Opinion ID: 2545968
Heading Depth: 2
Heading Rank: 4

Heading: Attorney Fee for Successfully Defending Appeal

Text: The plaintiffs next argue that the trial court erred in denying their motion seeking to recover as costs their attorney fees incurred in successfully defending Regions Bank and Advanced Realty's appeal of the final judgment; such fees, they say, are damages recoverable in this State as costs under the supersedeas bond. It is well settled that `Alabama follows the American rule, whereby attorney fees may be recovered if they are provided for by statute or by contract or if they are called for by special equity, such as in proceedings where the attorney's efforts create a common fund out of which fees may be paid.' City of Bessemer v. McClain, 957 So.2d 1061, 1078 (Ala.2006) (quoting Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala.1995)). However, relying on Hudson v. Hudson, 555 So.2d 1084 (Ala.Civ.App.1989), the plaintiffs argue that they are entitled to recover as costs under the supersedeas bond the attorney fees they incurred in successfully defending Regions Bank and Advanced Realty's appeal. Regions Bank asks this Court to overrule Hudson to the extent it contravenes the American rule with regard to the award of attorney fees. In Hudson, the wife was found to be in contempt of court for failing to deed certain real property to the husband pursuant to a divorce judgment. The wife posted a supersedeas bond in the amount of $63,750 and petitioned the Court of Civil Appeals for a writ of certiorari. The supersedeas bond stated that the wife agreed to satisfy such judgment, penalties, costs, including costs of appeal as may be rendered in this case if the wife was unsuccessful on the petition to the Court of Civil Appeals. [11] Hudson, 555 So.2d at 1085. After the wife's petition for a writ of certiorari was denied, the husband sued on the supersedeas bond to recover, among other things, an attorney fee, taxes and interest paid on the mortgage during the time the wife unlawfully retained title to the property, and expert fees required to prove depreciation on the land and the interest on the value of the property. The trial court awarded the husband the relief he sought. The wife argued on appeal that the attorney fee, taxes and interest, and the expert-witness fees were not specifically designated as damages recoverable under the supersedeas bond and that the husband could not recover those damages as costs of appeal. Hudson, supra . In affirming the trial court's judgment, the Court of Civil Appeals stated: Implicit in its opinion, the trial court determined that certain costs and damages were `costs of appeal' pursuant to Rule 8, Alabama Rules of Appellate Procedure. Rule 8, [Ala. R.App. P.], requires an appellant to execute a supersedeas bond with sufficient sureties to stay execution of the judgment. The purpose for requiring the bond is as stated: `[T]o keep the parties in statu quo pending the appeal. This purpose, we now say, reached not only to possession of the property, but every other consequence of the judgment, including costs, and the evidential status and value of the judgment pending appeal.'  Fidelity & Deposit Co. v. Torian, 221 Ala. 131, 133, 127 So. 829, 831 (1930). See also Osborn v. Riley, 331 So.2d 268, 274 (Ala.1976). The committee comments to Rule 8,[Ala. R.App. P.], state in part as follows: `Subdivision (a) provides for the stay of execution of a judgment pending appeal in three situations: . . . In so providing, it supersedes Title 7, §§ 793, 794 and 795. . . .' Code 1940, title 7, § 794, which was superseded by Rule 8, provided in part as follows: `If the decree or judgment be for the payment of money, and also for the performance of some other act or duty, or for the recovery of property, real or personal, or the possession thereof, or for the sale of property, real or personal, and the party appealing wishes to supersede the execution of such judgment or decree, he must,. . . also execute bond with good and sufficient sureties, payable to the clerk or register, in such sum as the judge may in writing prescribe, with condition to pay all such costs and damages as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of the judgment or decree; . . . .' Whereas title 7, § 794, required that the word `damages' be included in order for damages to be recoverable under a supersedeas bond, we find that a clear reading of Rule 8 reveals that there is no such requirement under the rule. Therefore, it is not required that the specific items the husband sought to recover as `damages' be set out in the supersedeas bond. Consequently, we reject the wife's contention that the award of attorney fees, expert fees, taxes, and interest paid on the mortgage was improper on this ground. Hudson, 555 So.2d at 1085-86. The holding of the Court of Civil Appeals in Hudson is premised upon the statement in the opinion that [i]mplicit in its opinion, the trial court determined that certain costs and damages were `costs of appeal' pursuant to Rule 8, Alabama Rules of Appellate Procedure. 555 So.2d at 1085. We find no basis in Rule 8 to support this conclusion by the trial court or the Court of Civil Appeals. As noted by the Court of Civil Appeals, the former Title 7, § 794, Ala.Code 1940 (Recomp.1958), which was superseded by Rule 8, required the party appealing a judgment entered by the trial court to `execute bond . . . with condition to pay all such costs and damages as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of the judgment or decree; . . .' (Some emphasis added.) Rule 8 provides: (a) Stay by Supersedeas Bond. The appellant shall not be entitled to a stay of execution of the judgment pending appeal (except as provided in Rule 62(e), Ala. R. Civ. P.) unless the appellant executes bond with good and sufficient sureties, approved by the clerk of the trial court, payable to the appellee (or to the clerk or register if the trial court so directs), with condition, failing the appeal, to satisfy such judgment as the appellate court may render, when the judgment is: (1) For the payment of money only, in an amount equal to 150% of the amount of the judgment if the judgment does not exceed $10,000.00, or 125% if the judgment exceeds $10,000.00; (2) For the payment of money and also for the performance of some other act or duty, or for the recovery or sale of property or the possession thereof, in such sum, in addition to the sum required for money judgments only in (1) above, as the trial court may in writing prescribe; or if appellant wishes to supersede the judgment as to the payment of money only, the requirements of (1) above shall apply; (3) Only for the performance of some act or duty, or for the recovery or sale of property or the possession thereof (or if the judgment includes the payment of money and the appellant does not wish to supersede the judgment in that respect), in such sum as the trial court may in writing prescribe. The approval of the supersedeas bond by the clerk of the trial court, unless contested by the opposing party, shall constitute a stay of the judgment when the judgment is for the payment of money only, or the payment of money and some other act and the appellant wishes to supersede the judgment as to the payment of money only. In the event the clerk declines to approve the bond, or the clerk's approval is contested, the requirements of (b) below shall apply. (Emphasis added.) Rule 8 does not include the express language from § 794 requiring as a condition of the bond the payment of costs and damages as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of the judgment or decree. Rule 8 simply requires, as a condition of the bond, the satisfaction of such judgment as the appellate court may render. Damages are no longer expressly recoverable under a supersedeas bond pursuant to Rule 8. Thus, there was no basis in Hudson, decided after the adoption of Rule 8, for the trial court and the Court of Civil Appeals to conclude that the husband was entitled to damages in the form of an attorney fee as costs of the appeal under the supersedeas bond. Therefore, Hudson provides no authority for the plaintiffs in this case to recover damages in the form of an attorney fee as costs of the appeal under the supersedeas bond. [12] To the extent that Hudson provides otherwise, it is overruled. The plaintiffs also rely heavily on the decision in Osborn v. Riley, 331 So.2d 268 (Ala.1976), for their contention that they are entitled to damages in the form of an attorney fee as costs of the appeal under the supersedeas bond. In Osborn, the plaintiffs sued the defendants seeking to have set aside a deed by which the plaintiffs had conveyed to the defendants a large tract of land. The trial court entered a judgment for the plaintiffs setting aside the deed based on a finding of undue influence. The defendants filed an application with the trial court to fix the amount of a supersedeas bond. The trial court granted the application conditioned on the requirement that the defendants pay any judgment the appellate court might render as well as `such costs and damages as any party may sustain by reason of the wrongful appeal and suspension of the decrees.' Osborn, 331 So.2d at 270. The defendants obtained a supersedeas bond from Aetna Casualty and Surety Company naming Aetna as surety. This Court affirmed the trial court's judgment on appeal. Subsequently, the plaintiffs sued on the supersedeas bond seeking damages and contending that the defendants' failure to successfully prosecute their appeal and to pay all costs and damages constituted a breach of the supersedeas bond. The defendants contended that the plaintiffs failed to prove they were damaged by the unsuccessful appeal or that the appeal was wrongful. The trial court entered a judgment for the plaintiffs and awarded them $20,000 plus costs. Osborn, supra . In affirming the judgment of the trial court, this Court stated: The third issue presented for our review arises from [the defendants'] contention that the [plaintiffs] suffered no injury as a result of the appeal and the accompanying suspension of [the] judgment during the pendency of the appeal. It is undisputed that, during the appeal, [the plaintiffs] were in possession of the land over which the dispute arose. [The defendants] contend that because the [plaintiffs] were in possession of the land over which the dispute arose, it cannot be argued that they were harmed by the suspension of the court's decree. These arguments are not persuasive in view of the rule of our cases. The purpose of a supersedeas bond is `to keep the parties in status quo pending the appeal. This purpose . . . reach[es] not only to possession of the property, but every other consequence of the judgment, including costs, and the evidential status and value of the judgment pending appeal. Delay in the settlement of the title in the plaintiff was consideration enough to support the bond.' Fidelity & Deposit Co. v. Torian, 221 Ala. 131, 133, 127 So. 829, 831 (1930). It was there held that there could be recovery on the bond notwithstanding appellant was not in possession. In the instant case, the [plaintiffs] were damaged not only by a delay in the settlement of title, but also by the expense of defending their judgment. . . . . The fourth and final issue raised on appeal challenges Alabama case law allowing the recovery of attorney's fees paid for defending the appeal as an element of damages to be recovered under the supersedeas bond in a suit of this character. [The defendants] argue that neither the statute providing for supersedeas bonds, nor the decree in the instant case, specifically includes attorneys' fees as an element of damages. In the absence of express statutory or contractual provision to the contrary, [the defendants] contend that there is no `inherent right to have attorney's fees paid by the opposing side.' On the basis of case law from other jurisdictions which is in conflict with the existing Alabama rule, [the defendants] urge this Court to hold that damages in suits on supersedeas bonds in a suit of this character should include only those damages resulting from the stay of execution of the judgment. Specifically [the defendants] ask that we overrule our case of Drake v. Webb, 63 Ala. 596 (1879) and those cases following it. [The defendants] refer[] the Court to its recent opinion in White v. State, 294 Ala. 502, 319 So.2d 247 (1975), in which this Court held that attorneys' fees were not recoverable as `just compensation' in eminent domain proceedings. However, the issue in White was a matter of first impression in Alabama. In contrast, the issue in the instant case involves the recovery of attorney's fees as an element of damages under the supersedeas bond, in a suit of this character, and is the subject of a long-standing rule in this state. See, e.g. Dempsey v. Gay, 227 Ala. 20, 148 So. 438 (1933); Fidelity & Deposit Co. v. Torian, 221 Ala. 131, 127 So. 829 (1930); Caldwell v. United States Fidelity & Guar. Co., 205 Ala. 463, 88 So. 574 (1921); Drake v. Webb, supra; Wheeler v. Fuller, 4 Ala.App. 532, 58 So. 792 (1912). [See Anno: `Attorneys fees paid by appellee in resisting unsuccessful appellate review as damages recoverable on appeal bond' 37 ALR2d 525.] In Drake v. Webb, supra, Justice Stone makes the following statement as the rationale for the Alabama rule: `We find nothing in the condition of the present bond which we consider unreasonable. The damages imposed are not a tax, or clog, placed on the appellant's right of appeal. That he could have had without a supersedeas bond, on giving security for costs of appeal. Such security for costs would have imposed on his surety no other liability than to pay the costs of appeal, if unsuccessful. This is a mere regulation of the right of appeal, for the security of the officers of court. But, when an aggrieved suitor desires to go further, and suspend the execution of a judgment or decree rendered against him, this is not simply a question of the right of appeal. It goes much beyond that. Very great damage may result from the appeal and the suspension. The condition of a bond, entailing these consequences, should be so adjusted and prescribed, as to secure the appellee against all loss or damage that may result proximately from the appeal and supersedeas. Attorney's fees are proximate damages, cast on the appellee by the appeal, and are, therefore, within the condition of the bond. We are not able to distinguish, in principle, between this question and the kindred one which arises in suits on injunction and detinue bonds.' Osborn, 331 So.2d at 273-75. Although Osborn was decided after Rule 8, Ala. R.App. P., became effective, it addressed a supersedeas bond that was executed before § 794 was superseded by Rule 8, Ala. R.App., see Rule 49, Ala. R.App. P. Additionally, the supersedeas bond executed in Osborn obligated the appellants to pay both costs and damages, but there was no reference to the payment of damages in the supersedeas bond executed in this case. Specifically, in Osborn, the supersedeas bond required the appellants to pay `such costs and damages as any party may sustain by reason of the wrongful appeal and suspension of the decrees.' Osborn, 331 So.2d at 270 (emphasis added). However, the supersedeas bond in this case provides only as follows: NOW, therefore, the condition of the foregoing obligation is such that, if the appellant shall prosecute this appeal to effect, and satisfy such judgment, penalties, and costs, including costs of appeal as may be rendered in this case, then the said obligation to be null and void, otherwise to remain in full force and effect. Therefore, although the supersedeas bond in Osborn expressly provides for the payment of damages, the supersedeas bond executed in this case is silent with respect to damages. Accordingly, Osborn provides no authority for the recovery of an attorney fee as costs of the appeal under the supersedeas bond in this case. Likewise, in Ex parte Home Indemnity Insurance Co., 374 So.2d 1356 (Ala.1979), the trial court entered two judgments against Home Indemnity declaring that it had a duty to defend and to indemnify Reed Equipment Company in a negligence action brought by third parties. Home Indemnity sought to appeal the judgments, and the trial court required it to file a supersedeas bond containing the following language: `Now, therefore, the condition of the foregoing obligation is such that, if Appellant fails in the appeal it will pay such judgment as the Appellate Court may render in the premises, and all such costs, and damages as any party aggrieved may sustain by reason of the execution of the decree, then the said obligation to be null and void, otherwise to remain in full force and effect.' Ex parte Home Indem. Ins. Co., 374 So.2d at 1357. Home Indemnity petitioned this Court for a writ of mandamus arguing that the trial court could not require it to post a supersedeas bond containing the above-quoted language because a supersedeas bond with such conditions would make Home Indemnity liable for any attorney fees incurred by Reed Equipment in defending the appeal of the declaratory judgments, should Home Indemnity's appeal be unsuccessful. In denying Home Indemnity's petition, this Court explained the holding in Osborn as follows: This argument is totally without merit. In Osborn v. Riley, 331 So.2d 268 (Ala. 1976), this court reaffirmed a long line of Alabama decisions which held attorneys' fees were proximate damages recoverable in an action on a supersedeas bond where an unsuccessful appellant had superseded that portion of a judgment requiring the performance of some act or duty other than the payment of money. Osborn, therefore, allows trial judges to require supersedeas bonds conditioned as the one at issue in this case, where the judgment or decree requires an act or duty other than the payment of money. Home Indemnity implies that Rule 8, [Ala. R.App. P.], changed the law regarding supersedeas bonds since Rule 8 supplanted Code 1940, Title 7, §§ 793, 794, and 795. While it is true the above sections were replaced by Rule 8, and thus left out of the 1975 Code, they were in fact incorporated into Rule 8. See Committee Comments to Rule 8, [Ala. R.App. P.]. Rule 8 still recognizes there are three separate types of judgments that can be superseded, viz.: (1) judgments for the payment of money only; (2) judgments for the payment of money which also require the performance of, or the staying of the performance of, acts or duties other than the payment of money; and (3) judgments requiring the performance of, or the staying of the performance of, acts other than the payment of money. Rule 8(a)(2), applicable to this case, definitely allows the trial judge to shape the supersedeas bond to conform to the facts of the case. This is demonstrated by the language: `. . . in such sum, in addition to the sum required for money judgments only in (1) above, as the trial court may in writing prescribe; . . . .' Furthermore, since the former statutes governing supersedeas bonds were incorporated in Rule 8 without substantial change, former decisions interpreting those statutes govern interpretation of the rule, there being no intention to the contrary expressed in the rule. See Lewis v. Hitt, 370 So.2d 1369 (Ala.1979). Ex parte Home Indem. Ins. Co., 374 So.2d at 1357-58. Ex parte Home Indemnity is not authority for allowing the plaintiffs to recover as costs an attorney fee in this case because Home Indemnity relied on Osborn, which addressed a supersedeas bond executed before the effective date of Rule 8, Ala. R.App. P. Additionally, we note that the statement in Osborn that § 794, Ala. Code 1940 (Recomp.1958), [was] in fact incorporated into Rule 8 is not entirely accurate given the fact that the language requiring as a condition of the bond the payment of costs and damages as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of the judgment or decree is, as discussed above, absent from Rule 8, Ala. R.App. P. Accordingly, we conclude that the plaintiffs are not entitled to recover damages in the form of an attorney fee as costs of the appeal under the supersedeas bond.