Morris v. PetersonMorris v. Peterson
Ken M. Peterson, Morris, Laing, Evans, Brock & Kennedy, Wichita, Kan. (Joseph J. Hlavacek, Morris, Laing, Evans, Brock & Kennedy, Wichita, Kan., was also on the brief), for defendants-appellees.
Before HOLLOWAY, Chief Judge, and ANDERSON, Circuit Judge, and BRIMMER, District Judge*.
HOLLOWAY, Chief Judge
The procedural posture here is сomplicated but the legal issue is simple: May a district court assess appellate attorney‘s fees under either its inherent equitable powers or
In a Colorado state court, appellants Dunlap and Rector filed a legal malpractice action against defendants Peterson and the Kansas law firm of Morris, Lаing, Evans, Brock & Kennedy. The defendant Kansas attorneys removed the case to the United States District Court for the District of Colorado on diversity grounds and successfully moved to transfer the case to the federal district court in Kansas. The motion was predicated upon the fact that Kansas law applied and most of the witnesses lived in Kansas. In the federal court in Kansas, the defendant Kansas attorneys then moved for summary judgment and requested attorney‘s fees pursuant to
Being unable to satisfy their judgment against appellants Dunlap and Rector in Kansas, the defendant Kansas attorneys registered thе judgment in the United States District Court for the District of Colorado pursuant to
The defendant Kansas attorneys who had prevailed in their appeal to this court then returned to the Kansas federal district court. There they requested additional attorney‘s fees and costs which they had incurred in successfully appealing and obtaining the reversal of the decision of the Colorado federal district court. The district court in Kansas granted the motion and awarded fees and costs arising from that appeal against Rector and Dunlap, stating the following findings, inter alia:
The Court: All right. I think the matter before the Court is the application of Mr. Peterson and his firm for the allowance of attorney‘s fees as the result of that recent appeal on Judge Kane‘s decision.... [T]hey have had this appeal, they‘ve been out this money, аnd essentially all they‘re trying to do is get themselves made whole.... And the only way to make this thing whole, in my opinion, is to put Mr. Peterson and the Laing firm in the position that they were before. And, whatever time they‘ve had to take in defending that goes clear back to the inception of the other matter.... [O]n that basis I think that the actions of Mr. Rector and Dunlap in this whole matter were frivolous and had to bear on the vindictive, and for that reason I think it — even though one hates to impose sanctions on lawyers — why I think it has to be done once in awhile to define what their duties and obligations are.... And, I think any judge that handled this, whether he never saw this before or whether he was familiar with the whole background as I am would have no hesitancy in allowing these attorneys fees, because this will put the defendants in a whole position.
III R. 2, 14-16. The court ordered an award of attorney‘s fees and costs in the amount of $15,730.04 in favor of the defendant Kansas attorneys against Rector and Dunlap, which was made to reimburse them for fees and expenses in prosecuting the appeal to this court from the ruling of the federal district court in Colorado to obtain a reversal of the order which had vacated the judgment for other fees in favor of the defendant Kansas firm.
This appeal followed. While the appellants, Rector and Dunlap, do not contest the amount of the fees and costs awarded against them by the district court in Kansas and did not below, III R. at 10, they vigorously challenge the authority of the Kansas federal district court to reopen the earlier Kansas case and make the award of fees and costs for the appeal in the Colorado litigation.
Among other things the appellants, Rector and Dunlap, maintain that the Kansas federal district court erred in reopening the earlier legal malpractice case, decided there, to award attorney‘s fees and costs arising from the appeal of the ruling of the Colorado federal district court. They contend that the defendant Kansas attorneys could and should have requested this court to award them the attorney‘s fees and costs incurred in that appeal, pursuant to
The record does support the defendant Kansas аttorneys’ position that Rector and Dunlap did not in their response or oral argument challenge below the Kansas federal district court‘s jurisdiction to consider the application for fees and costs. We view the issue raised, however, as going to subject matter jurisdiction. It “suffiсiently partakes of the nature of a jurisdictional bar so that it need not be raised in the trial court.” Edelman v. Jordan, 415 U.S. 651, 678 (1974).
Turning to the further arguments of the defendant Kansas attorneys, we note at the outset that the American rule is that the prevailing litigant is not entitled to collect a reasonable аttorney‘s fee from the loser, absent a statute or an enforceable contract provision therefor, or an established exception like that where the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247, 257-259 (1975). Under that exception to the American Rule, it is “unquestioned that a federal court may award counsel fees to a successful party when his opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’ ... In this class of cases, the underlying rationale of ‘fee shifting’ is, of сourse, punitive, and the essential element in triggering the award of fees is therefore the existence of ‘bad faith’ on the part of the unsuccessful litigant.” Hall v. Cole, 412 U.S. 1, 5 (1973) (citations omitted). Similarly, under the statutory provision in
The defendant Kansas attorneys assert that thе Kansas federal district court‘s inherent and statutory powers included awarding such relief with respect to the appeal they took from the ruling of the Colorado federal district court. However, cases cited by the defendant Kansas attorneys mainly concern questions about the propriety and timeliness of motions for a district court‘s award of attorney‘s fees incurred in that district court, not in another district court nor in an appeal from another district court. E.g., White v. New Hampshire, 455 U.S. 445 (1982); Dreiling v. Peugeot Motors of America, Inc., 768 F.2d 1159 (10th Cir.1985); Gordon v. Heimann, 715 F.2d 531 (11th Cir.1983); McQuiston v. Marsh, 707 F.2d 1082 (9th Cir.1983); Cox v. Flood, 683 F.2d 330 (10th Cir.1982); Obin v. District No. 9 of International Association, etc., 651 F.2d 574 (8th Cir.1981).2
As noted, the fees and costs awarded to the defendant Kansas attorneys are unusual in that they were incurred by the Kansas attorneys as appellants, apparently on the theory that the position of Rector and Dunlap on the
Accordingly, the award of fees and costs made in the district court of Kansas must be REVERSED.
Notes
Any attornеy or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorney‘s fees reasonably incurred because of such conduct.
The defendant Kansas attorneys also cite Indian Head National Bank of Nashua v. Brunelle, 689 F.2d 245 (1st Cir.1982), which discusses the general rule that a registration court, like the Colorado federal district court here, usually defers on
The defendant Kansas attorneys also rely on Shimman v. International Union of Operating Engineers, 719 F.2d 879 (6th Cir.1983), panel opinion reversed on other grounds, 744 F.2d 1226, 1238 (6th Cir.1984). The panel opinion held that the district court had authority to award fees for services on an earlier appeal under the bad faith exception; the en banc opinion held there were no grounds for the award, without discussing the trial court‘s power to award appellate fees. In any event, we are not persuaded to follow the result of the panel opinion.
The defendant Kansas attornеys argued, in part, as follows before the Kansas federal district court:
[A]lthough Judge Kane did rule in their favor at the trial level, the fact of the matter is that the Circuit Court took no time at all, once they heard the case, in reversing that decision on a very, very simple proposition, which I have already stated, and therefore, we believe that in fairness and in equity we should be granted our fees and expenses on the appeal also.
III R. at 8.