Fourth District, Division One Answers “Yes” in Dowling v. Zimmerman.
A couple of days ago, Susan Medwied, a good friend and terrific Orange County collections attorney, called and asked Mike Hensley whether a SLAPP fee order had to be bonded during an appeal by the losing party (the plaintiff). Mike did not know the answer, but mused “perhaps” because it resembles a money judgment (bondable) more than a “costs only” judgment (stayed on appeal). With the magic of Westlaw, Mike found the issue had been decided in a 2001 published opinion.
The Fourth District, Division One confronted this precise issue in Dowling v. Zimmerman, 85 Cal.App.4th 1400, 1426-1434 (2001). There, the losing plaintiff was “SLAPPed” with an award of attorney’s fees a little shy of $10,000. While losing plaintiff’s appeal was pending on both the merits of the SLAPP order and the related fee award, losing plaintiff brought a writ of supersedeas petition, arguing that the fee judgment was automatically stayed and that no undertaking had to be posted to stop enforcement of the judgment. Plaintiff lost the merits on appeal and also did not prevail on the supersedeas petition.
The appellate court acknowledged that Code of Civil Procedure section 917.1(d) provides that a “costs only” judgment does not have to be bonded during an appeal. However, it did note case law indicating that this only applies to routine costs rather than nonroutine, discretionary costs such as expert witness fees awardable under Code of Civil Procedure section 998. See Bank of San Pedro v. Superior Court, 3 Cal.4th 797, 805 (1992). It similarly recognized that the Rutter Practice Guide on Appeals takes the position that attorney’s fees awards—even though not routine in nature—are the equivalent of “costs only” judgments. (BLOG OBSERVATION—We will explore this unsettled issue in depth in a future post.)
However, the Dowling court did not view a SLAPP fee award as a simple “costs only” judgment. Rather, the Court of Appeal found it more akin to a money judgment that is an express exception to the appeal automatic stay. (See Code Civ. Proc. sec. 917(a)(1).) The appellate court found that there was nothing routine about a SLAPP fee award because it usually is only made automatically to the winning defendant, with the winning plaintiff not afforded reciprocity unless proving the losing defendant’s motion was frivolous or brought to unnecessarily delay proceedings (under the old Code of Civil Procedure section 128.5 test, now section 128.7). Thus, a bond or undertaking was required to halt judgment enforcement procedures in the SLAPP fee order context based on the money judgment exception to the appellate automatic stay rule.
Dowling also observed that an undertaking requirement made policy sense, encouraging losing plaintiffs to bring meritorious SLAPP appeals if they must bond them from the outset.
Actually, Dowling’s reasoning fairly closely tracks parallel reasoning used by the First Distrct, Division One in the unpublished decision of Foster v. Warner, which we reviewed in our June 19, 2008 post. In Foster, the appellate court decided that plaintiff attorneys could not be assessed with SLAPP fees for being unsuccessful in prosecuting a SLAPP motion. It reasoned that such an award is not a sanction against the losing part, but “a form of relief to the prevailing party”—in short, a money judgment.
(BONUS COVERAGE—The winning defendant in Dowling initially appeared in pro per and then retained counsel who brought the winning SLAPP motion and fee application. The appellate court decided that the fact defendant was initially in pro per did not prevent the winner from receiving fees to compensate the subsequent winning retained attorney.)