Failure to Appeal the First Fees Order Was Fatal.
If you got an adverse determination in a prior fees order, you better appeal or else potentially suffer the bite of the collateral estoppel doctrine. Losing individuals learned that painful lesson in Harris v. Save the Queen, LLC, Case No. B249533 (2d Dist., Div. 2 May 28, 2014) (unpublished)—and yes, it does involve the Queen Mary situated in Long Beach, California.
Queen Mary. Carol M. Highsmith, photographer. 1980 – 2010. Library of Congress.
The basic dispute involved Save the Queen’s successful defense of an action brought by Rarebreed Motorcycle Club, Inc., a motorcycle club comprised of African-American members, and two of its individual members/officers. Plaintiffs sued for racial discrimination and breach of the contractual implied covenant after Rarebreed’s anniversary celebration failed to materialize at the Queen Mary, but instead took place in Rarebreed’s clubhouse in Gardena. Save the Queen (STQ) then moved for attorney’s fees under a contractual fees clause (the first fees motion), with the lower court granting a total of $111,134.77 in fees/costs against all Plaintiffs (Rarebreed and the individual members/officers). No appeal was taken from this first ruling.
Then, STQ brought a second fees motion to recover appellate attorney’s fees for successfully defending the merits of the prior favorable summary judgment on appeal. The lower court granted STQ its requested fees of $27,023.61 against all of the Plaintiffs.
The individual Plaintiffs appealed the second fees order, but to no avail. Why? They were collaterally estopped from relitigating the issue of fee recovery exposure given that the first fees order determined they were jointly and severally liable. As put succinctly by the appellate court, “They do not get a second bite at the apple.”