Why Even A ‘Bad Guy’ Won’t Have to Pay Your Attorneys’ Fees

by Varnum LLP
Contact

I've been a trial lawyer for 32 years.  And if I had a dollar for every time I heard a litigant vow to collect actual attorneys' fees from an adversary -- because the bad guy's claim was "frivolous" -- then I'd have a pocket full of money. On the other hand, if I had a thousand dollars for every time the winner actually won attorneys' fees from the loser, then I would be broke.

Awards of actual attorneys' fees for filing bad faith lawsuits are few and far between.  We regularly hear criticism of frivolous lawsuits, but actual attorneys' fees are seldom awarded to those forced to spend hard-earned money defending themselves.

A recent example of the courts steering clear of actual attorney fee awards appeared in a decision known as Department of Natural Resources v. Rexair, Inc.   The case involved an appeal from an Ingham County Circuit Court decision awarding a successful defendant over $3.8 million in legal fees. 

In Natural Resources, the plaintiff filed a motion to enforce a judgment, then changed its mind and decided to withdraw its motion. The Trial Court did not grant the plaintiff's request.  Instead, it entered an order that not only ended the lawsuit but also required the plaintiff to pay the defendant's actual attorneys' fees.  3.8 million dollars in actual attorneys' fees later, the defeated plaintiff appealed. 

The Opinion reversing the Trial Court's award of actual attorneys' fees included noteworthy broad-brush pronouncements concerning attorney fee awards. 

In Michigan, actual attorneys' fees are seldom awarded to successful litigants unless a specific statute or court rule allows such an award. 

For example, the appellate Judges noted that, in Michigan, actual attorneys' fees are seldom awarded to successful litigants unless a specific statute or court rule allows such an award.  While such statutes exist in both Michigan and Federal law, they are few and far between. 

The Court also pointed out that, while Michigan has a specific Court Rule allowing the award of actual attorneys' fees as a sanction for frivolous claims, the occasions when actual attorneys' fees are actually awarded are very rare. 

Finally, the Court of Appeals noted that -- even when courts award actual attorneys' fees -- their awards are subject to a Michigan Rule of Professional Conduct barring the award of excessive fees.

The bottom line is that while there are specific Michigan state and federal statutes -- such as civil rights statutes -- allowing the award of actual attorneys' fees, civil litigants who vow to defeat their opponent and also win an award of actual attorneys' fees would do well to make very sure that there is clear authority for that result.

Perhaps this is why, in three-plus decades of representing both plaintiffs and defendants in Michigan and other states, I have seldom seen courts award actual attorney fee sanctions based upon the simple argument that a claim or defense was "frivolous."  I'm not saying that it isn't done.  I’m saying that it is seldom done. 

Why the aversion to actual attorney fees awards at a time when we regularly hear commentary about a legal system that has allegedly "run amok?"  Keeping in mind my time spent sympathizing with clients who have said, "I can't believe that I'm getting sued over this. . .," I offer two thoughts.

It's tough to read the heart of a litigant, even one who appears to have been a "knucklehead" in filing a lawsuit.

Initially, there is the thought that a truly "frivolous" lawsuit would be one filed so clearly in bad faith as to leave no doubt that it was instituted as part of an obvious, mean-spirited, and improper attempt to harass or damage an adversary.  That happens from time to time, but it doesn’t really happen very often.  Lawsuits get filed in most cases because of genuine disagreements between parties.  Most courts find it very difficult to determine when a litigant has clearly crossed the line between filing an ill-advised lawsuit and filing a bad faith lawsuit. 

It's tough to read the heart of a litigant, even one who appears to have been a "knucklehead" in filing a lawsuit.  I suspect that this difficulty causes judges to be very hesitant in deeming court cases to be so "frivolous" as to make it fair that one side pay the other side's actual attorneys' fees. 

Courts and judges are asked to be objective and to see both sides of disputes.  That characteristic likely makes it very difficult to be so certain of a knucklehead's heart as to decide to sanction him.

Closely related is the idea that, for all of its flaws, our judicial system is preferable to other methods of solving disputes. 

We go to court instead of shooting each other.  We go to court instead of taking money from each other by force.  We go to court so that independent judges and juries can resolve disputes instead of forcing parties to go nose-to-nose, potentially bringing about much less desirable outcomes. 

As frustrating as being hauled into court can be, the tendency of courts to not penalize parties for using the courts might be viewed as a small price to pay for a dispute resolution system that is far preferable to more damaging alternatives.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Varnum LLP | Attorney Advertising

Written by:

Varnum LLP
Contact
more
less

Varnum LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.