Opinion
2023-CA-0354-MR
09-13-2024
TIM HALLORAN APPELLANT v. DEPUTY JOHN SPAULDING AND TREVOR BEATY APPELLEES
BRIEF FOR APPELLANT: Gregory D. Simms Louisville, Kentucky BRIEF FOR APPELLEE: Carol Schureck Petitt Tess M. Fortune PeeWee Valley, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM WASHINGTON CIRCUIT COURT HONORABLE SAMUEL TODD SPALDING, JUDGE ACTION NO. 22-CI-00009
BRIEF FOR APPELLANT: Gregory D. Simms Louisville, Kentucky
BRIEF FOR APPELLEE: Carol Schureck Petitt Tess M. Fortune PeeWee Valley, Kentucky
BEFORE: ACREE, EASTON, AND GOODWINE, JUDGES.
OPINION
ACREE, JUDGE
Appellant Tim Halloran appeals from the Washington Circuit Court's March 23, 2023 order denying his motion for attorneys' fees. The circuit court determined that, though it would award fees if it could, it lacked the ability to do so. We affirm.
On May 1, 2021, Deputies John Spaulding and Trevor Beaty charged Halloran with disorderly conduct, fourth-degree assault, and public intoxication. Over a year later, the charges against Halloran were dropped. The details of the arrest are irrelevant to this appeal.
Halloran sued the deputies for wrongful arrest. The circuit court conducted a jury trial on February 22, 2023. Deputy Beaty obtained a directed verdict dismissing all counts against him, but the counts against Deputy Spaulding were submitted to a jury. The jury returned a unanimous verdict against Deputy Spaulding. The jury unanimously awarded Halloran compensatory damages and punitive damages.
Halloran filed a motion for attorneys' fees on February 26, 2023. In a March 23, 2023 order, the circuit court denied the motion. In doing so, it noted the apparent conflict between Mo-Jack Distrib., LLC v. Tamarak Snacks, LLC, 476 S.W.3d 900 (Ky. App. 2015), on one hand and, on the other hand, the opinions in Bell v. Cabinet for Health & Fam. Servs., Dep't for Cmty. Based Servs., 423 S.W.3d 742 (Ky. 2014), and Seeger v. Lanham, 542 S.W.3d 286 (Ky. 2018), as to whether attorneys' fees may be awarded as a matter of equity. The circuit court concluded that, because "the Kentucky Supreme Court has the last say about the law in this state[,]" Record (R.) at 515, Bell and Seeger controlled and, therefore, Halloran was not entitled to equitable attorneys' fees. However, the circuit court explicitly stated that, if it could, it would have awarded Halloran fees for Deputy Spaulding's egregious conduct.
Halloran appeals. He argues that circuit courts do indeed have the discretion to award attorneys' fees as a matter of equity on a case-by-case basis, and that the circuit court erred in relying on Bell and Seeger.
"It is well settled that the decision whether to award costs and attorney's fees to a party is within the sound discretion of the trial court and its decision will not be disturbed on appeal absent an abuse of discretion." Giacalone v. Giacalone, 876 S.W.2d 616, 620-21 (Ky. App. 1994) (citing Gentry v. Gentry, 798 S.W.2d 928 (Ky. 1990); Wilhoit v. Wilhoit, 521 S.W.2d 512 (Ky. 1975)). The trial court has abused its discretion where its decision was "arbitrary, unreasonable, unfair, or unsupported by sound legal principles." Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky. 2000) (citing Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999)).
Halloran contends the principles explained in Bell and subsequently in Seeger do not apply because these cases are not directly factually analogous to Halloran's circumstances. We disagree. In Bell, the circuit court awarded attorneys' fees against the Cabinet for Health and Family Services; despite lacking the statutory authority to do so, the circuit court awarded attorneys' fees by authority of its equitable powers. Bell, 423 S.W.3d at 746. In Seeger, the circuit court denied a motion for attorneys' fees on the basis that it had not been empowered by statute to do so. Seeger, 542 S.W.3d at 289.
Both cases are factually applicable and directly confront the question of law that the instant appeal presents: whether a circuit court may award attorneys' fees as a matter of equity when the court has not been empowered by statute or contract to award them. Both cases answer that question in the negative.
Though courts of law and equity historically were separate, their merger resulted in courts of law holding jurisdiction over both kinds of cases. Bell, 423 S.W.3d at 747. As a result of this merger, "[e]quity practice, in general, is merged with law, or the statutory provisions." Id. Constitutions, statutes, and case law, in that order, trump equity, and "[o]nly when there is no law or precedent does a court have the authority to exercise pure equity." Id. (citing Vittitow v. Keene, 95 S.W.2d 1083, 1084 (Ky. 1936)). Only where there is no remedy at law will equity apply. Id.
Applying these principles to attorneys' fees, the Supreme Court in Bell plainly stated that "attorney's fees in Kentucky are not awarded as costs to the prevailing party unless there is a statute permitting it or as a term of a contractual agreement between the parties." Id. at 748. However, it noted attorneys' fees may be awarded as sanctions in limited circumstances. Id. Four years later, the Supreme Court reiterated these principles in Seeger, where it again determined that courts are not empowered to award attorneys' fees as a matter of equity, but that statutory or contractual authorization is required. See Seeger, 524 S.W.3d at 294-95. The Supreme Court stated clearly that, though attorneys' fees may be applied as sanctions "only when the integrity of the court is at stake[,]" a trial court may not award them "without a sound basis in contract or statute." Id. at 295.
Halloran relies upon this Court's 2015 Mo-Jack opinion, where a panel of this Court discussed the authority of trial courts to grant attorneys' fees and identified an "equitable exception" to the "American Rule" that "in the absence of a statute or contract expressly providing therefor, attorneys fees are not allowable as costs, nor recoverable as an item of damages." Mo-Jack, 476 S.W.3d at 906 (quoting Cummings v. Covey, 229 S.W.3d 59, 61 (Ky. App. 2007)). This Court in Mo-Jack determined that attorneys' fees may be awarded as a matter of equity, in the absence of statutory or contractual authorization, if punitive damages are available. Id. at 911.
However, Seeger states plainly: "A court is no longer imbued with equitable power to award attorneys' fees" except as a sanction where the integrity of the court is at stake. Seeger, 542 S.W.3d at 294-95. Clearly, a subsequent, published opinion by a higher court has eliminated the exception relied upon in Mo-Jack. We are bound by the principles in Seeger and determine the circuit court correctly concluded the equitable award of attorneys' fees was not an option available to it.
Because we detect no abuse of discretion in the circuit court's decision to deny Halloran's motion for attorneys' fees, we affirm its March 23, 2023 order.
ALL CONCUR.