ALAN STEMPEL V. JOAN GATES [Note 1]
Alan Stempel for the plaintiff.
Andrea Perana-Sweet for defendant Gates.
Andrew A Caffrey, Jr. For defendant Caffrey.
KARSTETTER, J. Alan Stempel ("Stempel") sued both his sister Joan Gates ("Gates") for tortious interference with fiduciary relationship and her attorney Andrew A. Caffrey, Jr. ("Caffrey") for "aiding and abetting" tortious interference with fiduciary relationship. Stempel was concerned about the care that his sister Gates was providing their mother. He petitioned the Essex County Probate and Family Court ("Probate Court") for appointment of a conservator. The attorney's fees he incurred in the Probate Court were the damages he sought in the District Court action. The trial judge dismissed the amended complaint pursuant to Mass. R. Civ. P. 12(b)(6) in part because "there was no 'harm' because attorney's fees are not damages." It is from that decision that Stempel appeals. [Note 3] We affirm.
Facts. In September of 2017, Harriet Stempel executed a durable power of attorney naming her son Alan Stempel and her daughter Joan Gates. In December of 2017, after an argument with her brother, Gates obtained a new power of attorney from their mother naming her alone. In 2019, Harriet Stempel was suffering from advanced dementia, and Stempel learned of the December 2017 power of attorney after contacting the director of the facility caring for his mother. Shortly thereafter, believing he had a fiduciary duty to do so based upon the September, 2017 power of attorney, Stempel filed a petition for appointment of a conservator in the Probate and Family Court. Gates objected and was represented by Caffrey. In September of 2019, the Probate Court granted Stempel's petition and a conservator was named and discovery conducted. Stempel incurred nearly $30,000 in fees.
Stempel filed a second petition in the Probate Court seeking reimbursement for the attorney's fees he incurred in his first action seeking appointment of the conservator. He later voluntarily dismissed that second petition and filed suit in the District Court alleging that Gates and Caffrey had interfered with his fiduciary duty to his mother and that he had suffered damages, mainly comprising his attorney's fees.
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The defendants moved to dismiss his complaint pursuant to Mass. R. Civ. P. 12(b)(6) and that motion was allowed.
Analysis. We review the allowance of a motion to dismiss de novo. Harhen v. Brown, 431 Mass. 838, 845 (2000). We accept as true the allegations in the complaint and draw every reasonable inference in favor of the plaintiff. Warner-Lambert Co. v. Execuquest Corp., 427 Mass. 46, 47 (1998). "Further, a motion to dismiss a complaint on such grounds should not be allowed unless it appears certain that the complaining party is not entitled to relief under any state of facts which could be proved in support of his claim." Spinner v. Nutt, 417 Mass. 549, 550 (1994), quoting Logotheti v. Gordon, 414 Mass. 308, 310-311 (1993). Stempel misconstrued the Tort of Another doctrine on which he relied, and the attorney's fees he seeks are not otherwise compensable as he did not state any claim for which attorney's fees would be an element of damages.
Massachusetts follows the American Rule, [Note 4] which prohibits "successful litigants from recovering their attorney's fees and expenses." Preferred Mut. Ins. Co. v. Gamache, 426 Mass. 93, 95 (1997). This principle reflects strong policy considerations, such as ensuring that litigants are not deterred from seeking legitimate redress. The rule encourages the beneficial expansion of the law by enabling litigants to pursue novel (and therefore risky) claims and defenses. The American Rule also creates an incentive for parties to limit their legal fees, which facilitates the consensual resolution of disputes. See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717-718 (1967).
The American Rule has exceptions. Most are familiar. Fees may be awarded where authorized by contract or statute, or where a party has engaged in sanctionable conduct. Courts may award attorney's fees pursuant to their equitable powers where justice so requires. See Sears v. Nahant, 215 Mass. 234, 240 (1913) ("Courts of equity, in certain cases under its [sic] general powers, allow counsel fees."). This power "is one of great delicacy and is to be applied with caution." Hayden v. Hayden, 326 Mass. 587, 596 (1950). "Consequently, 'the list of exceptional circumstances in which we have sanctioned the departure from our traditional approach -- in the absence of a statute or court rule -- is not long.' See Bournewood Hosp., Inc. v. Massachusetts Comm'n Against Discrimination, 371 Mass. 303, 312 (1976), and cases cited." Tocci v. Tocci, 490 Mass. 1, 19 (2022) (holding that the use of surcharge to remedy a fiduciary's breach may not serve as an equitable exception to the American Rule where a closely held corporation sues a fiduciary for breach of loyalty [Note 5]). As matter of law, an award of attorney's fees and costs is an appropriate element of a
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successful civil contempt proceeding. Demoulas v. Demoulas Super Markets, Inc., 424 Mass. 501, 571 (1997). In an action for malicious prosecution, attorney's fees incurred by the plaintiff in defending the earlier prosecution are an element of damages. Wheeler v. Hanson, 161 Mass. 370, 376 (1894). In actions brought to recover indemnity, where the right to indemnity is either implied by law or under a contract, costs, including reasonable counsel fees, which have been incurred in resisting the claim indemnified against, may be recovered. Hartford Accident & Indem. Co. v. Casassa, 301 Mass. 246, 255 (1938); Curtis v. Banker, 136 Mass. 355, 360 (1883). Where a defendant has intentionally interfered with a plaintiff's contractual relations, the plaintiff may, as a result, incur attorney's fees in dealing with third parties, when, for example, as a result of the wrong, the plaintiff is sued by some third party. See Mailhiot v. Liberty Bank & Trust Co., 24 Mass. App. Ct. 525, 531 (1987). Also, when a plaintiff is forced to sue a third party to hold it to the bargain with which a defendant intentionally and wrongfully interfered, attorney's fees in that action may properly be awarded against the tortfeasor. Id. at 532. See also M. F. Roach Co. v. Town of Provincetown, 355 Mass. 731 (1969); Chartrand v. Riley, 354 Mass. 242 (1968); Coady v. Wellfleet Marine Corp., 62 Mass. App. Ct. 237 (2004). [Note 6]
We note that Stempel had a mechanism for an award of his attorney's fees in the Probate Court. [Note 7] But the question before us is a narrow one, and it is not whether he had any method of recovery but whether he stated a legal claim for recovery within the jurisdiction of the District Court in his amended complaint.
Stempel has not cited an applicable exceptional circumstance warranting departure from the traditional approach. His reliance on the Tort of Another doctrine from the Restatement (Second) of Torts § 914 (1979) and O'Brien v. New England Tel. & Tel. Co., 422 Mass. 686 (1996) is misplaced. This third-party-litigation exception to the American Rule allows an award of attorney's fees where a plaintiff is forced to sue a third party to hold it to a bargain with which a defendant intentionally and wrongfully interfered. Mailhiot, supra at 532. Stempel, however, did not sue a third party due to his sister and her attorney's alleged tortious interference with his fiduciary duty. His petition for appointment of a conservator was on behalf of his mother, not on his own behalf. He incurred attorney's fees seeking redress on her behalf. He was therefore entitled to reimbursement for the expense (and attorney's fees) from his mother or from her estate. See note 5, supra.
Judgment of dismissal affirmed.
So ordered.
FOOTNOTES
[Note 1] Andrew A. Caffrey, Jr.
[Note 2] The Honorable Franco J. GoBourne participated in the deliberation of this case but completed his Appellate Division service prior to the issuance of this opinion.
[Note 3] The defendants also moved to dismiss under Mass. R. Civ. P. 12(b)(9) (pendency of a prior action in the Commonwealth) but because we affirm the dismissal under Rule 12(b)(6), we need not reach this issue.
[Note 4] The rule was first announced in Arcambel v. Wiseman, 3 Dall. 306 (1796) and so named to distinguish it from the English rule in effect since 1607 empowering courts to award counsel fees to defendants in all actions where such awards might be made to plaintiffs. See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717-718 (1967).
[Note 5] Surcharge may be used to award attorney's fees to a party who at his own expense and not for his sole benefit successfully sues to benefit an estate or trust as a whole. Tocci, supra at 19, citing Matter of the Trusts under the Will of Crabtree, 449 Mass. 128, 145-146 (2007). Stempel did not, however, bring a surcharge claim. Had he done so, it would likely have been in the exclusive jurisdiction of the Probate Court in any case. See note 7, infra.
[Note 6] These examples are not intended to be an exhaustive list.
[Note 7] Stempel filed a second petition in the Probate Court seeking reimbursement of the fees incurred in petitioning for the appointment of a conservator and he alleged that it became "moot" when his mother died. He then voluntarily dismissed the petition. He did not state reasons for doing so in his complaint or in his brief. General Laws c. 190B, § 5-413 provides that "any attorney whose services resulted in a protective order or in an order that was beneficial to a protected person's estate is entitled to reasonable compensation from the estate." It follows that Stempel would be entitled to reimbursement for having paid those compensable attorney's fees in petitioning for appointment of a conservator, but that reimbursement would be obtainable from his mother (or her estate), not his sister and his sister's attorney, and would only be obtainable under G.L. c. 190B, § 5-413 in the Probate Court. See G.L. c. 190B, § 1-302.