CALIFORNIA ATTORNEY'S FEES

Probate: Beneficiary Winning Undue Influence Challenge To Adverse Trust Amendment Entitled To Appellate Fees Under Trust’s “No Contest” Expense Clause

Lower Court’s Denial of Winning Beneficiary’s Appellate Fees Reversed In This Appeal.

            One beneficiary in Key v. Tyler, Case No. B283979 (2d Dist., Div. 2 April 19, 2019) (published) successfully challenged a disinheriting, adverse trust amendment as being the product of undue influence by the trustee, who was also a trust beneficiary. Winning beneficiary also was successful in obtaining affirmance of this ruling in a prior appeal by trustee. However, when winner petitioned to enforce the trust’s “no contest” clause against trustee/beneficiary and to obtain attorney’s fees for prevailing on appeal, the probate court granted a SLAPP motion to the “no contest” enforcement petition and denied appellate fees to winning beneficiary in the prior proceedings.

            The 2/2 DCA reversed both orders. With respect to the denial of fees, the appellate court found a fee entitlement basis for an award of appellate fees to winning beneficiary based upon language in the “no contest” clause providing that “[e]xpenses to resist any contest or attack [of] any nature upon any provision of this Trust shall be paid from the Trust Estate as expenses of administration.”

Probate: Trustee Successfully Winning Baseless Accounting Challenge Not Entitled To Reimbursement Of Expert Witness Fees

Nothing In General Costs Statutes Or Probate Code Section 17211 So Allows.

           In Ramirez v. Rue, Case Nos. B283677/B286574 (2d Dist., Div. 4 April 18, 2019) (unpublished), a trustee prevailed in a battle by co-beneficiaries challenging certain accountings. Trustee won because the probate court determined the contested accounting dispute was brought/prosecuted in bad faith and without reasonable cause under Probate Code section 17211. The lower court awarded the expenses of a privately-retained expert to the trustee. That order was reversed on appeal, given that nothing in the general costs statute or section 17211 allows for recovery of such expenses.

Family Law, Sanctions: Husband Losing Hiding Marital Asset Appeal Was Going To Have To Pay Attorney’s Fees And Frivolous Appeal Sanctions On Remand, Likely, In Some Amount

Rub Here Was That Trial Judge Stayed Any Fee Ruling Pending Determination Of Merits Appeal.

           Although procedurally different in nature, Marriage of Haghighat, Case No. G054993 (4^th Dist., Div. 3 April 17, 2019) (unpublished) demonstrates how family law judges and appellate justices can impose attorney’s fees and frivolous appeal sanctions when a litigant hides marital assets.

            Briefly stated, husband eventually lost a merits appeal that he hid marital assets, which under Family Code section 1101 allows for recovery of interest, attorney’s fees and costs, as well as the invested assets. However, the trial judge stayed any ruling on fees until the appeal on the merits decision was made.

            The 4/3 DCA affirmed the merits decision as well as remanded to the family law judge to determine the initial fees requested under section 1101 as well as sanctions for the frivolous appeal. Although normally the appellate court would determine the frivolous appeal sanctions, this one went back to the lower court to set given that it had to determine the initial fees which had to be awarded also. Justice Goethals authored the 3-0 panel decision.

SLAPP: $352,736.14 SLAPP Fee Award In Favor Of Certain Defendants Affirmed On Appeal

SLAPP Fee Motion Entertainable During Appeal Of Merits SLAPP Grant.

           Plaintiff, a political cartoonist and blogger, sued certain defendants for certain tort claims (including defamation), with defendants successfully SLAPP-ing the case, which carries mandatory fee recovery. Although plaintiff appealed the merits in an earlier appeal, the appellate court concluded that the SLAPP grant was successful. After the initial SLAPP grant and during the pendency of the prior unsuccessful appeal, defendants moved for SLAPP fees. The lower court was persuaded, granting $352,736.14 against plaintiff.

            Plaintiff’s appeal in Rall v. Tribune 365 LLC, Case No. B287721 (2d Dist., Div. 8 April 17, 2019) (unpublished) was unavailing. The main argument was that the trial judge could not decide the fees motion while the merits SLAPP appeal was pending. Not so. (Carpenter v. Jack in the Box Corp., 151 Cal.App.4^th 454, 460-461 (2007).) Besides that, the appellate court was not impressed with plaintiff’s “disrespectful and baseless attacks upon the trial court and his rantings against the legal system.” (Slip Op., p. 6.) Plaintiff also was exposed to further costs and fees for losing the appeal. Lesson: even for First Amendment advocates, pick your spots carefully, especially where there is SLAPP exposure should you lose.

Civil Rights, Special Fee Shifting Statute: Ninth Circuit Reverses And Remands Close To $1 Million Attorney’s Fees Award Under EAJA Against the Government

Problem Was That District Judge Did Not Have Benefit Of Goodyear Tire Decision.

            In Lu v. United States of America, Case Nos. 17-55040/17-55087 (9^th Cir. April 17, 2019) (published), the federal court of appeals had to grapple with a long-running case involving tort claims involving a Chinese national and asylum officer where substantial compensatory damages were awarded to the Chinese national. Then, a long saga of proceedings took place about whether attorney’s fees were awardable against the government because it engaged in bad faith conduct. The statutory basis was Equal Access to Justice Act fee-shifting provisions relating to bad faith governmental conduct. The district judge ultimately awarded $993,758 in fees against the USA.

            USA appealed, and won a remand. What happened is that the U.S. Supreme Court decided Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), which requires a “but for” causation analysis. The district judge in fashioning its award did not have the benefit of this SCOTUS decision such that its causation test needed to be applied in an EAJA context—so, a remand was in order.

Class Actions: Carlton Field’s 2019 Eighth Annual Class Action Survey Shows Class Action Spending By Nearly 400 Responding Companies At Record High Since 2008 Recession

Labor/Employment Class Actions Are Most Common, With Over 50% Of Class Actions Settling Before Certification.

            Carlton Fields has put out some annual class action surveys with respect to spending and trends by American companies for the last 8 years. Its 2019 (eighth annual) survey is out. We provide a summary of what was reported through a survey of almost 400 companies:

• The surveyed companies spent $2.46 billion on class actions, the largest amount since the 2008 recession;
• 75% of class actions centered in these areas –labor/employment, consumer fraud, product liability, and antitrust;
• Labor/employment class actions were the most common ones encountered;
• Most of the companies, although expecting some actions in this area, had data breach action plans—but many of the companies were concerned with the impact of California’s Consumer Privacy Act;
• One-fourth of the class action cases were viewed as “bet the company” or high-risk cases;
• Over 50% of the class action cases settled before class certification motions, although a lot of the companies did fight for quite a while;
• Arbitration clauses are being increasingly used by companies in this area; and
• 95% of the surveyed companies say they rely on a small group of outside counsel with respect to handling class action cases, rather than gravitating to large firms.

Civil Rights: Winning FEHA Plaintiff Recovers $211,795.80 In Attorney’s Fees, Inclusive Of A 1.2 Positive Multiplier On Lodestar Amount. Plus $25,603.73 In Costs

Real Life Example Of A Fees/Costs Ruling By A San Mateo Superior Court Judge.

          We like to provide real life examples of rulings by California superior court judges where we can. We give a “hat tip” to Robert S. Nelson of Nelson Law Group (San Francisco), who successfully obtained attorney’s fees/costs for his FEHA plaintiff client, in providing us a tentative ruling on an attorney’s fees motion (which has been adopted as the final order) by San Mateo County Superior Court Judge Susan Greenberg.

           In Centeno v. Bon Appetit Management Co., et al., San Mateo County Superior Court Case No. 18-CIV-00620, FEHA plaintiff reached a settlement with the defense, preserving the ability to afterwards move to recover attorney’s fees under FEHA’s fee-shifting statute (Gov. Code, § 12965(b)). On April 11, 2019, Judge Greenberg ruled on plaintiff’s fee motion, where $397,080 was sought (inclusive of a requested positive 1.5 multiplier on the $282,470 lodestar amount). In the end, she awarded plaintiff $211,795.80 in fees—not a bad pay day at all.

            Judge Greenberg reached this number by (1) reducing time for some unsuccessful tasks, (2) not awarding time for media activities and an EDD unemployment benefits hearing, (3) reducing time for retention of a human resources expert, and (4) pegging the reasonable hourly rate at $535 per hour rather than the $600-650 range requested by plaintiff (with the defense arguing $480 was reasonable). She then found that a positive 1.2 multiplier was appropriate on the adjusted lodestar, most likely because there was good lawyering and the matter was taken on contingency.

            She also awarded costs of $25,603.73, including mediation fees given that they were appropriate under the circumstances of the case (citing as support, Berkeley Cement, Inc. v. Regents of University of California, 30 Cal.App.5^th 1133, 1143 (2019) [discussed in our January 8, 2019 post and in co-contributor Marc’s January 29, 2019 L.A. Daily Journal article on the case, which is mentioned in our January 29, 2019 post]).

Prevailing Party, Section 1717: In UCC Case, Plaintiff Only Winning Installation Cost Recovery Rather Than Defective System Recovery Against Contractual Recovery Properly Denied Attorney’s Fees Recovery

Defendant Gravitated More On The “Winning Side,” Although Mixed Bag For Everyone.

           This next case takes us back to law school for co-contributor Mike. He had a great Uniform Commercial Code professor in law school (E. Hunter Taylor, who is a professor emeritus at Rutgers-Camden Law School but is still practicing law in New Jersey), and this case is must reading on how an appellate court steered through various UCC provisions to enforce certain UCC disclaimers and liability limitations to a significant extent. However, as we must, we talk about the attorney’s fees aspect of the case—however, this case is must reading for practitioners in the UCC area.

            In City of Imperial v. Ferguson Enterprises, Inc., Case No. D072737 (4^th Dist., Div. 1 April 15, 2019) (unpublished), City eventually won compensatory damages of $626,232.50 against a defendant for installation of defective products by a manufacturer, although City did not win its “grand banana” of much more exorbitant exposure for the defective system which was installed (close of $4 million claimed during the trial). City wanted substantial contractual attorney’s fees based on a fees clause, but the trial judge would have none of it.

            The fee denial was affirmed on appeal. The reason was that under Civil Code section 1717, the case was a “mixed bag” for both sides, especially City wanting fee recovery, such that no one really prevailed in a pragmatic sense.   Although City did win on the installation issue, it lost on the bigger defective systems theory of the case against defendant. In the end, the defense got much closer to its goal of evading large exposure—with some indications in closing argument that it admitted installation costs might be a legitimate exposure although advocating a zero-sum approach based on a stricter interpretation of the UCC disclaimers/limitations. However, plaintiff did not clearly prevail, so that the fee denial was not erroneous.

Bankruptcy, In The News . . . . Four Outside Bankruptcy Law Firms Seeking Approval Of $84 Million In Fees Since PG&E’s January 2019 Bankruptcy Filings

Filings Also Show Hourly Rates Being Claimed.

            As reported by NALTA in an April 2, 2019 post, four outside bankruptcy firms have requested approval of around $84 million in fees for work on Pacific Gas & Electric Company’s bankruptcy case, which was filed in January of this year. Based on its summary of public court filings, NALTA reports that Cravath attorneys are charging at rates of $415 to $1,500 per hour; Weil attorneys charge $560 to $1,600 per hour; Jenner & Block attorneys charge PG&E at hourly rates ranging from $400 to $982; and Keller & Benvenutti attorneys are charging at $400 to $800 per hour.

In The News, Sanctions: Over $1 Million Sanctions Imposed Against Condo Plaintiff And His Lawyer In Cook County Superior Court

Sanctions Paid For Fees Incurred By HOA/Condo Board Members And For Increased HOA Insurance Costs.

            As reported by Debra Cassens Weiss in an April 8, 2019 post on the ABA Journal (on-line version), a Cook County, Illinois (Chicago) state court judge has sanctioned a condo litigant and his attorney over $1 million in sanctions to cover attorney’s fees/costs incurred by the HOA and a condo board member as well as to cover increased HOA insurance costs. Judge Margaret Ann Brennan found no basis for the claim and labeled the sanctioned persons’ actions as “simply obscene.” One of the defending attorneys, who has practiced 48 years in Cook County, observed that the sanctions award could be a record and was one like he had never seen before as far as amount.

Section 1717: Nominal Defendant Corporation Improperly Assessed With Substantial Attorney’s Fees And Costs In Meritless Derivative Action

4/3 DCA Amended Judgment To Reflect Unsuccessful Shareholder Liable For Fees And Costs Under Contractual Fees Clause; Corporation Dodged $1,357,410 Fee Award And $34,358.90 In Costs.

            Here is another case where there was a complete change in fortune on appeal for a corporation sued as a nominal defendant in a derivative action.

            In Bailey v. Cremach Tech, Inc., Case Nos. G054026/G054474 (4^th Dist., Div. 3 April 10, 2019) (unpublished), a shareholder brought a meritless shareholder derivative suit, naming a prevailing party individual defendant where a contractual fees clause was involved and also naming the corporation as a nominal defendant. (In this area of the law, the corporation cannot oppose on the merits because it is effectively a plaintiff and a nominal defendant.) When prevailing individual defendant moved for fees and costs, the lower court awarded $1,357,410 in fees and $34,358.90 in costs against corporation but refusing to award anything against the losing plaintiff individual shareholder.

            Corporation did well to appeal. The 4/3 DCA, in a 3-0 opinion authored by Presiding Justice O’Leary, reversed the fees and costs award against corporation and amended the judgment to reflect that the award should be made against the losing individual plaintiff shareholder. The reason is that the corporation should not be liable under Civil Code section 1717 given that it could not oppose the derivative action such that the true losing party, the shareholder, should be the one to bear the burden of the fee/costs award. In doing so, the panel relied heavily on the on-point reasoning in Brusso v. Running Springs Country Club, Inc., 228 Cal.App.3d 92, 99-100, 107-108 (1991).

Private Attorney General: $163,136 Private Attorney General Fee Award To Plaintiff Was Affirmed By Fifth District

City’s Challenges For Reversal Were Unsuccessful Under Abuse Of Discretion Review.

           In City of Bakersfield v. West Park Home Owners Assn. & Friends. Case No. G075834 (5^th Dist. April 4, 2019) (unpublished), West Park did achieve partial success in having the lower court find that the use of tax revenues to fund certain road improvement projects was unconstitutional in nature. The lower court later awarded West Park its full CCP § 1021.5 attorney’s fees request, a $98,867.50 lodestar and a 1.5 positive multiplier, for a total of $163,136 in fees. (The evidence in the fee proceeding showed West Park had a receivable of $56,049.37 owed to its attorneys.)

            City’s appeal did not change things.

            West Park was indeed successful on a significant issue, resulting in a published decision on the tax revenue use issue. Partial success is enough in the CCP § 1021.5 area.

            With respect to the financial burden element of section 1021.5, no monetary relief would ever go back to the individuals of the respondent entity, everyone knew the probability of stopping the project entirely was low in nature, and the gain to the individuals was slight from even a delay in the project perspective. That was enough to justify the fee award.

With respect to the 1.5 positive multiplier, the prevailing party did have a receivable owed to the attorneys representing it, plus—it was a difficult case, meaning the positive enhancement was no abuse of discretion. The “fee award will fall on the taxpayer” factor was a legitimate concern, but the lower court’s rejection of it was similarly no error under the circumstances.

Costs, POOF!, Private Attorney General: Plaintiff’s CCP §1021.5 Fee Award Of $827,035 Went POOF! On Appeal

Plaintiff Did Not Obtain Its Primary Litigation Objective Such That Fee Award Was Abuse Of Discretion; Prevailing Defendant’s Costs Request Was Improperly Stricken Because It Prevailed.

           San Diegans For Open Government v. City of San Diego & San Diego Tourism Marketing Dist. Corp., Case No. D072181 (4^th Dist., Div. 1 April 4, 2019) (unpublished) shows how fee entitlement cases can involve “wild swings” in fortune where an appellate court looks at the record and decides entitlement was not there. Beyond that, it independently reviews whether a prevailing defendant for a routine costs award should have it taken away based on “equitable” grounds—naught!

           In this one, plaintiff sued defendants alleging that an assessment was an illegal tax requiring voter approval. Although City did modify the assessment to a small degree, plaintiff lost the bid to put the assessment to voter approval—the primary litigation objective. However, the lower court decided that plaintiff was a “catalyst” for the assessment modification, awarding it private attorney general fees of $827,035, including a .25 negative multiplier out of plaintiff’s request for $2.6 million. It also denied District’s routine costs, rejecting the notion that it was the prevailing party under CCP § 1032.

            On appeal, City and District did very well to challenge the fee grant and the costs denial.

            After an independent review of the record, the 4/1 DCA determined that plaintiff did not obtain its primary relief vis-à-vis the illegal tax/voter relief. Instead, the circumstances showed that the City’s modification of the assessment was not causally related to plaintiff’s lawsuit. That required reversing the fee award as a matter of law – POOF!

            District successfully challenged the routine costs denial. District did fall into the categories of being a prevailing party under section 1032 after plaintiff dismissed its lawsuit voluntarily. Given that this was a matter of right, the trial judge’s determination to deny on “equitable grounds” could not thwart District’s statutory entitlement to costs.

Private Attorney General: Third District Publishes Friends of Spring Street Decision

3/28/19 Unpublished Decision Now Published—B&B Challenging Petitioner Did Prevail For Costs And CP § 1021.5 Fee Denial Was Remanded.

           In a March 29, 2019 post, we discussed Friends of Spring Street v. City of Nevada, Case No. C086563 (3d Dist. March 28, 2019), which was unpublished at the time. We can now report that the opinion was certified for publication on April 4, 2019.

            In brief, the appellate court determined that petitioner did successfully challenge a City of Nevada ban on B&Bs in certain areas, so that it was entitled to routine costs and possibly CCP § 1021.5 fees if the financial burden element was shown on remand.

Appeals Sanctions, SLAPP: After Affirming SLAPP Denial, Appellate Court Granted Frivolous Appeal Sanctions To Prevailing SLAPP Litigant As Well As Costs To Clerk For Working On The Appeal

Sanctions Award Mooted Any Need For Trial Court To Consider Appellate Fees For The Frivolous SLAPP Motion.

            Workman v. Colichman, Case No. B285945 (2d Dist., Div. 4 April 2, 2019) (published) (posted April 3, 2019) is an interesting study in how an appellate court will attempt to avoid remand proceedings where a result is clear.

            What happened is that the defense won a SLAPP motion, which was appealed but with the trial court denying the defense request for SLAPP attorney’s fees because the motion was frivolous in nature. The 2/4 DCA affirmed the SLAPP denial, but decided that the SLAPP motion was frivolous as was appellant’s appeal. Although trial court fees for the frivolous motion were still in play, the Court of Appeals decided that instead of remanding to the trial court to award appellate fees for the SLAPP win, it would assess sanctions against appellant and its attorney to the tune of $35,985 for respondent’s work and to the tune of $8,500 for the appellate costs to work up the appeal. Respondent also was entitled to routine costs on appeal.  

Construction, Prevailing Party, Section 1717: 4/1 DCA Affirms That Subcontractor Was Not Prevailing Party Because Its Post-Litigation Deposit Near The End Of The Litigation Was Not A Proper Tender Under Civil Code Section 1717(b)(2)

Very Elaborate Discussion Of “Tender” Under Section 1717(b)(2), Which Appellant Did Not Meet.

            D.R. Horton Los Angeles Holding Co., Inc. v. Milgard Mfg. Co., Inc., Case No. D074889 (4^th Dist., Div. 1 March 29, 2019) (unpublished) is an interesting case which interpreted the nature of Civil Code section 1717(b)(2). That provision says that where a defendant alleges in his answer that he tendered to the plaintiff the full amount to which he was entitled and then deposits in court that same amount so tendered, if found true, then defendant is deemed the prevailing party on the contract under section 1717.

            The case involved a subcontractor’s obligation to indemnify and defend a general contractor/developer for certain sums under an indemnity obligation. Although we briefly summarize the facts, deep into the litigation, subcontractor was granted leave to amend its answer to allege a section 1717(b)(2) tender and filed a deposit document with the court for $11,000 deep into the litigation. The 4/1 DCA conceded that section 1717(b)(2) did not define tender, but applied law saying that it had to be a full and unconditional tender of the amount due before the litigation commenced. It was inappropriate for subcontractor to make the tender post-litigation in an attempt to cut off the other party’s entitlement of prevailing party fees because it had to go deep into the case to obtain success. Subcontractor wanted to be the prevailing party for fees, but that was nixed on application of conservative “tender” principles.

            The appellate court also emphasized that this tender provision was not akin to a CCP § 998 shifting mechanism. Subcontractor did not make an appropriate tender, so that its $11,000 “deposit” did not operate to make it prevail under section 1717(b)(2).

Homeowner Associations: $19,233 In Attorney’s Fees And $815 In Litigation Costs To HOA Obtaining Injunction To Require Access To Condo Unit To Make Repairs Affirmed

HOA Satisfied Prelitigation Efforts To Resolve And Prevailed By Meetings Its Objectives.

            In Durant Towers Owners Assn. v. Winchester, Case No. B288966 (2d Dist., Div. 8 March 29, 2019) (unpublished), HOA sued defendant condo owner to obtain access to her unit in order to determine if water leakage from her unit was causing damage to a unit below. After ignoring efforts for voluntarily cooperating, HOA sued under the CC&Rs to obtain access to defendant’s unit. At an injunction hearing, defendant agreed to allow access on certain terms, but later reneged. HOA obtained injunctive relief, the repairs were eventually made, and the case was dismissed without prejudice. HOA moved for recovery of attorney’s fees and costs as the prevailing party against defendant, based on the Davis-Stirling Act’s fee-shifting provision for CC&R enforcement (Civil Code section 5975) as well as the CC&R fee provision itself. The lower court obliged, awarding HOA $19,233 in fees and $815 in costs.

            Defendant’s appeal was unsuccessful. She argued that HOA failed to exhaust administrative remedies, but that was rejected because (1) defendant thwarted voluntary efforts to gain access by the HOA, and (2) HOA’s certification of the need for injunctive relief in the complaint satisfied prelitigation efforts under Civil Code section 5950(a)(3). With respect to the claim that HOA did not prevail, it did obtain its main litigation objective to gain access and make repairs such that its voluntary dismissal did not change the fact it did meet its aims in the lawsuit.

Allocation, Section 1717, Reasonableness Of Fees: 4/3 DCA Affirms Contractual Fee Award To Prevailing Asserted Alter Ego Defendants To The Tune Of $203,940

No Apportionment Required Because Alter Ego Claims Were Involved On Both Causes Of Action; Assertion That Hourly Rates Should Be Lower Did Not Rebut Fee Claimant’s Attorney’s Declaration.

            In Alvarado v. Freedman, Case No. G055918 (4^th Dist., Div. 3 March 28, 2019) (unpublished), plaintiff sued defendants for loan repayment, based on a loan agreement with an LLC obligor, under an alter ego theory. There was a contractual fees clause in play. Plaintiff lost to defendants, with the lower court ordering plaintiff to pay defendants $203,940 in attorney’s fees under Civil Code section 1717. Plaintiff’s appeal did not alter things, in a 3-0 opinion authored by Presiding Justice O’Leary.

            The alter ego theory did trigger section 1717 exposure under the rationale of Reynolds Metals [our Leading Case No. 5], with appellant not explaining why its reasoning was inapt.

            No apportionment was done or needed, because plaintiff was seeking alter ego “liability” on both the contract and tort claims, such that the work on both was intertwined.

            The hourly rates sought by the winning attorneys in Orange County -- $650-$750 for a 25-year experienced litigator and $350 for 8- and 10-year associates – were found reasonable, with appellant only asserting $350 was the reasonable rate. However, just an assertion did not adequately controvert the proof submitted by defendants’ attorney in his moving papers.

Costs, Private Attorney General: Petitioner Winning Some Claims Which Vindicated A Local Ordinance Passed By Public Initiative Vote Was Prevailing Party For Routine Costs And Might Be Prevailing Party For CCP § 1021.5 Fees

Successful Party And Significant Benefit Prongs Met, But Remanded To See If Financial Burden Element Met Under Section 1021.5.

            The Third District in Friends of Spring Street v. Nevada City, Case No. C086563 (3d Dist. March 28, 2019) (unpublished) had found in an earlier appeal that petitioners had properly challenged real parties’ ability to operate a bed and breakfast in a residential area (in Kendall House in Nevada City), although not winning all claims under its mandate petition. In large degree, petitioners had vindicated a people’s voted local initiative, Measure G, which made B&Bs nonconforming uses in certain zoned areas, something accomplished in the earlier appeal. Later, petitioner requested routine costs and private attorney general attorney’s fees. The trial court denied both requests, which prompted petitioner’s appeal in Case No. C086563.

            The Third District reversed and remanded to award routine costs and to determine if the financial burden of CCP § 1021.5 was met—and, if so, the amount of reasonable fee recovery was due to petitioner.

            Petitioner did obtain its main litigation objective in relation to the B&B, such that it was entitled to prevailing party routine costs under CCP § 1032.

            The appellate court also did buy the trial judge’s conclusions for denying fees, namely, petitioner was not successful and did not vindicate a right involving the general public. Petitioner was indeed successful with respect to the B&B issue. Given that zoning is an important right of a public interest, the vindication of Measure G—a people’s voted initiative—was even more important. However, the lower court did not consider the financial burden aspect of section 1021.5, so a remand was in order to analyze this element of fee entitlement.

Costs, Fee Clause Interpretation, Homeowner Associations, Section 1717: Trial Court Properly Denied Fee Recovery To Prevailing Defendants Under Davis-Stirling Act Or Civil Code Section 1717 And Properly Struck The Costs Memorandum

Action Was Based On Tort, Not CC&Rs; Fee Clause Did Not Reach Tort Claims Under Section 1717; And Defendants Failed To Apportion Costs As Between Themselves.

            In the fee area, you must have a solid fee entitlement basis and you usually have to apportion costs where there are several prevailing defendants rather than claim total costs without an appropriate allocation. Schuchmacher v. McDermott, Case No. B288130 (2d Dist., Div. 3 March 28, 2019) (unpublished) is a case where prevailing defendants obtained no fees and costs because they could not establish fee entitlement and did not apportion routine costs.

            Plaintiffs suffered an adverse summary judgment against an HOA’s general manager and its current directors (who were not directors when the main plaintiff owned the condo unit) in a tort action involving insurance fire proceeds. Prevailing defendants moved to recover attorney’s fees of $361,586 and filed to recover $ 27,290 in routine costs. The trial judge denied the fee motion and struck the costs memorandum.

            The 2/3 DCA affirmed. The problem for defendants was that the tort claims were not efforts to enforce governing HOA documents, so entitlement under Davis-Stirling Act’s Civil Code section 5975(c) was lacking. Civil Code section 1717 was of no help either, because the CC&R fee clauses were narrow and did not apply to the tort claims against a general manager or the current directors. With respect to striking the costs, that was no abuse of discretion because defendants claimed all litigation costs, without apportioning between plaintiffs as well as defendants.