CALIFORNIA ATTORNEY'S FEES

Class Action: Uber Class Action Settlement Challenges Were Not Sustained On Appeal

Main Reason Was That The Settlement Was Not A “Coupon” Settlement.

            The Ninth Circuit, in McKnight v. Hinojosa (Uber Technologies, Inc.), Case Nos. 21-16623 et al. (9^th Cir. Nov. 30, 2022) (published), affirmed a class action settlement against Uber over certain objectors’ challenges. 

            The district court approved a class action settlement, after concluding that “coupon” settlement restrictions did not apply, by awarding class counsel close to $5.7 million, 17.5 of the face value of the settlement fund and 2.9 times the lodestar—even though they sought $8.125 million in fees (25% of face value of the settlement fund and a 4.4 multiplier on a $1.961 million lodestar).

            Objectors primarily argued this was too rich, because they argued that the settlement was a coupon settlement with stricter restrictions.

            The Ninth Circuit disagreed.  Two of the three factors on gauging a coupon settlement cut against such a determination—class members can claim their award upfront or get a passive cash payment and a reversionary payment feature provided a flexible alternative to using credits as well as saving administrative expenses.

Appealability, SLAPP: 4/3 DCA Decides That Immediate Appeal Of SLAPP Fee Award Is Not Cognizable

Appellate Court Sides With One Side In “Irreconcilable Conclusions” On The Appealability Issue.

                 In Ibbetson v. Grant, Case No. G060473 (4^th Dist., Div. 3 Nov. 30, 2022) (unpublished), the appellate court was faced with the question of whether an anti-SLAPP fee award was immediately appealable after a prior SLAPP order grant or whether it had to await a final judgment down the way.

                 The 4/3 DCA panel, in an unpublished opinion authored by Acting Presiding Justice Bedsworth, dismissed the appeal. 

                 It determined that there were two “irreconcilable” approaches on the appealability issue.  The first was embodied in Doe v. Luster, 145 Cal.App.4^th 139, 144-148 (2006) and Baharian-Mehr v. Smith, 189 Cal.App.4^th 265, 275 (2010), which both held that a separate SLAPP fee award is not immediately appealable unless it is part of the SLAPP motion (where the fees are awarded at the same time as the SLAPP grant).  The second approach was represented in City of Colton v. Singletary, 206 Cal.App.4^th 751, 781-782 (2012), which held that the SLAPP fee award was separately appealable under the collateral order exception to the one final judgment rule.  However, the Ibbetson panel decided that the Doe/Baharian-Mehr cases provided “the sounder approach,” especially given what the Legislature did in making SLAPP grants/denial immediately appealable but not including fee awards within that ambit.  That led to a dismissal of the appeal; although, as we read the opinion, the adverse party can raise a challenge to it from any final judgment entered in the future.

                 BLOG OBSERVATION—This case might be seen as one which should have been published.  However, given that the adverse party can appeal the issue from the final judgment, we will indicate that Justice Bedsworth rarely grants civil opinion publication requests.  He believes there is too much law on the books already, so why add more unless there is something really special dictating a different conclusion.

Arbitration: Employer’s Failure To Pay Its Share Of Required Arbitration Fees And Costs Within 30 Days Breached The Arbitration Agreement So That Employee Could Pursue Claims In Court

Issue Was Failure To Pay Fees/Costs For An Arbitration Continuance, But Arbitration Initiation Case Reasoning Was Analogous. 

            DeLeon v. Juanita’s Foods, Case No. B315394 (2d Dist., Div. 3 Nov. 23, 2022) (published) is the next progression from Espinoza v. Superior Court, 83 Cal.App.5^th 761, 775-776 (2022), which held that an employer’s failure to timely pay required arbitration initiation fees within 30 days was in material breach of the arbitration agreement so the employee could instead pursue claims in superior court.  DeLeon involved a similar arbitration payment statute applying to arbitration continuance fees under CCP § 1281.98, with the appellate court reaching the same result under this statute.  This should be a huge reminder for employers, demanding arbitration, to timely pay fees; if not, you might find yourself back in superior court!

HAPPY THANKSGIVING TO ALL OUR READERS!

“A Thanksgiving Toast.” Published by Keppler & Schwarzmann on November 30, 1898.  Artist: Udo J. Keppler. Library of Congress.  

 

Section 1717: $547,532.33 Contractual Fee Award Against Otis Elevator Based On Litigant’s Cross-Complaint Affirmed On Appeal In Duty To Defend Situation

It Was Irrelevant Who Paid The Fees, Law Of The Case Sustained The Award Based On Earlier Appellate Opinion, And Duty To Defend Ruling Was “On The Contract.”

            In Sierra Pacific Properties, Inc. v. Otis Elevator Co., Case Nos. A162854 et al. (1^st Dist., Div. 5 Nov. 21, 2022) (unpublished), Otis Elevator was not happy that it suffered a $547,532.33 contractual, Civil Code section 1717 based fees/costs award based on an adverse judgment on an opponent’s duty to defend cross-complaint after the appellate court earlier reversed a judgment in Otis Elevator’s favor.  Unfortunately, those are the breaks in contested litigation and appeals in the California state system.  Otis Elevator appealed, but its arguments were rejected as follows: (1) it did not matter who paid the fees for purposes of fee entitlement under the contractual fees clause (Sonoma Land Trust v. Thompson, 63 Cal.App.5^th 978, 984-985 (2021)); (2) the other side was the prevailing party under law of the case based on the earlier appellate court decision on the duty to defend reversal issue; and (3) the duty to defend was “on the contract,” an independent reason to conclude Otis Elevator’s opponent was the prevailing party.

Arbitration: Arbitration Claimant Failing To Raise Fee Entitlement Basis As A Ground For Fee Award Waived The Argument In Later Arbitration Confirmation Proceedings

This Was No Ground To Correct The Award.

            In Hollander v. Tennenbaum Capital Partners, LLC, Case No. B314018 (2d Dist., Div. 1 Nov. 21, 2022) (unpublished), the appellate court rejected an arbitration claimant’s argument that Labor Code fees were unwaivable when the claimant did not articulate that ground as a basis for the fee award before the arbitrator.  It was too late to raise in superior court confirmation proceedings. 

Deadlines, Retainer Agreements: Notwithstanding Whether Retainer Agreements Are Avoided, Quantum Meruit Statute Of Limitations Runs From Discharge

Appellate Court Follows Fracasse.

            The Law Firm of Kallis & Associates v. Padgett, Case No. H046063 (6^th Dist. Nov. 21, 2022) (unpublished) confirmed that, notwithstanding when a fee agreement is voided by the client, an attorney’s quantum meruit claim generally runs from the time that the law firm was discharged by the client, which was consistent with the retainer agreement in this case.  (Fracasse v. Brent, 6 Cal.3d 784,790, 792 (1972); Leighton v. Forster, 8 Cal.App.5^th 467, 480, 487 (2017).)

Insurance: Appellate Court Determines That Brandt Recovery Does Entail Routine Litigation Defenses In Addition To Attorney’s Fees

Analysis Of Other Cases So Confirmed.

            In Vallejo v. Fire Ins. Exchange, Case No. C091547 (3d Dist. Nov. 21, 2022) (unpublished), the Court of Appeal faced a narrow issue:  under Brandt v. Superior Court, 37 Cal.3d 813 (1985), does an insurer receive routine litigation expenses as a recovery in addition to attorney’s fees to obtain the benefits under an insurance policy?  Answer:  yes, examining other California decisions to confirm that was the case. 

Prevailing Party, Reasonableness Of Fees, Section 1717: $200,000 Fee Award To Prevailing Defendant Affirmed Because Tort Claims Allowed For Recovery, Post-Dismissal, Under Santisas

Settlement With Other Parties Did Not Impact Analysis Of Fee Reasonableness As To The Prevailing Defendant.

            Carp Property, LLC v. Corona, Case No. B316354 (2d Dist., Div. 6 Nov. 17, 2022) (unpublished) was a situation where plaintiff litigated a matter for two years where there was a contractual fees clause in an operative agreement, suing for over $2.1 million.  Plaintiff settled with some defendants for a total of $90,000 and then dismissed the prevailing defendant after that party rejected a “walkaway” settlement in exchange for a waiver of costs.  Prevailing defendant moved for $228,000 in Civil Code section 1717 fees, but the lower court awarded $200,000 after trimming the request for block billing and for higher-level attorneys performing lower level tasks.

            The appellate court affirmed the fee award.  Plaintiff dismissed both contract and tort claims, but the dismissed tort claims were inextricably intertwined with the contract claims and the broadly worded attorney’s fees provision allowed for tort claim recovery, an exception to the Santisas v. Goodin, 17 Cal.4^th 599, 621 (1998) “general rule” relating to dismissal of contractual claims.  It then found that the $90,000 settlement with some defendants did determine fee reasonableness as far as the work done by the other prevailing defendant here.  The trial court also trimmed about $28,000 from the fee request, such that some of plaintiff’s arguments for a reduction were credited—meaning the fee award was no abuse of discretion and did not shock the conscience. 

Multipliers: Dicta In Unpublished Case Implies That Fee Agreement With “Incurred” Language Did Not Prevent A Multiplier

Appellate Decision Suggested That San Dieguito Partnership Decision Was Undermined By PLCM Group.

            Because appellant really failed to support challenges to a fee decision, dicta in Counts v. Chadwick, Case No. A163282 (1^st Dist., Div. 1 Nov. 15, 2022) (unpublished) has more importance for practitioners in fee proceedings.  Specifically, appellant claimed that an award of a multiplier was improper because the attorney fee agreement only allowed for recovery of attorney’s fees “incurred.”  Although indicating that appellant did not correctly cite San Dieguito Partnership v. San Dieguito River Valley Regional Etc. Authority, 61 Cal.App.4^th 910, 919 (1998) to support the proposition, the Counts appellate court observed that if this was the ruling in San Dieguito, it was later undermined by the holding in PLCM Group, Inc. v. Drexler, 22 Cal.4^th 1084, 1097, fn. 5 (2000), which held that unless there was an express language capping the amount to be awarded or indicating no multiplier could be awarded, nothing prevented a multiplier award—as was done in the decision.

Costs: $240,170 Out Of $322,812 In Costs Awarded In Personal Injury Action Against Defendant Were Improperly Awarded

Costs For Non-Expert Treating Physicians And Exhibit Work By Law Firm Regularly Salaried Employee Were Not Proper Subjects Of An Award.

            Plaintiff husband (and his wife to some extent) were awarded over $3.7 million in a vehicular personal injury action against defendant, with the lower court later awarding plaintiff $322,812 in costs (out of a requested $351,320).  Defendant appealed certain of the awarded cost items, and that was a good move in Kirk v. Jelly Belly Candy Co., Case No. B322612 (2d Dist., Div. 7 Nov. 15, 2022) (unpublished opinion authored by Justice Segal).

            The first cost item found to be improperly awarded was $234,740 under Code of Civil Procedure section 998 for testimonial expenses of plaintiff’s three treating physicians.  Because they were only percipient witnesses, and not designated as expert witnesses, section 998’s potential costs-shifting for expert testimony component was inapplicable.

            The second cost item found to be improperly awarded was $5,430 for model, enlargement, and exhibit photocopying work by a trial technician.  Although that can be proper where the technician is a truly independent consultant, the problem here was that the technician was a regularly salaried employee of plaintiff’s law firm such that his costs were no more awardable than if the work had been performed by an attorney or paralegal [because they are proper “routine costs”].  To the extent that El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4^th 612, 615 (2017) implied otherwise, the 2/7 DCA panel disagreed that a cost of this sort could be “incurred” when it involved labor of a regularly salaried law firm employee of a party.

            However, other cost items were sustained as proper.  Two third-party retained expert fees were fine even though they did not ultimately testify at trial.  Remote court appearance costs were okay, subject to the lower court’s discretion in finding them reasonable and necessary.  (LandWatch San Luis Obispo County v. Cambria Community Services Dist., 25 Cal.App.5^th 638, 646 (2018).)   Finally, just like messenger costs in the discretion of the court, court filing service company expenses were properly allowed. 

Costs, Judgment Enforcement: CourtCall and Electronic Filing Fees Are Discretionary Costs Which Can Be Awarded

Appellant’s Claim For An Offset Based On An Appellate Costs Award Was Rejected Because Appellant Failed To Renew His Judgment Before The 10-Year Deadline Ran.

            In Henry v. Dawson, Case No. G061115 (4^th Dist., Div. 3 Nov. 15, 2022) (unpublished), the 4/3 DCA affirmed that CourtCall and electronic filing expenses are allowable in the discretion of the lower court.  (Code Civ. Proc., § 1033.5(c)(4); LandWatch San Luis Obispo County v. Cambria Community Services Dist., 25 Cal.App.5^th 638, 646 (2018) [CourtCall is not a prohibited telephone charge, but a means by which a party can make an appearance without being physically present in court].)  Appellant also requested an offset for a prior appellate costs award; however, because such an award constitutes a separate judgment (Los Angeles Unified School Dist. v. Wilshire Center Marketplace, 89 Cal.App.4^th 1413, 1419 (2001)), his failure to renew the appellate costs judgment—which was still valid when a motion was filed—means there was no valid judgment to offset given that the motion did not toll the mandate to renew the judgment (something which was not done).

            Justice Moore authored the 3-0 opinion.

Family Law, Sanctions: $73,000 Fee Award, $220,952 Expert Fee Award, And $200,000 Sanctions Award Under Family Code Section 2107(c) Were Not Erroneous

Statutory Provision Allows For These Awards Where An Ex-Spouse/Ex-Partner Fails To Satisfy His/Her Disclosure Violations In A Dissolution Proceeding.

            Family Code section 2107(c) allows a family law judge to award fees, costs, and sanctions for disclosure violations during a dissolution proceeding, with certain disclosure obligations triggered by the service of the divorce action.  In Marriage of Matkovic, Case No. H047406 (6^th Dist. Nov. 14, 2022) (unpublished), ex-wife was hit with $73,000 in attorney’s fees, $220,952 in expert costs, and $200,000 in deterrence sanctions under section 2107(c).  Although hefty, the Sixth District found the awards were no abuse of discretion by the lower court.  The appellate court affirmed these rulings, but it did remand for a reduction in an award under Family Code section 1101(g) [limiting misappropriation awards to an ex-spouse’s community interest in an undisclosed or transferred asset]. 

Deadlines, Probate: $212,089.25 In Fees To Sole Trust Beneficiary Under Probate Code Section 8804(c) Was Sustained Under Law Of The Case Doctrine

Also, Fee Motion Was Timely Filed Based On Notice of Entry of Judgment Containing Two Documents Comprising The Judgment.

            In Karamooz v. Karamooz, Case No. G060515 (4^th Dist., Div. 3 Nov. 14, 2022) (unpublished), authored by Justice Moore, sole trust beneficiary earlier had obtained a $212,089.25 attorney’s fees award under Probate Code section 8804(c), a determination affirmed by the appellate court in a prior opinion.  Section 8804(c) allows a court to award fees when a personal representative of an estate is removed for refusing or negligently failing to timely file an inventory and appraisal.  Personal representative appealed the fee award, but to no avail.

            First, the earlier appellate opinion was law of the case on the propriety of the fee award.  Beyond that, there was no requirement under the statutory provision that beneficiary had to show damage to the estate as an additional requirement. 

            Appellant also argued the motion was untimely, but that argument lacked merit because the judgment was comprised of two documents such that the clerk’s service of one did not start the clock ticking.  Instead, it only started when beneficiary served notice of entry of both documents, with the fee motion being timely from that date. 

Family Law, Sanctions: Husband’s Dismissal of Joinder Complaint Involving Wife’s Brother Did Not Divest Lower Court Of Jurisdiction To Impose Sanctions Against Brother And In Favor Of Husband For Frivolous Motion Under Family Code Section 271

$58,400 In Sanctions Were Imposed.

            In In re Marriage of Blake & Langer, Case No. B311966 (2d Dist., Div. 4 Nov. 10, 2022) (published), husband filed a joinder complaint against wife’s brother and wife’s father in wife’s dissolution action.  Wife’s brother filed a frivolous motion to disqualify husband’s attorneys.  Husband filed a Family Code section 271 sanctions motion against wife’s brother, with the lower court requesting supplemental documentation and with husband voluntarily dismissing his joinder complaint against both wife’s brother and father.  Later, the lower court awarded husband $58,400 in sanctions as against wife’s brother.

            The appellate court rejected brother’s argument that husband’s voluntary dismissal of the joinder complaint divested the lower court of jurisdiction to impose 271 sanctions, because the sanctions proceeding was a collateral one and the procedural posture of the dismissal was inconsequential.  (See Day v. Collingwood, 144 Cal.App.4^th 1116, 1125-1126 (2006).)

Intellectual Property: Ninth Circuit Affirms $508,709.20 Fee Award And $5,856.27 Costs Award To Plaintiff In A Copyright Case

Even Though Plaintiff Only Obtained Compensatory Damages, As Remitted Twice, Of $116,975.23.

            The Copyright Act has a discretionary fee-shifting statute, giving considerable discretion to district judges in making or denying an award of fees.  To show how the fees and costs award can be much more than a compensatory damages award, we refer you to Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., Case Nos. 18-56253 et al. (9^th Cir. Nov. 10, 2022) (published) to illustrate such a result.  There, plaintiff won a copyright infringement suit against defendant, being awarded profit disgorgement damages and lost profits, which were remitted twice (once by the district court and a second time by the circuit court) to a total of $116,975.23.  The district court awarded plaintiff attorney’s fees of $508,709.20 and costs of $5,856.27 under the Copyright Act.  The Ninth Circuit affirmed these awards, finding that defendant was found to have willfully infringed and had taken an unreasonable position regarding a Chinese registration. 

Reasonableness Of Fees: Plaintiffs Denied Contractual Fees Altogether Did Not Adequately Address All Reasons For Denial In Their Appellants’ Opening Brief

Responding To Some More Of The Defense Arguments In The Reply Brief Was Too Late.

            In GI Excellence, Inc. v. Padda, Case No. E076843 (4^th Dist., Div. 2 Nov. 7, 2022) (unpublished), plaintiffs won around $65,000 in compensatory damages and then moved to recover $755,300 in contractual attorney’s fees.  The lower court denied the request in entirety.  On appeal, plaintiffs did not address all of the defense arguments below as far as why the fee request should be denied in their opening appellants’ brief.  Although they did get to some more of the defense arguments in their reply brief, this was too late— “a day late and a dollar short,” as colorfully put by the appellate court in affirming the fee denial.

SLAPP: Lack Of A Reporter’s Transcript And Indication That The Lower Court Did Consider Degree Of Success In Its Order In Awarding SLAPP Fees Led To Sustaining The Fee Award

$25,795.50 Fee Award Affirmed On Appeal.

            An adequate appellate record is a necessity in modern appellate practice, not to say it did not change from being a necessity long ago.  In Beck v. Yozura, Case No. B313689 (2d Dist., Div. 4 Nov. 7, 2022) (unpublished), the trial judge awarded $25,795.50 to a prevailing defendant winning a SLAPP motion.  Appellant challenged this determination, although having no reporter’s transcript of the hearing and with the lower court’s order indicating that there was no real way to apportion fees between SLAPP and non-SLAPP work, as well as indicating in its order that the degree of success was considered.  Given the lack of a reporter’s transcript, there was no reason to upset the fee order below in tandem with the reasoning of the lower court order.

Arbitration: Arbitrator’s Revised Award Of Fees To Prevailing Defendant Reversed Where Initial Merits Award Expressly Denied Fees To Defendant

Revised Award Was Not A Mere Correction, But A Substantive Merits Reconsideration And Impermissible New Award.

            Taska v. TheRealReal, Inc., Case No. A164130 (1^st Dist., Div. 5 Nov. 4, 2022) (published) was a situation where an arbitrator found in employer’s favor on the merits and denied employer’s fee request after finding employee’s case was not frivolous in an initial award.  But that was hardly the end of the matter.  Employer took a “second bite” at a fees/costs request, with the arbitrator reversing course and awarding it $53,705.43 in a revised arbitration award after finding employee’s failure to testify truthfully did render her case frivolous in nature.  (Then, later, the arbitrator issued a corrected final award increasing the fees and costs award to $73,756.43.) When it came time to confirm and vacate the revised arbitration award, the lower court sustained the merits determination but struck the award of fees and costs because the arbitrator exceeded her authority by amending the initial award denying fees and costs.

            The 1/5 DCA affirmed.  The initial award did determine the merits and fees/costs entitlement, with the appellate court rejecting that this initial determination was just a “placeholder” for a further final fees/costs determination or correction.  Rather, the revised and corrected awards were not mere math corrections or inadvertent corrections, but substantive new determinations which were not allowed under the contractual arbitration statutory scheme.  (See Cooper v. Lavely & Singer Professional Corp., 230 Cal.App.4^th 1, 14, 18-19 (2014); Landis v. Pinkertons, Inc., 122 Cal.App.4^th 985, 992 (2004).) 

Section 1717: $321,338.54 Contractual Fee Award To Prevailing Party In Administrative Mandamus Proceeding

Mandamus Was “On The Contract” Under Section 1717 And Decision Was Final To Defeat Prematurity Argument.

            In The Traveler Indemnity Co. v. Lara, Case No. B306897 (2d Dist., Div. 7 Nov. 3, 2022) (published), insurance company lost an Insurance Commissioner administrative mandate proceeding concerning whether certain workers compensation agreements issued to it were unenforceable vis-à-vis the insured.  The lower court then assessed $321,338.54 in attorney’s fees against insurance company based on a contractual fees clause in the agreements for insured’s administrative proceeding work.  Insurance company’s arguments on appeal did not overturn the fee award.

            Administrative proceeding work was within the scope of the fees clause.  An administrative mandamus was “on the contract” under Civil Code section 1717 where the main issue was whether the agreement was unenforceable.  The fee award was not premature despite the existing of further litigation because the mandamus determination was a final determination in insured’s favor.