Opinion ID: 1169857
Heading Depth: 1
Heading Rank: 3

Heading: attorney fees on equitable grounds

Text: Appellants seek an award of attorney fees on equitable grounds for defending the declaratory judgment action and resisting both the inspection warrants and the probable cause warrants. Washington courts traditionally follow the American rule in not awarding attorney fees as costs absent a contract, statute, or recognized equitable exception. Rettkowski v. Department of Ecology, 128 Wash.2d 508, 514, 910 P.2d 462 (1996); State ex rel. Macri v. City of Bremerton, 8 Wash.2d 93, 113-14, 111 P.2d 612 (1941). Before addressing equitable exceptions to the American rule, we first consider whether the statutory proceeding provides for attorney fees in this case. The first court action filed in this dispute was the City's action seeking a declaratory judgment on the constitutionality of the RHIP. Requests for declaratory relief are governed by the Uniform Declaratory Judgments Act (UDJA), RCW 7.24. Attorney fees are not provided for under the UDJA. Seattle School Dist. No. 1 v. State, 90 Wash.2d 476, 540-41, 585 P.2d 71 (1978); RCW 7.24.100. In fact, in the context of State initiated declaratory judgment actions regarding constitutional issues, we have previously stated: [d]eclaratory procedure is peculiarly well suited to the judicial determination of controversies concerning constitutional rights.... Seattle School Dist., 90 Wash.2d at 490, 585 P.2d 71. Thus, the fact this action began as a declaratory judgment action brought by the City does not provide statutory grounds for attorney fees, or a basis for creating a new equitable exception. This court has explicitly recognized four equitable exceptions to the American rule: (1) the common fund theory, Grein v. Cavano, 61 Wash.2d 498, 505, 379 P.2d 209 (1963); (2) actions by a third person subjecting a party to litigation, Wells v. Aetna Ins. Co., 60 Wash.2d 880, 882-83, 376 P.2d 644 (1962); (3) bad faith or misconduct of a party, Miotke v. City of Spokane, 101 Wash.2d 307, 338, 678 P.2d 803 (1984); and (4) dissolving wrongfully issued temporary injunctions or restraining orders, Cecil v. Dominy, 69 Wash.2d 289, 291-94, 418 P.2d 233 (1966); Alderwood Assocs. v. Washington Envtl. Council, 96 Wash.2d 230, 247, 635 P.2d 108 (1981). See generally Philip A. Talmadge, Attorney Fees in Washington pt. 5 (1995). This court has also specifically considered and rejected adopting the private attorney general theory as a further equitable exception to the American rule. Blue Sky Advocates v. State, 107 Wash.2d 112, 122, 727 P.2d 644 (1986). While the traditional American rule relates to attorney fees as costs, at least two of the recognized equitable exceptions award attorney fees as damages. See, e.g., Cecil, 69 Wash.2d at 291, 418 P.2d 233 (attorney fees as damages in dissolving a wrongfully issued temporary injunction); Wells, 60 Wash.2d at 882, 376 P.2d 644 (attorney fees as damages in wrongful action by a third person subjecting a party to litigation). This court has also authorized the award of attorney fees as damages in slander of title and wrongful garnishment actions. Rorvig v. Douglas, 123 Wash.2d 854, 873 P.2d 492 (1994) (slander of title action); James v. Cannell, 135 Wash. 80, 82-83, 237 P. 8 (1925) (wrongful garnishment action), aff'd, 139 Wash. 702, 246 P. 304 (1926). Thus, a more accurate statement of Washington's American rule is attorney fees are not available as costs or damages absent a contract, statute, or recognized ground in equity. [6] Appellants argue they are entitled to attorney fees in defending the inspection warrants and the probable cause warrants based on two equitable exceptions: (1) protection of constitutional principles, and (2) dissolving wrongfully issued temporary injunctions. We address each argument in turn. Protection of Constitutional Principles The protection of constitutional principles was listed, without discussion, as an equitable exception to the American rule in Miotke, 101 Wash.2d at 340, 678 P.2d 803. Subsequently, two courts have listed, but not discussed, protection of constitutional principles as an equitable exception to the American rule. See Estate of Jordan v. Hartford Accident & Indem. Co., 120 Wash.2d 490, 509, 844 P.2d 403 (1993) (Andersen, J., concurring in part, dissenting in part); Dempere v. Nelson, 76 Wash.App. 403, 886 P.2d 219 (1994), review denied, 126 Wash.2d 1015, 894 P.2d 565 (1995). The phrase protection of constitutional principles has never been articulated or applied as an independent equitable exception to the American rule in this or any other jurisdiction. The only material discussion of the protection of constitutional principles in the context of equitable awards of attorney fees was as one of the rationales underlying a variation of the common fund theory enunciated by this court in Weiss v. Bruno, 83 Wash.2d 911, 914, 523 P.2d 915, 89 A.L.R.3d 681 (1974). See PUD No. 1 v. Kottsick, 86 Wash.2d 388, 391, 545 P.2d 1 (1976); Smith v. Board of Walla Walla County Comm'rs, 48 Wash.App. 303, 310-11, 738 P.2d 1076 (1987). [7] The four requirements of the Weiss common fund exception are: (1) a successful suit brought by petitioners (2) challenging the expenditure of public funds (3) made pursuant to patently unconstitutional legislative and administrative actions (4) following a refusal by the appropriate official and agency to maintain such a challenge. Weiss, 83 Wash.2d at 914, 523 P.2d 915. This exception does not apply to the facts of this case because appellants have not challenged the unconstitutional expenditure of public funds. See Seattle School Dist., 90 Wash.2d at 544-45, 585 P.2d 71 (successful declaratory judgment action on constitutional grounds did not entitle prevailing party to attorney fees because there was no challenge to expenditure of public funds). Appellants argue these requirements are not the correct requirements for the so-called protection of constitutional principles exception; however, they offer no alternative definition for the exception nor an alternative set of requirements. As stated above, this court has not recognized an independent equitable exception to the American rule based on the protection of constitutional principles. Appellants' request for attorney fees based on their successful resistance to the RHIP is essentially a request for fees under the private attorney general exception to the American rule. The private attorney general exception allows for the award of attorney fees when a successful litigant incurs considerable economic expense to effectuate an important legislative policy benefiting a large class of citizens. Miotke, 101 Wash.2d at 340, 678 P.2d 803. However, this court expressly rejected the private attorney general exception in Blue Sky Advocates, 107 Wash.2d at 122, 727 P.2d 644. Thus, the private attorney general theory is not available to Appellants here. Dissolving Wrongfully Issued Temporary Injunctions Appellants next argue the quashing of an invalid warrant is analogous to dissolving a wrongfully issued temporary injunction. This court has held attorney fees are recoverable in an action where a trial on the merits has for its sole purpose the determination of whether an injunction should be dissolved, the injunction is dissolved, and a trial was the sole procedure available to the party attempting to dissolve the temporary injunction. Cecil, 69 Wash.2d at 293, 418 P.2d 233; Alderwood Assocs., 96 Wash.2d at 247, 635 P.2d 108. If dissolving the injunction is not the sole purpose of the trial, then attorney fees are available only for services performed in dissolving the temporary injunction. Cecil, 69 Wash.2d at 293-94, 418 P.2d 233. The rationale supporting this exception starts from the premise that a temporary injunction or restraining order prohibits an individual from engaging in some given activity. See Alderwood Assocs., 96 Wash.2d at 232, 635 P.2d 108 (restraining order prohibited the collection of signatures for a referendum petition at a shopping mall); Cecil, 69 Wash.2d at 290, 418 P.2d 233 (injunction prohibited soliciting business within a competitor's territory). The only option available to a party faced with a temporary injunction or restraining order (other than submitting to the order) is to take legal action. Thus, if the wrongfully enjoined party prevails in the action to dissolve the temporary injunction, then attorney fees represent the damages suffered from the injunction. Cecil, 69 Wash.2d at 291-92, 418 P.2d 233. The exceptions recognizing awards of attorney fees as damages are based on a determination a wrongful act may leave another party with no choice but to litigate. Rorvig, 123 Wash.2d at 862, 873 P.2d 492. Because virtually all litigation compels a party's opponent to litigate, Washington courts have narrowly limited the type of actions where attorney fees are awarded as damages. Rorvig, 123 Wash.2d at 861-63, 873 P.2d 492 (attorney fees awarded as damages in slander of title action); Cecil, 69 Wash.2d at 294, 418 P.2d 233 (attorney fee awarded as damages in action to dissolve temporary injunction); Ritchie v. Markley, 23 Wash.App. 569, 597 P.2d 449 (1979) (attorney fees awarded as damages for dissolving temporary injunction but not for trial on the merits of the action following the dissolution), overruled on other grounds by, Cowiche Canyon Conservancy v. Bosley, 118 Wash.2d 801, 828 P.2d 549 (1992); James, 135 Wash. at 82-83, 237 P. 8 (attorney fees awarded as damages in wrongful garnishment action). Slander of title is the most recent and only type of action we have added to the narrowly limited exception of attorney fees as damages since Cecil v. Dominy in 1966. Rorvig, 123 Wash.2d 854, 873 P.2d 492. We based that addition upon the Restatement (Second) of Torts § 633 and the recent trend in other jurisdictions. Rorvig, 123 Wash.2d at 862-63, 873 P.2d 492. No such similar authority exists here for extending this exception to actions brought for the quashing of warrants. In the absence of such authority, we decline this invitation to recognize an additional exception to the American rule for actions brought to quash search warrants.