Opinion ID: 2615891
Heading Depth: 1
Heading Rank: 16

Heading: The trial court's refusal to award respondents reasonable attorneys' fees.

Text: Respondents have cross-appealed assigning error to the trial court's refusal to allow them reasonable attorneys' fees. They contend such fees should have been awarded either under RCW 7.16.260 or RCW 7.24.100, pursuant to the common fund/common benefit doctrine as an exception to the American Rule, or under the court's inherent equitable powers. We do not agree. By way of support, respondents point to unchallenged findings of fact that they were billed $199,035.50 for attorneys' fees. Based upon the skill, time involved, and nature of the action, the fees charged were found to be reasonable even though they represent only those sums accumulated through December 25, 1976. Other unchallenged findings of fact reveal that this litigation secured a substantial benefit common to all public school children. Finally, the trial court found that the most equitable way to assure that the benefited class would bear its share to the total burden would be to assess attorneys' fees against appellants. Respondents' suggestion for awarding attorneys' fees was to assess them against the State and require payment by way of a judgment from taxing sources. Respondents' action was instituted seeking writs of prohibition, a writ of mandate, a declaratory judgment and damages. Respondents' prayer for the writs of prohibition was denied and they have not cross-appealed either that denial or the denial of their damage claim. Consequently, we need not decide whether RCW 7.16.260 authorizes a trial court to award reasonable attorneys' fees to a prevailing party. Further, respondents did not claim to have proceeded as a private attorney general. Thus, we express no opinion as to the applicability of that theory in this or other cases. [20] [22] We have consistently refused to award attorneys' fees as part of the cost of litigation in the absence of a contract, statute, or recognized ground in equity. Crane Towing, Inc. v. Gorton, 89 Wn.2d 161, 176, 570 P.2d 428 (1977); Hsu Ying Li v. Tang, 87 Wn.2d 796, 797-98, 557 P.2d 342 (1976); Swift v. Island County, 87 Wn.2d 348, 362, 552 P.2d 175 (1976); see Beadle v. Barta, 13 Wn.2d 67, 74, 123 P.2d 761 (1942); State ex rel. Macri v. Bremerton, 8 Wn.2d 93, 102, 111 P.2d 612 (1941); Miesen v. Motter, 115 Wash. 49, 55, 196 P. 659 (1921). In this case there is no contract for attorneys' fees. Thus, we must determine whether there is either a statutory or equitable basis for such an award. [23] Respondents point to the fact that they have prevailed in an action for declaratory judgment and thus are entitled to reasonable attorneys' fees under RCW 7.24.100, which provides: In any proceeding under this chapter, the court may make such award of costs as may seem equitable and just. (Italics ours.) However, RCW 7.24.100 is not a statutory authorization for attorneys' fees. Referring to this statute and the meaning of costs as used therein we have said: `costs' do not include attorneys' fees (other than statutory) or accountants' fees.... `The term costs is synonymous with the term expense. Costs are allowances to a party for the expense incurred in prosecuting or defending a suit, and the word costs, ... does not include counsel fees; in other words, counsel fees are not costs or recoverable expenses incurred in prosecuting or defending a suit, either in suits in equity or actions at law. (Italics ours.) Rocky Mt. Fire & Cas. Co. v. Rose, 62 Wn.2d 896, 899-900, 385 P.2d 45, 1 A.L.R.3d 876 (1963), quoting from Chapin v. Collard, 29 Wn.2d 788, 795, 189 P.2d 642 (1948). In Rocky Mt. Fire & Cas. Co., supra, we concluded that the court was without power to award attorneys' fees, other than statutory fees, under the provisions of the declaratory judgments act. See Fiorito v. Goerig, 27 Wn.2d 615, 619, 179 P.2d 316 (1947); Schoenwald v. Diamond K Packing Co., 192 Wash. 409, 421, 73 P.2d 748 (1937). See also Fritz v. Gorton, 83 Wn.2d 275, 315, 517 P.2d 911 (1974). Accordingly, we affirm the trial court's determination that it was without power under the declaratory judgments act to award attorneys' fees other than statutory attorneys' fees. Further, respondents have not directed our attention to any other statutory basis upon which reasonable attorneys' fees can be awarded. Consequently, we also affirm the trial court's holding that it lacked statutory authority to make the requested award. [24] Next, respondents argue that reasonable attorneys' fees may be awarded because this litigation has benefited a recognized class and that attorneys' fees may be imposed upon the fund created by the litigation, citing Hein v. Forney, 164 Wash. 309, 319, 2 P.2d 741, 78 A.L.R.3d 631 (1931) and Drain v. Wilson, 117 Wash. 34, 200 P. 581 (1921). However, neither Hein nor Drain is in point. In each, the litigation produced or preserved an actual fund under the court's control that would not have existed but for the lawsuit. In each case we referred to the fund as an estate or a trust fund, and logically so. The fund acquired or preserved did not devolve solely to the benefit of the immediate litigant, but was to be divided among all members of a closely defined class. In Hein, a creditor's challenge to the receiver's report preserved the estate for the remaining lawful creditors. In Drain, the action resulted in the creation or augmentation of a fund for the benefit of the beneficiaries under a will. The court referred to it as a trust fund. In each case there was an actual identifiable fund under the control of the court upon which attorneys' fees could be impressed. Here, no such fund has been created from which beneficiaries may draw in common, upon which attorneys' fees may be impressed, or from which those fees may be paid so that all who benefit may share equally in the payment of fees. The only source from which attorneys' fees might be drawn would be a legislatively imposed tax. The cited cases are inapposite. Respondents next rely on the common benefit/common fund theory. This theory requires the litigation to both benefit others as well as the litigant and also to protect, preserve, or create a common fund. Crane Towing Co. v. Gorton, supra at 176-77; Hsu Ying Li v. Tang, supra at 799. Without question, respondents have benefited a substantial class. Yet, they have not protected, preserved, or created an existing common fund. To the contrary, an unchallenged finding of fact recognizes that respondents have assured for the future that the state will preserve or create, or cause to be preserved or created, a common fund ... (Italics ours.) Having failed to protect, preserve or create an immediate fund from which reasonable attorneys' fees may be awarded, respondents are not entitled to such fees under the common benefit/common fund theory. See also Weiss v. Bruno, 83 Wn.2d 911, 914, 523 P.2d 915 (1974). Nonetheless, respondents argue that there is an exception to the common benefit/common fund theory which permits such fees even though no specific monetary fund has been preserved, protected or created. Respondents rely upon Hsu Ying Li v. Tang, supra ; PUD 1 v. Kottsick, 86 Wn.2d 388, 545 P.2d 1 (1976); and Weiss v. Bruno, 83 Wn.2d 911, 523 P.2d 915 (1974). Although the broad language in Hsu superficially supports respondents' contention, it is not in point. First, Hsu (like Drain and Hein ) was an action between private litigants involving neither the State nor State funds. Second, in the instant case, there is no allegation or proof of constructive fraud such as that which supported the award of attorneys' fees in Hsu Ying Li v. Tang, supra . See generally PUD 1 v. Kottsick, supra at 930; State ex rel. Macri v. Bremerton, 8 Wn.2d 93, 113, 111 P.2d 612 (1941). See also Fiorito v. Goerig, supra at 618. Respondents' reliance upon Kottsick is equally without merit. In Kottsick we said at pages 390-91: The appellants also claim that they fall within the common fund exception to the no-attorney-fees rule. We first applied this exception to cases where the litigant preserved or created a specific monetary fund for the benefit of others as well as himself.... This court broadened the exception in that it is no longer limited to situations where the litigant preserved or created a specific monetary fund. The exception now extends to situations where the litigant confers a substantial benefit on an ascertainable class. (Italics ours.) Respondents rely too heavily upon the phrase specific monetary fund in addition to taking it out of context. By eliminating the need for a specific monetary fund, we did not eliminate the need for accumulating, preserving, or creating a common fund. Kottsick, and the cases upon which it relies, merely eliminate the need to create a monetary common fund. Kottsick does not eliminate the need to create a common fund from which attorneys' fees may be drawn to justify an award of such fees. The common fund may be monetary; it may be the enrichment of a corporation by securing the return of the value of stocks and bonds as in Baker v. Seattle-Tacoma Power Co., 61 Wash. 578, 112 P. 647 (1911); the common fund also may be preservation of funds by forcing proper accounting and bookkeeping procedures as in Grein v. Cavano, 61 Wn.2d 498, 379 P.2d 209 (1963); but there must be an immediate common fund from which attorneys' fees may be drawn. See generally Crane Towing, Inc. v. Gorton, supra ; Swift v. Island County, supra . Weiss v. Bruno, supra , is presented as another variation of the common benefit/common fund concept that might permit respondents to recover reasonable attorneys' fees. Respondents point out that in Weiss the successful litigant did not benefit a truly ascertainable class. The class benefited was all taxpayers. In Weiss, the award of attorneys' fees was authorized on four very narrowly defined grounds: (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. (Italics ours.) Weiss v. Bruno, supra at 914. Thereafter, in PUD 1 v. Kottsick, supra at 391-92, we clarified the Weiss v. Bruno variation by recognizing its applicability only if all four narrowly defined requirements were met. Upon failing to find that all four requirements were met in Kottsick, we determined that appellants therein were not entitled to attorneys' fees under the limited circumstances of Weiss. Here, as in Kottsick, we must conclude that respondents are not entitled to attorneys' fees under the limited circumstances of Weiss. In Weiss, the litigants met requirements (1) and (2) by successfully and permanently halting the disbursement of public funds. Here, respondents were successful litigants and thus have met the first requirement of Weiss. However, there was no challenge to the expenditure of public funds and also no saving or preserving of any fund. On the contrary, this lawsuit has had the opposite effect. It started a flow of funds from the State treasury. Thus, while the public spirited act is to be commended, it does not fall within the limited circumstances of Weiss. PUD 1 v. Kottsick, supra at 391-92. As we indicated in Swift v. Island County, 87 Wn.2d 348, 363, 552 P.2d 174 (1976), the common fund theory allows for an award of attorneys' fees out of a fund created or preserved by a litigant for the benefit of a class of persons. Here there is no such fund. See Crane Towing Co. v. Gorton, supra at 176-77: As the name implies, the common fund doctrine requires the prevailing party to have brought suit to preserve or protect a fund which benefits the party and others. Even if respondents had prevailed here, no fund exists out of which attorney fees might be granted. Having failed to preserve, protect or accumulate any common fund, respondents are not entitled to be awarded their reasonable attorneys' fees under the common benefit/common fund theory. Nor is there a finding of bad faith, fraud or wantonness on the part of appellants to justify such an award under PUD 1 v. Kottsick, supra at 390. Accordingly, we affirm the trial court's denial of reasonable attorneys' fees. WRIGHT, C.J., and BRACHTENBACH, HOROWITZ, and DOLLIVER, JJ., concur. UTTER, J. (concurring) I concur in the majority opinion but on the limited ground that the State has not met its constitutional duty to fund ample education in a general and uniform way. The testimony in this case establishes that by any standard definition of educational quality the State's contributions to school finance have been inadequate. Due to the State's abandonment of its responsibilities in this area, local school systems have been forced to submit a large percentage of their budgets to local voting, a fact which has jeopardized the fairness of the State's educational system. Under the ensuing system of local levies, the local educational program may not reflect children's needs, but rather local wealth and taste, and the size of the local school property tax base. Consequent variations in district budgets are inconsistent with the fair and uniform system of education contemplated by the constitution. For these reasons the trial court's decision prohibiting heavy reliance on special levies should be affirmed. In affirming the judgment of the trial court, I would find local school districts may not be financed by a funding scheme whereby any substantial part [21] of the total school budget is subject to local veto. I would ground this conclusion upon the constitutional imposition of a duty upon the State to make ample provision for education of the state's children, Const. art. 9, § 1, together with the requirement that the education be provided through a  general and uniform system of public schools. (Italics mine.) Const. art. 9, § 2. These constitutional provisions are not the nullity appellants would make of them. I share the majority's view that section 1 guarantees a right of education to the state's children. Though for reasons discussed below I would not now seek to define precisely the contours of that right; the provision makes clear that this education must be provided without distinction or preference among the state's children. The companion provision, section 2, is equally explicit, and requires that there be uniformity in the state's educational system. These provisions together contemplate an educational system in which, to the extent practical through statewide planning and financial support, each child is afforded an equal opportunity to learn, regardless of differences in his or her family and community resources. The system of local levy financing challenged here is an anathema to the egalitarian promise of these provisions, violating them in both letter and spirit. Having found the challenged system to be unconstitutional, I should not reach beyond such a holding to find with the majority that the constitution mandates a specific basic education be provided to the state's children. For the court to cast in terms of a constitutional doctrine the meaning of this term properly subjects it to the criticism voiced by the dissent, and deprives the people of this state of a continuing legislative and political dialogue on what constitutes a proper education. A limited holding is particularly appropriate at this time due to the vigor with which the legislature addressed its responsibility through the school finance legislation of 1977. That legislation is contained in three acts  the Washington Basic Education Act of 1977, Laws of 1977, 1st Ex. Sess., ch. 359; the Levy Lid Act, Laws of 1977, 1st Ex. Sess., ch. 325; and sections 94, 96, and 97 of the State Operating Budget, Laws of 1977, 1st Ex. Sess., ch. 339. During argument of this case counsel for respondent was asked whether this suit would have been brought had the legislation now enacted been in existence at the outset. The answer was equivocal, counsel conceding he could see why we might not have brought it. It is easy to see why he must make such a concession. The legislation enacted by the 1977 legislature is comprehensive. First, where the old legislative scheme provided no detailed definition of the educational program to be offered students, the current legislation provides such a definition. The Basic Education Act defines the program evolving from the act to include a complex series of goals enumerated therein, [22] and the program requirements deemed necessary to accomplish these goals, [23] as well as the legislative determination of state resources to implement the program. Laws of 1977, 1st Ex. Sess., ch. 359, § 1. Second, where the old scheme provided no legislative standards for staffing ratios and salary structures, the current legislation addresses the issues of staffing ratios and salary structures and establishes procedures by which these ratios and structures are to be determined. This is accomplished through a directive to the Governor and Superintendent of Public Instruction to develop a formula for legislative determination of a basic education allocation reflecting appropriate staffing ratios and staff costs, Basic Education Act, § 5 (see Appendix A), and through specific staffing and salary guidelines enunciated in the budget, State Operating Budget, § 97(1) (see Appendix B). Finally, where the old scheme provided no control at all on the amount of excess levies a district might be asked to approve, a deficiency which lies at the root of the controversy before us in this case, the current legislation provides a permanent lid of 10 percent (beginning in the 1980-81 school year) upon the extent of local levy contribution to the local school district budget, Levy Lid Act (see Appendix C). And at the same time, through allocation of funds the legislation over time would equalize compensation schedules among the districts, State Operating Budget, § 96 (see Appendix D). I have undertaken to delineate in limited form the scope of the legislature's efforts in 1977 to emphasize the lack of necessity for this court to act on the scale it has in the majority opinion. These legislative achievements substantially remedy deficiencies in the funding system here at issue. The majority, in noting the passage of this legislation in footnote 14, apparently assumes we cannot even consider the effect of this legislation in rendering our judgment here. I do not share the view that we cannot consider extensive action taken by the legislature during the pendency of this appeal. Although I agree that we do not and should not render advisory opinions, I do not see how this rule applies where, as here, we have real parties and real controversy affected by currently effective changes in the laws applicable to the issues raised on this appeal. This court has often sustained the proposition that the law governing a case on appeal is that applicable at the time of the disposition of the appeal, not that existing at the time of the trial court's decision. We have recognized and given effect to change in the law in civil cases, see Samuelson v. Freeman, 75 Wn.2d 894, 454 P.2d 406 (1969); Denison v. Goforth, 75 Wn.2d 853, 454 P.2d 218 (1969); Federal Shopping Way, Inc. v. O.K. Ins. Agency, Inc., 78 Wn.2d 903, 481 P.2d 5 (1971); Spear v. Bremerton, 95 Wash. 264, 163 P. 741 (1917); and in criminal cases, see Beard v. Conte, 78 Wn.2d 902, 480 P.2d 488 (1971). That rule applies to changes caused by judicial decisions, see Samuelson and Denison, and those brought about by statute, see Federal Shopping Way, Beard, and Spear. The majority at page 519 refers to the Legislature's obligation as one to provide `basic education' through a basic program of education as distinguished from total `education' or all other `educational' programs, subjects, or services which might be offered. It is precisely this unnecessary intrusion in this detail that I believe goes beyond what we must decide as a matter of constitutional necessity. Moreover, we noted in In re Juvenile Director, 87 Wn.2d 232, 243, 552 P.2d 163 (1976), that [t]he spirit of reciprocity and interdependence requires that if checks by one branch undermine the operation of another ... those checks are improper and destructive exercises of the authority. Here the legislature has acted responsibly and exhaustively through its own uniquely constituted factfinding and opinion gathering processes. Given that we may fully discharge our responsibility to adjudicate the controversy before us without intervening unnecessarily in a legislative process ably completed, the above enunciated principle [24] mandates that we do so.