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Frivolous Litigation in Pennsylvania: Recovery of Counsel Fees


In Pennsylvania, a successful party is not entitled to be reimbursed for its counsel fees by the losing party unless the right to such an award of fees is expressly provided by statute or an agreement of the parties. This rule is generally known as the American Rule to distinguish it from the English practice which provides for recovery of such fees.

The American Rule is based on the assumption that the party bringing the action has acted in good faith and upon a sufficient investigation which has led to a reasoned position. However, when a party initiates an action randomly and without investigation, and as a consequence joins the wrong party to an action, this general rule works an injustice. For example, when an injured construction worker sues an architect asserting that he was responsible for construction site safety, the architect unjustly bears the cost of proving that he owed no such obligation, which proof could have been provided to the party joining him through a pre-litigation investigation.

To address such cases, exceptions to the American Rule have developed. In Pennsylvania, these exceptions have been codified in its statutes and developed in case law. Of particular importance are the codified exceptions, one of which provides that a party "shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter" if the court has awarded fees "because the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith." 42 Pa C.S.A. §2503 (9).1

Thus, if a successful party in litigation can prove that the party initiating the action acted arbitrarily, vexatiously or in bad faith, he can file a petition seeking reimbursement of his attorney's fees.

However, until recently, the courts have narrowly interpreted this language making it difficult to recover attorney's fees. Although the courts have recognized that the purpose of this "attorney's fees statute" is to curb frivolous litigation, they have been concerned that an overly expansive interpretation of the statute could result in punishing all who initiate actions which are not ultimately successful and produce a "chilling effect" on the right to bring suit. Specifically, the courts have narrowly defined "arbitrary" conduct as conduct based on random or convenient selection or choice. A "vexatious" suit has been defined as one instituted without sufficient grounds, serving only to cause annoyance. "Bad faith" has been interpreted to mean only fraud, dishonesty, or corruption. However, Pennsylvania's highest court has just issued its decision in Thunberg vs. Gazey, ___ Pa. ___, 1996 Pa. LEXIS 1822 (Sept. 17, 1996), which expands the definitions of some of these terms which should make it easier for a prevailing party to recover its counsel fees.

The Facts

On June 28, 1988, Janice Thunberg was traveling in the left lane of the west bound lanes of a four lane divided highway. Howard Strause was also traveling west, but in the right lane. As Thunberg's vehicle approached Strause's vehicle, Strause allegedly crossed the centerline into Thunberg's travel lane. Thunberg swerved to the left and lost control of her vehicle skidding across the medial strip separating the west and east bound lanes. She entered the east bound lanes and struck a vehicle driven by John Gazey, killing him and injuring herself.

Two years after the accident, Thunberg initiated an action against Gazey's estate alleging that Gazey failed to exercise due care in operating his car as he failed to maneuver his car to avoid hitting Thunberg's out-of-control vehicle. Plaintiff's theory was that Gazey had been using his car phone at the time and as a result he did not see her vehicle and avoid the collision. In response, Gazey's counsel served Thunberg with Requests for Admis-sions asking her to admit that Gazey was not using his car phone at the time of the accident, that Gazey could not avoid the accident, and that Gazey was not liable for her injuries. Thunberg failed to respond to these requests and so they were deemed admitted. Gazey's counsel then moved for summary judgement and that motion was granted. Gazey's counsel then filed a petition for attorney's fees under Section 2503(9). At a hearing of the petition, Thunberg's counsel testified that, prior to filing the action against Gazey's estate, he did not interview any of the witnesses identified in the police accident report, made no attempt to determine if Gazey had an opportunity to see and avoid the accident, and did not confirm whether or not Gazey was using his carphone immediately before the accident.

Based upon this testimony and the admitted requests, the lower court granted the petition finding that Thunberg's action against Gazey was brought in bad faith. The Superior Court reversed on appeal finding that there was no evidence to establish Thunberg's bad faith. Gazey's estate appealed to the Pennsylvania Court.

The Decision

In a decision that drew a strong dissent from one of the Justices, the Pennsylvania Supreme Court found that Thunberg's action had been initiated "arbitrarily" and that Gazey's estate was entitled to recovery of attorney's fees from Strause.

In reaching its decision, the court reviewed the language and purpose of section 2503(9), particularly focusing upon the words "arbitrary," "vexatious" and "bad faith." However, the court departed from the narrow definitions for "arbitrary," vexatious" and "bad faith" which had been developed by preceding courts and expanded the concepts embodied by them by focusing upon plaintiff's counsel's failure to investigate the circumstances leading to the accident. The court emphasized that plaintiff's counsel did not interview any of the witnesses, made no attempt to ascertain whether or not defendant had the opportunity to avoid Thunberg's vehicle, and did not confirm that Gazey was using his car phone as claimed. Since no such pre-filing investigation had been conducted, plaintiff had insufficient support in either law or in fact for her theory of negligent avoidance of the accident. The court next took the important step of determining that the concept embodied by the word "arbitrary" required a party "to conduct at a minimum a reasonable preliminary investigation to insure there are sufficient facts which, if believed, would warrant the filing of a specific claim against a particular party."

In so holding, the Court recognized that the lower court based its decision on its finding that Thunberg acted in bad faith. However, the Court found this difference to be irrelevant since either arbitrary or bad faith conduct could support the award of counsel fees. Yet, the Court did note that bad faith could be found where a party "did not possess sufficient facts at the time of her filing of the Complaint which a reasonable person would believe demonstrated" the requirements of her claim.


Before Thunberg, to prove that a party acted in an "arbitrary" manner in initiating his suit you had to prove that he acted without any reason (i.e., randomly). Now it would appear that you do not need to prove that the party acted without any reason; rather, you need only prove that the party acted without a reasonable preliminary investigation and thus without a sufficient reason. Additionally, before Thunberg, to prove a party acted in bad faith you had to prove fraud, dishonesty, or corruption. Now it appears that you merely have to prove that the party did not possess sufficient facts to support his claim.

Thus, the Court has made the Attorney's Statute a handier weapon for battling frivolous claims and we look forward to using it as such in future cases.

1This article does not discuss the Dragonetti Act, 42 Pa. C.S.A. §§8351, et seq., which creates a statutorily based cause of action for Wrongful Use of Civil Proceedings (which action must be brought as a separate proceeding after the underlying case has been dismissed). It also does not review the cause of action known as Abuse of Process, which is a separate cause of action to recover attorney's fees incurred in responding to vexatious conduct during the underlying litigation (as opposed to the vexatious act of initiating the litigation). Finally, the limits of this article prevent a discussion of the Federal Rules of Civil Procedure, such as Rule 11, which permit a federal judge to assess attorney's fees as a sanction against a party or its counsel for certain conduct.

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