CALIFORNIA ATTORNEY'S FEES

Probate: No Abuse Of Discretion In Lower Court’s Denial Of Probate Code § 2642 Petition For Attorney Fees Of $64,398.75 And $4,145.31 Costs To Law Firm Representing Co-Guardians Of Minor’s Estate

Law Firm Failed To Cease Work As Instructed By One Of The Co-Guardians.

            Probate Code § 2105(c)(1) requires that “[w]here there are two guardians or conservators, both must concur to exercise a power.”  Unfortunately for the law firm seeking fees in Guardianship of the Estate of L.T., Case No. B288733 (2d Dist., Div. 5 November 22, 2019) (unpublished), it filed a legal malpractice action under authorization from only one of two co-guardians.  As a result, the malpractice action had to be withdrawn, and although the law firm eventually received temporary authorization from other co-guardian to continue work, that authorization was revoked with instruction to cease work less than two weeks later – an instruction the law firm did not follow. 

            In the meantime, co-guardians brought in other counsel to resolve the dispute they had with their former attorney/firm.  Once that dispute was resolved, the law firm that had been instructed to cease work petitioned for $64,398.75 in attorney fees and $4,145.31 in costs.  The trial court denied – with its implied finding that the $10,000 retainer fee paid to the law firm to be reasonable and adequate compensation for the work performed during the time period work was authorized by both co-guardians.  Everything else

            The 2/5 DCA affirmed – finding substantial evidence supported the trial court’s ruling – and included a nice discussion on Cal. Rules of Court, Rules 7.751 and 7.702 (interest of ward considered instead of interest of beneficiaries of estate, and the showing required for an attorney filing a petition for extraordinary compensation) and Probate Code section 2642 (attorney providing legal services for guardian may petition for fees with court determining reasonable compensation).

Fee Clause Interpretation, Section 1717: Collections Fees/Costs Provision In A Preprinted Form Which Was Incorporated In The Parties’ Bargain Provided Fee Entitlement

Fees Are Costs, And Do Not Have To Be Pled/Proven Unless In A Third Party Tort or Brandt Situation.

            Ya know, fee entitlement under a contractual fees clause can be based on very simple language set forth in a preprinted form.  In Ozuna Electric Co., Inc. v. Integrated Process Control Engineering, Inc., Case No. G056765 (4^th Dist., Div. 3 Nov. 26, 2019) (unpublished), the language was as simple as “All [c]ollection costs and [a]ttorney fees shall be added to the unpaid balance” in an exhibit which was incorporated into the overall bargain between the parties through an integration clause.  A prevailing party in a contract action was awarded fees under this contractual provision, which triggered an appeal by the opposing party.  To no avail—the clause was clear in granting fee entitlement and was integrated into the overall bargain between the parties.  With respect to the argument that fees had to be pled and proven as damages at trial, that is simply not the case because attorney’s fees are costs which do not have to go through this process, except in inapplicable third-party tort or Brandt situations.  Presiding Justice O’Leary authored the 3-0 panel opinion. 

POOF!, Probate: Four Successor Trustees’ Attorney’s Fees Of $74,824.50 Went POOF! Based Upon Failure To Show One Beneficiary Petition Was Prosecuted In Bad Faith And With No Differentiation Of Fees Between Two Petitions

Trustees Failure To File A Respondents’ Brief Sealed The Result!

            A beneficiary filing two petitions concerning two qualified personal residence trusts likely was shocked when a probate court granted $74,824.50 in attorney’s fees to four successor trustees after beneficiary voluntarily dismissed petitions after obtaining some desired results.  Beneficiary did well to appeal in Sterne v. Sterne, Case Nos. B289907/B290099 (2d Dist., Div. 2 Nov. 26, 2019) (unpublished).

            The appellate court reversed the fees award as a matter of law.  Beneficiary was successful in obtaining results via his first petition.  Trustees failed to apportion their fees between the two petitions, such that the success on the first petition meant the whole fees award had to fall.  Beyond that, the probate court imposed fees against beneficiary personally, not out of his share of the trust estates--an order beyond the equitable power of the probate court.  (Pizarro v. Reynoso, 10 Cal.App.5^th 172, 189 (2017).) 

            It also bears noting that trustees filed no Respondents’ Brief—bad idea, where the other side raises cognizable arguments for reversal on appeal. 

Prevailing Party, Probate: Appellate Court’s Reversal Of A Probate Court Asset Characterization Required A Reexamination Of Whether Trustee’s Attorney’s Fees Were Proper Because She Was Really The Prevailing Party

A Re-Do Was Ordered To Be Done By The Trial Judge In The First Instance.

            In Placencia v. Strazicich, Case No. G055631 (4^th Dist., Div. 3 Nov. 26, 2019) (published), our local Santa Ana appellate court reversed a trial judge’s characterization of bank account funds which had led the lower court to award attorney’s fees to trustee as the prevailing party.  Given that the appellate ruling might have undermined that conclusion, the trial judge had to revisit the fee entitlement issue and amount of any fees to be awarded on remand.  Justice Ikola authored the decision, which deals with an interpretation of provisions of California’s Multiple-Party Accounts Law.

Private Attorney General, Special Fee Shifting Statute: 2/8 DCA Follows Earlier 2/1 DCA Opinion In Recognizing That Successful Requesting Party/Intervenor Was Entitled To Fees In A California Public Records Act Proceeding And A Reverse-CPRA Action

End Result Was A San Diego Newspaper Garnered Almost $149,000 In Attorney’s Fees After The Judgment Modified To Allow For Additional Reply Brief Work.

           In City of Los Angeles v. Metropolitan Water District of Southern California, Case No. B272169 (2d Dist., Div. 8 Nov. 19, 2019) (published), a San Diego newspaper which successfully intervened in a reverse-California Public Records Act (CPRA) action and successfully brought its own CPRA cross-petition against the MWD.  The trial judge awarded fees under both the CPRA and California’s private attorney general statute, which was augmented on appeal to include some further reply brief work, for a total of almost $149,000 to the successful newspaper.

            The adverse parties, on appeal, challenged the fee award before the appellate court added $12,350.33 more for reply brief work.  Those challenges were unsuccessful.

            On the most significant legal issue, the 2/8 DCA agreed with the 2/1 DCA’s reasoning in Pasadena Police Officers Assn. v. City of Pasadena, 22 Cal.App.5^th 147, 157 (2018) [reviewed in our April 15, 2018 post], which recognized that a successful requesting/intervening party was eligible for CPRA fees on a CPRA cross-petition and for CCP § 1021.5 attorney’s fees in the reverse-CPRA action.

            The appellate court then went on to analyze why the successful newspaper did vindicate important public rights relating to how public utilities were reimbursing for turf programs when the drought was at an extreme in earlier years.  Newspaper did obtain disclosure of certain public agency records on water consumers, such that it did vindicate the “public’s right to know how the government uses public money” (including claims that the two public agencies involved in the primary CPRA proceedings were colluding with each other to prevent the disclosure of public information on various grounds). 

Judgment Enforcement: Fees/Costs Incurred In Successfully Adding Judgment Debtors, Including Appellate Work To Obtain That Successful Outcome, Were Prejudgment Costs Not Governed By EJL Procedures Or Deadlines

Award Of $80,000 Each In Fees To Two Successful Plaintiffs Remanded For A Re-Do.

            In Highland Springs Conference and Training Center v. City of Banning, Case No. E069248 (4^th Dist., Div. 2 Nov. 21, 2019) (published), two CEQA petitioners obtained a successful judgment relating to an EIR certification, obtaining significant attorney’s fees under the private attorney general statute, each, against the main real party in interest.  After real party lost certain property to a foreclosure and exhausted around $14 million in capital, petitioners filed a motion under CCP § 187 to add a new party as a judgment debtor to the judgment.  The trial judge denied the motion based on a lack of diligence, but the appellate court reversed in a prior decision (see 244 Cal.App.4^th 267, 273, 282-289 (2016)).  Petitioners then sought attorney’s fees connected with the 187 motion and attendant appellate work reversing the earlier denial order; petitioners sought fees over $1,274,000 in fees based on the private attorney general statute (which included a 1.5 multiplier).  The trial court refused to award fees for the 187/appellate work, primarily determining that the Enforcement of Judgments Law (EJL) postjudgment procedures/limitations applied.  The trial judge awarded each petitioner $80,000 in fees, rejecting the lodestar request, under CCP § 11021.5.

            The 4/2 DCA reversed and remanded.

            The appellate court concluded that prejudgment costs procedures, not EJL directives, applied to petitioners’ fee work for ultimately obtaining the 187 addition of judgment debtor order (inclusive of appellate work in the prior appeal).  They reached this conclusion even though petitioners had caused confusion by indicating they were making requests under the EJL, with the appellate court piercing to the substance and determining instead that prejudgment costs were at stake.  With respect to the remand, the appellate court did not voice any definitive guidance, but did remind the trial judge that private attorney general fee awards should generally be fully compensatory in nature.  This decision has a very good discussion of the differences between prejudgment and EJL postjudgment costs procedures/ limitations (especially parsing through the germane California Rules of Court).

Prevailing Party, Section 1717: Losing Plaintiffs’ Strained Interpretation of Prevailing Party Language In Fees Clause Did Not Disturb Trial Judge’s Award Of Fees And Costs To Prevailing Defendants

$40,202 Was The Fees/Costs Award In Easement Dispute, Reduced From The Requested $79,675 In Fees.

            Defendants/cross-complainants in an easement dispute won on every issue except for cross-complainants” claim that plaintiffs owed them money for utilities, garnering $1,350 for damages for injury to their livestock.  Even though there was no unqualified winner, the trial court in its discretion deemed defendants the prevailing party, awarding $40,000 in attorney’s fees and $202 in costs (reduced from the requested $79,675 in fees).

            The appellate court affirmed in Yerman v. Parker, Case No. C080254 (3d Dist. Nov. 20, 2019) (unpublished).

            There was a “prevailing party” fees clause in the easement agreement, with plaintiffs advancing a rather convoluted argument that they were not the nonprevailing party in light of contractual language saying fees and costs could be recovered from “the nonprevailing party.”  Aside from not accepting this strained interpretation, the Third District concluded that plaintiff’s argument would contravene the “prevailing party” definition in Civil Code section 1717, something the parties cannot do contractually.  (Walker v. Ticor Title Co. of California, 204 Cal.App.4^th 363, 372-373 (2012).) 

            At the outset, there was an argument that plaintiffs’ appeal of the fees award was untimely, but that did not succeed because plaintiff did appeal from the “fixed” fee order—not having to appeal from an earlier judgment which left fees blank and to be determined at a later juncture.

            BLOG OBSERVATION—The lower court venue was none other than Calaveras County, the site of Mark Twain’s tale about the notorious jumping frog!

Costs, Experts, Insurance, Section 998: Trial Court Properly Awarded Costs, Including Almost $70,000 In Expert Witness Fees, To Successful Defendant After Plaintiff’s Rejection Of Defendant’s Section 998 Offer

Plaintiff May Have Been Overreaching When He Followed Defendant’s $15,001 Offer With His Own $299,995 Offer Given Jury’s Return Of Defense Verdict.

            Grayfer v. Wawanesa General Ins. Co., Case No. B285554 (2d Dist., Div. 7 November 18, 2019) (unpublished) provides a cautionary tale about the risk involved in overreaching and rejecting reasonable section 998 offers.

            Plaintiff sued his insurance company after his car was stolen – valuing his car at $31,263.43 in his complaint.  Insurance company made a Code Civ. Proc. § 998 offer to settle plaintiff’s claims for $15,001, but plaintiff rejected the offer and served his own offer in the amount of $299,995.  The insurance company rejected plaintiff’s offer and the matter proceeded to trial.  Following the defense verdict returned by the jury and entry of judgment in its favor, the insurance company filed its memorandum of costs which included almost $70,000 in expert witness fees.  Plaintiff moved to tax costs – especially the expert witness fees – arguing insurance company was not entitled to recover fees because its 998 offer was unreasonable and made in bad faith, the experts were not court ordered, and the amounts incurred were unreasonable and unnecessary.  The trial court rejected plaintiff’s arguments – finding the 998 offer reasonable in light of Plaintiff’s claimed emotional distress, the value plaintiff placed on his stolen car, insurance company’s denial of liability for plaintiff’s loss, and the ultimate jury verdict confirming insurance company’s stance on liability.

            After entry of the order awarding its costs/expert witness fees, the insurance company levied plaintiff’s bank accounts, to which plaintiff filed a claim of exemption asserting social security and disability payments were deposited into the levied accounts.  After a hearing on plaintiff’s exemption claim, the trial court found one single account was exempt as it received social security benefits, but found no exemptions for plaintiff’s other accounts.

            Plaintiff appealed the rulings on both his motion to tax costs and his claimed exemption motion, and the 2/7 DCA affirmed – finding no abuse of discretion in the costs ruling and no error in the claim of exemption ruling.

POOF!: Plaintiff Prevailing On Summary Adjudication Has His Contractual Damages Award, Interest, Costs And Contractual Attorney’s Fees Award Go POOF! On Appeal

The Trial Court Erred In Granting Plaintiff’s Motion For Summary Adjudication On Breach Of Contract Claim Because Defendants Had Established A Triable Issue Of Fact, And That Error Prejudiced The Subsequent Bench Trial On Other Claims.

            In Groth v. Gilad, Case Nos. A151497 and A150493 (1^st Dist., Div. 5 November 18, 2019) (unpublished), plaintiff and other individuals signed a Partnership Engagement Letter that provided each person signing would contribute capital equally for the purpose of engaging in a cigar club.  Shortly thereafter, plaintiff agreed to fund the purchase of real property for the club – depositing $735,000 into a business account belonging to one of the defendants.  That defendant then transferred the funds into an LLC account – with the LLC having been formed to own the real property.  The cigar club (which has since failed) was operated under a California corporation incorporated about a month later.

            Approximately four months after depositing the $735,000, plaintiff requested a written promissory note for $610,001 showing the corporation as the borrower.  The promissory note was signed by the corporation’s Secretary and CFO – both of whom had signed the Partnership Engagement Letter with plaintiff – on behalf of the corporation.

            After receiving only one payment from the LLC of $10,001, plaintiff received no additional payments.  He sued the Secretary and CFO who had signed the promissory note, and one corporate entity, alleging breach of contract, negligence, and breach of fiduciary duty.  His motion for summary adjudication on the breach of contract claim was granted and, after a bench trial on other issues, the trial court issued judgment against all defendants for $400,000 in contract damages and interest, plus costs and contractual attorney’s fees.

            On appeal, defendants argued that the trial court erred in granting summary adjudication on the breach of contract claim because defendants had established triable issues of fact that brought into question whether the parties agreed that the partnership, as opposed to solely the corporation or the LLC, would be obligated under the note.  They also argued that this erroneous ruling had prejudiced the subsequent bench trial on other claims.  The 1/5 DCA agreed and reversed the judgment and post-judgment fees order – finding the promissory note to be ambiguous with competing reasonable inferences regarding liability.  Because triable issues of material fact exist as to the breach of contract, summary adjudication was precluded.  With that, plaintiff's damages, interest, costs and fees awards went POOF! (at least for now).

Appealability, Homeowner Associations, Prevailing Party, Special Fee Shifting Statutes: Second District Affirms $67,458.07 Attorneys’ Fees Awarded To Prevailing Defendant On Remand

Gravamen of Plaintiffs’ Action Was Based On Governing CC&Rs Which Made Defendant Prevailing Party For Attorneys’ Fees Purposes When She Defeated The Action Through Demurrers And Plaintiffs’ Voluntary Dismissal.

            We first discussed our next case – Durack v. Wang, Case No. B293597 (2d Dist., Div. 7 November 18, 2019) (unpublished) – in a September 27, 2017 post.  In that appeal, Wang, who prevailed on demurrer against most of plaintiffs’ causes of action – with the remaining causes of action voluntarily dismissed by plaintiffs – challenged the trial court’s denial of her motion for attorneys’ fees. There, the 2/7 DCA found Wang to be the prevailing party under Civ. Code section 5975(c) [the Davis-Stirling Act] as Plaintiffs’ complaint sought to enforce CC&Rs.  With that, the 2/7 DCA reversed and remanded with direction to the lower court to enter a fee award to Wang with proper apportionment.

            On remand, Wang filed a peremptory challenge under Code Civ. Proc. § 170.6 to the trial judge who determined the first attorneys’ fees motion.  After the case was reassigned to a different department, Wang filed her second motion for attorneys’ fees seeking $72,158.57.  Plaintiffs opposed – seeking denial of Wang’s motion in its entirety – with the trial court finding the request to be “patently improper in light of the Court of Appeal’s direction to grant Wang’s motion for attorneys’ fees.”  After some apportionment and reductions, the trial court awarded Wang $67,458.07.

            Plaintiffs were not deterred.  They marched right back to the 2/7 DCA with a slew of failing arguments to support their claim that the trial court erred in awarding the fees as directed on remand.

            First, they argued the peremptory challenge should not have been accepted.  However, the proper procedure for such a review is a petition for writ of mandate.  Next, they argued the trial court failed to properly assess fee and non-fee claims.  This was without merit as the trial court had conducted an evaluation of the legal work Wang’s attorneys performed and appropriately reduced and apportioned for time spent litigating causes of action that did not allow Wang to recover fees. 

            Plaintiffs also focused two of their arguments on Wang’s specific factual defense – claiming she was not entitled to fees because she did not prevail on that specific defense, and because that defense was a lie.  Neither argument gained any traction because Civ. Code section 5975(c) did not require Wang to prevail on every issue or defense, just to achieve her main litigation objective – which she did by defeating all of the causes of action against her.  As to her specific defense being a lie, there was no “lie.”  The parties never resolved/litigated that issue with plaintiffs dismissing their complaint against Wang.

            Finally, plaintiffs attacked the fees charged by Wang’s counsel – claiming her counsel deferred work to a law clerk and submitted improper block billing entries to support the fees request.  To these arguments, the 2/7 DCA found the trial court had correctly ruled that legal assistant and support staff time is routinely included in fee awards – that, if anything, work delegated to the law clerk only served to reduce the amount of an otherwise reasonable fee award.  As to the examples plaintiffs cited as “block billing,” the 2/7 DCA came to no such conclusion.  Rather, they found them to be descriptive entries showing the amount of time spent on each specific task.  One exception to this was the 85.6 appellate work hours Wang’s counsel included in his declaration.  Although the declaration did not include detail, the 2/7 DCA found the significance of detailed time entries reduced for appellate work – with only a few kinds of tasks for which an appellate lawyer bills.  In this case, the amount of time cited was very reasonable given the filing of both an opening and reply brief, appearance for oral argument, and successful reversal of the trial court’s fee denial.

Appealability, Lis Pendens: The Sixth District Expresses No Opinion As To Defeated Plaintiff’s Challenge To Lis Pendens Expungement And Attorneys’ Fees Order

Plaintiff Appealed Defendants’ Successful Demurrer Without Leave To Her First Amended Complaint, But Failed To Appeal The Later Issued Expungement and Fees Order.

            Bryer v. J.P. Morgan Chase, N.A., Case No. H045407 (6^th Dist., November 18, 2019) (unpublished), provides a reminder that appeal of an underlying judgment generally does not include matters later decided – such as orders on attorneys’ fees motions.

            Here, plaintiff filed a lawsuit to prevent foreclosure of her residence.  The lower court sustained defendants’ demurrers to plaintiff’s first amended complaint without leave to amend.  Plaintiff appealed.

            Months later, the trial court granted defendants’ motion to expunge the lis pendens plaintiff had recorded and also awarded attorneys’ fees for the expungement motion.

            On appeal, plaintiff challenged the lower court’s order sustaining the demurrers without leave to amend, but also challenged the awarded attorneys’ fees and expungement order.  Unfortunately for plaintiff, she failed to file a notice of appeal for the later and separate attorneys’ fees and expungement order.  

            Following the principles set forth in Polster, Inc. v. Swing (1985) 164 Cal.App.3d 427, 436 (limiting scope of jurisdiction on appeal to the notice of appeal and judgment/order appealed from) and Soldate v. Fidelity Nat. Financial, Inc. (1998) 62 Cal.App.4^th 1069, 1073 (matters occurring after a judgment are rendered irrelevant on appeal), the Sixth District “express[ed] no opinion regarding the merits of plaintiff’s challenge” to the expungement and attorneys’ fees order. 

 

Family Law: Ex-Wife’s Needs Based Support Fee Request Properly Denied

She Had More Assets/Wealth After Dissolutions Rulings And Future Payments By Husband Which Meant She Should Pay Her Attorneys When She Recoups!

            Ex-wife was probably not happy that her Family Code sections 2030/2032 “needs based” attorney’s fees request was denied again in Marriage of Restaino, Case No. G054778 (4^th Dist., Div. 3 Nov. 14, 2019) (unpublished).  However, her appeal of this fee denial did not change the result.

            The 4/3 DCA, in an opinion authored by Justice Ikola, found there was no abuse of discretion based on family law judge’s findings that (1) ex-wife had more assets/wealth than ex-husband after rulings in the dissolution matter, and (2) both ex-spouses had the ability to pay their own attorneys.  Ex-wife argued that the needs-based award was warranted because ex-husband owed her $650,000; however, the appellate court found this did not resonate because ex-wife could simply pay her attorneys once she collected from ex-husband—no foul here!

            BLOG OBSERVATION—A footnote in the opinion may be even more telling.  Wife spent $1.2 million in the divorce, and husband spent $900,000, with the family law judge observing that much of this occurred because ex-wife over-litigated the case. 

Costs, Special Fee Shifting Statute: Venue Transfer Order—Under Penalty Of Dismissal—Ran From Service Of Minute Order, With Plaintiff’s Noncompliance Leading To A Reversal

Failure To Dismiss Case Lead To A Real Reversal Of Fortune!

           In Southwestern Law School v. Benson, Case No. BV032895 (L.A. County Superior Ct. App. Div. Oct. 25, 2019, posted Nov. 14, 2019) (published), a very narrow issue was presented on appeal, with dire consequences for the plaintiff.  The issue was whether a plaintiff which did not pay for costs and expenses, including attorney’s fees, under a venue transfer order under CCP § 399(a), was subject to dismissal based on receiving a minute order on the venue transfer order conditions.  The answer to the issue was “yes,” but with repercussions being of a fairly dramatic fashion.  Plaintiff did not pay the transfer costs/expenses, the defense dismissal order was denied, and—on appeal—this failure to dismiss was found erroneous because the minute order provided notice of what plaintiff should have done (but did not do).  As a result, a civil judgment of $28,341.10 (inclusive of $2,500 attorney’s fees and $95 in costs) in plaintiff’s favor evaporated on appeal, all based on failure to pay a couple of thousands of dollars in venue transfer fees.

Intellectual Property: E.D. Michigan Federal Magistrate Judge Explores The Exceptional Circumstances Under Which A Prevailing Party Can Be Awarded Attorney’s Fees By A District Court Based On PTAB IPR Successful Work

Exceptionality Standard Presents A High Obstacle For PTAB Fee Recovery.

            In American Vehicular Sciences LLC v. Autoliv Inc., 2019 U.S. Dist. LEXIS 164343 (E.D. Mich. Aug. 30, 2019), report and recommendation adopted in 2019 U.S. Dist. LEXIS 162914 (E.D. Mich. Sept. 24, 2019), U.S. Magistrate Judge Anthony P. Patti explored what circumstances might warrant a district court to award attorney’s to prevailing parties for Patent Trial and Appeal Board (PTAB)-related work which was successful in invalidating several patents after inter parties review (IPR) before the PTAB.

            What happened here is that a plaintiff sued numerous defendants for patent infringement, with the district court case eventually stayed during the pendency of the IPR process based on IPR petitions filed by several defendants.  The IPR petitions resulted in invalidity determinations for several patents, with the prevailing parties then turning to the federal magistrate for an award of discretionary attorney’s fees relating to PTAB work based on the case being “exceptional” in nature under the Octane standard.

            Magistrate Judge Patti recognized that “exceptional” cases can include (1) when PTAB proceedings play a central role in the federal case outcome, or (2) there was a stay of the related district court case, such that the PTAB proceedings effectively took the place of the federal court (with this second situation being present).  However, he still determined that the circumstances did not support a fee award in a report and recommendation to the district judge, which was adopted, based on the following factors:  (1) the jurist did not see any bad faith arguments being presented before the PTAB; (2) the validity challenges had not been found persuasive earlier by the USPTO examining corps; and (3) the PTAB refused to sanction the losing party, although it has power to do so.

            For an excellent article on this issue and the magistrate judge’s decision, see a November 9, 2019 post on the Finnegan & Henderson website. 

Family Law: $10,000 2030 Award To Ex-Wife With A Big Disparity In Income/Assets Affirmed On Appeal As Against Ex-Husband

Appellate Court Implored That Appealing Ex-Husband Get Beyond Past Dissolution Disputes.

            Marriage of Dodson, Case No. E070719 (4^th Dist., Div. 2 Nov. 12, 2019) (unpublished) is an interesting acrimonious dissolution case where husband and wife went back and forth in a marriage where only a finite of assets/income were at issue.  (Sound familiar?)

            In the end, the trial court awarded ex-wife $10,000 in “needs-based” fees against ex-husband, rebuffing multiple requests for Family Code section 271 sanctions by both sides.  Ex-husband appealed this award, even though he moved on and has an apparent new finance.   This was no abuse of discretion in light of the record showing that husband had over 4 times earning taxable income over wife’s disability income. 

            Here is the telling ending observation by the Court of Appeal:  “We are hopeful that [ex-husband/appellant] will find a way to move past this very difficult and stressful period in his life and find a happier and brighter future for himself, his fiancé, and his adult children.” 

Miscellaneous: The Judge Group, With An Irvine, California Office, Has Three Attorney’s Fees Insurance Products For Consideration By Litigants And Their Counsel

The Three Products Are Fee Shifting Insurance, Attorney’s Fees Insurance, And Contingency Fee Insurance.

            Co-contributors Mike and Marc met with James Blick, director of The Judge Group, which operates under the name TJ Insurance Services in California (with its office in Irvine) and makes available three attorney’s fees insurance products for consideration by litigants and their counsel.  All three products are offered after there is underwriting due diligence by the insurer, with premiums based on the nature of the case, the time at which insurance is sought in the case, and other underwriting factors.

            The first product is fee shifting insurance, which operates as a “hedge” against an adverse award of attorney’s fees.  Most frequently, this product is underwritten in breach of contract cases with contractual fees clauses or cases subject to Civil Code section 1717 reciprocity principles. 

            The second product is attorney’s fees insurance, with the insured party being a plaintiff desiring to insure against the risk that plaintiff will not recoup all of its legal spend in a case as a result of a negative outcome or a less-than-expected fee recovery.

            The third product is contingency fee insurance, with a law firm working on a contingency arrangement being the insured.  This product will insure an income loss for the contingency attorney if the case is unsuccessful or results in a low fee recovery.

            All of these products can include “contingent premium” features, where the insurer obtains a larger premium in the event of a positive litigation outcome or fee award.  However, the premiums are set, according to Mr. Blick, based on the unique underwriting process applied to a particular outcome.

            Although this blog has no affiliation with The Judge Group, we thought these products should be called to the attention of interested litigants and their counsel.  Mr. Blick can be reached at 877.766.8958 or at james.blick@thejudgeglobal.com. 

Allocation, Prevailing Party, Substantiation Of Reasonableness Of Fees: Prevailing Plaintiff Under Civil Code § 3344 Properly Awarded $137,595.20 In Attorneys’ Fees And $9,523.55 In Costs While Prevailing Defendant Under § 3344 Properly Denied Fees

Plaintiff – Although Seeking Six-Figures In Damages – Had Achieved His Litigation Purposes Through Damages Verdict of $10,000, But Dismissed Defendant Failed To Meet His Burden As To The Reasonableness Of His Fees Request.

            In Dice v. X17, Inc., Case No. B2282448 (2d Dist., Div. 3 September 27, 2019) (unpublished), a celebrity news website published images of sobriety coach Peter Dice showing a bag containing healing crystals to celebrity Lindsay Lohan, and depicted the interaction as a drug deal.  Mr. Dice sued the media company and its president/sole shareholder seeking damages and injunctive relief. 

            Before trial, plaintiff presented defendant media company with a rejected Code Civ. Proc. § 998 offer for $250,000.  During a later mandatory settlement conference, defendant media company offered $45,000 to settle the case.  Plaintiff rejected the offer, and the case proceeded to jury trial.  At the close of evidence, plaintiff dismissed president/sole shareholder from the action.

            The jury returned its special verdict finding the media company liable to plaintiff for defamation, and common law and Civ. Code section 3344 misappropriation of likeness for its knowing, unauthorized use of plaintiff’s likeness on its website – awarding plaintiff $10,000 in damages. 

            The lower court entered judgment – finding the prevailing parties under section 3344 to be plaintiff against media company, and dismissed president/sole shareholder defendant against plaintiff.  This triggered cross-motions for attorneys’ fees and costs pursuant to section 3344(a) which provides the prevailing party entitlement to fees and costs. 

            As to plaintiff, the lower court found no requirement to apportion fees between the section 3344 and common law claims, concluding that proving plaintiff’s successful section 3344 and common law causes of action “required virtually identical testimony and evidence” (although it did reduce for fees not incurred to prevail on section 3344) and awarded fees of $137,595.20 and $9,523.55 in costs.

            President/shareholder, however, was awarded only costs of $4,934.91 against plaintiff – with denial of his $226,456.50 fees request altogether for failure to meet his burden of proof that the requested fees were reasonable.  He made his request jointly with media company – although media company was not a prevailing party – and provided no apportionment between the two defendants, and did not categorize the fees nor apportion for the section 3344 work, even after the trial court had issued its tentative ruling.  Additionally, the lower court was unable to find that president/shareholder had incurred any fees – with only the media company being invoiced. 

            Media company and president/shareholder jointly appealed – arguing the trial court erred in determining plaintiff a prevailing party because in doing so it had improperly considered his success on other causes of action, and also because plaintiff failed to achieve his monetary litigation goal, with the nonmonetary goals being irrelevant under section 3344.  Additionally, they argued the lower court erred by basing the denial of their fees on president/shareholder sharing of counsel with media company and in the fact he did not personally incur fees.

            The 2/3 DCA found no error or abuse of discretion and affirmed.  Plaintiff had realized his litigation objectives, which included the award of monetary damages and “to right a wrong and clear his reputation.”  Section 3344 does not limit recovery to economic damages, but includes “any damages sustained” – thus including damage to reputation and providing remedy for the associated mental harm.  The jury’s verdict, regardless of the amount awarded, had provided plaintiff public vindication. 

            While the 2/3 DCA agreed that president/shareholder could not be denied fees based on sharing counsel and not personally incurring fees, it found that the trial court had properly denied fees.  Due to defendants’ failure to apportion fees, the lower court was unable to determine what fees were incurred to defend president/shareholder against the section 3344 cause of action, and president/shareholder did not demonstrate that the facts in his defense were inextricably intertwined with those of media company.  As a result, president/shareholder had failed to meet his burden as to reasonableness.

            BLOG COMMENT:  Congratulations go out to James R. Balesh of the Los Angeles-based Balesh Law Group for your successful representation at the trial and appellate court levels!  Great results on plaintiff’s fee request and his opposition to defendants’ joint fee request.

Prevailing Party: Fourth District Affirms $5,000 Attorneys’ Fees Award To Prevailing Defendant Despite Request Erroneously Made Under The Wrong Statute

The Correct Statute Allowed For Fees And There Was No Prejudice To Plaintiff.

        In Jabbar v. Loy, Case No. D075200 (4^th Dist., Div. 1 November 8, 2019) (unpublished), plaintiff sought an elder abuse restraining order against defendant pursuant to Welf. & Inst. Code § 15657.03.  The following month, the trial court granted plaintiff’s request to dismiss and ordered the entire action dismissed with prejudice.

        Defendant then successfully moved for attorneys’ fees, under Code Civ. Proc. § 527.6(i) and Civil Code § 527.6(h), as the prevailing party. 

        On appeal, plaintiff argued that the lower court erred in awarding the attorneys’ fees because defendant had requested the fees under statutory provisions that did not authorize an award of fees.  First, Code Civ. Proc. § 527.6(i) pertained to the procedure for the hearing on a general civil harassment restraining order, not to the authorization to award fees related to an action for an elder abuse restraining order.  Second, Civ. Code § 527.6(h) did not exist. 

        The 4/1 DCA acknowledged defendant cited the wrong statutes in her request for fees. However, Code Civ. Proc. § 527.6(i), relating to general civil harassment restraining orders, previously included a provision for fees (this provision had been moved to subdivision (r) in 2012 and (s) in 2016) nearly identical to the correct statute allowing for the award of fees in this action, Welf. & Inst. Code § 15657.03(t).  The 4/1 DCA found that the trial court had the authority to award the fees under the correct statute, and that the award did not prejudice plaintiff.  Defendant’s inaccurate citations to the statutes had not deprived plaintiff of adequate notice to oppose the fees.  He did oppose the fees in the lower court – just not persuasively.

Section 998, Special Fee Shifting Statute: Berkeley Municipal Ordinance “Reasonable Fee” Requirement Disposed Of Winning Cross-Appellant’s Fee Challenge

CCP § 998 Does Not Expand Fee Allowance, But Only Expands Group Of Litigants Treated As Prevailing Parties.

            Glaser v. Mitchel, Case No. A155815 (1^st Dist., Div. 4 Nov. 7, 2019) (unpublished) was a neighborhood dispute over sunlight/tree disputes—something we have posted on many times before with respect to various California venues.  There was a Berkeley Municipal Code fee-shifting, prevailing party provision covering these types of disputes, although the prevailing party has to incur “reasonable” fees.  Believe it or not, the winner recovered $255,782.25 in fees, $31,089.70 in routine costs, and $9,200.54 in CCP § 998 expert witness fees.  However, winner cross-appealed, claiming the recovery was not enough.

            Get outta here, the appellate panel said, although much more politely.  The fee recovery had to be reasonable, with the trial court reducing for some associate where information was wanting and for an unidentified billing professional.  There was no abuse of discretion in these reductions.  Cross-appellant argued that, somehow, something more was owed under section 998, which was dispatched with this observation:  section 998 does not grant greater rights to attorney’s fees than those provided by the underlying statute, although it does expand the group of those who are treated as prevailing party and who may be entitled to fees as prevailing parties under the relevant statute.  (Mangano v. Verity, Inc, 167 Cal.App.4^th 944, 951 (2008).)

Construction, Prevailing Party: General Contractor Plaintiff Prevailing In Litigation Matter Against Subcontractor Through A Summary Judgment Motion Entitled To Contractual Fees

General Contractor Won A Positive Recovery By Keeping A $125,000 Properly Withheld Retention As Against The Sub.

            Justice Wiley of the 2/8 DCA is showing a lot of writing panache in recent opinions, with the one we now post on involving a contractual attorney’s fees issue.

            In Regency Midland Construction, Inc. v. Legendary Structures Inc., Case No. B292602 (2d Dist., Div. 8 Nov. 7, 2019) (published), a general contractor won a summary judgment in litigation against a subcontractor, with the general contractor vindicated in withholding a $125,000 retention after the subcontractor quit and contractor found a replacement sub to complete the work.  The trial judge also awarded attorney’s fees to contractor under a contractual fees clause in the parties’ construction contract.

            The lower court’s rulings were affirmed on appeal.  On the merits of the contractual interpretation ruling, the appellate court made an analogy to statutory interpretation by observing: “Felix Frankfurter repeatedly said the three rules of statutory interpretation are to read the statute, read the statute, and read the statute.  The same wise counsel applies to interpreting every text.  So we read read read the contract . . . .”  The panel vindicated the lower court’s interpretation of the retention provision.  With respect to the fees issue, contractor did realize its litigation objective on the retention withholding such that it did prevail.  Although contractor might have won less than it requested, this is relevant only in a damages-only trial where the defendant stipulates to liability, Olive v. General Nutrition Centers, Inc., 30 Cal.App.4^th 804,, 822-829 (2018), not the situation before the 2/8 DCA in this matter—contractor achieved its litigation objective.