CALIFORNIA ATTORNEY'S FEES

Consumer Statutes, Multiplier, Reasonableness Of Fees: Trial Court Did Not Abuse Its Discretion In Awarding $20,000 Fee Award Out Of Requested $40,113.75 Base Lodestar

The Problem Was That The Case Was Routine Such That Hours Billed For “Cut And Paste” Activities Were Excessive, With A 25% Positive Multiplier Properly Denied.

            In Fishback v. FCA US, LLC, Case No. B298677 (2d Dist., Div. 3 May 14, 2021) (unpublished), a lemon law plaintiff was awarded a lesser sum of attorney’s fees of $20,000 out of a requested $52,834,30 ($40,113.75 lodestar plus a 25% positive enhancement).  Plaintiff was not satisfied with this fee awarding, triggering an appeal.  When it comes to the amount of fees, plaintiff could not surmount the deferential abuse of discretion standard.  The lower court found that this was a routine case, the discovery was “cookie-cutter” and “cut and paste,” there was no law and motion proceedings except for the fee motion, there was limited discovery, and a settlement was reached early in the case.  None of these conclusions were disturbed on appeal.  However, we will give an example of fees found to be excessive—counsel traveling by car from Rancho Palos Verdes to Burlingame and back to defend a deposition, given a flight from LAX to SFO takes about one hour—did not justify counsel’s billing for 16.1 hours of automobile travel, as the trial judge could determine as not being reasonable in nature. 

            Also, the 25% positive enhancement correctly rejected due to the lower court’s conclusion that this was a garden-variety lemon law case. 

Private Attorney General: Denial Of $250,000 Fees Request To Prevailing Respondent In Health Care Clinic Turf Battle Affirmed On Appeal

Respondent Had Too Much Of A Pecuniary Interest, Even As A Non-Profit With Respect To Stake In The Litigation.

            Inyo County Local Agency Formation Commission v. Southern Mono Healthcare Dist., Case Nos. C085138/C086087 (3d Dist. May 13, 2021) (unpublished), involved a mandate petition filed by a petitioner against Southern Mono in what was, in essence, a “turf war” over whether respondent could serve the Eastern Sierra area from its South Main Street medical clinic in Bishop.  Southern Mono won based on statute of limitations and laches defenses, then moving for over $250,000 in private attorney fees.  The trial court denied the request, with the appellate court affirming that determination.  The main problem was that Southern Mono submitted evidence that it would lose $780,000 in hard costs, monthly lease payments of $8500 with no recoupment ability, and would lose lots of business.  Despite that it was a non-profit, this pecuniary loss justified the trial court’s conclusion that the winning party had too much at stake for purposes of obtaining CCP § 1021.5 fees.  (Jobe v. City of Orange, 88 Cal.App.4^th 412, 418-419 (2001).)  The broader “health access” concerns did not outweigh Southern Mono’s pecuniary interest. 

Substantiation Of Reasonableness Of Fees: $387,464.50 Postjudgment Fee Award Reversed Based On Block Billed Entries And Severely Redacted Entries With No Justification

Entries Made It Hard To Discern What Work Was Performed.

            We like the result reached in R Consulting & Sales, Inc., Case No. D076749 (4^th Dist., Div. 1 May 13, 2021) (unpublished), where an appellate court reversed a $387,464.50 postjudgment CCP §§ 685.040 and 685.070 enforcement fees award because the petitioning fee claimant had block billed entries and severely redacted entries not justified as being privileged or protected by the attorney work product doctrine.  Because these in tandem factors made it impossible to determine what was compensable, the fee award was reversed—basically on due process grounds.  The opposing party did a good job of objecting in the fee proceeding.

Discovery, Sanctions: $4,423 Discovery Sanctions Affirmed Against Plaintiff And Its Attorney On Appeal

Reduced Sanctions Were Awarded, But Excuses For The Losing Side Were Not Credited.

            We would say that Heesung Investment, Inc. v. Karle, Case No. E074320 (4^th Dist., Div. 2 May 11, 2021) (unpublished) indicates that, like many other appeals, credibility reigns king.

            This one involved reduced discovery sanctions of $4,423 against a litigant and its counsel for failing to respond to four discovery requests.   The other side had requested $9,546 in discovery sanctions, but the lower court found this requested amount to be excessive so as to lead to the reduced amount as the ultimate award.

            The 4/2 DCA found the reduced sanctions order was no abuse of discretion.   A failure to respond to discovery, unless there is substantial justification, is one which automatically leads to sanctions.  No credible excuses were offered.   In fact, the attorney who was sanctioned as well promised responses, but did not deliver.  Discovery sanctions order affirmed.  (We always wonder why an appeal would be made from this type of lower monetary award, but one cannot speculate why.)

            This does give us a chance to inform practicing attorneys about CCP § 2023.50, which does allow a court to report to the State Bar document discovery sanctions above $250 in specified circumstances.   Just letting you all know ….

Allocation, Indemnity, Section 1717, Seriously: 4/1 DCA Affirms $6,000 Damages Award And $143,183.55 Out Of Requested $572,730.11 § 1717 Fees To Prevailing Breach Of Contract Plaintiff Who Proved $1,463,745 In Damages At Trial

Plaintiff’s Failure To Conduct Due Diligence Prior To Entering Into Commercial Lease And Failure To Mitigate Damages Once Problems Arose Left Him Upside-Down By More Than A Million Dollars When All Was Said And Done

            Sherwood v. Vogele, Case No. D076776 (4^th Dist., Div. 1 May 7, 2021) (unpublished) highlights the importance of conducting due diligence before entering into a commercial property lease (or purchase), and of working to mitigate damages when problems arise.

            Plaintiff leased a commercial building for the purpose of building and operating a coffee house with an added rooftop deck – accepting the zero lot line property “as is,” and signing a lease with a hold harmless clause indemnifying landlords in the event he caused a claim to be filed against them.  Afterward, plaintiff became aware that a neighboring property had roof eaves that overhung onto his leased property and hindered his ability to build his project.  When neighboring property owner failed to begin removing those eaves on the date specified in a written agreement with plaintiff, plaintiff instructed landlords to cut off communications with neighbor – claiming he did not believe neighbor intended to remove the eaves, that he would have to proceed as if the eaves would not be removed, and that he intended to sue neighbor for a million dollars because he would have to spend considerable more on a build-out to accommodate the encroaching eaves.  Plaintiff then received landlords’ permission for a complete tear down, rather than a remodel, of their building based on their belief plaintiff’s construction of a new building included a “workaround” to the problem.  This was not the case, however, with plaintiff obtaining permits, and going forward with the demolition, based on plans that did not take the encroaching eaves into account. 

            After filing his lawsuit against neighbor, plaintiff terminated his lease and left landlords with a vacant lot.  Neighbor cross-claimed against plaintiff and landlords for damage to his property caused by the demolition, landlords cross-claimed against plaintiff for breach of lease and indemnity, and plaintiff cross-claimed against landlords alleging fraud and breach of the covenant of quiet enjoyment.  The jury found neighbor breached its binding contract with plaintiff, negligently trespassed and maintained a private nuisance – causing plaintiff $1,463,745 in past and future economic damages.  However, judgment was entered with plaintiff being awarded only $6,000 in damages against neighbor as the jury found plaintiff could have mitigated all but $30,000 of his damages, and that plaintiff was 75% responsible for his losses, while neighbor was only 20% responsible.  Additionally, neighbor was awarded $50,000 in property damage, plus $29,027.50 in costs, against plaintiff, while landlords were awarded $620,492 in damages against plaintiff.  Finally, in a postjudgment order, plaintiff received an award of $143,183.55 in § 1717 attorney fees – only 25% of the $572,730.11 he sought based on the trial court’s allocation for plaintiff’s breach of contract cause of action.  Plaintiff appealed.

            The 4/1 DCA affirmed – finding substantial evidence concerning plaintiff’s failure to mitigate damages supported the judgment.  “One has an obligation to avoid an unwarranted enhancement of damages ‘through passive indifference or stubborn insistence upon a conceived legal right . . . .’ ” (Valle de Oro Bank v. Gamboa, 26 Cal.App.4^th 1686, 1691 (1994).)  As to the fees, the panel found no abuse of discretion in the trial court’s 75% reduction given allocation among plaintiff’s contract and tort claims was proper, and plaintiff did not assert that his claims were so intertwined to make allocation impracticable.   

Deadlines, Sanctions: $1,500 In Code Civ. Proc. § 2023.030 Sanctions Issued Against Nonparty, For Failure To Comply With A Deposition Subpoena For Production Of Business Records, Reversed On Appeal

The Deposition Subpoena And Motion To Compel Compliance Were Not Properly Served On Nonparty, Plus The Motion To Compel and For Sanctions Was Untimely.

            In Yousif v. Alpine Orthopedic Medical Group, Case No. F078734 (5^th Dist., May 7, 2021) (unpublished), certain defendants in a malpractice action sought discovery from a nonparty doctor through a deposition subpoena for production of business records. (Code Civ. Proc. § 2020.010(a)-(b).)  Later, when defendants sought a motion to compel and sanctions, the trial court issued $1,500 in § 2023.030 sanctions against nonparty doctor for not fully complying with the deposition subpoena.

            Nonparty doctor appealed, and the Fifth District reversed – finding abuse of discretion.

            Neither the deposition subpoena, nor the motion to compel, had been properly served on nonparty doctor, and a subpoena for production of business records may not be enforced against an individual who was not personally served with the subpoena, nor against one who is not the custodian of records or a person qualified to make the attestation required by Evidence Code § 1561.

            The proof of service for the deposition subpoena indicated it had been personally served on “ANNA B,” with no evidence that she was an “officer, director, custodian of records, or . . . agent or employee authorized . . . to accept service of a subpoena.” ((§ 2020.220(b)(2).)   In fact, defendants did not dispute a declaration by Anna B., which stated that she worked in the front office, had the deposition subpoena thrown at her face while she was working, and that the custodian of records had not been served with the subpoena.  The motion to compel was also served on Anna B., instead of being personally served on doctor nonparty as required pursuant to Cal. Rules of Court, rule 3.1346.  As such, defendants were not entitled to sanctions as they failed to demonstrate a misuse of the discovery process warranting sanctions because they failed to prove that the subpoena was personally served on nonparty doctor or the custodian of his records.

            Additionally, the motion to compel and for sanctions was untimely pursuant to the mandatory 60-day deadline set forth in § 2025.480(b) and should have been denied by the trial court.

In The News . . . . KQED News Report Indicates That 90% Of Funds In First Year Of Operation For PG&E Fire Reimbursement To Camp Fire/Paradise Victims Went To Overhead

Much Of That Overhead Was Law Firm And Claim Administration Expenses.

            In a May 7, 2021 article in The Orange County Register, KQED News has reported that 90% the funds from a trust set up to compensate victims in the Camp/Paradise fires, in its first year of operations, was spent on overhead, including attorneys, project managers, analysts, claim reviewers, and software developers.  This trust was set up in the PG&E bankruptcy case.  A former California State Bar governor has been quoted that these charges are excessive compared to the meager compensation paid to the victims and that the trust has not been completely transparent about what it is doing for this money.  The trust paid out $7 million to victims while racking up $51 million in overhead according to the Register article.

Prevailing Party: Defendants Obtaining An Unqualified Defense Judgment In Short-Term Rental Dispute Were Improperly Denied Routine Costs And Civil Code Section 1717 Fees As The Prevailing Parties

Fact That Plaintiffs Obtained Preliminary Injunction Relief Was Only Interim, Not Determining Which Parties Ultimately Prevailed.

            Hamilton v. Van Wert, Case No. F078345 (5^th Dist. May 6, 2021) (unpublished) reminds us all that a Civil Code section fee victor and routine costs victor awaits what ultimately happens at the judgment stage, not interim provision relief with respect to determining which parties actually did prevail.

            In this one, a dispute over Declaration of Restrictions banning short-term rentals which was somewhat ameliorated through a subsequent local ordinance allowing such rentals, plaintiffs did obtain a preliminary injunction but lost the war—the ultimate judgment was a “clean sweep” in favor of defendants on all causes of action.  However, the trial judge denied the defense costs and fee motion requests after determining that the interim success by plaintiffs and some other defense testimony made no side the prevailing party.

            The Fifth District reversed.  In this one, defendants were the clear winners based on the sweeping defense judgment.  Section 1717 does not hinge the “prevailing party” determination to a preliminary tactical victory, but to the ultimate strategic victory at the end of the day.  (Estate of Drummond, 149 Cal.App.4^th 46, 51 (2007); DisputeSuite.com, LLC v. Scoreinc.com, 2 Cal.5^th 968, 981 (2017) [our Leading Case No. 21—front website page on the upper right hand corner]; Liu v. Moore, 69 Cal.App.4^th 745, 755 (1999).)  Similarly, defense testimony that they would no longer engage in short-term rentals was not equivalent to the relief ultimately awarded—and that relief was in favor of the defense.  Because the defense obtained a “no relief” determination against plaintiffs, they were entitled to routine costs as a mandatory right under CCP § 1032(a)(4).) 

Celebrities, SLAPP: Former U.S. Rep. Katie Hill Ordered To Pay SLAPP Fees Of A Little Under $30,000 To Talk Show Host Joseph Messina

Fees Resulted After She dismissed A Revenge Porn Lawsuit Against Mr. Messina.

            Recently, L.A. Superior Court Judge Yolanda Orozco decided that former U.S. Representative Katie Hill must pay former defendant Joe Messina, a radio talk show host, $29,905 in attorney’s fees under the SLAPP fee shifting provision after she dismissed him from her revenge porn lawsuit on the eve of the SLAPP motion to dismiss.  Mr. Messina had sought recovery of $37,585, but the judge found this to be an excessive request.

Probate: Trust Income Beneficiary Losing Fiduciary Breach Petition Against Trustees Properly Had To Bear Trustees’ Costs Under Probate Code Section 1002

Costs Award Was Not Under General Equitable Powers, But Section 1002—Which Has No Bad Faith Requirement.

            In McClatchy v. Pruitt, Case No. A160367 (1^st Dist., Div. 5 May 4, 2021) (unpublished), trust income beneficiary lost a fiduciary duty petition against certain current and former trustees, with the lower court awarding trustees some litigation costs under Probate Code section 1002.  Beneficiary, on appeal, argued that the costs award was infirm because there was no determination that he acted in bad faith. 

            That argument was rejected on appeal.  Beneficiary’s personal liability for costs arose from section 1002, which provides: “Unless it is otherwise provided by this code or by rules adopted by the Judicial Council, either the superior court or the court on appeal may, in its discretion, order costs to be paid by any party to the proceedings, or out of the assets of the estate, as justice may require.” (Emphasis added.)  The probate court had discretion “to decide not only whether costs should be paid, but also, if they are awarded, who will pay and who recover them.” (Hollaway v. Edwards, 68 Cal.App.4th 94, 99 (1998) emphasis omitted.)

            Probate courts also have equitable powers “to charge attorney fees and costs against a beneficiary’s share of the trust if that beneficiary, in bad faith, brings an unfounded proceeding against the trust.” (Pizarro v. Reynoso, 10 Cal.App.5th 172, 183 (2017), emphasis added; accord, Rudnick v. Rudnick, 179 Cal.App.4th 1328, 1335 (2009).) However, such equitable powers do not support an award of fees and costs against a beneficiary personally. (Pizarro, supra, at pp. 187-189.)  Here, the problem was that beneficiary faced costs under section 1002, which carried no bad faith requirement such that the postjudgment order was affirmed. 

Allocation, Multipliers, Section 1717, Substantiation Of Reasonableness Of Fees: Reversal And Remand Were In Order Where Trial Court Believed It Did Not Have Authority To Apply A Negative Multiplier In An Award Of Attorney Fees

Invoices Submitted In Support Of Plaintiff’s § 1717 Fees Motion Were Extensively Redacted And Contained Vague Block-Billing, Which Offered The Trial Court No Way To Meaningfully Apportion Time Between Causes Of Action.

            After defeating defendant’s cross-claim breach of contract cause of action, plaintiff moved for Civ. Code § 1717 attorney fees of $939,600.50, which represented all of plaintiff’s incurred fees from the time defendant amended their cross-complaint to add the breach of contract cause of action.  In opposition, defendant argued that a negative multiplier should be applied based on the extensive redactions and block-billing of the invoices submitted by plaintiff in support of its fee motion, which offered the trial court no way to meaningfully apportion time between causes of action.  Defendant argued that no more than $47,980.20 should be awarded to plaintiff.  The trial court rejected defendant’s negative multiplier argument and awarded plaintiff $369,811.50 after reductions to one attorney’s hours, hourly rate reductions, and further reductions for apportionment and excessiveness.

            Defendant appealed, and the 2/1 DCA reversed in Southern Cal. School of Theology v. Claremont Graduate University, Case No. B302452 (2d Dist., Div. 1 May 3, 2021) (unpublished). 

            The trial court appeared to have rejected defendant’s proposed negative multiplier based on its belief it had no authority to apply defendant’s requested negative multiplier.  However, a trial court has considerable discretion in determining fee awards, including its authority to ““assig[n] a reasonable percentage to [time] entries, or simply cast them aside.” (Bell v. Vista Unified Sch. Dist., 82 Cal.App.4th 672, 689 (2000).)  The court may reduce compensation on account of any failure to maintain appropriate time records as the party moving for fees bears the burden of establishing entitlement and documenting the appropriate hourly rate and hours expended. (ComputerXpress, Inc. v. Jackson, 93 Cal.App.4th 993, 1020 (2001).)

            On remand, the panel instructed the trial court to reconsider its order based on its full authority to fashion a fees award under § 1717 – reminding the trial court it has the authority to apply a negative multiplier as a basis to apportion fees.

Requests For Admission, Sanctions: 2/8 DCA Reverses And Remands Trial Court’s Denial Of Costs Of Proof Sanctions To Plaintiff Association And Amends $75,190.98 Judgment Entered In Plaintiff’s Favor To Add Over $7.8 Million In Damages

Trial Court Was Required To Award Plaintiff Its Reasonable Fees And Costs Incurred In Proving Matters Defendants Failed To Admit Without Reasonable Grounds To Do So, And Plaintiff Association Had Standing To Seek Damages On Behalf Of Its Members.

            In Assn. for L.A. Deputy Sheriffs v. Macias, Case No. B295086 (2d Dist., Div. 8 April 30, 2021) (published), plaintiff Association for Los Angeles Deputy Sheriffs (a nonprofit mutual benefit corporation that represents LASD and the district attorney’s bureau of investigations employees in contract negotiations) sued two of its board members for breaches of fiduciary duty, fraud, constructive fraud, conversion, and declaratory relief.  The breaches occurred after the board’s director and president had been removed due to lack of eligibility to be director under the Association’s bylaws.  He and the board’s vice president fought the removal by causing Association great disruption in its management by creating confusion and informing staff that Macias was still president, conducting board meetings without the required quorum, obtaining a $100,000 cashier’s check without approval from an Association account to retain counsel to fight the removal, and so on.

            After four years of litigation and a 7-day trial, the trial court entered judgment for $75,190.98, plus postjudgment interest, in Association’s favor, but sustained defendants’ last-minute objection to Association’s requested $7.8 million in damages on behalf of its members for lost salary increases – concluding Association had standing to sue only if it brought a class action.  On appeal, the 2/8 DCA concluded the class action analysis was an improper test for associational standing as California follows the federal rule on an association’s standing to sue on behalf of its members. “[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” (Hunt v. Washington State Apple Advertising Com., 432 U.S. 333, 343 (1977).)  With substantial evidence supporting both causation and damages findings that Association members suffered $7,813,833 in lost salary increases due to defendants’ actions, the panel amended the judgment to add that amount.

            The trial court also denied Association’s postjudgment Code Civ. Proc. § 2033.420 motion for costs of proof sanctions, related to defendants’ failure to admit the truth of basic matters in their requests for admission responses, based on the following grounds: (1) lack of jurisdiction due to the parties’ pending appeals; (2) some denials were not unequivocal and Association had not identified the specific fees/costs incurred to prove those that were; and (3) defendants had reasonable grounds to believe they would prevail on the conversion claim and the breach of fiduciary duty claim as to the appointment of a member to the board without a quorum.

            The 2/8 DCA found abuse of discretion for each basis for denial stated by the trial court. 

            First, the trial court did retain jurisdiction to rule on the costs of proof motion as an appeal does not stay proceedings on “ ‘ancillary or collateral matters which do not affect the judgment [or order] on appeal’ even though the proceedings may render the appeal moot.” (Varian Medical Systems, Inc. v. Delfino, 35 Cal.4th 180, 191 (2005).) 

            Second, defendants’ claims of insufficient information to respond to matters they clearly knew or should have known constituted a “failure to admit” response as specified in §§ 2033.420(a) and (b)(4).  No motion to compel was necessary as the responses were complete, and Association did not waive its right to cost of proof fees.  Also, there is no statutory requirement that fees and costs must be separately allocated to each specific request for admission – especially where all the requests relate to a single issue as was the case here. 

            Third, nothing prevented defendants from admitting facts related to their taking of $100,000 and returning it 17 days later regardless of what they believed about Association’s standing was to recover funds taken from its own account, and defendants had no reasonable ground to deny that voting to appoint a board member without quorum was a breach of fiduciary duty based on their belief director/president should not have been removed.

            Finding the trial court was required by § 2033.420 to award Association its reasonable fees and costs incurred in proving matters defendants failed to admit without reasonable grounds to do so, the panel reversed and remanded for determination of those fees and costs. 

Fee Clause Interpretation, Retainer Agreements, Section 1717: Postjudgment Order Awarding Attorney $1,232,735 In § 1717 Fees And Costs Incurred Defending Against Former Client’s Tort And Contractual Claims And Cross-Claim For Unpaid Fees Affirmed

Retainer Agreement’s Broadly-Worded Fee Provision Allowed For Recovery Of Fees For Attorney’s Defense Of All Claims By Former Client, Including Tort Claims – The Defense Of Which Were Necessary To Defeat The Contractual Claim.

            In Singh v. Molnar, Case No. B303366 (2d Dist., Div. 7 April 30, 2021) (unpublished), defendant attorney was awarded $1,232,735 in Civ. Code § 1717 fees and costs in a postjudgment order after prevailing against former client’s numerous contractual and tort claims and in his cross-claim against former client for unpaid fees.  Former client’s tort claims were based on attorney taking possession of a 10-year-old Mercedes (offered to former client as part of a settlement of another case) as an offset for fees owed by former client. 

            On appeal, former client argued that attorney improperly sought fees for attorneys who worked at his own firm defending against the tort claims, and that fees incurred in defense of the tort claims were not “on a contract” as required by § 1717.

            The 2/7 DCA affirmed. 

            Although tort and noncontract claims are generally not subject to § 1717 and its reciprocity principles, it does not prevent parties from contracting to allow for recovery of fees in tort actions.  Therefore, the question before the panel was not whether former client’s tort claims were “on the contract,” but whether the fees incurred in defending against those claims were covered by the retainer agreement.  The appellate panel found that former client’s tort claims fell within the scope of the broadly-worded fee provision because he sought a declaration of whether he owed money under the retainer agreement, or whether attorney owed money after taking the offset for the fees owed.  Agreeing with the trial court, the panel concluded that attorney’s defense of the tort claims was necessary to succeed on the breach of contract claim – and that the parties’ communications about the Mercedes/offset underscored that their disagreement was directly related to their dispute about contractual payment obligations under the retainer agreement.

Multipliers, Private Attorney General, Special Fee Shifting Statutes: The 1/5 DCA Affirms $2,961,264.29 Fees And Costs Award, Inclusive Of A 1.4 Multiplier, To Prevailing Plaintiff In Action For Violations Of A Conservation Easement

Plaintiff’s Attorneys, Who Bore The Risk Of Taking On A Partially Contingent Case With Important Public Interests At Stake, Displayed Exceptional Expertise and Skill In A Case Involving Nearly Five Years Of Contentious Litigation And A 19-Day Trial.

            Following a 19-day bench trial in The Sonoma Land Trust v. Thompson, Case No. A159139 (1^st Dist., Div. 5 April 30, 2021) (published), defendant property owners and their non-party corporation were found jointly and severally liable for violations of a conservation easement – with plaintiff nonprofit easement holder being awarded $575,899 in monetary damages, which included $318,870 for the costs of restoring the property, and injunctive relief (results affirmed in a previous appeal).  Additionally, the trial court awarded plaintiff with attorney fees and costs of $2,961,264.29, inclusive of a 1.4 multiplier, under Civ. Code § 815.7(d), Code Civ. Proc. § 1021.5, and the conservation easement itself.  

            Defendants appealed, but the 1/5 DCA affirmed.

            Contrary to defendants’ contention, the trial court was not required to deduct the initial $500,000 in fees paid by plaintiff’s insurance policy as trial courts may award fees regardless of who paid the fees, and plaintiff did not receive a double recovery as, pursuant to its insurance policy, it had to reimburse its insurer from any damage award.  Additionally, pursuant to the easement, plaintiff was entitled to its fees as the prevailing party – whether or not it actually paid the fees.

            The panel also was not persuaded by defendants’ vague arguments that plaintiff’s attorneys were inefficient and over-litigated an easy case – especially given that the litigation was contentious, dragged on for nearly five years, involved a 19-day trial, and plaintiff’s counsel had reduced its request by more than 10 percent to account for duplications and inefficiencies. 

            As to the multiplier, there was no abuse of discretion.  The contingent risk plaintiff’s attorneys faced was not eliminated by the initial insurance payment – it was merely mitigated.  The trial court reduced plaintiff’s requested multiplier from 1.6 to 1.4 after properly considering that plaintiff’s attorneys received some fees upfront, then proceeded on a “fully contingent basis . . . due to the important public interests at stake.” 

            Finally, defendants argued that the trial court improperly used the skill level of plaintiff’s attorneys and the novelty and difficulty of the case to justify the lodestar and the multiplier – resulting in double counting.  Not so, said the panel.  Based on the exceptionally high levels of skill and expertise displayed by plaintiff’s counsel – that was not fully factored in to the lodestar – the trial court could have reasonably set a higher hourly lodestar rate.  However, the lower lodestar allowed the trial court more room for a multiplier to provide fair compensation for plaintiff’s attorneys – with the panel noting that the contingent risk factor alone justified the multiplier.

Section 998: Trial Court Order Awarding Postoffer Costs Against Prevailing Song-Beverly Plaintiff Affirmed On Appeal Because Plaintiff Failed To Beat Defendant’s § 998 Offer At Trial

Requirement That Plaintiff Sign A General Release Did Not Invalidate The § 998 Offer As The General Release Clearly And Unambiguously Applied Only To The Claims In The Underlying Action.

            Plaintiff received a $17,259.19 jury verdict in his Song-Beverly Consumer Warranty Act violations (California’s lemon law; Civ. Code § 1790 et seq.) action against Toyota.  However, when both parties moved post-trial to recover attorney fees and costs, the trial court awarded Toyota with its postoffer costs – finding plaintiff had failed to recover more at trial than Toyota had offered in its pretrial Code Civ. Proc. § 998 offer to compromise, which would have provided plaintiff $20,857.27 in restitution, plus $10,000 in attorney fees, and payment of the balance of plaintiff’s lease in exchange for return of the car with clear title, dismissal of the action, and execution of a general release. 

            Plaintiff appealed, arguing Toyota’s § 998 offer was invalid because it included a vague general release that would have included a Civ. Code § 1542 waiver of known and unknown claims, and was not attached to the offer itself, but the 2/8 DCA affirmed Khoshnevis v. Toyota Motor Sales, U.S.A., Case No. B301461 (2d Dist., Div. 8 April 30, 2021) (unpublished). 

            Although a § 998 offer that includes a nonmonetary component can sometimes create a situation where the trial court is unable to attach an overall value to the offer – rendering the offer invalid – that was not the case here.  The panel found Toyota’s offer capable of valuation as it clearly and unambiguously applied only to the underlying action, and the general release was limited only to the claims already being litigated.  Additionally, the panel found no authority mandating that a release itself be attached to the offer, and held it unnecessary where the offer otherwise appropriately limits the scope of the release.

Section 998: Where CCP § 998 Offer Did Not Clearly Negate Contemplation Of Entry Of Judgment In Favor Of Accepting Party, There Was No Basis To Vacate Judgment To Do Differently

Words To The Wise—As Offering Parties, Make Clear What Triggers Conclusion—If Not, Entry Of Judgment May Not Result Even Under Ambiguous Terms.

            Arriagarazo v. BMW of North America, LLC, Case No. C090980 (3d Dist. Apr. 30, 2021) (unpublished) solely related to a CCP § 998 battle, specifically, whether a section 998 offer precluded entry of judgment based on its terms.  The lesson, boiled down, is that the offeror needs to make clear what it wants done as far as resolution of the case in the 998 offer; otherwise, ambiguities may be construed against the offeror, as the drafting party.

            This case, ultimately, was decided on the basis of an ambiguous offer from the defense, which only indicated a general release would be executed but with no further resolution issues—such as a dismissal or entry of judgment.  After a lot of exchanges and a trial court decision indicating that an entry of judgment was contemplated, the Third District reversed.

            The infirmity here was that the 998 offeror needed to precisely indicate the resolution in the 998 offer.   Nothing in the offer met this requirement of a dismissal or entry of judgment.  Simply agreeing to a general release did not meet these requirements.  So, 998 offerors—make the terms of the offer clear as far as final resolution!

Special Fee Shifting Statute: Defendant Winning Dismissal Of Civil Harassment Restraining Proceeding Only Obtains $5,000 Out Of Requested $11,500 In Fees

Fee Request Was Excessive, But Trope Argument Against Defendant Was Unavailing.

            A plaintiff dismissing a civil harassment restraining order proceeding, without informing defendant or the lower court of the dismissal, was subject to defendant’s fee motion under Code of Civil Procedure section 527.6(s), a discretionary fee-shifting statute.  The lower court in Khalili v. Hoag, Case No. B302744 (2d Dist., Div. 8 Apr. 28, 2021) (unpublished) awarded $5,000 out of a requested $11,500, because the trial judge found the request to be excessive.  The lower court properly extended the time to file the fee motion based on defendant’s family health situation, which dispatched the untimely filing argument.  Plaintiff then argued that defendant, an in pro per, could not obtain attorney’s fees under Trope, but that argument was rejected because there was testimony by an attorney that he had been retained to appear at the scheduled hearing.  The dismissal of the restraining order proceeding did make defendant the prevailing party.  (Adler v. Vaicius, 21 Cal.App.4^th 1770, 1777 (1993).)  Lowered fee award affirmed.

Reasonableness Of Fees: Reduction Of Requested Contractual Fees Award By Over $250,000 For Excessive Collaboration And Block Billing Was No Abuse Of Discretion

Defendants’ Final Award Was $410,115.50.

            In Barto/Signal Petroleum, Inc. v. Boneyard, LLC, Case No. B299794 (2d Dist., Div. 8 Apr. 29, 2021) (unpublished), defendants prevailed and sought attorney’s fee under a contractual fees clause in a settlement agreement.   They were awarded $410,115.50 in fees, a reduction of over $250,000.  That result was affirmed on appeal.  The reasons?  Excessive collaboration and block billing, with the trial judge reducing the block billed entries by 65%.

Damages: Trial Court Erred In Granting Motion In Limine And Denying Motion To Amend To Allow Plaintiff To Pursue Attorney’s Fees As Damages In Residential Rescissionary Case

First District Suggests That Nonstatutory Motions For Judgment On The Pleadings Might No Longer Be Viable And Cautions Against Use Of Motions In Limines As Substitutes For Statutorily Authorized Dispositive Motions.

            Plaintiff in Tung v. Chicago Title Co., Case No. A151526 (1^st Dist., Div. 3 Apr. 28, 2021) (published) sought attorney’s fees as damages for securing/quieting title from defendants (many insured by Chicago Title) of a two-unit San Francisco residence.  The lower court granted a motion in limine on the eve of trial in which it refused to allow introduction of fees because they were not specifically pled as damages and also denied a motion to amend as tardy/prejudicial to the defense.

            The 1/3 DCA, in an opinion authored by Retired Justice Wiseman (a former Fifth District justice sitting by assignment), reversed on behalf of a 3-0 panel.  Because defense counsel was aware fees were being sought as damages, the denial of leave was an abuse of discretion under the circumstances.  She also made two other interesting observations in the opinion:  (1) questioning whether nonstatutory motions for judgment on the pleadings are viable (although not deciding the issue); and (2) cautioning against the use of motions in limine as substitutes for statutorily authorized dispositive motions, which put the burden on the trial judge rather than the moving trial counsel.  Here is what she said on the last issue: “In addition, we caution trial judges to be wary when choosing to decide an in limine motion that, no matter how captioned, functions as a nonstatutory motion for judgment on the pleadings, particularly when the motion is filed on the eve of trial. Doing so, under circumstances like those presented here, is a recipe for reversal.”

Prevailing Party: Residential Owners And Contractor, Each Winning On Their Dueling Contract Claims, Were Properly Found Not To Be The Prevailing Side

No Clear Winner And Mixed Results Sealed That Conclusion, With A Mechanical, Arithmetic Approach Not Being The Dispositive Calculus.

            Residential owners, contractor, and subcontractors got into a brouhaha about the construction on a residential house, resulting in residential owners winning $160,000 on a contractual delay claim, contractor winning $535,000 on a contractual cross-claim for nonpayment (reduced to $375,000 after offsetting the $160,000), and subcontractors settling out with owner for around $972,000 in settlements.  Owners also won on some negligence design claims, which were offset by the various settlements and awards.  The lower court, based on a contractual fees clause, decided neither owners nor contractor were prevailing parties, concluding the results were mixed and owners’ settlement offers showing they were willing to settle well under their more inflated trial demands.

            The “no prevailing party” determination was affirmed on appeal in Dickerson v. Perry & Papenhausen, Inc., Case Nos. D076080/D076471 (4^th Dist., Div. 1 Apr. 28, 2021) (unpublished). Contrary to contractor’s position, the analysis on that issue is not purely mechanical or arithmetic in nature, but also entails scrutiny of equitable considerations.  Both sides recovered on their contract claims, but contractor received much less than the $980,000 sought, owners recovered on their negligence claims, and settlement offers by owners demonstrated that they sought much less than the “swinging” $4.9 million number put before the jury.  No fees for anyone in this case.