Court Opinion

ID: 9855994
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:35:58.235565+00
Date Added: 2024-06-11T09:37:24.504849
License: Public Domain

NEELY, Justice,
concurring:
As a general rule in America the private litigation expenses of a winning party cannot be transferred to the losing party. In contravention of this general rule, the majority opinion has awarded attorneys’ fees to the appellants. Because I believe that there are substantial policy reasons for a move in this direction, I agree with the majority. In this concurring opinion I should like to illuminate further my reasons for joining with the majority in their *452holding concerning attorneys’ fees. But I first disassociate myself from that part of the majority opinion that suggests any willfully improper behavior on the part of the Public Employees Insurance Board.
In the instant case the petitioner-spouses brought an action to compel government officials to perform nondiscretionary duties. For strong policy reasons they are entitled to an award of their attorneys’ fees. As the majority stated at 171 W.Va. 451, 300 S.E.2d 92: “No individual citizen ought to bear the legal expense incurred in requiring the government to do its job.” I believe that we could go further than the majority has gone, however, and serve a broader policy. The impact of attorneys’ fees on the structure of litigation, from the initial client interview through trial to appeal, can hardly be overstated. Cost considerations pervade every move an attorney makes for his clients and every bit of advice he gives them. An intelligently designed program of fee-shifting, derived from principled standards permitting the award of attorneys’ fees on a broader basis, could serve as a catalyst for a healthier legal system. “Legal ‘rights’ are ‘airy nothing’ when they are enforceable only in theory; they are ‘bodied forth’ when they function realistically.” Hornstein, “Legal Therapeutics — The ‘Salvage’ Factor in Counsel Fee Awards,” 69 Harv.L.Rev. 658 (1956).
In order to remove certain cost-related impediments to court access we must derive these principled standards, and to do that we must look to the institutional foundation for the general rule that a winning party cannot recover private costs against the losing party. An understanding of the justification for that rule will lead to an understanding of where we may suspend the rule without damaging the policies it serves.
I
There are important considerations that militate in favor of the so-called “American rule” in certain situations. First and foremost is that the American rule against fee shifting prevents the harassment of petty debtors whose indebtedness, though minor, is not in real dispute. Tenants, alimony payers, and retail customers are all permitted to default until the amount owed is sufficient to make hauling them into court economically feasible.1 In the alternative system, a minor debtor might be buried under an avalanche of attorneys’ fees from over-eager creditors, amounting, perhaps, to many times the original obligation.2 A strict Puritan might find this de facto legal excuse of minor obligations irritatingly at odds with his philosophy, but the current approach is clearly the lesser of two evils. The refusal to award attorneys’ fees can be seen, thus, as an implementation of a social policy protecting small debtors from their creditors.
The American rule also implements a policy in favor of control over one’s own expenses. A litigant may budget his attorneys’ fees, and know that, whatever happens, he will not be forced over that figure *453by the uncontrolled cost of his opponent’s counsel. Thus a litigant’s purse is protected by the American rule.3
Furthermore, an eventual loser’s refusal to recognize the validity of the eventual winner’s position, and his insistence on taking the winner to court, do not necessarily imply wrongful conduct on the part of the loser. After all, the loser calculated his chances of winning as sufficiently promising to put up his own attorneys’ fees. And even where lawyers take a ease on a contingent fee, the lawyer has usually calculated the chance of winning as sufficiently strong to warrant his time and effort.
II
In litigation where there is no real dispute, however, litigation itself necessarily has a value to one of the parties. The most frequent advantage of litigation per se to a wrongdoer is use of the contested money while the case proceeds glacially through the court system. This benefit is then reflected in the settlement process, in that a plaintiff is willing to settle for substantially less than he may be due in order to avoid the delays of the cumbersome procedure, and the expense of maintaining legal representation throughout.
So long as there exists a bona fide dispute among the parties, the American rule should probably apply. However in suits where a court is not called on to resolve a conflict, but merely to enforce a rule or to point out that there is no dispute and make an award, a rule indemnifying a party for his attorneys’ fees can provide important benefits.
At the moment, overburdened courts, because of the principle of open access, are powerless to resist the attraction to the public that litigation per se presents. An indemnity rule can be used to eliminate or counterbalance the illegitimate advantages of litigation, and thus restore some proportionality between parties’ enthusiasm for litigation and the merits of their claims. As Sir Arthur Goodhart concluded, it should be possible “to adopt a modified system of substantial costs which, while limiting the discretionary element, would nevertheless prevent the abuse of the legal process which follows from the American system.” Goodhart, “Costs,” 38 Yale L.J. 849, at 877 [1929]. In order to do so, however, we must not approach the allocation of costs ritualistically, but rather in a functional way that discriminates among different classes of cases. A modification of the American rule to permit the award of attorneys’ fees to the “winner”4 where the other party has forced the litigation of a non-dispute from corrupt motives would accomplish this purpose.
Ill
In order to avoid exacerbating the effects of wealth on one’s prospects of having justice done, we have a strong egalitarian tradition of completely free access to our courts. See, e.g., Johnson v. Stevens, 164 W.Va. 703, 265 S.E.2d 764 (1980) (referring to W. Va. Const., art. Ill, §§ 10 and 17 and the Fourteenth Amendment of the Constitution of the United States). While the wealthy may be able to hire lawyers, they cannot hire a court. This is an unquestionably proper posture, but as grounds for an argument against a principled use of fee-shifting it fails.
Free access to courts is a principle predicated on the erroneous assumption that both litigants in all lawsuits have a good faith dispute. Often this is not the case, and where it is not, the mischief must-be discouraged. Courts are available free of charge, so they are overused. Their overuse in turn congests the docket, resulting in justice-defying delays. In a court sys*454tem burdened, even compromised, by congestion and delay we need to be particularly sensitive to mischievous overuse of the courts. Litigation designed simply to impede a party seeking payment of an obligation, spiteful and vexatious suits — these simply do not belong in court.
At present there is no incentive not to abuse the system and, through the litigation of non-disputes, accomplish corrupt purposes. A willingness to litigate for years and sustain high litigation expenses, therefore, is frequently a profit-making venture for a wrongdoer in a case where there is a large and almost completely certain liability. A fee-shifting doctrine could control these abuses, clearing nondisputes from court dockets and eliminating the threat of prolonged litigation as a factor of the settlement calculus.5
Everyone who has a good faith dispute requiring a decision by an impartial arbiter is entitled to his day in court. On the other hand, every person is not entitled to his day in court regardless of the frivolous nature of the suit. Parties whose interest in the legal process is to oppress or cheat others should be discouraged. Non-disputes should, of course, be filtered out of the legal process by the subjective decision of the litigants themselves or else by their attorneys. Where they are not, courts and juries, which specialize in determining the question of good faith, are capable of distinguishing good faith disputes from non-disputes and assessing an appropriate penalty in the form of an award of attorneys’ fees.6
IV
Tinkering with some user-based allocations of litigation costs can be done without challenging the fundamentally public nature of the courts. Depending on the pattern of abuse, courts will have to manipulate the fee-shifting doctrine to take into account different types of cases. In domestic relations cases, for instance, both parties generally sincerely believe themselves in the right, and generally both parties are to some degree in the right. Many other types of cases taken to court, however, are nondisputes in which one party knows from the start that he is in the wrong, but wishes to delay the eventual result or diminish the eventual payment. One of the best examples is that of the policyholder who is made to sue an insurance company to recover for damages to his property. Insurance companies attempting to wear out policyholders, and hoping that policyholders will accept less than full value, frequently require the filling out of elaborate forms, argue, delay, and attempt to intimidate policyholders with the spectre of a court battle. Unless a company has a reason to suspect fraud, the nuisance of this cumbersome procedure very likely constitutes its only value to the company.
*455In personal injury suits, the prospect of substantial jury awards for rather nebulous components of the injury such as pain and suffering or loss of consortium operates as a countervailing incentive against the defendant going all the way to trial. In contract disputes, property damage claims and actions for alimony payments, the precision with which the exact damages may be determined prevents this kind of a disincentive from operating. The jury is bound to the value of the pecuniary loss, from which the successful plaintiff must then deduct his attorneys’ fees.7
Although the manifest complexity of the realm of possible configurations in which a viable claim for attorneys’ fees may be presented militates in favor of extreme caution in the foreordination of approved circumstances, a number of conclusions may safely be drawn.
First, with respect to debt cases, spreading the cost of minor defaults onto the credit industry is preferable as a matter of social policy to a system that would permit minor debtors to be systematically hunted to the ground and then charged with the costs of capture. Fee-shifting is inappropriate in such cases because in the consumer credit business and residential rental property business there is a statistical parameter for bad debts. This statistical parameter amounts to a type of social insurance by which debtors as a class pay for defaulters. And since everyone can lose his job and fall on hard times, the rule that forbids the shifting of collection costs works more or less equitably.
Personal injury cases are also inappropriate for fee-shifting. Litigation is a game one can afford to play only if one can afford to lose. Personal injury suits would be discouraged if the price of loss were raised by the possibility of one’s being stuck with the defendant’s attorneys’ fees in the event the suit were unsuccessful. And, as discussed supra, a good part of a defendant’s incentive to delay is removed by the weighting of the balance in favor of the plaintiff at trial.
Property damage suits, contract claims, and actions to recover alimony or back pay provide more fertile ground for fee-shifting principles. In such cases the administration of justice and the principle of full and fair recovery would both be served by adopting fee-shifting as an approved judicial response to the litigation of what to the court appears to be a non-dispute.
V
Although there is substantial hostility to the adoption of an indemnity rule, an adoption of such a rule in limited circumstances should come as no surprise to observers of the American legal landscape. Many commentators have long advocated that, in the interest of a full and just recovery, the award to the prevailing litigant must be increased to include his or her attorneys’ fees, as in the English system.
The ideal of the law is that in civil actions the wronged person shall be made whole, at least so far as that can be *456accomplished, with money. It is strange then that the American legal system maintains a practice which deliberately frustrates the attainment of this ideal. Be his case ever so strong, the prevailing party to a lawsuit generally cannot recover his attorney fees used in prosecuting or defending his legal rights.
Stoebuck, “Counsel Fees Included in Costs: A Logical Development,” 38 U. Colo L.Rev. 202, 203 (1966); See also Goodhart, “Costs,” supra; Kuenzel, “The Attorney’s Fee: Why Not a Cost of Litigation?” 49 Iowa L.Rev. 75 (1963); Ehrenzweig, “Reimbursement of Counsel Fees and the Great Society,” 54 Calif.L.Rev. 792 (1966).
Furthermore, American law can hardly be said to demand that a party necessarily pay his own fees. Lawsuits where the fee is shifted to the government, to the private sector, or to successful litigants as a group may well outnumber lawsuits paid for out of the present litigant’s pocket.
Attorneys’ fees are shifted to the government by government funded legal aid and by representation afforded pursuant to constitutional “due process” requirements. Law firm practices establish the other fee-shifting arrangements. The private sector (generally in the form of a law firm’s other clients) foots the bill for the pro bono work most respectable law firms perform. More importantly, the winners of cases taken on a contingent-fee basis as a class bear the costs for losers in cases taken on contingency.
These patterns of fee-shifting are distinct from the pure indemnity system in that the costs of the litigation are absorbed by an entire class and not dropped in any individual’s lap, but they show the broad acceptance in our society of the practice of fee-shifting, at least away from a party if not onto one. Within a narrower range, we also countenance shifting attorney’s fees onto a party. W.Va.Code, 48-2-13 [1977] authorizes trial courts to make any order that may be proper to compel a spouse to pay sums necessary to allow the other spouse to prosecute or defend a domestic relations suit. Rules of court expressly authorize the award of attorney’s fees in certain circumstances. See W.Va.R.Civ.P. 30(d) (regarding oral depositions); W. Va.R. Civ.P. 37 (regarding e.g., failure to admit, to attend depositions, to serve answers to interrogatories, or to respond to requests for inspections). Our case law has long recognized that, in appropriate cases, attorneys’ fees may be awarded to the prevailing litigant. In syllabus 2 of Roach v. Wallins Creek Collieries Co., Ill W.Va. 1, 160 S.E. 860 (1931), this Court stated that “a court [may] require one party to contribute to the fees of counsel of another party ... where the plaintiff, suing in behalf of himself and others of the same class, discovers or creates a fund which enures to the benefit of all.”
Attorneys’ fees may also be awarded by agreement of the parties. It is a common practice now to insert attorney fee clauses in contracts, notes, mortgages, and like instruments. In Moore v. Johnson Service Co., 158 W.Va. 808, 219 S.E.2d 315 (1975), we expressly approved this practice, enforcing a commercial lease contract in which the parties had agreed that the successful party in an action to enforce the lease should recover attorneys’ fees from the unsuccessful party:
In the context of complex business dealings resulting in the execution of lease agreements, it is to be anticipated, despite the best efforts of the parties, that occasional disputes may require resolution by the courts. When these disputes are submitted for judicial determination, in our view, it is far better that the courts and judges receive the benefit of the expressed intentions of the parties ascertainable from the plain provision of the contract.
Id., 158 W.Va. at 819-820, 219 S.E.2d at 322-23.
The conclusion to be drawn from these illustrations is that the shifting of attorneys’ fees is hardly a novelty in our judicial system.8 The problems that could be *457solved by a broader adoption of fee-shifting principles militate in favor of further inquiries into the proper engineering of such principles.
There are two components to the cost of courts: the publicly-funded administrative cost of the courts and the private costs to the parties of trying the particular case. The public nature of the former expense is easily accepted.9 With regard to the latter, and particularly with regard to attorneys’ fees, we have an opportunity to devise ways to discourage non-dispute litigation without discouraging the litigation of real disputes.
VI
While the general rule that forbids the recovery of costs by a winning litigant probably works better than any other general rule, we do not need a general rule. A principled set of standards for selecting between fee-shifting and not will permit us to avoid the evils inherent in either alternative.
The real merit of a judicial rule, its true eloquence, is not measured by its use in court proceedings, but by its effect on potential litigants in the interim between an injury and a decision to litigate. The best rules are those that encourage parties to treat one another in a decent and civilized manner when they are not under the direct supervision of a court. The evil of friv- „ olous, corruptly-motivated litigation in the court system is compounded by the additional delay legitimate clients of the courts are forced to bear while frivolous suits are heard. A rule discouraging such suits would combat both evils, and should be an urgent priority of this Court.
Certainly this concurring opinion has not given any definitive guidance concerning instances where fee-shifting is appropriate. Its purpose, however, is only to invite the litigation of this issue in cases where counsel consider it appropriate in light of the policy considerations raised in this opinion. The majority opinion just awarded attorneys’ fees to the plaintiffs without much of an explanation of why. Well, that is a court’s prerogative — case law, after all, is just a way of predicting what a court will do.
The fabric of the law is woven by countless thousands of ad hoc determinations that ultimately form a pattern that is susceptible of analysis by legal scholars. Sometimes courts are good at explaining their reasons and sometimes they are not. In any event, it is not reasons but results that count. Consequently, if the issue of attorney fees is raised, the courts will decide it, and as they decide it on a case by case basis a new pattern regarding fee-shifting may emerge that is an improvement over the universal rule that rejects fee-shifting in every case. As I have indicated above, it would appear that the most proper opportunities for such a new rule are in the area of contract disputes, property damage claims, alimony and child support collection (where attorneys’ fees have traditionally been awarded) and suits where the deep pocket government is the loser. Also it would appear that consumer debt, landlord and tenant, and personal injury cases are least in need of such a rule, either because the costs of collection are already shifted or because the litigation process has developed other disincentives to litigation, such as the pain and suffering jury award, that achieve the same end.
The reason, probably, that the majority opinion did not articulate more definite reasons for shifting the attorneys’ fee is that there is not a great body of law that encourages such a result. Nevertheless, the body of law is wrong and the result in this case is right, so we might just as well plough along and plant a new furrow. Once upon a time there was no law on products liability, contracts of adhesion, comparative negligence, and a host of other subjects. In the area of principled rules to govern fee-shifting, let the law begin.

. "The no-fee rule may deter resort to the courts where the legal claim is clear and the facts are undisputed but the amount likely to be recovered insufficient to reimburse the plaintiff for the costs of litigation in the absence of an award of attorneys' fees. In this situation, the no-fee rule may serve to screen out cases where the amount claimed does not justify the expenditure of additional public and private resources in order to pursue a claim to judgment. See Posner, An Economic Approach to Legal Procedure and Judicial Administration, 2 J. LEGAL STUD. 399, 439 (1973), where the author reasons that a fee-shifting rule may result in "socially unjustified litigation — litigation that costs more than the errors that would result from failure to enforce a class of meritorious claims." A no-fee rule may thus function as a sort of flexible self-administered minimum-amount-in-controversy requirement.”
Walthall, “Awards of Attorneys’ Fees in the Absence of a Statute: Funds & Prospects in the Fifth Circuit,” 10 Cumb.L.Rev. 359, 366 (1979).

. The costs of securing the judgment might alone amount to more than the debt. In addition, the costs of tracking down the defendant, making an inventory of his personal property, listing his exemptions, and selling his non-exempt property to satisfy the judgment could all be considered under the rubric of attorneys’ fees as well. Adding all these other costs into the calculation would inflate the final judgment to many times the amount of the original debt.

. See abo Day v. Woodworth, 13 How. (U.S.) 363, 14 L.Ed. 181 (1851) (suggesting that fair play demanded that no additional burden be placed on the party unfortunate enough to be the losing party).

. The concepts of winning and losing are, of course, relative, and this should be recognized in any discussion of the attorney’s fee issue. A nominal award to a plaintiff often represents a "verdict for the defendant perversely expressed.” See Coakley v. Marple, 152 W.Va. 68, 159 S.E.2d 378 (1968); Freshwater v. Booth, 160 W.Va. 156, 233 S.E.2d 312 (1977).

. Mine is not the first mind that this thought has crossed:
In England the costs which the unsuccessful party has to pay consist (in substance) in the expense he has wrongfully made the other party incur; in other words, the unsuccessful party in England has to pay his opponent's lawyer’s bill as well as his own. The possibility of having to pay the lawyer's bill of both parties to the action makes a plaintiff think twice before he sues out a writ and a defendant think twice before he defends an action which ought not to be defended, and that is a direct deterrent on the number of cases put or kept in suit, (emphasis added).
First Report of the Judicial Council of Massachusetts, published in 11 Mass.L.Q. 7, 63 (1925).

. This is analogous to our discussion in Mason County Bd. of Educ. v. State Superintendent of Schools and Bright McCausland, 170 W.Va. 632, 295 S.E.2d 719 (1982) concerning an employee's “duty" to mitigate his damages. A “duty” to proceed in good faith could be read in the same way as the "duty” to mitigate.
The employee is in fact under no affirmative "duty” to seek employment; he may seek it or not, at his pleasure. However, should employment similar to that contemplated by his breached contract be locally available to him, he will be charged in mitigation of his damages, the amount of the salary he would have earned at that employment. More accurately, then, the “duty to mitigate” is a limitation on his recovery dictated by the local job market.
Similarly, while a person may, at his pleasure, have his day in court, he must be aware that there is a built-in risk that he will have to pay his opponent’s attorney fees as well as his own. Thus everyone is still entitled to his day in court, but along with the privilege comes a sanction when that privilege is abused.

. This Court has recently held that, in property damage claims, "annoyance and inconvenience are properly considered as elements in the measure of damages that plaintiffs are entitled to recover." Jarrett v. E.L. Harper & Son, Inc., 160 W.Va. 399, at 404, 235 S.E.2d 362, at 365 (1977). Although award of attorneys’ fees was not mentioned in the majority opinion, the flexibility of the concepts of annoyance and inconvenience now permits juries in property damage cases to manipulate the amount of the award in a manner that will effectively shift attorneys' fees to the losing defendant. The "wild card” factor a jury adds to the judicial process is well described in United States v. Dougherty, 473 F.2d 1113 (D.C.Cir.1972). Although the opinion concerned itself with the issue of jury nullification, its explanation of the process is nonetheless apt.
The jury knows well enough that its prerogative is not limited to the choices articulated in the formal instructions of the court. The jury gets its understanding as to the arrangements in the legal system from more than one voice. There is the formal communication from the judge. There is the informal communication from the total culture — literature (novel, drama, film, and television); current comment (newspapers, magazines, and television); conversation; and of course, history and tradition. The totality of input generally convey adequately enough the idea of prerogative of freedom in an occasional case to depart from what the judge says.
Id., at 1135 (emphasis added).

. In such a context, lawyers who feign horror at the mention of fee-shifting begin to resemble "Casablanca’s" Louis who, pocketing his winnings, announces that he is “shocked, shocked to find that there is gambling here.”

. In England, on the other hand, the court system was once profit-making. In 1910, for example, the English judicial system made over one million pounds from court fees. Their court system is still largely supported by court fees rather than by general revenue. R. Jackson, The Machinery of Justice in England 293-94 (1964).