Andrews v. District of Columbia

• Decision Date: 01 April 1982
• Docket Number: No. 81-78.,81-78.
• Citation: 443 A.2d 566
• Parties: Frederick P. ANDREWS and Edith W. Andrews, Appellants, v. DISTRICT OF COLUMBIA, Appellee.
• Court: D.C. Court of Appeals

443 A.2d 566

Frederick P. ANDREWS and Edith W. Andrews, Appellants, v. DISTRICT OF COLUMBIA, Appellee.

No. 81-78.

District of Columbia Court of Appeals.

Argued November 18, 1981.

Decided April 1, 1982.

Howard E. Wahrenbrock, Washington, D. C., with whom James E. Hickey, Jr., was on the briefs, for appellants.

Robert J. Harlan, Jr., Asst. Corp. Counsel, with whom Judith W. Rogers, Corp. Counsel, Charles L. Reischel and James E. Lemert, Deputy Corp. Counsel, and Richard L. Aguglia, Asst. Corp. Counsel, Washington, D. C., were on the brief, for appellee.

Before KELLY, NEBEKER and BELSON, Associate Judges.

KELLY, Associate Judge:

At issue in this appeal is the validity of the trial court's denial of attorney's fees to appellants because of the alleged bad faith conduct of appellee. Finding no abuse of discretion in the court's ruling¹ and no merit in the other issues on appeal, we affirm.

I

When this distressing saga began, appellants resided in the District of Columbia on McKinley Street, N.W. Mrs. Andrews was employed as a labor economist with the U.S. Department of Labor. Appellants sold their home in the District and, on November 15, 1969, moved to Geneva, Switzerland, where Mrs. Andrews worked as a U.S. Civil Service employee on loan to the International Labor Organization (ILO). When the ILO suffered financial reverses, they extended Mrs. Andrews' employment contract for six months to June 1971, but she refused to accept their offer of monthly extensions thereafter.

Before returning to the United States, appellants searched in Europe for a retirement home. They ultimately purchased land in Cyprus, with the intention of retiring there as soon as finances permitted. On July 6, 1971, appellants returned to Washington, D. C., where Mrs. Andrews resumed employment with the U. S. Department of Labor. They lived in a hotel in the District for a month while seeking a house in the suburbs, and on August 13, 1971, moved to a home in Bethesda, Maryland.

II

The District of Columbia government collected $1,813 in income taxes from appellants for the period from November 15, 1969 to August 13, 1971, pursuant to D.C. Code 1981, §§ 47-1801.4(17), -1806.3 (a tax levied on those persons who are domiciliaries of the District on the tax day). When appellee denied appellants' request for a tax refund, appellants sued in Superior Court, contending that they did not owe the tax because they were not domiciled in the District during the period in question. A bench trial was held before then Judge Harry T. Alexander on April 18 and 19, 1973. Appellee moved for an immediate decision at the end of the trial, but appellants opposed the motion in order to have the opportunity to file a trial brief. Appellee's motion was denied, a trial transcript was prepared, and briefs were filed. The series of events which followed defy explanation from the court and do no credit to the judicial process.

On December 1, 1976, after three years of silence, appellants moved to expedite decision. Pursuant to this motion, Judge Fred Ugast explained to counsel that the trial judge had retired without deciding the case and that the court file, including the trial exhibits, had been misplaced. When counsel could not settle the case, they filed a joint request for decision based on the trial transcript and the trial briefs. On January 3, 1977, Judge Ugast declared a mistrial, ruling that since the question of domicile appeared very close he could not decide the case without observing appellants' demeanor on the stand to determine issues of credibility. A motion to reconsider was denied on May 11, 1977. On June 6, 1977, because appellants had moved to Cyprus and could not, without considerable sacrifice, return to the United States for a new trial, they appealed from the denial of reconsideration of the mistrial order. That order was not appealable, however, and the appeal was dismissed on November 9, 1977. Appellants then moved for a new trial and admission of former trial testimony and exhibits on December 7, 1977. Judge John Garrett Penn granted the motion for a new trial and admission of former trial testimony, but because appellee objected to the identification and filing of appellants' copies of appellants' former trial exhibits, he requested that counsel confer and report back on the status of the trial exhibits. Judge Penn resigned from the court before a decision was made as to the use of the duplicates of the former trial exhibits.

Undaunted, appellants filed a motion for substitution of documents as duplicates in lieu of lost exhibits one through five (appellants' exhibits only). Appellee failed to reply in writing to this motion, but opposed it at oral argument, counsel noting that he was trying to settle the case. Judge William Pryor granted the motion on July 11, 1979, the date of the oral argument. On the trial date, October 30, 1979, Judge John Fauntleroy (differing with Judge Ugast) decided a trial was unnecessary and that he would decide the case on the record, after submission of exhibits and a legal memorandum by appellee with an opportunity for appellants to respond. Appellee, characteristically, failed to file the requested documents within the allotted 30 days, so on December 12, 1979, appellants filed yet another motion for decision. In its reply to this latest motion, filed January 11, 1980, appellee, in apparent surrender, withdrew its opposition to granting a refund to appellants, together with the allowable statutory interest, insisting however that its action in no way waived any of its rights, defenses, determinations or authority previously asserted in the case for purposes of this case or any future case. Appellants opposed appellee's equivocal proposed withdrawal and filed a brief on the merits on February 19, 1980. At a hearing on May 28, 1980, Judge Fauntleroy stated that he was prepared finally to decide the merits and dispose of the case, but wanted to tie all pending matters into one order. Because appellants wanted a decision on an award of attorney's fees and an award of interest on the refund above the statutory rate to be included in the order, the court continued the case until July 16, 1980, for oral argument on those issues. On July 9, 1980, appellants filed a motion to determine reasonable attorney's fees and interest and a request for further findings. Appellee filed its reply on July 16, 1980, the date of the hearing. Judge Fauntleroy found that "the record fails to disclose that the District of Columbia acted in bad faith," and accordingly denied appellants' request for attorney's fees. He also ruled that he was bound to follow the interest rate fixed by statute. Accordingly, he awarded interest on the refund at the statutory rate of 4%, and requested appellee to file a proposed order. Appellants filed a motion to expedite entry of final judgment on July 31, 1980. Appellee filed proposed findings of fact, conclusions of law and order on August 8, 1980; and appellants filed comments thereon on August 13, 1980. The court entered its findings of fact, conclusions of law and an order on January 6, 1981. Notice of appeal was timely filed on January 16, 1981.

III

The general, or American rule, is that in the absence of statutory authority the prevailing party may not recover attorney's fees. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 245, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); American Federation of State, County and Municipal Employees, AFL-CIO v. Ball, D.C.App., 439 A.2d 514 (1981) (AFSCME v. Ball); Trilon Plaza Co. v. Allstate Leasing Corp., D.C. App., 399 A.2d 34, 37 (1979). This rule is based on notions that "no person should be penalized for merely defending or prosecuting a lawsuit" and that "the threat of having to pay an opponent's costs might unjustly deter those of limited resources from prosecuting or defending suits." Harkeem v. Adams, 117 N.H. 687, 690, 377 A.2d 617, 619 (1977). On the other hand, when a party institutes or prolongs litigation through bad faith, or obstinate, unjust, vexatious, wanton, or oppressive conduct, a court, through its equity power, may award counsel fees to the opposing party. See id. at 690-91, 377 A.2d at 617; Hutto v. Finney, 437 U.S. 678, 689 n. 14, 98 S.Ct. 2565, 25'73, 57 L.Ed.2d 522 (1978); Trilon Plaza Co. v. Allstate Leasing Corp., supra at 37; 6 Moore's Federal Practice § 54.77[2], at 1709 (2d ed. 1981). Under this exception, an award of attorney's fees "vindicates judicial authority without resort to the more drastic sanctions available for contempt of court and makes the prevailing party whole for expenses caused by his opponent's obstinacy." Hutto v. Finney, supra at 689 n. 14, 98 S.Ct. 2573. Nevertheless, the court's equity power is to be exercised only under extraordinary circumstances. Sprague v. Ticonic National Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); e.g., Bradley v. School Board of City of Richmond, Virginia, 345 F.2d 310, 321 (4th Cir.), vacated on other grounds, 382 U.S. 103, 86 S.Ct. 224, 15 L.Ed.2d 187 (1965); see 6 Moore's Federal Practice, supra at § 54.77[2], at 1709-11. In Harkeem v. Adams, supra, the court reasoned that an award of attorney's fees is warranted "[w]here an individual is forced to seek judicial assistance to secure a clearly defined and established right, which should have been freely enjoyed without such intervention. . . ." Id. at 691, 377 A.2d at 619. See also Bradley v. School Board of City of Richmond, Virginia, supra at 321; Shull v. Columbus Municipal Separate School District, 338 F.Supp. 1376 (N.D. Miss.1972). In that case, a determination by the New Hampshire Department of Employment Security (DES) that the appellant was ineligible for unemployment benefits because he had voluntarily quit his employment was overturned by the court. Nevertheless, DES used the same rationale to disqualify the appellant from benefits for a second period of time, necessitating a second hearing. At...