CALIFORNIA ATTORNEY'S FEES

Homeowner Associations, Prevailing Party: Trial Court’s Call That HOA Was Prevailing Party, Although Homeowners Had Partial Success, Was No Abuse Of Discretion

$157,146.44 Was Fee Assessment Against Homeowners Arising Out Of Landscape Dispute.

            In a somewhat complimentary unpublished decision to Harris v. Rojas (a Second District decision we posted on recently), the Third District in Winchester Community Assn. v. Perrotta, Case No. C085295 (3d Dist. July 20, 2021) (unpublished) had to review a discretionary “prevailing party” decision under the Davis-Stirling Act fee shifting statute by which the HOA was awarded $157,146.44 in attorney’s fees against homeowners in a landscaping submission dispute.  (Harris dealt with a denial of fees on a discretionary basis.)  Even the trial and appellate court acknowledged that homeowners gained some partial successes, but they were ultimately unsuccessful in invalidating a prior settlement agreement between the parties or in excusing themselves from a duty of performance as far as resolving the dispute.  The “prevailing party” determination was a discretionary one, and the lower court did not exceed the bounds of reason in coming to that conclusion as supported by some earlier caselaw.  (See, e.g., Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5^th 252, 256, 261 (2016) [reviewed in our August 13, 2016 post]; Almanor Lakeside Villas Owners Assn. v. Carson, 246 Cal.App.4^th 761, 775-776 (2016) [reviewed in our April 21, 2016 post].)

Prevailing Party: Party Winning Only $6,450 Of $200,00 Sought In Damages Did Not Prevail For Civ. Code § 1717 Purposes And, When Other Lawsuit Was Considered, The Other Side Won The Overall War So As To Seal The “Non-Prevailing Party” Determination

Case Has Interesting Observations On The Necessity To File A Related Case Notice, Present An Adequate Appellate Record, And Show Common Sense As Far As Claiming To Be A Prevailing Party.

            Justice Wiley has authored, on behalf of the 2/8 DCA, a colorful decision on who is a “prevailing party” for Civil Code section 1717, but also reminds readers that related case notices are mandatory, that appealing parties must provide an adequate record (including a reporter’s transcript and ample pleadings at the trial court level), that meeting litigation objectives is a pragmatic, objective test rather than a litigant’s lust for a large result, and that a prevailing party determination is not proper when one side won little or actually lost when the related case result is considered.

            In Harris v. Rojas, Case No. B305848 (2d Dist., Div. 8 July 20, 2021) (published), landlord and tenant got involved in a Burbank unlawful detainer action and then a Los Angeles broader damages action arising out of the lease.  Tenant won $6,450 in the L.A. lease breach case although asking the jury for $200,000.   However, landlord won $13,000 - $17,000, depending on interest calculations in the Burbank UD action although neither side gave a related case notice.  (TAKE NOTICE, LITIGATORS, THE APPELLATE COURT WAS VERY CRITICAL THAT NEITHER SIDE GAVE THIS MANDATORY NOTICE.)  Tenant then moved for contractual attorney’s fees under a bilateral fees lease clause in the amount of $296,744.68 (yes, you are not dreaming).  The lower court denied the fee request, reasoning that there was no prevailing party.

            Tenant appealed.  Bad move.  The fee denial was affirmed, producing a very interesting published appellate decision.  Aside from berating both sides for not filing a related case notice, the appellate court came close to simply finding that tenant failed to provide an appellate record, given the absence of trial transcripts and many pleadings below.  However, there was a pleading showing the $200,000 demand which allowed the prevailing party issue to be decided, just barely.  Justice Wiley also talked about the Civil Code section 1717 “prevailing party” analysis from a litigation objective perspective, meaning that the trial judge is in a unique perspective to decide it based on dealing with the litigants both on and off the record. 

            However, it was easy to decide tenant was not the “prevailing party” after gaining a few thousand in damages when earlier asking for $200,000 before the jury, and secondarily, losing the war when the undisclosed Burbank UD action resulting in a judgment for landlord was factored into the ultimate results.  No matter whether you considered the result in the L.A. action or considered it in tandem with the Burbank UD action, tenant did not clearly win—and probably lost the overall war in both suits.  The fee denial was well justified.

            Here is our favorite quote from the decision: “Litigation is a practical human endeavor, not an entertaining sport where rules can make a one-point margin into total victory. In litigation, spending great effort only to achieve little is not simple and unqualified success. Litigation is not for sport. It is to resolve disputes so everyone can return to productive activity. It always has costs, including opportunity costs.”

Requests For Admission: Trial Court’s Denial Of Prevailing Plaintiff’s Request For Costs Of Proof Fees Affirmed.

The Record Showed The Existence Of At Least One Of The Four Exceptions To The Otherwise Mandatory Fee Award Under Code Civ. Proc. § 2033.420.

            In Figg v. Mann, Case No. D078585 (4^th Dist., Div. 1 July 19, 2021) (unpublished), prevailing personal injury plaintiff appealed the trial court’s denial of his motion to recover his costs of proof against defendant for failure to admit to any of plaintiff’s injuries prior to trial – arguing that the award was mandatory under Code Civ. Proc. § 2033.420. 

            The 4/1 DCA found no abuse of discretion.  There are four exceptions to the mandatory costs of proof awards under § 2033.420: “(1) that an objection to the request was sustained or a response to the request was waived; (2) the admission sought was of no substantial importance; (3) the party failing to make the admission had reasonable ground to believe that the party would prevail on the matter; or (4) there was other good reason for the failure to admit the request.”  (Laabs v. City of Victorville, 163 Cal.App.4th 1242, 1276 (2008).)  The record in this case showed that plaintiff had opposed defendant’s attempts, no less than seven times, to obtain an expert medical examination that would have reasonably enabled defendant to admit or deny the requests for admission.  This created at least one clear reason that the trial court might have found a statutory exception to the mandatory award of costs – the “good cause” exception.  Based on the abuse of discretion review in this case – a “deferential standard of review . . . [that] requires [the reviewing court] to uphold the trial court’s determination . . . so long as it is reasonable” (Bloxham v. Saldinger, 228 Cal.App.4th 729, 753 (2014)) and determination as to whether any of the four exceptions apply falls “within the sound discretion of the trial court” (Brooks v. American Broadcasting Co., 179 Cal.App.3d 500, 508 (1986)), the panel affirmed.

Employment, In The News . . . . Attorney’s Fees Average More Than $405,000 Per Case And Average Settlement Is $1.2 Million In PAGA Cases

A Recent Study By CABIA So Concludes.

            Under the Private Attorneys General Act (PAGA), prevailing plaintiffs can obtain attorney’s fees for success on certain employment and workplace claims.  As reported in an OpEd article “Help business recovery, end PAGA” written by Ken Monroe in the July 18, 2021 edition of The Orange County Register, a recent study by the California Business and Industrial Alliance (CABIA) demonstrates that since creation of the law, attorney’s fees average more than $405,000 per case and the average settlement in such cases with PAGA claims is $1.2 million. 

Appealability, Lodestar, Partition, Substantiation Of Reasonableness Of Fees: Lower Court’s Award Of Fees To Winning Beneficiaries And Property Owner In Partition Action Was Affirmed On Appeal

Apportionment Under Partition Statutes Is Vested Within Lower Court’s Equitable Discretion.

            In Hofmann v. Hofmann, Case No. F079977 (5^th Dist. July 15, 2021) (unpublished), trustee son Michael was obviously not happy when he lost a partition action to trust beneficiaries (his siblings) and the current property owner.  Beneficiaries and property owner, respectively, filed attorney’s fees motions under the partition statutes, primarily Code of Civil Procedure sections 874.010 and 874.040, which allow the lower court wide discretion to determine if fees were incurred for a common benefit or should be apportioned against a loser who drove up the costs of litigation.  That is what happened to trustee Michael, with the lower court granting the beneficiaries $122,395.81 and the property buyer $191,031.50, about a 50% apportionment based on certain interests.  Michael was unhappy, so he appealed.

            The Fifth District affirmed the fee awards.

            With respect to the beneficiaries, they could not entertain the challenges because Michael failed to appeal the post-judgment fee order—something we have constantly reminded our readers to do.

            Although the appeal was timely as to property buyer, the buyer was entitled to fees under sections 874.010 and 874.040 because Michael engaged in some spurious activities and the “common benefit” apportionment was not out of bounds.  Michael also challenged the amount of fees, but the lower court properly utilized the lodestar method and Michael waived any challenge that the requested fees were “padded” because he failed to include the detailed billing records in the appellate record for review. 

Homeowner Associations: Champir Decision, Unpublished Earlier, Now Certified For Publication

Homeowners Did Achieve Their Pragmatic Objective, So Davis-Stirling Fees Were Justified.

         In Champir v. Fairbanks Ranch Assn., Case No. D077384 (4^th Dist., Div. 1 June 22, 2021) (unpublished), which we reviewed when it was unpublished in our June 29, 2021 post, homeowners received a substantial fee award for prevailing against HOA under a Davis-Stirling Act fee shifting provision.  We can now report that this case was certified for publication on July 15, 2021.

Fees As Damages: Denial Of Defendant’s Cross-Complaint Claim For Attorney’s Fees As Damages, Based On Trial Court’s Belief That It Was Constrained Under Copenbarger From Exercising Its Discretion, Reversed And Remanded For Retrial

The Trial Court Misunderstood The Scope Of Its Own Discretion Where It Was In The Middle Of An Active Trial And Could Have Ordered Unredacted Copies Of The Attorney’s Bills To Be Provided And Allowed Time For Opposing Parties To Depose Attorney.

            When the owner of an apartment building was sued for breach of contract regarding the sale of her property, she invoked the “tort of another” doctrine in her counter-suit against her real estate agent and the agent’s employer.  In her counter-suit, which proceeded to bench trial, owner mainly sought to recover the nearly $200,000 in attorney’s fees she incurred defending against the breach of contract action as the agent had forged her signature to the sales contract and related documents after owner rejected the buyer’s offer.  Just before trial, however, agent/employer filed a motion in limine to exclude the partially unredacted attorney billing records owner attempted to mark as trial exhibits – arguing unfair surprise as the billing records were not produced during discovery, and citing Copenbarger v. Morris Cerullo World Evangelism, Inc., 29 Cal.App.5th 1 (2018) [discussed in our October 20, 2018 and November 13, 2018 posts].  Then, during owner’s direct examination at trial, agent/employer objected to her testimony regarding the amounts paid to her attorney – claiming hearsay and citing Copenbarger. Ultimately – based on its interpretation of Copenbarger and belief that Copenbarger constrained it from exercising its discretion – the trial court sustained agent’s/employer’s objection to owner’s testimony, precluded judicial notice of the pleadings and papers in the court file to provide at least some evidence of the work performed by owner’s attorneys, and very reluctantly denied in entirety owner’s claim for fees as damages.

            In a 3-0 opinion, authored by Justice Dato, the 4/1 DCA reversed and remanded for retrial on the issue of fees as damages in Mai v. HKT CAL, Inc., Case No. D076708 (4^th Dist., Div. 1 July 12, 2021) (partially published – Copenbarger and evidence supporting fees as damages discussions published).  The panel disagreed with Copenbarger – concluding there is a critical distinction between the evidence necessary to support “attorney fees sought qua damages and attorney fees sought qua costs of suit.”  (Brandt v. Superior Court, 37 Cal.3d 813 (1985); Sooy v. Peter, 220 Cal.App.3d 1305 (1990).)  In a claim falling under the “tort of another” doctrine, which allows for the recovery of fees as damages when a plaintiff is forced into litigation with a third party due to the tortious conduct of defendant, the attorney fees are a type of compensatory damages and are recoverable in “the same way that medical fees would be part of the damages in a personal injury action.” (Brandt, supra, 37 Cal.3d at p. 817.)  As such, a prima facie case regarding the fees owner incurred and their reasonableness can be established by her testimony, and a hearsay exception for invoices exists for the limited purposes of corroborating a party’s testimony that he/she incurred a liability, and – if the charges were paid – as evidence that the charges were reasonable.  (Pacific Gas & Elec. Co. v. G. W. Thomas Drayage & Rigging Co., 69 Cal.2d 33, 42-43 (1968).) Additionally, judicial notice of attorney-prepared documents in the court file was an available means to provide some evidence of the work performed. (Bruckman v. Parliament Escrow Corp., 190 Cal.App.3d 1051 (1987).)

            The panel also found the trial court misinterpreted Copenbarger as stripping it of its own discretion.  Copenbarger was assessing evidentiary errors after a trial concluded and judgment had been entered.  However, the trial court in this case was presiding over an active trial and could have paused the proceedings, ordered unredacted copies of the attorney’s bills to be provided to agent/employer, and allowed time for them to depose owner’s attorney.

Employment, In The News . . . . Attorney’s Fees Average More Than $405,000 Per Case And Average Settlement Is $1.2 Million In PAGA Cases

A Recent Study By CABIA So Concludes.

            Under the Private Attorneys General Act (PAGA), prevailing plaintiffs can obtain attorney’s fees for success on certain employment and workplace claims.  As reported in an OpEd article “Help business recovery, end PAGA” written by Ken Monroe in the July 18, 2021 edition of The Orange County Register, a recent study by the California Business and Industrial Alliance (CABIA) demonstrates that since creation of the law, attorney’s fees average more than $405,000 per case and the average settlement in such cases with PAGA claims is $1.2 million. 

Appealability, Costs, Discovery: Denial Of $1.1 Million For Electronic Discovery Costs Reversed Because Lower Court Seemed To Indicate No Discretion On Awarding Them

Modern Trend Is To Recognize E-Discovery Recoupment Costs As Long As They Are Justified.

            Ya know, times change, technology changes, and jurisprudence changes.  Although unpublished, City of Los Angeles v. PricewaterhouseCoopers, LLP, Case No. B305583 (2d Dist., Div. 5 July 8, 2021) (unpublished) shows how electronic discovery costs may be awardable, if justified, based on  evolving technological changes from an early appellate court decision which was adverse to recovery of these costs.  (We do not discuss the affirmance of some substantial costs reductions for out-of-town attorneys traveling and attending depositions, because the reductions were in order given that the same law firm had Los Angeles attorneys who could attend rather than New York travelling attorneys.  If you need support for these reductions, you can read the decision.)

            What happened here is that the City of Los Angeles voluntarily dismissed a suit, with defendant moving to recover about $1.1 million in electronic discovery costs, mainly for processing/loading, hosting, and producing documents.  The lower court denied all the requested costs based on an older decision in Science Applications Internat. Corp. v. Superior Court, 39 Cal.App.4^th 1095, 1103-1104 (1995), deciding that routine costs in this area should be denied in an earlier time where the technology costs were substantial and the rationale for granting them was more attenuated.  Much has changed with technology since Science Applications, given that subsequent decisions generally show a proclivity to award these electronic discovery costs as long as they are supported as being necessary and reasonable in nature.  (See, e.g., El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4^th 612, 620 (2007); Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 990-991 (2013); Hooked Media Group, Inc. v. Apple Inc., 55 Cal.App.5^th 323, 338-339, 351 (2020).)  Because these costs are not prohibited and can be awarded in the trial court’s discretion, the denial based on an outright ban had to be reversed and remanded for another look. 

            BLOG MILEAGE TIME—Although there is a split in thinking, this appellate panel also sided with the view that an order taxing routine costs is appealable as a post-trial order, following Mesa Shopping Center-East, LLC v. O Hill, 232 Cal.App.4^th 890, 898 (2014) and Gassner v. Stasa, 30 Cal.App.5^th 346, 354-355 (2018), but not following the contrary decision in Mon Chong Loong Trading Corp. v. Superior Court, 218 Cal.App.4^th 87, 92 (2013).  The panel found its conclusion was consistent with the treatment of collateral final orders.  (Krikorian Premiere Theatres, LLC v. Westminster Central, LLC, 193 Cal.App.4^th 1075, 1083 (2011).) 

Probate: Beneficiary Successfully Defeating Settlement Agreement Based On Subject Matter Jurisdiction Argument Improperly Denied A Request For Fees

Any Argument Was Circular—Subject Matter Jurisdiction Win Did Not Mean Fee Request Evaporated, So A Remand Was In Order.

            A beneficiary won a successful defense to a trustee’s effort to enforce a settlement agreement on the basis that the probate court lacked subject matter jurisdiction to enforce that agreement, but the beneficiary was denied fees in Dunlevie v. Valletta, Case Nos. E072846 et al. (4^th Dist., Div. 2 July 7, 2021) (unpublished).  The appellate court reversed because the beneficiary win on the subject matter jurisdiction did provide a basis for an award of fees (because they did prevail, and that argument did not divest the probate court of ability to award fees).  Remanded for another try!

Employment: Denial Of Multiplier In Single-Plaintiff FEHA Case, Simply Based On One Plaintiff Case, Was An Abuse Of Discretion

Remand Was Required.

            In Guerrero v. Crown Energy Services, Inc., Case Nos. D076299/D077201 (4^th Dist., Div. 1 July 7, 2021) (unpublished), a single FEHA plaintiff won a compensatory damage verdict of $207,855.60 and a punitive damage verdict of $900,000 against defendants.  Plaintiff moved for $553,835 in lodestar fees enhanced by a 2.0 positive multiplier, for a total request of $1,107,671.  The trial judge awarded $342,284 in fees, denying a positive enhancement because it was a single-plaintiff case.  The 4/1 DCA reversed, because it chronicled many cases and found that a positive multiplier is not per se unallowable in a single-plaintiff case.  A remand will occur to reassess the multiplier request.

Homeowner Associations, Mediation: $318,426 Fee Award To HOA Prevailing On Encroachment Issue Was No Abuse Of Discretion

Parties’ Inability To Mediate Was A Discretionary Factor To Weigh In The Fee Calculus.

            HOA, in Country Glen Oak Park Homeowners Assn. v. Garrett, Case No. B303220 (2d Dist., Div. 6 July 6, 2021) (unpublished), won a case to require removal of a pool equipment encroachment by homeowners as well as $820 in compensatory damages.  The trial court then awarded HOA $318,426 out of a requested $323,579 in attorney’s fees under the Davis-Stirling Act fee shifting provision (Civil Code section 5975(c)).  That award was affirmed on appeal.  HOA’s failure to mediate was only a discretionary factor to weigh in a fee assessment, Civil Code section 5960, with the record showing both sides could not come to terms on how to approach a mediation.  With respect to the award itself, HOA did prevail on the overriding encroachment issue so to enforce CC&Rs, and the record showed the lower court did look closely at the amount being requested as far as fashioning an award.  This case goes to show you how HOA disputes can be costly and earth-shattering with regard to fee award allocations.

BLOG COMMENT—It is with sadness that we announce that Hon. Edward J. Wallin (Ret.) recently passed away in late May of this year.  He was a long-time former sitting justice of the 4/3 DCA and a JAMS neutral, who co-contributor Mike appeared in front of, from time to time, during his tenures as an appellate justice and neutral.  He also is the author of our Mission Statement quote--"All too often attorney fees become the tail that wags the dog in litigation,"  Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993), which has been quoted often by both California and out-of-state decisions. 

Section 998: Defendants’ Section 998 Offer Requesting Indemnification (And, Implicitly, Defense) Of Unspecified Non-Parties Made The Offer Too Vague For Enforcement

That Conclusion Erased $5,360 Expert Witness Fees Award Against Plaintiffs And In Favor Of Defendants.

            In Khosravan v. Chevron Corp., Case No. B307482 (2d Dist., Div. 7 July 6, 2021) (published), the Chevron Defendants won a summary judgment against plaintiffs after sending an unaccepted CCP §998 offer to dismiss for a waiver of costs plus indemnifying Defendants against possible future indemnification claims by unspecified non-parties.  Ultimately, the lower court granted $5,360 in expert witness fees against the unsuccessful plaintiffs, with those limited fees being the subject of the appeal.  (Other imposed routine costs were not challenged.)  Plaintiffs claimed that the non-party indemnification 998 term was incapable of ascertainment so as to render the 998 offer vague, with the appellate court agreeing because of the vagaries of ascertaining the value of the claims, both for indemnification and litigation defense reimbursement purposes.  (See also Toste v. CalPortland Construction, 245 Cal.App.4^th 362, 373 n. 6 (2016).)  Given this vagueness of being able to delineate the value of the 998 offer, the expert witness fees were reversed as a matter of law.

Probate, Section 1717: Section 1717 Prevailing Party Attorney Fees Of $84,402 Awarded To Plaintiff Pursuant To Trust’s No-Contest Clause Reversed On Appeal

No Basis For Fees Under No-Contest Clause Because Trust And Its Terms Were Not Contested, And Plaintiff Forfeited Argument For Fees Under Prob. Code § 17211(b) By Not Raising It Below.

            In Haley v. Konatich, Case No. A160725 (1^st Dist., Div. 2 June 29, 2021) (unpublished), three siblings were the beneficiaries of their late mother’s Trust. After the sister died, her husband – as executor of sister’s estate – sued the two brothers, and a related LLC controlled by the brothers, for his late wife’s share of the distributable trust estate. After prevailing against the brother who was the trustee of the mother’s estate, husband successfully moved to recover § 1717 attorney fees under a no-contest clause of the Trust – with the trial court awarding husband $84,402 against trustee brother, both individually and in his capacity as trustee, and against the related LLC.

            The 1/2 DCA reversed. As relevant in this case, a no-contest clause “shall only be enforced against . . . [a] direct contest that is brought without probable cause.” (Prob. Code § 21311(a)(1).) Pursuant to § 21310(b), a direct contest is narrowly defined as “a contest that alleges the invalidity of a protected instrument or one or more of its terms, based on one or more of the following grounds”: forgery; lack of due execution; lack of capacity; menace, duress, fraud, or undue influence; and/or revocation of a will pursuant to § 6120, revocation of a trust pursuant to § 15401, or revocation of an instrument other than a will or trust pursuant to the procedure for revocation that is provided by statute or by the instrument. As husband acknowledged, his lawsuit was not a contest of the Trust’s terms, but an effort to enforce the Trust. Trustee brother also did not contest the Trust or its terms. Rather, this dispute was ultimately over the interpretation of the Trust as a whole – with trustee brother being found by the trial court to be in breach of his fiduciary duty as to his sister.  Because there was no contest of or attack on the Trust or its terms, there was no basis to award legal fees under the Trust’s no-contest clause.

            Additionally, the panel declined consideration of husband’s argument that he was entitled to fees under Prob. Code § 17211(b) – which allows a trial court to award fees where a beneficiary contests the trustee’s account and the trustee opposes the contest without reasonable cause and in bad faith – because husband forfeited the argument by not raising it below.

Family Law: Section 271 Sanction Of $85,000 Reversed And Remanded For Determination Of Whether Imposition Of Sanction Would Constitute An Unreasonable Financial Burden

Before Issuing Sanctions Under Family Code § 271, A Trial Court Is Required To Consider The Parties’ Incomes, Assets And Liabilities, And Cannot Impose Sanctions That Constitute An Unreasonable Financial Burden On The Sanctioned Party.

            In Marriage of Luu and Avritch, Case No. A161935 (1^st Dist., Div. 1 June 29, 2021) (unpublished), the trial court sanctioned ex-wife $85,000 under § 271(a) after repeatedly warning her that the relief she sought was beyond that required under the terms of the parties’ dissolution judgment, that had been entered about two years earlier, and that it would impose sanctions.

            The 1/1 DCA reversed.  Section 271(a) allows the trial court to award attorney fees and costs, in the form of a sanction, against a party frustrating the policy of the law to promote settlement and reduce the cost of litigation.  However, while the imposition of sanctions under § 271 is left to the discretion of the trial court, § 271(a) requires the trial court to “take into consideration all evidence concerning the parties’ incomes, assets, and liabilities.”  Additionally, the trial court is not permitted to impose a sanction under § 271 that would impose an unreasonable financial burden on the sanctioned party.  Because evidence presented at the trial court hearing indicated that ex-wife was unable to pay the imposed sanction based on her current financial situation, and because the trial court had no evidence regarding ex-wife’s current income and assets, a remand was in order with directions that the trial court determine whether the sanction would impose an unreasonable financial burden on ex-wife.

Probate: Attorney Fees And Costs Awarded Under § 17211(b) Against Trustee, Who Opposed Petition For An Accounting, Affirmed On Appeal – Along With Denial Of Trustee’s Request For Fees Under § 15684

Trustee’s Opposition To Remainder Beneficiaries’ Petition For An Accounting Was Without Reasonable Cause And Was In Bad Faith.

            Trust beneficiaries normally – even if they prevail – pay their own attorney fees when challenging a trustee’s conduct.  However, as the saying goes, there is an exception to every rule. Pursuant to Prob. Code § 17211(b), “If a beneficiary contests the trustee’s account and the court determines that the trustee’s opposition to the contest was without reasonable cause and in bad faith, the court may award the contestant the costs of the contestant and other expenses and costs of litigation, including attorney’s fees, incurred to contest the account. The amount awarded shall be a charge against the compensation or other interest of the trustee in the trust. The trustee shall be personally liable and on the bond, if any, for any amount that remains unsatisfied.”

            In Enderle v. Enderle, Case No. G058326 (4^th Dist., Div. 3 June 29, 2021) (unpublished), a remainder beneficiary of a multigenerational irrevocable trust petitioned to compel his trustee uncle to provide an accounting, and the uncle opposed – arguing nephew, as a remainder beneficiary, was not entitled to an accounting because Prob. Code § 16061 references only beneficiaries. The trial court disagreed – citing Esslinger v. Cummins, 144 Cal.App.4^th 517, 525 (2006), which holds that a remainder beneficiary may request an accounting under § 16061 and then petition the trial court for an accounting if the trustee does not comply within 60 days. Additionally, the trial court granted nephew’s request for fees and costs under § 17211(b) – finding trustee uncle had acted without reasonable cause and in bad faith in refusing to provide nephew with an accounting. This result was affirmed on appeal. Section 17211 is not a prevailing party statute, and the determining factor for awarding fees/costs for uncle’s refusal to provide an accounting was whether that refusal was made in bad faith.

            Additionally, the 4/3 DCA, in a 3-0 opinion authored by Justice Goethals, affirmed the trial court’s denial of trustee uncle’s request for fees under § 15684. Because uncle’s refusal to provide an accounting was without reasonable cause, the attorney fees uncle incurred in defending that refusal were not “incurred in the administration of the trust,” nor as a benefit to the trust, under § 15684.

Landlord/Tenant: 2/4 DCA Affirms Denial Of LARSO Statutory Damages And Attorney Fees To Prevailing Tenant, And Affirms Award To Tenant Of Only $500 In Fees, Out Of The $71,000 Incurred, Pursuant To Amendment Capping Fees In Parties’ Lease

Tenant Failed To Assert Claims For Statutory Damages And Fees Under LARSO In The Lawsuit As Required, And The Fees Cap Was Valid.

            In 510PacificAve v. Weiss, Case No. B304369 (2d Dist., Div. 4 June 29, 2021) (unpublished), owner of an apartment building in Venice served tenant with notice of a 25% rent increase due to unauthorized occupancy of tenant’s apartment by her boyfriend.  The Venice apartment building is subject to the City of Los Angeles Rent Stabilization Ordinance (L.A. Mun. Code,1 ch. XV, §§ 151.00 et seq.) (LARSO).  When tenant disputed the increase, owner filed a lawsuit seeking declaratory relief regarding the applicability of a paragraph in the parties’ lease permitting such an increase.

            Six weeks after the trial court issued its final statement of decision – wherein it found that that the lease paragraph at issue was valid and enforceable to the extent it complies with the requirements of LARSO § 151.06(G), but that the rent increase was unenforceable for exceeding the limits of § 151.06(G) – tenant filed a motion for attorney fees and statutory damages under § 151.10.A (LARSO penalty ordinance mandating damages and fees/costs as determined by the trial court).  The trial court denied tenant’s request for both fees and statutory damages on the ground that § 151.10.A. was inapplicable because tenant never filed a cross-complaint or pled a claim for statutory damages.  However, the trial court awarded tenant $500 in attorney’s fees, of the more than $71,000 she claimed to have incurred, pursuant to an amendment to the parties’ lease that capped prevailing party attorney fees at $500. 

            Tenant appealed, and the 2/4 DCA affirmed.  Section 151.10.A. requires a defendant claiming statutory damages make the claim in the lawsuit – which tenant did not do – so that landlord’s liability, if any, may be determined at trial.  Additionally, the panel found no merit to tenant’s claim that the lease amendment capping attorney fees was statutorily illegal or in violation of LARSO.

Employment, Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: Third Circuit Court Of Appeals Affirms Denial Of Fees Where Wage/Hour Plaintiffs Had Limited Success And Fee Petition Was Not Properly Documented

Plaintiffs Only Recovered $6,601 Out Of Requested $180,000 In Damages And Attorneys Sought $118,569 In Fees.

            In Wang v. Chapei, LLC, Case No. 20-2975 (3d Cir. June 10, 2021) (nonprecendential), two wage/hour plaintiffs had their federal claim dismissed, were unsuccessful on class certification tries, and won about $6,601 out of a requested $180,000 in damages under a state statute with an employee-friendly fee shifting provision.  The district judge denied their $118,569 fee request in entirety based on (1) plaintiffs’ limited success, (2) the attorneys failing to justify their claimed hourly rates, and (3) sloppy fee petition drafting where the rate request was erroneously requested for over ten times the correct amount.  The Third Circuit affirmed, finding no abuse of discretion as well as indicating employment litigators should not expect large fee awards where the results were meager.

Private Attorney General: No Abuse Of Discretion In Trial Court’s Denial Of § 1021.5 Attorney Fees To Plaintiff Achieving A Significant Public Benefit

The Third District Applied The Standard For Determining Necessity Of Private Enforcement, Where The Attorney General Performs Its Function, Set Forth In Committee to Defend.

            After the Attorney General filed a complaint for declaratory and injunctive relief and petition for writ of mandate alleging defendant violated the California Wild and Scenic Rivers Act (Rivers Act) (Public Resources Code § 5093.542), plaintiff filed a similar complaint alleging defendant violated the Rivers Act in North Coast Rivers Alliance v. Westlands Water District, Case No. C092233 (3^rd Dist., June 28, 2021) (unpublished).  After plaintiff and defendant entered a stipulation for entry of judgment, which was identical to the stipulated judgments entered in the Attorney General’s cases against defendant, plaintiff moved for more than $303,835 in attorney fees pursuant to Code Civ. Proc. § 1021.5.  The trial court denied – finding that although plaintiff achieved a significant public benefit in obtaining the stipulated judgment, plaintiff provided nothing to show that it produced any evidence, let alone substantial evidence, contributing to the judgment, or any evidence that was not provided by the Attorney General.  Therefore, plaintiff had failed to meet its burden of showing that it rendered necessary and significant services necessary to the success achieved. 

            The Third District – following the standard for determining necessity of private enforcement set forth in Committee to Defend Reproductive Rights v. A Free Pregnancy Center, 229 Cal.App.3d 633 (1991) – found no abuse of discretion and affirmed. 

            In Committee to Defend, the trial court set forth two factors for trial courts to consider when determining whether the services of a private party were necessary where the Attorney General performs its function – whether the private party advanced significant factual or legal theories adopted by the court which were nonduplicative of those advanced by the governmental entity; and whether the private party produced substantial evidence significantly contributing to the court’s judgment which was not produced by the governmental entity, and which was neither duplicative of nor merely cumulative to the evidence produced by the governmental entity. 

Appeal Sanctions, Probate: 4/1 DCA Grants Brothers’ Request For $25,087.91 In Appeal Sanctions Against Sisters And Orders Sisters To Pay Additional $8,500 Sanction To The Clerk Of The Court

Sisters Were Previously Found To Be “Vexatious Litigants” Under Code Civ. Proc. § 391(b), Forfeited Claims On Appeal By Failing To Raise Them In The Trial Court And Failing To Follow Appellate Procedures, And Sought To Relitigate Claims Previously Decided By The Appellate Panel.

            Family members were involved in disputes over their deceased mother’s estate – with two sisters on one side, who were previously found to be "vexatious litigants" under Code Civ. Proc. § 391(b), and two brothers on the other – in Estate of Schooler, Case No. D076490 (4^th Dist., Div. 1 June 28, 2021) (unpublished). 

            In what was Sisters’ approximate 29^th action before the 4/1 DCA, involving family trusts and/or their mother’s estate, Sisters attempted to appeal claims and issues that had previously been decided against them by the appellate panel.  Additionally, Sisters' opening brief did not “include a fair and accurate factual and procedural summary to support their arguments,” contained little or no citation to the record – nor, in most instances, any legal support or analysis – and raised claims never raised in the trial court. 

            Based on its conclusion that Sisters’ appeal was both objectively and subjectively frivolous, the appellate panel dismissed the appeal and awarded Brothers $25,087.91 in sanctions imposed against Sisters to account for the attorney fees incurred by Brothers, the impact of the unnecessary delay on the probate proceedings, and to deter future misconduct.   (CRC, Rule 8.276(a); Code Civ. Proc. § 907.)  Additionally, the panel imposed another $8,500 sanction against Sisters, payable to the Clerk of the Court, for the estimated cost to the government and taxpayers of processing Sisters’ frivolous appeal. (Finnie v. Town of Tiburon, 199 Cal.App.3d 1, 17 (1988).)