Kresock v. Gordon (CA1 3/17/16)

This is another case (like Hoag) interpreting the supersedeas-bond statute. The court holds that “attorneys’ fees imposed as sanctions . . . are not ‘damages awarded’ for purposes of calculating “ the bond.

The trial court dismissed the plaintiffs’ case and as sanctions awarded against them the defendants’ attorneys’ fees. The plaintiffs appealed. Under the statute the amount of the supersedeas bond is normally the ‘total amount of damages awarded excluding punitive damages.” Since there were no damages the plaintiffs took the position that there need be no bond. The trial court disagreed and refused to stay the judgment; the plaintiffs took special action (after filing a motion to stay directly with the Court of Appeals, which denied it and basically told them to take special action instead).

The Court of Appeals accepts jurisdiction and, in a way,  grants relief. Various cases have held that attorneys fees are not “damages.” Jantzen did so in the context of a supersedeas bond. The plaintiffs tried to distinguish it because in that case fees were awarded under 341.01 (contract case) rather than as a sanction. But as in Jantzen the fees were not part of the substantive claim; they were not “a legal consequence of an original wrongful act.” And the court says that the statute’s exclusion of punitive damages includes amounts awarded as punishment. Finally, 12-349, under which these sanctions were awarded, distinguishes between fees and the doubled fees that it allows to be awarded and calls “double damages.” But here the court has over-analyzed things; if the trial court had doubled the fees would that have made them “damages” for fixing the bond?

The court does not stay the judgment nor instruct the trial court to do so. The court “grants relief by ordering that the award of attorneys’ fees as sanctions” are not “damages” for purposes of a supersedas bond. But that’s a conclusion of law, not an order. Our appellate courts like to take a hands-off attitude toward supersedeas bonds nowadays; the failure to remand with instructions, though, turns this into a sort of advisory opinion that they aren’t really supposed to be in the business of.

We have to suggest again that the legislature take another look at the statute. (For some reason we’re not sure that our last suggestion sent them all running to the books with their red pencils.) Having been written to address a particular problem (that of capping bonds when verdicts are huge) it seems to have in mind only very traditional, damages-only judgments. But those are not the only type that exist and they are, as we have also suggested before (with equal impact on public consciousness), a vanishing species.

(Opinion: Kresock v. Gordon)