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Lewis v. United States
Case Summary: Erma T. Lewis and Clark Stanley Milton v. United States of America, Caroll Reta Ludwig and James O. Stobaugh, Civ. No. 69-262-M (S.D. Cal. Mar. 8, 1971)
Factual and Procedural Background
This action was brought under Title 38 U.S.C.A., 784 et seq., to set aside a designation of beneficiary on two National Service Life Insurance policies. Defendants filed a cross-complaint requesting that the court deny the plaintiffs any relief and, if the defendants were successful, that the court award them reasonable attorney's fees to be paid by the plaintiffs. The plaintiffs moved to dismiss the cross-complaint. The court considered the motion to dismiss and addressed the question of entitlement to attorney's fees under the statutory scheme.
Legal Issues Presented
- Whether the defendants' cross-complaint seeking an award of attorney's fees against the plaintiffs may be maintained in this action brought under 38 U.S.C.A. § 784 et seq.
- Whether attorney's fees may be recovered from an adverse party in this type of case absent statutory authorization, a court rule, or a contractual provision.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Standard Accident Ins. Co. of Detroit, Mich. v. Hull et al., 91 F.Supp. 65 (S.D.Cal. 1950) | Attorney's fees ordinarily are recoverable from an adverse party only by virtue of a statute, rule of court, or written agreement. | The court relied on this principle to emphasize that a prevailing party cannot recover attorney's fees from an adverse party absent statutory or contractual authorization. |
| Paper Makers Importing Co. v. City of Milwaukee, 165 F.Supp. 491 (E.D.Wis. 1958) | Attorney's fees are not recognized as recoverable damages unless authorized by statute or contract. | The court used this authority to support the conclusion that attorney's fees cannot be awarded as damages against plaintiffs in the absence of statutory authorization or contract. |
Court's Reasoning and Analysis
The court began by identifying the statutory framework applicable to attorney's fees in actions brought under Title 38. It noted that the subject is "fully covered" by 38 U.S.C.A. § 784(g), and the opinion reproduces the statutory provision quoted by the court:
"Whenever a judgment or decree shall be rendered in an action brought under the provisions of this section, the court, as a part of its judgment or decree, shall determine and allow reasonable fees for the attorneys of the successful party or parties and apportion same if proper, said fees not to exceed 10 per centum of the amount recovered and to be paid by the Veteran's Administration out of the payments to be made under the judgment or decree at a rate not exceeding one-tenth of each of such payments until paid; * * *"
After identifying the statutory scheme, the court cited established principles from prior decisions that attorney's fees are generally recoverable from an adverse party only when authorized by statute, a rule of court, or contract, and that attorney's fees are not recoverable as damages absent such authorization. Applying these principles to the facts before it, the court observed that the cross-complaint sought an award of attorney's fees from the plaintiffs, but the statutory provision in § 784(g) contemplates fees being allowed as part of the judgment and paid by the Veterans Administration out of payments under the judgment. The court stated that it knew of no exception that would permit a separate action to recover attorney's fees against the plaintiffs in this type of case.
Because the statutory framework provides for attorney's fees in a specific manner (payment by the Veterans Administration from judgment payments) and because there was no statutory or contractual basis presented for awarding fees directly against the plaintiffs, the court concluded that the cross-complaint seeking such fees could not be maintained.
Holding and Implications
The court granted the plaintiffs' motion to dismiss the defendants' cross-complaint.
Implications:
- The immediate effect is dismissal of the defendants' cross-complaint seeking an award of attorney's fees against the plaintiffs.
- The court relied on 38 U.S.C.A. § 784(g) as the governing statute for attorney's fees in this type of action and on prior authority establishing the general rule that attorney's fees are not recoverable from an opposing party absent statutory or contractual authorization.
- The opinion does not announce a broader new rule of law; it applies the statutory scheme and existing precedent to deny the cross-complaint's request for attorney's fees against the plaintiffs.
Benjamin P. Dillahunty, San Diego, Cal., for plaintiffs.
Frederick B. Holoboff, Asst. U.S. Atty., San Diego, Cal., for the United States.
Edwin C. Jeffries, San Diego, Cal., for Caroll Reta Ludwig and James O. Stobaugh.
ORDER
WILLIAM D. MURRAY, Senior District Judge.
This action arises under Title 38 U.S.C.A., 784 ff., for the purpose of setting aside a designation of beneficiary on two National Service Life Insurance Policies. The defendants have filed a cross complaint asking the court to deny plaintiffs any relief and to grant them reasonable attorney's fees from the plaintiffs in case they are successful. The plaintiffs have moved the court to dismiss the Cross Complaint.
The subject of attorney's fees as it applies to this Title is fully covered in Section 784(g).
'Whenever a judgment or decree shall be rendered in an action brought under the provisions of this section, the court, as a part of its judgment or decree, shall determine and allow reasonable fees for the attorneys of the successful party or parties and apportion same if proper, said fees not to exceed 10 per centum of the amount recovered and to be paid by the Veteran's Administration out of the payments to be made under the judgment or decree at a rate not exceeding one-tenth of each of such payments until paid; * * *'
It should also be noted that attorney's fees can ordinarily be obtained by a prevailing party against an adverse party only by virtue of a statute, a rule of court, or the provisions of a written agreement. Standard Accident Ins. Co. of Detroit, Mich. v. Hull et al., 91 F.Supp. 65 (S.D.Cal. 1950). Attorney's fees are not recognized as recoverable damages unless authorized by statute or contract. Paper Makers Importing Co. v. City of Milwaukee, 165 F.Supp. 491 (E.D.Wis.1958). Here the court knows of no exception that would allow an action for the recovery of attorney's fees in this type of case.
Therefore, it is ordered and this does order that the said motion to dismiss the cross complaint be and the same is hereby granted.
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