The Kentucky Supreme Court recently limited the authority of Kentucky trial courts to make awards of attorney’s fees for equitable reasons or to impose attorney’s fees as a sanction. The Court, noting that attorney’s fees are not recoverable litigation costs under CR 54.04 unless they are provided for under a contract between the parties or by Kentucky statute, held that a trial court has discretion to make an equitable award of attorney’s fees or impose them as a sanction “only…when the very integrity of the court is in issue.” Bell v. Com., Cabinet for Health & Family Svcs., Dept. for Cmty. Based Svcs., 423 S.W.3d 742 (Ky. 2014) (emphasis omitted).
The Court in Bell listed several examples of situations in which the trial court’s integrity is implicated by an improper action of an attorney or a party: (1) a Rule 11 violation; (2) disregard of a court order justifying an award of fees under CR 37.02; and (3) a contempt proceeding. Only in those or similar circumstances does a trial court have discretion to impose fees as a matter of equity or as a sanction. The Court stated that the very limited prior Kentucky authority to the contrary was “misguided,” and reaffirmed Kentucky’s general adherence to the prevailing “American rule” under which fees are generally not to be awarded absent a right to recover them pursuant to statute or contract.
Note: The foregoing post includes commentary reprinted from the forthcoming 2015 supplement to 7 Philipps & Kramer, Rules of Civil Procedure Annotated, 6th ed. (Kentucky Practice Series), by David V. Kramer, with permission of the author and publisher. Copyright (c) 2014 Thomson Reuters. For more information about this publication click here.
David Kramer is a Partner in the law firm of Dressman Benzinger LaVelle, with offices in Cincinnati, Ohio, Crestview Hills, Kentucky, and Louisville, Kentucky.
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