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Articles

 

Civil Defendants Finally Awarded a Defensive Weapon
by Darcy S. McAlister, Esq.

Imagine if you are sued by someone seeking to recover money damages from you. Despite the fact that the lawsuit might be frivolous or that you are convinced you will ultimately prevail, it is an inescapable truth that you will be forced to expend considerable effort and to incur substantial cost in your defense. Until recently, there was very little chance you could recover such costs. The effects, both emotionally and financially, can be devastating to you and your family. Yet, until just recently, you were essentially powerless to obtain reimbursement, despite the claimant’s bad faith in bringing the lawsuit. At such times, the judicial system can seem inherently unjust.
As of June 29th, 2004, however, you may no longer be powerless. In a dramatic extension of past precedent, in Maris v. McGrath the Connecticut Supreme Court ruled that you can recover your legal fees if the lawsuit against you is sufficiently frivolous. Such threshold would be met if the court determines that the claimant, with his firsthand knowledge of the facts, could not reasonably have believed that he could establish the requisite facts to support his claim. Indeed, the Court affirmed that attorneys’ fees “should be awarded to the defendant for defending a case which the court finds to be totally without merit.” The decision is remarkable not only for its explicit declaration that you can recover the full cost of your defense, but also for permitting such recovery based solely on the bad faith of the claimant.
In the past, recovery of defense costs was generally limited to cases involving egregious conduct by the claimant’s attorney. Historically, our courts have subscribed to what has been deemed the “American Rule,” wherein a prevailing defendant is not entitled to an award of its attorneys’ fees unless specifically provided by statute, contract or other exceptional circumstances. Such practice has often been criticized for unwittingly permitting the victimization of innocent defendants by aggressive claimants. However, the public policy underlying the American Rule has honorable roots inherent to our concept of equality for all. It is based on the principal that the judicial system should not inhibit honest claimants from pursuing good faith claims by creating an apprehension that they may be financially penalized for exercising their rights.
That is not to say that the judicial system has never recognized certain circumstances where defense costs were awarded. Defendants have always been permitted to recover damages for certain counterclaims that they may have against a claimant. The Federal Rules of Civil Procedure also expressly acknowledges that defendants have a right to seek reasonable attorneys’ fees if a claim or statement is made in contradiction of the signatory’s good faith belief. Similarly, the Connecticut legislature has codified defendants’ right to seek reimbursement of costs if a claim is made without reasonable cause. However, historically, attempts to recover under these procedures have most often been unsuccessful and invariably resulted in only minimal penalties. Although defendants may also seek redress by bringing a vexatious litigation claim, this is only available if the defendant, having first prevailed in the underlying lawsuit, then files and prosecutes a subsequent lawsuit.
Due in part to the ineffectual nature of these federal and state procedures, courts created the bad faith exception, in which a “court has inherent authority to impose sanctions for bad faith pleading even in the absence of a violation of a specific rule or order of the court.” Until now, however, this exception has only been applied to an attorney’s conduct in filing or prosecuting a claim, rather than the claimant’s own bad faith in pursing a lawsuit. Although the recent expansion of the bad faith exception is not all-encompassing and will likely be narrowly construed by the courts, the Connecticut Supreme Court’s reformulation of this exception is a significant development in our jurisprudence. Not only does Maris v. McGrath serve as an endorsement of defendants’ rights against meritless claims, but hopefully it will also serve as an inhibitor of aggressive claimants who may now themselves be forced to expend considerable effort and to incur substantial cost for which they may never recover. Indeed, defendants may finally have been provided with their own defensive weapon.

 

Darcy S. McAlister, Esq. is an associate with the firm . As a member of the litigation department, her work encompasses a broad spectrum of areas, including contract, intellectual property and employment law. Ms. McAlister is also actively involved in the land use / zoning department, where she works cooperatively with other attorneys in matters that are being appealed or issues that may involve litigation.