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Arbitration: “Award” For Arbitration Correction Purposes Depends On Whether Every Aspect Of A Dispute Is Resolved, With Post-Arbitration Judicial Proceeding Fees Allowable

Breadth Of Fees Clause Sustained The Post-Arbitration Judicial Fees.

            In Lonky v. Patel, Case No. B295314 (2d Dist., Div. 2 July 2, 2020) (published), the Second District had to consider two issues:  what is an arbitration final “award” for purposes of jurisdictional correction purposes and are post-arbitration judicial proceeding fees to the prevailing party awardable?  The answers will follow.

            In short, plaintiffs in Phase I won a $558,266 compensatory award, leaving punitive damages and fee/costs issues for a later phase.  Then, this interim award was later modified to decrease the compensatory award to $310,838.62.  In Phase II, the arbitrator reflected the compensatory damages correction and awarded $1 million in punitive damages, also containing blanks for fees and costs to be determined.  Then, the Phase II award was modified upward to $434,158,25.  Finally, in Phase III, there was a final award of $434,158.25 in compensatory damages, $1 million in punitive damages, and $791,826.26 in attorney’s fees/costs.  The trial court confirmed most of it, but the judge did slash the $434,158.25 compensatory award down to $310,138.62 based on the perception it could not be jurisdictionally corrected.  However, it did award $65,197 in post-arbitration judicial proceeding fees based on plaintiffs having prevailed.

            On appeal, the 2/2 DCA returned the compensatory award to $434,158.25 and affirmed everything else.  It found that “award,” for arbitration correction purposes, needed to be a pragmatic test of whether it resolved every part of the parties’ controversy.  When that test was used, the Phase III award was justified in toto.  With respect to the post-arbitration judicial proceeding fees, they were allowable.  So, that meant plaintiffs could now seek more fees and costs for winning on appeal.

Fee Clause Interpretation: Prevailing Plaintiff Freight Forwarder Improperly Denied Contractual Attorney’s Fees Because Lower Court Erroneously Interpreted The Breadth Of Clauses In One Of Two Contracts

Confusion Arose Because There Were Two Contracts, But The Earlier One Had Terms And Conditions Applying To the Subsequent Contract; Because Fee Reasonableness Not Questioned, 4/3 DCA Remanded With Directions To Enter The Requested Fee Amount.

            Plaintiff freight forwarder had 2013 and 2015 contracts with defendant rice importer requiring reimbursement of certain third-party expenses, with the 2013 contract having a contractual fees clause and with the 2015 contract having no fees clause.  Plaintiff sued for about $36,000 in unpaid third-party expenses, and the trial court awarded $18,213.93 plus interest after a bench trial.  In a prior merits appeal, the appellate court determined that the 2015 contract incorporated the terms and conditions of the 2013 contract—a crucial determination for the end result with respect to fee entitlement.  Plaintiff moved for contractual fees of $31,713.50, but the lower court denied them based on plaintiff’s failure to break the fees down between the 2013 and 2015 contracts. 

            There was a reversal and remand of the fee denial in Western Overseas Corp. v. KRBL, LLC, Case No. G057515 (4^th Dist., Div. 3 June 30, 2020) (unpublished).

            The reason for the reversal/remand was that the lower court failed to adhere to the prior appellate ruling that the 2013 contract terms, including the fee clauses, were part and parcel of the 2015 contract, such that no apportionment was needed.  There were two clear contractual fee clauses in the 2013 agreement which allowed for fee entitlement to plaintiff.  The 4/3 panel, authored by Acting Presiding Justice Aronson, remanded with directions that the lower court award plaintiff the requested fees, rather than determine reasonableness—after all, defendant never challenged the reasonableness of the requested fees.

Judgment Enforcement, SLAPP: Lower Court Did Not Err In Granting Only Minimal Postjudgment Fees/Costs Of $735 To Winning SLAPP Defendant Where Plaintiff Interpled $22,000 As An Undertaking To Secure Underlying Trial-Level SLAPP Fee Award

Requested Fees/Costs Of Almost $6,700 Were Not Reasonable Or Necessary Under CCP § 685.040.

            In Padilla III v. Jakubaitis, Case No. G057424 (4^th Dist., Div. 3 June 30, 2020) (unpublished), a SLAPP defendant successfully had stricken one cause of action, with the trial court awarding it about $14,300 in mandatory fees/costs.  While things were on appeal, plaintiff interpled $22,000 as the equivalent of an appellate undertaking.  However, defendant undertook some postjudgment enforcement efforts, then moving to recover almost $6,700 in fees and costs under CCP § 685.040, a postjudgment fee-shifting statute allowing recovery of reasonable and necessary as collectible costs after the SLAPP grant was affirmed. The trial judge found most of the fees/costs were not reasonable or not necessary, awarding only $735.  Defendant appealed, but the appellate court affirmed because the record showed plaintiff did try to “secure” the trial level fee/costs award, and the defense did not demonstrate its activities met the “reasonable/necessity” standard.  Justice Fybel penned the 3-0 decision for the court.

Appeal Sanctions, Appealability: 4/3 DCA Imposes $25,452 In Sanctions Against Counsel For Nonparty Group Of Church Congregation Members Who Appealed Trial Court’s Ruling On Their Motion For Protective Order

Nonparty Group’s Motion For Protective Order Was Actually A Nonappealable Motion For Reconsideration Of A Discovery Ruling, But 4/3 DCA Treated Appeal As A Writ Petition To Stop The Harm Caused By Delaying Litigation In This Case.

            In Roe 1 v. Doe 2, Case No. G057684 (4^th Dist., Div. 3 June 29, 2020) (unpublished), plaintiffs brought an action alleging they were molested as children during Bible study sessions in an Orange County congregation of the Jehovah’s Witness Church.  Through discovery, plaintiffs sought production of files related to child molestations by church members that had been compiled the highest level of Jehovah’s Witness’s governing body (Watchtower).  To resolve a dispute over the production of the molestation files, the trial court ordered they be produced with specific redactions and under a protective order regarding the use of the files.  In violation of the trial court’s order, Watchtower instead produced documents using a pseudonym procedure that redacted all victims and third party identifying information (including names of congregations, victims, elders, witnesses, and alleged perpetrators) and replaced it with pseudonyms composed of letters and numbers.  Plaintiffs’ counsel notified Watchtower of the noncompliant production, and moved for sanctions.  The day after plaintiffs’ counsel notified Watchtower of non-compliance, a nonparty group of congregation members, who feared information in the documents would harm their families, filed a federal complaint unsuccessfully seeking to enjoin the superior court from enforcing its discovery order.

            Meanwhile, the nonparty group also filed a motion for a protective order requesting that the trial court modify its discovery order “to exempt and recall from production documents mentioning [them] or their family members” or “to exempt all documents with clergy-penitent communications from production and permit complete redaction of all information that could lead to the identification” of the nonparty group.  The trial court denied the motion as untimely, and concluded the motion was actually a motion for reconsideration of the discovery ruling – one that failed to set forth new or different facts, circumstances, or law as required under Code Civ. Proc. section 1008(a).  The trial court then continued plaintiffs’ motion for sanctions – ordered plaintiffs’ counsel to file an updated supplemental declaration setting forth the fees and costs incurred in bringing the motion, and stating it was inclined to grant if Watchtower failed to comply with the discovery order by nine days before the continued hearing.  As this deadline approached, the nonparty group appealed and requested a stay enforcement of the discovery order – with the trial court imposing a partial stay and vacating the hearing on plaintiffs’ motion for sanctions.

            The 4/3 DCA agreed with the trial court’s assessment that nonparty group’s motion was one for reconsideration of a discovery order, and that it was nonappealable.  However, based on the circumstances of the case, the panel treated the appeal as a writ petition on a motion for protective order because it “perceive[d] the need to put an end to this matter so the case can get back on track in the lower court.”  To that end, the 4/3 DCA found no abuse of discretion – concluding the trial court had properly found the motion untimely.  However, the panel was not quit finished and – finding the appeal, taken from a nonappealable order, to be frivolous and supported with meritless arguments – imposed appeal sanctions of $25,452 against nonparty group’s counsel.  In a 3-0 decision authored by Justice O’Leary, the 4/3 DCA opined on the possible motivation behind this appeal.  “It is difficult to imagine how an attorney could be unaware of the large body of legal authority, including Supreme Court decisions, holding discovery orders are not appealable.  It appears counsel may have been aware the appeal could be dismissed, but by filing the appeal, he achieved a one year stay of the May 2018 discovery order, and postponed a sanctions hearing.”  

Requests For Admission, Sanctions: Costs Of Proof Sanctions Affirmed Against Contestants To Will Who Denied Critical RFA Without Reasonable Ground To Believe They Could Prevail On The Matter At Trial

The Only One Of Four Will Contestants Who Showed For Trial Provided No Evidence To Support The Request For Admission Denial.

            Estate of Moshier, Case No. G057076 (4^th Dist., Div. 3 June 29, 2020) (unpublished) involved a will contest brought by decedent’s adoptive brother and three adult nieces against decedent’s wife.  Decedent’s will named wife as the executor of his estate and left the entire estate to her – which included the house decedent had inherited from his late father where decedent and wife lived.  Decedent had no children. When wife petitioned to probate the will, brother and nieces contested – seeking an intestate share of the estate as, they argued, the will did not comply with Probate Code sections 6110 and 6111 because it was witnessed only by wife instead of two individuals, and was not signed by decedent because the signature omitted decedent’s middle initial.

            When wife propounded discovery, contestants denied a Request for Admission asking for admission that decedent’s intent was to leave his entire estate to wife.  Instead, contestants claimed the house decedent inherited was meant to stay in the family and decedent would not have left the house to anyone but decedent’s adoptive brothers.  At trial, decedent’s best friend and his biological half-sister testified that decedent’s intent was to leave his entire estate to his wife.  On the other side, only one person showed for trial – a niece who had not seen the decedent in over 25 years, had never spoken with decedent about his property, will or intentions as to his estate, and who had no documents or other witnesses to support the contention that the house was to stay in the family.  The trial court found evidence supporting decedent’s intent to leave everything to his wife to be clear and convincing, and denied the will contest.  Afterward, wife successfully moved for Code of Civil Procedure § 2033.420 costs of proof sanctions to recover the fees she incurred in proving the truth of the matter regarding decedent’s intent, and was awarded $23,675 in fees and $3,707 in costs.

            The 4/3 DCA affirmed.  Contestants’ argument that the trial judge, rather than a temporary judge, was required to hear the sanctions motion fell flat.  First, contestants had stipulated to having the temporary judge hear the motion and had failed to withdraw that stipulation.  Second, the motion for costs of proof sanctions involved sanctionable conduct during pretrial discovery, not sanctionable conduct during trial, and ruling on the motion did not require the trial judge’s knowledge of the parties’ trial conduct.  Beyond this, the 4/3 DCA concluded there was no abuse of discretion in awarding the costs of proof sanctions – wife proved the truth of decedent’s intent at trial, and contestants had no reasonable ground to believe they would prevail on the issue of decedent’s intent.

Private Attorney General: Doe v. Regents Of The University Of Cal. Decision Now Published

Narrowly Focusing On Plaintiff’s Personal Interest In Bringing Suit, Rather Than Significance Of Constitutional Due Process Rights Effectuated By Plaintiff’s Action, Was Error For Purposes Of Fee Determination Under Section 1021.5.

            In our June 10, 2020 post, we discussed the case of Doe v. Regents of the University of Cal., Case No. B293153 (2d Dist., Div. 6), which was unpublished at the time.   The case holds that determination of entitlement to Code Civ. Proc. § 1021.5 attorney fees requires looking at a broader scope of the effect of plaintiff’s actions – that fees cannot be denied merely because the primary effect of the litigation was to benefit the individual rather than the public.  Although Doe brought a suit based on his own personal interest, his action resulted in significant benefit to all students at UC Santa Barbara, thereby entitling him to attorney fees under section 1021.5.   Doe v. Regents of the University of Cal.was certified for publication on June 29, 2020.

Judgment Enforcement, Section 1717: In A Case Of First Impression, The 4/3 DCA Affirms Section 1717 Attorney Fees To Prevailing Alter Ego Defendant In An Enforcement Action For An Underlying Breach Of Contract Judgment

Prevailing Alter Ego Defendant Would Have Been Entitled To Section 1717 Fees For Defeating Plaintiffs’ Claims If Made In The Underlying Action Even Though He Was Not A Signatory On The Contract.

            In MSY Trading Inc. v. Saleen Automotive, Inc., Case No. G057093 (4^th Dist., Div. 3 June 26, 2020) (published), judgment creditor plaintiffs brought an enforcement action against three defendants seeking to hold them liable on the underlying breach of contract judgment as alter egos of the judgment debtors.  The trial court granted the motion as to only one of the defendants and denied as to the other two defendants.

            Afterward, one of the defendants moved for attorney fees – with the trial court holding that equitable considerations entitled prevailing defendant to fees pursuant to Civil Code § 1717.  Although the immediate action was for enforcement rather than breach of contract, the trial court reasoned that defendant would have become liable for the underlying judgment as well as the attorney fees if plaintiffs had succeeded in having him added as a judgment debtor.

            On appeal, plaintiffs argued that because the action was an enforcement action and not “on a contract,” there was no statutory basis for an award of fees to prevailing defendant.  The 4/3 DCA disagreed with this “facial[ly] appealing” argument and affirmed.

            In an opinion authored by Justice Ikola, the 4/3 DCA found the principles in Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979) persuasive.  Reynolds holds that the intent of section 1717 is to ensure mutuality in the availability of attorney fees, and that “[i]ts purposes require [Civil Code] section 1717 be interpreted to further provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he were a party to it, when a plaintiff would clearly be entitled to attorney’s fees should he prevail in enforcing the contractual obligation against the defendant.” (Id. at p. 128.)  Observing that if plaintiffs had brought the same alter ego allegations against defendant in the underlying breach of contract action, and defendant had prevailed, he would have been entitled to attorney fees, the appellate panel found defendant’s argument on point – that the timing of the alter ego claim should not be the basis for determination of the right to fees. 

            After all, if the timing of the alter ego claim was the deciding factor in the right to fees, all alter ego claims would be made post-judgment.

SLAPP: No Abuse Of Discretion Where Trial Court Awarded Each Of Three Successful SLAPPing Defendants Separate Attorneys’ Fees.

Plaintiffs’ Claims of Duplicative Efforts, Excessive Hourly Rates, And Inefficiencies Were Not Supported By The Record.

            In Truong v. Philhower, Case Nos. GO55054 et al. (4^th Dist., Div. 3 June 26, 2020) (unpublished), two plaintiffs asserted separately up to ten claims against each of three defendants for malicious prosecution.  These nearly sixty claims stemmed from causes of action alleged in an underlying action against numerous defendants.  In the underlying action, the two plaintiffs in this case had prevailed against the causes of action through dismissals, demurrers or the jury’s verdict.  The three defendants in this case were the underlying action’s plaintiff/his company, plaintiff’s lead counsel, and co-counsel.

            After successfully SLAPPing plaintiffs’ malicious prosecution action, defendants were separately awarded a combined total of about $266,575 in mandatory attorney fees pursuant to Code Civ. Proc. § 425.16(c)(1).  Plaintiffs appealed the dismissal of their complaints and attorney fees awards.

            In an opinion authored by Justice Goethals, the 4/3 DCA affirmed.  Under the two-step analysis for the governing standard for granting an anti-SLAPP motion, as recently set out by the 4/3 DCA in Mobile Medical Services, etc. v. Rajaram, 241 Cal.App.4th 164, 170 (2015), the appellate panel concluded defendants’ pursuit of the underlying action was a protected activity and that plaintiffs failed to meet their burden of establishing a probability of prevailing on the claim. 

            As to the attorney fees awards, plaintiffs challenged the amount awarded to each defendant – claiming duplicative efforts between the defendants, excessive hourly rates, and that legal work performed by defendants could have been done more efficiently.  However, there was no support for these claims in the record.   Rather, the record established that defendants did not charge to draft papers where the template was created by another defendant’s counsel, billing rates were well within the range for comparable work in the area, and the trial court scrutinized the attorneys’ billing records, added a $25/hour multiplier for contingency work where appropriate, and made reductions where appropriate.

Sanctions: Section 128.5 Sanctions Reversed In Second Appeal On Sanctions Issue Because Subjective Bad Faith Determination On Remand Was Made By Judge Other Than Trial Judge

1/2 DCA Also Concludes That An Appellate Court Is Not Bound To The Rule Of Law Of The Case Where Adherence Would Result In An Unjust Decision.

            Armstrong v. Daly, Case No. A155656 (1^st Dist., Div. 2 June 26, 2020) (unpublished) represents the second appeal related to a Code Civ. Proc. § 128.5 motion for sanctions in this case which was filed by defendant against plaintiff’s attorney – alleging the petition for dissolution of marriage, where there was no valid marriage, was pursued for the sole purpose of causing unnecessary delay in defendant’s unlawful detainer action against plaintiff. 

            The first appeal was filed by defendant when the trial court denied his section 128.5 motion for failure to comply with the safe harbor provision found in Code Civ. Proc. § 128.7.  When the 1/2 DCA reversed and remanded, based on San Diegans for Open Government v. City of San Diego, 247 Cal.App. 4^th 1306 (2016), the motion was assigned to a new judge who imposed sanctions of $23,352.68 against plaintiff’s attorney without further briefing or argument.  This second appeal was filed by plaintiff who argued for reversal based on intervening case authority and legislative history establishing that section 128.5 contained a safe harbor provision, and on the grounds that the motion was not heard by the trial judge on remand.    

            The appellate panel reversed – concluding that ruling on the section 128.5 sanctions motion required a finding of subjective bad faith, and that the trial judge – who observed the trial as well as plaintiff’s counsel’s justification for bringing a dissolution proceeding where there was no valid marriage – was in the best position to make that determination.  (Orange County Dept. of Child Support Services v. Superior Court, 129 Cal.App.4^th 798, 805-806 (2005).)  To that end, the 1/2 DCA ordered that, on remand, the trial judge hear the motion if defendant continues to pursue sanctions.

            The panel also rejected defendant’s contention that it was precluded from revisiting its prior holding in this case under the doctrine of law of the case.  The 1/2 DCA recognized the doctrine of the law of the case, which generally precludes multiple appellate review of the same issue in a single case, as a rule of procedure that will be disregarded when adherence would result in an unjust decision.  Here, the 1/2 DCA found, the principal ground for exception to the doctrine of law of the case existed – an intervening or contemporaneous change in the law.  Since the panel’s first ruling in this case on the sanctions issue, the Legislature urgently reacted to San Diegans by amending section 128.5 to clarify its previous intent by importing section 128.7 conditions and procedures, including the 21-day safe harbor provision.  Also, since the panel’s first ruling in this case, appellate courts had uniformly held that section 128.5 (before amendment) required compliance with the safe harbor provision of section 128.7.  (See Nutrition Distribution, LLC v. Southern SARMS, Inc., 20 Cal.App.5^th 117, 130 (2018).) 

SLAPP: Combined Total Of $45,899.67 In Trial And Appellate Attorney Fees And Costs Against Successfully SLAPPed Plaintiff Affirmed On Appeal

Plaintiff Now Facing A Third Round Of Fees From Second Unsuccessful Appeal.

            After settling a case brought against his company by a former employee, plaintiff in Uziel v. Employment Lawyers Group, Case No. B299226 (2d Dist., Div. 4 June 26, 2020) (unpublished), filed a lawsuit claiming misconduct against defendant law firm that had represented former employee. Defendant successfully SLAPPed back, and plaintiff filed his first appeal in the case.  When the 2/4 DCA affirmed the lower court’s order – concluding plaintiff could not prevail on any of his claims against defendant’s protected activity in prosecution of the former employee’s action  – plaintiff unsuccessfully petitioned the appellate court for a rehearing, then filed an unsuccessful petition to the California Supreme Court for review.

            Meanwhile, defendant was awarded $14,120 in trial related attorney fees and costs.  A little over a year later, defendant also received an award of $31,779.67 in appellate attorney fees.  About a month later, the trial court entered judgment and incorporated its prior SLAPP and attorney fees/costs orders. 

            Once again, plaintiff unsuccessfully appealed – attempting to include in his appeal the trial court’s order on the anti-SLAPP motion and arguing it was warranted based on his former counsel’s declaration filed with the trial court and Amicus Curiae letter filed with the Supreme Court for review.  This argument went nowhere as both the trial court and appellate court were precluded from reopening plaintiff’s case.  The trial court’s order dismissing plaintiff’s case was final upon the 2/4 DCA’s issuance of the remittitur affirming the trial court’s order – which issuance followed plaintiff’s unsuccessful petition to the California Supreme Court. 

            As to the attorney fees, plaintiff had missed the deadline for appealing defendant’s trial related fees/costs award.  Incorporation of the trial related fees/costs award in the later entered judgment did not reinstate or extend plaintiff’s deadline.  As to the awarded appellate attorney fees, plaintiff failed to offer any argument or legal authority – thereby forfeiting the issue.

            Unfortunately for plaintiff, it looks like he is likely headed back to the trial court for another round on yet more attorney fees.  The 2/4 DCA ordered defendant is to recover its costs and attorney fees on this second appeal.

In The News: Top Law Firms Not Doing So Bad During The Pandemic

However, Next Few Months May Define What Actually Happens.

            We were somewhat surprised by the results of a Wells Fargo Private Bank’s legal specialty’s group survey of April-May 2020 data for 52 of the top grossing law firms and 20 midsized/regional law firms, which chartered some trends during the coronavirus pandemic.

            Overall, cash collections increased more than 3% in May 2020, with expenses basically flat as the surveyed firms decreased discretionary spending.  54% of reporting firms said client requests for discounts increased in May as compared to April 2020.  52% also said that there were more client requests for payment extensions in May of this year.  Number of associates dropped by just .9%, while nonlegal staff positions dropped by 4.1%.  Nonlegal staff layoffs occurred most often in jobs that did not lend themselves to remote work. 

            What practice areas have suffered?  Answer:  transactional, corporate and real estate.  What practice areas have remained robust?  Answers:  bankruptcy; banking; labor/employment (with a host of labor issues raised by the COVID-19 pandemic). 

            Liquidity was better than expected, with 90% of the surveyed firms having the ability to cover three months of monthly expenses, excluding partner draws.  More than 50% of the reporting firms cut of delayed partner contributions so there was more cash on hand.

            The real test may be future collections in the next 3-4 months.  That future may be testy, which may greatly influence how firms end up at the end of 2020. 

Family Law: Ex-Husband’s Adverse $31,500 Sanctions Award Under Family Code Section 271 Sustained On Appeal

Sanctions Do Not Need A Precise Correlation To Sanctioned Conduct And The Specific Fees.

            In Lebid-Jurtschyk v. Lebid-Jurtschyk, Case No. B300370 (2d Dist., Div. 4 June 25, 2020) (unpublished), ex-husband was hit with Family Code section 271 sanctions for insisting on too high of a listing price for a house, not signing documents to get the deal done, and not contributing to repairs on the house.  Ex-husband’s appeal was not successful, given the facts showed he was not cooperative in trying to settle the divorce issues.  With respect to the argument that some related time was not compensable, the appellate court indicated that section 271 does not require a precise correlation between the sanctioned conduct and the fee award, a determination affirmed on appeal.  (In re Marriage of Corona, 172 Cal.App.4^th 1205, 1226 (2009).)

Probate: Around $300,000 In Attorney’s Fees/Costs Incurred By Petitioner In Conservatorship Proceeding Affirmed On Appeal

Conservatorship Petition Was Successful And In Mother’s Best Interests.

            For those of you who have read our posts under the category “Probate,” you hopefully discerned that probate court is a court of equity, and that many of the fee decisions are guided by equitable principles.  The result in Conservatorship of Dubro, Case No. A157185 (1^st Dist., Div. 5 June 25, 2020) (unpublished) is consistent with those principles.

            There, a fifth sibling successfully obtained results for his mother against four other siblings in a conservatorship proceeding involving mother, resulting in revoking a power of attorney for one sibling and obtaining appointment of a professional fiduciary requested by the fifth sibling as conservator.  Fifth sibling Dennis moved for more than $300,000 in attorney’s fees and costs based on the conservatorship results, with the lower court—in line with a special master report—granting almost all except for a minor reduction.

            The fee order was affirmed on appeal.  The deciding factor in conservatorship reimbursement disputes is whether the expenses were incurred in good faith and in the best interests of the proposed conservatee, a determination usually being a discretionary call for the probate judge.  In this instance, Dennis’ activities did benefit his mother.  The fee order was justified by the fact that the other siblings roughly incurred the same amount of fees as Dennis, an indicia that his fees happened to be reasonable.  (Donahue v. Donahue, 182 Cal.App.4^th 259, 272 (2010).).

Costs: Lemon Law Plaintiff Losing Case Properly Assessed With Certain Subpoena Fees, Expert Witness Fees, And Deposition Costs

On Appeal, Taxed Deposition Costs Were Additionally Awarded On Defense Cross-Appeal.

            In Nguyen v. House of Imports, Inc., Case Nos. G056789/G057216 (4^th Dist., Div. 3 June 25, 2020) (unpublished), plaintiff lost a consumer remedies/lemon law case after rejecting two CCP § 998 offers.  In the end, he was saddled with some routine costs.  Plaintiff appealed those cost losses, but he did not win anything.  The defense cross-appealed a refusal to award $7,742 in deposition costs, which actually resulted in a modification to allow these costs.

            Plaintiff challenged some defense witness service of process fees, but that challenge was rejected.  After all, “a trial is a fluid process, particularly for defendants, who present their case last.  Therefore, there may be occasions where it is necessary to subpoena witnesses who ultimately do not testify.”  Next, plaintiff contested $31,068.55 in expert witness fees as far as amount, but the expert’s trial witness preparation costs were not excessive given the expert was a key witness whose testimony was necessary to obtain a defense verdict.  Finally, the defense’s claim for $7,742 deposition costs was righteous, given that 11 of 13 depositions were taken by plaintiff and plaintiff failed to shift the burden from the verified costs memorandum as far as showing the costs were not reasonable or necessary in nature.  Costs award affirmed, plus another $7,742 to the defense.

            Acting Presiding Justice Moore authored the 3-0 panel decision. 

Equity: Failure To Grant A Trial Court Reporter Fee Waiver To An Eventually Losing Plaintiff Required A New Trial, With Harmless Error Analysis Having To Go With The Plaintiff Needing A Transcript To Show Error

However, Jury Trial Fee Waiver Argument Lacked Merit Given A Jury Waiver A Long Time Back.

            There are some famous quotes about justice under the American system.  Two come to mind with respect to our next post.  The first is: “It’s every man’s business to see justice done,” attributed to Sir Arthur Conan Doyle.  The second is a partial quote from Seimon v. So. Pac. Transp. Co., 67 Cal.App.3d 600, 606 (1977): “Justice is to be accorded to rich and poor alike.”

            In Padron v. City of Parlier, Case No. F077052 (5^th Dist. June 25, 2020) (unpublished), plaintiff suffered a nonsuit at trial, after asking for a court reporter fee waiver on the first day of trial and after having been granted an initial fee waiver when the complaint was filed.  The trial proceeded without a court reporter such that plaintiff really had no way to prove error without a transcript.  Based on two recent decisions, Jameson v. Desta, 5 Cal.5^th 594, 599, 607-608 (2018) and Dogan v. Comanche Hills Apartments, Inc., 31 Cal.App.5^th 566, 568, 570 (2019), the appellate court found the failure to provide a court reporter fee waiver was not harmless error, although a “firm conclusion” was difficult to draw.  However, the absence of the actual testimony did establish prejudice so that a new trial was the result.  The Fifth District panel did indicate there were merits problems with plaintiff’s case, so some cautionary remarks were provided to plaintiff in deciding to seek a new trial on remand.  With respect to the claim of error in waiving a jury trial, the defense won this one given that jury fees were not posted at the case management conference long before—even though they were required under CCP § 631(b), (c), (f)(5), augmented by the fact that no jury waiver relief motion was brought. 

SLAPP: Defense SLAPP Fees Available For Work Of Associate Who Represented Partners Sued Individually By Plaintiff

Gilbert v. Master Washer Opinion Is Still Good Law On This Issue.

            In Opperwall v. Stone, Case No. A156200 (1^st Dist., Div. 5 June 24, 2020) (unpublished), a plaintiff sued an insurer’s counsel for various contractual and tort counts, specifically suing two partners individually of a small law firm.  They filed a SLAPP motion which was worked up by an associate representing them individually.  They won, and the trial judge awarded mandatory fees to the defendants to the tune of $13,100 (the entire request, 52.4 hours of work performed at $250/hour by the associate).

            Plaintiff’s appeal of the SLAPP grant and fee order did not produce any change in result.

            In affirming, the appellate court addressed plaintiff’s principal argument that no fee recovery could be had based on the Trope prohibition, such as where an associate employed at a firm represents the firm on a SLAPP motion.  However, there was a critical difference here:  the associate was representing the partners who had sued in individual capacities.  A case on point, Gilbert v. Master Washer & Stamping Co., 87 Cal.App.4^th 212, 222 (2001), held that SLAPP fees were recoverable and there was no violation of the self-representation prohibition of Trope v. Katz, 11 Cal.4^th 274, 292 (1995) [our Leading Case No. 12].  Plaintiff contended that Gilbert was “no longer good law,” but the panel found a number of cases had followed it.  (Lockton v. O’Rourke, 184 Cal.App.4^th 1051, 1074 (2010); Gorman v. Tassajara Development Corp., 178 Cal.App.4^th 444, 96 (2009); Century Surety Co. v. Prince, 782 Fed. Appx 553, 558 (9^th Cir. 2019).). Plaintiff’s main authority in support of why fee recovery could not be had, Carpenter & Zuckerman, LLP v. Cohen, 195 Cal.App.4^th 373, 386-387 (2011), was distinguishable because associate was representing the interests of her sued law firm instead.

Requests For Admission: 1/2 DCA Opinion Reversing “Costs Of Proof” Sanctions For RFA Denials Suggests That Successful Moves Are To Make RFAs Deeper Into The Case And To Support These Type Of Sanctions With Detailed Trial Testimony

$35,595 Fee Award Under CCP § 2033.420(a) Reversed Based On Early Nature Of RFAs And Lack Of Supporting Evidence Of Trial Proof To Correlate Against RFA Denials.

            Universal Home Improvement, Inc. v. Robertson, Case Nos. A157067/A157562 (1^st Dist., Div. 2 June 24, 2020) (published) has some nice tips to litigators seeking to obtain “costs of proof” sanctions against a litigant who may have denied requests for admissions without a reasonable basis, which can trigger fee recovery under CCP § 2033.420(a).

            What happened here is that a different judge other than the trial judge awarded “costs of proof” sanctions against plaintiffs to the tune of $35,595 in attorney’s fees when the defense prevailed in a fraudulent transfer action. 

            That award was reversed as a matter of law, with the appellate court finding it was an abuse of discretion.  It, first of all, found that RFAs seeking a response that a “plaintiff has no case” early on in a suit should not ordinarily give rise to “cost of proof” sanctions, because that would be a strict liability exposure for any prosecuting litigant even though things were at an early stage of a matter.  However, more into the weeds, the defense failed to provide any trial testimony to show why the denied requests were sanctionable, given that most of the facts were vigorously contested at trial.  Simply drawing a straight line from the admissions to the ultimate result did not support sanctions under section 2033.420(a), especially in a contested matter with lots of conflicting testimony.  We believe that this demonstrates that there needs to be some supporting trial testimony, in moving papers, to show why the denials would lead to “costs of proof” sanctions in most situations. 

Substantiation Of Reasonableness Of Fees, Trespass: Fee Recovery To Plaintiffs In Federal-State Court Agricultural Trespass Case Affirmed On Appeal

Fees In Federal Case Were A Continuation Of The Entire Litigation, And Reconstructed Time Can Be Credited Under The Right Circumstances.

            The parties in Shuler v. Capital Agricultural Property Services, Inc., Case No. B294555 (2d Dist., Div. 6 June 24, 2020) (unpublished) came to the end of an agricultural trespass case which went before both federal and state courts, resulting in two published decisions before the 2/6 DCA (based in Ventura).  At the end of the day, under a trespass fee-shifting statute (CCP § 1021.9), the trial judge awarded plaintiffs about $1.271 million in fees (which included a positive 1.4 multiplier).

            That result was affirmed on appeal.  The argument that plaintiffs did not “prevail” for purposes of the trespass fee-shifting statute did not resonate because it was simply a continuation of the overall battle in which plaintiffs prevailed.  No apportionment was required because all of the legal theories related to common facts, with no California case requiring a statement of decision on a fee motion (although some selective cases may need a more detailed explanation).  The defense then argued that certain clients could only be liable for their proportion of fault in the case with respect to fee apportionment, but that would fly in the face of the mandatory fee-shifting provision so as frustrate overall responsibility for fees—so they should be joint and several.   (Friends of the Trails v. Blasius, 78 Cal.App.4^th 810, 837-838 (2000) [CCP § 1021.5 case].)  Although reconstructed time is subject to credibility challenges, it can support a fee motion if there is adequate information to reach reasonable estimates of the work described.  (Cates v. Chiang, 213 Cal.App.4^th 791, 821 (2013).)  The 1.4 multiplier award was no abuse of discretion given the risk involved in the lengthy litigation. 

Intervenors, Private Attorney General: Intervenor In Reverse-CPRA Litigation Properly Denied Attorney’s Fees For Failure To Satisfy Private Enforcement Element Because Its Intervention Did Not Result In A Change In School District’s Release Of Docume

Along The Way, 4/1 DCA Did Not Endorse Marken’s Observations/Dictum On No Fee Recovery In A Reverse-CPRA Case.

            In Voice of San Diego v. Teacher 1 etc., Case Nos. D075148 et al. (4^th Dist., Div. 1 June 23, 2020) (unpublished), an intervenor in a reverse-California Public Records Act (reverse CPRA) case was denied CCP § 1021.5 attorney’s fees after some school districts released records after petitioner active/retired teachers tried to enjoin release of records unless certain information was redacted.  Intervenor’s appeal of the fee denial was affirmed under the deferential abuse of discretion standard.

            The problem here was that intervenor did not satisfy the “private enforcement” element of section 1021.5.  When all the facts were sorted, the school districts had basically agreed to produce the documents, once reverse CPRA concerns were addressed, with nothing significantly tethered to intervenor’s actions.  That was a factual call, with the trial judge not getting it wrong.

            However, in a footnote and other observations, this panel did indicate it did not agree with dictum in Marken v. Santa Monica-Malibu Unified School Dist., 202 Cal.App.4^th 1250, 1268    (2012) suggesting that parties or intervenors could not obtain fee entitlement under the California Public Records Act.