Brown v. General Motors Corp., Chevrolet Div., 1031

• Decision Date: 04 November 1983
• Docket Number: D,No. 1031,1031
• Citation: 722 F.2d 1009
• Parties: 33 Fair Empl.Prac.Cas. 417, 32 Empl. Prac. Dec. P 33,931 Samuel L. BROWN, Sr., Plaintiff, v. GENERAL MOTORS CORPORATION, CHEVROLET DIVISION, Tonawanda and Chevrolet Division, Buffalo, Defendants-Appellees. ocket 82-7840.
• Court: U.S. Court of Appeals — Second Circuit

Page 1009

722 F.2d 1009

33 Fair Empl.Prac.Cas. 417,

32 Empl. Prac. Dec. P 33,931

Samuel L. BROWN, Sr., Plaintiff, v. GENERAL MOTORS CORPORATION, CHEVROLET DIVISION, Tonawanda and Chevrolet Division, Buffalo, Defendants-Appellees.

No. 1031, Docket 82-7840.

United States Court of Appeals, Second Circuit.

Argued March 24, 1983.

Decided Nov. 4, 1983.

Charles L. Davis, Buffalo, N.Y., for appellant pro se.

Arnold Weiss, Raichle, Banning, Weiss & Halpern, Buffalo, N.Y., for defendants-appellees.

Before OAKES, CARDAMONE and WINTER, Circuit Judges.

WINTER, Circuit Judge:

Charles L. Davis appeals from Judge Curtin's denial of an application for attorney's fees. Davis was the original attorney for plaintiff, Samuel Brown, in one of three consolidated civil rights actions settled on October 14, 1981. We affirm on the alternative grounds that Davis lacks standing to make such an application and that the settlement included all claims for counsel fees.

BACKGROUND

Brown commenced this civil rights action seeking reinstatement, back pay or sick benefits, exemplary damages of one million dollars, and an injunction. Brown retained Attorney Davis on a contingency basis on July 24, 1975, to prosecute the action. Four years later, Brown fired Davis because of "dissatisfaction with the amount of interest you show in my affairs." Concerning the fee, Brown wrote, "I will arrange for the contingency fee to be split between you and the Attorney who replaces you."

Brown then hired Attorney Norman Effman who obtained a settlement with General Motors for $5000 for this and two subsequent pro se actions filed by Brown against General Motors Corporation. The stipulation, signed by Effman and counsel for General Motors, provided:

IT IS HEREBY STIPULATED AND AGREED by and between the undersigned that each of the within three consolidated cases, having been settled and compromised for the sum of Five Thousand Dollars ($5,000.00), be and the same hereby are dismissed on the merits and with prejudice and without costs to any party as against the other.

Brown signed a general release absolving General Motors from "all ... claims and demands whatsoever, in law or in equity." Davis was paid $833.33, Effman receiving an identical amount. On October 14, 1981, Judge Curtin entered the stipulated judgment dismissing the action "without costs and without prejudice to the right, upon good cause shown within 60 days, to reopen the action if settlement is not consummated."

On January 4, 1982, Davis, acting for himself, petitioned the district court for attorney's fees in the amount of $30,073. Judge Curtin denied the application, finding that the stipulation and release were intended by the parties, namely General Motors and Brown, to include any claim for attorney's fees. Davis appealed in his own

name--the caption remaining in Brown's name--claiming that he was entitled to fees by virtue of The Civil Rights Attorney's Fees Awards Act of 1976 ("the Act"), 42 U.S.C. Sec. 1988 (1976) ("Section 1988"). We affirm.

DISCUSSION

1. Standing to Apply for Counsel Fees

Davis contends that he is entitled to $30,073 in additional compensation for his time spent on Brown's behalf under Section 1988 which authorizes the court to "allow the prevailing party, ... a reasonable attorney's fee as part of the costs." We agree that such a fee may be awarded regardless of whether a party "prevails" through settlement or litigation, Maher v. Gagne, 448 U.S. 122, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980), but disagree that Davis may claim attorney's fees in his own name as the real party in interest.

Under the Act it is the prevailing party rather than the lawyer who is entitled to attorney's fees. See Oguachuba v. INS, 706 F.2d 93, 97 (2d Cir.1983) (interpreting similar language in the Equal Access to Justice Act, 28 U.S.C. Sec. 2412(d)(1)(A) (Supp. V 1981)).

We repeat what we said in Oguachuba. The entitlement of an attorney to fees depends upon the contractual arrangement between the attorney and the client. The parties to these arrangements may well take into account the possibility of a court award of fees where statutory authority such as Section 1988 exists but a claim for such an award must itself be made by the party rather than the attorney.

Section 1988's direction that fees may be awarded to "the prevailing party" is plain enough and, absent evidence of a contrary congressional intent (which has not been provided), is dispositive. However, there are additional compelling reasons to reject Davis' argument. Where an attorney and client have independent entitlements in the same action a conflict of interest is created. Defense counsel will agree only to settlements which satisfy the attorney as well as the client. A client willing to settle for $5,000 will be thwarted if his or her attorney asserts a further right to $30,000 from the defendant. There is simply no reason to believe that Congress intended to diminish substantially the attorney's duty of undivided loyalty to his or her client.

In the present case, the reasons for denying Davis standing to assert such a claim are overwhelming. Davis was discharged by Brown because of the latter's dissatisfaction with his representation. Were we to entertain Davis' claim, clients' control over their litigation would be subject to a veto by former attorneys no longer under an obligation of loyalty and perhaps aggrieved by the circumstances of their discharge.

Since the inability of a client to control litigation can only deter it, we believe the result of entertaining claims for fees under Section 1988 by attorneys in their own name would be counterproductive so far as the underlying purpose of that section is concerned. See Kerr v. Quinn, 692 F.2d 875, 877 (2d Cir.1982) (purpose of Section 1988 is to encourage the bringing of meritorious civil rights actions). Davis' claim, therefore, should have been denied outright without regard to Brown's entitlement to counsel fees.

2. The Effect of a Settlement and Release

Davis has now supplied us, outside the district court record, a consent by Brown to this proceeding. In Oguachuba, supra, we faced a somewhat similar situation in which the denial of an application for attorney's fees made in the attorney's name was appealed with the client's authorization. Since the district court had reached the merits and we were reluctant to deny what was on appeal clearly a claim asserted by a party, we reached the issue of Oguachuba's right to attorney's fees. We reach the merits here also, again reluctantly and with the admonition that applications for fees under Section 1988 must be made in the name of the party.

We conclude that the release executed by Brown as part of the settlement negotiated by Effman bars a subsequent claim for attorney's fees. By the release, Brown remised, released, and forever discharged ... for [himself and his] heirs, executors and administrators ... the [defendant and its] successors and assigns, heirs, executors and administrators, of and from all, and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckoning, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, in law or in equity ... against the [defendant] ... upon or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of the presents.

We are aware that the effect of a general release can be a matter of some uncertainty, see Barninger v. National Maritime Union, 372 F.Supp. 908, 914-15 (S.D.N.Y.1974), but we perceive no such problem here. That the settlement was an arms-length bargain intended by the parties to settle all three actions brought by Brown, including the instant case, is not disputed. The application for fees made no showing or offer of proof that less than a complete settlement of all claims in this case was intended. In those circumstances, the settlement includes any claim for attorney's fees.

Section 1988 does not create a separate action for attorney's fees. An award of fees may be made only as to "the prevailing party ... as part of costs" recovered in the underlying case. We believe it reasonably obvious that an agreement utilizing the broad language of the release here accompanied by a stipulation that the case will be dismissed "without costs to any party" is, absent circumstances indicating otherwise, intended to settle all claims involved in the...