Opinion ID: 1938987
Heading Depth: 3
Heading Rank: 2

Heading: The bad faith exception

Text: Appellant also argued to the trial court that attorneys' fees were appropriate because of RSA's bad faith and oppressive conduct both before and during the litigation. Judge Kessler took note of appellant's claim that the long and convoluted history of this lawsuit and events leading up to its filing establish the obduracy and bad faith which would provide justification... for an award of counsel fees, but stated nevertheless: While the Defendants have not been a model of timely bureaucratic action, and while they have not demonstrated any great eagerness to accommodate the claims of the Plaintiff, the Court does not find that their conductand specifically their post-litigation conductrises to the level of vexatiousness or bad faith which must be shown to justify an award of attorneys fees under this exception to the American Rule. In short the court cannot conclude that the claims and litigation posture of the defendants is entirely without color and has been asserted wantonly, for purposes of harassment or delay, or for other improper reasons, Synanon Foundation, Inc. v. Bernstein, supra, 517 A.2d at 40. [19] The trial court's finding that RSA's post-litigation actions did not amount to the extraordinary circumstances necessary to invoke the bad faith exception is amply supported by the record and applicable authorities. Although a trial court's decision to award or deny attorneys' fees is reviewed for abuse of discretion, Synanon, supra, 517 A.2d at 38; Trilon Plaza Co., supra, 399 A.2d at 38, the predicate finding of bad faith vel non is a factual one which we review under the clearly erroneous standard. D.C.Code § 17-305(a) (1989); [20] American Federation of State, County and Municipal Employees v. Ball, 439 A.2d 514, 515 (D.C.1981) (award of attorneys' fees must be affirmed unless, after addressing the facts underlying the award, we find that the trial court abused its discretion). See also Simpson v. Chesapeake & Potomac Tel. Co., 522 A.2d 880, 885 (D.C.1987) (trial court's implicit finding under Super.Ct.Civ.R. 11 that the pleadings were filed in bad faith was not clearly erroneous); United Food and Commercial Workers, Local 400 v. Marval Poultry Co., 876 F.2d 346, 350-51 (4th Cir.1989); Bulgo v. Munoz, 853 F.2d 710, 714 (9th Cir.1988). In Synanon, this court imposed a heavy burden on a party alleging that an action has been brought or litigated in bad faith, so as to avoid penalizing a party for a legitimate exercise of the right of access to the courts, or for maintaining an aggressive litigation posture and asserting all colorable claims or defenses. 517 A.2d at 37. Appellant did not meet this burden. She argued that RSA's bad faith was shown by its action in barring her attorney from certain meetings where challenged regulations were being discussed, frustrating her discovery requests by requiring her to file a motion to compel release of documents, and attempting to delay the proceedings and bankrupt appellant by submitting hypertechnical pleadings. [21] In response, RSA contended that any meetings from which Schlank's attorney had been barred were not open to the public since no official action was being taken at them. Although the trial court ultimately ruled that Schlank's attorney could not be barred from these meetings as an agent and representative of Ms. Schlank, it made no finding that the meetings were indeed public or that RSA's position was unreasonable or asserted in bad faith. With regard to the motion to compel discovery, RSA noted that the motion had been withdrawn shortly after being filed when the requested documents were produced. Lastly, concerning the argument that the pleadings were hypertechnical, the trial court made no finding that any of appellee's positions were groundless or asserted for the purpose of delay. All told, the trial court could properly find, as she did, that RSA's actions amounted to an aggressive litigation strategy but not the bad faith and deliberate oppressiveness necessary to satisfy the equitable exception. Somewhat more troubling is Schlank's argument that attorneys' fees were justified by RSA's obdurate and dilatory conduct at the administrative level when she repeatedly, and unsuccessfully, sought to reconcile her differences with the agency informally. Judge Kessler found that Schlank had been trying for ten years to obtain permission from the District of Columbia bureaucracy to service vending machines in the State Department, and that even after she had prevailed on several significant legal issues before Judge Wagner, she was still meet[ing] with delay, foot dragging, and roadblocks from the District Government. [22] Nevertheless, the judge was unable to conclude that appellant's allegations met the necessarily stringent standards of the bad faith exception. Synanon, supra, 517 A.2d at 28. Mindful of our limited scope of review of this factual determination, we must affirm it as well. There is debate among the federal courts over whether the bad faith exception applies to pre -litigation conduct. Compare, for example, Skehan v. Board of Trustees of Bloomsburg State College, 538 F.2d 53, 57-58 (3d Cir.) (en banc), cert. denied, 429 U.S. 979, 97 S.Ct. 490, 50 L.Ed.2d 588 (1976), with Shimman v. International Union of Operating Engineers Local 18, 744 F.2d 1226 (6th Cir.1984) (en banc), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985). [23] In Synanon, this court pointed out that the bad faith exception is intended to punish those who have abused the judicial process and to deter those who would do so in the future. 517 A.2d at 37 (emphasis added). On the other hand, in Andrews v. District of Columbia, supra , we cited several cases for the principle that an award of attorneys' fees is warranted `[w]here an individual is forced to seek judicial assistance to secure a clearly defined and established right, which should have been freely enjoyed without such intervention....' 443 A.2d at 569 (emphasis added), quoting Harkeem v. Adams, 117 N.H. 687, 691, 377 A.2d 617, 619 (1977). See also Cahn v. Antioch University, 482 A.2d 120, 133 (D.C.1984) (fees appropriate where a party ... withholds action to which the opposing party is patently entitled, as by virtue of a judgment or because of a fiduciary relationship, and does so in bad faith). We shall assume, without deciding, that on a proper showing appellant would have been entitled to attorneys' fees for the pre-litigation conduct of RSA. Schlank argues that the agency's conduct in resisting her effort to incorporate and in threatening her with license revocation if she did so met the necessary standard. She points to a series of letters from the Regional Commissioner of DOE to RSA in which, after originally stating that the Randolph-Sheppard legislation did not encourage or provide for incorporation, he changed his mind and twice stated that the Act did not prohibit that form of doing business. We agree with appellant that the agency had little practical justification for warning her against incorporation in light of these letters, but we cannot say that her right to incorporate in accordance with the Act was clearly defined and established when the agency adhered to its contrary position. [24] Certainly it was not clear by virtue of a judgment, Cahn, supra ; see Harkeem v. Adams, supra (agency determination of ineligibility for unemployment benefits overturned by court; agency thereafter used the same [rejected] rationale to disqualify the appellant from benefits); Shull v. Columbus Municipal Separate School Dist., 338 F.Supp. 1376 (N.D.Miss.1972) (also cited in Andrews, supra ) (school board denied admission to unwed mother despite fact court had twice held that policy unconstitutional). Nor can we say that RSA's adoption of new criteria for vendors wishing to service vending machineswhich appellant asserts was directed with surgical precision at herself and the only other State Department vendorcompels a conclusion that the agency was motivated by an intent to punish her for past assertion of her rights. In granting partial summary judgment for Schlank, Judge Wagner specifically reserved for trial the factual dispute as to the reason plaintiff had been denied the request to service vending machines, noting that RSA contended there were other reasons besides the new criteria why it was necessary to deny plaintiff's application. The issue was never tried, however, because in August 1988 the parties jointly moved for entry of final judgment, asserting that RSA had agreed to submit to the U.S. General Services Administration on plaintiff's behalf a request to permit her to service vending machines in the State Department. Thus, the issue of whether RSA had valid, non-pretextual reasons for originally resisting appellant's request was mooted by the parties' consent. In these circumstances Judge Kessler cannot be faulted for finding that the obstacles the agency had placed in the way of Schlank's effort to obtain the servicing right were not retaliatory and evidence of bad faith.