CALIFORNIA ATTORNEY'S FEES

Prevailing Party: $1 Million-Plus Fee Award Sustained On Appeal After Appellate Court Ordered A Remand To Award Fees To Prevailing Party

Second District, Division 6 Finds Lack of Record to Show Fees Were Excessive.

     Without sounding preachy, seriously, folks, if you are going to appeal, give the appellate court some authority and an adequate record. If not, you will be in the stance of the losing litigant in the next case we look at—having little chance of overturning a $1.2 million fee award.

     M&C Products Analysis Technology v. Bertik, Case No. B200090 (2d Dist., Div. 6 Dec. 3, 2009) (unpublished) involved a situation where the appellate court had earlier overturned a lower court’s denial of attorney’s fees under circumstances where the lower court had found that plaintiff was the prevailing party for purposes of fee recovery under Civil Code section 1717 and Labor Code section 218.5. On remand, the trial court awarded plaintiff around $1.2 million in fees for prevailing at trial and then on appeal.

     Although defendant appealed, it did not go very far. Reason you ask? Simple. Defendant failed to cite to any cogent authority and did not provide an adequate record for purposes of demonstrating error. That made it simple for Justice Perren, the author on behalf of a 3-0 panel of the Second District, Division 6, who affirmed the substantial fee award in favor of plaintiff.

     Moral:  Don't slip on a banana appeal.

Appeal: Appeal From Amended Judgment Inserting Fee Award Did Not Preserve Appeal Of Merits Judgment

 

Fourth District, Division 1 Reminds Us All of An Important Lesson in the Appellate Arena.

     The Fourth District, Division 1, provided us all with an important reminder of timely appealing judgments in order to preserve appellate jurisdiction. In Gravelle v. Aquadek, Case No. D054215 (4^th Dist., Div. 1 Nov. 17, 2009) (unpublished), defendant lost a bench trial where an adverse judgment was entered on May 23, 2008 with an indication of “zero” for the amount of attorney’s fees and costs to be awarded. Later, on September 25, 2008, the trial court entered an amended judgment identical to the May 23 judgment except plaintiff was awarded attorney’s fees in the amount of $26, 240. Defendant appealed more than 180 days from the May 23, 2008 judgment, challenging only the merits judgment rather the fee award. Big mistake. The failure to appeal timely the May 23 judgment was fatal, requiring a dismissal of the appeal of the merits judgment. (Torres v. City of San Diego, 154 Cal.App.4^th 214, 222 (2007).) Good reminder to make sure an appeal is taken, timely, from the right judgment.

Discovery Sanctions: $3,587.00 Deposition Sustained Because It Is Collateral And Not Independently Appealable Until Later

 

Sixth District Provides a Good Lesson in Properly Timing Appeal of Discovery Sanctions Under $5,000.

     This next unpublished case, in a 3-0 unpublished decision from the Sixth District, is a good reminder on when the appeal of smaller discovery sanctions orders—under $5,000—is properly made.

     In Stough v. Klure, Case No. H034000 (6^th Dist. Oct. 26, 2009) (unpublished), defendant/appellant was sanctioned a total of $3,587 for refusing to submit to questioning under oath at a deposition (a sanctions imposed in late February 2009 arising from a mid-January 2008 deposition). Four days prior to the sanctions order, the trial court denied defendant’s summary judgment motion. Unhappy about the sanctions, defendant appealed.

Attorney’s Fees On Appeal: Court Of Appeal Returns Fee Request to Trial Court When Winning Party Cannot Provide Predicate Basis Authority For Award Of Fees

Second District, Division 8 Volleys the Fee Request Back to the Lower Court.

     The next case illustrates the practical dynamics of appellate court practice: if you are going to request the appellate court to award fees to you as the prevailing party, provide specific authority supporting such a request. Otherwise, the request will be denied and returned to the lower court to sort out whether fees are justified and then determine the reasonable amount of fees to be awarded. That is exactly what happened in Campos v. Oppenheimer Funds Distributor, Inc., Case No. B201789 (2d Dist., Div. 8 Aug. 12, 2009) (unpublished).

     In Campos, the Court of Appeal dismissed an appeal of a nonappealable order of dismissal in an action that also contained an interpleader cross-complaint. The winning respondent on appeal requested the appellate court to award it costs and attorney’s fees as the prevailing party. Although finding that respondent was entitled to an award of routine appellate costs, it failed to provide the appellate panel with clear authority as to why it was entitled to an award of attorney’s fees on appeal. Given this situation, what did the appellate court do? You guessed it. Respondent was awarded costs on appeal, but the matter was remanded to the trial court for purposes of determining if respondent was entitled to fees (and, if so, for the further purpose of setting the reasonable amount of fees to be awarded). The Court of Appeal denied respondent’s fee request without prejudice and punted the issue back to the lower court for assessment.

     Lesson from this one—If you want the appellate court to find fee entitlement, make sure you provide them with particularized authority in the appellate briefing. Cursory references to statutes, without case authority showing why the statutes extend to fees on appeal, may result in what happened here: more work for the winning respondent before the trial court.

Appellate Reversal: Court of Appeal Publishes Costa Serena Decision

Case Holds that Reversal Moots Appeal of Attorney's Fees Denial Order.

     On July 17, 2009, the Fourth District, Division 1 certified for publication a previously unpublished decision, Costa Serena Owners Coalition v. Costa Serena Architectural Committee, Case No. D052903 (4^th Dist., Div. 1 filed June 24, 2009; published July 17, 2009). This case held that an order denying attorney's fees becomes moot when the appellate court issues the right type of reversal. We discussed this decision in our earlier June 24, 2009 post.

Labor Commissioner Appeals: Employer Wins $10,000 Fee Award Against Unsuccessful Ex-Employee

Fees Can Be Awarded Under Labor Code section 98.2(c).

     An employer is entitled to an award of reasonable attorney’s fees, in an amount to be determined by the trial court, when an employee unsuccessfully appeals from a Labor Commissioner’s ruling to the trial court. (Lab. Code sec. 98.2(c).) Cooper v. Golden Gate Reporters, LLC, Case No. A122156 (1^st Dist., Div. 4 June 26, 2009) (unpublished) involved application of this provision, where a trial court awarded winning employer $10,000 out of a requested $16,000 in fees. The award was affirmed under the deferential abuse of discretion standard.

     BLOG UNDERVIEW—The Court of Appeal actually helped employee out upfront. She appealed from a minute order awarding fees, not the later signed judgment. However, the appellate court liberally construed the notice of appeal to encompass the later order—a determination that has or has not been endorsed by other courts depending on the circumstances.

Appeal Reversal Impact: Moots Appeal By Reversed Winner Claiming Trial Court Error In Denying An Award Of Attorney’s Fees

 

Fourth District, Division 1 So Holds in Unpublished Opinion.

     What happens when an initial winner in a case cross-appeals a determination that denied winner an award of attorney’s fees but the appellate court eventually reverses the merits judgment in favor of initial winner? The answer is provided in Costa Serena Owners Coalition v. Costa Serena Architectural Comm., Case Nos. D052903 et al. (4^th Dist., Div. 1 June 25, 2009) (unpublished).

Receiverships: Order Approving Receiver’s Final Plan and Payment of Fees (Including Attorney’s Fees) Is An Appealable Order

 

Defendant’s Failure to Properly Appeal Order Precluded Substantial Review by Court of Appeal.

     If you are going to enter into the world of appellate practice, you must perfect your appeal by properly specifying what is being appealed. Otherwise, you are not likely to get to first base and certainly provide the reviewing court with an opportunity to dismiss the appeal or find it lacks jurisdiction to consider arguments on the merits. The next case, by and large, was decided on that basis, stemming from the appellant’s failure to properly file a notice of appeal from an appealable order.

     City of Montebello v. Uribe, Case No. B206672 (2d Dist., Div. 5 June 16, 2009) (unpublished) involved a receivership appointment to cure substandard housing conditions in a four-unit apartment building. (The City filed a petition for receivership appointment pursuant to Health and Safety Code section 17980.7.) A receiver was appointed, with his rehabilitation plan eventually being approved by the trial court. The receiver moved for approval of his final report and for payment of fees and costs. The trial court eventually approved receiver’s final report and approved his claimed fees and costs in the amount of $50,425.98 (even though property owner had asked for a $31-35,000 reduction). However, property owner never appealed the receivership payment order. Later, City moved to recover attorney’s fees and costs for prevailing in the receivership proceeding. The lower court awarded $53,000 to City, and property owner did timely appeal this fee/cost award. (Property owner’s notice of appeal also failed to make any mention of the prior receiver payment order.)

     On appeal, the appellate panel found it had no jurisdiction to consider any error with respect to the receivership payment order. The order fixing payment to the receiver was independently appealable, even where the award preceded a final judgment. (Los Angeles v. Los Angeles C. Water Co., 14 Cal. 121, 122-124 (1901); Fish v. Fish, 216 Cal. 14, 15-17 (1932).) However, appellant failed to mention this order in his notice of appeal; although these notices are liberally construed, the failure to specify each appealable judgment was fatal in the matter before the Court of Appeal. (Sole Energy Co. v. Petrominerals Corp, 128 Cal.App.4^th 212, 239 (2005).)

     Although property owner’s appeal was timely with respect to the fee/cost award in favor of City, the waiver doctrine ended his chances of a reversal. Property owner failed to cite authority or develop a cogent argument on the merits with citations to the record; this constituted a waiver. (Moulton Niguel Water Dist. v. Colombo, 111 Cal.App.4^th 1210, 1215 (2007).) The end result: both orders were affirmed because the notice of appeal and appellate briefing were inartful in nature, reinforcing that appellate practice is a specialty where attention must be given to detail.

Appealability: Plaintiff’s Acceptance of $2,000 Payment For Fee Award Impliedly Waived Appellate Rights

Second District, Division 1 Discusses Technical Appeal Issues, But Also Indicates Affirmance of Award on the Merits.

     When you are a plaintiff winning a fee award (which you believe was not large enough), be careful to avoid a waiver of appellate rights by accepting a check payment for the fee award. That is what happened in the next case—implied waiver precluded an appeal, although the appellate court did indicate in a footnote that the award would have been affirmed on the merits.

     In Casas v. Record Town USA, LLC, Case No. B210527 (2d Dist., Div. 1 June 15, 2009) (unpublished), plaintiff sued defendant for disability accommodation violations. (The American with Disabilities Act and state counterparts do have statutory fee-shifting provision that generally run in a prevailing plaintiff’s favor.) Plaintiff accepted a $1,000 payment for defendant’s unintentional violation of the ADA in full settlement of her claims, with the trial court retaining jurisdiction to decide the fees to be awarded to her attorneys. She also agreed to dismiss the action with prejudice upon payment of the settlement amount and any fees award. Plaintiff moved for $16,076.50 in fees and costs, but was only awarded $2,000. Defendant tendered a $2,000 check that was negotiated by plaintiff without protest. Plaintiff then appealed.

Enforcement of Costs/Fee Awards: Trial Court Still Has Discretion To Order An Undertaking For Postjudgment Costs/Fee Order Even Where Defendants Paid Off Prior Damages Judgment

First District, Division 1 Grants Writ of Mandate Because Trial Court Failed to Exercise Any Discretion on Undertaking for Substantial Cost/Fees Order.

     This post is somewhat complimentary to our June 12, 2009 post on Tracy v. Tracy, where a reversal and remand was required because a trial court failed to actually exercise its discretion based on a legal misreading of a judgment. Here, a similar situation arose in a post-judgment undertaking motion, where an aggrieved plaintiff filed a writ of mandate to remedy a perceived lower court error. Plaintiff was right to do so.

     W. Wong Construction Co., Inc. v. Superior Court, Case No. A124013 (1^st Dist., Div. 1 June 11, 2009) (unpublished) concerned a business plaintiff which won a $131,338.57 damages judgment, which they appealed but paid off. Later, the trial court awarded plaintiff costs in the amount of $28,672.56 and attorney’s fees in the amount of $370,955.20, determinations separately appealed. (BLOG OBSERVATION—Defendants prudently separately appealed the subsequent costs/fee order, a practice we have recommended many times in our category “Appealability.” The appellate panel did indicate that no separate appeal was necessary in this situation because the damages judgment did indicate that plaintiff was the prevailing party for costs and fees, which means the appeal of the first damages order subsumed the later order under Grant v. List & Lathrop, 2 Cal.App.4^th 993, 998 (1992) and later cases such as Amwest Surety Ins. Co. v. Patriot Homes, Inc., 135 Cal.App.4^th 82, 84 (2005). However, the Court of Appeal did agree with us, observing “[t]he normal practice, however, is to appeal both the judgment and the subsequent award” and citing in support Torres v. City of San Diego, 154 Cal.App.4^th 214, 222 (2007).)

Appealability: Failure To Appeal The Correct Fee Award Prevents Review

Third District Finds No Jurisdiction to Review Under Unusual Procedural Backdrop.

     In our category “Appealability,” we have canvassed many prior decisions on when an appeal of a prior merits judgment can also subsume and preserve appellate review for a subsequent postjudgment fee award liquidating the amount of the award. For example, we have looked several times at Grant v. List & Lathrop, 2 Cal.App.4^th 993, 997-998 (1992), where a notice of appeal subsumed a subsequent order awarding fees, but only when the prior award did find a litigant to prevail for fee purposes (with the amount to be liquidated in the subsequent order). However, there are decisions like DeZerega v. Meggs, 83 Cal.App.4^th 28, 43 (2000), which counsel that each appealable judgment or order must be expressly appealed (whether in a single notice or multiple notices) even where the several judgments and orders occur close in time.

     Plaintiffs’ failure to separately appeal the right order precluded review in Teichmer v. Grass Valley Terrace, Case No. C055877 (3d Dist. June 9, 2009) (unpublished), albeit under unusual facts.

Appellate Review: Include The Oral Argument Transcripts … Or Risk Affirmance Based On An Inadequate Record

First District, Division 4 Applies a Cardinal Appellate Principle.

     As we have stressed in past posts on appellate practice, litigants needs to make sure that they provide an adequate appellate record for review of fee determinations. If they do not do so, affirmance is a foregone conclusion. The next case illustrates this well.

     Zarate v. Manuel, Case No. A120686 (1^st Dist., Div. 4 May 28, 2009) (unpublished) involved an award of $69,753.97 in fees to a prevailing party successfully suing to enforce a written settlement agreement even though the party requested an award of $107,702.50. The party hit with the adverse fee award appealed, but did not include any record of the oral proceedings on the fee motion.

     That was a big mistake.

Civil Code Section 1717: Court of Appeal Reverses Fee Award Given That Neither Side Prevailed Under The Contract

Fifth District Overturns Based on a Pragmatic Assessment of Litigation Results.

     Who says that appellate courts are not pragmatic in their assessment of who prevailed for purposes of awarding attorney’s fees? That is the law after all, and the next case is an illustration of where a cause was reversed because neither side prevailed under the contract.

     Boland v. Baker, Case No. F054226 (5^th Dist. May 7, 2009) (unpublished) concerned litigation over a right of first refusal to buy adjoining property in which the trial court eventually concluded no side was entitled to damages or specific performance, because one side failed to candidly provide all the terms of the outside purchase offer so that the holder of the refusal right knew what do to initially (but was not really interested in exercising its refusal right given the pricey nature of the outside offer). Given these equities, it is no surprise that the lower court did what it did. However, the trial court did award the refusal right holders attorney’s fees and costs as prevailing parties under the purchase agreement fees clause.

     The Fifth District reversed the fees/cost award.

Fee Sanctions Under $5,000: Not Appealable

Second District, Division Two Applies CCP section 904.1(a)(12) in Venue Transfer Dispute.

     A.Z. Mashiah, Ltd. v. Christopher Ranch, LLC, Case No. B204185 (2d Dist., Div. 2 Mar. 23, 2009) (unpublished) reminds us all that only a sanctions order greater than $5,000 is immediately appealable under Code of Civil Procedure section 904.1(a)(12), one of the key appeal jurisdictional subdivisions.

     There, defendant lost a venue transfer battle and his attorney was sanctioned $2,090 under Code of Civil Procedure section 396b(b), which authorizes a court to order fees against a venue loser (with the fees being the personal liability of the attorney as between attorney and losing client in such an instance). Defendant and his attorney appealed the adverse rulings.

     Both lost. Defendant lost because a venue transfer order can only be reviewed through an appellate mandate petition. (Code Civ. Proc., sec. 400.) Attorney lost because the $2,090 sanctions order was not immediately appealable under section 904.1(a)(12), but could only be reviewed on appeal from any final judgment or by extraordinary writ petition. (Code Civ. Proc., sec. 904.1(b).) Thus, both appeals were dismissed.

Arbitration Petition Denial: Fees Not In Order Where Denial Was Only An Interim Procedural Victory

Third District Distinguishes Its Facts From Otay in Unpublished Decision.

     In California, attorney’s fees are generally not recoverable for interim procedural victories.   The “prevailing party,” for purposes of fee recovery, usually must await a final deposition on the merits. However, there are exceptions.

     For example, Otay River Constructors v. San Diego Expressway, 158 Cal.App.4^th 796, 801, 808 (2008) involved a sui generis fact pattern where the only proceeding being litigated in court at the time was a petition to compel arbitration. The trial court’s denial of the petition was a “discrete legal proceeding” giving rise to fees even if claims were pursued in another later action.

     Otay was distinguished recently in Hall-Mark Services, Inc. v. Harris & Associates, Case No. C056691 (3d Dist. Feb. 17, 2009) (unpublished). In contrast to Otay, there was pending litigation filed in court in which a petition to compel arbitration was initially denied. In a prior appeal, the Third District reversed the denial and remanded so that the petition to compel arbitration would be granted instead. The trial court granted the winning party in this case an award of routine costs but denied $37,589 in requested attorney’s fees. The lower court decided no contractual fees under Civil Code section 1717 were warranted until final disposition of the case.

Sanctions: $8,836 In Various Sanctions Affirmed Against Plaintiff Losing Claims Through Demurrer Or Summary Judgment

Court of Appeal Reverses $15,611.50 in 128.7 Sanctions Because “Safe Harbor” Papers Were Not Identical to Filed 128.7 Motion Papers.

     In a lengthy but informative unpublished opinion, the Fourth District, Division One affirmed and reversed some sanctions components assessed against a plaintiff who was defensed through demurrer and summary judgment law-and-motion proceedings in his investment fraud lawsuit. The decision has some valuable pointers on the right way to set up Code of Civil Procedure section 128.7 motions with proper pre-motion “safe harbor” papers.

Appealability: Separately Appeal A Postjudgment Fee Award Or Suffer The Cruel Sword of Dismissal!

 

Second District, Division 2 Reinforces Message Sent in Prior Posts.

     In our category: “Cases: Appealability,” we have stressed an important message that emerges from California state court cases: notwithstanding some nuances in unusual situations, litigants wishing to challenge attorney’s fees awards should always appeal the postjudgment fees award in order to preserve appellate rights. The next case is a recent illustration of how failing to do so resulted in the loss of appellate jurisdiction over the challenged fees award.

   

POOF! Principle: Top 6 Cases In Last Eight Months

     We are pleased that our fellow blawger, Greg May, presiding at The California Blog of Appeal, has recognized our inestimable contribution of the Poof Principle to California attorney's fees jurisprudence in his January 28, 2009 post.  The American Heritage Dictionary (online) defines "poof" thusly:  "Used to indicate a sudden vanishing: The magician waved a wand, and poof! The birds disappeared!"  

     We are impressed by the number of times our appellate courts make attorney's fees awards vanish.  We have coined the "poof principle" to describe this phenomenon.  Examples follow. 

Mixed Result In Decade Long Litigation: Substantial Attorney’s Fees Award Goes “Poof” When Plaintiff Should Have Been Given Leave To Amend, But Plaintiff Denied Post-Judgment Enforcement Fees

Second District, Division 7 Publishes Decision in Decade Long Battle Arising From Credit Impairment Allegations.

     Although too long to recite in detail (43 pages in length), Sanai v. Saltz, Case Nos. B198217 & B202787 (2d Dist., Div. 7 Jan. 26, 2009) (certified for publication) chronicles a donnybrook between a former in pro per renter (a transactional lawyer who learned litigation along the way), credit-reporting service, and landlord over a credit reporting dispute arising out of claimed unpaid rent under $5,000. (Yes, you heard that right.) The case demonstrates the “poof” principle and reinforces that a judgment must award fees in order for the judgment creditor to obtain post-enforcement attorney’s fees by statute.

      Click it up; here are the facts.

Costs: Order Directing Set Aside of Settlement Funds Based On Costs Award Results In Issuance Of Appellate Mandate Writ

Second District, Division 2 Overturns Set Aside Order, But Does Not Pass on Validity of Lien.

     A defense judgment involving a costs award is usually automatically stayed without bond pending an appeal by the impacted party, such that execution efforts cannot go forward until the appeal is final. (Vadas v. Sosnowski, 210 Cal.App.3d 471, 475 (1989).) The next case involved an appellate writ petition, with the panel finding Vadas to be dispositive.

     In Stites v. Superior Court, Case No. B213360 (2d Dist., Div. 2 Jan. 15, 2009) (unpublished), defendants/real parties (Hilton) won a costs award against petitioner after winning summary judgment. Hilton filed a costs memorandum, seeking $14,750.32 in routine costs. Petitioner reached a settlement with other defendants, with Hilton filing a notice of lien based on the costs award in the litigation. Hilton also filed a motion to direct payment of the settlement funds to it, with petitioner appealing the summary judgment order. The trial court ordered the settlement funds frozen in a joint account to be maintained until there was a ruling on petitioner’s appeal. Petitioner sought mandate.

Anti-SLAPP Fees: Fee Award Not Cognizable Until Final Judgment And Fee Reduction Request Waived by Lack of Supporting Argument

Second District, Division 7 Finds No Basis to Reduce Fee Award to Anti-SLAPP Victor Any Further.

     If you are going to challenge the award of a mandatory fee to an anti-SLAPP victor, the message from the next case is to make sure that you have an appealable fee order and that you provide substantiated authority for a further reduction from any reduced amount already made by the trial court.

Appealability: Failure to Timely File Reconsideration Ruling Resulted In Dismissal of Appeal Challenging $70,408.75 Fee Award

Fourth District, Division Three Determines Notice of Reconsideration Ruling Does Not Need Any “Magic” Language to Trigger Running of Appeal Period.

     The next case is an interesting reminder to hit the books when determining what triggers the running of the appeal period in the context of reconsideration rulings.

     In Walshe v. Gelfand, Case No. G041115 (4^th Dist., Div. 3 Jan. 12, 2009) (unpublished), the court entered a judgment against appellant for attorney’s fees in the amount of $70,408.75 after dismissal of appellant’s complaint against defendants. Defendants served a notice of entry of judgment, and appellant timely moved for reconsideration of the fee award, which was denied in a minute order. Defendants served appellant with a document entitled “notice of ruling” on the reconsideration motion. However, appellant filed his notice of appeal 50 days after service of the reconsideration ruling notice. Motions were then filed by appellant and respondents in the appellate court as to the timeliness of appellant’s appeal. Appellant lost, and the appeal was dismissed in a by-the-court opinion.

     California Rules of Court, rule 8.108(e) requires that an appellant appeal a reconsideration motion order by the earliest of (1) 30 days after the superior court or a party serves an order denying the motion or a notice of entry of that order, (2) 90 days after the first motion to reconsider was filed, or (3) 180 days after entry of the appealable order.

     In the case before it, the 4/3 appellate panel determined that trigger (e)(1) was fatal. Although appellant argued that the “notice of ruling” was inadequate given that “notice of entry of order” language was required, the Court of Appeal rejected this contention. Rather, rule 8.108(e)(1) “does not require any particular title for a document to trigger the 30-day deadline” (Slip Opn., at p. 3), contrasting it with rule 8.104(a)’s explicit requirement of service of a “document entitled ‘Notice of Entry’ of judgment or a file-stamped copy of the judgment” to start the 60-day clock for the “normal time” to appeal. Because the appeal was 20 days past the 30-day appeal deadline, appellant’s appeal was dismissed.

     The panel of justices on Walshe—Presiding Justice Sills; Justice Moore; and Justice Fybel.

    Hourglass:  (c) S. Sepp, 2007, Wikipedia Commons.

Civil Code Section 1717: Fees Incurred In Previously Dismissed Action Properly Allowed In Refiled Action Where First Action Work Necessarily Used in Second Action.

Fourth District, Division Three Also Faces Grant/P R Burke Appeal Untimeliness Issue.

     Two interesting issues were raised in Presiding Justice Sills’ opinion on behalf of the Fourth District, Division Three in Kenney v. Tanforan Park Shopping Center, Case Nos. G038323 & G039372 (4^th Dist., Div. 3 Dec. 15, 2008) (unpublished). The first concerns timeliness of an appeal, involving debate around an issue that needs clarification. The second concerns whether the Santisas bar—precluding a fee award under Civil Code section 1717—applies where the work in the previously dismissed action is used in a subsequent refiled action. Keep reading and you will determine how these issues were resolved.

Appealability: Another Reminder To Separately Appeal Subsequent Fee Award

Appellate Jurisdiction to Hear Fee Award Challenge Is Likely Not Cognizable

     In our category “Cases: Appealability,” we have reviewed numerous decisions from state appellate courts indicating that subsequent orders awarding attorney’s fees must be separately appealed where there is no mention of fees in a prior merits judgment. Averbuch v. Strekovsky, Case No. B201764 (2d Dist., Div. 8 Dec. 2, 2008) (unpublished) reinforces the teaching of those decisions. There, Father failed to appeal a subsequent fee order, never even mentioning it in the notice of appeal from a prior judgment that did not deal with fees at all. Result: the challenge of the fees award was not cognizable and was not entertained by the appellate court.

Family Law: Needs-Based Fee Award Reversed On Due Process Grounds And Litigiousness-Based Fee Award Affirmed Under Abuse of Discretion Standard

Second and Sixth District Cases Show That Appellate Record Can Be The Key to Success on Appeal.

Needs-Based Fee Award Is Reversed and Remanded

     In Marriage of Rothe, Case No. B202733 (2d Dist., Div. 4 Nov. 20, 2008) (unpublished), the Court of Appeal reversed and remanded a lump sum fee award of $92,552.86 in favor of wife and against husband where the appellate record showed that the trial court did not really exercise discretion by having no supportive evidence and not attempting to give the husband adequate due process in the fee proceeding. Husband appealed and won.

     Interestingly enough, the first issue was appellate jurisdiction. The trial court had assessed fees of $88,552.86 in a July 2007 order and then assessed further fees of $4,000 which was added to a “composite” order in September 2007 totaling $92,552.86. Husband only appealed the July 2007 order, such that wife claimed the $4,000 additional fees in the September 2007 could not be challenged. By analogy to Grant v. List & Lathrop, 2 Cal.App.4^th 993, 997 (1992), the Second District, Division 4 found that wife was put on notice that husband was challenging the entire fee award and was not prejudiced by a liberal reading of the notice of appeal to encompass the September 2007 order. (BLOG OBSERVATION—As we discussed in our November 15, 2008 post on Christie v. Piccolotti, this appellate law issue needs to be clarified in situations where there are multiple prevailing party/fee fixing orders. Clarification is needed so that both parties and practitioners have some closure on how to proceed. The most prudent course would to appeal from all of these multiple orders in light of the current state of California’s jurisprudence in this area.)

     That brought the appellate panel to the merits of the fee award. Family Code section 2030 allows a family law judge discretion to order one spouse to pay for the fees of the other, but it must be based on need and comparison of the respective financial resources of each side. Here, the problem was that the lower court did not show that any consideration was given to the “need” factors set forth in the statutory and case law. In fact, nothing showed that husband could make a lump sum payment of over $90,000. The family law judge’s reaction, over objection, was to tell husband to take it up on appeal. He did, and won—especially because the record showed his expenses outstripped his income, he had no savings or liquid assets, and a lump sum payout seemed to be a near impossibility. (See In re Marriage of Keech, 75 Cal.App.4^th 860, 868-869 (1999).) The reversal was ultimately based on due process grounds, requiring a reconsideration of fixing fees upon remand.

Litigiouness-Based Fee Award Is Affirmed

     An entirely different picture was presented in In re Marriage of Earls and Amdahl, Case No. H031582 (6^th Dist. Nov. 21, 2008) (unpublished). There, the Court of Appeal affirmed a discovery-related attorney’s fees award of $60,000 and family law litigiousness-related fees award of $225,000 against wife, based on a record that showed a history of trying to undo agreements that had been previously agreed to by wife.

     Both awards were predicated primarily upon Family Code section 271, which allows the family law judge discretion to award fees against a party or attorney frustrating the policy of the law to promote settlement or to reduce the costs of litigation through cooperative conduct. The Sixth District found the lower court was well justified in finding that wife had not been forthcoming in discovery and had protracted the litigation by trying to set aside agreements which she had voluntarily entered into previously. There was evidence to show the awards would not be a financial burden on wife, so no abuse of discretion was shown when the appellate record was rife with a chronology of wife’s past conduct in the case.

     BLOG OBSERVATION—It could have been worse for wife, although the amount of fees spent by husband again gives credence to our mantra that fees are the tail that wags the litigation dog. Wife spent almost $57,000 on the discovery dispute, while husband said he spent $104,500 (with husband eventually being awarded $60,000). With respect to the non-discovery fee disputes, husband claimed to have spent $485,000 [Trivia: husband Calrton G. Amdahl is the son of Gene Amdahl, the computer genius and founder of Amdahl Corporation and Trilogy Systems], while wife said she spent $103,894 (with husband eventually being awarded $225,000). All we can say is wow and good thing that wife has some assets to satisfy these hefty fee awards totaling $285,000.

Appellant’s Failure To Appeal Initial Judgment Awarding Fees, Rather Than Second Judgment Fixing Fees, Led to Dismissal Of Appeal

Third District, in Unpublished Decision, May Have Parted Company From Fourth District, Division Two’s View on the Issue.

     In our June 7, 2008 post, we reviewed P R Burke Corp. v. Victor Valley Wastewater Reclamation Auth., 98 Cal.App.4^th 1047, 1050, 1055 (2002), where the Fourth District, Division Two held that an appellant preserved review of a fee award where appellant appealed either the initial judgment awarding fees or the second judgment fixing the amount of the fees. The Third District, in a recent unpublished decision, apparently thinks otherwise.

     The appellant in Christie v. Piccolotti, Case No. C056398 (3d Dist. Nov. 14, 2008) (unpublished) failed to timely appeal an initial judgment against him awarding damages “plus attorney fees and costs” in an amount to be determined through a cost memorandum and subsequent fee motion to determine the amount of fees, but did timely appeal the subsequent judgment fixing the amount of fees after the trial court’s ruling on respondent’s fee motion. Too late, the Third District held, dismissing the appeal.

     The Court of Appeal principally relied on Grant v. List & Lathrop, 2 Cal.App.4^th 993, 998 (2002), which reasoned that a notice of appeal from an initial judgment awarding fees subsumes the later order setting the amounts of the fee award. However, the Third District then used Guillemin v. Stein, 104 Cal.App.4^th 156, 161 (2002)—which stated that a postjudgment order, to be appealable, must raise a different issue than embraced by the judgment in order to prevent an appellant from having two chances to appeal the same ruling—as the logical bridge to conclude that appellant’s failure to appeal the initial judgment awarding fees was tantamount to trying to get an unwarranted “second bite” through appeal of the subsequent order fixing fees.

     BLOG OBSERVATION—This area needs clarification given the apparent divergence between this case and PR Burke. Grant also has engendered some confusion, as observed in the unpublished decision of Sanders v. Lawson, slip opn. at 13, fn. 8, reviewed on our July 1, 2008 post. Such a recurring appealability issue needs to be sorted out so that appellants and appellate practitioners know with clarity the procedural deadlines for appealing fee awards.

Cross-Complainant Hit With Anti-SLAPP Fees Failed To Preserve Challenge By Separately Appealing Fee Grant Order

 

Fourth District, Division One Refuses to Consider the Fee Grant Issue.

 

            Cross-complainant failed to beat an anti-SLAPP motion and was ordered to pay successful cross-defendants $3,998 in attorney's fees and $80.00 in other costs.  The final judgment granting the anti-SLAPP motion was silent as to both entitlement to or amount of fees and costs.  Later, on June 4, 2007, a separate order on the fees and costs was issued. 

 

           

            Cross-complainant only appealed the order granting the anti-SLAPP motion.  However, he wanted the Court of Appeal to consider his challenge to the fee/costs order.

 

            No way, was the retort of the Fourth District, Division 1 in Jones v. Barrett, Case No. D051031 (Oct. 6, 2008) (unpublished).  Citing Eisenberg et al, Cal. Practice Guide:  Civil Appeals and Writs (The Rutter Group 2007) ¶ 2:156.3, p. 2-74, the appellate panel observed "[w]here, as here, the final judgment or order 'is silent as to attorney fees and costs (determines neither entitlement nor amount), the failure to separately appeal a postjudgment order awarding costs and fees is a jurisdictional bar to appellate review of the fees and costs award.'"  Cross-complainant did not even get off of home plate.

 

            BLOG OBSERVATION—This result is consistent with the recent decision in Melbostad v. Fisher, 165 Cal.App.4^th 987, 995 (2008).  We first posted our report about Melbostad (when it was still unpublished) on July 25, 2008.
 

Plaintiff Winning Anti-SLAPP Motion Is Not Entitled to Appeal A Fee Denial Until Final Judgment Is Reached

 

Plaintiff's Appeal of Anti-SLAPP Fee Denial Was Premature.

 

            A plaintiff successfully opposing an anti-SLAPP motion may be entitled to attorney's fees if the motion is determined to have been frivolous or brought solely for the purpose of furthering unnecessary delay.  Code Civ. Proc., § 425.16(c).  In the case discussed below, defendant lost his anti-SLAPP motion.  Plaintiff moved to recover its attorney's fees, a request denied by the lower court.  Both sides appealed the adverse determination. 

 

            In Call v. Digital Domain, Inc., Case No. B197815 (2d Dist., Div. 7 Oct. 6, 2008) (unpublished), the Second District, Division 7 determined the appeal was premature.  An order declining to award fees to a plaintiff successfully opposing an anti-SLAPP motion is not immediately appealable, but is appealable from a final judgment in the matter.  (See Doe v. Luster, 145 Cal.App.4^th 139, 150 (2006); American Humane Assn. v. Los Angeles Times Communications, 92 Cal.App.4^th 1095, 1102-1103 (2001).)  Plaintiff requested that the appeal be treated as an extraordinary writ, but the Court of Appeal found that it had not demonstrated entitlement to such relief.  Plaintiff's fee request would have to wait until the end of the case.

Plaintiff Who Lost Attorney's Fees Motion Untimely Appealed, Which Meant Appellate Court Was Without Jurisdiction To Review The Matter

Sixth District Refuses to Review Adverse Fee Order Based on Plaintiff's Failure to Timely Appeal under CRC 8.104

            Plaintiff  lost a motion to set aside a judicially supervised stipulated judgment in a roadway easement action.  One of the defendants was granted attorney's fees for defending the motion under a contractual fees clause.  Plaintiff appealed the adverse fee order.  The problem is that her appeal was untimely.

            In Debert v. Isaacs, Case No. H031122 (6^th Dist. Sept. 30, 2008) (unpublished), the Sixth District refused to review the fee grant against plaintiff because she untimely appealed.  The fee order was served by the winning defendant upon plaintiff on October 4, 2006.  She appealed on January 24, 2007.  However, California Rules of Court, rule 8.104 requires that a plaintiff must appeal 60 days from October 4, 2006, something she did not do.  Plaintiff's retort was that a notice of entry is required by rule 8.104.  Not quite right, said the Court of Appeal—"she overlooks that the rule does not require a notice of entry if a party serves a copy of the order itself."  (BLOG OBSERVATION—The Court of Appeal is correct.  See Cal. Rules of Court, rule 8.104(a)(2).)  The untimeliness of the appeal meant the appellate panel lacked jurisdiction to consider the motion granting attorney's fees.  (Casado v. Sedgwick, Detert, Moran & Arnold, 22 Cal.App.4^th 1284, 1286 (1994).) 

Anti-SLAPP Prevailing Party Properly Appeals Post-Dismissal Fee Award

However, Prevailing Party's Anti-SLAPP Win Is Overturned, With a Resulting Reversal of the Fee Award.

            A notary was named in a conspiracy-charging civil lawsuit brought by a disgruntled plaintiff arising out of a loan he made to others on a series of real estate transactions.  Plaintiff charged that the notary failed to record a trust deed, knew that one of the signatures notarized was a forgery, and benefited from the purported fraudulent transactions.  Notary was not amused in the least, bringing an anti-SLAPP motion that was successful and resulted in a complete judgment of dismissal as to the notary, a ruling appealed by the plaintiff.  Notary subsequently was awarded $10,500 in sought-after $83,250 attorney's fees pursuant to a postjudgment fee award.  Notary, again, was not amused by the fee order, and cross-appealed from that order in an attempt to challenge what notary obviously viewed as a miserly fee award. 

            In an interesting decision on both the merits and fee awards, the Second District, Division Eight reversed both determinations in Altman v. Azrilyan, Case No. B195061 (2d Dist., Div. 8 Sept. 12, 2008) (unpublished).

            On the merits, the appellate panel determined that notary's conduct in notarizing certain documents was not an official proceeding authorized by law” so as to give her absolutely immunity under Civil Code section 47 and to provide a basis for the anti-SLAPP motion.  Relying heavily on Garretson v. Post, 156 Cal.App.4^th 1508, 1520-1521 (2007) (a case in which contributors Marc Alexander and Mike Hensley provided research to the winning in pro per plaintiff), the Court of Appeal determined that notarial activity “is more akin to a nonjudicial foreclosure sale [found to not give rise to an anti-SLAPP motion in Garretson]” and “does not require the exercise of discretion or the adjudication of a fact.”  (Slip Opn., at p. 13.) 

            That brought the appellate panel to notary's cross-appeal of what she believed was an unduly low fee award.  Was the fee award appealable?  You bet, said the Court of Appeal.  In this particular case, the anti-SLAPP motion win had resulted in a judgment of dismissal, such that the fee award was a postjudgment order that was expressly appealable under Code of Civil Procedure section 904.1(a)(2).  Although not mentioned by the appellate panel, its result is supported by the First District, Division Four's recent decision in Melbostad v. Fisher, Case No. A119514 (lst Dist., Div. 4) (published on court's own motion on August 4, 2008).  Melbostad reasoned that a judgment of dismissal as to some parties is a judgment so that a subsequent postjudgment fee order can be separately appealed under section 904.1(a)(2).   (See our July 25, 2008 post for a further discussion of Melbostad.)  However, because notary was no longer the prevailing party after reversal of her anti-SLAPP motion win on appeal, the fee order had to be reversed also.  (See Gallimore v. State Farm Fire & Cas. Ins. Co., 102 Cal.App.4^th 1388, 1401 (2002).) 

            

Appealability Of Interlocutory Fee Awards Before Entry Of Underlying Judgment: No Need To Appeal The Interlocutory Order.

We Clarify a Good Question on Past Posts on Appellate Decisions in the Area.

            Mark Hooshmand of The Hooshmand Law Group in San Francisco sent us a good question on our August 25, 2008 post discussion of Carr Business Enterprises, Inc. v. City of Chowchilla, Case No. F051999 (Aug. 20, 2008) (certified for partial publication; unpublished on pertinent fee award issue).  He was curious about why fee grant and fee denial awards would be treated differently in some contexts unless there was no prior underlying judgment on the merits.  Actually, Mr. Hooshmand has hit upon an important distinction that is worthy of repetition. 

            Before entry of judgment, orders either granting or denying fees are not appealable but can only be reviewed on appeal from the judgment.  (See Code Civ. Proc., sec. 904.1(a)(2) [postjudgment order is appealable]; Doe v. Luster, 145 Cal.App.4^th 139, 146-147 (2006) [interlocutory order granting or denying fees following a successful anti-SLAPP motion generally not appealable unless the motion resulted in a judgment or dismissal disposing of plaintiff’s action]; Lacey v. Bertone, 33 Cal.2d 649, 654 (1949) [separate appeal from order denying tax costs motion appealable only when order made after final judgment; if order made before final judgment, review is made upon appeal of the judgment]; Carr Business Enterprises, Inc., supra, Slip Opn. at 8-9 [order denying fees made before entry of judgment may only be reviewed on appeal from the judgment]; Renteria v. Cruz, Case No. B196359 (2d Dist., Div. 8 Aug. 18, 2008) (unpublished and reviewed on our August 18, 2008 post) [appeal dismissed where appeal taken from order denying fees motion where no judgment entered on matters impacting the appellant].)

            Nonetheless, we would remind readers of two important caveats: 

• PR Burke, a decision reviewed in our June 7, 2008 post, does hold that where an initial judgment does determine a litigant’s prevailing party status and a subsequent order fixes the amount of fees, the appeal from the initial judgment subsumes the later order fixing the fee award amount.  (See also Grant v. List & Lathrop, 2 Cal.App.4^th 993, 998 (1992).) 
• Where an initial judgment is silent about costs and attorney’s fees, the failure to appeal a subsequent postjudgment order awarding costs and fees jurisdictionally bars review of the costs/fee award.  (See, e.g., Norman I. Krug Real Estate Investments, Inc. v. Praszker, 220 Cal.App.3d 35, 46 (1990); Robinson v. City of Yucaipa, 28 Cal.App.4^th 1506, 1517 (1994); Johnson v. Greenberg, Case No. B197894 (2d Dist., Div. 5 June 5, 2008) [unpublished].) 

See also our June 6, 2008 post for Johnson v. Greenberg.

Reversals Of Two Judgments Result In Either Vacating Or Remand Of Fee Orders

First and Fourth Districts Overturn Fee Awards After Reversal of Underlying Judgments.

            Reversals of underlying judgments can also mean that attorney’s fees awards are vacated or remanded if properly appealed, as the next two cases illustrate.

            The First District, Division Four, in Arntz Builders v. City of Berkeley, Case No. A117744 (1^st Dist., Div. 4 Aug. 25, 2008) (unpublished), reversed a trial court judgment after concluding that a contractual claims procedure was the exclusive mechanism trumping a statutory claim procedure under Government Code section 910.  The trial court earlier had granted the City $750,000 in attorney’s fees under Public Contract Code section 7107(f), which provides for such an award in any action for the collection of retention proceeds wrongfully withheld by a public entity or contractor.  Aggrieved party Arntz separately appealed the fee award (which we have urged litigants and practitioners to do—see “Cases:  Appealability”).  Because the underlying judgment was reversed, the fee award was vacated as well.  (Metropolitan Water Dist. v. Imperial Irrigation Dist., 80 Cal.App.4^th 1403, 1436-1437 (2000).)

            The Fourth District, Division One, in Gogri v. Jack in the Box, Inc., Case No. D050838 (4^th Dist., Div. 1 Aug. 25, 2008) (certified for publication), reversed a summary judgment grant even though Gogri had voluntarily dismissed his entire remaining action before any tentative decision.  The trial court subsequently granted Jack in the Box’s request for an attorney’s fees/costs award in the amount of $270,810.77, which was incorporated into an amended judgment that was timely appealed by Gogri.  On review, the Court of Appeal—in an opinion that is must reading on the issue of when voluntary dismissals will trump pending dispositive motion hearings—decided that the voluntary dismissal prevailed.  Gogri then advanced the notion that the court had no jurisdiction to entertain a fee/costs request.  However, the appellate panel only partially agreed with the fee/costs challenge.  As to Gogri’s contractual claims, the challenge was correct because Santisas v. Goodin, 17 Cal.4^th 599, 614-619, 622 (1998) held that the pretrial dismissal prevented a fee award in these situations.  However, the appellate court remanded to have the trial court consider an amended request for fees/costs limited solely to Gogri’s noncontract/tort causes of action—given that the lower court had awarded Jack in the Box fees and costs on all causes contained in the complaint (including the impermissible contract claims).  So, although avoiding over $270,000 in fees/costs, the door was open for the trial court to award something on the noncontract counts. 

Fifth District Finds Indemnification Clauses, Even Though Extending To Performance Of Contractual Work, Did Not Allow For Recovery Of Civil Code Section 1717-Type Fees

Court of Appeal Affirms Denial of Attorney's Fees to Prevailing Parties Against the City of Chowchilla.

            In our July 12, 2008 post, we discussed when contract indemnification clauses will and will not be interpreted as allowing a recovery of attorney's fees to litigants in litigation not involving true third-party indemnity issues.  The answer came down to the specifics of the wording and headings of the germane contractual clauses.  Recently, the Fifth District dealt with a hybrid clause—dealing with both third-party indemnity and contractual performance of work issues—and found it more closely resembled the third-party indemnity clauses not giving rise to fee recovery than peculiar provisions that allowed for fee recovery arising from indemnification obligations.

            Carr Business Enterprises, Inc. v. City of Chowchilla, Case No. F051999 (5^th Dist. Aug. 20, 2008) (certified for partial publication) involved a referee's award that went against the City of Chowchilla based upon Carr's performance under two separate agreements with Chowchilla involving city streets and municipal airport improvement work.  Carr moved to fix attorney's fees pursuant to a provision found in both contracts.  The trial court denied the fees request, rolling this determination into a final judgment also encompassing the merits.  Chowchilla appealed an award of prejudgment interest, and Carr cross-appealed the denial of fees.

            Justice Wiseman, the author on behalf of a 3-0 panel of the Fifth District, first considered whether the cross-appeal was timely, because it was filed 20 days after the Chowchilla appealed but more than 60 days from the judgment itself.  It was timely, the appellate panel decided, rejecting the notion that the order denying fees was a separately appealable order such that it had to be appealed 60 days from the judgment.  Rather, the order denying the fees was not a post-judgment order (unlike an order granting fees) such that it can only be reviewed on appeal from the judgment.  (Lacey v. Bertone, 33 Cal.2d 649, 654 (1949).)  Given that Chowchilla appealed from the judgment, Carr likewise had the 20 day cross-appeal extension time to bring the appeal on the fee denial aspect of the judgment.

            That brings us to the merits of the appeal on the fee denial order.

            The street-improvement contract, in a section entitled "Insurance Requirements for Contractors" and with a heading of "Hold Harmless and Indemnification Agreement," stated:  "[Carr] shall indemnify and hold harmless [Chowchilla] … from and against all claims, damages, losses and expenses including the attorney fees arising out of the performance of the work described herein, caused in whole or in part by any negligent act or omission of [Carr], any subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, except where caused by the active negligence, sole negligence, or

willful misconduct of [Chowchilla]."  Elsewhere, the street-improvement contract contained a provision under the section title of "Indemnity Agreement" which stated:  "[Carr] agrees to indemnify and save harmless [Chowchilla] … for and against all loss or expense (including costs and attorney fees) on account of injury or death of persons employed by [Carr], or his subcontractors, his or their agents or employees; injury to or death of any other person; or injury to, damage or destruction of property, real or personal including loss of use thereof.  Upon demand, [Carr] shall defend any suits or actions covered by the terms of this agreement."  The airport-improvement contract had essentially identical provisions.

            The lower court, siding with Chowchilla, found that these provisions were standard indemnity provisions, which do not authorize attorney's fees on a dispute arising out of the two contracts.  The Fifth District agreed.

            After indicating that the "performance of work" language superficially seemed to extend beyond third-party claims, the appellate panel found that similarly-worded language had still been found to be indemnification clauses not giving rise to fees.  See, e.g., Myers Building Industries, Ltd. v. Interface Technology, Inc., 13 Cal.App.4^th 949, 964 (1993); Meininger v. Larwin-Northern California, Inc., 63 Cal.App.3d 82, 84 (1976); Campbell v. Scripps Bank, 78 Cal.App.4^th 1328, 1336 (2000).  The trial court found that the headings in the contractual provisions—relating to indemnity—were helpful in the determination, a point not disputed by the Court of Appeal.

            In contrast, cases like Baldwin Builders v. Coast Plastering Corp., 125 Cal.App.4^th 1339, 1342, 1344 (2005) and Continental Heller Corp. v. Amtech Mechanical Services, Inc., 53 Cal.App.4^th 500, 508-509 (1997) found indemnification clauses did give rise to fee exposure because specific language indicated fees could be awarded for suing on the indemnification agreements themselves. 

            So, how did the Fifth District steer between these two lines of decisions?  Answer:  it found the provisions were indemnification clauses not allowing for a grant of fees.  Justice Wiseman reasoned this way:  "We conclude that the language of the indemnity provision here more closely parallels the language found in Myers, Meininger, and Campbell, than the language examined in Baldwin and Continental.  Unlike in Baldwin, there is no express language authorizing recovery of fees in an action to enforce the contract.  Instead, the language authorizes fees as an expense of litigation that Carr agreed to pay in any action brought by another person arising out of the performance of the contract.  The intent was to ensure that Chowchilla did not suffer any damages if, as a result of Carr's negligence or willful misconduct, it became embroiled in litigation with a third party." 

Real Estate Brokerage Proprietor Who Ratified Employee Conduct Liable For Attorney’s Fees Under Elder Abuse Act Fee-Shifting Provision

Proprietor’s Ratification Triggered Fee Liability to Conservator When House Sold For Less Than Its Fair Market Value.

            Welfare and Institutions Code section 15657.5 has a mandatory fee-shifting provision that authorizes an award of reasonable attorney’s fees and costs (including conservator’s fees devoted to litigation) when a defendant is proven liable for financial abuse of an elder under section 15610.30.  Civil Code section 3294(b) is the provision that makes an employer liable for punitive damages if employer ratified an employee’s wrongful conduct, which has applicability under section 15657.5(b).  This latter provision states that no attorney’s fees can be assessed against any employer unless the Civil Code section 3294(b) imputation standards are met.    All these provisions came into play and produced the fee award that was sustained on appeal in the case we next discuss.

            In Vilchez v. Seville Properties, Case No. B196779 (2d Dist., Div. 8 Aug. 22, 2008) (unpublished), Ungo, the sole proprietor of a brokerage business, was found liable for damages in $50,000 to a conservator for having ratified his employee’s actions in selling the incompetent conservatee’s home for less than its fair market value.  The trial court also awarded $50,549.30 in attorney’s fees, costs, and conservator’s fees to conservator, who had earlier attempted to rescind the sale without success, expressly determining that the financial abuse against conservatee was reckless, oppressive, fraudulent and malicious in nature.   (The breakdown was $40,218.75 in attorney’s fees, $8,020.55 in costs, and $2,310 in conservator’s fees.)  The fees were awarded under section 15657.5.  Ungo appealed.  He untimely appealed the compensatory judgment, but did separately—and timely—appeal the adverse fee award.  (BLOG NOTE—Under our “Cases:  Appealability” topical section, we have discussed past decisions recognizing that fee awards are separately appealable, repeatedly noting that failure to separately appeal fee orders may result in the appellate court determining it lacks jurisdiction to consider the fee award challenges.  Here, the appellant was dilatory on the merits appeal, but timely with respect to challenging the fee award.)

            Ungo lost his challenges on appeal to the fee award. 

            First, Ungo’s reliance on Welfare and Institutions Code section 15657, which deals with elder physical abuse or neglect, was inapposite because this case concerned elder financial abuse, which triggered the section 15657.5 fee-shifting statute. 

            Second, attorney’s fees were warranted against Ungo, because the evidence did show he ratified the conduct of his employees—he reviewed his employee’s listing agreement and discussed conservatee’s condition with the employees, he made no further investigation, and he ignored conservator’s rescission request.  Fees were properly awardable under section 15657.5(b), based on substantial evidence supporting the ratification of conduct under Civil Code section 3294(b). 

            

            

Litigant Prevailing On Labor Code Indemnification Issue After Oral Ruling On A Directed Verdict Motion Did Not Preserve Jurisdiction For Appellate Review By Failing To Obtain Entry of A Judgment On The Directed Verdict Motion

Second District, Division Eight Dismisses Appeal of Fee Motion Denial for Lack of Jurisdiction, Reminding Us That A Fee Determination Is Only Appealable After Entry of An Appealable Order or Judgment.

            Increasingly, appellate courts have become less lenient for litigants'/practitioners' failures to appeal from appealable orders or judgments.  For example, no appeal technically lies from an order sustaining a demurrer without leave on all claims; the appeal lies from a subsequent judgment of dismissal based on the demurrer ruling.  Sometimes, appellate courts have rescued appeals from such demurrer rulings by treating the appeal as a petition for writ of mandate.  However, there have been stern warnings from some appellate panels that they will not rescue litigants/practitioners from nonappealable orders in situations where formal orders or judgments are necessary.  See, e.g., Jordan v. Malone, 5 Cal.App.4^th 18, 22 (1992); Shpiller v. Harry C's Redlands, 13 Cal.App.4^th 1177 (1993); Cohen v. Equitable Life Assurance Society, 196 Cal.App.3d 669, 671 (1987).  The more modern rule came around to "bite" the winning litigant in the next case, resulting in the dismissal of his appeal.

            Renteria v. Cruz, Case No. B196359 (2d Dist., Div. 8 Sept. 18, 2008) (unpublished), involved Renteria, an unlicensed stucco/plaster subcontractor who built scaffolding for a home improvement project.  After a worker fell off the scaffolding, the worker sued Renteria, the contractor who hired Renteria (Cruz), and the owner of the house (Fregolee).  Cruz and Renteria filed indemnity cross-claims against each other, and Fregolee got out on a summary judgment motion.  After several days of trial, Renteria filed a directed verdict motion against Cruz on Renteria's cross-complaint and a nonsuit motion against Cruz's cross-complaint, arguing that Renteria was Cruz's employee acting within the source and scope so as to be entitled to indemnification for fees/costs under Labor Code section 2802.  The trial court orally granted both motions in a terse two sentence pronouncement with no express findings.  Injured worker dismissed his complaint against Renteria without prejudice, so that the trial only proceeded against the worker's claims against Cruz.  The jury returned a verdict against Cruz (finding him 35% responsible), and judgment was entered based on the verdict (with nothing said about Renteria).

            Renteria filed a motion seeking an attorney's fees award of $132,837.50 from Cruz.  The trial court denied the request.  While acknowledging the indemnification basis under Labor Code section 2802, the trial judge ruled he had made no express determination as to whether Renteria was acting within the course and scope, which required a denial of the fee request.  Renteria appealed from the fee denial order.

            In a decision dismissing the appeal for lack of jurisdiction, the appellate panel—in a 3-0 decision authored by Justice Bigelow—reminded us all of an important twist in appealing attorney's fees orders:  attorney's fees orders after judgment are appealable under Code of Civil Procedure section 904.1.  If no appealable judgment was the precursor to the fee order, then appellate jurisdiction likely will be found lacking.

            That is exactly what occurred here.  The summary judgment in favor of Fregolee and the judgment upon verdict in favor of injured worker did not relate to Renteria.  Appellant never obtained entry of judgment based upon the directed verdict motion, which was fatal because an order on a directed verdict motion is not itself appealable.  (Hilliard v. A.H. Robins Co., 148 Cal.App.3d 374, 384-385 (1983).)  The appellate panel did not want to rescue the flaw by amending the judgment, citing toJordan v. Malone, supra, 5 Cal.App.4^th at 22 for the view that strict compliance with the appealable order rule was in order. 

            However, the Court of Appeal suggested that not all was lost.  If Renteria were to secure a judgment on the directed verdict/nonsuit motions, the appellate panel indicated that it might disagree that the "course and scope" issue was not ruled on—hoping to save time and expense if the fee order was challenged after entry of an appropriate judgment on the merits issue.

            BLOG OBSERVATION—Since 1963, Code of Civil Procedure section 581d requires that all involuntary and nonsuit dismissals must be in the form of a written order, signed and filed, with such orders constituting judgments.  This amendment makes minute entries in this area ineffectual and nonappealable, a reminder for all practitioners entering the appellate arena to not blindly rely on minute orders as necessarily being appealable in nature. 

First District, Division Four Publishes Melbostad Decision Reviewed On Our July 25, 2008 Post

Melbostad Offers Crucial Tips on Correctly Appealing anti-SLAPP Order Granting Fees to a Prevailing Defendant.

            On August 4, 2008, the First District, Division Four—on its own motion—has decided to publish Melbostad v. Fisher, Case No. A119514 (1^st Dist., Div. 4 July 23, 2008).  Actually, we believe that this was a decision well justified for publication, clarifying the type of fee grant orders that must be appealed from in order to preserve appellate jurisdiction.  It specifically held that a later "judgment" combining a previous order granting an anti-SLAPP motion and order granting the separate anti-SLAPP fee motion "served no purpose," where prior written orders—albeit two different ones—should have been the subject of separate appeals.  Melbostad is must reading for practitioners representing litigants aggrieved by grants of anti-SLAPP merits and fees motions.  See our earlier July 25, 2008 post on Melbostad.

Anti-SLAPP Fee Award: Don’t Wait Until Final Judgment Issued—Appeal From Prior Order Granting Fees Where Earlier Dismissal Of Entire Complaint Has Occurred

First District Unpublished Decision So Counsels, Dismissing Appeal Where Anti-SLAPP Plaintiff Failed to Timely Appeal from Fee Recovery Order.

            Melbostad v. Fisher, Case No. A119514 (1^st Dis., Div. 4 July 23, 2008) (unpublished) is must reading for litigants and practitioners with respect to what orders should be appealed from in order to preserve review of an adverse anti-SLAPP fee award.

            As we have seen before, Code of Civil Procedure section 425.16 (c) provides that a prevailing defendant on an anti-SLAPP defendant is entitled to recovery of attorney’s fees and costs.  That means it is critical for a losing plaintiff to appeal from the proper fee grant order or ultimate judgment, in timely fashion, so as to preserve appellate jurisdiction to review the lower court’s ruling. 

            Melbostad involved the following procedural storyline:

• On April 18, 2006, the trial court granted defendants’ motion, striking plaintiff’s complaint in entirety, and indicating defendants were entitled to fees pursuant to a later noticed hearing.
• The trial court granted reconsideration and recusal motions based on plaintiff’s claim that the trial court research attorney was biased against him, with the trial judge agreeing to work up the motion without the assistance of the research attorney.
• On September 8, 2006, the trial court granted defendants’ anti-SLAPP motion, striking the entire complaint.  Defendants sent plaintiff a “notice of entry of order” on the same day.  No appeal was taken from that order, although it was appealable.
• Plaintiff filed a chapter 13 bankruptcy, and defendants obtained a lift stay order from the bankruptcy court so that they could pursue their attorney’s fees motion in connection with the anti-SLAPP victory.
• On June 13, 2007, the trial court granted defendants’ motion for attorney’s fees, awarding them $148,044.25 in fees/costs.  Notice of the court’s order was served the same day.
• On August 1, 2007, judgment was entered recapitulating the two prior orders granting the motion to strike and awarding attorney’s fees. 
• On September 28, 2007, plaintiff appealed from the judgment.

After appellant filed a civil case information statement (a screening devise routinely used by appellate courts), the First District, Division Four directed the parties to address the timeliness of the appeal.  This turned out to be the dispositive issue, and one that went against plaintiff so that no review of the merits of the $148,044.25 fees/cost award took place.

      In a very scholarly discourse on anti-SLAPP appealability, Justice Sepulveda—writing for a 3-0 panel—determined that appellant should have independent appealed the September 8, 2006 order (for purposes of a merits review) and the June 13, 2007 order (for scrutiny of the fees/cost award).  Appellant’s appeal on September 28, 2007 was outside the 60 day appeal period ticking from the date of the June 13, 2007 fee grant order. 

      Appellant conceded that his failure to appeal the September 8, 2006 order precluded consideration of the correctness of the motion to strike his complaint.  (See Maughan v. Google Technology, Inc., 143 Cal.App.4^th 1242, 1246-1247 (2006).) 

      The unsettled question was whether an order granting fees to a prevailing defendant under the anti-SLAPP statute is directly appealable or is reviewable only on appeal from the judgment.  (Slip Opn., at p. 5.)  Appellant relied on Doe v. Luster, 145 Cal.App.4^th 139 (2006), but that decision was found inapposite because the plaintiff prevailed on anti-SLAPP motions and plaintiff appealed a denial of a fee request.  This meant that the fee denial order in Doe necessarily was interlocutory and nonappealable.  However, Doe did observe that a fee award may be appealable as “an order after judgment” where there was an earlier dismissal order disposing of the entire action.  (Id. at 147-149 & fn. 8.)  This interpretation of Doe, bolstered by a consistent interpretation advanced by The Rutter Guide treatise on appeals, made it easy for the Melbostad court to determine that the June 13, 2007 fee order was independently appealable. 

      Also relying on reasoning from Doe, the First District panel found that the later August 1, 2007 judgment was simply duplicative of the June 13, 2007 order, which was a judgment of dismissal of an immediately appealable nature.  (Accord, Paulus v. Bob Lynch Ford, Inc., 139 Cal.App.4^th 659, 669-670 (2006); Code Civ. Proc. sec. 577.)

Attorney's Fees Award of $20,330 In Anti-SLAPP Proceeding Reversed

Sixth District Overturns Fee Award Because A Subpoena Request Is Not Within the Ambit of the Anti-SLAPP Motion to Strike Procedure.

            Plaintiff, a New York resident, obtained an Ohio state court order with subpoena power to obtain information from Google about anonymous web blogs that were allegedly defaming plaintiff.  After Google declined to respond to Ohio subpoenas, plaintiff had his California attorney endorse the subpoenas in Califonia.  Google notified the web blogs, who moved under the anti-SLAPP statute (Code of Civil Procedure section 425.16) to strike the subpoenas.  The trial judge granted the motion and awarded the anonymous web blogs $20,330 out of their requested $42,241.89 in fees and costs as the prevailing parties.  Plaintiff timely appealed both the merits and fee award orders.  (BLOG NOTE—Good move, as discussed in our category “Cases:  Appeability.”  With rare exceptions, fee awards are separately appealable and failure to separately appeal can mean there is no review of the fee orders.)

            Plaintiff obtained a reversal of both orders.  The Sixth District determined that a subpoena request was not the equivalent of a “cause of action” under section 425.16, such that it could not be the subject of an anti-SLAPP motion.  Justice McAdams, in an impassioned concurring opinion, urges the Legislature to consider whether the statute should be expanded to include third-party subpoena requests of this type given that some litigants will try to use subpoena requests “for the purpose of silencing a critic by harassment, ostracism, or retaliation.” 

            Plaintiff’s fee reversal was obtained in Tendler v. www.jewishsurvivors.blogspot.com, Case No. H031130 (6^th Dist. June 10, 2008, certified for publication on July 7, 2008). 

            Our friend H. Scott Leviant at The Complex Litigator also has an informative July 8 post on this case

Rescission Provides Basis for Attorney's Fees and Award Under Civil Code Section 1717

Fourth District, Division Three Finds Appealability and Affirms Fees In a Rescissionary Case.

            Our local Santa Ana-based appellate court, the Fourth District, Division Three, faced an appeal of a fee award based upon a rescissionary theory.  It affirmed the award in Deen v. Fisler, Case No. G038907 (4^th Dist., Div. 3 June 27, 2008) (unpublished), a  3-0 decision authored by Acting Presiding Justice Rylaarsdam.  This case teaches that rescission is a basis for finding that a fee award is “on the contract” within the meaning of Civil Code section 1717.

            Plaintiff buyer sued for specific performance of a contract to sell commercial real estate in which defendant seller executed a note and trust deed.  Defendant, in turn, cross-complained for rescission, restitution, cancellation of instruments, and slander of title, premised on the primary theory that the failure to agree on an interest rate meant there was no agreement to enforce.  The trial court agreed with defendant, entering judgment in favor of defendant in both actions.  Defendant moved for attorney’s fees based on provisions in the note and trust deed, with the trial court awarding defendant $50,000 in fees and costs.

            Plaintiff appealed, losing challenges to both the merits judgment and to the fee award.

            In a very familiar threshold challenge, defendant initially argued that the appellate court lacked jurisdiction because plaintiff failed to separately appeal from the order awarding attorney’s fees.  (See sidebar link for decisions listed in “Cases:  Appealability.”)  The Court of Appeal rejected this argument in light of the operative circumstances.  Plaintiff did appeal from the specific minute order granting attorney’s fees, although not appealing from the subsequent formal order.  Because the appellate panel liberally construed the premature appeal from a subsequent appealable order, there was no fatal infirmity.  Unlike the other situations we have reviewed, plaintiff did specify the minute order actually fixing fees, even if it was formally entered at a later point in time.  “Because plaintiff ‘expressly specified’ both the judgment and liberally construed order awarding attorney fees in a single notice of appeal, we have jurisdiction over the appeal of the order awarding attorney fees.”  (Slip Opn., at p. 5.)

            Although overcoming the jurisdictional hurdle, plaintiff did not catapult to a win on the merits. 

            Defendant obtained a rescission of all agreements relating to the real estate transaction, including a rescission of the note and trust deed.  This was sufficient to authorize recovery of fees under the contractual fees clauses, as mandated by Civil Code section 1717.  It mattered little whether plaintiff attempted to enforce the note and trust deed; rather, because integrated real estate documents were involved, defendant’s successful rescission of the entire transaction—which included the note and trust deed—triggered fee recovery under section 1717.  (Slip Opn., at p. 8.)  Result:  fee award affirmed.

            (BLOG OBSERVATION—Alternatively, there are cases holding that a party prevailing on a rescission claim, as the defendant did in this case, qualifies for section 1717 “on the contract” recovery.  See, e.g., Leaf v. Phil Rauch, Inc., 47 Cal.App.3d 371, 378-379 (1975); Care Constr., Inc. v. Century Convalescent Centers, Inc., 54 Cal.App.3d 701, 705-707 (1976); Hambarian v. City of Orange, 2006 WL 1756835 at *3-4 (4^th Dist., Div. 3 June 28, 2006) (Fybel, J.).  Similarly, the result in Deen is nearly identical to the conclusion reached in Neptune Society Corp. v. Longanecker, 194 Cal.App.3d 1233, 1249-1250 (1987) [rescission of partnership agreement and promissory notes—where notes had fee clauses—triggered section 1717 because notes were inherent part of the entire transaction and fee clauses applied to entire transaction].)

            

            

            

Attorney's Fees Awarded Against Litigant Losing a Code of Civil Procedure Section 128.7 Motion is Appealable and Justified

Sixth District Affirms Fee Award Assessed Against Litigant Who Brought Section 128.7 Motion That Was Denied.

            In Star Building Systems v. G.W. Davis, Inc., Case No. H032093 (6^th Dist. June 27, 2008) (unpublished), plaintiff filed a first amended complaint, after a demurrer was sustained with leave, with an unjust enrichment claim that addressed the trial court’s concerns at the demurrer stage.  Defendant believed that the new allegations lacked evidentiary support and filed a motion for award of sanctions under Code of Civil Procedure section 128.7, a provision allowing the trial court discretion to sanction a litigant and/or its counsel for filing a pleading that has been presented for an improper purpose, that is frivolous in nature, or that lacks evidentiary support or not likely to have such support after a reasonable opportunity is afforded for investigation.  The trial court denied the section 128.7 motion and awarded plaintiff $9,750 in expenses and attorneys fees for having to oppose the motion.  (Section 128.7(c) authorizes an award of attorney’s fees and expenses “if warranted” to the party who prevails on such a sanctions motion.)

            Defendant appealed and lost his challenges to the fee award.

            

            At the outset, the Sixth District, in a 3-0 opinion authored by Justice Elia, rebuffed the argument that the fee award was not appealable.  Citing In re Marriage of Skelley, 18 Cal.3d 365, 368 (1976), the appellate panel found the order was a collateral order that was dispositive of the rights of party on a collateral matter that directed a monetary payment.  This sufficed to satisfy the collateral order exception in the area of appealability.

            Next, using the abuse of discretion review standard, the Court of Appeal found no abuse.  Justice Elia found that defendant had not demonstrated that the pleading was frivolous and was largely dependent on underlying facts, some of which would likely be developed during discovery later on.   Fee award affirmed, in the case of the aggrieved litigant appealing a section 127.8 motion denial. 

            (BLOG OBSERVATION—Defendant’s motion did appear premature.  It would have seemed better to allow plaintiff to engage in discovery and then bring a summary judgment or section 128.7 motion once plaintiff could not demonstrate the evidentiary basis for the unjust enrichment claim.)