CALIFORNIA ATTORNEY'S FEES

Deadlines: Bankruptcy Extension Rules Discussed in Attorney’s Fees Motion Filing Context by Second District, Division 6 in Published Decision

 

Fee Claimant, Two Days Too Late, Allowed to Recoup Substantial Fees Given Uncertainty in Bankruptcy Extension/Tolling Rules.

     Here is an interesting published decision relating to the deadlines for filing an attorney’s fees motion. The normal deadline, absent stipulation or extension by the trial judge, is governed by California Rules of Court, rule 3.1702(b)--the time period for usually filing an appeal (60 days, usually, unless posttrial motions are involved). Here, HOA won a $292,205.20 attorney’s fees award as the prevailing party, but the losing common interest development unit owner appealed, protesting, “Untimely! untimely!”

     Owner’s appeal was unsuccessful, but did produce an enlightening opinion discussing deadlines/bankruptcy extension nuances in Lewow v. Surfside III Condominium Owners’ Assn., Inc., Case No. B230595 (2d Dist., Div. 6 Feb. 2, 2012) (certified for publication), authored by Acting Presiding Justice Yegan.

     HOA argued that the 60-day period was “tolled” by the Chapter 13 bankruptcy filing by owner, but this was not really the correct basis (although as any appellate attorney can tell you, even an incorrect basis--although the result is right--will carry the day, which was the case here). Neither the automatic stay nor Code of Civil Procedure section 356 “tolled” the running of the 60-day period. However, that was not the end of the analysis by any means. The real issue was whether Bankruptcy Code section 108(c) extended the matter, and it did--but only for the 30-day default extension unless a longer period was required (but nothing indicated that this was the case).

     Well, HOA was two days late--yep, 2 days. However, not all was lost. A trial judge has discretion to extend a fee motion filing for “good cause.” Given the trial court did entertain and grant the substantial fee request, good cause was established given the very “complex and debatable” issue of how the Bankruptcy Code tolling provision operated. The lower court’s entertainment of the request showed good cause implicitly, resulting in the affirmance of the $292,205.20. This opinion is worth reading again by any practitioners facing deadlines in all kind of claims in a bankruptcy context.

Deadlines: Amended Costs Memorandum Filed Pursuant To Court Order Was Timely

Situation Normal . . .

     Kempton v. Cooper, Case No. B229912 (2d Dist., Div. 3 Jan. 25, 2012) (unpublished) was a situation where the appellate court affirmed a trial court’s award of fees on appeal of $53,440 and costs on appeal of $1,410. There was a snafu on the costs to be awarded, necessitating another battle, which was won by the cost claimant (albeit for a lower amount). The losing side did not prevail on its argument that the filing of the amended costs memo, in line with trial court directives, violated the initial costs memo filing deadlines.

Costs/Deadlines/Special Fee Shifting Statutes: Substantial Fee Awards Against Losing Subcontractor, After Contractor Paid Disputed Small Amount, Affimed On Appeal

 

Some of the Appeals Were Untimely; College District Award of Costs and Fee Justified in Nature.

     Subcontractor sued a general contractor and community college district on an approximate $100,000 extra work claim. Subcontractor lost many of the claims through pre-trial dispositive motions and dismissed the remaining claim after general contractor paid a disputed $5,230 amount to avoid further costs. The lower court then awarded substantial fees and costs against subcontractor and in favor of general contractor/college district. (The college district was awarded $121,190 in fees, and the general was awarded $150,712.75--although the final judgment “evened up” any duplications and gave credit for any necessary offsets.)

     The fee and costs awards were affirmed in Richards v. S.J. Amoroso Constr. Co., Inc., Case Nos. A129670/A130837 (1st Dist., Div. 5 Jan. 4, 2012) (unpublished).

     One of the primary issues was whether the appellate court even had authority to review the fee/costs awards given that subcontractor appealed the primary judgment but failed to appeal the subsequent postjudgment orders in the fee/costs area, which involved a consideration of Grant v. List & Lathrop, 2 Cal.App.4th 993, 996 (1992)--earlier authority holding that a later postjudgment order settling the amount of fees to be paid was indeed subsumed in an earlier appeal of the first judgment.

     Richards decided that DeZerega v. Meggs, 83 Cal.App.4th 28, 44 (2000) had correctly interpreted Grant as standing for the propositions that an earlier appeal of a fee entitlement judgment does subsume a later order setting the amount of the entitlement while it could not encompass a later postjudgment order where it was clear that the later order would decide everything. Judged by this interpretation, the appellate court could not review the general contractor awards because the first judgment was silent about fees and costs (which meant there needed to be a separate appeal from the later order), but could scrutinize the college district awards because there was an adjudication of fees and costs in the initial judgment which was initially appealed.

     The costs award in favor of college district was sustained because the $5,230 voluntary payment was unusual in nature, invoking trial court discretion to still award costs under Code of Civil Procedure section 1032(a)(4) and Kim v. Euromotors West/The Auto Gallery, 149 Cal.App.4th 170, 183 (2007).

     The college district’s favorable fee award was proper under Government Code section 1038, which allows a trial court the ability to award fees to a prevailing public entity where an action was brought without reasonable cause or a good faith belief that there was a justifiable controversy. Among other things, subcontractor’s admission during discovery that its stop notice was invalid established substantial evidence supporting the lower court’s award of fees under section 1038.

Deadlines/Section 1717/Substantiation Of Reasonableness of Fees: Fourth District, Division 3 Talks About Timely Moving For Fee Recovery, Scope of Section 1717 Recovery, And Fee Billing Redactions

 

Reversal and Remand Was the Result in this One.

     Acting Presiding Justice O’Leary in Fuller v. Monogram Real Estate, Case No. G044808 (4th Dist., Div. 3 Dec. 19, 2011) (unpublished), on behalf of a 3-0 panel of our local appellate court, got to explore three issues of interest in the attorney’s fees area in reversing the denial of attorney’s fees under a fees clause to a defendant prevailing on a summary judgment motion.

     The first ground for reversal was the lower court’s determination that the fee request was untimely because it was not sought in the costs memorandum. In a contested matter, a fee request must be brought through a separate motion under current rules (Cal.Rules of Court, rule 3.1702(b)(1)), a change from different rules in effect before 1994 (where the fees should have been claimed in the costs memo).

     The second ground for reversal was the lower court’s conclusion that the fees clause did not apply because there was no contract. Not to worry, section 1717 allows for recovery even when the prevailing party demonstrates the contract is inapplicable, invalid, unenforceable, or nonexistent, assuming the opposite party could recover fees--which was the case here. Beyond that, the restriction of the fees clause to certain rental monies (a percentage of the unpaid rent) did not matter as far as recovery, because section 1717 was expanded to cover claims applying to the entire contract. (Harbor View Hills Community Assn. v. Torley, 5 Cal.App.4th 343, 348-349 (1992).)

     Finally, that brought the appellate court to the question of reasonableness--after all, losing party said he was charged fees of $28,250, while winning defendant asserted it was billed $163,000 for legal services. Because it was unclear whether the lower court actually exercised its discretion in ruling on reasonableness (given the other grounds for decision), its denial order had to be reversed and remanded. However, that is not quite the end of this matter. Defendant did submit redacted billing statements, with the appellate court dismissing that these statements could only be reviewed in camera without giving plaintiff an opportunity to review and contest such documentation.

     Two options were outlined by the appellate court: waive the privilege/produce the billing statements for everyone to review or present a much more detailed declaration of counsel summarizing the required information. (Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224, 254-255 (2001).)

Deadlines: Attorney’s Fees Motion Deadlines Not Suspended While Appealed Case Is Subject to Appellate Mediation Procedures

 

$45,017.50 Fee Award Against Losing Employee Sustained on Appeal.

      Losing employee was hit with attorney’s fees under Labor Code section 218.5 when she lost an employment case. The fee award was $45,017.50, one-fourth of the total fees expended by defendant on an apportioned basis in line with the defense request to the lower court.

     On appeal, employee claimed the postjudgment fee motion was untimely because it was filed after employee had applied to the appellate court’s mediation program, which had the effect of suspending further trial court proceedings according to employee.

     Wrong, the appellate court said in Mitchell v. GigOptix, LLC, Case No. H036131 (6th Dist. Nov. 29, 2011) (unpublished). The appellate mediation procedures only apply to proceedings on appeal, but do not cause a suspension of postjudgment proceedings in the trial court. Fee award affirmed.

Deadlines: Amended Judgment On Fees/Costs Award Was Substantial Change Restarting Appeals Clock And Time For Filing Fee Motion Following Prior Appellate Opinion Directives

 

Appellate Court Follows Erickson over Torres on Amended Judgment Procedural Issue.

     This next case is a sequel to an appellate opinion we discussed in our December 1, 2009 post, where the Second District, Division 4 decided that the first 998 offer is the proper measuring stick in a case where a second 998 offer is withdrawn by the offeror.

     One Star, Inc. v. Staar Surgical Co., Case No. B229034 (2d Dist., Div. 4 Nov. 22, 2011) (unpublished) is the appellate opinion after further court proceedings following in the wake of the prior opinion and may be the last opinion in the overall litigation between the parties.

     Because the prior opinion remanded so that defendant/cross-complainant could seek fees and costs as the 998 offer winner, the matter did see some further lower court activities. The trial court, on remand, awarded defendant/cross-complainant $557,946.15 in total fees and costs (including appellate fees relating to the prior opinion work by defendant/cross-complainant). Unhappy plaintiff/cross-defendant appealed.

Rembrandt’s The Anatomy Lesson (1630).

Section 1717/Deadlines: Prevailing Landlord Forfeited Fee Entitlement By Not Filing Noticed Motion For Fees

 

Merely Objecting to Preliminary View in Statement of Decision Not Enough.

     Landlord won modest damages in case, but was denied an award of attorney’s fees in a statement of decision giving a preliminary view on the prevailing party issue, a statement drawing objections by both sides and resulting in an eventual judgment stating both sides would bear their own fees/costs.

     Landlord appealed the fee denial in Pace v. Orozco, Case No. B225816 (2d Dist., Div. 4 Nov. 22, 2011) (unpublished). The denial stuck on appeal. Reason? Landlord never filed a noticed fee motion, which forfeited the fee entitlement claim on appeal. (Hydratec, Inc. v. Sun Valley 260 Orchard & Vineyard Co., 223 Cal.App.3d 924, 929 (1990).) In so reasoning, the appellate court distinguished Dorman v. DWLC Corp., 35 Cal.App.4th 1808 (1995) because the forfeiture issue was not raised in a case garnering a reversal of a fee denial under a similar factual pattern.

Deadlines/Private Attorney General Statute: Substantial Awards For Successful Appellate Work Affirmed In Long Ongoing Litigation

 

Trial Court Properly Rejected Comparison of Selective Tasks of Opposing Counsel in Gauging Reasonableness of Claimant’s Fee Request.

     Here is an interesting one where years and years of litigation may have come to a close in Vasquez v. State of California, Case No. D056598 (4th Dist., Div. 1 Oct. 19, 2011) (unpublished), resolving in the process some deadline and other issues relating to the lower court’s award of substantial attorney’s fees to the successful plaintiff for appellate work under Code of Civil Procedure section 1021.5.

Costs/Deadlines: Costs Memorandum Deadline Extended For 5 Days If Notice Of Judgment Entry Done By Co-Litigant

 

Amendment of Judgment to Include Costs Award Was Clerical Issue Not Subject to Strict Time Limits.

     In an interesting procedural decision of interest to any of us anal, time-driven attorney litigators, the Sixth District provided some interesting guidance on two issues: (1) the deadline timeliness for filing a costs memorandum after a notice of judgment entry is done by a litigant; and (2) the deadline for requesting entry of an amended judgment inclusive of costs when there has been a lot of intervening procedural developments.

     Fitzgerald v. El Camino Hospital, Case No. H035951 (6th Dist. June 20, 2011) (unpublished) involved a losing plaintiff’s challenge to a trial court’s decision to amend a judgment to include costs of $20,151.09 for the defense under a costs memorandum filed more than 15 days after notice of entry of judgment was filed by one of defendant’s codefendants and pursuant to an amended judgment request over 2 years later after plaintiff’s appeal was adversely decided in the defense’s favor. What happened next? You guessed it--another appeal by plaintiff.

Family Law Awards: Recent Unpublished Decision Reviews Deadlines For Claiming Section 271 Fee Recovery

 

Second District, Division 6 Does So While Affirming $75,000 Sanctions Award.

     In Marriage of Lancashire, Case No. B217022 (2d Dist., Div. 6 May 23, 2011) (unpublished), the Second District, Division 6 discussed deadlines for bringing attorney’s fees motions based on sanctionable conduct of family law litigants under Family Code section 271 before it affirmed a $75,000 sanctions fee award to husband.

     Here is what the court had to say in a 3-0 opinion by Justice Yegan:

     *A 271 motion for attorney’s fees on appeal in affirming a prior sanctions award must be filed no later than 40 days after issuance of the remittitur (In re Marriage of Freeman, 132 Cal.App.4th 1, 7 (2005));

     *In a case involving false accusations of child abuse, 271 sanctions request must be filed within 60 days after service of notice of a judgment exonerating the litigant seeking sanctions or 180 days if no notice is sent (Robert J. v. Catherine D., 171 Cal.App.4th 1500, 1504 (2009)); and

     *A motion for pre-judgment fees for sanctionable conduct must be filed within the deadlines for filing a notice of appeal from the sanctions judgment order at issue pursuant to Cal.Rules of Court, rule 3.1702(b).

Arbitration: Substantial Supplemental Arbitrator Fee Award Of Almost $1.9 Million Affirmed On Appeal

 

Deadline Argument Did Not Prevail Under the Circumstances.

     Here is a real corker in our “Arbitration” category, especially for those of you who are procedurally oriented.

     In Williams v. Joseph Phelps Vineyards LLC, Case No. A127708 (1st Dist., Div. 2 Apr. 19, 2011) (unpublished), vineyard and affiliated individuals were ordered by an arbitrator to pay about $26 million in damages, interest, attorney’s fees, and costs for dishonoring vineyard’s contract with former employees Williams and Shelton. The fee/costs proceedings, suffice it to say, were interesting. After the 90-day period within which the parties had contractually specified the arbitrator would render a final decision, the arbitrator entered a “supplemental” fee/costs award of almost $1.9 million. The Operating Agreement between the parties indeed had an attorney’s fees provision, so entitlement was not the issue. Timing of the award was everything here, with the defense claiming that the arbitrator was without jurisdiction to enter a fee award. (The actual fee award ballooned even further after time spent in the superior court confirmation battle.)

   

Deadlines: Second District, Division 1 Determines That Default Judgment Fee Recovery Cannot Be Garnered Through Postjudgment Fee Motion

 

Follows the Lead of Division 5 in Garcia v. Politis.

     In our February 26, 2011 post, we synopsized Garcia v. Politis, 192 Cal.App.4th 1474 (2011), where the Second District, Division 5 determined that default judgment attorney’s fees could not be recovered through a postjudgment fee motion but had to be recouped through a request made in papers filed with the default judgment prove-up packet.

     Now, the Second District, Division 1 has followed Garcia in a case brought by the same plaintiff denied fee recovery in the earlier case. (In this instance, plaintiff was denied recovery of $3,272.50 in fees as prevailing party under the Unruh and Disabled Persons Act, Civ. Code, §§ 52(a), 54.3(a), 55.)

     Division 1, in Mundy v. The Reel Inn Corp., Case No B223655 (2d Dist., Div. 1 Apr. 12, 2011) (unpublished), aptly summarized its bottom line conclusion this way: “We agree with Garcia and see no reason to depart from its well-reasoned analysis.” (Slip Opn., p. 3.)

Costs/Deadlines/Section 998: $40,000 Costs Award Based On 998 Offer Sustained Despite The Fact Defendant Failed To Enter Favorable Costs Ruling To Judgment For Over 2 Years

 

No Provision Required that Winning Defendant Enter Costs Judgment Under Any Deadlines.

     Here is an interesting case that really is a big one to be archived in our “Deadlines” category. It goes to show you that recalcitrance, while not to be condoned, may not get punished unless there are statutory or court rule deadlines that are specific in application.

     Millsaps v. Doehrman Co., Inc., Case No. C064390 (3d Dist. Apr. 11, 2011) (unpublished) was a situation where plaintiff employee sued both employer and a third party for personal injuries arising from a malfunctioning piece of equipment alleged to have been negligently installed by third party on employer’s premises. (Employer had paid workers’ compensation benefits to plaintiff, bringing a complaint in intervention to recover those benefits.) Third party made a 998 offer to plaintiff, offering to pay plaintiff $50,000 in exchange primarily for plaintiff’s agreement to indemnify and hold harmless third party from any claims or liens asserted by intervener employer. Plaintiff did not accept the 998 offer, but lost a jury verdict finding that third party did not install the equipment causing plaintiff’s injuries. Third party sought $50,000 in costs, with the trial court eventually awarding third party nearly $40,000 in costs and ordering third party’s counsel to reduce the favorable ruling to a form of order. However, defendant did nothing more on the case for more than two years, but eventually submitted a draft order that drew an estoppel/waiver challenge from plaintiff. Although finding the submission of the form of order “extremely tardy,” the lower court nevertheless entered it, prompting an appeal by the losing plaintiff.

Appealability/Deadlines: Once Notice Of Entry Of Underlying Judgment Is Served By Other Than Personal Delivery, What Is The Deadline To File An Attorney’s Fees Motion?

Stay Tuned if You Want to Know the Answer.

     So, you have been served with a notice of entry of judgment in which no new trial motion or JNOV motion is filed (after having prevailed) by either the clerk or another party, what is the time for filing a motion for attorney’s fees (which parallels the time for the adverse party to file a notice of appeal)?

     Answer: We believe the clear answer is 60 days. Cal.Rules of Court, rules 3.1702(a), 8.104(a)(1)-(2). However, what happens if the notice of entry is served by mail--does it extend the time to file the fee motion? We think the answer to this one is “no,” because the parallel time for filing a notice fo appeal is not extended because of service of a notice of entry of the judgment or order by mail, express mail, some other form of overnight delivery, or fax. Code Civ. Proc., § 1013(a), (c), (e); Baker v. County of Los Angeles, 2005 WL 2822412 (2005) (unpublished).

Appealability/Deadlines: Ninth Circuit Finds No Jurisdiction To Entertain Challenge To Substantial Fee Award

 

Failure to File Timely Supplemental Notice of Appeal from Fee Order Was Fatal.

     Here is an ouch! It reinforces a lesson that we have reminded our readers out there to observe time and time again: whether at the state or federal level, separately appeal any adverse attorney’s fees orders. It cannot hurt and may avoid what happened to the City of L.A. in the next case.

     In Hunt v. City of Los Angeles, Case Nos. 09-55750/09-55765 (9th Cir. Mar. 22, 2011) (for publication), City of Los Angeles lost its defense of the constitutionality of some Venice Beach Boardwalk ordinances in plaintiff’s civil rights action, with the district judge awarding plaintiff $207,285 in attorney’s fees on July 10, 2009. City subsequently filed an untimely notice of appeal from the fee order, one that was withdrawn. City challenged the fee award in its appeal from the underlying merits judgment.

     Too late, said the Ninth Circuit. It had no jurisdiction to consider the challenge to the fee order because City failed to timely file a supplemental notice of appeal from separate fee order. (E.E.O.C. v. Wal-Mart Stores, Inc., 187 F.3d 1241, 1250 (10th Cir. 1999); Doughtery v. Lehman, 711 F.2d 555, 558-559 (3d Cir. 1983).) Again, for emphasis, avoid this ouch! by separately appealed fee orders.

Deadlines: Fee Recovery After Default Judgment Entry Cannot Be Made By Postjudgment Motion For Fees

Fee Request Must Be Addressed In Default Judgment Packet Submissions.

     The next case is one that any litigator should read when seeking a default judgment against a party. It sets forth the proper procedure for claiming attorney’s fees, and the incorrect way is to move for fees postjudgment.

     The plaintiff in Garcia v. Sofia Politis, Case No. B224453 (2d Dist., Div. 4 Feb. 25, 2011) (certified for publication) learned this lesson the hard way. After obtaining a default judgment against defendant for $4,000 in damages, $385 in costs, and an order requiring designation of a parking lot spot for the handicapped, plaintiff then moved postjudgment for an award of fees in the amount of $4,302.50 under the disability discrimination fee-shifting statutes (Civ. Code, §§ 52(a), 54.3(a), 55). The trial court denied the motion as untimely because it should have been filed with his default judgment papers, but also indicated that only $330 would have been deemed to be reasonable fees.

Deadlines: Trial Courts Can Extend Fee Motions Deadline Under CCP § 473 . . . Even If They Erroneously Granted A Fee Recovery On An Untimely Basis

Second District, Division 8 Remands In Procedural Nightmare Case.

     Just to show you that procedure and facts may drive a matter--stay tuned for this one.

     In New Star Realty, Inc. v. Park, Case No. B220602 (2d Dist., Div. 8 Nov. 18, 2010) (unpublished), defendant filed an attorney’s fees motion one day late, but sought relief to have it deemed timely filed under CCP § 473, after prevailing in a contract dispute with plaintiff where there was a contract with a fees clause. The trial court, however, granted fees to defendant in the amount of $25,410, incorrectly determining that the mail service extension applied to the fee motion which was tied to appeal periods that did not include the mail extension. Plaintiff appealed--because the fee motion was filed one day late from a procedural standpoint

     Plaintiff, at least now, won a reversal and remand (but a hold-your-horses remand).

Special Fee Shifting Statute: Retained P.E. Teacher Had To Follow Normal Fee/Costs Procedures For Timely Claiming Costs Under Education Code Section 44944

First District, Division 2 Upheld Trial Court Decision to Award Some Fees and Costs to Teacher, But Not All of Them.

     Well, we report on all areas of the law. This one is a curious case, where a teacher untimely filed for fees and costs, but the trial court cut teacher a break and still awarded a little under one-fifth of requested fees and costs. Better than nothing, you might say. Teacher still appealed. Did he win or lose? Verdict to come.

     In San Ramon Valley Unified School Dist. v. Cahn, Case No. A126905 (1st Dist., Div. 2 Oct. 28, 2010) (unpublished), tenured physical education teacher beat an administrative “for cause” dismissal proceeding . Teacher then filed a costs memorandum and fee motion pursuant to Education Code section 44944(e)(2), which provides that the governing school board shall pay the expenses and reasonable attorney’s fees incurred by the employee at the hearing. However, the real rub is that the Education Code does not specify the procedure for recovering section 44944(e) fees. Under the normal CCP and CRC procedure, teacher untimely filed a fee/costs request aggregating about $233,000. The lower court, despite finding the requests untimely, awarded teacher fees and costs of a little over $44,000. Miffed, apparently, teacher appealed.

     Verdict: fee/costs award affirmed.

     The appellate court essentially determined that normal fee/costs procedures should be followed with respect to section 44944(e) requests, finding tacit support in reasoning from Fontana Unified School Dist. v. Burman, 45 Cal.3d 208, 225, 225-226 n. 18 (1988).) Given the procedural context of this case, other nuances did not apply. Also, there was no abuse of discretion in the lower award when one considers that teacher could have been out of luck completely.

Deadlines, Special Fee-Shifting Statutes And In The News: Good Good Good Vibrations on Appeals—Depends on Your Point of View . . .

Sanctuary Records Group Seeks Appellate Attorney’s Fees After Defensing Right Of Publicity/Lanham Act Claims Against Beach Boys Writer Mike Love

Katy Perry Create a Stir With Ending Lines in Hit “California Gurls.”

     Sanctuary Records Group Ltd. defensed Mike Love, one of the writers for “The Beach Boys,” in a lawsuit alleging right of publicity/Lanham Act claims involving distribution of Mail on Sunday and Good Vibrations in the United Kingdom and Ireland.

     Sanctuary was also awarded attorney’s fees of $149,264.75 under California’s right of publicity fee shifting statute (Civ. Code, § 3344(a)) and the Lanham Act (15 U.S.C. § 1117(a), which allows a fee award where the defendant acted maliciously, fraudulently, deliberately, or willfully). Love appealed the adverse rulings to the Ninth Circuit, which affirmed in a recent published decision earlier this year.

     Now, Sanctuary has sought to recoup attorney’s fees for their successful work to the tune of $67,495. The successful appellate work for Sanctuary was performed by

     Gregory J. Aldisert and Gregory S. Gabriel of Kinsella Weitzman Iser Kump & Aldisert LLP.

     This appellate fee motion does demonstrate the differences between how fees for appellate work are claimed at California state and federal court levels. At the state level, winning appellate attorneys having a basis for fee entitlement generally have 40 days after the remittitur is issued to seek fees, with the prevailing practice to seek them before the trial court judge assigned to the case. (See Cal. Rules of Court, rules 3.1702(c)(1), 8.278(c)(1).) However, winning appellate attorneys in cases decided by the Ninth Circuit generally have 14 days after the deadline for filing a petition for rehearing (which is 14 days from issuance of the appellate court opinion) in which to file a motion to recover appellate attorney’s fees. (9^th Cir. Rule 39-1.6(a); Fed. R. App. P. 40(a)(1).) Also, the appeal fee request is heard by the Ninth Circuit itself, although certain parties can ask to have the matter transferred for consideration by the district judge or ask an appellate commissioner to make a recommendation/issue an order about the amount of fees to be awarded. (9^th Cir. Rules 39-1.8, 1.9.)

     In the News Extra: Mike Love apparently enjoys singer Katy Perry, who has a hit single in California Gurls. However, some controversy has arisen from the fact, at the end of the song, Snoop Dogg says “I wish you all could be California Gurls” (which contrasts with the line “I wish they all could be California Girls” from The Beach Boys’ California Girls legendary hit of 1965).

     Hat tip to our friend/appellate specialist Ben Shatz at Manatt Phelps for providing us a copy of Sanctuary’s appellate fee motion in Love v. Wilson, Case No. CV-05-97798-ABC (C.D. Cal.), Case Nos. 07-56008/07-56568 (9^th Cir.).

Special Fee Shifting Statutes: Losing Plaintiff In Unsuccessful Overtime/Meal Break Superior Court Action Required To Pay Attorney’s Fees Of $28,731.25 To Employer

First District, Division Two Finds Fee Motion Timely and Fee Award Reasonable in Amount.

     In Cun v. Café Tiramisu, Case No. A124985 (1^st Dist., Div. 2 July 7, 2010) (unpublished), plaintiff ex-employee lost a superior court FLSA action following a de novo Labor Commissioner hearing in which she claimed to have not been paid overtime and to have been denied meal breaks by her employer/alleged joint employer. Because fees incurred in the action were awardable to employer under Labor Code section 98.2(c), employer timely filed a motion for fee after entry of judgment but then sent an amended notice of motion confirming a new hearing date of the motion as ordered by the court, also submitting unredacted versions of invoices filed with the initial moving papers. The trial court granted employer’s motion for fees, awarding it $28,731.25.

     To say the least, ex-employee was grumpy about the result, and appealed. Her challenges were not found persuasive.     

     Although arguing the fee motion was untimely filed, this one did not come close to catching the favor of any appellate eyes. The original noticed motion was timely, with the amended motion merely confirming the court-set hearing date and containing only unredacted versions of information previously filed. Put another way, plaintiff had not demonstrated prejudice.

     Then, plaintiff’s attorney complained about the fact that defense counsel charged $370 per hour. However, the trial court properly used the lodestar approach and the disparity in hourly rates is one factor to consider, but was hardly determinative. The defense success could well be attributable in large measure to the high quality of trial work by employer’s counsel. Fee award affirmed.

     BONUS:  Recipe for Tiramisu.  Link to the Wikipedia article on Tiramisu.

     

                 Above:  From Wikipedia article on the FLSA.

Deadlines: Fee Motion Filed 15 Days After Dismissal of Harassment OSC Satisfied Cost Memorandum Requirement

Fourth District, Division 2 Nixes Overly Technical Argument on Deadlines.

     You knew where this one would end when the appellate panel concluded at the tail end of the opinion that “Plaintiff’s contention on appeal elevates form over substance.” That meant the trial court’s order awarding costs, including attorney’s fees, in the amount of $8,078.35 was going to get affirmed. It was.

     Waters v. Munoz, Case No. E048918 (4^th Dist., Div. 2 June 21, 2010) (unpublished) involved a situation where a defendant won an OSC harassment proceeding, and the trial court awarded him attorney’s fees and costs of $8,078.35 in a renewed motion after losing plaintiff claimed she did not get notice of the fee motion.

     The sole challenge by plaintiff was whether the defense motion was supported by a proper costs memorandum. This argument did not go very far. All of the purposes of a costs memorandum were satisfied by the fee motion, which was timely filed. Put another way, form was going to prevail substance—naught! (See Civ. Code, § 3528.)

Deadlines And Fee Clause Interpretation: Second District, Division 6 Affirms $121,000 Fee/Cost Award In Neighborhood Mega-Squabble

 

Fee Motion Found Timely and Declaratory Relief Action Was “On the Contract” for Purposes of Justifying the Award.

     We knew that this next case was going to be a crazy one, when Acting Presiding Justice Yegan wrote, “Within a year or so, [the] relationship [between neighbors] had deteriorated from a warm friendship to open hostility” and “The enmity between the parties continued unabated through 2005.” The litigation involved accusations of yelling at each, driving into pots with a car, placing a mailbox in a landscape easement, poisoning of a koi pond, undue car honking, hitting a neighbor with shoveled dirt, and a citizen’s arrest for battery (for which a neighbor was prosecuted but acquitted). This case rivals some of the antics on the T.V. oldie “Romper Room.”

     In Sjoquist v. Nebroski, Case No. B209161 (2d Dist., Div. 6 June 22, 2010) (unpublished), one set of neighbors won $352,000 in compensatory damages and $100,000 in punitive damages for battery/emotional distress in litigation also having a declaratory relief count that requested declarations of rights under an easement agreement alleged to govern the parties (with there being a fees clause in the agreement). The trial court awarded prevailing neighbors $112,00 in attorney’s fees and $8,426 in costs. (As an aside, the losing neighbors got divorced, with wife filing two days after the jury verdicts were returned.) Losers appealed.

Deadlines: Plaintiff's Reliance on Adversary’s Fee Motion Extension, Despite Failure to File Written Stipulation, Was Excusable Neglect For CCP Section 473 Purposes

 

Fourth District, Division 2 Finds Renege by Adversary Trumps Neglect to Comply With a Clear Rule.

     Under California Rules of Court, rule 1702(c)(2), any stipulation to extend the time for filing a motion for attorney’s fees on appeal must be filed with the court before the original time has expired. The next case involves a situation where a fee claimant did get several extensions of fee motion filing time from an adversary, who then argued that a fee motion was untimely submitted because claimant’s counsel failed to file a timely written stipulation.

     The Fourth District, Division 2 did not like what the adversary did, especially when it argued the time preclusion and opposed claimant’s Code of Civil Procedure section 473 motion for relief, which was denied by the trial court (with claimant losing the chance to recoup fees).

     In Ron Burns Construction Co., Inc. v. Moore, Case No, E047077 (4^th Dist., Div. 2 May 11, 2010) (certified for partial publication), the appellate court found that, although the law frowns on attorney’s neglect to comply with a clear rule, “it positively glowers at another attorney’s exploitation of such neglect as an excuse to break his word.”

SLAPP: Law Firm “Saddled” With $76,275 SLAPP Fees Award For Failure To Make An Untimely Objection 19 Months “After The Horse Left The Barn”

U.S. District Judge Says “Nay” to Untimely Objection, Refusing to Follow Unpublished State Court Decision and Finding “The Horse Relevant to the Objection Left the Barn” Long Ago.

     Here is an interesting development that Mr. Ed of an erstwhile television series (the proverbial “horse, of course, of course”) would be proud of. It also deals with a SLAPP fee issue that will need to be confronted by a court in a published decision, assuming the matter is raised by an attorney spurred to timely action.

Mr. Ed and the Dodgers

     As background for the situation, we surveyed Foster v. Warner, 2008 WL 2445106 (Cal. Ct. App. 2008), an unpublished state intermediate appellate decision in our June 19, 2008 post. This decision held that an attorney cannot be held liable for an adverse SLAPP fee award, with only the client bearing such a burden. However, a federal district judge recently bridled at that result.

     In Mory v. City of Chula Vista, Case No. 07-CV-462 JLS (WVG) (Doc. No. 198, filed May 7, 2010), U.S. District Judge Janis L. Sammartino granted defendants’ SLAPP motion and eventually awarded them $76,275.00 under the SLAPP fee-shifting provision. The fee award was entered jointly and severally against Plaintiff and her counsel Jackson DeMarco Tidus & Peckenpaugh. Relying on Foster v. Warner, JDTP challenged the award as against it (the law firm). The only problem was that JDTP waited more than 26 months after defendants’ SLAPP motion filing and more than 19 months after the initial SLAPP order to raise an objection to the district judge’s February 11, 2008 order granting the SLAPP order and implicating that fee liability would be joint and several. Based on this procedural context, District Judge Sammartino found JDTP’s objection to be untimely. She colorfully put it this way: “The horse relevant to this objection left the barn with the issuance of the anti-SLAPP Order on February 11, 2008.” (5/5/10 Order, p. 4 of 5.)

     With respect to Foster v. Warner, the district judge also went on to indicate her disagreement with the decision. The district court examined other California intermediate decisions indicating the SLAPP statute should be construed broadly in order to effectuate its purpose, one which advocated in favor of joint and several liability for fee award liability. Apparently, District Judge Sammartino viewed Foster as a horse of another color, “because it fails to consider or implement the explicit legislative directive of broad statutory construction.” (Id.)

     BLOG UNDERVIEW—The losing law firm, in an earlier federal decision written by U.S. Senior District Judge Shadur, was told that it made an argument emulating the attempted creativity of alchemists of old. (See our June 11, 2009 post on San Diego Police Officers’ Assn. v. San Diego City Employees’ Retirement System.) With the recent order on the SLAPP motion, both equestrians and alchemists should be delighted with the outcomes.

     Full Disclosure: Co-contributors Mike and Marc are former members of the JDTP stable, but have moved on to green pastures.

I got a horse right here . . .

Deadlines: Deadline To File Motion For Post-Appeal Fee/Cost Recovery Extended By 5-Day CCP § 1013 Mailing Rule

 

First District, Division 4 Finds That Filing of Fee/Costs Motion 42 Days After Remittitur Issuance Was Proper.

     In a case of first impression, parties successfully prevailing on an appeal with a fee-shifting situation filed their costs memorandum and motion for fees 42 days after issuance of the remittitur in the appellate cause. CRC, rules 8.278(c) and 3.1702(c) prescribe a 40-day deadline for a party claiming costs or fees awarded for winning on appeal to file the costs memorandum/fee motion. Was the 40-day deadline absolute or did the winning parties get the 5 extra days added for mailing of the remittitur under CCP § 1013?

     The First District, Division 4 answered that question in Zarate v. Manuel, Case No. A125662 (1^st Dist., Div. 4 Mar. 30, 2010) (unpublished).

Family Law Awards: Make Sure Pre-Judgment Fee Recovery Is Rendered For Final Judgment Or Stipulate to Reservation of Jurisdiction

 

$21,936 Reallocation of Fees for Temporary Judge Was Error, Because Jurisdiction Was Lacking.

     The next case is a potential real pitfall for family law practitioners. It clearly counsels lawyers to make sure that certain fee/costs awards are ordered before a final judgment is entered or preserved pursuant to a reservation of jurisdiction.

     In Marriage of Carrino, Case No. A124724 (1^st Dist., Div. 3 Mar. 30, 2010) (unpublished), a trial court reallocated certain private fees in a way requiring wife to pay her former husband’s delinquency of $21,93 in fees owed to a private judge pursuant to a stipulation between the parties. However, in line with prevailing law, the stipulation provided that any unpaid sums to the private judge had to be included “in the judgment rendered in this proceeding.” The problem is that the private judge entered an earlier judgment that did not include the unpaid fees or order a reallocation.

     The wife appealed from the lower court’s reallocation, winning on a jurisdictional point. The trap for the unwary was that future attorney’s fees orders for legal services rendered prior to the final judgment cannot be entered after the judgment is entered absent a reservation of jurisdiction. (In re Marriage of Mulhern, 29 Cal.App.3d 988, 994 (1973); Hogoboom & King, Cal. Prac. Guide: Family Law (The Rutter Group 2008) ¶ 14.9, p. 14-3.) Here, the private judge’s final judgment had been entered, meaning the trial court lacked authority to require wife to pay husband’s portion of the fees incurred prior to entry of judgment. (Incidentally, the parties did agree the lower court had authority to reallocate fees incurred after entry of judgment, but this wasn’t involved in the case.)

      On the subject of traps and pitfalls, see Monty Python and the Holy Grail -- Three Questions.

Arbitration: $12.3 Million Compensatory Award And $6.7 Million in Fees, Costs, And Interest Additional Award Affirmed On Appeal

Second District, Division 8 Does Find Procedural Issue Might Deserve Supreme Court Review, But Affirms Merits Awards.

     In Oaktree Capital Management, L.P. v. Bernard, Case No. B207865 (2d Dist., Div. 8 Feb. 22, 2010) (certified for publication), arbitration awards of $12.3 million for lost management fees and $6.7 million in attorney’s fees, costs, and interest were sustained on appeal.

     The appellate court found that defendant’s response to a petition to confirm the award—with a short-fused 10-day deadline—was timely, although noting the muddled state of the law when squaring this short deadline with the 100 day deadline for filing a petition to vacate. “We believe the time may have come for our Supreme Court to provide definitive guidance on the time deadlines a party who seeks to vacate an arbitration award faces when the prevailing party in an arbitration has filed a petition to confirm the award.” (Slip Opn., p. 8.) However, the Court of Appeal did find that the response by defendant was timely.

     However, that was hardly the end of the analysis. Because neither legal error nor merits flaws are usually reviewable when it comes to arbitration awards, the appellate panel found Moncharsh’s rule applicable, especially since the parties did not provide that legal errors were reviewable in court and further specified that the arbitrator’s decision was binding in nature.

Law Of The Case: Prior Appellate Opinion, Never Challenged On Rehearing Or Supreme Court Review, Was Law Of The Case On Fee Determination

 

Mere Disagreement With Prior Appellate Opinion Does Not Impact Law of the Case Doctrine.

     In Tennen v. Finstad, Case No. B217765 (2d Dist., Div. 2 Feb. 10, 2010) (unpublished), losing litigants on an order denying an attorney’s fees motion brought a prior successful appeal in which the Court of Appeal reversed an order denying the request to award attorney’s fees. The loser on appeal failed to file a petition for rehearing or for review with the California Supreme Court. Loser (who was ordered to recover postoffer fees and costs by virtue of a CCP § 998 offer) appealed the prior reversal in favor of the parties held entitled to fees.

     Loser lost a bid for a reversal because he failed to challenge the prior appellate opinion correctly, invoking the application of the doctrine of law of the case. Because he simply disagreed with the prior appellate determination, this type of challenge does not demonstrate injustice so as to set aside application of law of the case. (Morohoshi v. Pacific Home, 34 Cal.4^th 482, 491-492 (2004).)

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.