CALIFORNIA ATTORNEY'S FEES

In The News . . . . Texas Contingency Plaintiffs’ Attorneys Garner Close To $22 Million Fee Award After Plaintiffs Unsuccessfully Challenge Contingency Arrangement

 

Plaintiffs’ Contingency Arrangement Was Valid and They Breached It.

     Here is an interesting one from a January 30, 2012 post in the Texas Lawyer.

     Thee Dallas firms -- Lisal Blue of Baron and Blue; Charla G. Aldous of the Aldous Law Firm; and Stephen F. Malouf of the Law Offices of Stephen F. Malouf (also designated as “BAM”) -- represented Albert G. Hill III, Erin Nance Hill and their minor children (“Hill III”) in a 2010 settlement pursuant to a contingent fee arrangement by which BAM was entitled to over $33.7 million. After unsuccessfully challenging the contingency fee agreement, Hill III were determined to have breached the fee agreement, but U.S. District Judge Reed O’Connor did reduce BAM’s fee recovery to a little under $22 million after sustaining some of Hill III’s objections regarding the contingent fee.

     Pretty nice recovery in the state boasting that everything is bigger in it, or “Texas-sized.” (“Even spiders know everything is bigger in Texas.”)

Caption:  “Cattleman with his grandson at auction of beef steers and breeding stock at the San Angelo Fat Stock Show. San Angelo, Texas. The Stetson hat, leather coat and boots are standard everyday wear of ranchmen. There is an old saying in Texas that a man never buys but two Stetsons, one when he gets married and the other when his oldest son gets married.”  March 1940.  Lee Russell, photographer.  Library of Congress.

Appealability/SLAPP/Substantiation Of Fees: First District Entertains Challenge Of SLAPP Fee Award Even Though Fee Award Not Specifically Appealed

 

Informative Discussion of SLAPP Fee Appealability Cases and Block Billing Implications.

     Though unpublished, the appellate decision in LegacyQuest v. Rosen, Case No. A129177 (1st Dist., Div. 1 Jan. 27, 2012) (unpublished) has a great discussion of SLAPP fee order appealability issues as well as trial court discretion relating to block billing time submissions by fee claimants.

     Defendant won a SLAPP motion on plaintiff’s libel claim and was then awarded $23,449 in attorney’s fees under the SLAPP mandatory fee-shifting statute. Plaintiff appealed the SLAPP grant, but did not specifically appeal the second subsequent fee order.

     That meant that the appellate court first had to determine if it had jurisdiction to entertain the merits of the fee challenge, with two issues having to be resolved in the process.

Costs/Substantiation Of Fees/Trespass: Fifth District Decision, With Its Reversal Requiring New Fee Reconsideration On Remand, Offers Some Clues . . .

 

. . . On Adequate Fee Substantiation, Cost Recovery Under Civil Code Section 3334(a), And Deadlines For Submitting Amended Fee Request Information

     This next case is a wild thing,

a second appeal involving litigants entangled in a subsurface trespass case where plaintiff was seeking to recover for defendant’s environmental contamination of its groundwater. In the earlier appeal, Starrh and Starrh Cotton Growers v. Aera Energy LLC, 153 Cal.App.4th 583, 606-608 (2007), the Fifth District concluded that a fee-shifting trespass statute applicable to “under cultivation” land (Code of Civil Procedure section 1021.9) would allow for fee recovery even if the trespass was subsurface in nature. Well, this case resulted in another jury verdict and claims of error, giving us more fodder to blog about. The case is Starrh and Starrh Cotton Growers v. Aera Energy LLC, Case Nos. F058778/F059660 (5th Dist. Jan. 25, 2012) (unpublished), authored by Acting Presiding Justice Wiseman on behalf of a 3-0 panel.

Deadlines: Amended Costs Memorandum Filed Pursuant To Court Order Was Timely

Situation Normal . . .

     Kempton v. Cooper, Case No. B229912 (2d Dist., Div. 3 Jan. 25, 2012) (unpublished) was a situation where the appellate court affirmed a trial court’s award of fees on appeal of $53,440 and costs on appeal of $1,410. There was a snafu on the costs to be awarded, necessitating another battle, which was won by the cost claimant (albeit for a lower amount). The losing side did not prevail on its argument that the filing of the amended costs memo, in line with trial court directives, violated the initial costs memo filing deadlines.

Costs/Prevailing Party: Defendant Obtaining Dismissal After TRO Grant/Preliminary Injunction Denial Was Prevailing Party For Costs Award

 

Plaintiffs’ Dismissal Cemented Costs Entitlement.

     Although coming about in convoluted fashion, defendant was awarded certain costs in an adjacent neighbor tree dispute where plaintiffs won a temporary restraining order but defendant voluntarily made some construction changes so that a preliminary injunction was ultimately denied. Plaintiffs then dismissed their action without prejudice. The trial court awarded certain costs to defendant, sparking plaintiffs’ appeal in Tavangarian v. Florman, Case No. B227269 (2d Dist., Div. 3 Jan. 25, 2012) (unpublished).

     The costs award was affirmed.

     Although arguing that defendant was not the prevailing party, plaintiff’s argument was rejected because the dismissal established the defense’s status as the winner in spite of the earlier TRO win. (Code Civ. Proc., § 1032(a)(4); Adler v. Vaicius, 21 Cal.App.4th 1770, 1777 (1993).) Plaintiffs did not prevail by just winning the TRO, because this win was interlocutory in nature--trumped by the later preliminary injunction denial and subsequent dismissal. Defendant was expressly entitled to copying costs for exhibits, even though copying costs for other documents is not allowable. (El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4th 612, 618 (2007).)

Private Attorney General/Reasonableness Of Fees: Attorneys Representing Public Interests Entitled To Same Compensation As Private Practicing Attorneys In Community

 

$313,000 Fee Award Affirmed on Appeal.

     Nonprofit interests won a mandate proceeding requiring the City of Redondo Beach to put a local coastal progress amendment to a public vote. Plaintiffs then requested an attorney’s fees award of $354,978.12 under California’s private attorney general statute (CCP § 1021.5), which included a .25 multiplier. City opposed, arguing that the total fees should not exceed $128,729.33. The trial court awarded fees of $313,000, discounting plaintiffs’ pre-court litigation expenses.

     City did not get any further reduction of the fee award on appeal in Building a Better Redondo v. City of Redondo Beach, Case No. B226499 (2d Dist., Div. 8 Jan. 25, 2012) (unpublished).

     After all, the substantiation of the fees was good--attorney declarations and national law journal billing surveys showing that $500-550 partner rates, $200-250 associate rates, and $125 paralegal rates were justified. However, the main premise rejected was that public interest attorneys should be compensated at a lower rate than that for private practitioners in the same community--no way under governing precedent. (Serrano v. Unruh, 32 Cal.3d 621, 642 (1982).)

     BLOG UNDERVIEW--We reported on this Measure G dispute in our November 9, 2010 post when the fee award originally came down. The City decided to appeal way back then. So, here is the result!

Allocation/Interpretation Of Fees Clause: CC&R Nuisance Provision Allowed For Recoupment Of Over $600,000 In Attorney’s Fees And Costs

 

Allocation Not Necessary Where Same Facts And Evidence Involved On All Claims.

     In Klein v. Nyamathi, Case No. B228157 (2d Dist., Div. 6 Jan. 25, 2012) (unpublished), defendants were found liable to the tune of just under $400,000 for flooding their plaintiff neighbors’ property under nuisance and breach of contract theories. The trial court also awarded plaintiffs attorney’s fees of $552,655.75 and costs of $63,595.83. Defendants appealed.

     They did not get any aid. Paragraph 11 of the governing CC&Rs did have an anti-nuisance clause allowing for fee entitlement. No allocation of fees was necessary between compensable and noncompensable claims because the same facts and evidence were interrelated to all theories of recovery.

Civil Rights/Reasonableness Of Fees: $717,828.50 Fee Request For $6,500 FEHA Recovery Properly Denied

 

“Inflated” Fee Request Justified Outright Denial By Trial Court.

     Plaintiff won $6,359.10 on a FEHA claim, plus $168 for missed lunch breaks. Then, this litigant sought to recover fees of $717,828.50 under FEHA for “prevailing” in the trial court.

     Get outta here, said the appellate court more eloquently than we in Romero v. Leon Max, Inc., Case Nos. B226820/B230313 (2d Dist., Div. 1 Jan. 25, 2012) (unpublished).

     Relying upon Chavez v. City of Los Angeles, 47 Cal.4th 970 (2010) [one of our Leading Cases], Presiding Justice Mallano on behalf of a 3-0 panel affirmed the fee denial. “Inflated” requests alone can allow for such a denial (in this case, a 110 times request on the small judgment amount), which was bolstered by other facts--among others, plaintiff turned down a reasonable pre-trial settlement offer of $75,000.

Employment: Employee Winning Contractual Severance/Bonus/Vacation Pay Awards Entitled To Attorney's Fees Under Labor Code Section 218.5

 

Breach of Contract Actions Within Section 218.5's Ambit.

      Former employee won contractual awards for severance pay, bonus pay, and vacation pay penalties from ex-employer (totaling about $172,523), enhanced by a further attorney's fees award of $101,100 under Labor Code section 218.5 (a mandatory fee-shifting statute allowing fees to the prevailing party in "any action brought for the nonpayment of wages or fringe benefits"). Employer was not happy and appealed in Milian v. Jet Source, Inc., Case No. D057448 (4^th Dist., Div. 1 Jan. 24, 2012) (unpublished).

     Employer was no happier after its unsuccessful appeal.

     The fee entitlement statute was clear, with no law indicating that it was inapplicable to a breach of contract action. The Legislature did not exclude contract breaches from the ambit of the statutory language, so they were included (especially given that the provision did except out certain matters from fee entitlement in the same section). Employer also argued that the complaint needed to specifically cite the statute in its fee allegations/prayer, but the appellate court found no such requirement in section 218.5 itself. The general prayer allegation for "reasonable attorneys' fees as provided by statute" sufficed to put employer on notice of potential attorney's fees exposure.

SLAPP: Trial Court Correctly Refused to Award Fees Against Unsuccessful SLAPP Defendants

 

Defense Motion Was Not Frivolous In Nature.

     Though successful defendants are entitled to reasonable attorney’s fees for winning a SLAPP motion, they are not exposed to fees unless their motion is found to be frivolous in nature. That frivolousness test was not met in Mandurrago v. City of Carmel-By-The-Sea, Case No. H036488 (6th Dist. Jan. 23, 2012) (unpublished).

     There, the appellate court reversed a trial court’s SLAPP grant, which resulted in a subsequent vacating of the grant and denial of the SLAPP fee. Plaintiff, apparently sensing blood in the water, moved to recover fees from the defense, a request denied by the trial court and prompting plaintiff’s appeal of the fee denial. 

     Fee denial affirmed. The defense motion, although unsuccessful, was not frivolous in nature. Plaintiff’s claims were not easy to categorize, and the appellate court had to engage in an earlier nuanced analysis in the prior appeal to distinguish the defense legal authorities. The frivolousness standard simply was not met in this one.

In The News/Retainer Agreements: ABA Journal Summarizes Results of Recent American Lawyer Report On Alternative Fee Arrangements

 

They Are Catching On, Along With Client Requests for Discounts.

     Co-contributor Mike, who is a member of the American Bar Association, found an interesting article by Debra Cassens Weiss dated January 17, 2012 in the ABA Journal Weekly Newsletter, where she summarized a recent American Lawyer report on alternative fee arrangements this way:

     “ . . . [in an] American Lawyer survey of leaders at large law firms[, . . . ] more than 81 percent said more clients are seeking discounts, and about 55 percent said clients are asking for deeper discounts. Of the law firms that used alternative or value-based fees in 2011, 92 percent had used flat fees, 88 percent had used blended rates, 83 percent used incentive or success fees, and 82 percent used collars or caps. ([. . .] a collar is an arrangement where there is an agreed-upon flat fee, and a discount when the bill exceeds the flat fee by a certain percentage.)”

Undertaking: California Supreme Court Rules That Borrowing Interest Expense For Appellate Bonding Letter Of Credit Is Not Recoverable As Costs Under CRC 8.278(d)(1)(F)

 

Disapproves Contrary Reasoning in Cooper v. Westbrook Torrey Hills.

     In our August 28, 2011 post, we mentioned that the California Supreme Court was considering a case on recoverability of consequential interest expense by an appellate litigant who prevailed after posting a letter of credit but sought to recover the interest expense incurred by borrowing money to obtain the LOC securing an appellate bond. In a closely analogous case, an appellate court in Cooper v. Westbrook Torrey Hills, 81 Cal.App.4th 1294 (2000) held that interest expenses were recoverable costs on appeal where the appellant borrowed funds to deposit as an undertaking in order to stay foreclosure pending appeal.

     Above:  Undertaking.  Chicago.  Edwin Rosskam, photographer.  1941.  Library of Congress.

     The California Supreme Court disapproved Cooper and ruled against the recovery of interest expenses as costs in Rossa v. D.L. Falk Construction, Inc., Case No. S183523 (Cal. Supreme Court Jan. 23, 2012). The main basis for determining interest expenses were not recoverable costs was grounded upon the historical premise that California routine costs statutes/rules of court are strictly construed with respect to costs recoverability. Secondarily, the smaller premium for a bond or LOC generally was much, much smaller than the fluctuating exponentially larger expense associated with obtaining a loan to post an LOC for the undertaking, with the Judicial Council needing to express in much clearer fashion that CRC 8.278(d)(1)(F) encompassed these more expensive items.

      In doing so, our state high court did not opine on whether rules relating to bonds were applicable to cash deposits in lieu of bonds in the routine costs context.

Section 998: Losing Litigant Did Not Waive “Puerta Right” Challenge To 998 Award Invalidity For Absence Of Acceptance Line By Not Challenging In The Trial Court

 

Reversal of Costs Based On Invalid Offer Occurred, While Another Cost Award Sustained Because 998 Offer Made In Good Faith/Reasonable in Nature.

     Our local Santa Ana appellate court decided Puerta v. Torres, 195 Cal.App.4th 1267, 1273 (2011), which invalidated a CCP § 998 offer because it did not include the acceptance provision required by the 2005 amendment to section 998. The next case explored whether this “Puerta right” was waived because it was not advanced as a trial court argument in opposition to the costs award based on a successful 998 offer by the defense.

     Justice Yegan, author for a 3-0 panel, in Azizad v. Feinfield, Case No. B231568 (2d Dist., Div. 6 Jan. 19, 2012) (unpublished), decided that a plaintiff losing a 998 offer rejection could still raise a Puerta right challenge even though it was not raised in the trial court. Aside from its discretion to consider a pure question of law not raised below, the appellate court found that it would be unfair to penalize plaintiff for not raising an argument clarified in Puerta way after the 998 offer was made and after the trial court ruled in favor of costs entitlement. This reversal saved plaintiff from having to reimburse one prevailing defendant for $47,425 in expert witness fees.

     However, there was another defendant who did serve a separate compliant 998 offer who was awarded $16,512.50 in expert witness fees after plaintiff rejected the offer and then lost at trial. Plaintiff did not win her argument that the offer was unreasonable and made in bad faith. She had the benefit of a summary judgment expert declaration casting doubt on her case (even though the SJM was later withdrawn) such that there was information from which an informed decision could be made. (Najera v. Huerta, 191 Cal.App.4th 872, 877 (2011).) The trial court’s determination about the reasonableness of the expert fees was no abuse of discretion, and no line item individualized scrutiny was necessary. So, in the end, she was liable for the lower expert fee cost award in the case where her medical malpractice case was lost to two defendant doctors.

Family Law: Family Judge’s Award Of Additional Pendente Lite Fees Of $850,000 Within 15 Days To Wife Was No Abuse Of Discretion

 

“Big” Picture Was Considered By Family Judge, Especially Where Husband Had Substantial Assets And Outspent Wife By Almost Double In Dissolution Fees.

     As we predicted in our post of March 21, 2009, family law practitioners would use “big” picture language from Alan S. v. Superior Court, 172 Cal.App.4th 238 (2009) in arguing that the playing field was unfairly tilted in “needs” based fee awards under Family Code sections 2032/4320. Our prediction has come true in numerous cases, with the next case being the most recent one in the queue.

     Husband, despite having substantial assets and spending almost double in fees what wife spent in the dissolution proceeding, argued on appeal in Marriage of Hagaman, Case No. B228238 (2d Dist., Div. 7 Jan. 18, 2012) (unpublished) that the $850,000 pendente lite fee award to wife ignored the “big picture” and tried to level the playing field too much.

     Didn’t work. She had a lot less assets, a lot less cash flow, and had spent much less on attorney’s fees, albeit had spent a lot. (You can’t believe it, but here are the facts from the unpublished opinion: in April 2010, wife spent $611,820 and husband spent $1,004,766; and, in August 2010, wife spent $807,591 and husband spent $1,443,208. Wow!) Nothing demonstrated a myopic approach by the lower court, especially since it reserved wife’s request for an additional $576,400 for trial. Ouch -- more fees to come, potentially.

     BLOG TIDBIT: According to an Internet article in 2002, Earl Hagaman was the owner of Scenic Circle Hotels, a large New Zealand hotel chain. The article estimated his personal worth at $75 million.

Kiwi.  Apteryx Australis.  1835.  Elizabeth Gould, illustrator.

Fees Clause Interpretation: Fees Clause In Corporate By-Laws Did Not Allow For Fee Recovery Where Litigant Not Sued In His Official Corporate Capacity

 

$78,250 Fee Award In Favor Of Individual Litigant Gets Reversed.

     For litigators of all ages, we have come to appreciate that the “hat” worn by a litigant frequently may play a determinative role in the course of a lawsuit. This next case we discuss exemplifies this very well.

     One individual defendant won a $78,250 fee award against a Trust in The Alberta Hale Land Trust, Inc. v. Bonneau, Case No. C061945 (3d Dist. Jan. 18, 2012) (unpublished) after a long and complicated prescriptive easements/constructive trusts litigation. The trial court based the award by a fees clause in corporate by-laws, premised on the assumption individual defendant was sued in an official corporate capacity.

     Wrong “hat” caused a reversal of the fee award. He was never sued in this capacity as an agent of the corporation. So, the award went bye bye.

Just a bye-bye kiss. Circa 1906.  Library of Congress.

Fees Clause Interpretation/Section 1717: Narrow Purchase Agreement Fees Clause Did Not Allow Recovery For Litigant Prevailing On Tort Claims

 

Dismissal of Recission Count Preclude Fee Recovery.

     The message from the next case is be careful of what claims you dismiss during the progress of a case on behalf of a client plaintiff. If you have a narrowly worded fees clause, dismissal of a contractually based claim (such as rescission) may end any fee entitlement even though there was success on noncovered tort claims.

     Plaintiff in Taheri v. Khadari, Case No. B222132 et al. (2d Dist., Div. 7 Jan. 17, 2012) (unpublished) must have been feeling pretty good after obtaining a jury verdict on certain tort claims for over $8 million. However, plaintiff had dismissed a rescission claim during the litigation. That was fatal in his later request for attorney’s fees, with the lower court denying the request in toto. So, he did not feel very good for not garnering fees, provoking an appeal.

     The appellate court affirmed the fee request denial, finding that the Purchase Agreement fees clause was narrowly worded and would not allow recovery of fees for successful tort claims. The earlier dismissal of the rescission claim was “over and out” as far as fee entitlement under Civil Code section 1717. (Gil v. Mansano, 121 Cal.App.4th 739, 744 (2004).)

MLK Day

In Honor of Dr. Martin Luther King, Jr.

 

 

Dr. Martin Luther King, Jr. January 15, 1929 – April 4, 1968.

Civil Rights/In The News . . . . Civil Rights Plaintiff Winning $500 Entitled To Fee Award Of $80,000

 

U.S. Magistrate Judge’s Recommendations Has Some Nice “Fees on Fees” Hints.

     In a January 13, 2012 post of the Courthouse News Service, we are informed that U.S. District Judge Jack Weinstein accepted U.S. Magistrate Judge Roanne L. Mann’s recommendation that a civil rights plaintiff should be awarded $80,000 in attorney’s fees for prevailing in the interesting civil rights case of Brown v. Starrett City Associates, Case No. 09-CV-3282 (JBW) (E.D.N.Y.).

     Civil rights plaintiff, a Brooklyn woman, was handcuffed by a policeperson after she adjusted the shoulder strap of a young woman who was earlier handcuffed in an altercation occurring outside plaintiff’s abode. Plaintiff allegedly told officers that she had existing wrist problems, but was cuffed very tightly and only had the pressure alleviated after her wrist became swollen from the cuffing. She filed a civil rights lawsuit against the police, with a jury awarding her $500 for excessive force.

     Recently, District Judge Weinstein accepted the magistrate judge’s recommendation that plaintiff be awarded $80,000 in attorney’s fees under the pro-plaintiff fee-shifting provision codified at 42 U.S.C. § 1988. See Judge Weinstein’s January 6, 2012 Order.  Plaintiff was found to have prevailed, with even the modest damages awarded supporting an affirmative fee order under the civil rights statutes. The magistrate judge rejected that plaintiff was limited to the 33 1/3% contingency fee bargain when it came to awarding reasonable fees under section 1988.

     The biggest reduction was registered in the “fees on fees” area--plaintiff’s counsel’s request for fees in preparing the fee motion itself. Counsel claimed 29 hours for this work, but the magistrate judge reduced it by 7 hours--observing, in the process, that the norm for fee application work in the E.D.N.Y. is 5-15 hours, citing Murray ex rel. Murray v. Mills, 354 F.Supp.2d 231, 241 (E.D.N.Y. 2005) as support for this generalized work effort with respect to “fees on fees.”

     For a copy of the magistrate judge’s recommendation (Doc. 89, filed on 10/27/11), see Courthouse News Service’s January 13, 2012 post for a link to the recommendation.

        BLAWG BONUS:  “Jack Bertrand Weinstein (born August 10, 1921) is a United States federal judge in the Eastern District of New York. Judge Weinstein was appointed in 1967 by President Lyndon Johnson. From 1980 to 1988, he served as chief judge of the district. On March 1, 1993, he took senior status; however, unlike some senior judges, he has maintained a full docket. He is the author of a leading treatise on evidence and numerous articles and books, and is widely regarded as one of the most respected and influential living judges in America.”  Source:  Wikipedia.

Employment/POOF!: Appellate Court’s Reversal Of Two Labor Claims With Fee Recovery And One Independent Sales Act Claim With Fee Recovery Means That Plaintiff’s $889,000 Fee Award Goes POOF!

Reversal of Fortune on Appeal to Plaintiff Winning Substantial Jury Verdict and Substantial Attorney’s Fees Below.

     Acting Presiding Justice Bedsworth, as author for a 3-0 panel in Gardner v. Baby Trend, Inc., Case No. G043451 (4th Dist., Div. 3 Jan. 13, 2012) (unpublished), shows how reversal on the merits--even of a large substantial jury verdict based on what the jury actually found or on legal statute of limitations issues--can have a deadly effect on the fees award. In this one, a $889,000 fee award went POOF!

     Harold Edgerton, photographer.  1933.

     Plaintiff won a combined $8.1 million from a jury based on various claims arising from his termination of a relationship with defendant (i.e., wrongful termination, wage/hour violations, Independent Sales Act violations, etc.). Defendant was successful in getting about $64,000 in costs taxed. When it came to attorney’s fees, there were two major fee entitlement anchors: (1) Labor Code sections awarding fees to a prevailing plaintiff in an action to recover unlawful deduction of expenses from commissions and awarding fees for an employer’s wrongful refusal to reimburse an employee for business-related expenses; and (2) a fee-shifting provision for violation of the Independent Sales Act (Civ. Code, § 1738.16). Plaintiff requested $1,873,932.50 in fees (a 2-times multiplier applied to the $936,966.25 lodestar). The lower court awarded plaintiff 95% of the lodestar request, or $889,000 total fees. Then, the trial court mooted its $64,000 tax cost order by determining that these should be allowed as additional costs to plaintiff under Labor Code section 2802, which allows costs to be awarded as indemnification expenses to an employee who was following employer directives.

     Defendant separately appealed the merits judgment and cost/fee awards.

     Aside from doing well on the merits, defendant hit a “grand slam” on the challenges to the cost/fee awards. The Labor Code provisions did not allow for entitlement because the jury made determinations that plaintiff was not an employee. The Independent Sales Act basis was inapt because it was barred by the applicable statute of limitations. Labor Code section 2802 was unavailing for the $64,000 in costs because it does not apply to direct actions between employers and employees (Freund v. Nycomed Amersham, 347 F.3d 732 (9th Cir. 2003)) and it was also doomed by the jury’s rejection of an employee status for plaintiff. POOF!

Costs/Reasonableness Of Fees: Fee Award To Prevailing Party Of $80,000 Sustained Even Though Request Was $560,236.47

 

Deposition Costs Disallowed Where No Detail Provided.

     The next case from our local Santa Ana appellate court teaches two lessons: (1) prevailing parties filing costs memoranda need to utilize the entire Judicial Council forms, including the worksheets which have more detail that just the initial summary page; and (2) Civil Code section 1717 fee awards have to be reasonable in nature, with unnecessary work or small outcomes justifying reductions (sometimes very severe) depending on the circumstances of the case.

     In Andersen v. Pacific Asian Enterprises, Inc., Case No. G043957 et al. (4th Dist., Div. 3 Jan. 13, 2012) (unpublished), plaintiff did prevail on a contract warranty/fraud lawsuit against defendant involving a cruising yacht. Plaintiff was awarded $25,770 for breach of contract/warranty and $18,000 for loss of use on the fraud claim (with plaintiff requesting $218,000 for loss of use), or a total judgment of $43,770. The trial court taxed $45,503.75 out of a requested $49,503.76 in deposition costs, and subsequently awarded $80,000 in contractual attorney’s fees (based on a fees clause in the purchase agreement) out of a requested $560,236.47. (That’s right, there is no typo here.)

     Defendant’s appeal of the merits, cost award, and fee award did not prevail.

With respect to the deposition costs reduction, plaintiff only attached the initial Judicial Council summary with an omnibus line item total, failing to utilize the worksheet (which asks for more detail, such as the deponent, date and other items) or failing to attach deposition invoices to the costs memo. That was fatal on appeal, given there was no explanation of how the costs were incurred. It was plaintiff’s burden to establish necessity and reasonableness of the costs, and that was not effectively done here.

     The lower court awarded lowered fees based upon the request being “wildly out of proportion to the recovery” and plaintiff not providing a methodology to award higher fees given the outcome far below what was demanded during the case. The appellate court sustained this result, bolstered by the trial court’s conclusion that the case was a fairly routine breach of warranty case (not highly complex). (Cf. EnPalm, LLC v. Teitler, 162 Cal.App.4th 770, 774-775 (2008) [reviewed in our May 12, 2008 post].)

     Justice Fybel was the author of Andersen on behalf of a 3-0 panel.