Reyes v. Prince George's County

• Decision Date: 31 October 1977
• Docket Number: No. 51,51
• Citation: 281 Md. 279,380 A.2d 12
• Parties: Pedro J. REYES et ux. v. PRINCE GEORGE'S COUNTY et al.
• Court: Maryland Court of Appeals

Page 279

281 Md. 279

380 A.2d 12

Pedro J. REYES et ux. v. PRINCE GEORGE'S COUNTY et al.

No. 51.

Court of Appeals of Maryland.

Oct. 31, 1977.

Josef B. Brown and Richard C. Daniels, Mount Rainier (Reichelt, Nussbaum, Brown & Topf, Mount Rainier, on the brief), for appellants.

Francis B. Burch, Atty. Gen., and George A. Nilson, Deputy Atty. Gen., Baltimore, and Michael J. Milton, Asst. Atty. Gen., Annapolis, on the amicus curiae brief filed by State of Md.

James C. Chapin, County Atty., Upper Marlboro, for Prince George's County.

Roger D. Redden, Baltimore (Henry R. Lord, W. Gar Richlin and Piper & Marbury, Baltimore; Ellis J. Koch, and O'Malley, Miles, Farrington & McCarthy, Upper Marlboro, on the brief), for Washington National Arena Limited Partnership.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

DIGGES, Judge.

While this suit appears from the record to be only a mundane challenge by appellant-taxpayers to the proposed issuance and sale of revenue bonds by appellee Prince George's County, and the intended loan of the bond proceeds to appellee Washington National Arena Limited Partnership, it raises, by the circumstances of its initiation and prosecution, questions of far greater concern, at least to this Court, than those actually presented by the parties for our determination. We defer for the moment a fuller statement of the facts relevant to the merits of the case, addressing first the question whether the suit is collusive. We conclude that, although it is indeed dismissible on that ground, we are not constitutionally bound to dismiss it and, under the circumstances present here, decline to do so; in addition, we establish with this case specific conditions and procedures under which, in the discretion of the court, actions of sufficient public concern, involving a governmental body, or an agency or official thereof, may be adjudicated despite their collusive nature.

I. Jurisdictional Considerations

In response to interrogation by members of this Court at oral argument, counsel for the first time since inception of these proceedings disclosed, in effect, that this suit was initiated by appellee Washington National Arena solely to satisfy The Equitable Life Assurance Society of the United States, a prospective bond purchaser, as to the legality of bonds being issued to refinance the arena's existing indebtedness. From counsel's statements, it appears that the arena, a nongovernmental business entity, engaged and compensated counsel for then-unselected nominal plaintiffs, and through that counsel obtained the services of the plaintiff-appellants to sue itself in order to secure an opinion of this Court concerning the validity of the proposed bond issue. On that account, we can only conclude that the suit is a collusive one, not involving the " 'actual antagonistic assertion of rights' to be adjudicated a safeguard essential to the integrity of the judicial process . . . ." United States v. Johnson, 319 U.S. 302, 305, 63 S.Ct. 1075, 1076, 87 L.Ed. 1413 (1943). Consequently, it is plain that the adjudication below may be set aside and the cause dismissed without entering judgment on the merits.

We begin by pointing out what is known to every student of our judicial process: that the American system of adjudication from its inception has been grounded on the principle that adversary presentation of issues actually in dispute between the parties to the suit plays a vital and essential role in attaining justice. See Neff & Nagel, The Adversary Nature of the American Legal System from a Historical Perspective, 20 N.Y.L.F. 123, 123-126 (1974). It should be obvious to all that this role is undermined when a defendant selects a plaintiff to sue him, and is further eroded when, in addition, that party pays the counsel fees for his phantom adversary. While we do not question the sincerity of the statement of appellants' counsel here that they were "prepared to . . . take the appellees to the mat on the case," there is nonetheless no guarantee in this or any other action that the cause will be prosecuted antagonistically and with the vigor that can be assumed when counsel is paid and directed by his own client. Who can say what subtle psychological influences might be at work even if counsel is instructed to oppose his employer to the fullest when the attorney knows that his employer, having a very substantial financial interest at stake, actually desires a result opposite that which the attorney is to advocate? Since such matters may be impossible of proof in an individual case, and since the appearance of and opportunity for the frustration of justice will always be present where attorneys' fees not subject to court approval are paid by an opposing party, the payment by the appellee of fees for both his own counsel and that of his illusory antagonist must perforce be deemed collusive.

Our research reveals only one Maryland case relevant to the question of collusive suits in the context presented here. In Fitzjarrell v. Boyd, 123 Md. 497, 503, 91 A. 547, 548 (1914), this Court, in finding a negligence action by a guest against the owner of an automobile neither collusive nor fictitious, ¹ observed that:

If the real and primary object of the suit is to redress the grievance of the plaintiff and there is an actual controversy, involving real and substantial rights between the parties to the record, the suit (will) not be dismissed.

It is only when the sole object of the suit is to affect third parties and when the interest of the parties to the suit is not adverse, and when there is no real and substantial controversy between those who appear as adverse parties, that the principles (regarding collusive and fictitious suits) apply. ²

Those incidents establishing the collusiveness of a suit are clearly present in this case. Implicit in counsel's statements at oral argument is the fact that the arena selected its adversary; thus, the "real and primary object of the suit" is not to redress any grievance of the plaintiff. Certainly the interests of the parties cannot be truly adverse where the private-party defendant pays counsel fees for both parties. Although of course not binding upon them, it seems plain that the true object of this suit is to affect third parties: that is, by the precedential effect of a hoped-for decision by this Court upholding the validity of the act authorizing the bond sale, to discourage any future attack by others on the legality of the bonds, and by that tactic encourage their purchase by The Equitable Life Assurance Society. If this action, with the maneuvering that gave birth to it, is not collusive, it is difficult for us to envision one that is. Decisions of the Supreme Court of the United States are in accord with this conclusion. United States v. Johnson, supra, 319 U.S. at 304-05, 63 S.Ct. 1075 (suit in which one of the parties has dominated conduct of the litigation by payment of the fees of both is collusive because in no real sense adversary, and judgment will not be allowed to stand); Gardner v. Goodyear Dental Vulcanite Co., 131 U.S.Append. ciii, ciii-civ, 21 L.Ed. 141 (1873) ("it cannot be admitted that one party to a suit can pay the fees of counsel on both sides . . . without being held to have such control over both the preparation and argument of the cause, as to make the suit merely collusive"); see Chamberlain v. Cleveland, 66 U.S. (1 Black) 419, 17 L.Ed. 93 (1862); Lord v. Veazie, 49 U.S. (8 How.) 251, 12 L.Ed. 1067 (1850); cf. Chicago & G.T.R. Co. v. Wellman, 143 U.S. 339, 12 S.Ct. 400, 36 L.Ed. 176 (1892).

Although we have no doubt that presentation of the issues by the appellants' counsel in this case was as vigorous as could be desired, this Court ordinarily does not sit to make such assessments of counsel's conduct of a suit, and we must, for the reasons we have pointed out, conclude that selection of counsel and payment of his fees by an opposing party is always equivalent to dominating the conduct of the litigation. That is not to say, of course, that an action in which the fees of counsel for both sides must ultimately be paid from public funds, as where the opposing parties are a municipal corporation and one of its officers, is a collusive proceeding, "since the common source of such payment does not give one party control over the preparation and argument of the cause." City and County of San Francisco v. Boyd, 22 Cal.2d 685, 140 P.2d 666, 670 (1943). But this remains true only so long as there is an actual controversy between the parties. ³ See id. In a case involving private parties, however, payment of counsel fees for an adversary cannot help but give the paying party control over the case, whether or not exercised in the particular instance, for "(h)e who pays the piper can call the tune." A Collection of English Proverbs (J. Ray ed. 1670).

We think there is no question, then, that the suit here is appropriately characterized as a collusive one, lacking on its face the "safeguard essential to the integrity of the judicial process" adverseness between the parties. United States v. Johnson, supra, 319 U.S. at 305, 63 S.Ct. at 1076. Properly concerned as we are that questions brought before us for decision are presented with "that concrete adverseness which sharpens the presentation of issues upon which the court(s) so largely (depend) for illumination of difficult constitutional questions," Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962), we are at the same time acutely aware that there are occasions upon which a refusal to adjudicate issues not arising in the context heretofore deemed prerequisite to the exercise of the court's decisional responsibilities may have extremely deleterious consequences as, for example, where a crucial city bond issue simply will not be underwritten absent a judicial determination establishing its legality. The practical necessity for an...