Moakley v. Smallwood

826 So.2d 221

Barbara MOAKLEY, Petitioner, v. Sheri SMALLWOOD, Respondent.

No. SC95471.

Supreme Court of Florida.

February 28, 2002.

Rehearing Denied April 18, 2002.

John P. Fenner, Boca Raton, FL, for Petitioner.

Sheri Smallwood, pro se, Key West, FL, for Respondent.

PARIENTE, J.

We have for review Moakley v. Smallwood, 730 So.2d 286 (Fla. 3d DCA 1999), a decision of the Third District Court of Appeal, which expressly and directly conflicts with the decision of the Second District Court of Appeal in Israel v. Lee, 470 So.2d 861 (Fla. 2d DCA 1985), and the First District Court of Appeal in Miller v. Colonial Baking Co., 402 So.2d 1365 (Fla. 1st DCA 1981). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. The conflict issue presented in this case is whether a trial court possesses the inherent authority to assess attorneys' fees as a sanction against an attorney for the attorney's bad faith conduct during the course of litigation.

BACKGROUND

This case arises out of post-dissolution proceedings and the imposition of attorneys' fees against petitioner Barbara Moakley, the former wife, and her trial attorney. The Third District explained the factual background of this case as follows:

According to the findings of the trial court in post-dissolution proceedings, the former wife [Moakley] subpoenaed the former husband and two of his former attorneys, seeking to compel production of an original note which had been awarded to the former wife in the final judgment. On its face, the motion to compel production conceded that one of the former attorneys, appellee Sheri Smallwood, did not have the note and she so testified. Because of short notice, Ms. Smallwood was unable to be relieved of the obligation to attend the hearing, fifty miles from her office. The trial court granted monetary sanctions against the former wife and her counsel. The court concluded that there was no reasonable explanation for issuance of the subpoena to Ms. Smallwood.

Moakley, 730 So.2d at 286-87 (footnote omitted). The trial court imposed attorneys' fees in the amount of $1125 against Moakley and her counsel, Margaret Broz, as compensation for the time Smallwood expended in responding to the subpoena. See id. at 287. On appeal, the Third District affirmed the imposition of monetary sanctions against both Moakley and her attorney, concluding that the trial court possessed the inherent authority to do so. See id.

ANALYSIS

The issue before us in this case is whether the trial court possessed the inherent authority to impose attorneys' fees against Moakley's attorney absent a specific rule or statute authorizing the imposition of such fees.¹ This Court has explained that "[g]enerally, a court may only award attorney's fees when such fees are `expressly provided for by statute, rule, or contract.'" Bane v. Bane, 775 So.2d 938, 940 (Fla.2000). However, since 1920, this Court has recognized the inherent authority of trial courts to assess attorneys' fees for the misconduct of an attorney in the course of litigation. See United States Sav. Bank v. Pittman, 80 Fla. 423, 86 So. 567, 572 (1920). In Pittman, this Court approved an award of fees against an attorney, where the trial court found that the attorney had unnecessarily conducted foreclosure proceedings on a mortgage for the sole purpose of increasing his fee and that the attorney was acting in his own self-interest and against the wishes of his client. Id.

As we have subsequently stated, "Clearly, a trial judge has the inherent power to do those things necessary to enforce its orders, to conduct its business in a proper manner, and to protect the court from acts obstructing the administration of justice." Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. United States Fire Ins. Co., 639 So.2d 606, 608-09 (Fla. 1994). Most recently, the Court in Bitterman v. Bitterman, 714 So.2d 356, 365 (Fla. 1998), recognized the inherent authority of a trial court to award attorneys' fees for bad faith conduct against a party, even though no statute authorized the award:

The inequitable conduct doctrine permits the award of attorney's fees where one party has exhibited egregious conduct or acted in bad faith. Attorney's fees based on a party's inequitable conduct have been recognized by other courts in this country. See Vaughan v. Atkinson, 369 U.S. 527, 530-31, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962) (awarding attorney's fees based on respondent's "recalcitrance" and "callous" attitude); Rolax v. Atlantic Coast Line R.R. Co., 186 F.2d 473, 481 (4th Cir.1951) (holding that attorney's fees were justified because "plaintiffs of small means have been subjected to discriminatory and oppressive conduct by a powerful labor organization"). We note that this doctrine is rarely applicable. It is reserved for those extreme cases where a party acts "in bad faith, vexatiously, wantonly, or for oppressive reasons." Foster v. Tourtellotte, 704 F.2d 1109, 1111 (9th Cir.1983) (quoting F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974)). "Bad faith may be found not only in the actions that led to the lawsuit, but also in the conduct of the litigation." Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1298 (9th Cir.1982) (quoting Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 (1973)). This Court and other courts in this state have recognized that attorney's fees can be awarded in situations where one party has acted vexatiously or in bad faith. See Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145, 1148 (Fla.1985) ("This state has recognized a limited exception to this general American Rule in situations involving inequitable conduct."); Hilton Oil Transport v. Oil Transport Co., 659 So.2d 1141, 1153 (Fla. 3d DCA 1995); In re Estate of DuVal, 174 So.2d 580, 587 (Fla. 2d DCA 1965).

Nothing in the Court's reasoning in Bitterman, in which we acknowledged the trial court's inherent authority to award attorneys' fees under extremely narrow circumstances, limits the application of this authority to a party rather than the party's attorney. Indeed, the attorney is not only a representative of the client, but also an officer of the court. See Preamble to Rules of Professional Conduct, R. Regulating Fla. Bar ("A lawyer is a representative of clients, an officer of the legal system, and a public citizen having special responsibility for the quality of justice.").

Moreover, appellate decisions that have addressed this issue have recognized that trial courts must sparingly and cautiously exercise this inherent authority to award attorneys' fees against an attorney. For example, in Patsy v. Patsy, 666 So.2d 1045 (Fla. 4th DCA 1996), another post-judgment dissolution proceeding, the Fourth District affirmed an award of attorneys' fees and costs against an attorney for the bad faith filing of a motion to disqualify counsel. The Fourth District recited the facts as follows:

In a modification proceeding in which he represented the former husband, Meisler filed a motion to disqualify opposing counsel on the ground that he had perpetrated a fraud on the court on two prior occasions. At Meisler's request, based on the motion, the court stayed further proceedings until after it conducted an evidentiary hearing on the motion to disqualify. After hearing the evidence the trial court found that the motion had no factual basis, was filed solely to delay the proceedings, and was a sham. The court assessed attorney's fees of $1,870 and costs.

Id. at 1046 (emphasis supplied). After reviewing the applicable case law, the Fourth District concluded that trial courts possess the inherent authority to assess attorneys' fees for litigating in bad faith. See id. at 1047; see also David S. Nunes, P.A. v. Ferguson Enter., Inc., 703 So.2d 491, 491 (Fla. 4th DCA 1997) (citing Patsy for the proposition that the trial court had inherent authority to assess attorneys' fees against counsel who did not attend a mediation and advised his clients that they also did not have to attend).

Similarly, in Lathe v. Florida Select Citrus, Inc., 721 So.2d 1247, 1247 (Fla. 5th DCA 1998), the Fifth District upheld the imposition of attorneys' fees against an attorney who lied to the trial court after he failed to appear for a deposition. The Fifth District observed that the attorney did not deny that he lied to the court, but argued that the trial court could not impose attorneys' fees without first finding him in contempt. See id. Relying on this Court's decision in Pittman, the Fifth District rejected this argument and held that a "trial court has inherent authority to order an attorney, who is an officer of the court, to pay opposing counsel's reasonable attorney's fees incurred as a result of his or her actions taken in bad faith." Lathe, 721 So.2d at 1247. The Fifth District explained that in the case before it, the attorney had notice and an opportunity to object to the sanctions and to provide mitigating evidence before awarding fees for the attorney's bad faith conduct. See id.

Indeed, many jurisdictions recognize this limited inherent authority to impose attorneys' fees against an attorney for bad faith conduct in the course of litigation. See, e.g., Eberly v. Eberly, 489 A.2d 433, 449 (Del.Super.Ct.1985) (holding that trial court had inherent authority to assess attorneys' fees against attorney who "unreasonably and vexatiously prolonged the proceedings below and increased the cost of representation to both parties"); Charles v. Charles, 505 A.2d 462, 467 (D.C.1986) (holding that trial court has inherent authority to impose attorneys' fees against attorney who repeatedly failed to obey court orders to file an answer or affidavit in lieu thereof); Lester v. Rapp, 85 Hawai`i 238, 942 P.2d 502, 505-06 (1997) (remanding case to trial court to determine whether counsel's misrepresentation of facts to the court constituted bad faith and whether...