CALIFORNIA ATTORNEY'S FEES

Probate: Where Judgment Was Satisfied, Trial Court Erred In Awarding Post-Satisfaction Fees Against Satisfying Objector

4/3 DCA Also Determines Probate Court Section 859 Allows Doubling, But Not Trebling, Of Damages.

            Objector in Conservatorship of Ribal, Case No. G056105 (4^th Dist., Div. 3 Jan. 18, 2019) (published) was ordered to return funds to the conservatorship and, on remand, the trial court awarded conservator post-judgment attorney’s fees incurred in attempts to enforce the judgment of $43,507.50 against objector. This one was reversed because the record showed that the judgment had been satisfied before the fee motion was brought, meaning the fee motion was untimely under Code of Civil Procedure section 685.080(a). The 4/3 DCA, in the opinion authored by Acting Presiding Justice Moore, also construed the scope of Probate Code section 859, determining that it allows for doubling, but not trebling, of damages for the value of property taken or disposed of by a person committing financial elder abuse.

Costs, Employment: Third Circuit Court Of Appeals Affirms $319,655.80 Costs Award Against Named FLSA Plaintiffs For ESI Vendor TIFF Conversion And Platform Loading Production Activities

Federal Appellate Court Dismisses Arguments That Costs Recovery Not Allowable Under FRCP Or FLSA, Or Was An Abuse of Discretion Under The Circumstances.

           This next case is a harbinger for risk advice which plaintiff litigators should provide to putative Fair Labor Standards Act (FLSA) plaintiff clients, because these clients could be liable for certain e-discovery vendor expenses of a substantial amount if the defense prevails, as the defense did in Camesi v. University of Pittsburgh Medical Center, Case Nos. 17-3476/18-1112 (3d Cir. Jan. 15, 2019) (nonprecedential).

            What happened here is that four named plaintiffs filed an FLSA collective action on behalf of another 2,800 unnamed plaintiffs for meal break violations, a case which was conditionally certified by the district court. Named plaintiffs then sought broad ESI production, with the district court entering an order to that effect. Later, after the defense complied through an ESI vendor who converted documents to TIFF and loaded the converted files onto the vendor’s platform for eventual production, the district court decertified the action, dismissing the unnamed plaintiffs’ claims without prejudice. Named plaintiffs then dismissed their claims in order to appeal the decertification order, an appeal the Third Circuit earlier dismissed due to lack of jurisdiction. Then, the defense sought to recover $319,655.80 in ESI vendor expenses as costs against the named plaintiffs, smartly requesting only a third of the ESI vendor expenses (with $300,000 encompassing copying charges and the remainder the ESI vendor direct expenses). The district court clerk taxed costs (in federal parlance, that means costs were allowed), with the district judge confirming this allowance. Named plaintiffs appealed to the Third Circuit with numerous challenges, all of which were rejected in the 2019 nonprecedential opinion. (In doing so, the federal appeals court relied on the reasoning in Kuznyetsov v. West Penn Allegheny Health System, Inc., 2014 WL 5393182 (W.D. Pa. Oct. 23, 2014).)

            First, named plaintiffs claimed that the costs were not recoverable under 28 U.S.C. §1920, which allows taxing of costs “where the copies are necessarily obtained for use in the case.” No, because the Third Circuit’s prior opinion in Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012) does allow for recovery of these expenses, which the district judge awarded after a prior appeal remand to obtain more evidence to see if Race Tires allowed them. (Both Race Tires and the prior Camesi appeal decision were discussed in our March 28, 2016 post.) The costs were necessary to the case, since plaintiffs were the ones demanding the documents!

            Second, plaintiffs contended that defendants were not prevailing parties under FLSA. This argument did not itself prevail because FLSA does not address a prevailing defendant situation such that FRCP 54(d)(1) did allow for costs recovery of the subject expenses. The appeals court found the award was not violative of FLSA, because plaintiffs should be incentivized to carefully assess and not file meritless/marginal claims. Also, the Third Circuit followed the majority approach that the defense can prevail based upon a voluntary dismissal by unnamed plaintiffs. It further determined that there was nothing unfair about only assessing costs against the four named plaintiffs rather than unnamed plaintiffs too, because this would encourage named plaintiffs’ counsel to advise them, prefiling, of the risks associated should the defense later prevail (which would include a costs award against them).

            Third, the award was not an abuse of discretion. The evidence showed that the four named plaintiffs were not indigent and could bear the costs award (although we presume this will hurt). Beyond that, a district judge only permissively can deny costs based on the indigency/pocketbook factor—it is not mandatory to deny costs in this situation. No bad faith was shown by the defense, given that this side was only responding to the broad document production wanted by plaintiffs anyway.

            BLOG OBSERVATION—An interesting question is whether the result would be the same in a California state case alleging a FLSA collective action. We believe the answer may well be “yes.” Number 6 of our Top 25 decisions for 2018 was the 4/3 DCA’s published opinion in Quiles v. Parent, 28 Cal.App.5^th 100 (2018) (now final), which allowed recovery of costs to FLSA prevailing plaintiffs under FLSA even though California routine costs statutes would not permit costs recovery. In this area, Toshiba America Electronic Components, Inc. v. Superior Court, 124 Cal.App.4^th 762 (2004) held that CCP § 2031.280(b) (formerly § 2031(g)(1)) requires that the reasonable costs of ESI data translation into usable form must be borne by the demanding party. Given that California courts look to federal cases on e-discovery issues (see id. at 770; Vasquez v. Calif. School of Culinary Arts, Inc., 230 Cal.App.4^th 35, 42-43 (2014)), a good case can be made that the result in Camesi would allow recovery of ESI costs in certain respects by prevailing defendants.

Family Law: Pont v. Pont Now Published

Appellate Court Recognized Spin-Off Litigation Under Stipulated Settlement With A Fees Clause Could Give Rise To Fee Recovery Even Though Dissolution Case Venued Elsewhere.

            In our December 22, 2018 post, we discussed Pont v. Pont, Case No. B284064, which was a 2/1 DCA decision which was unpublished at the time. The opinion upheld an attorney’s fees award to a husband who prevailed in Orange County spin-off litigation involving a stipulated dissolution settlement even though the dissolution case was venued in Los Angeles County. We can now report that the opinion was certified for publication on January 16, 2019.

Reasonableness Of Fees, Section 1717: $1,047,313.72 Contractual Fee Recovery To Defendants Was Not Excessive In Long-Running Litigation

Civil Code Section 1717 Has No “Obligation-To-Pay” Requirement.

            Defendants in Legendary Investors Group v. Niemann, Case No. B284736 (2d Dist., Div. 4 Jan. 16, 2019) (unpublished) prevailed in a long-running suit against plaintiff involving commercial loan and guaranty documents. Defendants, as prevailing parties, requested fees of $1,061,208.22, with the lower court awarding $1,047,313.72. Plaintiff primarily challenged the fees as excessive.

            The award was sustained on appeal. Plaintiff argued that defendants should have raised a pivotal standing issue earlier on to avoid fee accumulation, but the reviewing court observed that plaintiff had the burden to establish standing (not the defense) and that the standing issue was hotly litigated over numerous years of the litigation. The fees were adequately documented through detailed attorney declarations and billing entries. Plaintiff then argued that no fees should be awarded because other entities than the defendants were obligated to pay the fees. That argument was rejected on two grounds: (1) Civil Code section 1717 has no “obligation to pay” requirement engrafted into it (Dzwonkowski v. Spinella, 200 Cal.App.4^th 930, 938 (2011)); and (2) the operative provisions stated that the losing party would pay for reasonable, court-ordered fees, saying nothing about them needing to be “incurred.”

Fee Clause Interpretation, Prevailing Party: $53,791.79 Fees/Costs Award To Tenant And Against Landlord Affirmed On Appeal

Fee Clause “Any Right” Language Allowed Tenant To Recover For Landlord’s Misrepresentations.

            Zhang v. Cheung, Case No. B282132 (2d Dist., Div. 7 Jan. 16, 2019) (unpublished) involved a situation where a landlord won only $16,200 in damages for breach of a lease, while tenant won $30,078.85 in damages from landlord for intentional misrepresentation and negligence. The lease had a fees clause providing recovery to prevailing litigant in situations “to enforce any provision of this lease or any right of either party hereto ….” The lower court awarded fees and costs of $53,791.79 to tenant as the prevailing party in the litigation. (The trial judge, while the matter was on appeal, vacated the fee award and then later reinstated it, with the appellate court only looking to the initial fee award given that the vacation order was void once the appeal was filed.)

            The 2/7 DCA upheld the fees/costs award. The “any right of either party” language was broad enough to encompass tenant’s victory on the misrepresentation/negligence claims. Because the jury awarded more to tenant than landlord, tenant was the successful party. Landlord then asked the appellate court to limit his liability to his equity in the property based on a lease limitations provision, but that only applied to any lease claims rather than the tort claims under which tenant was victorious.

Homeowner Associations, Prevailing Party: HOA Obtaining Preliminary Injunction To Aid Fumigation Of Separate Units Was Prevailing Party Entitled To Fee Recovery

Lower Court Fee Award And Appellate Fees Were Warranted In Favor OF The HOA.

            Although we do not know the amount of fees awarded below, the homeowners in Windham at Carmel Mountain Ranch Assn. v. Lacher, Case No. D071799 (4^th Dist., Div. 1 Jan. 16, 2019) (unpublished) obviously were dismayed when the lower court awarded HOA fees after the trial judge issued a preliminary injunction in favor of the HOA. Under the terms of the preliminary injunction, the homeowners had to vacate their unit and provide a key while separate units were being fumigated. The appellate court affirmed the finding that the HOA was the prevailing party, given that a preliminary injunction assisting the fumigation process so as to demonstrate that the organization obtained its litigation objectives. (Rancho Mirage County Club Homeowners Assn. v. Hazelbacker, 2 Cal.App.5^th 252, 262 (2016); Press v. Lucy Stores, Inc., 34 Cal.3d 311, 316 (1983).) To add more insult, HOA was entitled to fees for prevailing on appeal.

Probate: Trust Beneficiary Obtaining Concrete Substantial Benefits On Behalf Of The Trust Was Entitled To Have $721,258.28 In Attorney’s Fees, Expert Fees, And Costs Paid From The Trust

2/6 DCA Has Nice Discussion Of Similarities And Differences Between The Substantial Benefit Versus Common Fund Theories Of Fee Recovery.

          Generally, trust beneficiaries must pay their own attorney’s fees incurred in challenging a trustee’s conduct, even if they ultimately succeed. (Leader v. Cords, 182 Cal.App.4^th 1588, 1595 (2010).) However, a court in its equitable discretion can order a trust to pay for the fees incurred by a trustee beneficiary providing a substantial benefit to the trust or the trust beneficiaries. (Serrano v. Priest, 20 Cal.3d 25, 38 (1977) [our Leading Case No. 3].) These principles were applied by the 2/6 DCA to affirm a substantial attorney’s fee, expert fees, and costs award in favor of a trust beneficiary who provided concrete pecuniary and nonpecuniary benefits to the trust.

            In Smith, Jr. v. Szeyller, Case No. B281758 (2d Dist., Div. 6 Jan. 16, 2019) (published), one trust beneficiary expended hefty sums to challenge the conduct of some trustees to a $14 million trust estate, given that they had apparently spent over $2 million on expenditures, gambling, and gifts from a survivor’s trust accounts during the last year of the wife (who was a co-trustee along with one of the trustees accused of making extravagant expenditures). The litigating trust beneficiary (Don) eventually obtained a settlement by which the trustees froze accounts, had a referee appointed to do accountings, and had the challenged trustees pay some past due tax penalties/interest on behalf of the trust. The lower court also ordered that the trust, in proportion to beneficiaries’ interests, pay Don’s $721,258.28 in attorney’s fees, expert fees, and costs based on the “substantial benefit” doctrine. A nonparticipating beneficiary along the way (Donna) challenged this award, although she failed to contest or object to the fees even through being provided notice of same.

            The 2/6 DCA affirmed. It found that Donna’s failure to object largely gutted her challenges to what Don had accomplished for the trust. With respect to fees, her failure to object had large impacts. The appellate court did believe that Don produced concrete benefits for the trust, and it noted that Donna only had to pay a small amount of the fees given her more limited beneficiary interests in the operative trust, sub-trusts, and related accounts. In doing so, the reviewing court reminded us that, although the substantial benefit doctrine is an outgrowth of the common fund doctrine, the substantial benefit doctrine applies to both pecuniary and nonpecuniary benefits while the common fund doctrine applies only to pecuniary benefits.  

Appealability: Expiration Of Restraining Order Did Not Moot Appeal Where Outcome On The Merits Could Determine Whether Prevailing Party Entitled To Attorney’s Fees

However, Merits Order Was Reversed, So No Fees Would Be Awarded To Prior Prevailing Party.

            In Lall-Yepez v. Pukka, Case No. B283975 (2d Dist., Div. 5 Jan. 14, 2019) (unpublished), respondent won a civil harassment restraining order issued under CCP § 527.6 against appellant, who appealed. However, the restraining order expired by its terms, raising the possibility that the appeal was moot. However, there was a mootness exception applicable here: the order’s propriety affected the prevailing party’s eligibility for an award of attorney’s fees given the existence of a fee-shifting statute in this area. (See, e.g., Carson Citizens for Reform v. Kawagoe, 178 Cal.App.4^th 357, 365 (2009); Save Our Residential Environment v. City of West Hollywood, 9 Cal.App.4^th 1745, 1750-1751 (1992); Mapstead v. Anchundo, 63 Cal.App.4^th 246, 277-279 (1998).) Respondent did file a motion for fees of $34,200 under CCP § 527.6(s), which was pending during the appeal. The appellate court found no substantial evidence to support the restraining order such that the merits order was reversed anyway on review—which, by the way, mooted respondent’s fee motion.

Family Law: Ex-Husband Siphoning Off Equity In House Properly Assessed With Fiduciary Breach, 271, And Financial Disclosure Failure Sanctions

No Abuse of Discretion Shown, With Appellate Court Reminding Practitioners That Fiduciary Breach Fee Sanctions Are Mandatory In Nature.

            Ex-husband in Marriage of Tsatryan, Case Nos. B270784/B276299 (2d Dist., Div. 7 Jan. 14, 2019) (unpublished) was not happy with being hit with $65,000 in attorney’s fees sanctions under Family Code sections 1101(g) [for breach of fiduciary duty with regard to community assets], 271 [failure to promote settlement/hold down the costs of a dissolution case] and 2107(c) [failure to make required disclosures in declaration of financial disclosure]. However, the sanctions award was hardly an abuse of discretion when the record showed that ex-husband had siphoned off equity in the ex-couple’s house to the tune of $650,000 in encumbrances—making the sanctions award only 10% of the transfers (with section 1101(g) allowing a base award of 50% of any transferred asset). The appellate court also reminded everyone that the section 1101(g) award of fees for a spouse’s breach of fiduciary duty is mandatory. (In re Marriage of Fossum, 192 Cal.App.4^th 336, 348 (2011).)

Allocation, Substantiation Of Reasonableness Of Fees: City Prevailing On Cross-Complaint Could Not Obtain Recovery Of Unilateral Inverse Condemnation Fees, Which Could Only Be Awarded To Losing Cross-Complainants

Apportionment Was Required In This Context, Plus A Relook At “Block Billing” Despite A 20% Reduction By The Trial Judge On The First Go-Around.

            In City of Patterson v. Patterson Hotel Associates, Case No. F074038 (5^th Dist. Jan. 11, 2019) (unpublished), City of Patterson prevailed on its complaint and defensed a cross-complaint involving a commercial project. However, the rub was that the cross-complainants included an inverse condemnation claim which has a unilateral fee-shifting clause in their favor, not cross-defendant’s favor. (See Code Civ. Proc., § 1036.) City, feeling emboldened, moved to recoup fees of a little over $1 million for all of the work, arguing everything was intertwined, so that the spoils go the victor. Loser argued that fees for the inverse condemnation work had to be excluded and that block billing made it impossible to review the fee request. The trial judge did not buy the legal argument, but awarded $673,600 in fees to City, reducing the fee request by 20% based on the uncertainties created by block billing.

            The Fifth District reversed and remanded the fee award for another bite.

            The problem here was that the unilateral, pro-plaintiff inverse condemnation time had to be apportioned based upon reasoning in Carver v. Chevron U.S.A., Inc., 119 Cal.App.4^th 498, 504 (2004). Because the inverse condemnation work was not compensable, it needed a restudy by the trial judge—especially given the City had the burden to produce information sufficient to determine how much time was spent on particular claims. However, some apportionment or percentage discount was necessary.

            That then led the Fifth District to look again at the block billing issue. Reading in between the lines, the reviewing court understood the discretion to trial judges on block billing but wanted a better read on whether block billing prevented a “reasoned apportionment of fees.” So, another look is in order on this one.

            Justice Snauffer, a recent Fifth District appointee, authored this opinion.

Appealability, POOF!: Dismissed Defendants’ Later $155,182.50 Fee Award Went POOF! On Appeal Because Defendants Did Not Attempt To Correct Earlier Judgment Indicating No Fees Were To Be Awarded

Lower Court Had No Power To Change Prior Judgment And Then Award Fees.

            The result in this case may sound harsh, but it appears to be legally sound.

            In Schermer v. Upland Cascade, L.P., Case No. D072997 (4^th Dist., Div. 1 Jan. 11, 2019) (unpublished), a first superior court judge “struck” class allegations against defendants, such that the case became a direction against numerous defendants. The first judge denied a defense motion for attorney’s fees without prejudice, finding it premature until the conclusion of the case on the merits in the direct action. Dismissed defendants then won a judgment on the pleadings dismissing the action, with the minute order saying zero fees to defendants and with defendants to prepare a judgment (which they did) with the same language. This judgment of dismissal was never appealed. However, later, a second superior court judge granted defendants $155,182.50 in fees against plaintiffs, prompting an appeal.

            Plaintiffs won. Although not raised by any of the parties, the appellate court gleaned and asked for supplemental briefing about the earlier judgment, never appealed, containing a zero fees award. The 4/1 DCA decided that the language in the earlier judgment was binding, because the court had no ability to correct the earlier judgment through a subsequent fee award which was contrary to the previous judgment. (Ramon v. Aerospace Corp., 50 Cal.App.4^th 1233, 1236, 1238 (1996).) Just like that, the fee award went POOF! on appeal.

Deed Of Trust, Section 1717: Statutory Duties To Reconvey In Quiet Title Action Allowed Prevailing Party To Obtain Fees Under Contractual Clause Incorporating Those Duties

Integrated Loan Document Transaction Governed The Result.

            In Heier v. Barnett, Case No. G054785 (4^th Dist., Div. 3 Jan. 10, 2019) (unpublished) the appellate court affirmed an award of attorney’s fees to a prevailing party under a contractual fees clause in a quiet title dispute. The appellate court affirmed the fee award. The prevailing party’s entitlement to fees depended on a statutory duty to reconvey a deed of trust, which was incorporated into the contractual agreement. The fees provision in the installment note was broad enough, given the integrated nature of the overall loan, to encompass the duty to convey theory which was at issue in the quiet title action. Justice Goethals authored the 3-0 opinion.

Requests For Admissions: Orange County Water District Decision Now Partially Published

Reliance On Expert Retained Opinions Can Demonstrate Reasonable Bases For RFA Denials.

           On December 22, 2018, we posted on Orange County Water District v. The Arnold Engineering Co., Case No. D070763 (4^th Dist., Div. 1 Dec. 19, 2018; partially published Jan.10, 2018), which was unpublished at the time. The appellate court reversed a hefty costs-of-proof sanctions award for denial of RFAs because expert opinions supported the RFA denials in some instances. We can now report that this aspect of the decision was partially published on January 10, 2018. However, the unpublished decision—relating to inadmissibility of the evidentiary submissions on expert costs—was not published, although it is instructive for practitioners when facing costs-of-proof sanctions as far as what needs to be competently introduced for purposes of obtaining a “sanctions” award in this area.

Cases Under Review, Social Security: SCOTUS Decides That Social Security Benefits Cap Of 25% Only Applies To Court Representation, Not Agency Work

SCOTUS Disagreed With Eleventh Circuit, Following The Contrary Conclusion By Three Other Circuit Courts.

United States Supreme Court

            On January 8, 2019, the United States Supreme Court issued its opinion in Culbertson v. Berryhill, No. 17-773 (U.S. Supreme Court Jan. 8, 2019), which confronted this issue in the social security benefits area: “Whether fees subject to 42 U.S.C. § 406(b)’s 25-percent cap related to the representation of individuals claiming Social Security benefits include, as the U.S. Courts of Appeals for the 6th, 9th, and 10th Circuits hold, only fees for representation in court or, as the U.S. Courts of Appeals for the 4th, 5th, and 11th Circuits hold, also fees for representation before the agency.”

            In a unanimous opinion written by Justice Clarence Thomas, SCOTUS decided that the 42 U.S.C. § 406(b)(1)(A) cap of 25% applies only to fees for court representation rather than aggregate fees awarded under § 406(a) and (b), which can include more inclusive “reasonable” agency fees unless a fee agreement dictates otherwise. It disagreed with the Eleventh Circuit, endorsing the conclusion reached by three other federal courts of appeal.

In The News . . . . Los Angeles County Superior Court Judge Richard L. Fruin, Jr. Pens An Interesting Article On Law And Motion Volume In His Courtroom, Including Fees And Costs Trends

He Advocates “Nudges” For Efficient Litigation Given That 40% Of I/C Judges’ Cases Involve Pro-Plaintiff Prevailing Party Statutes; He Also Advocates A Meet And Confer Requirement For Motions To Tax Costs.

            In an interesting article by sitting Los Angeles County Superior Court Judge Richard L. Fruin, Jr. in the January 8, 2019 edition of The Los Angeles Daily Journal, he did a statistical tally of law and motion matters in his courtroom between 2013-2018 as well as making some poignant observations about how prevailing party fee statutes can make a difference in pro-plaintiff cases given the distribution of business to Independent Calendar Judges. Here is a summary of his findings and observations:

• Volume of Fee and Tax Costs Motions – FEES: in 2014, he had 25 motions, in 2017, he had 11 motions, and in 2018, he had 20 motions; MOTION TO TAX COSTS: in 2014, he had 12 motions, in 2017, he had 11 motions, and in 2018, he had 19 motions.
• Distribution of IC Judges’ Business in Pro-Plaintiff Prevailing Party Cases – Judge Fruin estimates that 30-35% of IC Judges’ caseloads involve employment cases and another 10% are motor vehicle warranty matters (many involving the Song-Beverly Act), altogether around 40% overall concern fee shifting statutes which are pro-plaintiff in nature. Given this reality, he tells defense counsel at case management conferences that they need to minimize demurrers and discovery costs given the possibility of fee-shifting. His advice: “Counsel should recognize that any statute or contract that provides the prevailing party shall recovery reasonable fees is a ‘nudge’ to encourage efficient litigation.”
• Motions to Tax Costs Often Exceed the Amount at Issue; Meet and Confer Requirement Suggested – Judge Fruin granted in part most of his 19 motion to tax costs in 2018 because the prevailing party “overclaimed” entitlement to costs recovery. He observed that tax costs motions usually involved rather small monetary amounts, with the expenses to make and defend the costs often exceeding what was at issue. His suggestion: “The Legislature could impose a reasonable ‘nudge’ in the form of an in-person meet and confer as condition to bringing a motion to tax costs. Substantial savings in fees and time could be realized by doing this.”
• LASC Judge Getting More Research Help – In 2019, LASC will provide every IC judge with an assigned research attorney for law and motion matters, rather than the past one research attorney per two judge allocation.

Costs, Mediation: Fifth District Indicates, Quite Strongly, That Private Mediator Fees Are A Prime Candidate For Routine Costs Recovery In A Voluntary Mediation Situation

Court-Ordered Mediation Alone Should Not Determine If Costs Recoverable; However, Expert Witness Expenses Not Ordered By Lower Court Were Not Recoverable.

            The Fifth District, in Berkeley Cement, Inc. v. Regents of the University of California, Case Nos. F073455/F073586 (5^th Dist. Jan. 7, 2019) (partially published; expert fee costs discussion not published; mediation costs discussion published), confronted defense costs requests after it prevailed in front of a jury in a dispute over construction of a building on the Merced campus of the University of California. The trial judge awarded the defense $6,486.25 in expert witness fees for time spent taking their depositions and $15,590 for fees paid to mediators for a voluntary mediation agreed to by the parties.

            On appeal, the Fifth District deleted the expert witness fees costs, but affirmed the voluntary mediation expenses.

            In an unpublished discussion on the expert witness fees, the reviewing court could find no basis to sustain the costs award because this was not a court-ordered witness. (See, e.g., Ripley v. Pappadopoulos, 23 Cal.App.4^th 1616, 1624-1625 (1994); Baker-Hoey v. Lockheed Martin Corp., 111 Cal.App.4^th 592, 601-602 (2003).)

            The published discussion on the recoverability of voluntary mediation costs is significant, given that prior decisions only really dictated the recovery of court-ordered mediator fees. The Fifth District refused a categorical rejection of recovery of voluntary mediation costs, with expansive language indicating that mediation has become an accepted method of resolving cases in recent times. Otherwise, mediation costs could only be awarded in a case where $50,000 or less was in controversy—unnecessary line drawing in the ADR and modern litigation contexts. “We conclude mediation fees incurred for mediation that was not ordered by the court are not categorically nonrecoverable as ‘not reasonably necessary to the conduct of litigation.’ The question whether mediation fees should be awarded as costs in a particular matter must be determined based on the facts and circumstances of the particular action. [Plaintiff] does not contend the trial court erred in assessing the facts and circumstances of this case, when it made its determination that the mediation fees should be awarded.”

            BLOG OBSERVATION—Co-contributor Mike had the voluntary mediation costs issue pop up in a Stockton case, with the lower court determining that many reasons exist for voluntary mediation and with the mediation privilege making it difficult to determine if the mediation was truly reasonable and necessary. The Fifth District did not discuss this evidentiary complication, but its broad reasoning strongly suggests voluntary mediation costs should be recoverable in the absence of extenuating circumstances—Mike wish he had this case at an earlier point in time! But that demonstrates the importance of evolving jurisprudence.

Book Review: Richard L. Hasen's "The Justice of Contradictions: Antonin Scalia and the Politics of Disruption"

Co-Contributor Marc's Review Of Richard L. Hasen's The Justice of Contradictions: Antonin Scalia and the Politics of Disruption, Has Been Published in California Litigation.

    With the permission of California Litigation, the journal of the litigation section of the California Lawyers Association, co-contributor Marc's review of Prof. Richard L. Hasen's book, The Justice of Contradictions: Antonin Scalia and the Politics of Disruption, is made available by clicking here.

In The News . . . . 2018 HBR Consulting Report Indicates Corporate Law Department Spending Is Up And Outside Counsel Hourly Rates Are Up

However, These Same Departments Are Taking Steps To Assimilate More Services In-House, Including Increased Expenses On Artificial Intelligence Technology.

            HBR Consulting provides various surveys, including several with corporate law departments, comprised of 250 organizations participating across 22 industries (with 65% of the survey participants being in Fortune 500 companies). We can now report on the highlights of their 2018 HBR Consulting Law Department Survey:

• Corporate law departments’ total legal spending increased by 5% from 2017;
• 61% of the survey participants indicated an increase in outside counsel hourly rates; and
• Corporate law departments were shifting investment into in-house resources, with some upward emphasis on implementation of artificial intelligence technology.

Family Law: Wife Properly Awarded $87,500 In Needs-Based Fees And $46,000 In 271 Sanctions

Husband And Wife Had Litigated Themselves Into Financial Ruin, Trial Court Observed.

            In Thacher v. Thacher, Case No. B279985 (2d Dist., Div. 2 Jan. 3, 2019) (unpublished), the trial judge observed that husband and wife had litigated themselves into financial ruin in the dissolution case. After all, they had engaged in a 38-day trial on dueling domestic violence protective petitions, followed by a 6-day bench trial on dissolution issues and several hours on fees/sanctions requests. Wife had spent $1.2 million on the case, while husband had expended $603,000 (using three attorneys, including mother—who was a family law specialist representing him free at some later phases of the case). Eventually, husband was ordered to pay needs-based fees to wife in the sum of $87,500 and also ordered to pay $46,000 in 271 sanctions to wife. He appealed aspects of the prior dissolution order as well as the fees/sanctions orders.

            The 2/2 DCA affirmed. The prior dissolution judgment was independently appealable even though issues such as spousal support and fees had not been adjudicated; husband’s failure to appeal the dissolution judgment prevented any challenges to it. With respect to fees and sanctions, husband could show no abuse of discretion in the orders. He had three times the base annual salary as compared to wife’s salary, and he had money to pay the orders based upon his half of sales proceeds from a sale of the family house and funds leftover in trust accounts for his girls’ counsel. The record did show that 271 sanctionable conduct did take place, not to mention that wife was sanctioned for some conduct (with that amount offsetting to arrive at the net aggregate award).

Equity: No Jury Trial Entitlement On Fees Motion Under The Confidentiality Of Medical Information Act

Post-Trial Motion Is The Way To Go!

West courtroom, Jury box, Howard M. Metzenbaum U.S. Courthouse, Cleveland, Ohio

            In Brown v. Mortensen, Case No. B281704 (2d Dist., Div. 1 Jan. 3, 2019) (published), the 2/1 DCA decided that no jury trial is available for attorney’s fee requests under the Confidentiality of Medical Information Act (CMIA), Civil Code section 56.35. Rather, a post-trial motion is the way to seek recovery of such fees.