of Alaska
Sept. 9, 1977
568 P.2d 986
Before BOOCHEVER, C. J., and RABINOWITZ, CONNOR, ERWIN and BURKE, JJ.
OPINION
BURKE, Justice.
In this case, the City of Anchorage appeals the superior court‘s award of $5,151.41 in costs and attorney‘s fees to two of the appellees, David and Janet McCabe.
On January 15, 1975, appellee Edward Carlstrom petitioned the G.A.A.B. Planning and Zoning Commission for a special exception to the zoning ordinance for construction of a Planned Unit Development (hereinafter P.U.D.).1 After holding a public hearing on the matter, the Planning and Zoning Commission granted Carlstrom permission to build two eleven-story buildings at the northwest corner of West 13th Avenue and “I” Street. The McCabes, homeowners in the neighborhood of the proposed P.U.D., appealed this decision to the Anchorage City Council, which also sits as the Board of Adjustment for the City of Anchorage,2 and this appeal was denied.
The McCabes appealed the City Council‘s decision to the superior court, pursuant to
The City appeals the superior court‘s award of fees on three grounds, contending:
- That the McCabes are not entitled to any attorney‘s fees, since they were litigating a public interest issue;
- That since the City was only a nominal party in the appeal to the superior court and had no interest in the outcome of the case, it should not be liable for any attorney‘s fees to which the McCabes may be entitled;
- That the superior court abused its discretion in awarding the full amount of attorney‘s fees requested by the McCabes.
STANDARD OF REVIEW
We will interfere only where the trial court‘s determination as to attorney‘s fees appears to be ‘manifestly unreasonable.’ (footnote omitted) 553 P.2d at 63
PUBLIC INTEREST NATURE OF THE CASE
We turn first to the question of whether the McCabes were entitled to any award of attorney‘s fees. Both the City and the McCabes have characterized this case as a suit involving issues of public interest, the constitutionality of the P.U.D. ordinance having been litigated in the superior court. This court has previously held that “it is an abuse of discretion to award attorney‘s fees against a losing party who has in good faith raised a question of genuine public interest before the courts.” Gilbert v. State, 526 P.2d 1131, 1136 (Alaska 1974) (emphasis added). Accord, Girves v. Kenai Peninsula Borough, 536 P.2d 1221, 1227 (Alaska 1975). Although in Alaska costs and attorney‘s fees are normally awarded to the prevailing party, the City now argues that if a plaintiff does not risk being charged attorney‘s fees by virtue of the public interest nature of the suit, he should not be able to benefit from
The Gilbert public interest exception to
Although all jurisdictions other than Alaska have adopted the “American rule” that each party to a legal dispute is responsible for his own attorney‘s fees, regardless of the ultimate disposition of the suit, awards of attorney‘s fees to public interest plaintiffs have long been an exception to that general no-fee rule. The policy behind the award of attorney‘s fees to “private attorneys general” was first articulated by the United States Supreme Court in Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968). In that case, the court held that a plaintiff who was successful in bringing a suit under Title II of the Civil Rights Act of 1964, which prohibits discrimination in restaurants, should ordinarily recover attorney‘s fees. The basis for this holding was the same policy articulated by this court in Gilbert—to encourage plaintiffs to raise issues of public interest by removing the awesome financial burden of such a suit.
When a plaintiff brings an action under [Title II], he cannot recover damages. If he obtains an injunction, he does so not for himself alone but also as a ‘private attorney general‘, vindicating a policy that congress considered of the highest priority. If successful plaintiffs were routinely forced to bear their own attorney‘s fees, few aggrieved parties would be in a position to advance the public interest by invoking the injunctive powers of the federal courts. (emphasis added) 390 U.S. at 402, 88 S.Ct. at 966. (footnote omitted)
Thus, if courts in jurisdictions which do not ordinarily allow the award of attorney‘s fees to prevailing parties make an exception for successful public interest plaintiffs,7 certainly in a state where compensation is the rule, the contention that public interest plaintiffs should be the only successful plaintiffs not entitled to attorney‘s fees has no merit.
The policy of encouraging public interest litigants, articulated by the court in Gilbert, supports an award of attorney‘s fees to the prevailing plaintiffs in this and all other public interest cases.
AWARD OF FEES AGAINST THE CITY
The City‘s next contention in this appeal is that even if the McCabes were entitled to an award of attorney‘s fees, the City was not the proper party to be charged with this award. In this argument, the City has raised several issues: (a) that it had no capacity to be charged with fees since it had insufficient party status or legal interest in the case; (b) that the Borough was an indispensable party to the case and was the only municipal body capable of being charged with the fees; and (c) that Carlstrom should have been charged with the full amount or at least a portion of the fees.
a. Capacity to be assessed
In arguing that the City was not the proper party to be assessed for attorney‘s fees, the City first contends that it had no capacity to be charged with the awards. It bases its lack of capacity argument on the contention that it had no legal interest in the case. First, it claims that it was disinterested in the outcome of the case since its role was that of a “quasi-judicial” body and its function was “closely analogous to the role of the Superior Court in this case.” It thus seems to argue that it never should have been named as a party in the McCabe‘s appeal to the superior court at all. In support of this argument, the City cites State v. Bd. of Zon. Adjust. of New Orleans, 197 So.2d 691 (La.App.1967), in which plaintiffs, attempting to appeal the Board of Adjustment‘s decision to grant a variance, named only the Board and City as defendants. The trial court‘s decision to dismiss the case for failure to join the owners of the lots in question was based on the Board‘s quasi-judicial status and its resultant lack of capacity to be sued.
The Board is a quasi-judicial body and can have no legal interest in the outcome of the case. It can neither sue nor be sued nor can it appeal from a Court‘s reversal of its decision for the reason that it has no legal interest in the outcome of the Court‘s review thereof. 197 So.2d at 694 (emphasis added)
However, in this jurisdiction, the Board of Adjustment has in the past been afforded full party status in appeals of its decisions. When, in Munroe v. City Council for City of Anchorage, 545 P.2d 165, reh‘g granted and opinion modified, 547 P.2d 839 (Alaska 1976), builders appealed the Board of Adjustment‘s decision to deny a special exception to the zoning ordinance for construction of a P.U.D., the superior court upheld the Board‘s decision, awarding it
Furthermore, the City failed to object to its capacity to be sued in this action.
When a party desires to raise an issue as to the legal existence of any party or the capacity of any party to sue or be used or the authority of a party to sue or be sued in a representative capacity, he shall do so by specific negative averment, which shall include such supporting particulars as are peculiarly within the pleader‘s knowledge.
We recently relied on this provision in holding that “failure to raise the issue of capacity to sue results in waiver of the defense.” King v. Petroleum Services Corporation, 536 P.2d 116, 118 (Alaska 1975). The failure to raise the issue of lack of capacity to be sued has the same waiver effect, and the City has thus waived this defense.
b. Failure to join the Borough
The City next argues that since the superior court‘s decision on the merits of the case turned entirely on the invalidity of the G.A.A.B. ordinance and not on an abuse of discretion by the City Board of Adjustment, the Borough was an indispensable party to the case. Although the City never objected during trial to the plaintiff‘s failure to join the Borough, this court may, in its discretion, review this issue for the first time on appeal. Padgett v. Theus, 484 P.2d 697, 700 (Alaska 1971).
We have defined an indispensable party as “one whose interest in the controversy before the court is such that the court cannot render an equitable judgment without having jurisdiction over such party.” State, Department of Highways v. Crosby, 410 P.2d 724, 725 (Alaska 1966). In determining at the trial level whether a party is indispensable, the court must balance the danger that judgments will lack finality against the desirability of having some determination of a dispute. Since the lower court was able to dispose of the merits of this case in an equitable manner, without the presence of the Borough, and there is no possibility that any further litigation of the matter will ensue, the Borough was not an indispensable party under Crosby standards.
Even if at the trial level the Borough could have qualified as an indispensable party to the action, in reviewing the issue for the first time, we must consider the additional factor of whether failure to overturn the judgment will substantially prejudice the interest of the party who was not named. Padgett v. Theus, 484 P.2d at 702. In this case, the G.A.A.B.‘s interests will not be affected by this court‘s affirmance of the judgment of attorney‘s fees against the City, since subsequent to the commencement of this litigation, the G.A.A.B. and the City of Anchorage merged to form the present Municipality of Anchorage.
c. Carlstrom‘s liability for fees
The City also argues that appellee Carlstrom was the real party at interest in this case and should have been liable for all or at least a portion of the fees. In support of this contention, the City cites First National Bank of Alaska v. Enzler, 537 P.2d 517 (Alaska 1975), in which we upheld an award of attorney‘s fees against a party not named in the suit. In that case, the trial court perceived the bank as the “true prosecutor of the action—in effect the real plaintiff,” and awarded fees against it on the grounds that “[o]f the parties appearing, only the bank stood to profit by a judgment in favor of the named plaintiff.” Id. 537 P.2d at 525. The nominal plaintiff, a trustee, was not charged with any portion of the fees awarded since it was not the real party at interest. In the instant case, however, Carlstrom was not the only party who stood to profit from the superior court‘s affirmance of the grant of a special exception; the Board of Adjustment had an interest in seeing its decision upheld—that of protecting the public interest in having zon-
The superior court‘s exclusion of Carlstrom from any obligation to pay attorney‘s fees appears to have been based in part on this court‘s decision in Girves v. Kenai Peninsula Borough, 536 P.2d 1221 (Alaska 1975). In that case we held that it was unfair to impose attorney‘s fees on a plaintiff who had relied upon an attorney general‘s opinion which was held to be invalid. In the case before us now, Carlstrom relied on a P.U.D. ordinance which was found to be invalid, and to assess him for fees would also be unfair. In light of the Girves case, it is clear that the superior court did not abuse its discretion by charging only the City with the judgment of fees.
AWARD OF FULL AMOUNT OF FEES INCURRED
At the time that the superior court overturned the Board of Adjustment‘s decision, the McCabes moved for attorney‘s fees in the amount of $4,612.50. This requested amount was calculated at 92 1/4 hours at $50 per hour and, according to the attorney‘s accompanying affidavit, represented compensation for the total amount of work she performed in the case. Judge Carlson granted the entire amount requested.
The City argues that if the McCabes were to be compensated at all, they should only have been partially compensated. The McCabes respond by citing Palfy v. Rice, 473 P.2d 606 (Alaska 1970), for the proposition that the court may reasonably award attorney‘s fees which are commensurate with the actual amount of legal work performed by the attorney in the case. This interpretation of Palfy is presumably based on our consideration of the amount of legal work involved in that case in deciding that the award of attorney‘s fees was too low.
However, it is unconvincing in light of this court‘s recent decisions in Malvo v. Penney, 512 P.2d 575 (Alaska 1973) and Continental Insurance Company v. United States Fidelity and Guaranty Company, 552 P.2d 1122 (Alaska 1976).
In Malvo, we held that the trial court abused its discretion by automatically awarding the full amount of attorney‘s fees incurred by the prevailing party. This holding was based on the underlying purpose of
RABINOWITZ, Justice, with whom ERWIN, Justice, joins concurring.
While I agree with the court‘s disposition of this matter, I disagree with the court‘s treatment of the “capacity to be assessed” issue. The majority reasons that since the Board of Adjustment was accorded full party status in Munroe v. City Council for City of Anchorage, 545 P.2d 165, reh‘g granted and opinion modified, 547 P.2d 839 (Alaska 1976), it is capable of full party status in the instant case and has the capacity to be assessed attorney‘s fees. I think it is necessary to examine those factors which set a zoning board apart from other quasi-judicial administrative boards and thus compel the decision that the zoning board in the case at bar should be assessed attorney‘s fees.
Many quasi-judicial administrative boards, such as the Workmen‘s Compensation Board, are charged with adjudicating the rights of individual parties according to the terms of administrative law. However, the zoning board‘s duties go far beyond determining the relative rights of the parties in quasi-judicial proceedings; the zoning board is granted a large degree of discretion to be exercised in the public interest. That discretion is particularly obvious in cases such as the one at bar where a party is seeking a variance or special exception to a zoning ordinance.1 The exercise of the zoning board‘s discretionary authority may seemingly involve only a few individuals, but the impact of its decision may be felt by the entire community. In explaining its decision that the zoning board involved had sufficient party status to maintain an appeal from a lower court reversal of its decision, the Connecticut Supreme Court stated:
In some appeals from administrative boards the question at issue is of consequence only to certain parties who will be directly affected, as, for example, where the public utilities commission is called upon to apportion between a municipality and a railway company the cost of the construction of a highway bridge over a railway track. . . . In other cases, however, there is a definite public interest to be protected. This is true, for instance, of many orders of the public utilities commission, and is particularly true with respect to zoning regulations. . . . While [zoning] boards have ordinarily no corporate existence as such but are merely agencies of the municipality, and while they have no direct interest in this litigation, it would be a logical conclusion that because of the function they perform they should represent the public interest entrusted to them in ap-
peals taken from their decisions.2 (citation omitted)
Representing the public interest in appeals from its decisions may often imply justifying its decision. Because of the extent of its discretion, the zoning board has a far greater interest in attempting to uphold its decision than does a quasi-judicial administrative body like the Workmen‘s Compensation Board and thus should be granted full party status. Given these factors, I conclude that it is appropriate for the zoning board to be accorded full party status and assessed attorney‘s fees in the instant case.
BOOCHEVER, Chief Justice, dissenting.
I do not believe that attorney‘s fees should have been awarded against the City in this matter. When a city or administrative body actively participates in an appeal from its decision, it should be regarded as a party for the purpose of awarding fees. Where, however, it is a mere nominal participant, attorney‘s fees should not be awarded either for or against it.1
At the outset, the City of Anchorage heard the appeal from the Planning and Zoning Commission in a quasi-judicial capacity. On the subsequent appeal to the superior court, it was properly named as a party. If it had deemed that the public interest required it to advocate a particular position, the City could have actively participated in the appeal.2 Here, however, the City apparently decided that there were no significant municipal interests justifying opposition to the appeal. The only party who actively disputed the contentions raised by the McCabes was Mr. Carlstrom, who was primarily interested in the construction of the planned unit development. Under these circumstances, he was the one who lost on the appeal; and, in my opinion, the costs and attorney‘s fees should have accordingly been awarded against him rather than the City.
I also differ from the majority in regard to the court‘s role in public interest litigation. The opinion seems to take the position that such litigation should be actively encouraged. In my view, our function is not to encourage litigation of any sort. On the other hand, I believe that we should strive to prevent our courts from becoming inaccessible, as a practical matter, to those who seek to vindicate rights shared by the public. This concern is similar to that evinced by the Supreme Court in Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968). The Court noted that few parties would be in a position to advance the public interest if successful plaintiffs were routinely forced to bear their own attorney‘s fees. For similar reasons, I agree that in appropriate cases, it is proper to deny an award of fees against an unsuccessful plaintiff.3 Moreover, where a sufficient public interest is involved, it may be appropriate to award full attorney‘s fees to a successful plaintiff to the extent that they are reasonable.
In any “public interest” litigation, the plaintiff must also have some direct and immediate interest.4 Moreover, in most litigation, a party can usually contend that his position represents some public interest. For example, a plaintiff in an automobile collision case can say that he is promoting the public interest in preventing negligent driving. Although specific standards for
Where the sums at stake in the controversy are sufficiently large to prompt suit regardless of the public interest, an award of attorney‘s fees against the losing party has been found reasonable. In such cases, the concern that fear of expenses will significantly deter citizens from litigating questions of general interest to the community is inapplicable. Mobil Oil Corp. v. Local Boundary Comm., 518 P.2d 92, 109 (Alaska 1974). Similarly, questions which primarily affect the rights of the parties before the court lack the requisite public character to prohibit an award, even if some public or constitutional issues are involved. Munroe v. City Council for the City of Anchorage, supra (challenge to denial of application for special exception to applicable zoning ordinances); Kelly Supply Co., Inc. v. City of Anchorage, 516 P.2d 1206, 1211 (Alaska 1973) (challenge to refusal to permit nonconforming use).
In each case, the court must weigh the private motivation for the lawsuit against the extent of the public interest involved. Here, as owners of property adjoining the proposed development, the McCabes had a significant personal interest. While their interest was doubtlessly shared by others in the neighborhood, and to some extent generally by others in Anchorage, it hardly manifests the same degree of public importance as the residency requirement for candidates for political office,5 prohibiting racial discrimination in restaurants6 or enforcing compliance with federal statutes in construction of highways.7 As in Munroe v. City Council for the City of Anchorage, the private property interests of the McCabes appear the paramount motivation for the lawsuit, while the public interest seems of somewhat marginal significance. Accordingly, I would remand for a redetermination of reasonable attorney‘s fees sufficient to partially compensate plaintiff.8
Notes
| Contested | Without Trial | Non-Contested | |
| First $2,000 | 25% | 20% | 15% |
| Next $3,000 | 20% | 15% | 12.5% |
| Next $5,000 | 15% | 12.5% | 10% |
| Over $10,000 | 10% | 7.5% | 5% |