Appellate Court Dismisses Applying Perdue in California State Court Cases and Affirms that Interest Ran From Date of Remanded New Fee Determination.
In our March 31, 2009 post, we extensively discussed Khazan v. Braynin (Khazan II), an unpublished appellate court decision where the First District, Division 4 remanded a fee award because it felt some apportionment and relook at the degree of success justifying the fees actually awarded was warranted on the part of the lower court. It also wanted the lower court to consider when interest should run -- from the date of earlier awards or the date of the new fee decision on remand.
We can now report that the trial judge did award significant fees to prevailing plaintiffs, to the tune of $1,370,604, under Civil Code section 1717 based on a fees clause, apportioning out some time and also considering the degree of success. The judge also found that the prior appellate opinion was a reversal, so interest on the fee award ran from the date of its new fee decision on remand. The appellate court was happy with these determinations, affirming in Khazan v. Braynin (Khazan III), Case No. A128536 (1st Dist., Div. 4 Sept. 12, 2012) (opinion following rehearing).
Two points caught our eye in Khazan III.
First, appellants argued that the 1.5 multiplier awarded by the lower court did not follow the directives of Perdue v. Kenny A., 130 S.Ct. 1662 (2010), which in a civil rights context indicated positive enhancements are only appropriate for rare and exceptional cases. The Khazan III court rejected the invitation to apply the standards of Perdue to the case, determining that California law was different and did not disfavor enhancements. (Ketchum--one of our Leading Cases--confirmed that enhancements are appropriate under section 1717, although we might add that have not seen multipliers awarded in many 1717 cases.)
Second, because the appellate remand was tantamount to a reversal requiring the lower court to review evidence and reset the award, interest on the fee award was found to run only as of the date of the new remand decision affirmed on appeal. (Discussing Stockton Theatres, Inc. v. Palermo, 55 Cal.2d 439, 440-444 (1961); Snapp v. State Farm Fire & Cas. Co., 60 Cal.2d 816, 817-820 (1964); Munoz v. City of Union City, 173 Cal.App.4th 199, 202-203, 207 (2009); Ehret v. Congoleum Corp., 87 Cal.App.4th 202, 204, 210 (2001) [discussing difference between reversal and mere modification for purposes of when interest should run on a fee award].)