Pedlow v. Stamp

Judge DUBOFSKY

concurring.

I wholeheartedly concur in the result reached here; however, I write separately to discuss certain problems with our attorney fees statute that are demonstrated by this case.

As pertinent here, § 13-17-101, et seq., C.R.S. (1987 Repl.Yol. 6A), provides for an award of attorney fees when a lawsuit or claim is deemed substantially frivolous by the trial court. Prior to the enactment of this statute in 1977, Colorado closely followed the traditional American rule, and thus, in virtually all circumstances, one party to a lawsuit was not allowed to recover its legal fees from the other party.

Two of the purposes underlying the enactment of the attorney fees statute were to reduce the amount of litigation and to compensate a party against whom a frivolous claim or lawsuit had been asserted. Recently, the Bar has voiced great concern that the beneficial purposes of reducing litigation and compensating wronged parties are not being met and that rules or statutes permitting attorney fees because of frivolous claims are adversely affecting the practice of law. See generally Renner, A Trial Lawyer’s View of Attorney’s Fees Awards, 17 Colo.Law. 466 (1991); New York Times, Sept. 14, 1990, § B18, col. 1.

Rather than the threat of attorney fees reducing litigation, a new category of “satellite” cases, numbering in the thousands, based on “frivolous actions” has been spawned. See Nelken, The Impact of Federal Rule 11 on Lawyers and Judges in the Northern District of California, 74 J.Am. Judicature Soc’y 147 (Oct./Nov. 1990).

Furthermore, the difficulty of determining what is a frivolous claim greatly complicates the process, see Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir.1983); Indianapolis Colts v. Mayor & City Council of Baltimore, 775 F.2d 177 (7th Cir.1985), and makes compensation of the “wronged” party very uncertain.

Also, since the determination of what is a frivolous claim or lawsuit is subjective and variable, a party cannot be confident of which claims will be so classified. See Rule 11 in the Real World, 132 F.R.D. 309 (1990); Analytica, Inc. v. NPD Research, Inc.; and Indianapolis Colts v. Mayor and City Council of Baltimore, supra.

In addition to apparently increasing litigation, these frivolous action claims have created other problems for the litigants and their attorneys. For example, it appears that some attorneys request attorney fees on the basis the other party’s claims are frivolous in virtually every case they handle. See A Trial Lawyer’s View of Attorney’s Fees Awards, supra, at 166. Thus, the allegation that a claim is frivolous has become a weapon in the arsenal of attorneys to either force favorable settlements or dismissal of claims. One study indicates that only 13.6% of requests for attorney fees because of frivolous claims were *1113found to be meritorious. This evidence suggests that a high percentage of claims for attorney fees are without a legitimate and substantial basis. See Rule 11 in the Real World, supra at 317 n. 21.

More significantly, however, is the negative impact such claims have had on the practice of law because they have increased the distrust and personal attacks of attorneys on each other. See A Trial Lawyer’s View of Attorney’s Fees Awards, supra. A claim by one attorney that another has brought a frivolous action implies that the latter attorney is acting improperly, if not unethically. This type of accusation inevitably raises the level of hostility and acrimony within the lawsuit. See A Trial Lawyer’s View of Attorney’s Fees Awards, supra. Such claims also set the client against the attorney and thereby undermine the trust that is essential to their relationship.

Thus, ironically, at a time when major segments of the legal profession desire a more streamlined and conciliatory approach to litigation, the impact of § 13-17-101 appears to be just the opposite. See A Trial Lawyer’s View of Attorney’s Fees Awards, supra.

In addition, there is the very disconcerting indication that accusations of frivolous claims and lawsuits are most often made against minorities and poor people who are asserting civil rights and related personal injury type claims. See Nelken, Has the Chancellor Shot Himself in the Foot? Looking for a Middle Ground on Rule 11 Sanctions, 41 Hastings L.J. 383 (1990); The Rule 11 Ruckus, 11 Calif.Law. 17 (May 1991).

An important function of the judicial system is to provide an avenue for people, who are excluded from the opportunities and benefits within the society, to obtain justice. A substantial award of attorney fees can financially destroy or bankrupt a person in a middle to lower economic class, and therefore, this threat acts as a substantial deterrent from bringing difficult but meritorious lawsuits. Statutes and rules providing attorney fees also make the litigants’ experience with the legal process more confusing and hostile, and far more expensive.

Most claims involving frivolous lawsuits arise because the offending party’s facts arguably did not support the claim. Here, defendant’s argument that plaintiff’s claim was frivolous is not based on the absence of supporting facts, but rather on the lack of a theoretical/legal justification for the claim. There are compelling reasons to allow the liberal assertion of new and different legal theories and claims based on them. The courts should welcome, not decry, proposed new directions in the law.

The complex conflicting interests of a diverse, rapidly growing, and changing society require that new legal ideas be readily assertible so that the law can appropriately reflect the experience and needs of the society. To close the door on new legal theories will isolate the courts from appropriately responding to the factors which bear on the pending issues. See R. Posner, Problems of Jurisprudence, (Harv.Univ. Press 1990); Oliver Wendell Holmes, The Common Law, (1881); O.W. Holmes, The Path of the Law, 10 Harv.L.Rev. 457 (1897).

When initially proposed, many legal theories appear strange and unorthodox and thus not worthy of acceptance. Over time, in the marketplace of competing legal theories, many of these “strange and unorthodox” ideas have won acceptance and become the law. As the court stated in Eastway Construction Corp. v. City of New York, 637 F.Supp. 558 (E.D.N.Y.1986), cert. denied, 484 U.S. 918, 108 S.Ct. 269, 98 L.Ed.2d 226 (1987):

“Sometimes there are reasons to sue when one cannot win. Bad court decisions must be challenged if they are to be overruled, but the early challenges are certainly hopeless. The first attorney to challenge Plessy v. Ferguson was certainly bringing a frivolous action, but his efforts and the efforts of others eventually led to Brown v. Board of Education.”

By punishing the litigant through an adverse award of attorney fees, the courts may too readily slam the door on the liti*1114gant s right to espouse new ideas and to challenge improperly decided cases. Furthermore, in closing this door, we threaten the very source of ideas which is essential for enlightened decisions that reflect the needs of the society.

For these reasons, I would adopt an interpretation of § 13-17-101, et seq., that only permits the recovery of attorney fees for bringing frivolous claims when the claim is totally meritless and the attorney/party advocating the claim maliciously persists in pursuing it after he knew or should have known it was meritless. Furthermore, the court should review a losing request for attorney fees with an eye toward awarding fees against the requesting party if a proper basis for the request is not shown. See Ace Title Co. v. Casson Construction Co., 755 P.2d 457 (Colo.App.1988).