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Award of prevailing party attorneys fees contingent on status as prevailing party

Giant of Maryland, LLC, et al. v. Julia Taylor
--- A.3d---, (Md. Spec. App. 2015)
by Gregory S. Emrick, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.mdcourts.gov/opinions/cosa/2015/1799s13.pdf

On February 27, 2004, Taylor filed suit against her former employer, Giant of Maryland, LLC (“Giant”), on the basis of various discrimination claims. The matter went to trial in January 2007; and, on January 18, 2007, the jury returned a verdict in Taylor’s favor on the gender discrimination and retaliation claims, and awarded her $644,750 in compensatory damages (“Merit Award”). Taylor then sought “prevailing party” attorneys’ fees. Before the “attorneys’ fees” motion was decided, Giant timely filed its appeal to the Merit Award. Taylor was subsequently awarded $544,925 in attorneys’ fees and costs by the trial court, which was entered as a judgment on July 26, 2007 (“Fee Award”). Giant filed a supersedeas appeal bond on August 28, 2007, as required to appeal the Merit Award. Giant did not file an appeal of the Fee Award until 34 days after it was entered as a judgment. Taylor moved to dismiss the Fee Award appeal as untimely.

The Court of Special Appeals heard the Merit Award and Fee Award appeals separately. The Court held that there was insufficient evidence of discrimination as to the Merit Award appeal and reversed the judgment. Giant of MD, LLC v. Taylor, 188 Md. App. 1 (2009). The Court of Special Appeals then denied the motion to dismiss the Fee Award appeal and reversed the Fee Award judgment, as reversal of the Merit Award meant Taylor was no longer the prevailing party. Giant of MD, LLC v. Taylor, Slip Op. No 1356, Sept. Term 2007 (filed Nov. 2, 2009).

Taylor appealed both the Merit Award and Fee Award appeal decisions to the Court of Appeals, which consolidated the matters. The Court of Appeals reversed the Court of Special Appeals holding on the Merit Award appeal, finding there was sufficient evidence of discrimination, and then held that the Court of Special Appeals did not have jurisdiction over the Fee Award appeal as it was untimely filed. Taylor v. Giant of MD, LLC, 423 Md. 628 (2011). In accordance with the Court of Appeals ruling, the Court of Special Appeals dismissed the Fee Award appeal.

In the trial court, Taylor then filed a Motion for Judgment on Giant’s bond on the basis that she was entitled to collect the Fee Award since the Court of Appeals had held that the Court of Special Appeals lacked jurisdiction over the Fee Award. In Taylor’s view, the judgment now final and subject to execution. Giant filed an opposition and the Court held the motion in abeyance pending the conclusion of the Merit Award Appeal that was in the Court of Special Appeals for determination of appellate issues not addressed in the first ruling by the Court of Special Appeals.

On October 8, 2013, the Court of Special Appeals held that certain errors in the admission of evidence required a new trial on the merits on the discrimination claim. Taylor again requested payment of the Fee Award Judgment from the supersedeas bond, which the trial court granted on October 24, 2013, the same day that Giant opposed the request. Giant filed a notice of appeal to the Court of Special Appeals on the bond order and a motion for approval of a new supersedeas bond with the lower court. The lower court held a hearing, in which it denied Giant’s post-bond motions. Thereafter, Giant and Travelers, the bond issuer, filed notices of appeal to the Court of Special Appeals on the court’s bond motion denials.

While the Court of Special Appeals had addressed issues not raised in the first appeal, it still reversed the Merit Award. Meanwhile, Taylor filed a motion for reconsideration of the reversal of the Merit Award appeal, which was denied. Taylor’s subsequent writ of cert to the Court of Appeals was also denied.

In Giant of MD, LLC v. Taylor, --- A.3d--- (2015), Taylor filed a motion to dismiss the appeal from the bond motions as being barred by res judicata by the Court of Appeals holding in the Fee Award appeal, in which the Court stated that “no matter the ultimate outcome of the [Merits Appeal], Taylor’s award of fees and costs cannot be challenged on appeal.” The Court of Special Appeals held that the Fee Award had been dismissed for lack of jurisdiction, and res judicata did not apply.

The Court then addressed Taylor’s entitlement to the Fee Award, despite the reversal of the Merit Award. After noting that the parties normally bear the burden of their own costs, the Court acknowledged the statute shifted the burden of attorneys’ fees to the prevailing party. The Court, however, noted that the reversal of the Merit Award effectively acted as if it had never been entered.

The issue of whether Giant had waived its right to contest the award by failing to timely file the first appeal on the Fee Award was more difficult, as there was no Maryland case law on a collateral order awarding prevailing party attorneys’ fees that was reduced to judgment and was not challenged on appeal when the underlying judgment was appealed and reversed. The Court noted that the two (2) Federal Courts that had addressed the issue had both held that the reversal of the merit award nullified the fee award, even if it was not appealed. The Court, persuaded by the Federal decisions, agreed that the Fee Award had been nullified by the reversal of the Merit Award. The Court further held that the Circuit Court had not erred when it did not hold a hearing on Giant’s motion to alter the abeyance order, because neither party had requested a hearing.