Indian Head Nat. Bank v. Corey

• Decision Date: 31 December 1986
• Docket Number: No. 86-166,86-166
• Citation: 129 N.H. 83,523 A.2d 70
• Parties: INDIAN HEAD NATIONAL BANK v. George D. COREY et al.
• Court: New Hampshire Supreme Court

Page 70

523 A.2d 70

129 N.H. 83

INDIAN HEAD NATIONAL BANK v. George D. COREY et al.

No. 86-166.

Supreme Court of New Hampshire.

Dec. 31, 1986.

Sullivan, Gregg and Horton P.A., Nashua (James L. Sullivan, Jr., on brief and orally), for plaintiff.

Berman, DeValerio & Pease, (Norman Berman (orally) and Harry A. Garfield, II, Boston, Mass. on brief), and George D. Corey, Nashua, pro se, for defendant George D. Corey.

SOUTER, Justice.

The plaintiff, Indian Head National Bank, appeals an order awarding counsel fees to the defendant George D. Corey based on the express finding of the Superior Court (Goode, J.) that the bank's delay in discharging its obligations under a consent decree was "arbitrary, capricious and [in] bad faith...." The bank claims that the findings do not support an award of counsel fees, and that the evidence does not support the findings. We affirm and further grant Mr. Corey interest of 12% on the trial court's award, together with his counsel fees and double his other costs incurred in this appeal.

Mr. Corey is a beneficiary under a trust of which the bank is a trustee. The bank began the proceeding now before us by filing a petition for instructions following a disagreement with Mr. Corey, the exact nature of which is not apparent in the record before us. Both the disagreement and any uncertainty about the trustee's obligations supposedly ended with a consent decree entered on May 6, 1985, under the terms of which the bank was obligated to pay Mr. Corey's debts plus a lump sum directly to him, to provide funds and assistance for his purchase of a house, and thereafter to make distributions of net income to him, and to provide periodic reports of the trust's financial transactions.

The decree did not end the difficulties, however, and on the following June 14 Mr. Corey filed a motion to find the bank in contempt, claiming that the bank had failed to make any of the required payments, and seeking costs and attorney's fees in the renewed litigation. The bank answered that Mr. Corey had been hasty and asserted that "even as respondent was pursuing his motion for contempt, [the bank] was complying with the order...." An informal hearing in chambers on July 19 appeared to resolve the matter once again.

Nonetheless, in November, 1985, Mr. Corey filed a further motion in which he claimed that the bank's delay in complying with the consent decree had injured him, and alleged that the bank still remained in default of its obligation to discharge his balance due to Master Card, a debt which continued to damage his credit rating. Based on these allegations, Mr. Corey again sought reimbursement for expenses and attorney's fees incurred in preparation for the hearing in chambers on July 19, and for the additional legal fees and costs resulting from the bank's continuing failure to honor the decree thereafter. The bank responded, in effect, that it had acted reasonably, and although the bank admitted that it had misapplied a payment to Master Card, it represented that to the "best of [its] knowledge the matter [had] been rectified."

In December, 1985, the court held a full hearing on the original motion for contempt and the later motion for fees, and enquired into the bank's efforts to comply with the consent decree. After presenting evidence that the bank still had not discharged the Master Card debt, as well as other evidence unfavorable to the bank, Mr. Corey's counsel told the court that he did not claim that the bank had intentionally disregarded the decree so much as it had failed to attend to it. He expressed a preference for an award of fees and costs without a formal and express finding of contempt, since a contempt finding would only make it more difficult for Mr. Corey to deal with the bank in the future.

Without mentioning "contempt," the court found

"that the defendant-beneficiary George Corey, through counsel, was required to seek judicial intervention to compel compliance with the terms of the consent decree entered on May 6, 1985.

The record discloses a number of instances where the plaintiffs' trust department has failed without just cause to discharge their obligation as corporate fiduciaries to the defendant. This litigation, unnecessarily protracted through the plaintiffs' arbitrary, capricious and bad faith conduct has required time and effort of defendant counsel to compel plaintiffs to do that which they should have done on their own."

The court accordingly awarded fees of $6,150.94, which we take to be reimbursement for counsel fees, all but $70.43 of which had apparently been incurred in connection with the original filing of the motion for contempt and preparation for the July hearing.

In this appeal the bank argues, first, that the award of counsel fees in a contempt proceeding is erroneous in the absence of an express finding of contempt. The short answer is that the longstanding rule authorizing a court to award reasonable attorney's fees to a litigant who is required to bring action to enforce a judicial decree, see Guay v. Association, 87 N.H. 216, 221, 177 A. 409, 413 (1935), does not require an express finding of contempt. Although such a finding will normally be the occasion for an award of fees on this basis, see Barber v. Company, 80 N.H. 507, 120 A. 80 (1923); Fowler v. Owen, 68 N.H. 270, 39 A. 329 (1895), this court apparently thought no such finding was necessary to support the award of counsel fees in Manchester v. Hodge, 75 N.H. 502, 77 A. 76 (1910). Rather, the essential justification for such an award is the gratuitous burden placed on the successful party who is forced to incur further legal expenses simply to obtain what a court has previously awarded or to enforce a right that a court has previously declared. On this basis alone, therefore, the trial court's finding entitled Mr. Corey to the award of reasonable fees.

The cases we have cited do not, however, exhaust the authority supporting the trial court's order. Superior Court Rule 59 authorizes the assessment of "reasonable costs, including reasonable counsel fees, against any party whose frivolous or unreasonable conduct makes necessary the filing of or hearing on any motion." In addition, Harkeem v. Adams, 117 N.H. 687, 377 A.2d 617 (1977) and its companion case, St. Germain v. Adams, 117 N.H. 659, 377 A.2d 620 (1977), establish the more comprehensive rule that "where litigation is instituted or unnecessarily prolonged through a party's...