Gold Bondholders Protective Council v. Atchison, Topeka & Santa Fe Railway Co.

658 P.2d 776, 1983 Alas. LEXIS 363
CourtAlaska Supreme Court
DecidedJanuary 28, 1983
DocketNo. 6490
StatusPublished
Cited by23 cases

This text of 658 P.2d 776 (Gold Bondholders Protective Council v. Atchison, Topeka & Santa Fe Railway Co.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gold Bondholders Protective Council v. Atchison, Topeka & Santa Fe Railway Co., 658 P.2d 776, 1983 Alas. LEXIS 363 (Ala. 1983).

Opinion

OPINION

CONNOR, Justice.

In this case, the Gold Bondholders Protective Council (hereafter referred to as Bondholders) appeals the superior court’s award of $15,551.22 in attorneys’ fees and costs to appellee, the Atchison, Topeka and Santa Fe Railway Company (hereafter referred to as Santa Fe).

The facts of the case from which this appeal arises are as follows:

In 1895, Santa Fe issued bonds for public sale. The bonds contained a “gold clause” which promised to pay to bondholders in the year 1995, the face amount in “gold coin of the United States, of the present standard of weight and fineness, or its equivalent,” together with interest calculated at 4% annually, “payable in like gold coin” semi-annually until the principal became due.

On June 5,1933 Congress enacted a Joint Resolution, now codified as 31 U.S.C. § 463, which in effect annulled all gold clauses such as that contained in the Santa Fe bonds. In 1980, appellants, the Bondholders, purchased some of the Santa Fe bonds. The Bondholders subsequently demanded that interest owing on the bonds be paid in gold coin or its equivalent pursuant to the gold clause provision. When Santa Fe refused to honor this demand, appellants commenced an action for breach of contract. The superior court dismissed the appellants’ amended complaint for failure to state a claim on which relief could be granted, thereby precluding a determination as to whether the suit would be certified as a class action.1

After entry of judgment, Santa Fe moved for an award of attorneys’ fees in the amount of $20,000 out of a total bill of $29,784 calculated at 350.4 hours, at $85.00 per hour. Santa Fe also submitted a memorandum of costs and disbursements, seeking recovery of certain deposition costs in the amount of $551.22. The superior court awarded $15,000 in attorneys’ fees and the court clerk awarded $551.22 in costs for a total award of $15,551.22. The clerk’s award of eosts was subsequently affirmed in the superior court’s judgment, which was entered on October 26, 1981.

ATTORNEYS’ FEES

The Bondholders appeal from the superi- or court’s award of attorneys’ fees on two grounds, contending:

[778]*7781. That Santa Fe is not entitled to attorneys’ fees because appellants litigated an issue of important public interest; and,
2. That if Santa Fe is entitled to attorneys’ fees, $15,000 is excessive.

STANDARD OF REVIEW

As we stated in Anchorage v. McCabe, 568 P.2d 986, 989 (Alaska 1977):

“Rule 82(a)(1), Alaska Rules of Civil Procedure, provides that in cases where there is no monetary recovery, ‘attorney’s fees for the prevailing party may be fixed by the court as a part of the costs of the action, in its discretion, in a reasonable amount.’ This court has recognized that the trial judge has wide discretion in awarding fees to a prevailing party. As we recently stated...
We will interfere only where the trial court’s determination as to attorney’s fees appears to be ‘manifestly unreasonable.’ ” (Citation and footnote omitted).

PUBLIC INTEREST NATURE OF THE CASE

The first question we are asked to consider is whether Santa Fe was entitled to any award of attorneys’ fees. The Bondholders contend that they litigated an issue of important public interest by challenging the constitutionality of 31 U.S.C. § 468 in the superior court. We have consistently held that “it is an abuse of discretion to award attorneys’ fees against a losing party who has in good faith raised a question of genuine public interest before the courts.” Gilbert v. State, 526 P.2d 1131, 1136 (Alaska 1974). Accord, Girves v. Kenai Peninsula Borough, 536 P.2d 1221, 1227 (Alaska 1975), see also, Anchorage v. McCabe, 568 P.2d at 989-90. However, we have also held that where the sums at stake in a controversy are substantial enough to prompt a suit without consideration of the public interest, it is not an abuse of discretion for the superior court to award attorneys’ fees against a plaintiff who has raised issues of public interest. Mobil Oil Corp. v. Local Boundary Commission, 518 P.2d 92, 104 (Alaska 1974). We recently explained that:

“Where the sums at stake in the controversy are sufficiently large to prompt suit regardless of the public interest, an award of attorney’s fees against the losing party has been found reasonable. In such cases, the concern that fear or expense will significantly deter citizens from litigating questions of general interest to the community is inapplicable. Similarly, questions which primarily affect the private rights of the parties before the court lack the requisite public character to prohibit an award, even if some public or constitutional issues are involved.” (Emphasis added.)

Thomas v. Bailey, 611 P.2d 536, 539 n. 9 (Alaska 1980). The sums at stake in the case before us are in dispute. The Bondholders contend that the maximum amount they could have recovered had they prevailed at trial would have been insubstantial.2 According to Santa Fe’s calculations, however, the appellants stood to recover well over one-half million dollars. That figure is clearly substantial enough to have motivated the Bondholders to file suit against Santa Fe.3

REASONABLENESS OF THE FEE AWARD

We now turn to the question of whether the $15,000 attorneys’ fee award was so “manifestly unreasonable” as to constitute an abuse of discretion by the superior court.

The Bondholders argue that the award is excessive, and therefore unreasonable, because it amounts to more than one-half of the attorneys’ fees actually incurred [779]*779by Santa Fe. This argument is unpersuasive and we reject it. Alaska Rule of Civil Procedure 82(a) states that:

“Should no recovery be had, attorney’s fees for the prevailing party may be fixed by the court as a part of the costs of the action, in its discretion, in a reasonable amount.”

We have consistently held that an award of full attorneys’ fees, absent a showing of bad faith on the part of the losing party, is manifestly unreasonable. Davis v. Hallett, 587 P.2d 1170, 1171-72 (Alaska 1978); Malvo v. J.C. Penney Co., Inc., 512 P.2d 575, 587 (Alaska 1973). However, we have never held, and decline now to hold, that an award of over one-half of the attorneys’ fees actually incurred is per se unreasonable.

In the case now before us, the superior court awarded attorneys’ fees calculated at a rate of $85.00 per hour.

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Cite This Page — Counsel Stack

Bluebook (online)
658 P.2d 776, 1983 Alas. LEXIS 363, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gold-bondholders-protective-council-v-atchison-topeka-santa-fe-railway-alaska-1983.