Advertiser Co. v. Auburn University

• Decision Date: 27 February 1991
• Citation: 579 So.2d 645
• Parties: 18 Media L. Rep. 1849 The ADVERTISER CO., et al. v. AUBURN UNIVERSITY, a public corporation. 2900122.
• Court: Alabama Court of Civil Appeals

Page 645

579 So.2d 645

18 Media L. Rep. 1849

The ADVERTISER CO., et al. v. AUBURN UNIVERSITY, a public corporation.

2900122.

Court of Civil Appeals of Alabama.

Feb. 27, 1991.

Dennis R. Bailey of Rushton, Stakely, Johnston & Garrett, Montgomery, for appellant.

Thomas D. Samford III, Gen. Counsel, Auburn University, Auburn, and T.W. Thagard, Jr., David R. Boyd and Patricia A. Hamilton of Balch & Bingham, Montgomery, for appellee.

RUSSELL, Judge.

This appeal is from an order denying an award of attorney's fees.

The appellants in this case are the Advertiser Company of Montgomery, Alabama, and other media-related corporations and individuals; the appellee is Auburn University. In early 1989 the appellee's general counsel retained the Atlanta-based law firm of King & Spalding to investigate allegations concerning Jerry F. Smith, who was employed by Auburn University as Executive Director of Alumni and Development. Mr. Smith also held the position of Secretary of the Auburn University Foundation (AUF), a nonprofit corporation whose purpose was to attract gifts for the benefit of the University. In recent months a controversy had arisen over Mr. Smith's involvement with the estate of Lois Huff, who had made a large testamentary gift to AUF. Under Mrs. Huff's will Mr. Smith had been appointed co-executor of the Huff estate. Members of the news media and others had questioned the propriety of Mr. Smith's receipt of an executor's commission while also serving as an official of the University and AUF. King & Spalding's investigation was to focus on activities of Mr. Smith relevant to the Huff estate while Mr. Smith was employed by the University. The firm was then to render to the University's Board of Trustees and general counsel a report of factual findings and legal opinions and advice.

On April 14, 1989, King & Spalding delivered to the appellee's general counsel a written report (the King & Spalding Report) with the results of its investigation as well as the firm's recommendations. Requests for copies of the King & Spalding Report by the appellants and other members of the news media were refused by the appellee. Subsequently, the appellants initiated an action in the Circuit Court of Lee County, seeking a judgment from the court declaring that the report was a "public writing" of the state and was subject to disclosure pursuant to Alabama's "Open Records Act," Ala.Code 1975, § 36-12-40. This act provides:

"Every citizen has a right to inspect and take a copy of any public writing of this state, except as otherwise expressly provided by statute."

In its answer to the appellants' complaint, the appellee maintained that the report was not a "public writing" covered by § 36-12-40; that even as a "public writing," the report would still be exempt from the mandate of § 36-12-40 because of non-statutory exceptions set forth in Stone v. Consolidated Publishing Co., 404 So.2d 678 (Ala.1981); and, finally, that the report was protected from disclosure by the attorney-client privilege. After serving interrogatories upon the appellee, in response to which the appellee admitted that it had disclosed the contents of the King & Spalding Report to AUF and to Mr. Smith's legal counsel, the appellants filed a motion for summary judgment on their suit. They contended that any attorney-client privilege with respect to the report had effectively been waived when the appellee distributed the report to AUF and Mr. Smith's counsel.

On March 29, 1990, the trial court entered its order granting summary judgment for the appellants. In its opinion the court first recognized the King & Spalding Report as a "public writing" within the scope of § 36-12-40. Next, it found that the non-statutory exceptions found in Stone were inapplicable in this case. The court then held that the report was subject to the attorney-client privilege, but that the appellee had waived the privilege when it furnished a copy of the report to AUF and to Mr. Smith's counsel. Once the privilege was waived, said the court, the report became like "any other public writing. As [it] is not otherwise protected it must be released to the press." The appellee was ordered to furnish the report to the appellants within 30 days; this it did. Neither side appealed from the trial court's ruling that the report should be released to the public.

On April 4, 1990, citing as authority the "common benefit" doctrine followed by the trial court in Birmingham News Co. v. Bell (CV-89-9468-MC, Jefferson Circuit Court), the appellants filed a motion to tax attorney's fees as costs against the appellee. When the trial court here denied the motion without further comment, this appeal followed. We affirm.

The dispositive issues before us are whether the trial court had the discretion to exercise its equitable power to award attorney's fees under the "common benefit" doctrine, and whether the trial court erred when it refused to allow the appellants' claim for attorney's fees against the appellee. In their briefs, the parties presented numerous peripheral issues and supporting arguments. However, we pretermit as unnecessary a discussion of any but the dispositive issues.

As to the first issue, the appellants do not claim entitlement to attorney's fees based on any statutory authorization or contractual provision, but instead base their claim on the inherent equitable powers of the court to award such fees when appropriate. It is well established that Alabama follows the "American Rule" with respect to awards of attorney's fees. Under this rule a prevailing litigant is not entitled to have attorney's fees paid by the opposing party, absent a contractual or statutory right or a recognized ground of equity. Porter v. Hook, 554 So.2d 382 (Ala.1989); Reynolds v. First Alabama Bank of Montgomery, N.A., 471 So.2d 1238 (Ala.1985). Despite the general strictures of the American Rule, this state has joined other jurisdictions in recognizing certain equitable exceptions that allow fee awards. In Reynolds, our supreme court dealt extensively with the power of courts to award attorney's fees, noting that, where a state court is unencumbered by a state or federal statute, it "retain[s] all the inherent equity powers that existed at common law, which included the right to assess attorney's fees against the losing party." Reynolds, 471 So.2d at 1243. The court in Reynolds recognized that one exception to the traditional disinclination toward awarding attorney's fees may occur where an unsuccessful litigant has acted in bad faith; in such instances, a court may, in its discretion, shift the cost of attorney's fees to the offending litigant. Reynolds, 471 So.2d at 1242. Also, our supreme court has determined that an award of attorney's fees may be made where the actions of the plaintiff generally benefited the administration of justice in the state. Brown v. State, 565 So.2d 585 (Ala.1990). We recently cited this "common benefit" exception when holding that where a litigant rendered a public service by bringing an improper governmental practice to an end, the public nature of the services rendered by the litigant's attorney justified an award of attorney's fees. Bell v. Birmingham News Co., 576 So.2d 669 (Ala.Civ.App.1991) (citing Brown, 565 So.2d at 592).

Relying on Brown and Birmingham News Co. v. Bell (CV-89-9468-MC), the appellants here contend that an award of attorney's fees in their case was appropriate under the "common benefit" exception to the American Rule regarding fee awards. (We note here that CV-89-9468-MC was subsequently appealed to and affirmed by this court in Bell, 576 So.2d 669.) It is the appellants' position that the trial court erred when it refused to tax the cost of attorney's fees against the appellee after the appellants successfully sued to enforce § 36-12-40 and thereby conferred a "common benefit" upon the citizens of this state. The appellee urges this court not to extend the holding in Brown beyond the particular facts of that case and, instead, to construe that decision narrowly.

Despite the numerous decisions of this and other courts recognizing equitable exceptions to the American Rule regarding attorney's fees, we do not read Brown (or, more recently, Bell ) to mean that in every instance where a "common benefit" arguably accrues to the general public because of actions of the plaintiff, attorney's fees must be taxed as costs. Reynolds, 471 So.2d 1238. Although such awards are authorized, they are not, of course, compelled.

The appellants also cite, as additional authority for recovery of fees, Ala.Code 1975, § 6-6-230, which allows for "further relief" in declaratory judgment actions "whenever necessary or proper." However, we cannot interpret a statute that merely authorizes fee awards as making the awarding of attorney fees mandatory on the trial court. Accordingly, we find the awarding of fees in the present case also to be discretionary under the additional cited authority.

The appellants have also contended that, as the trial court had the power to award attorney's fees, the court abused its discretion when it refused to award them fees against the appellee. We disagree.

At the outset we note that the decision to award or deny attorney's fees lies within the sound discretion of the trial court. Rayford v. Rayford, 456 So.2d 833 (Ala.Civ.App.1984); Nolen v. Nolen, 398 So.2d 712 (Ala.Civ.App.1981). On appeal the trial court's decision is subject to reversal only upon a showing of abuse of discretion. Rayford, 456 So.2d at 834.

Our reading of the record before us,...