CALIFORNIA ATTORNEY'S FEES

Section 1717: Lower Court Improperly Awarded Attorney’s Fees To Plaintiffs Under A Post-Dismissal Settlement Agreement Because Easement Dispute Was Contractual, Not Based On Tort Theories

Santisas Controlled The Result In This One.

            In Cho v. Hamilton Court, LLC, Case No. B282399 (2d Dist., Div. 4 Nov. 13, 2018) (unpublished), parties reached a settlement agreement with a fees clause relating to any action or arbitration “to enforce the terms or conditions [of the easement agreement],” after dismissing a breach of easement agreement and negligence case.   Plaintiffs moved for fees of $145,802.97 (based on a 1.5 multiplier), with the defense arguing that plaintiffs could only recover for easement contractual breach claims. The lower court disagreed, awarding plaintiffs $95,215.30 in fees based on the easement agreement fees clause which it deemed applied to tort claims.

            The appellate court reversed the fee award as a matter of law.

            Civil Code section 1717 does not apply to tort and other noncontractual claims, but contractual language on what claims can gain fee recovery is left to the language chosen by the parties.   The narrow nature of the “terms or conditions of the easement agreement” language did not include tort claims such that it was erroneous to award fees to plaintiffs.

Damages: Copenbarger Opinion Now Published—Deals With Attorney’s Fees As Damages And How To Properly Authenticate Them At Trial

October 19, 2018 Unpublished Decision Now Published.

            On October 20, 2018, we posted on the then unpublished decision in Copenbarger v. Morris Cerullo World Evangelism, Inc., which was authored by Justice Fybel of the 4/3 DCA. It dealt with whether breach of a settlement agreement fees were recoverable as damages versus costs (they were recoverable as damages) and with how to competently prove the fees from an evidentiary standpoint during trial (with the judgment reversed because no proper foundation was laid).   We can now report that the unpublished decision was certified for publication on November 13, 2018.

Common Fund, Homeowner Associations, Section 1717: Developers Properly Denied $1.950 Million In Attorney’s Fees Against HOA Under Either Civil Code Section 1717 Or The Common Fund/Substantial Benefit Doctrine

HOA Would Not Have Been Entitled To Fees If It Had Won, So Developers Did Not Prevail, With Equitable Doctrines Not Supplying An Anchor For An Award.

            Market Lofts Community Assn. v. 9^th Street Market Lofts, LLC, Case Nos. B280446/B282412 (2d Dist., Div. 2 Nov. 13, 2018) (unpublished) involved a case where an HOA lost a suit against Developers based on a Parking License Agreement (PLA) to which HOA was not a party, with the PLA containing a fees clause. HOA was a party to a sublicense agreement with a fees clause. The lower court denied fees to certain Developers totaling about $1.950 million, as against HOA, finding that it was not a party to the PLA (which prevented Civil Code section 1717) and that the common fund/substantial benefit theory could not provide an anchor for recovery.

            Those determinations were affirmed on appeal.

            Developers were not entitled to fees under the sublicense agreement because the gravamen of the lawsuit was whether the PLA prohibited defendants from charging condo eventual owners for parking—with HOA not a party to the PLA and with the narrow fees clause not extending exposure to HOA, following Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4^th 858, 898-900 (2008) in this regard. With respect to the common fund/substantial benefit theory, this was an equitable theory which could only benefit the HOA in limited circumstances, such that it could form the “reciprocity” basis for recovery; “[a]llowing the Developers to utilize this equitable doctrine to recoup millions of dollars in attorney fees would turn equity on its head.” (Slip Op., at p. 21.)

Consumer Statutes, Section 998: Lemon Law Fee Award Which Was A 78% Reduction From Request Reversed And Remanded Because Post-998 Offer Fees Should Have Been Considered And Appellate Court Unclear Whether Proper Lodestar Analysis Conducted By Lower Court

Size Of The Reduction Obviously Bothered Appellate Court, Although Its Statements On Level Of Detail Of State Court Fee Award Seems To Point Toward Adoption Of More Detailed Federal Court Analysis.

            McCullough v. FCA US, LLC, Case No. D073330 (4^th Dist., Div. 1 Nov. 9, 2018) (unpublished) is an interesting “lemon law” case where the trial judge eventually reduced a Song-Beverly Act fee request by 78% but did award prejudgment interest which resulted in the necessity for a “re-do” based on a prior 998 offer. But the appellate court also suggested that the reduction was too steep and that a better explanation of the fee recovery was necessitated even though a statement of decision is not required in California – this has the seeds for a more stringent explanation of a fees award in state court proceedings, as is the standard in federal courts.

            What happened here is that plaintiff car owner rejected a $24,000 CCP § 998, plus reasonable expenses/fees/costs, in a lemon law case, going to trial by which plaintiff won $17,163.83. Plaintiff then moved to recover $125,055 in pro-car owner, Song-Beverly Act fees ($83,370 lodestar plus a 1.5 multiplier). The lower court was appalled at this request and only awarded $18,685 fees—a 78% reduction after finding the case was over-lawyered and inefficiently run. Later, the trial judge did determine plaintiff was entitled to $10,791.20 in prejudgment interest although denying post-offer fees to plaintiff after determining that he did not “beat” the 998 offer.

            The appellate reversed the fee award and remanded upon plaintiff’s challenges. The first one was the easiest—when one adds the compensatory award with the prejudgment interest, the 998 offer was exceeded such that plaintiff was entitled to recapture post-offer fees.

            However, just as salient, the appellate court did opine on the lower court’s reasoning in reaching the 78% reduction. It was worried about the size of the reduction given that the Song-Beverly Act is crafted to be compensatory in nature as far as fee awards. Simply because the compensatory award was low in relation to the fee request made no difference, because proportionality is not at issue under the fee-shifting statute. The reviewing court also criticized the trial judge for not providing any examples of inefficiency and duplicative effort such that the fee award was not precise enough. This last determination is interesting because California law does not require a statement of decision in a fee proceeding such that there is a strong insinuation by the panel in wanting to see more a detailed explanation in line with the one required in the federal court system. Although admitting that lower courts do not have to be meticulous accountants when adjudging fees motions, it did conclude that “[t]he reviewing court should be able to determine how the court ultimately arrived at the amount of fees it awarded, particularly where it orders a substantial reduction in the actual time expended.” (Slip Op., p. 22.)

Private Attorney General: Plaintiff Citizens Group Vindicating Pomona’s Proposition L Ban On Outdoor Advertising Billboards Properly Awarded CCP § 1021.5 Fees

However, Only $75,200.40 Lodestar Out Of Requested $569,700 Lodestar/Three Times Multiplier Actually Awarded.

            In Citizens For Amending Proposition L v. City of Pomona, Case No. B283740 (2d Dist., Div 4 Nov. 7, 2018) (published), the appellate court considered an award to a plaintiff public citizen’s group of $75,200.40 under CCP § 1021.5. The City appealed, but there was no change in result.

            What happened here is that Regency Outdoor Advertising, Inc. erected various billboards along several Pomona freeways, but Pomona citizens passed Proposition L—a proposition prohibiting construction of additional billboards within City limits. Pomona and Regency extended contracts, prompting the plaintiff Citizens’ group to sue on the theory that the new billboards under the “new” contract were in derogation of Proposition L. The trial court agreed and granted mandamus writ relief, which was affirmed on the merits.

            But, that takes us to what we blog on—fees. Plaintiff sought recovery of private attorney general fees based on a lodestar of $189,900 plus a 3 times positive multiplier, for a total fee request of $569,700. The lower court determined that hours had to be reduced and that the requested hourly rate had to be reduced, so that only a lodestar of $75,200.40 was awarded, no multiplier at all given.

            The lower court result was affirmed, both as to the merits and as to the fees award on appeal by the City of Pomona. The public interest was vindicated by a win on Pomona Proposition L, and it was not just a procedural victory. With respect to the financial burden factor, plaintiff Citizens’ group was hardly a competitor of Regency (the “somewhat” real party in interest never really made a party) such that plaintiff had no financial risk/benefit incentive vis-à-vis Regency.

Costs: $4,200 In Deposition Costs For Percipient “Higher Up” Witnesses No Abuse Of Discretion For Plaintiff Winning $587,000 In Damages After Bench Trial

Whether Costs Are Reasonable And Necessary Happen To Be Discretionary Calls Entrusted To The Trial Judge.

            Deposition related costs are allowable, CCP § 1033.5(a)(3)(A), but—as with all costs—must be reasonably necessary to the underlying litigation in the case, Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 989-990 (2013). In Xeo International, Ltd. v. Fantasia Distribution, Inc., Case No. G055170 (4^th Dist., Div. 3 Nov 6, 2018) (unpublished), the two sides once had a business relationship, which soured, in the electronic cigarette and electronic hookah industry. Plaintiff won $587,000 in compensatory damages and fended off cross-claims by defendant. During the litigation, plaintiff took the depositions of three defense “higher ups” who were involved in percipient business discussions relating to the dispute. The lower court awarded deposition related costs of about $4,200. The defense challenge to the costs on appeal was not persuasive given that the necessity and reasonableness are questions entrusted to the discretion of the lower court. In this instance, it did not matter that one of the deponents was not called as a witness to trial, because litigants never know who may need to be called and the proof might be established through other witnesses. (Chaaban v. Wet Seal, Inc., 203 Cal.App.4^th 49, 57 (2012) [recovery of deposition costs does not depend on whether the deponent ultimately testifies at trial]; Lindy v. McChesney, 141 Cal. 351, 353 (1903) [it is frequently proper and necessary to take depositions, even though it may not be necessary to use the deponents’ testimony].) Justice Ikola authored the 3-0 affirming opinion.

Undertaking: Trial Judge Has Discretion To Order Discretionary Undertaking For Fees/Costs-Only Segment Of Judgment Under CCP § 917.9

Trial Judge Does Have Jurisdiction Under Section 917.9, Such That $1.5 Million Undertaking Ruling Was Not Beyond His Power.

            Quiles v. Parent, Jr., Case No. G054907 (4^th Dist., Div. 3 Nov. 2, 2018) (unpublished), also authored by Justice Fybel, is somewhat of a companion to our November 4, 2018 post on the related published decision. What happened here is that the trial judge ordered that the defendant post a $1.5 million discretionary undertaking under CCP § 917.9 to support the appeal of a $383,500 compensatory award and a little over $1.1 million fees/costs award. The appellate court affirmed that the lower court had jurisdiction do so under section 917.9, determining that a costs-only judgment (which may include substantial fee recovery) is within the ambit of the discretionary undertaking provision while a case is being pursued on appeal.

Employment: FLSA Recovery Of Costs And Fees In State Court Is Governed By Federal Principles

End Result Was That $50,591.69 Costs And $689,310.04 Fee Award Was Sustained Even Though Compensatory Recovery Was Only $280,500.

            Quiles v. Parent, Case No. G054353 (4^th Dist., Div. 3 Nov. 2, 2018) (published) is an important decision establishing that costs and fees recovery for a prevailing employee in a Fair Labor Standards Act (FLSA) action tried in state court is governed by federal, not state law, principles in this respect. What happened was that a joint employer was hit with $50,591.69 in costs and $689,310.04 in attorney’s fees under FLSA, even though they were less than the requested amounts, in state court involving FLSA claims.   In a case of first impression, the 4/3 DCA—in an opinion authored by Justice Fybel—determined that federal FLSA law ruled supreme in this area. As such, that allowed certain routine costs not allowed under state law and the fees for joint employer/alter ego determinations were related enough under federal law so as to allow for their recovery.

Celebrities, Prevailing Party: Plaintiff Model/Actor Winning $1.123 Million In Unauthorized Likeness Case Was Improperly Denied Prevailing Party Fees Under Civil Code Section 3344

Despite Plaintiff Not Winning Multi-Millions More Being Claimed, Appellate Court Believed He Should Get Prevailing Party Fees.

            Co-contributor Mike was a little surprised by this one, given how prevailing party determinations in mixed cases are usually governed by a deferential abuse of discretion standard. However, that often depends on the facts of the case, with the appellate court in Olive v. General Nutrition Centers, Inc., Case No. B279490 (2d Dist., Div. 4 Nov. 2, 2018) (published) giving plaintiff a nice win on appeal such that he was declared the prevailing party and entitled on remand to seek what we would think are significant attorney’s fees in this status.

            In an unauthorized likeness case by a plaintiff model/actor, where liability was conceded, damages was the contested item in this matter. Plaintiff won $1.123 million under Civil Code section 3344, which does have a prevailing party fee-shifting provision under subdivision (a). The trial judge determined no one prevailed because (1) plaintiff sought much, much larger profits and emotional distress damages (actually, $12 million to $36 million) but only received $1.123 million; (2) GNC recommended only damages of $4,800 in total; and (3) the jury did not accept either party’s recommendation. So, between $4,800 and $23.5 million, no one prevailed.

            The appellate court disagreed, remanding such that plaintiff can be awarded prevailing party fees in the discretion of the lower court. It reasoned that failure to obtain the “most lucrative portion of sought-after damages” was not a disqualifying factor, such that plaintiff did garner the “greater relief” compared to the paltry amount which defendant thought was offered. Big win for a plaintiff who now gets to seek, we would think, significant fees.

            BLOG OBSERVATION—We do not usually comment on the end result of a decision, but this one does not “smell” like an abuse of discretion. It appears that the appellate court compared the defense recommendation to what the plaintiff ultimately achieved, but this does not take into account the huge damages plaintiff really wanted as far as determining the true prevailing party calculus at the conclusion of the day. Just sayin’ ….., given we can comment once and a while on decisions.

SLAPP: SLAPP Fee Award To Defendants—One Half Of Their Request—Was Proper

Various Challenges Did Not Prevail.

            Defendants prevailed on their anti-SLAPP motion, which requires mandatory fees in the trial judge’s discretion. They asked for $44,656.73, but were awarded $22,000, but plaintiff still appealed in Lavi v. Cohen, Case Nos. B281352/B284653 (2d Dist., Div. 3 Oct. 31, 2018) (unpublished). They were not successful on appeal.

            Plaintiff challenged mainly that the fees were excessive based on block billing, which is not per se objectionable. However, the lower court could discern the nature of the work and reduced based on excessive hourly rates and spending too much on the motion. So, in a word, no prejudice was shown because good discretion was exercised in making reductions for other reasons. Plaintiff then contested that the work should have been apportioned between the parties, but this did not require any restudy because the fee claimants did that already by discounting fees 10% -- so, so sorry, but no change in result for the losing plaintiff.

            BLOG OBSERVATION—Depending on the facts where apportionment may be an issue, offer a discount as defendants did in this case. It worked!

Private Attorney General: Defendants’ Vindication Of B&P § 16600 Principles, In Non-Recruiting Dispute, Was Worthy Of $169,000 Fee Award

Basis Under California’s Private Attorney General Statute—CCP § 1021.5.

            In AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., Case No. D071924 (4^th Dist., Div. 1 Nov. 1, 2018) (published), individual defendants—former AMN “travel nurses” providing services to medical services throughout the U.S.—had to contest non-recruiting clauses in their AMN contracts when they switched over to competitor Aya. Defendants prevailed via summary judgment motions granted in their favor, principally based under Business and Professions Code section 16600 non-compete principles. Defendants invalidated contractual provisions against non-recruiting violations when they went to work for a different company.   The trial judge later granted successful defendants $169,000 in attorney’s fees under the private attorney general statute.

            This determination was affirmed on appeal. Clearly, the enforcement of section 16600 rights involved an important public right, and defendants were successful based on winning summary judgment motions interpreting employment contractual provisions which were invalid in nature. With respect to whether their own financial interests were subordinate to the greater public interest, the record showed they pursued an injunctive relief which was granted on the validity of the contractual restrictions—over and above their own interests--such that the Whitley cost/benefit analysis was satisfied.

Consumer Statutes, Deeds Of Trust: Trial Court’s Award Of Almost $13,000 To Borrower Obtaining Preliminary Injunction Under California Homeowner Bill Of Rights (HBOR) Affirmed On Appeal

Fee Award Based On Interim Success Sustained.

            We have posted earlier on the sequence of events in Sese v. Wells Fargo Bank, N.A., Case No. C083724 (3d Dist. Oct. 31, 2018) (unpublished). Earlier, the borrower had obtained an appellate decision determining that HBOR authorized an award of legal fees to borrowers who obtained a preliminary injunction preventing a trustee’s sale of their residences, based on Monterossa. (Monterossa v. Superior Court, 237 Cal.App.4^th 747 (2015) [reviewed in our June 14, 2015 post].) The trial court then denied an award of fees, which was deemed to not be an appealable order. (Sese v. Wells Fargo Bank, N.A., 2 Cal.App.5^th 710 (2016) [reviewed in our July 30, 2016 and August 18, 2016 posts].) However, borrower renewed its fee request, with the trial court granting $13,000 in fees based on the interim HBOR win. Wells Fargo appealed.

            This fee award was affirmed. The Third District decided that a fee recovery could be considered for interim relief under HBOR despite a final merits decision and despite a plaintiff who is ultimately not successful—the interim relief justified some fee recovery. With respect to a supremacy argument under 12 U.S.C. §91, that provision did not apply to an interlocutory order awarding fees against a bank because it did not come within the ambit of the statute—no bank property was seized (even on a pretrial attachment basis), just an order for fees entered. Trial court fee award affirmed in this one.

Family Law: $10,000 Sanctions Award Reversed Because Not Tethered Into Any Specific Fees Or Costs

Gotta Have Causation, Family Law Practitioners!

            Okay, we have posted before on sanctions awarded against litigants in a family law dissolution or related matter under Family Code section 271, which is aimed at dissuading conduct which is frivolous or not targeted at resolving the matter. The facts in Marriage of Karuppiah and Thurairajah, Case No. D071601 (4^th Dist., Div. 1 Oct. 31, 2018) (unpublished) are not important because a $10,000 section 271 sanctions award was vacated. The problem was that the winning litigant must “tether” the request to attorney’s fees and costs actually incurred—a causation principle. Because that was not done in this case, the $10,000 award was invalid.

Section 998: Plaintiff’s Rejection Of $30,000 Section 998 Offer Meant That Defendant Obtained Net $9,179.83 Award Despite Plaintiff Winning $10,000 From A Jury

Case Illustrates The Potent Impact Of A Successful CCP § 998 Offer.

            Malabed-Verona v. Hollaway, Case No. B278154 (2d Dist., Div. 4 Oct. 30, 2018) (unpublished) is a situation where a car accident plaintiff won $10,000 after a jury trial, but also after rejecting a close-to-trial defense offer of $30,000. The trial judge awarded the defense $20,620.53 in costs under 998’s costs-shifting provision, resulting in a net judgment to the defendant of $9,179.83 (after crediting the $10,000 won by plaintiff).

            Plaintiff, not happy, appealed. No change in result.

            The 998 offer was certain in nature. It could contain, as it did, a condition to release unknown claims relating to the accident claims pled in the lawsuit. (Ignacio v. Caracciolo, 2 Cal.App.5^th 81, 89 (2016).) With respect to whether it was a good faith offer, it was given that (1) the $30,000 offer exceeded the $10,000 jury verdict such it was prima facie evidence of reasonableness; (2) the offer was made close to trial such that plaintiff had plenty of time to evaluate it; and (3) plaintiff did not produce meaningful evidence of loss of income such that her assertions of inflated damages did not alter the analysis about the offer being made in good faith.

In The News . . . . President Donald Trump Seeks Around $342,000 In Fees Against Stormy Daniels After She Lost Her Defamation Case

Texas Anti-SLAPP Motion Is The Basis For The Fee Recovery.

            We can tell you that U.S. District Judge S. James Otero of the Central District of California decided to grant an anti-SLAPP motion in favor of now President Donald Trump in the defamation case brought against him by Stormy Daniels. He primarily found that the alleged tweets by Mr. Trump were rhetorical hyperbole protected under the First Amendment. Here is a link to his decision. The problem was that he granted a motion to dismiss under Texas’ anti-SLAPP statute, which similar to California’s statute, has a fee recovery provision for successful defendants.   We can now report that Mr. Trump has filed a fees motion seeking about $342,000 from Ms. Daniels based on his win.

Probate: Attorney Guardian Ad Litem (GAL) Fees Can Be Paid From Mother’s Trust

Probate Code Section 1003 So Allows.

            In Berwick v. Walsh, Case No. G054632 (4^th Dist., Div. 3 Oct. 30, 2018) (unpublished), the issue on appeal was whether a probate court could award GAL fees for a mother’s husband to be paid out of mother’s share of the trust. Temporary successor trustee contested that the court could order disbursement from mother’s trust, with the fees being just over $12,000. The 4/3 DCA, in a 3-0 opinion authored by Justice Goethals, affirmed. Probate Code section 1003 expressly provides that the GAL’s expenses, including compensation and attorney’s fees, “shall be … paid as the court orders, either out of the property of the estate involved or by the petitioner or from such other source as the court orders.” Given that the statute allows payment from “such other source as the court orders,” the probate court did not abuse its discretion in ordering GAL fees paid from mother’s trust.

Arbitration: Arbitrator’s Decision On Awarding Fees To One Party On One Dispute And Denying To Same Party Another Dispute No Abuse Of Discretion

Moncharch Discretion To Arbitration Decisions Ultimately Prevailed.

            No huge recitation of the facts or conclusion is required in Axten v. Axten, Case No. D073089 (4^th Dist., Div. 1 Oct. 30, 2018) (unpublished). What basically happened was that one party obtained an arbitration award of $94,972 in attorney’s fees under a settlement agreement fees clause on one disputed matter (although the other disputed matter went the other way). The losing party claimed she should be awarded $99,322.50 in fees for prevailing in the matter not won by the prevailing party. The problem was that the arbitrator denied the latter fee request. In the end, even though some procedural challenges might have won the day anyway, the arbitrator’s merits determinations were unassailable such that the arbitrator did not act in excess of jurisdiction in ruling as the arbitrator did.

Consumer Statutes, Landlord-Tenant, Section 1717: Tenant Prevailing On Common Law Residential Inhabitability Claim Limited To Contractually-Capped Fees Of $1,600

Although More Fees Potentially Allowable Under Statutory Inhabitability Claim, Jury Did Not Base Its Verdict On The Statute Such That Contractually Capped Amount Was The Proper Award.

            This next case involves an intersection between the parties’ contractually capped fee recovery under lease agreements and potentially more expansive damages under a statute allowing recovery for a tenant if that tenant recovers under the statute (Civil Code section 1942.4(b)(2), which specifies recovery for a prevailing tenant if the elements of the statute are met).

            What happened in Brookshire v. HPG Management Inc., Case No. B269544 (2d Dist., Div. 1 Oct. 25, 2018) (unpublished) was that tenant prevailed on a common law implied warranty of habitability claim against landlord under four leases. Each lease did allow fee recovery to a prevailing party, but capped recovery at $400 per lease. Tenant moved to recoup $146,670 in attorney’s fees under both the lease fees clause and Civil Code section 1942.4(b)(2). The lower court determined that plaintiff was entitled to contractual fees, but only $1,600 ($400 under the four leases) and was not entitled to fees under the statutory implied warranty of habitability claim because the jury did not render findings under the statute (instead awarding recovery under the different, but somewhat related, common law implied warranty claim).

            The fee award was affirmed on appeal.

            On the lease fee clauses, there was nothing wrong with the cap because the limits applied to all parties equally.   The appellate court relied greatly on the reasoning in 511 S. Park View, Inc. v. Tsantis, 240 Cal.App.4^th Supp. 44, 48 (2015) [reported in our October 10, 2015 post], which did sustain a similar contractual cap on fees. There was nothing “one sided” about such a cap given that it applied to all parties.

            With respect to the claim for greater fees under the statutory claim, the problem here was that the jury only awarded recovery under a common law implied warranty claim with much different elements than the statutory claim. Given this reality, no greater fees were justified under Civil Code section 1942.4.

Costs, Private Attorney General: 4/3 DCA Affirms $409,000 Fee Recovery And Additional Costs Recovery Even Though CEQA Petitioners Only Prevailed On One Out Of Close To Thirty Issues

Clarification Of Success Facto Under CCP § 1021.5 Is Sorely Needed In This Area.

            Our local 4/3 DCA in Protect Our Homes And Hills v. County of Orange (Yorba Linda Estates), Case No. G054631 (4^th Dist., Div. 3 Oct. 25, 2018) (unpublished) was an appeal from a situation where CEQA petitioners “partially” prevailed in an action—winning one greenhouse emission issue out of close to 30 issues raised—and with the lower court awarding them $409,000 in fees under the private attorney general statute and additional costs. Developer was not happy and appealed, but the appellate court affirmed in a panel decision authored by Justice Thompson.

            In the court below, the trial judge found that an award of pre-administrative hearing petition work—which he did allow—was faced with a split in authority between Beach Colony II v. California Coastal Comm’n, 166 Cal.App.3d 106 (1985) (no) and Edna Valley Watch v. County of San Luis Obispo, 197 Cal.App.4^th 1312, 1317 (2011) (yes). The appellate court sidestepped the conflict by finding that the rulings in these cases were dicta or distinguishable. Instead, it found that the Public Records Act was not administrative proceeding work but directly related to the CEQA litigation.

            The reviewing court then had to face whether administrative record preparation work had to be claimed through a costs memorandum, or could be raised instead through a fee motion. The appellate court concluded that it could be done by either method under CCP § 1094.5, and that the developer faced no prejudice by it being raised through a fee motion.

            Developer also challenged that the A/R costs were unjustified because developer/City had to do them because CEQA petitioners were recalcitrant. Although not really disagreeing, the reviewing court found that trial judges on a “case-by-case review” could determine if costs should be awarded even if the 60-day deadline for certification record had been or was close to blown by CEQA petitioners.

            Finally, that brought the court to the lack of success issue. Even though CEQA petitioners only prevailed on one issue, the appellate court found that the possible qualitative value of the greenhouse issue allowed the lower court discretion to award substantial fees even though losing other issues which were not found to be frivolous in nature.

            BLOG OBSERVATION—Co-contributor Mike was the lead appellate attorney on the case and has no “sour grapes” with the opinion, although he does disagree with some of the determinations. The most glaring one is that there needs to be clarification on what constitutes success in CEQA litigation when petitioners lose a huge amount of their issues. No “frivolousness” benchmark determines success, such that allowing trial judges to use this test means CEQA petitioners have no incentive to not adopt a “kitchen sink” approach to raising issues.   There is a good “issue by issue” test enunciated in the SOURCE state court case, which builds on federal Sierra Club cases on this contention. This success argument needs to be clarified given that some intermediary appellate decisions have admitted that the distinction between “claims,” “issues,” and “theories” in this area is confusing at best and has no elucidating analytics.

Allocation: Contract/Tort Cross-Over Claims Did Justify $825,000 Fees/Costs Award Against Non-Prevailing Parties

Hybrid Cases Can Be Expensive.

            Keenan v. Souza, Case Nos. B276437 et al. (2d Dist., Div. 4 Oct. 24, 2018) (unpublished) was an LLC dispute with broad contractual fee recovery clauses. Needless to say, certain defendants/cross-complainants prevailed. The trial judge awarded over $825,000 in fees and costs to the prevailing parties, determining the contractual and tort claims were inextricably intertwined such that no allocation was necessary. The appellate court affirmed, especially given in the right case (this one) that apportionment was only discretionary where claims were interrelated.