CALIFORNIA ATTORNEY'S FEES

Jurisdiction To Award Fees And Prevailing Party Status: Borrower Substantially Reducing Loan Exposure Through Usury Defense Awarded Fees Of $43,960

Trial Court Had Jurisdiction to Award Fees While Merits Appeal Pending and Borrower Was the Prevailing Party.

     Borrower on a loan, even after an initial appeal, reduced a loan balance to only $3,602.72 after an offset for usurious interest. The lower court refused to award costs to lender and also awarded $43,960 to borrower based on a fees clause in the promissory note.

     Lender appealed, but lost all fees/costs issues in Gilbert v. Wisdom, Case Nos. E047235, E048425 (4^th Dist., Div. 1 Feb. 4, 2010) (unpublished).

     Lender first argued that the appeal from the merits judgment, before the fee motion was filed, divested the trial court of jurisdiction to hear borrower’s fee motion. Wrong, because numerous courts of appeal have rejected similar arguments. (See, e.g., Robertson v. Rodriguez, 36 Cal.App.4^th 347, 360 (1995); Bankes v. Lucas, 9 Cal.App.4^th 365, 368 (1992).) Although relying on some isolated language in Butler-Rupp v. Lourdeaux, 154 Cal.App.4^th 918, 928 (2007), the Court of Appeal noted that Butler-Rupp, when viewed in context, did not dictate a different result.

     Lender next argued that the trial court did not explain the legal basis for the fee award. However, the appellate panel found no court rules or statutes that required such a statement of reasons for ruling on a motion for fees. (Slip Opn., p. 36; Laabs v. City of Victorville, 163 Cal.App.4^th 1242, 1272 (2008).)

     Lender also contended that borrower did not prevail for Civil Code section 1717 purposes. Wrong again. A lawsuit attacking a note as usurious is an action on the contract for purposes of fee recovery, and borrower reduced a loan balance to minimal proportions.

     Lender also challenged the striking of his costs memorandum request. However, this appellate challenge was dismissed because lender failed to appeal 60 days after the service of notice of the costs strike ruling.

Civil Rights: CCP § 1038 Does Not Apply To Unsuccessful 1983 Civil Rights Claims

First District, Division 4 So Decides, Also Denying Fees on a Different Theory Raised After Losing the § 1038 Request—Counseling to Seek Fees on Multiple Grounds the First Time Around.

     State entities eventually defended against a civil rights claim brought by a peace officer organization under 42 U.S.C. § 1983. State entities then moved to recover $370,529.29 in attorney’s fees under Code of Civil Procedure section 1038, which permits trial courts to award defendants their costs and fees in defending against unmeritorious and frivolous claims brought under the California Tort Claims Act. That request was denied, so state entities made a second request under 42 U.S.C. § 1988, which allows fee recovery in civil rights cases to prevailing defendants where plaintiff’s action was frivolous, unreasonable, or without foundation. That request, too, was denied. State entities appealed.

     Their appeals were unsuccessful.

     In California Correctional Peace Officers Assn. v. Virga, Case No. A123989 (1^st Dist., Div. 4 Jan. 15, 2010) (certified for publication), the appellate decision decided: (1) a section 1983 civil rights action is not a “civil proceeding under the California Tort Claims Act” for purposes of a fee award under section 1038; and (2) prevailing defendants were obligated to put forth all of their reasons for an award of attorney’s fees when they made their initial request, not attempting to use a later motion for renewal as a device to get a “second bite at the apple.” In doing so, the Court of Appeal has a nice discussion on motions for reconsideration and motions for renewal that is must reading for all litigators who contemplate the filing of such motions.

Costs Deadline, Fee Substantiation and Allocation: Fees/Costs Awarded In Anti-Speculation Liquidated Damages Clause Dispute Affirmed In Favor Of Developer

Liquidated Damages Clause Found Valid; Fees/Costs Award Sustained Also.

     This next decision should be of substantive interest to both developers and our readers interested in fee issues.

     Although unpublished, Beck Properties, Inc. v. Hameed, Case No. C058279 (Dec. 11, 2009) decided that an anti-speculation clause in a purchase agreement between a developer and residential buyers – a provision allowing for the developer to recover $50,000 in liquidated damages should purchasers sell or transfer the home in the one year period following close of escrow – was valid as far liquidated damages was concerned. The theory behind this type of clause is to encourage buyers to stabilize the neighborhood by living in the residence and keep speculators from bringing down property values based on lack of maintenance, competition with the developer trying to sell remaining units, and abandonment of the units to foreclosure by the speculators.

     Developer won a bench trial contesting the validity of the liquidated damages clause. The decision has a nice discussion of the proof needed to support such clauses and defeat buyers’ defense that they really did intend to live there (i.e., 1031 exchange information obtained during discovery and buyers’ use of option-ARM financing that provided for debt negative amortization/low, interest-only payments that is typically only used by investors).

     Later, the trial court awarded developer $88,485 in fees under an attorney’s fees clause in the purchase contract. Buyers’ appellate arguments were not persuasive for purposes of upsetting this award.

     Even though the costs memorandum was prematurely filed before entry of judgment, this is a mere irregularity not rising to the level of reversible error. (Parker v. City of Los Angeles, 44 Cal.App.3d 556, 566 (1974).)

     Buyers next challenged the fee substantiation by attacking the declaration of the lead counsel as to the performed legal work, arguing that it was inadequate because an associate did most of the work. Wrong, said the appellate panel. Lead attorney supervised the associate, and the time reflected came from the firm’s billing system in the normal course of business. The fee substantiation evidence sufficed.

     Last, buyers argued that the time spent on litigating the case against the buyer husband’s wife (who was dismissed) needed to be apportioned from the fee request. Not so, because “[n]o work was performed regarding [wife] that was not equally necessary for prosecuting the case against [husband].” (Slip Opn., p. 17.)

     BLOG UNDERVIEW—Co-contributor Marc has litigated the validity of anti-speculation clauses. He has done some prior matters where the clauses were challenged as unenforceable property restraints, beating demurrers and then settling the matters through mediation.

Post-Arbitration Fees and Judgment Enforcement: Court Of Appeal Considers Some Interesting Fee Award Appellate Challenges In These Two Areas

 

Sixth District Likes Trial Court’s Rulings Across the Board on Fee Issues.

     In Exatron, Inc. DiFrancesco, Case No. H033094 (6^th Dist. Dec. 9, 2009) (unpublished), plaintiff’s prior attorney’s fees and costs award from a contractual arbitration against defendant were affirmed in a prior appellate decision. Nine months later, plaintiff filed for supplemental fees and expenses of $105,919 to confirm the arbitration award, enforce the judgment, and defend the appeal. Ultimately, the trial court determined that plaintiff was only entitled to recover $42,195 in attorney’s fees incurred in enforcing the judgment (the confirmed arbitration award), denying in the process plaintiff’s Code of Civil Procedure section 473 mandatory and discretionary motions to allow the other supplemental fees and expenses.

     Both sides appealed; both sides lost.

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.

Prevailing Party: Defendants City And Landlord Win Summary Judgment and Gain $184,605 Fee Award As Prevailing Parties Under Civil Code Section 1717

Both Determinations Affirmed on Appeal.

     In Marinos v. City of Rocklin, Case Nos. C058958/C060844 (3d Dist. Nov. 4, 2009) (unpublished), defendants City and landlord prevailed on a summary judgment motion based on plaintiffs not complying with a notice provision in a settlement agreement with a fees clause. The trial court then awarded defendants $184,605 in attorney’s fees (a 30% reduction from the requested fees of $265,066.50) to defendants as prevailing parties under the fees clause.

     Plaintiffs appealed, and lost.

     They initially argued that the fee motion was untimely because it was filed after the costs memorandum deadline. Not so, said the appellate panel. Fee recovery is governed by CRC, rule 3.1702(b), which is tied to the time period for appealing the underlying merits judgment. Here, defendants timely filed within 30 days after denial of the new trial motion.

     Plaintiffs next argued that the two law firms representing the defendants unreasonably duplicated efforts. The problem with this contention is that the fee award is resolved under an abuse of discretion standard deferential to the lower court’s ruling. (Maughan v. Google Technology, Inc., 143 Cal.App.4^th 1242, 1249 (2006).) Although the notice issue was ultimately determinative, both sides vigorously litigated many issues and engaged in lots of discovery and law and motion practice. The fee claimants provided 112 pages of detailed invoices, such that more than adequate substantiation of work effort was presented before the lower court. Given that the trial judge did reduce the requested fees by 30%, plaintiffs did not do enough in simply posing unreasonableness rhetorical questions rather than “show” the appellate court that the award was patently unreasonable.

     They then argued that the fee motion was deficient because the defendants did not file copies of their fee agreements in connection with the motions. This one lost “ . . . as plaintiffs fail to offer any authority on that point.” (BLOG OBSERVATION—This argument was likely not going to prevail given that, under the Business and Professions Code, fee agreements are confidential attorney-client communications.)

     Because plaintiffs did not meet their burden in showing error, the fee award was sustained on appeal.

Prevailing Party: Broadly-Worded Fees Clause Gave Rise To Fee Exposure Even Under Santisas

Sixth District Also Resolves Joinder, Motion Timeliness, and Apportionment Issues.

     The next case is a virtual “issue cross-over” study for such subjects as prevailing party after a dismissal without prejudice (Santisas issue); joinder; motion timeliness; and apportionment. Walewski v. Williams, Case No. H033026 (6^th Dist. Oct. 8, 2009) (unpublished) is worth reading to see how each of these issues panned out.

Postjudgment Attorney’s Fees: “Fees on Fees” Must Be Claimed In Attorney’s Fees Hearing Before Trial Court … Appellate Court Rejects Awarding Them After Fee Claimant Wins on Appeal

 

Fourth District, Division 3 So Holds in Unpublished Decision.

     The lesson from the next case for litigants seeking attorney’s fees is to make sure your time for bringing the fee petition (called “fees on fees,” and usually compensable) is made timely before the trial court hearing the fee motion. If you wait and try to obtain later (after winning later appeals of the fees decision), you are probably out of luck.

     In Epicor Software Corp. v. The Imagery Group, Case No. G041333) (4^th Dist., Div. 3 Aug. 31, 2009) (unpublished), defendant/cross-complainant was awarded $14,849 in costs and $141,363.80 in attorney’s fees by the trial court after defensing plaintiff in a jury trial. Plaintiff appealed the costs/fee award, but it was affirmed. Plaintiff then filed a second fee motion seeking $50,000 more for winning on appeal, but also included $16,537.50 in fees relating to preparation of the original fee motion. The trial court disallowed the $16,537.50, but did award $30,863 in fees to plaintiff on the second motion.

     Plaintiff, apparently unhappy, appealed. It lost in a 3-0 decision authored by Acting Presiding Justice O’Leary.

     The problem with Plaintiff’s position was that it should have sought to recoup “fees on fees” compensation from the trial judge when the original motion was brought. Justice O’Leary found it was “common practice for attorneys to file supplemental declarations covering such fees and/or to estimate the reasonable fees that will be incurred in replying to opposition and attending the hearing on the motion” so that the request is timely heard by the trial judge. (Slip Opn., p. 4.) This result also followed from the deadlines of California Rule of Court 3.1702, which requires that postjudgment fees be sought within the time for filing the first appeal of a judgment and that later appellate fees won for appellate work had to be filed within 40 days after remittitur issuance.

     So, if you want to recoup “fees on fees,” put the issue in front of the trial judge at the time of the hearing on the original fees motion.

Miss Ellla Nachman with normal sized alarm clock in her hand.  Library of Congress.

Statutory Fees: Attorney's Fees Motion Preserves Fee Request, With Claimants Not Having To File Costs Memorandum Seeking Fees

Second District, Division 3 Rebuffs Contrary Technical Argument.

     In Brownstein v. Smith, Case No. B205864 (2d Dist., Div. 3 July 1, 2009), plaintiff lost a condominium dispute against other condo owners arising out of CC&Rs. Defendants were entitled to seek fees under Civil Code section 1354(a), a fee-shifting provision applying to parties seeking to successfully enforce CC&Rs. Defendants filed a motion seeking to recover $171,611.11 in fees and costs against plaintiff, with the bulk ($162,722.14) being for fees. The trial court eventually awarded defendants fees and costs of $161,223.74.

     The miffed plaintiff appealed, primarily arguing that defendants were precluded from recovering fees because they failed to file a costs memorandum in which fees were requested.

     This did not go very far. The appellate panel found that the proper method to recovery attorney's fees as an item of costs is to file a noticed motion. (Chinn v. KMR Property Management, 166 Cal.App.4^th 175, 194 (2008); Code Civ. Proc., § 1033.5(c)(5).) The trial court award of fees was affirmed, and the appellate court remanded so that defendants could seek recovery of appellate fees against the unsuccessful plaintiff.

Family Law Awards: Needs Award Must Be Heard Within 15 Days of Motion or OSC

Third District Reverses Lower Court Deferring Award for Unspecified Period.

     Marriage of Shurr, Case No. C057456 (3d Dist. May 12, 2009) (unpublished) does remind us that procedural time limits do exist for a reason and are frequently enforced by their terms. A trial court failed to hear wife’s request for an award of attorney’s fees under Family Code section 2030 based on “need.” It deferred the decision to an unspecified time. The appellate court reversed and remanded, finding that section 2031(a)(2) required that the fee request be heard within 15 days of the hearing on the motion or order to show cause. Reason for the reversal: “The court erred in failing to consider wife’s application during this timeframe.”

Legal Malpractice: Payment Of Attorney’s Fees To Correct Scrivener’s Error Is “Actual Injury” For Purposes Of Attorney Malpractice Statute of Limitations

Fourth District, Division 1 Explores “Cross Over” Issue of How Fees Have Implications in Lawyer Malpractice Cases.

     Remember when we all studied for the California Bar examination? (Probably most of you are glad those days are over.) Well, we were drilled about spotting “cross-over issues” or those issues that had implications for more than one area of substantive law. That is what we have in the next case—where payment of attorney’s fees will constitute “actual injury” so as to prevent tolling of the one-year California statute of limitations governing attorney malpractice actions (Code of Civil Procedure section 340.6).

     Section 340.6 provides that a legal malpractice action must be commenced within one year after the plaintiff discovers or reasonably should have discovered the facts constituting the wrongful act or omission. Under this statute, the period is tolled during the time plaintiff has not sustained “actual injury.” So, what do attorney’s fees have to do with actual injury? The next case tells us.

     In Hazewinkel v. Macgurn, Case No. D053432 (4^th Dist., Div. 1 May 8, 2009) (unpublished), son/beneficiary of the trust of his deceased father retained an attorney and paid him fees to correct a scrivener’s error by a former attorney erroneously amending a trust in a way that gave father’s disinherited ex-wife a claim to the trust and certain assets in it. However, son did not move to sue for legal malpractice until a year after actually paying some fees to the nonsued attorney retained to correct the problem in probate proceedings. That was enough “actual injury” to trigger the running of the statute of limitations, a point established by the California Supreme Court in Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal.4^th 739, 750-751 (1998).) Paying a second attorney fees to untangle the first attorney’s error constitutes “actual injury.” (Id. at 751.)

Fee Motion Deadlines: Pay Attention To Them …. Or Land Into the Hands of Defeat!

First District, Division 3 Affirms Trial Court’s Denial of Fees After Litigant Waited 17 Months Before Moving For a Fee Award.

     Boy, we knew that the next case was ominous for somebody when the appellate court opened with this sentence: “By their inaction, counsel for the plaintiff, have permitted a large measure of victory to slip from their jaws into the hands of defeat.” As you will see, the moral of the story is to observe the fee motion deadlines contained in the California Rules of Court or else risk the mixed fate of the “victor” in this next case—who won a merit judgment but lost the ability to recoup fees.

     In Nutt v. U.S. Food Service, Inc., Case No. A122333 (1^st Dist., Div. 3 May 5, 2009) (unpublished), plaintiff accepted defendant’s $201,000 998 offer, with the court to determine the reasonable attorney’s fees and costs to be awarded. It took some time for the judgment to be entered, and the defense sent several letters asking for the timing of the fee motion so that the entire case could be resolved. Approximately seventeen months after entry of judgment, plaintiff finally moved for a fees award. The trial court initially denied the motion because it was untimely. Plaintiff filed a motion to be relieved of his default pursuant to Code of Civil Procedure section 473(b). The lower court denied the motion based on lack of jurisdiction, given that it was sixth months after the deadline for bringing the motion. Plaintiff moved for reconsideration, arguing that the section 473(b) six-month period did not begin to run until the date on which the court ruled that the fee motion was untimely. (Actually, there is good authority for this. See Lee v. Wells Fargo Bank, 88 Cal.App.4^th 1187, 1199-1200 (2001); Colburn Biological Institute v. DeBolt, 6 Cal.2d 631 (1936).) The lower court granted reconsideration, but again denied the motion based on finding no mistake, inadvertence, or excusable neglect.

     Plaintiff appealed, but lost upon review by the First District, Division 3—failing to surmount the abuse of discretion standard used to scrutinize the 473 ruling.

Default Judgment Set Aside Fee Awards: Defendants Get To Challenge Fee And Costs Awards Under 15-Day CRC Rules

Second District, Division 3 So Holds in Unpublished Decision on a Novel Issue.

     This next decision, although unpublished, maybe should be. It is the first decision that we have seen establishing that defendants have the deadlines available for purposes of striking or taxing costs to challenge attorney’s fees and costs awarded as a condition of vacating and setting aside a default judgment.

     Baek v. A-Team Construction, Inc., Case No. B199437 (2d Dist., Div. 3 Apr. 24, 2009) (unpublished) involved a plaintiff owner-defendant general contractor dispute in which a hefty $1,337,407 default judgment was entered against general contractor.  [For the A-Team Intro., click here.] Defendant moved to set aside the default judgment under Code of Civil Procedure section 473. After a hearing on the motion, the trial court allowed plaintiff another week to file a supplemental declaration on the fees expended for pursuing the default judgment and other litigation matters. However, nothing was said about any defense opposition to the fees to be claimed. Plaintiff requested fees and costs totaling $31,738.88, and the court—one week after plaintiff filed the supplemental declaration and with no time given to the defense to contest—set aside the default judgment and awarded plaintiffs $20,097.88 in attorney’s fees and costs, to be paid by defense counsel (an amount subsequently reduced to $18,897.88 after the trial court denied a defense motion for reconsideration and a motion to tax plaintiff’s supplemental declaration fee/costs requests). The parties settled the case, with defendant paying $7,500 to plaintiff (yes, you read it right, $7,500) but with the $18,897.88 fee award remaining in place. (BLOG OBSERVATION—Yet, again, the fee award became the primary point of contention.) Defense counsel appealed both the original fee award and reconsideration denial.

Probate Settlement: Heir Loses Matter Encompassed By Settlement Agreement Fee Clause, Suffering Adverse Award Of $51,205.36 In Costs and Attorney's Fees

 

Second District, Division 5 Sustains Award Based on Broad Fees Clause in Settlement Agreement and Confirms 60 Day Fee Deadline Does Not Apply in Probate Litigation Matters.

     Most of the time in probate matters, attorney's fees are awarded for services to an estate. (Estate of Trynin, 47 Cal.2d 265, 272-273; see also cases under our category "Probate.") However, fees can also be awarded under contractual fee clauses in probate settlement agreements, as the next case illustrates.

     Estate of Simon, Case No. B209553 (2d Dist., Div. 5 Feb. 23, 2009) (unpublished) involved a settlement agreement that was reached in a prior probate action brought by son against his father and his father's second wife.

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.

Routine Costs: Trial Judge Found To Have Inferentially Granted 30-Day Extension to File Costs Memorandum When Granting Costs Where Memorandum Untimely Filed Under CRC 3.1700(a)

Fourth District, Division One Also Finds Untimeliness Argument Waived, But Also Decides Merits in Favor of Costs Claimant.

     California Rules of Court, rule 3.1700(a)(1) does contain a time deadline for filing and service of a costs memorandum after mailing of notice of entry of judgment or dismissal—15 days. The lower court has also discretion to extend the time for filing and servicing a cost memorandum for up to another 30 days if the parties do not agree to a specified extension. (See Cal.Rules of Court, rule 3.1700(b)(3).) However, a recent published decision holds that the lower court will be presumed to have granted the extension by granting costs under an untimely costs memorandum—without even a request by the cost claimant or an express statement by the lower court that the time is being extended.

Plaintiff Losing Trespass Case Against Defendant Landlords Liable For Opposition Attorney's Fees Under Broadly Worded Lease Clause

Second District, Division Four Determines Landlord Prevailed and Dismisses Other Technical Challenges to Major Portion of Fee Award.

            Tenant got caught up in an imbroglio with her Landlords when she moved her business into a residential apartment after the roof of her off-premises store collapsed.  After being served with an eviction notice, Tenant brought a civil action against Landlords arising from their efforts to evict her from the apartment (Vinci I).  Landlords filed an unlawful detainer action, which Tenant lost such that possession of the apartment was restored to Landlords.  This prompted Tenant to file an amended complaint in Vinci I, adding claims for trespass (based on Landlords' entry into the apartment to photograph its contents) and bad faith denial of contract.  The lower court sustained demurrers to all claims but the trespass count, which was transferred to a limited jurisdiction department.  Tenant filed a new action, Vinci II, asserting the same causes of action she tried to add to her complaint in Vinci I (with the trespass claim consolidated into this new action).  Vinci II proceeded to trial, with the court entering judgment in favor of Landlords based on the litigation privilege defense.  Tenant appealed, with the Court of Appeal finding that all the rulings in Vinci I and Vinci II were correct, excepting reversal on the trespass claim which was remanded for trial.  The jury found one of the Landlords had trespassed, but caused Tenant no harm and no damages.  The trial court awarded Landlords $157,940 in attorney's fees under a fees clause in the lease with Tenant.  Tenant appealed.

            In Vinci v. Pollyea, Case No. B199494 (2d Dist., Div. 4 Oct. 2, 2008) (unpublished), Presiding Justice Epstein—writing for a 3-0 panel of the Second District, Division 4—affirmed with a modification of the fee award.

            Initially, the appellate panel determined that Tenant's loss on the trespass count was covered by a broadly worded fees clause in the lease, which was not limited to actions on the contract but included "any legal action or proceeding" brought by either party to the agreement.  This was broad enough to cover the trespass cause of action.  (Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4^th 1338, 1341 (1992).) 

            Landlords were definitely the prevailing parties, the Court of Appeal reasoned.  Most of Tenant's claims were dismissed before trial, and she did not obtain any damages on a trespass claim for which she sought more than $1 million.  Beyond that, Tenant did not beat two prior CCP section 998 offers, one for $1,001 and a subsequent one for waiver of costs or fees. 

            Tenant next suggested that Landlords' fees motion was untimely because it was filed more than 40 days after issuance of the remittitur in the prior appeal in which the Court of Appeal had ordered both sides to bear their own costs, contravening the 40-day deadline of California Rules of Court, rule 8.278.  Not so, said Justice Epstein.  Because the prior appeal resulted in a reversal and remand, the prevailing party could not be determined until the case was at an end after remand.  Even a successful appellant who loses on the merits after trial will not be the prevailing party for purposes of Civil Code section 1717 fees for the appeal if that party ultimately loses on the merits.  (See Butler-Rupp v. Lourdeaux, 154 Cal.App.4^th 918, 928 (2007).)  Justice Epstein put it this way:  "Our order requiring each side to bear its own costs on appeal had no bearing on the entitlement to attorney fees under section 1717; based on the ultimate result in the action, respondents were the prevailing parties and were entitled to recover attorney fees, including the attorney fees in this court."  (Slip Opn., at p. 9.)  As far as timing of the motion, the appellate panel determined that rule 3.1702, not rule 8.278, governed, which meant Landlords had 180 days from entry of the ultimate judgment to timely file their fee motion. Landlords filed their fee motion 10 days after judgment entry, so there was no time bar.

            Tenant also challenged Landlords requesting the normal hourly rates charged by their attorneys rather than the rate Landlords' insurance carrier actually paid attorneys for defending the cases.  Justice Epstein rejected this challenge.  Fees can be based on the prevailing market value of comparable legal services, with the trial court not required to base its fee award on the actual contract between the insurer and counsel.  (Slip Opn., at p. 11, citing PLCM Group, Inc. v. Drexler, 22 Cal.4^th 1084, 1096, 1098 (2000).)  The trial court did not commit error in utilizing the lodestar approach.

            However, the appellate panel did reduce the fee award by $46.046, down to $111,894.  This reduction was grounded on the fact that the trial court had awarded fees previously for a period up to judgment in Vinci II, and Landlords did not move for reconsideration or challenge that award which was $46,046 less than the amount of fees claimed in the fee motion under review.  Even though the Court of Appeal agreed that the question of prevailing party could not be finally determined at the time the appellate court previously remanded the cause for trial, it was improper for the trial court to revisit the earlier portion of the fee award on remand.  Except for this reduction, Landlords won the final battle and were awarded costs on appeal (which will likely include supplemental fees based on the lease clause).

            

Prevailing Anti-SLAPP Defendant’s Failure to Timely File Fee Motion Affirmed On Appeal

Failure to Comply with CRC 3.1702’s Deadline Was Dispositive.

            California Rules of Court, rule 3.1702 requires that a motion to claim attorney’s fees for services up to and including the rendition of a trial court judgment must be served and filed within the time for filing a notice of appeal, which is normally (a) 60 days after notice of entry is given by the superior court clerk or opposing party or 60 days after a file-stamped copy of an appealable order is mailed by the opposing party, or (b) 180 days after entry of judgment where no notice is provided.  This Judicial Council rule must be rigorously followed in order to avoid timeliness arguments that can cost a litigant an opportunity to recoup fees for prevailing on an anti-SLAPP motion (with fees being mandatory for a prevailing defendant).

            An attorney felt the brunt of not complying with rule 3.1702 deadlines in Pyle v. Horowitz, Case No. A117105 (1^st Dist., Div. 3 Sept. 30, 2008) (unpublished). 

            Attorney won an anti-SLAPP motion by which a malicious prosecution action against him was dismissed through service of a notice of entry of the dismissal on April 5, 2006.  However, attorney did not timely file his fee motion on June 5, 2006, waiting instead to file on July 25, 2006.  The trial court denied attorney’s fee motion as untimely.  Attorney then filed a motion for relief under Code of Civil Procedure section 473, arguing that his failure to timely file was caused by excusable neglect.  During the section 473 law and motion proceeding, attorney conceded that the proffered excuse for failure to file did not affect his failure to file by June 5, 2006 (the fee motion deadline).  The trial court predictably denied the 473 request, prompting an appeal by aggrieved attorney.

            The First District, Division 3, in a 3-0 opinion by Presiding Justice McGuiness, affirmed the 473 denial, determining that attorney did not timely file his fee motion.

            The order of dismissal was a final judgment triggering the 60-day deadline to file a fee motion.  (See Melbostad v. Fisher, 165 Cal.App.4^th 987, 995 (2008); Kahn  v. Lasorda’s Dugout, Inc., 109 Cal.App.4^th 1118, 1120 n. 1 (2003).) 

            Attorney tried to blunt this result by relying upon Carpenter v. Jack in the Box Corp., 151 Cal.App.4^th 454 (2007).  Carpenter was not helpful to attorney, because it interpreted “rule 3.1702 such that the time limits imposed by the rule do not commence to run in connection with a motion for fees under [the ant-SLAPP statute] until entry of judgment.”  (Id. at 466 n. 9.)  In attorney’s case, however, the “entry of judgment” was the entry of the order of dismissal, with the April 5, 2006 service triggering the 60 day deadline.  Furthermore, the appeal of the anti-SLAPP grant by plaintiff did not impact the result, because “[t]he filing deadline for seeking attorney fees for services rendered before entry of a trial court judgment is not automatically stayed by an appeal.”  (Slip Opn., at p. 15.)  Attorney’s failure to timely file the fee motion was damning, compounded by his failure to proffer any excuse for not filing by the June 5, 2006 deadline. 

Appellate Court Rescues Attorney Blowing Fee Motion Deadline Under Code of Civil Procedure section 473(b)

Fourth District, Division One Credits Attorney’s Excuse that She Miscalculated Motion Deadline While Engaged in Protracted Trial.

            As we have seen before, absent a stipulation or court order, the deadline for filing a motion for attorney’s fees is based on the deadline for filing a notice of appeal.  (Cal. Rules of Court, rule 3.1702(b)(1).)  What happens if the attorney in charge—in the heat of battle in another battle—miscalculates the motion deadline?  Any relief?  You bet, said the Fourth District, Division One.  Code of Civil Procedure section 473(b), the discretionary relief provision, may save the day under the right circumstances.

            In Thomas v. Herring Broadcasting Co., Inc., Case No. D052149 (4^th Dist., Div. 1 Sept. 30, 2008) (unpublished), an attorney winning about a $20,000 jury verdict for a client blew the applicable motion deadline by eight days in which to file a motion for attorney’s fees seeking recovery of $154,000 in fees.  (BLOG OBSERVATION—Part of the jury verdict was a recovery of unpaid vacation pay under Labor Code section 227.3, which has a mandatory fee-shifting provision provided by statute.)  Attorney moved for relief under section 473(b), which is the proper statutory predicate to seek relief for missing the fee motion deadline.  (See Russell v. Trans Pacific Group, 19 Cal.App.4^th 1717, 1729 (1993).)  Attorney argued that she was involved in an all-consuming trial in another case such that she inadvertently counted from a hearing date set by the trial court for the fee motion rather than base the filing of the motion upon a count from the date of notice of entry of judgment.  Attorney also argued that she was excused because of the press of other business.  To her credit, attorney did attach some emails supporting the fact that she was mistaken in her calculations.  The lower court denied relief, but the Court of Appeal reversed and granted attorney her request to have a hearing held on the fee motion.

            The appellate panel rejected the argument that an attorney’s neglect is excusable when it solely based on the fact that the attorney is busy attending to one case and ignores deadlines in another matter.   (Slip Opn, at p. 12 n. 10, citing Elston v. City of Turlock, 38 Cal.3d 227, 234 (1985).)  However, in the case before it, attorney claimed she miscalculated the fee motion deadline, producing emails that corroborated her error.  This can be—and was—deemed excusable neglect.  (See also Nilsson v. City of Los Angeles, 249 Cal.App.2d 976, 980 (1967).)  Section 473(b) came to an attorney’s rescue in the case of the blown deadline.

            BLOG UNDERVIEW—In a footnote, the appellate court reminded us that the deadline for filing a fee motion is usually tethered to the deadline for filing an appeal, which is not extended by virtue of the fact that the notice of entry of judgment was served by mail.  (Slip Opn., at p. 3 n.4, citing Code Civ. Proc., sec. 1013(a).)

            

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).) 

DON'T LOSE YOUR FEE APPEAL - OR RELY ON A TRIAL COURT TO SAVE A LATE APPEAL

Fourth District, Division 3 Dismisses Appeal Based on Untimely Filing.

            The Fourth District, Division 3, in Kimball Avenue v. Franco, Case No. G039767 (4^th Dist., Div. 3 May 13, 2008), chronicles a sobering message for any unsuccessful litigant—appeal filing deadlines are jurisdictional and a lower court, no matter how well intentioned, cannot rescue an untimely appeal.

            On April 30, 2007, unbeknownst to the later appealing plaintiff, the trial court entered judgment enforcing a settlement and granting defendant’s motion for attorney’s fees.  This was done after several minute orders had already issued, and the April 30 judgment had been entered with confusing handmade corrections. 

            242 days after entry of the judgment on April 30, 2007, plaintiff appealed.

            Result:  too late.

            Reason:  Plaintiff only had 180 days from entry of judgment—where neither the clerk nor a party serves notice of entry earlier—in which to appeal.  (Cal. Rules of Court, rule 8.104(a)(3).)

            The trial court admirably tried to help the plaintiff clear up the confusing docket of rulings and judgment by granting a motion to vacate the judgment and reinstating it effective December 11, 2007.  However, the Court of Appeal found the trial court lacked jurisdiction to vacate the judgment, leaving plaintiff out of luck on appeal.  In finding that the 180 day deadline meant just that, the appellate court pithily observed:  “The lack of notice [from the clerk or a party] does not jeopardize the judgment.”  (Slip Opn., at p. 4.)

            An added caution exists for parties feeling aggrieved from attorney’s fee orders.  They are separately appealable, and there is a split in opinion among appellate courts on whether a separate appeal must be filed to challenge properly the fee award.  That will be explored in an upcoming post.  Nevertheless, prudence would dictate appealing separately from a fee award and asking the Court of Appeal to consolidate with the appeal of the merits judgment.  (PRACTICE POINTER—Fourth District, Division 2 frequently consolidates merits and fee appeals on its own motion, beating litigants to the punch in order to avoid a two-stage review process.)