CALIFORNIA ATTORNEY'S FEES

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attorney’s fees request was denied again in Marriage of Restaino, Case No. G054778 (4^th Dist., Div. 3 Nov. 14, 2019) (unpublished).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.

Civil Rights: Second District Affirms $46,800 Attorneys’ Fees Award Against Unsuccessful Whistleblower Plaintiff

A Lawsuit Brought In Bad Faith With Several False Statements In His Complaint Sealed The Deal For This Plaintiff.

            In Marciano v. City of Los Angeles, Case Nos. B287477 and B288907 (2d Dist., Div. 8 November 4, 2019) (unpublished), two police officers brought a whistleblower lawsuit against the City of Los Angeles claiming retaliation for reporting that they were subjected to an unlawful ticket quota.  After deposition testimony revealed that several statements made in their complaint were untrue, one of the plaintiff officers dismissed himself from the lawsuit.  Afterward, the City filed a motion for summary judgment against the remaining officer.  During a meet and confer one month later, City informed the remaining plaintiff officer that it seek to recover attorney fees under Code Civ. Proc. section 1038 should he continue to pursue his claim.  Instead of dismissing his suit, the officer filed his opposition to City’s motion for summary judgment.  After oral argument, the trial court ruled in City’s favor on the summary judgment motion based on the officer’s failure to show two of the three required grounds, under Labor Code section 1102.5, for a whistleblower retaliation case - (1) that City’s acts subjected him to adverse employment actions; and (2) that he failed to establish causation.

            City then successfully moved for $46,800 in attorneys’ fees.  The officer appealed both the summary judgment grant and the attorneys’ fees award.

            The 2/8 DCA affirmed.  First, the officer had forfeited his challenge against the trial court’s grant of the summary judgment by failing to address the trial court’s ruling on the causation issue in his opening brief.  Because the officer forfeited his challenge to the trial court’s ruling on causation, the 2/8 DCA did not have to make a decision regarding his challenge against the trial court’s ruling on adverse employment actions.

            As to attorney fees, Code Civ. Proc. section 1038(a) allows for the award of attorney fees against an unsuccessful plaintiff if the action was brought without reasonable cause and good faith.  Here, the 2/8 DCA found substantial evidence showed that the officer did not bring his action in good faith, and therefore did not have to address the reasonable cause issue.

Probate: Beneficiary’s Continuous Bad Faith Objections To Trustee’s Activities and Accountings Cost Him A Surcharge Of $153,245.25 In Attorneys Fees and $11,339.79 In Costs

Beneficiary’s Contention That Trial Court Erred In Concluding His Objections Were Made In Bad Faith Was Not Supported With Evidence Or Authority.

            In Ettinger v. Gaskin, Case No. B287857 (2d Dist., Div. 3 November 4, 2019) (unpublished), two brothers, Roger and Arnold, were beneficiaries to their parents’ trust.  After their father passed, their mother divided the trust into 3 sub-trusts.  She named her grandnephew attorney as successor trustee to one (the “Survivor’s” trust), and Roger and Arnold as co-successor trustees to the other two.  Grandnephew assumed his duties about a year before mother passed and, at some point, also assumed ministerial duties on the other two trusts.

            When grandnephew filed his second accounting for the Survivor’s trust, Roger filed objections – just as he had unsuccessfully done with the first accounting and the accountings filed for the other two trusts.

            Substantial evidence presented at trial showed Roger as having malicious intent, his  continuous efforts to obstruct Arnold’s and grandnephew’s attempts to administer the trusts, his efforts to hire an assassin to kill Arnold and Arnold’s wife, and Roger’s efforts to sabotage other litigation matters related to the mother’s estate.  Additionally, Roger’s visitations with his mother before her death had been court restricted. 

            To perform his duties as successor trustee, grandnephew had hired two attorneys to represent him – one specializing in estate law and elder abuse, the other in estate law and accounting.  The two attorneys provided reasonable explanation and careful analysis for their billing practices and apportionment of litigation issues between them – which the trial court found to be reasonable under the circumstances.  Roger’s testimony, however, was found to be “manifestly not credible” and “patently false” by the trial court.

            In the end, all fees and costs in the second accounting were approved, and all of Roger’s objections were overruled as being made without reasonable cause and in bad faith.  Grandnephew filed a petition requesting a surcharge amount against Roger’s share of the Survivor Trust, of $153,245.25 in attorneys’ fees and $11,339.79 in costs – which was granted in full.

            Roger apparently found the trial court’s decision objectionable because he appealed.  However, he went to the appellate court without evidence, argument, or authority supporting his contention that the trial court erred in its conclusion that his objections were unreasonable and made in bad faith.  Instead, he complained that the trial court had denied his request for a trial continuance and had excluded an exhibit at trial.

            When this happens, the appellate court may decline to consider the issue and treat the appellant’s contentions as waived.  However, the 2/3 DCA addressed the appellant’s contentions – despite the shortcomings in the appellate brief.

            First, his complaint about the denial of the trial continuance – made on the day before trial – was without merit.  Roger had requested a 60-day continuance to allow his attorney, who had substituted into the case, to get up to speed with the case.  This motion was renewed on the day of trial with Roger’s attorney informing the court that a 7-day continuance would suffice.  The 7-day continuance was granted over the objections of Arnold and grandnephew.

            Next, the 2/3 DCA found no abuse of discretion in the trial court’s exclusion of one exhibit.  The exhibit was a declaration that was not included on the joint exhibit list, had not been shared with opposing counsel, and did not pertain to the main issue at trial.  Therefore, there was also no prejudice to Roger in the exclusion of this exhibit.

Family Law: Singer/Actor Tyrese Gibson Achieves $47,485 Reduction To Needs-Based Attorneys Fees Awarded To Ex-Wife Based On Trial Court’s Calculation Error

Significant Disparity Between The Parties' Income And Assets Mandated The Fee Award.

            In In re Marriage of Gibson, Case No. B294875 (2d Dist., Div. 1 November 1, 2019) (unpublished), ex-wife sought $170,890 in Family Code §§ 2030 and 2032 needs-based attorneys fees when ex-husband, singer/actor Tyrese Gibson, moved for a move-away order to allow him to move their daughter to his home in Atlanta, Georgia.  The trial court, looking to avoid a lot of back-and-forth on the fees issue throughout the duration of the litigation, requested a declaration from ex-wife’s attorney itemizing the specific anticipated legal work to be conducted through trial on the move-away petition.   

            After a 51-hour reduction for unnecessary/ unreasonable time and for time to be spent on work irrelevant to the move-away petition, the trial court ordered Mr. Gibson to pay $147,140 in ex-wife’s attorneys’ fees through a schedule of installment payments set forth in the order.  The trial court further ordered that – should Mr. Gibson’s move-away petition be successful, and he subsequently seek an order modifying child support – he pay an additional $14,725 in needs-based attorneys’ fees.

            Mr. Gibson moved for a new trial regarding the fee award, but his request was denied as an improper remedy as no “trial” had been held – with a motion for reconsideration being the appropriate vehicle.  Additionally, the trial court issued an order conditioning its further consideration of Mr. Gibson’s move-away petition on compliance with the attorney fee award.

            Mr. Gibson appealed – claiming the trial court: (1) failed to consider his monthly expenses and obligations, including his own attorney fees; (2) had improperly viewed his real property assets as a source of funds; (3) had abused its discretion in awarding fees because of wife’s ability to pay some of her own legal expenses; (4) abused its discretion by requiring him to pay additional fees if he succeeded on his move-away petition and sought a child support modification; (5) ordered fees in an amount greater than what it deemed reasonably necessary; and (6) that the installment schedule set forth in the order was not manageable.

            The 2/1 DCA rejected Mr. Gibson’s arguments and affirmed, with one exception – that the attorney fees award be reduced to $99,655 due to a calculation error made by the trial court, and that a new installment schedule be entered in line with the reduced amount.

            There was no abuse in discretion in awarding attorneys’ fees to ex-wife under sections 2030 and 2032.  Significant income disparity brought section 2030 into play – which allows an award of attorneys fees even if the party receiving the award has some ability to pay – in order to assure parity in the parties’ legal representation.

            The 2/1 DCA found that unlike the trial courts in In re Marriage of Keech (1999) 75 Cal.App.4^th 860 and Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238, the trial court here had not failed to consider Mr. Gibson’s expenses and other obligations, and ability to afford his own attorney.  It further agreed with the trial court – that even if Mr. Gibson had a monthly shortfall in meeting the scheduled payments, he has the ability to obtain funds through the approximate $1.8 million equity in his homes, his $100,000 bank account, and the ability to adjust his discretionary expenses.  Following the reasoning in Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238, 255, the 2/1 DCA found the trial court appropriately considered the equity in Mr. Gibson’s real property assets in determining his ability to pay.

            Finally, there was no error and no abuse of discretion as to the trial court’s contingent fee order tied to, and derived from, the success of Mr. Gibson’s move-away petition. If Mr. Gibson’s move-away petition were unsuccessful and he, therefore, did not seek a modification in child support as a result thereof, the contingent fee order would not come into play.  Fee awards under section 2030 necessitate that courts make educated estimates on work yet to be performed, and provides them the discretion to do so.   The trial court had reduced from ex-wife’s attorneys’ fees request the amount anticipated to conduct financial discovery.  Financial discovery would, however, become necessary if Mr. Gibson moved for a modification of child support as a result of the move-away outcome.  Having the fee information for the financial discovery already before it, the trial court simply shifted the burden, with respect to fees, to Mr. Gibson.  It would be up to him to request a revision to that fee award before filing a modification request.

SLAPP: Despite Voluntary Dismissal Without Prejudice And Filing Of Parallel Federal Case, SLAPP Moving Defendants Entitled To Recovery Of Some Mandatory Fees

However, As Against One Defendant, SLAPP Fees Not Allowable On Plaintiff’s Intentional Infliction Of Emotion Distress Claim.

            In Astre v. McQuaid, Case No. A154945 (1^st Dist., Div. 2 Oct. 31, 2019) (unpublished), defendants filed a SLAPP motion against plaintiff’s state court complaint, with plaintiff choosing to voluntarily dismiss it without prejudice and seeking relief under a parallel federal court action.  Defendants moved for SLAPP fees, perfectly proper after even a voluntary dismissal, with the trial judge having to adjudge the merits of the SLAPP motion (to determine if the defense would have won) and then ultimately awarding $5,319.82 in SLAPP fees to defendants.

            Most of the fees award was affirmed on appeal, except on one claim as to one defendant.

            Plaintiff mainly argued that the fees motion was premature, but that was doomed by the nature of the SLAPP process which allows a court to assess the merits and award fees if the SLAPP motion was meritorious.  In this regard, the 1/2 DCA followed the reasoning in Tourgeman v. Nelson & Kennard, 222 Cal.App.4^th 1447, 1452, 1457 (2014), which held that a SLAPP merits determination was a prerequisite before awarding fees under a dismissal situation, expressly disagreeing with a more non-merits discretionary perspective expressed in Coltrain v. Shewalter, 66 Cal.App.4^th 94, 107 (1998).  The trial judge did not err in following Tourgeman over Coltrain.  With respect to the precise prematurity argument, the appellate court rejected it because “[under plaintiff’s] position, a motion for attorney fees could be postponed indefinitely if the plaintiff claims its objectives might still be achieved by different, unidentified means in the future, but this result would not serve the purposes of the anti-SLAPP statute, which include ending SLAPPs early and without great cost to the SLAPP defendant.”  (Slip Op., p. 10.) 

            Nevertheless, because the intentional emotion distress claim was not necessarily lacking in merit on the second step of the SLAPP analysis, the award against one defendant has to be revisited on remand.

Sanctions: Fourth District Affirms Monetary Sanctions Imposed Against Plaintiffs And Their Attorney For Abuse Of The Discovery Process

Appealing The Order Without A Reporter’s Transcript And With Only Partial Excerpts From The Clerk’s Transcript Proved To Be A Fatal Flaw.

            In Williams v. Hernandez, Case No. E071599, (4^th Dist. Div. 2 October 28, 2019) (unpublished), plaintiffs and their attorney challenged a monetary sanctions order issued against them for repeated failures to respond to discovery requests and attend scheduled depositions.

            To support their position, they provided the Fourth District with an inadequate record and no reporter’s transcript.  As a result, the 4/2 DCA deemed their argument forfeited.

            Additionally, the 4/2 DCA found no abuse of discretion upon review of the partial record that was provided.  Rather, the limited record established the abuse of the discovery process and provided ample grounds for the trial court’s order.

            BLOG COMMENT:  If you are appealing an order on an abuse of discretion standard, as here, it is essential to provide an adequate record for review – including a reporter’s transcript.

Family Law: $48,000 Needs-Based Attorney’s Fee Award Affirmed Against Husband Asserting No Monthly Income

Bank Records Showed Husband Had Monthly Non-Taxable Income of $62,896.86

            In Marriage of Gu and Gao, Case Nos. B290406 and B292480 (2d Dist., Div. 1 October 28, 2019) (unpublished), couple met in Hong Kong and began living together in 2015, coming to the United States in 2016 when husband sought political asylum.  They settled in California in April 2016, had twin daughters a month later, then married in December 2016.  Four months later, husband filed for divorce.  He was arrested the same day on suspicion of domestic violence. 

            During their time together, the couple had enjoyed an “extremely extravagant and affluent lifestyle” paid for entirely by husband.  Wife did not work and had few assets.

            When wife requested temporary spousal support, child support, and a needs-based attorney’s fees award, husband claimed he had no income.  He provided a 5-month period of bank statements showing deposits that averaged only $773.12 per month.  However, evidence provided by wife showed husband owned numerous businesses, had recently sold $4.1 million in stock, and had deposited a total of $754,762.32 into the couple’s joint checking account in the year preceding his dissolution petition.  After reviewing the evidence and hearing testimony from husband and wife, the trial court found that husband had complete and total access to money up until he petitioned for dissolution.  Husband was ordered to pay monthly temporary support of $13,356 in child support and $8,000 in spousal support, and $48,000 in needs-based attorney’s fees.  Husband appealed.

            Husband argued that the trial court should have calculated support based on the 5-month period of bank statements showing deposits of only $773.12 per month.  The 2/1 DCA disagreed – citing In re Marriage of Riddle (2005) 125 Cal.App.4^th 1075, 1083 [“It is a manifest abuse of discretion to take so small a sliver of time to figure income [for support orders] that the determination essentially becomes arbitrary”] – and found no abuse of discretion in the trial court’s orders.

Allocation, Civil Rights, Employment: No Abuse Of Discretion Where Trial Court Held Employer And VP Jointly And Severally Liable For Attorney Fees With No Apportionment Nor Statutory Fees Cap For CMIA Claim

Former Employee Achieved Her Litigation Objectives With Set Of Facts Common To All Causes Of Action.

            In Gwin v. Natvan, Case No. B292990 (2d Dist., Div. 1 October 1, 2019) (unpublished), former employee sued employer and its vice-president (husband of employer’s owner) asserting 13 separate causes of action – several of which allowed her to recover reasonable attorneys’ fees if she prevailed. 

            After phase 1 of a bifurcated bench trial, the trial issued tentative rulings finding in former employee’s favor on 9 of 10 causes of action against employer, and 2 of 11 claims against VP.  The parties then settled before the remaining issues were tried.  The settlement agreement included $170,000 payable by employer and VP, employer’s and VP’s guarantee of the settlement payment, and it preserved attorney fees claim for later resolution through motion practice.

            Former employee then moved for an attorneys’ fee award of $1,214,340, which included $821,940 in lodestar fees and multiplier fees of $392,400.  The trial court awarded the lodestar with no multiplier, “as reasonable and warranted” without further explanation, against employer and VP jointly and severally. Employer and VP appealed. 

            VP argued it was error to hold him jointly liable for the full fee award because the tentative ruling exonerated him on most claims – with the only claim for which he was found liable, that provided for an attorneys’ fees award, being the Confidentiality of Medical Information Act (CMIA) claim which puts a $1,000 cap on recovery of attorney fees (Civ. Code § 56.35).   The 2/1 DCA disagreed and, in paraphrasing Yogi Berra, put it this way, “[A] trial ain’t over till it’s over.”  VP was focused on the tentative ruling, but that was not the end of the case, the tentative was never finalized, another phase had yet to be tried, and the parties entered into a settlement agreement wherein employer and VP agreed to payment of settlement proceeds – without allocation or severance of their liabilities – on multiple causes of action in addition to the CMIA claim. Because VP had agreed to be jointly responsible for payment on claims other than the CMIA claim, there was no abuse in discretion holding VP jointly and severally liable for the fees award.

            Both employer and VP argued that the trial court erred by failing to apportion fees between claims for which fees were statutorily authorized and those for which fees were not, and by failing to enforce the statutory fees cap on the CMIA claim.  The 2/1 DCA, again, disagreed – finding former employee’s causes of action to be so intertwined, with her causes of action based on a common set of facts, that apportionment was not required.  As to the $1,000 cap for the CMIA claim, the 2/1 DCA found that section 56.35 did not require apportionment, that employer and VP failed to show that the ultimate fee award would have differed if the CMIA claim were apportioned and capped, and that “[a]pplying the CMIA to limit fees on work inextricably intertwined with other claims on which [former employee] prevailed and would otherwise be entitled to recover attorney’s fees would burden, not encourage, the enforcement of statutory rights.” 

Experts, Probate: First District Affirms $24,755.60 Expert Costs Award And $180,285.25 Fees Award, Which Included $8,245 In Fees On Fees, To Defendants Successfully Contesting Decedent’s New Will

Plaintiff Seeking To Probate New Will Was Decedent’s Long-Time Attorney Friend Who Drafted And Benefited From New Will.

            A person challenging the validity of a will on the grounds of undue influence or lack of testamentary capacity bears the burden of proof under Probate Code § 8252(a).  This burden shifts, under Probate Code § 21380, when a presumption of undue influence arises from the challenger’s showing that the person accused of undue influence (1) had a confidential relationship with the testator; (2) actively participated in procuring the instrument’s preparation or execution; and (3) would benefit unduly by the testamentary instrument. (Rice v. Clark (2002) 28 Cal.4^th 89, 97.)  When this happens, the proponent of the will has the burden of proving the absence of undue influence.  If he/she cannot, Probate Code § 21380(d) mandates the beneficiary to bear all costs of the proceeding, including reasonable attorney’s fees.

            This is what happened in Laguatan v. Pablo, Case Nos. A152115, A152250 (1^st Dist., Div. 3 Sept. 30, 2019) (unpublished).  Here, decedent executed a holographic will that left most of his estate to his two cousins.  Seven months later, he was admitted to a hospital suffering sepsis, pneumonia, heart failure, senility, and other ailments.  During this time, his long-time friend, a California-licensed immigration attorney, had him execute a new will that the attorney had actively procured.  The new will revoked the holographic will, reduced the gifts to the cousins, named attorney friend as the sole executor, and provided attorney friend the residue of the estate – after payment of debts and distribution of specific gifts – to “manage and dispose of . . . according to guidelines relating to Christian humanitarian charitable principles which we both agree on and accede to.”  The new will provided no oversight for management and disposal of the residual estate assets.

            When attorney friend sought to probate the new will, the cousins successfully challenged on the grounds of undue influence and lack of testamentary capacity, and successfully moved to have the holographic will admitted to probate.  Cousins’ successful challenge triggered fees and costs under § 21380(d), and the trial court awarded them with $27,427 in costs, which included $24,755.60 in expert costs, and $180,285.25 in fees after a $7,950 reduction for some duplication.  The fees award included fees on fees in the amount of $8,245.

            Attorney friend appealed the trial court’s judgment denying his petition to probate the new will and the post-judgment award of fees and costs, but the 1/3 DCA affirmed – finding the trial court had properly applied the presumption under section 21380 and had not abused its discretion in the post-judgment fees/costs awards. 

            Attorney friend’s arguments that the fees were excessive with too many hours billed, too many timekeepers, inflated rates for the attorneys and paralegals, vague time entries, non-compensable clerical work, and block billing went nowhere as he failed to meet his burden to point to the specific items he challenged, with sufficient argument and citations to the record.  The 1/3 DCA agreed with the trial court’s findings that fees were driven up by Friend’s own actions – meritless summary judgment motion and evidentiary objections, two trial continuances, and refusal to enter stipulations of undisputed facts.  Cousins had submitted detailed billing records and declarations in support of their initial request for fees and subsequent request for fees on fees.  As to attorney friend’s argument that the costs award was excessive and that the expert billed for two trial days, even though testifying on only one day, the 1/3 DCA found no abuse of discretion.  The expert fees were driven up by attorney friend’s actions – requesting a continuance on the day the expert had arrived prepared to testify. The continuance caused the expert to prepare for and attend a second trial day and testify when trial resumed over four months later.

Judgment Enforcement, Prevailing Party: Trial Court Properly Denied Plaintiff’s Motion For Attorney Fees In An Action Brought Under The Uniform Foreign-Country Money Judgments Recognition Act

The Foreign Judgment Was Never Recognized In The California Court Given The Parties Entered Into A Settlement Agreement Prior To A Determination On The Request For Recognition.

            The Uniform Foreign-Country Money Judgments Recognition Act (Code Civ. Proc., § 1713 et seq.) (UFCMJRA) allows California courts to recognize and enforce judgments entered by courts in foreign countries.  However, recognition of a foreign judgment is not a foregone conclusion.  Rather, the party seeking recognition and enforcement of a foreign judgment must first file an action in trial court, and has the burden of establishing that the foreign judgment is entitled to recognition.  Once this burden is met, the opposing party then has the burden of establishing that a ground for nonrecognition exists.

            In Vischer AG v. Appollo Enterprise Solutions, Case No. B289410 (2d Dist., Div. 1 October 25, 2019) (unpublished), plaintiff brought a motion under UFCMJRA based on a judgment entered in its favor by the Commercial Court of the Canton of Zurich, Switzerland.  Defendant opposed the request for recognition and enforcement, but settled the dispute with plaintiff, approximately eleven months after the action was initiated, for slightly more than half of the amount plaintiff sought.

            Plaintiff then moved for an award of attorney fees for the UFCMJRA action claiming entitlement as the prevailing party for having achieved more than half of what it was seeking in the California action.  The trial court denied – determining that “[i]n a settlement there’s no prevailing party,” that there was no statutory basis for awarding attorney fees in this case, and that the Swiss judgment had never been recognized under the UFCMJRA as the action was dismissed following the parties’ settlement agreement.  

            On appeal, plaintiff argued that it was entitled to attorney fees for its judgment enforcement efforts under Swiss law and was therefore entitled to the same under the UFCMJRA.  The Second District disagreed.  The Swiss judgment had no force in California courts because it was never recognized under the UFCMJRA, and therefore could not provide a basis for an award of attorney fees. 

            BLOG COMMENT – The 2/1 DCA referenced its earlier decision Wertheim LLC v. Currency Corp. (2019) 35 Cal.App.5^th 1124, 1131 in applying the standard of review for statutory entitlement to attorney fees.  Co-contributor Mike was one of the appellate counsel on the Wertheim case which was discussed in our June 10, 2019 post.

SLAPP: Fourth District Affirms $26,828.41 Fees/Costs Award To Successful SLAPPing Defendant Finding No Abuse Of Discretion

Plaintiff Real Estate Developer Failed To Provide The 4^th District With Any Evidence That The Award Was Excessive Or Biased.

            In SCPB Holdings v. Taggett, Case No. D074991 (4^th Dist., Div. 1 October 25, 2019) (unpublished), plaintiff real estate developer sued defendant and others for contractual interference and defamation, among other claims, after a home buyer canceled his contract with it to purchase a residential property in San Diego. 

            Defendant followed in the steps of two of her co-defendants and successfully SLAPPed back – upheld in unpublished May 24, 2019 opinion.  She then moved for attorney fees/costs of $32,360.82 for which the trial court awarded $26,828.41 after deduction for 10 hours work spent researching and drafting the anti-SLAPP motion, noting that “counsel was able to benefit from the [codefendants’] motion.”

            On appeal, plaintiff argued that the fees/costs award was excessive because defendant’s motion was copied from the co-defendants’ motion, yet provided no evidence that the motions were duplicative.  The Fourth District found this argument unpersuasive as anti-SLAPP motions filed in the same action would be necessarily similar, and the trial court had deducted 10 hours from the requested award for this reason.  Plaintiff also argued that the fees/costs award was motivated by bias, but provided no evidence to support this claim.

            As the Fourth District put it, “[Plaintiff] simply disagrees with the trial court’s decision, which is manifestly not a basis to overturn an award of attorney fees and costs.”

Prevailing Party, Section 1717: Base Dispute Over $515 Ballooned Into Dispute Over $50,858.50 Fee Award In Favor Of Prevailing Parties, One A Nonsignatory To An Invoice

Can’t Make It Up, With A Nonsignatory Being Entitled to Fees Had The Other Side Won Against The Nonsignatory.

            You really cannot make up some of the decisions we post on.  Ehiemenonye v. Escobar, Case No. B285915 (2d Dist., Div. 8 Oct. 23, 2019) (unpublished) clearly falls in this category.

            As unbelievable as it sounds, this case stemmed from plaintiff’s failure to pay a $515 balance on her account which resulted in her not being able to claim some vehicles being shipped from Nigeria.  Then, litigation ensued, with plaintiff not prevailing against various defendants, some of whom were parties to an invoice with an attorney’s fees clause and one of which was a nonsignatory (although plaintiff sued as if the nonsignatory was a contractual party).  Plaintiff lost, was denied attorney’s fees, and was hit with a fee award of $50,858.50 as against some prevailing defendants.

            The judgment and fee award were affirmed on appeal.

            Plaintiff’s argument that she was entitled to private attorney general fees for vindicating a public interest for forcing certain defendants to revive their corporate status did not resonate at all.  After all, this was a private dispute—that argument did not even get to first base. 

            The problem with the attack on the defense fee award was simple:  there was an invoice with an attorney’s fees clause.  With respect to one nonsignatory defendant, plaintiff sued it under the theory that it was a contractual party.  Plaintiff lost that argument such that Civil Code section 1717 reciprocity principles supported the fee award.  (Hyduke’s Valley Motors v. Lobel Financial Corp., 189 Cal.App.4^th 430, 435 (2010).)