Daily Gazette Co., Inc. v. Canady

• Decision Date: 27 June 1985
• Docket Number: No. 16581,16581
• Court: West Virginia Supreme Court
• Parties: , 56 A.L.R.4th 479, 11 Media L. Rep. 2243 The DAILY GAZETTE COMPANY, INC. v. The Honorable Herman G. CANADY, Judge, and Joseph C. Cometti.

Page 262

332 S.E.2d 262

175 W.Va. 249, 56 A.L.R.4th 479, 11

Media L. Rep. 2243

The DAILY GAZETTE COMPANY, INC. v. The Honorable Herman G. CANADY, Judge, and Joseph C. Cometti.

No. 16581.

Supreme Court of Appeals of West Virginia.

Submitted April 24, 1985.

Decided June 27, 1985.

Syllabus by the Court

A court may order payment by an attorney to a prevailing party reasonable attorney fees and costs incurred as the result of his or her vexatious, wanton, or oppressive assertion of a claim or defense that cannot be supported by a good faith argument for the application, extension, modification, or reversal of existing law.

Rudolph L. DiTrapano & Rebecca A. Baitty, Charleston, for petitioner.

Joseph C. Cometti, Charleston, for respondents.

McGRAW, Justice:

The petitioner, The Daily Gazette Co., Inc. seeks a writ of mandamus compelling reconsideration of its motion for attorney fees by respondent Judge Herman G. Canady of the Thirteenth Judicial Circuit sought in connection with the dismissal of a defamation action filed by respondent attorney Joseph C. Cometti. Although the respondent judge rejected this request for an award of attorney fees based upon his perception of an absence of authority, the petitioner contends that the ability of a trial court to assess attorney fees against counsel who has acted in bad faith is founded in the exercise of its inherent powers, and is not dependent upon either statutory or regulatory authorization.

As a general rule, each litigant bears his or her own attorney fees absent express statutory, regulatory, or contractual authority for reimbursement. See Nelson v. West Virginia Public Employees Insurance Board, 171 W.Va. 445, 300 S.E.2d 86, 91 (1982). This rule, however, known as the "American rule," is subject to a number of judicially created exceptions. See Mallor, Punitive Attorneys' Fees for Abuses of the Judicial System, 61 N.C.L.Rev. 613, 619-52 (1983). For example, in Nelson v. West Virginia Public Employees Insurance Board, 171 W.Va. at 451, 300 S.E.2d at 92, this Court noted that, "A well established exception to the general rule prohibiting the award of attorney fees in the absence of statutory authorization, allows the assessment of fees against a losing party who has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. See, e.g., Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); Vaughan v. Atkinson, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); see also Annot., 31 A.L.R.Fed. 833 (1977)."

In Roadway Express, Inc. v. Piper, 447 U.S. 752, 765, 100 S.Ct. 2455, 2463, 65 L.Ed.2d 488, 500 (1980), the United States Supreme Court held that "in narrowly defined circumstances federal courts have inherent power to assess attorney's fees against counsel." Previously, in Link v. Wabash R. Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 1389, 8 L.Ed.2d 734, 738 (1962), where a trial court's dismissal of an action for failure to prosecute was challenged, the Court had stated that, "The authority ... to dismiss sua sponte for lack of prosecution has generally been considered an 'inherent power,' governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases." (Footnote omitted). Later, in Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. at 258-59, 95 S.Ct. at 1622, 44 L.Ed.2d at 154, where an appellate court's award of attorney fees to environmental organizations based upon the "private attorney general" theory of recovery was challenged, the Court, although rejecting this theory of attorney fees recovery, acknowledged the "inherent power" of courts to "assess attorney's fees ... when the losing party has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons....' " F.D. Rich Co. [v. United States ex rel. Industrial Lumber Co.], 417 U.S. , at 129, [94 S.Ct. 2157, 2165, 40 L.Ed.2d 703, 714] [ (1974) ] (citing Vaughan v. Atkinson, 369 U.S. 527, [82 S.Ct. 997, 8 L.Ed.2d 88] (1962))." Finally, in Roadway Express, 447 U.S. at 766-67, 100 S.Ct. at 2464, 65 L.Ed.2d at 501-02, the Court concluded that:

The power of a court over members of its bar is at least as great as its authority over litigants. If a court may tax counsel fees against a party who has litigated in bad faith, it certainly may assess those expenses against counsel who willfully abuse judicial processes. See Renfrew, Discovery Sanctions: A Judicial Perspective, 67 Calif.L.Rev. 264, 268 (1979). Like other sanctions, attorney's fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record. But in a proper case, such sanctions are within a court's powers. [Footnotes omitted].

The concept of the "inherent power" of the judiciary is well recognized in this jurisdiction. In Syllabus Point 3 of Shields v. Romine, 122 W.Va. 639, 13 S.E.2d 16 (1940), this Court noted the general rule that, "A court 'has inherent power to do all things that are reasonably necessary for the administration of justice within the scope of its jurisdiction.' 14 Am.Juris., Courts, section 171." See also Virginia Electric & Power Co. v. Haden, 157 W.Va. 298, 306, 200 S.E.2d 848, 853 (1973); Syl. pt. 2, Frazee Lumber Co. v. Haden, 156 W.Va. 844, 197 S.E.2d 634 (1973). This Court has acknowledged inherent judicial powers in a variety of contexts at both the appellate and trial court levels. See, e.g., In re Pauley, 173 W.Va. 228, 314 S.E.2d 391, 396 (1984) (provision and supervision of court personnel); Syl. pt. 4, Prager v. Meckling, 172 W.Va. 785, 310 S.E.2d 852 (1983) (imposition of sanctions to maintain a fair and orderly trial); In re L.E.C., 171 W.Va. 670, 301 S.E.2d 627, 630 (1983) (supervision, regulation, definition, and control of the practice of law); Perlick & Co. v. Lakeview Creditor's Trustee Committee, 171 W.Va. 195, 298 S.E.2d 228, 235 (1982) (elimination of dormant cases from judicial dockets); E.H. v. Matin, 168 W.Va. 248, 284 S.E.2d 232 (1981) (transfer of actions to lower tribunals for further proceedings); State v. Daggett, 167 W.Va. 411, 280 S.E.2d 545, 556 n. 3 (1981) (compulsion of attendance by witnesses); Sparks v. Sparks, 165 W.Va. 484, 269 S.E.2d 847, 848 (1980) (grant of custody of a child to a person outside jurisdiction of court or permission to one who has custody to take child to another state or foreign jurisdiction); Hendershot v. Hendershot 164 W.Va. 190, 263 S.E.2d 90, 96-97 (1980) (imposition of civil contempt sanctions); State ex rel. Goodwin v. Cook, 162 W.Va. 161, 171-72, 248 S.E.2d 602, 607-08 (1978) (appointment of special prosecutor); Syl. pt. 3, State ex rel. Bagley v. Blankenship, 161 W.Va. 630, 246 S.E.2d 99 (1978) (determination of funding necessary for the effective operation of the judiciary); State ex rel. Moran v. Ziegler, 161 W.Va. 609, 614, 244 S.E.2d 550, 553 (1978) (disqualification of private prosecutor); Eastern Associated Coal Corp. v. Doe, 159 W.Va. 200, 208, 220 S.E.2d 672, 678 (1975) (enforcement of judicial orders); Corbin v. Corbin, 157 W.Va. 967, 980, 206 S.E.2d 898, 906 (1974) (modification of divorce decrees); Virginia Electric & Power Co. v. Haden, 157 W.Va. at 306, 200 S.E.2d at 853 (transfer of actions to administrative agencies for further proceedings); State v. Cowan, 156 W.Va. 827, 834, 197 S.E.2d 641, 645 (1973) (direction of pretrial discovery); Maxwell v. Stalnaker, 142 W.Va. 555, 563, 96 S.E.2d 907, 912 (1957) (adjudication of payment of costs); State ex rel. Chemical Tank Lines, Inc. v. Davis, 141 W.Va. 488, 493, 93 S.E.2d 28, 31 (1956) (prescription and enforcement of rules and regulations for the conduct of judicial business).

Although there is an undeniable interest 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...