First District, Division 5, Except for a $49 Adjustment, Tells Everyone to Go Home But For a Minor $1,000 Appellate Sanctions.
Salvio Street, LLC v. Lee, Case Nos. A122408/A123080 (1st Dist., Div. 5 July 29, 2010) (unpublished) is an interesting case, not just for the legal issues, but because it demonstrates how pragmatic appellate courts are when reviewing costs/fees issues after years and years of litigation. Yep, you guessed it—they affirm (with minor adjustments), reminding litigants that enough is enough. Or, as our post suggests, time for everyone to go home (if any house is remaining after the expenditure of costs and fees)!
In this “long-running saga” over the ownership of certain real property in the Bernal Heights neighborhood of San Francisco (the appellate court’s words, not ours), Salvio Street sought to quiet title to the property, but an attorney representing two parties claiming an ownership in the property (Lien and Yen) actually claimed his own separate interest in the property based on a fee agreement with his two clients. Salvio Street won, with attorney found to have no interest in the property. Salvio Street was awarded $8,190.05 in costs (out of a requested $13,183.97), but was denied any award of attorney’s fees (out of a requested $176,470.75). [Salvio Street relied on the fees clause in the Woo-Lien-Yen Purchase Agreement, which was involved in a prior appeal in the long-running saga.] Salvio Street and attorney Lee both appealed.
Result: affirmed, except for a minor $49 negative adjustment to the costs award and a small $1,000 appeals sanctions against Salvio Street on the fees denial appeal.
Here is how the issues on appeal panned out:
- Costs memorandum verification challenge. Lee argued that the costs memorandum was improperly verified because it was not signed under penalty of perjury. No go. Although CRC rule 3.1700(a)(1) does not state that a verification must be made under penalty of perjury, attorney Lee nevertheless argued that the perjury recitation was required under Code of Civil Procedure section 2015.5. This argument was rejected because section 2015.5 is permissive only, meaning that compliance with the CRC requirement will suffice. (BLOG OBSERVATION—This ruling tracks the Second District’s reasoning in Moghadam v. Regents, 169 Cal.App.4th 466 (2008), reviewed in our December 20, 2008 post.)
- Postage costs re deposition. This was the one adjusted cost resulting in a minor reversal by the appellate court. The postage cost was misclassified as a deposition cost, but nothing allowed an award of $49 in postage costs. (Code Civ. Proc., § 1033.5(b)(3).)
- Expert witness fees. The trial court correctly disallowed expert witness fees to Salvio based on the untimely service of a Code of Civil Procedure section 998 offer. The problem is that Salvio served the 998 offer 11 days before trial by mail (substituted service), but needed to serve it 15 days (10 days plus 5 days for mail service). See Lecuyer v. Sunset Trails Apts., 120 Cal.App.4th 920, 927 (2004). Even though Lee only provided a post office address for service, this did not truncate the 15-day service requirement.
- Salvio Street’s Attorney’s Fees Request. This one was easy. In a prior appeal, the Court of Appeal had determined that Salvio Street’s fee request was merged into the final judgment and effectively extinguished. Application of the collateral estoppel doctrine clearly disposed of the challenge. However, that did not end the matter. Lee asked for sanctions on appeal with respect to this argument. The appellate court did find Salvio Street’s argument was frivolous, but only granted $1,000 in sanctions—finding that Lee’s request for $25,000 was grossly inflated given that this issue was only a small proportion of issues involved in the consolidated appeals.