Bird v. Bird

• Decision Date: 22 June 1987
• Citation: 24 Mass.App.Ct. 362,509 N.E.2d 289
• Parties: Elizabeth B. BIRD v. Charles S. BIRD, Jr.
• Court: Appeals Court of Massachusetts

Page 289

509 N.E.2d 289

24 Mass.App.Ct. 362

Elizabeth B. BIRD v. Charles S. BIRD, Jr.

Appeals Court of Massachusetts,

Essex.

Argued March 10, 1987.

Decided June 22, 1987.

Richard K. Donahue, Lowell, for plaintiff.

Edward R. Lev, Boston, for defendant.

Before GRANT, KAPLAN and KASS, JJ.

KASS, Justice.

Four days into the trial of an action on a marriage separation agreement, the parties settled their primary dispute. ¹ What remains are controversies over whether Charles S. Bird, Jr., shall pay legal fees incurred by his former wife, Elizabeth, and, if so, how much those fees should be. Although a postlude to the main event, the fee dispute has itself generated a sizeable record and bitterness to spare on the part of counsel.

A judge of the Superior Court determined that Elizabeth, as the successful party was entitled to reimbursement of $56,139.50 in legal fees and costs charged by Donahue & Donahue, of Lowell, and $21,000 of a larger sum billed by Prickett, Jones, Elliott, Kristol & Schnee, of Wilmington, Delaware. Judgment entered for $77,139.50 plus interest. There are cross-appeals: Elizabeth contends she is entitled to the full measure of the Prickett firm's fee; Charles argues that she is entitled to none of either fee.

1. Who is the successful party? Article 13 of the parties' separation agreement provides, "In the event of any action by either of the parties to enforce this Agreement, the unsuccessful party shall bear the reasonable counsel fees and court costs of the successful party...." The action to enforce the separation agreement was initiated by Elizabeth after Charles had lapsed into substantial default of his obligations under the agreement.

The settlement which disposed of the underlying action on the separation agreement committed Charles to pay all arrearages, plus ten percent interest, and to adhere to future payments required by the original agreement, albeit with deferrals of $35,000 per year (out of $125,000) for five years. The deferred amounts, plus interest, are to be paid in 1991. The naive observer might suppose that Elizabeth had achieved an excellent result. Charles, however, claims rollicking success. His objective, he said, was to stretch out payments to tide him over a lean (these things are relative) period and a stretch-out is what the litigation produced.

As matter of language, success means the prosperous achievement of something desired, planned or attempted. See Webster's 3d New Intl. Dictionary 2282 (1971); Oxford English Dictionary 3134 (Compact ed. 1971); American Heritage Dictionary 1214 (2d College ed. 1982). Charles did, as an outcome of the action brought by Elizabeth to enforce the separation agreement, achieve something he desired: delay. Wishing to defer his payments was not simply a matter of wilfulness or whim on Charles's part. Although a wealthy man, he had suffered a precipitous drop in dividend income--$300,000 per year to zero--from Bird & Co., a closely held corporation in which he was a major stockholder. Charles had reason to anticipate that his comparative adversity would be temporary.

We think, however, that it would subvert the stability of legal agreements if the relatively modest concessions secured by Charles could be counted a success. Indeed, Charles's argument that he was the successful party is a profoundly cynical one. It suggests that provoking litigation through nonperformance of a legal obligation is an acceptable tactic and that the provocateur who gains an advantage through its use may raise the banner of success. We are disinclined, thus, to reward nonperformance of agreements.

There is also an insidious side to Charles's position. The allocation of legal costs to the prevailing party is not an unusual provision in marital separation agreements. Compromise of disputes arising out of such agreements would be much discouraged if yielding any ground of controversy also meant yielding the status of the prevailing or successful party.

In certain kinds of cases, achievement of less than ultimate goals, i.e., securing some benefit for the party bringing suit, may earn one status as a prevailing party for purposes of recovery of legal fees under 42 U.S.C. § 1988 (1982). See Draper v. Town Clerk of Greenfield, 384 Mass. 444, 453, 425 N.E.2d 333 (1981), cert. denied, 456 U.S. 947, 102 S.Ct. 2016, 72 L.Ed.2d 471 (1982); Crane v. Commissioner of Pub. Welfare, 400 Mass. 46, 49-50, 507 N.E.2d 751 (1987); Coalition for Basic Human Needs v. King, 691 F.2d 597, 599-600 (1st Cir.1982). See also Virzi Subaru, Inc. v. Subaru, Inc., 742 F.2d 677, 680-681 (1st Cir.1984), involving claims of rights under a Connecticut statute regulating retail franchises. Those cases, however, have a "private attorney general" ingredient which is absent from actions based on private contracts. An analogy with the former category of cases is not self-evident. ²

During the fee dispute portion of the litigation and on appeal, Charles said that a stretch-out of his obligations is all he ever wanted. The tenor of his answer and counterclaim was otherwise. In his pleadings he claimed the agreement was unconscionable and sought reformation. By terms of the settlement agreement, the fairness of the agreement was inferentially conceded and its provisions were left in the main unchanged. On a comparative basis, Elizabeth was the more successful party.

2. Consequences of overstatement of the Prickett firm's fees. As trial of the primary dispute drew closer, the parties' settlement negotiations became more serious and on January 10, 1985, Elizabeth served on Charles an offer of judgment (see Mass.R.Civ.P. 68, 365 Mass. 835 [1974] ) ³. That document represented that Elizabeth had, as of January 1, 1985, incurred counsel fees and costs aggregating $118,475, and was prepared, in compromise, to accept reimbursement of $50,000 of that sum from Charles. After the main case had been settled and the parties had begun picking at the fee dispute, Mr. William Prickett discovered a bookkeeping error in his firm's charges. It was a whopper. The Prickett firm had overstated its charges as of January 1, 1985, by some $55,000. The considerable dimensions of the Prickett firm's mistake come into sharper focus when one considers that the Donahue firm's charges as of January 1, 1985, were $36,000.

Charles argues that the Prickett firm's overstatement was so grievous and, thereby, so obstructed settlement that Elizabeth is estopped from any recovery of counsel fees. Estoppel entails a representation which induces a course of conduct detrimental to the person who reasonably relied on the representation. DeSisto's Case, 351 Mass. 348, 352, 220 N.E.2d 923 (1966). National Medical Care, Inc. v. Zigelbaum, 18 Mass.App.Ct. 570, 580, 468 N.E.2d 868 (1984). Although the trial judge found that the overstatement of the Prickett firm's charges had delayed disposition of the primary case, there was no evidence that Charles, at that juncture, was prepared to settle at all. His strategy was one of delay. Implicitly, the judge concluded that Charles had not materially changed his position by reason of the overstated fee. Not the least persuasive reason for so concluding was that Elizabeth had never asked for reimbursement of $118,475 in legal fees, but had been prepared from the outset to accept $50,000. The aggregate of the correct Prickett and Donahue charges as of January 1, 1985, exceeded $50,000. Contrast Cable Marine, Inc. v. M/V Trust Me II, 632 F.2d 1344, 1345-1346 (5th Cir.1980). We think the judge rightly rejected Charles's estoppel argument.

We are similarly unpersuaded, as was the trial judge, that Prickett's error saddled him with the onus of coming into equity with unclean hands. Application of that doctrine rests in the broad discretion of the trial court. Fales v. Glass, 9 Mass.App.Ct. 570, 575, 402 N.E.2d 1100 (1980). Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 814-815, 65 S.Ct. 993, 997, 89 L.Ed. 1381 (1945). Norton Co. v. Carborundum Co., 530 F.2d 435, 442 (1st Cir.1976). The trial judge acted well within the scope of that discretion. There was no finding that the overstatement was intentional or intended to deceive. The judge was in the best position to review and judge the conduct of the parties. Absent fraud or perjury, denying Elizabeth counsel fees would serve but lightly the cause of the integrity of the courts and would tend to defeat the policy of imposing upon debtor spouses the cost of the legal chase. See Walsh v. Atlantic Research Associates, Inc., 321 Mass. 57, 66, 71 N.E.2d 580 (1947); Olmstead v. Murphy, 21 Mass.App.Ct. 664, 666, 489 N.E.2d 707 (1986). As will appear later in this opinion, the judge did draw some inferences adverse to Prickett from his firm's confusion. Finally, the platform of Mr. Lev, who is Charles's counsel, to invoke a clean hands argument is shaky. His conduct of the litigation was a study in maneuver, delay, and obstructive defense. He was a major contributor to giving this case its nasty quality. Appeals to equity earn him the sanctimony award.

Further upon the business of the overstatement of fees which appeared in the offer of judgment, Charles urges that Mr. Prickett and Mr. Donahue, in filing their offer of judgment, transgressed Mass.R.Civ.P. 11(a), 365 Mass. 753 (1974). Elizabeth, by way of reaction, ascribes rule 11(a) violations to Charles's answer. The rule provides that the "signature of an attorney to a pleading constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information, and belief there is a good ground to support it; and that it is not interposed for delay." A "pleading" comprehends the complaint, answer, and reply which frame the issue, Kolakowski v. Finney, 393 Mass. 336, 340, 471 N.E.2d 99 (1984), and, therefore, an offer of judgment is not a "pleading." Under Mass.R.Civ.P. 7(b)(2), 365 Mass. 749 (1974), however, rules...