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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.
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