Opinion ID: 1137013
Heading Depth: 1
Heading Rank: 2

Heading: the award to aleut against moses of the costs and fees of the shareholders assessed against aleut

Text: It is not disputed that the shareholders prevailed in the litigation and were entitled to an award of costs and attorney's fees under the provisions of Alaska Civil Rule 82. [4] Moses and Aleut were joint defendants, although the claim which was tried sought no specific relief from Moses. There is no argument as to the authority of the superior court to assess fees against Aleut. Moses contends, however, that since no relief was specifically sought against him, he cannot be made liable for the fees. We were confronted with an analogous situation in First National Bank v. Enzler, 537 P.2d 517 (Alaska 1975). A trustee in bankruptcy filed suit against the bankrupt, alleging that he had conveyed his property to his wife to defraud his creditors. Because of its status as creditor, the bank was joined as a nominal defendant in the suit. No claim was asserted against the bank. The trial court found that the transfer was not fraudulent and awarded attorney's fees against the bank because the court aligned the bank as a plaintiff. The bank argued that the award of attorney's fees against it was inequitable because it did not initiate the action, but rather was joined as a defendant by the trustee. The bank, however, took an active part in opposing Enzler in the litigation, and stood to gain the most by defeating the conveyance. Noting that the determination of which party prevails and is entitled to costs is within the discretion of the trial judge, 537 P.2d at 526, we held that the award was not an abuse of discretion and agreed with the trial court's alignment of the bank as a plaintiff below. Similarly, in State v. Walsh & Co., 575 P.2d 1213, 1220-21 (Alaska 1978), we affirmed an award of attorney's fees against the plaintiff in favor of a third-party defendant, even though the plaintiff had asserted no claims against the third-party defendant. The rationale was that, although no claims had been asserted, the major dispute in the case was whether the debt to the plaintiff had been satisfied by the third party's payment and the third party was forced to defend and establish that the plaintiff had misapplied the funds paid to it. [5] We conclude that the court had authority to award the attorney's fees directly against Moses. Having authority to do so directly, the court could accomplish the same result by ordering Moses to reimburse Aleut for the fees awarded against it. [6] Ross v. 311 North Central Ave. Building Corp., 130 Ill. App.2d 336, 264 N.E.2d 406 (1970), supports this result. In Ross, minority stockholders brought a class action against the corporation and directors, alleging a fraudulent loan to another corporation controlled by the directors and their families. The court ordered that the directors be removed and that they pay the plaintiffs' attorney's fees and costs. We conclude that attorney's fees and costs, in a matter such as this, may be awarded in the discretion of the court according to equitable rules and principles, and generally they must come from the fund being protected by the suit. In the instant case we think the individual defendants, according to equitable rules and principles, could be properly required to pay either all or part of the costs and solicitor's fees. 264 N.E.2d at 415 (emphasis added). Although the award was based on the common fund doctrine, [7] an analogous approach may be followed under Civil Rule 82. Generally, under the common fund doctrine the fees would come from the common fund created, i.e., the corporation. However, the Ross court determined that under equitable principles the individual defendants should pay all [8] or part of the fees. Similarly, under Civil Rule 82 the trial court could, in its discretion, order one defendant to pay all the fees awarded, especially where the court believes that defendant, as here, to be the wrongdoer.