SALLY-MIKE PROPERTIES v. Woodrow YOKUM, et al.
No. 16987.
Supreme Court of Appeals of West Virginia.
June 12, 1986.
365 S.E.2d 246
McHUGH, Justice:
Richard W. Cardot, Elkins, W. Va., for appellants.
McHUGH, Justice:
This аction is before this Court upon appeal from the final order of the Circuit Court of Randolph County, West Virginia, entered on July 22, 1985. By that order the trial court dismissed the action of Sally-Mike Properties, the plaintiff/appellee, and denied the motion of Woodrow Yokum, et al., the defendants/apрellants, for an award of reasonable attorney‘s fees as part of the costs of the action. The sole question presented on this appeal is whether the trial court erred in denying the defendants’ motion for recovery of reasonable attorney‘s fees. We affirm the ruling of the triаl court.
I
Pursuant to
On appeal by Woodrow Yokum, one of the defendants, this Court reversed. We concluded that title to the burial ground had been excepted and that the description was sufficient. We therefore held that Sally-Mike had not established its ownership of the property in question and, consequently, was not entitled to obtain the statutory relief. Sally-Mike Properties v. Yokum, 175 W.Va. 296, 332 S.E.2d 597 (1985).
After this Court‘s ruling the defendants presented in the trial court their motion for dismissal of the action. The defendants, relying upon
The defendants’ counsel conceded during the hearing on the motion for recovery of attorney‘s fees that the action had not been frivolous. The trial court agreed and found that the action had been brought in good faith. It also held that “costs” within the meaning of the stаtute did not include reasonable attorney‘s fees. Accordingly, the trial court denied the defendants’ motion for recovery of reasonable attorney‘s fees.
II
On this appeal the defendants argue that the trial court had the statutory or equitable authority to award reasonable attоrney‘s fees to them as the prevailing party. The defendants admit on this appeal that this action was not brought in “bad faith.” Nonetheless, the tenor of the defendants’ brief is that this action was “worthless,” a “waste of judicial resources” and was instituted solely for economic gain. During oral argument before this Court, though, the defendants placed greater emphasis on this Court‘s accepting the concept of normally shifting responsibility for attorney‘s fees to the losing litigant. For the reasons hereinafter stated, we decline that invitation, in favor of retention of the existing rule and the exceptions thereto.
III
Quoting Humphrey v. Mauzy, 155 W.Va. 89, 95, 181 S.E.2d 329, 332 (1971), this Court in the recent case of Geary Land Co. v. Conley, 175 W.Va. 809, 813, 338 S.E.2d 410, 414 (1985), recognized again this general rule: “‘Costs were unknown at common law. They are created and provided for by statute and may be imposed, recovered or collected only as authorized by statute.‘” As quoted supra at n. 2,
This traditional exclusion of attorney‘s fees from “costs” recoverable by statute or court rule is derived from the principle that as a general rule each litigant bears his or her own attorney‘s fees absent a contrary rule of court or express stаtutory or contractual authority for reimbursement. Daily Gazette Co. v. Canady, 175 W.Va. 249, 250, 332 S.E.2d 262, 263 (1985); 1 S. Speiser, Attorneys’ Fees §§ 12:1, 12:3-12:4 (1973). This so-called “American” rule (contrasted with the rule in England) has, in other jurisdictions as well as in this jurisdiction, been subject to exceptions in certain types of cases. For example,
The trial court‘s finding that this action was brought in good faith is not clearly erroneous. The plaintiff‘s legal theories of ownership of the burial ground property presented substantial questions of law involving construction of a deed. While these theories of ownership were ultimately determined to be invalid, there is on this record no evidence that the plaintiff acted in bad faith, vexatiously, wantonly or for oppressive reasons.3 Bringing or defending an action to promote or protect one‘s economic or property interests does not per se constitute bad faith, vexatious, wanton or oppressive conduct within the meaning of the exceptional rule in equity authorizing an award to the prevailing litigant of his or her reasonable attorney‘s fees as “costs” of the action.
IV
In a related vein, the defendants contend that a person contemplating the institution of an action under
V
The defendants alternatively suggest that this Court should abandon the “American” rule in favor of a general rule authorizing “fee shifting,” whereby the losing litigant must pay the prevailing litigant‘s reasonable attorney‘s fees.4
In support of the American rule, one should not be penalized for merely prosecuting or defending a lawsuit, as litigation is at best uncertain.5 The primary justifi-
Assessment of reasonable attorney‘s fees against a losing litigant who has acted in “bad faith” is consistent with the primary justification for the rule agаinst the shifting of attorney‘s fees, specifically, that the losing litigant should not be discouraged from fairly prosecuting or defending a claim. Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1309 (2d Cir. 1973). Moreover, the “bad faith” exception does not constitute an abridgement of
Everyone who has a good faith dispute requiring a decision by an impartial arbiter is entitled to his day in court. On the other hand, every person is not entitled to his day in court regardless of the frivolous nature of the suit. Parties whose interest in the legal process is to oppress or cheat others should be discouraged.
Nelson v. West Virginia Public Employees Insurance Board, 171 W.Va. 445, 454, 300 S.E.2d 86, 95 (1982) (Neely, J., concurring).
The American practice of generally not including attorney‘s fees in costs was a deliberate departure from the English practice, stemming initially from the colonies’ distrust of lawyers and continued because of a belief that the English system favored the wealthy and unduly penalized the losing party. Conte v. Flota Mercante Del Estado, 277 F.2d 664, 672 (2d Cir. 1960).
While the American rulе of nonrecovery of reasonable attorney‘s fees as “costs” of an action, absent a contrary agreement of the parties or express allowance under a statute or rule of court, is subject to some criticism,7 the existing equitable exceptions, such as the “bad faith” еxception, alleviate much of the criticism of the general rule. Moreover, the American rule promotes equal access to the courts for the resolution of bona fide disputes. See Mighty Midgets, Inc. v. Centennial Insurance Co., 47 N.Y.2d 12, 22, 416 N.Y.S.2d 559, 564, 389 N.E.2d 1080, 1085 (1979).
Finally, we reiterate our intolerance in this context for demonstrated “bad faith” conduct:
Although there is an undeniable intеrest in the maintenance of unrestricted access to the judicial system, unfounded claims or defenses asserted for vexatious, wanton, or oppressive purposes place an unconscionable burden upon precious judicial resources already stretched to their limits in an inсreasingly litigious society. In reality, to the extent that these claims or defenses increase delay or divert attention from valid claims or defenses asserted in good faith, they serve to deny the very access to the judicial system they would claim as justification for their immunity from sanction.
Daily Gazette Co. v. Canady, 175 W.Va. 249, 252, 332 S.E.2d 262, 265 (1985).
For the foregоing reasons the final order of the trial court denying recovery of reasonable attorney‘s fees is affirmed.
Affirmed.
From the majority‘s holding that the defendants in this proceeding were not entitled to reasonable attorneys fees, I respectfully dissent. The plaintiff in this proceeding was a partnership еngaged in the commercial development of a tract of land. Within the boundaries of this tract was located a private cemetery. In furtherance of its enterprise, the partnership sought to remove and transfer the remains reposed in the graves of this cemetery under a statute enacted by the Legislature for such purpose.
Pursuant to
In cases where private citizens are made defendants in litigation commenced pursuant to a legislative enactment, it is unfair to burden them with attorneys fees should they ultimately prevail. This is especially true where such litigation is commenced by a party with superior financial resources. Otherwise, such defendants might be fоrced to choose between assertion of their legal rights and depletion of their limited financial resources.
The prospect of desecration of the cemetery of their ancestors must have been nightmarish for the defendants in this case. They fought long and hard to defend a right clearly reserved by their forebear in the conveyance to the plaintiff‘s predecessor in title. The plaintiff‘s legal fees will be absorbed as an ordinary business expense. So too should have been the defendants’ legal fees.
Notes
W.Va.Code, 37-13-6 [1963] provides:
In the event that the plaintiff or plaintiffs shall be granted the relief sought, then all costs of such action shall be borne by plaintiffs. In the event that such relief is not granted, or is granted only in part, then such costs may be allocated between the рarties as the court shall deem equitable and just. In any event wherein any relief is granted, the costs of removal, transfer and disposition shall be borne by the plaintiffs, including the cost of erecting appropriate memorials to the deceased as the same may be ordered by the court.
Thе Commonwealth of Virginia has a similar statutory provision on proceedings by a landowner for removal of remains from an abandoned family graveyard, with retention by the landowner of the land thus vacated.
Virginia also has a statute on proceedings by some of the owners of a private graveyard which is “in a condition of neglect or disuse,” against the remaining (including unknown) owners thereof, for removal of the remains to a more suitable repository and for sale of the land thus vacated.
175 W.Va. at 253, 332 S.E.2d at 266.We firmly reject the petitioner‘s implication that frivolity alone will support a finding of bad faith. Certainly, as the frivolousness of a claim or defense increases, the likelihood that it is being advanced for improper purposes increases. In some cases, however, frivolity may be less a function of improper motive than of sheer incompetence.
[A]n eventual loser‘s refusal to recognize the validity of the eventual winner‘s position, and his insistence on taking the winner to court, do not necessarily imply wrongful conduct on the part of the loser. After all, the loser calculаted his chances of winning as sufficiently promising to put up his own attorneys’ fees. And even where lawyers take a case on a contingent fee, the lawyer has usually calculated the chance of winning as sufficiently strong to warrant his time and effort.