CALIFORNIA ATTORNEY'S FEES

Discovery: 4/3 DCA Affirms Substantial $586,600 Discovery Order, With A Remand On A Relatively Smaller, Potential Add-On Amount, Against Plaintiffs, But Not Their Counsel

Principles Of Compulsion, Causation, And Reasonableness Are Beacons For Discovery Sanctions.

            Justice Fybel, the author of Cornerstone Realty Advisors, LLC v. Summit Healthcare REIT, Inc., Case No. G057176 (4^th Dist., Div. 3 Oct. 28, 2020) (published) on behalf of a 3-0 panel, has penned a decision which all litigation clients and attorneys should consult with respect to what principles govern discovery sanctions, given that much of modern day litigation expense is devoted to the discovery stage of a case in many instances.

            Plaintiffs got hit with terminating sanctions (not at issue) and monetary sanctions (at issue) for various discovery abuses under Code of Civil Procedure section 2023.030.  The defense requested about $2 million in sanctions, but the lower court awarded $586,600 instead, but only against Plaintiffs (not their counsel).  This awarded amount was three times over that recommended by a discovery referee (yep, referees are appointed all so often in contentious, high stake matters).  However, the defense appealed, arguing that more sanctions should have been awarded and they should have been awarded against Plaintiffs’ counsel.

            The 4/3 DCA affirmed a huge amount of the rulings, but it remanded for a fairly insubstantial amount at issue—agreeing that sanctions were not warranted against counsel.  This opinion is mandatory reading for litigators, because it teaches that three principles should always guide discovery sanctions requests by litigants, their counsel, and presiding trial judges.  Those principles are these:  compulsion; causation; reasonableness.  Read the decision to see why!

Section 998: Auburn Woods Decision From September 29, 2020 Now Published

Opinion Has A Nice Discussion On How To Structure An Effective 998 Offer.

            On September 29, 2020, we posted on the unpublished decision of Auburn Woods I Homeowners Assn. v. State Farm General Insurance, Case No. C085749.  It had a nice discussion on how to structure a valid CCP § 998 offer as far as acceptance, release of proper claims, and attachment of a settlement agreement for acceptance/rejection in connection with the offer.  We can now report that the 998 discussion was partially certified for publication on October 28, 2020. 

Civil Rights: $107,721 Fee Award Against Plaintiff Under 42 U.S.C. § 1988 Went Away On Appeal

Plaintiff’s Due Process Claims Were Not Frivolous—Timing Was Everything!

            Plaintiff, in Nemer v. City of Mill Valley, Case No. A159224 (1^st Dist., Div. 2 Oct. 28, 2020) (unpublished), was hit with a $107,721 adverse attorney’s fees award under 42 U.S.C. § 1988 based on the lower court’s perception that his due process claims were frivolous based on a summary judgment grant in City’s favor.  That result went away as a matter of law on appeal.  Plaintiff did get past a demurrer, and his real claim was for post-design review approvals which led the appellate court in a prior decision to determine that City did not determine its right to judgment as a matter of law.  Based on these circumstances, the fee award was reversed.

Employment, Multipliers, Costs: Employee Obtaining Partial Success In FEHA Case Properly Awarded $695,000 In Attorney’s Fees, No Expert Witness Fees, And Some Routine Costs

Plaintiff’s $2 Million Request, Inclusive Of A 2.0 Positive Multiplier, Did Not Gain Traction.

            Partial success and high hourly rates can often lead to reductions and rejection of a multiplier in contingency-driven cases under FEHA.  That is what basically occurred in Do v. Raytheon Co., Case No. B293950 (2d Dist., Div. 4 Oct 27, 2020) (unpublished).

            A FEHA plaintiff obtained a total $1.75 million compensatory/punitive damages award against his employer, prevailing on two out of eight claims.  Plaintiff then moved to recover close to $2 million in attorney’s fees under a FEHA shifting statute, $55,322.29 in expert witness fees, and other routine costs.  At the end of the day, the lower court awarded $695,000 in attorney’s fees, no expert witnesses fees, and some routine costs (taxing some messenger, mock trial, and jury consultant expenses).

            All of these determinations were affirmed on appeal.  No multiplier was justified, despite this being a contingency matter, because high hourly rates were being requested and plaintiff did not prevail on a significant number of claims.  Decreasing the fee claim for partial success was totally acceptable under California law, with the reduction off of the lodestar amount (around 20%) being okay.  Expert witness fees were properly denied because the experts did not testify at trial, such that they were not presumptively necessary or reasonable.  Finally, CCP § 1033.5 reasonableness requirements do govern FEHA costs requests, with the lower court’s discount of certain routine requests—messenger, mock trial, and jury consultant expenses—not being an abuse of discretion. 

Consumer Statutes, Section 998: $278,057 Lemon Law Fee Award And $56,882.89 Costs Award Affirmed On Appeal

The Reason—A Prejudgment Interest Award Of $2,600 Beat The Defense CCP § 998 Offer; Yes, It Was That Close—With Around $335,000 In Fees/Costs Being The Burden At The End.

            The Song-Beverly Act (better known as California’s lemon law) has a pro-plaintiff fee shifting provision; however, it is subject to Code of Civil Procedure section 998 fee/cost shifting features.  (Murillo v. Fleetwood Enterprises, Inc., 17 Cal.App.4^th 985, 1000 (1998).)  In the next case, unbelievably (but this is what case law is about), a car manufacturer failed to beat its CCP § 998 offer by $2,600 in prejudgment interest, exposing it to around $335,000 in fees and costs for a gamble that was not won.

            In Kadkhoda v. Daimler Vehicle Innovations USA, LLC, Case No. B293587 (2d Dist., Div. 5 Oct. 27, 2020) (unpublished), vehicle defendant—four months after filing its answer—sent a Code of Civil Procedure section 998 offer to repurchase plaintiff’s vehicle as well as pay plaintiff’s recoverable court costs, expenses, and reasonably-incurred expenses.  (Although plaintiff challenged many respects of the 998 offer, the appellate court—as did the trial judge—found the offer to be sufficiently valid and certain in nature, something defendant attorneys can look at because the exact 998 language was quoted in the opinion with respect to structuring 998 offers)  However, the problem was that the 998 offer did not address prejudgment interest, with the parties eventually agreeing that $2,600 was the figure.  That set off the normal fire storm of fee/costs motions, with the trial judge eventually awarding $278,057 in Song-Beverly fees and $56,882.89 in costs to plaintiff based on the perception that the defense 998 offer was beat based on the prejudgment interest award.

            The 2/5 DCA panel affirmed.  Plaintiff was entitled to prejudgment interest under the circumstances.  Because the 998 offer did not include prejudgment interest, plaintiff prevailed so that all of the awarded fees and costs were legitimate.  So, the lesson in this one is to make sure prejudgment interest is addressed in a 998 offer – so it would be to include repurchase language, plus prejudgment interest as awarded by the jury or court.  (However, you practitioners need to frame as necessary for a case, only saying …. Because you must draft as necessary in a given case.)

Reasonableness of Fees, Substantiation of Reasonableness of Fees: $2.1 Million Attorney Fees Award Upheld On Appeal Despite Billings Submitted With Excessively Heavy Redactions Defense Claimed Made Effective Challenge Impossible

The 2/8 DCA Determined Defense Counsel Could Have Used Its Own Knowledge Of The Case To Hire An Expert For A Determination Of Whether The Hours Requested Were Reasonable.

            In Los Angeles Unified etc. v. Torres Construction, Case No. B291940 (2d Dist., Div. 8 October 26, 2020) (unpublished), Defendant was hired by Los Angeles Unified School District to renovate middle and high school cafeterias in a three-phase project involving the purchase and installation of kitchen equipment and electrical upgrades.  Defendant’s performance on the project was bonded by Western Surety Company.  A few years into the project, LAUSD discovered some irregularities in Defendant’s billings and filed this action against Defendant and its Surety Company for breach of contract and breach of bond.

            After six years of litigation, LAUSD ultimately prevailed, and Surety Company was found liable on its bonds.  After the parties settled Defendant’s offset claims for withheld payments on other jobs, in the amount of $556,296.89 plus $151,958.47 in interest, LAUSD had a net recovery of $4,555,178.49 – consisting of $3,941,829 in damages, $1,232,887.88 in prejudgment interest, and $88,716.97 in costs.  Additionally, LAUSD was awarded $2,100,000.00 in attorney fees, out of a requested $2,123,277.20, against Surety Company.

            This appeal ensued – with Defendant and Surety Company challenging numerous trial court orders – but we will focus on Surety Company’s challenge to the attorney fees award.

            On appeal, Surety Company argued that the trial court violated its right to due process, and abused its discretion by “rubber stamping” LAUSD’s fee request – which was supported by its lead attorney’s declaration and extremely heavily redacted billings.  Surety Company argued that the billing submissions were meaningless due to the heavy redactions, and that the declaration did not have enough detail to allow an evaluation of or opposition to the fee request.  However, the 2/8 DCA found no abuse of discretion.  Although the trial court expressed concern about the heavily redacted billings and possible duplications – with Surety Company expressing the same, as well as an inability to determine whether LAUSD’s work was reasonably necessary and efficient – the appellate panel found, based on comments by the trial court, that the trial court was familiar with the amount of work and cost of a case like this and had found the fees reasonable.  Additionally, the appellate panel determined that Surety Company only disputed about $174,000 of the billings, and that the trial court’s reduction of $23,277.20 from LAUSD’s requested fees equated to 13% of that amount and likely reflected the trial court’s concern about duplicative entries.

            The 2/8 DCA found no merit to Surety Company’s contention that its right to due process was violated because it was unable to effectively challenge the fees request because of the heavily redacted billing – determining that Surety Company could have evaluated the overall hours billed by LAUSD based on its own counsel’s familiarity with the work involved in the case and appropriate hours for particular tasks.  The panel suggested that Surety Company could have hired an expert to estimate the appropriate hours for the work based on that information as there was not great variation in the attorney’s hourly rates, and an expert “could have simply categorized the work into one of two hourly rates.”

BLOG COMMENT:  Co-Contributor Mike Hensley served as co-counsel on the appeal.  Based on the record, he knew this would be an uphill battle on appeal, with the review based on discretion.  Despite the appellate panel’s findings in this matter, we do not know how defense counsel, with or without an expert, would have been able to appropriately challenge LAUSD’s fee request given the extremely heavily redacted billing submission.

Deeds of Trust: Attorney Fees Of $60,337.83 Awarded Pursuant To Deed Of Trust Provision To Prevailing Lender Defendant Reversed On Appeal

Deed Of Trust Provision Authorized Incurred Reasonable Attorney Fees To Become Additional Debt Secured By The Deed Of Trust, Not An Award Of Fees In A Judgment

            In Bidasha v. Novastar, Case No. B290634 (2d Dist., Div. 5 October 26, 2020) (unpublished), plaintiff sued her lender for rescission or cancellation of the deed of trust on her residence after she defaulted on her loan.  After lender successfully defended the action, it sought $95,337.83 in attorney fees – claiming entitlement pursuant to a provision of the subject deed of trust.  The trial court agreed and awarded $60,337.83 after some reduction based on plaintiff’s arguments as to lender’s defense of issues materially affecting its interest in the property.

            On appeal, plaintiff argued that the trial court erred in finding the deed of trust authorized an award of fees as part of the judgment – with the provision relied upon by the lender for an award of fees authorizing only that reasonably incurred attorney fees “. . . shall become additional indebtedness of Borrower secured by this Deed of trust.”

            The 2/5 DCA agreed and reversed – finding both Hart v. Clear Recon Corp. (2018) 27 Cal.App.5^th 322 and Chacker v. JPMorgan Chase Bank, N.A. (2018) 27 Cal.App.5^th 351 governed.  Hart and Chacker answered the question of whether a deed of trust provision stating that attorney fees become additional debt of the borrower authorized the award of attorney fees in a judgment – with each determining that it did not.

SLAPP: Attorney Fees Of $30,000 And $1,062 In Costs Awarded To Successful SLAPPing Defendant Subcontractor, Sued After Recording Multiple Duplicate Mechanic’s Liens, Affirmed On Appeal

Plaintiff Based Its Challenge Of The Fees/Costs Only On The Underlying SLAPP Determination Which Was Upheld Because The Recording Of A Mechanic’s Lien Constitutes Protected Activity, Even If The Lien Is Invalid Or Improper.

            RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc., Case No. D075615 (4^th Dist., Div. 1 October 23, 2020) (published) has a nice discussion of the applicability of statutory anti-SLAPP protections to improperly filed mechanic’s liens.

            In this case, plaintiff sued for quiet title, slander of title, and declaratory and injunctive relief after a subcontractor recorded four duplicate mechanic’s liens for work performed on plaintiff’s luxury hotel project in downtown San Diego.  Three of the liens were filed after plaintiff secured a bond to release the original lien.  Because defendant released liens subsequent to plaintiff filing its lawsuit, the only cause of action remaining when defendant SLAPPed back was for slander of title.  After the trial court granted defendant’s anti-SLAPP motion – finding the recording of a mechanic’s lien to be protected activity – defendant successfully moved for attorney fees of $30,000 and costs of $1,062 pursuant to Code Civ. Proc., § 425.16(c).

            Plaintiff appealed the SLAPP determination and subsequent fees/costs award – with its only argument against the fees/costs award being that it should fall with the reversal of the trial court’s SLAPP ruling.  However, based on the two-step process for determining anti-SLAPP motions – (1) whether the defendant met its burden to show a prima facie case that the activity underlying plaintiff’s action is protected, and, if so, (2) whether plaintiff met its burden to make a prima facie showing that its claims have minimal merit  by establishing a probability of success – the 4/1 DCA affirmed the SLAPP ruling.  On the first prong, the appellate panel found that defendant’s act of recording a mechanic’s lien constitutes protected activity, even if the lien is invalid or otherwise improper.  As a result, when it moved to the second prong, the appellate panel determined that plaintiff was unable to meet its burden of showing that its slander of title claim had minimal merit.   Because the 4/1 DCA found the anti-SLAPP motion was properly granted, it also affirmed the fees/costs award.

Allocation, Consumer Statutes, Lodestar, Multipliers: Santana Decision Now Published

Apportionment Between Song-Beverly Act Fees/Costs And Other Causes Of Action, Where Fees Are Not Permitted, Not Necessary Where Claims Are Inextricably Intertwined.  

            In our September 29, 2020 post, we discussed Santana v. FCA US, LLC, Case Nos. G057244/G058020 (4^th Dist., Div. 3), which was unpublished at the time.

            In Santana, the trial court awarded Song-Beverly Act fees/costs of $510,637.87, including a 2.0 multiplier, after a jury found defendant liable for breach of the express and implied warranty, and fraudulent concealment for plaintiff’s claims arising from the defective vehicle he purchased.

            On appeal, the 4/3 DCA vacated a significant portion of damages awarded to plaintiff when it reversed on the fraudulent concealment claim.  However, the appellate panel affirmed the entirety of the fees/costs awarded by the trial court – finding no abuse of discretion because apportionment between the Song-Beverly claims and non-fee claims was not needed given that plaintiff’s causes of action stemmed from an issue common to all of his claims.  As such, plaintiff’s claims were inextricably intertwined such that apportionment would be impracticable, if not impossible.

            Santana was certified for publication on October 23, 2020.

Celebrities, SLAPP: 4/3 DCA Affirms $137,340.25 Fees/Costs Awarded To SLAPPing Real Housewives Of Orange County Defendant In Defamation Lawsuit

Defendant’s Comments Were Protected Activity As They Were Made In A Public Forum Concerning A Public Interest.

            In Bellino v. Beador, Case No. G057255, consolidated with Case No. G058129 (4^th Dist., Div. 3 October 23, 2020) (unpublished), Shannon Beador and Tamra Judge, two cast members of the reality show the “Real Housewives of Orange County,” were sued by James Bellino, the ex-husband of a former RHOC cast member, and his company. 

            Plaintiffs’ lawsuit for defamation and other related claims stemmed from defendants’ appearance on a gossip podcast wherein they made comments about plaintiffs.  Defendant Beador’s comments were that she had heard plaintiffs no longer had their trampoline parks because they had been sued, that people get paralyzed at trampoline parks, and that she would not allow her children to go to trampoline parks for that reason.

            When Defendant Beador SLAPPed back against plaintiffs’ complaint, the trial court granted her motion in its entirety – reasoning Beador’s statements were protected speech – and subsequently awarded her attorney fees and costs of $137,340.25 out of a requested $220,894.55.

            Plaintiffs appealed both orders, but the 4/3 DCA affirmed.

            In the first of two steps used to determine an anti-SLAPP motion – whether the underlying activity that led to the lawsuit is protected – the appellate court found that Beador’s comments were protected activity.  Pursuant to Code Civ. Proc. § 425.16(e)(3) and (e)(4), Beador’s comments were an exercise of her constitutional right of free speech in connection with an issue of public interest.  In an opinion authored by Justice O’Leary, the 4/3 DCA explained that because Plaintiff Bellino had appeared on RHOC, had been depicted as a businessman on the show, and allowed his lifestyle and divorce to be fodder for public interest, the statements made by Beador were “statements made in a place open to the public or a public forum in connection with an issue of public interest.”

            As to the second step, the appellate panel found plaintiffs failed to meet their burden of showing minimal merit.  Beador’s statement that she heard plaintiffs sold their trampoline parks because they were sued was substantially true as plaintiffs sold trampoline park locations after being sued for personal injuries sustained at one of their trampoline parks.  Additionally, Beador’s statement that she will not allow her children to go to trampoline parks because they are dangerous was also true, and was an exaggeration of the potential worst-case scenario of harm that could come from a trampoline park – not a declarative statement of fact – and, therefore, constitutionally protected.

            Finally, the 4/3 DCA found no abuse of discretion in the trial court’s award of fees/costs given Beador prevailed in her anti-SLAPP motion and the trial court properly considered the detailed records submitted by Beador’s attorneys, Beador’s attorneys’ experience, the complexity of the case, reasonableness of rates, and procedural history.

Costs: $9,816.78 In Costs For 22 Medical Subpoenas Was Reasonably Granted To The Defendant, Given The Position It Took Through Affirmative Defenses.

Premature Filing Of Costs Memorandum Was No Problem Given A Lack Of Prejudice.

            In Lowry v. Port San Luis Harbor Dist., Case Nos. B300072/B302209 (2d Dist., Div. 6 Oct. 22, 2020) (published), defendant was allowed a routine costs award of $9,816.78 for service of 22 medical subpoenas in a case where the defendant alleged various affirmative defenses such as preexisting conditions, superseding/intervening causes, and unfitness for misrepresenting pre-hiring medical facts.  The trial court allowed the requested costs, a determination affirmed on appeal.  Unfortunately for plaintiff, this was an abuse of discretion standard, with nothing showing they were not necessary or unreasonable given the affirmative defenses staked by the defense.  Plaintiff argued that a prematurely filed costs memorandum, before judgment was entered, was erroneous, but the law in this area is that such a premature filing is only so if  prejudice resulted—a result rarely shown, and not in this particular case.  (Haley v. Casa Del Rey Homeowners Assn., 153 Cal.App.4^th 863, 880 (2007).)

Indemnity: $21,012 Fee/Costs Award Under CCP § 1038 Sustained On Appeal After 631.8 Motion Granted In Indemnity Action

Vindictive Purpose Of The Action Shown Through Emails.

            Code of Civil Procedure section 1038 provides that, where a trial court grants a defense motion for directed verdict, motion for judgment, or nonsuit in an action for indemnity and contribution, the trial court, on motion, may award attorney’s fees if the action was not brought with reasonable cause in the good faith belief that there was a justifiable controversy.  The “reasonable cause” prong is reviewed de novo, and the “good faith” prong is reviewed for substantial evidence when reviewing a lower court’s grant of fees/costs.  (Austin B. v. Escondido Union School Dist., 149 Cal.App.4^th 860, 888 (2007).)

            In Sturm v. Woods, Case No. B300572 (2d Dist., Div. 6 Oct. 21, 2020) (unpublished), plaintiff sued a paralegal who helped her oppose a summary judgment motion in a malpractice action filed against an ex-attorney (a motion eventually granted in ex-attorney’s favor).  In an email sent to the paralegal on the day she filed her action, plaintiff admitted that there was no unintentional error in the opposition papers, but that paralegal was “collateral damage” in trying to get to the ex-attorney.  The lower court granted a CCP § 631.8 motion for judgment in favor of paralegal and stated it would entertain a motion for attorney’s fees, with paralegal doing so and with the trial judge awarding $21,012 in fees and costs.

            Plaintiff’s appeal was sternly rebuffed by a 2/6 DCA panel.  The “tell-all” email satisfied the “reasonable cause” and “good faith” prongs, showing the litigation was “a vindictive action, brought in bad faith and without reasonable cause, to force paralegal to indemnify appellant.”  It was further bolstered by the “collateral damage” reference and plaintiff also indicating “I know that you are under a lot of pressure caring for your disabled husband and family.”  Ouch!

Fee Clause Interpretation, Deadlines: Broker Award Of $150,000 In Prevailing Contractual Fees Affirmed On Appeal

Good Cause Was Shown For Allowing Fee Motion To Be Considered After Deadline, With Broad Fees Clause Encompassing Contractual Duties Even If Statutory Duties Were Not Encompassed.

            Price v. Gullan, Case No. D075332 (4^th Dist., Div. 1 Oct. 21, 2020) (unpublished) was a very contentious case involving a defective yacht purchase dispute where the purchaser ultimately won damages/fees against yacht sellers but failed to obtain any relief against the dual broker in the transaction.  Broker then moved for costs and attorney’s fees of $440,198.45, with real storms arising on whether the fees motion was timely filed based on the judgment “trigger point” and on whether there was legitimate fee entitlement.  The lower court did award the requested routine costs and $150,000 in attorney’s fees to broker.

            Purchaser’s appeal of the fees award in favor of broker was unsuccessful.

            Although the legal discussion was somewhat convoluted, the time to appeal was triggered from the original judgment given that it only allowed costs but did adjudge the fee entitlement issue.  However, the deadline to file the fees motion can be extended for good cause—and that standard was met given a lot of confusion on the procedural history of what occurred.  The appellate court, here, did have a nice discussion on how trial courts have inherent power to grant a costs and/or fees request that does not strictly comply with statutory requirements.  With respect to the merits, the broad “arising out of or relating to this Agreement” language did encompass broker’s actions as a matter of contract, setting aside whether the conduct violated statutory actions outside the scope of the fees contract.  So, in the end, broker’s fees award was affirmed on appeal.

Family Law: Ex-Wife’s $100,000 Needs-Based Fees Request, Where Husband Had Lots Of Expenses And Her Request Made At Eleventh Hour, Was Properly Denied

Timing, Circumstances, And Nature Of Request Are All Key Concerns In This Area.

            In Marriage of Tearse, Case Nos. A155541/A156019 (1^st Dist., Div. 4 Oct. 21, 2020) (unpublished), ex-wife was not pleased when the family judge denied her needs-based fee request for $100,000.  The problem was she did not defeat the deferential abuse-of-discretion standard of review with respect to denial of her request.  The record showed that, despite the disparity in finances between herself and ex-husband, he had substantial expenses such that he could not pay this substantial request and also serviced his business and his own attorney’s fees in the divorce.  Expenses were a legitimate concern on a needs-based motion.  It also was not reasonable for ex-wife to ask for this amount of money given there was a discovery cut-off and she did not retain experts before that cut-off, with no explanation for the delay in the request—a totality of circumstances which salted the result for the appellate court. 

Costs: $149,106.50 In Routine Costs (Expert Witness Fees) Were Affirmed In Favor Of The Defense In Accountant Malpractice Action

Plaintiff Did Not Meet His Burden In Showing The Expenses Were Unnecessary/Unreasonable.

            In Anton v. Barbich Hooper King Dill Hoffman Accountancy Corp., Case Nos. F073713/F074644 (5^th Dist. Oct. 20, 2020) (unpublished), plaintiff lost a malpractice case brought against accountant defendants (mainly for accounting expert testimony in a litigation involving division of fees/costs) on summary judgment based on a lack of causation.  (The summary judgment was affirmed on the merits, with the appellate court providing a nice discussion of causation in “settle and sue” malpractice cases.). The trial judge denied plaintiff’s motion to tax costs ($149,106.50 for eight expert witnesses) claimed by the defense.  The appellate court affirmed under the abuse of discretion/compelled findings standards, because there was no uncontradicted, dispositive testimony by plaintiff showing why the main expert’s testimony was not proper rebuttal testimony necessary and reasonable in this type of case. 

Special Fee Shifting Statute: $1,435 Fee/Cost Award Against Losing Plaintiff In Civil Anti-Harassment Action Was Properly Granted

No Costs Memorandum Required To Be Filed Because Fees/Costs Awarded Made Before Notices Of Dismissal/Entry Of Judgment Served By Plaintiff, Who Had Notice Of The Requests.

            Plaintiff, a hair stylist at Chaddick’s beauty salon, was terminated and filed an anti-harassment petition against Ms. Chaddick, which action was dismissed after the trial court declined to issue a TRO and continued the trial.  Chaddick filed a fee motion about a month after the dismissal for $1,000 in fees and a subsequent declaration for $435 in costs.  The trial court found that Chaddick had prevailed, overruling plaintiff’s objections that there was no proper notice in moving papers for costs or no filed costs memorandum.  Plaintiff provided notices of dismissal and entry of judgment well after the fee/costs order was issued. 

            The 2/6 DCA affirmed in Tietz v. Chaddick, Case No. B303694 (2d Dist., Div. 6 Oct. 20, 2020) (unpublished), a 3-0 opinion authored by Justice Yegan.

            The $1,000 fee award was correct because Ms. Chaddick was the prevailing party given the dismissal of the anti-harassment action.  (Code Civ. Proc., § 527.6(s).)  The failure to file a costs memorandum was no obstacle under the circumstances, given that plaintiff filed the notices after the fee/costs award was made and that plaintiff also knew about/contested the costs request.  Besides, CRC 3.1170’s requirement of a costs memorandum could not trump CCP § 1032 allowing recovery of costs as a matter of right where fees/costs are awarded before the dismissal is served or before the entry of judgment is filed/served. 

            BLOG QUOTE—Justice Yegan is an appellate jurist who shows many literary flourishes in his opinions.  In this one he explains the origins of the phrase “too clever by half.”  It was coined in George J. Whyte-Melville’s 1985 book, “The Interpreters,” and means “too smart for one’s own good,” a discussion about the derivation of the phrase he found in the recent bankruptcy decision in In re Jet ICU Leasing, 614 B.R. 385, 388 n. 3 (Bankr. M.D. Fla. 2020).

Family Law: Where Ex-Husband’s Living Expenses Made Him Unable To Pay Requested Needs-Based Fees Of $100,000, They Were Properly Denied To Ex-Wife

No Oral Hearing Was Required On Needs-Based Request And Denial Of Ex Parte Request, Which Was Never Ruled On Anyway, Was Nonprejudicial.

            Ex-wife brought a last-minute request for $100,000 in needs-based attorney’s fees after resting her case-in-chief because she needed some more expert help and money for her attorney’s closing argument.  The lower court denied the request, finding that husband’s living expenses made him unable to pay this and also determining that the request was unreasonable given that wife had rested her case-in-chief.  Ex-wife renewed the request in an ex parte motion, with the lower court granting an alternative request but not ruling on the Family Code section 2020/2032 renewed request.

            The lower court’s determinations were affirmed on appeal in Marriage of Tearse, Case No. A156538 (1^st Dist., Div. 4 Oct. 15, 2020) (unpublished). 

            It was not irrational for the lower court to fail to rule on a later ex parte request for fees where the request was repetitious and there were unchanged circumstances.  (In re Marriage of Falcone & Fyke, 203 Cal.App.4^th 964, 976 (2012).)   The appellate court agreed that it was unreasonable for ex-wife to ask for $100,000 in fees to develop a closing argument.  The denial of the ex parte request was not prejudicial because the earlier ruling clearly discerned how the family law court exercised its discretion.  Finally, the lower court did not have to hold oral argument on the needs-based fees request because it did provide each side an opportunity to present its position in writing on the papers (satisfying due process concerns), with no different outcome likely in any event had an oral hearing been held based on the record before the reviewing court. 

Allocation, Employment, Section 998: Plaintiff Employee, In Unlimited Civil Case, Winning Limited Jurisdiction Damages Properly Awarded Wage/Hour And Break Claim Intertwined Fees

Section 998 Cost-Shifting Did Not Preempt Labor Code Cost-Shifting Provisions So As To Allow Fee and Costs Recovery To Certain Defendants.

            Cruz v. Fusion Buffet, Inc., Case No. D075479 (4^th Dist., Div. 1 Oct. 15, 2020) (unpublished) is an interesting unpublished decision discussing the intersection of Labor Code costs shifting and CCP § 998 costs shifting.  In the end, which scheme prevailed—stay tuned, but the employment provisions did.

            Plaintiff ex-employee sued for various wage/hour violations, including meal and rest breaks, eventually winning a compensatory bench trial award under $25,000 against employer but not against certain putative alter ego individual defendants, even though the matter was filed as an unlimited jurisdiction matter.   Plaintiff moved for fees under various Labor Code provisions against employer to the tune of $107,118.75 in fees (inclusive of a 1.25 multiplier) and to the tune of $4,583.35 in costs.  The alter ego defendants moved for fees and costs against plaintiff in the sum of $22,735.  Defendants moved to strike/tax costs claimed by plaintiff, and plaintiff moved to strike/tax costs asserted by the alter ego defendants.  In the end, the lower court granted plaintiff’s fees motion for the much lesser amount of $47,132.50, denied the defense motions to strike/tax costs, denied the alter ego defendant’s fees motion, and granted plaintiff’s motion to strike/tax costs as to the alter ego defendants. 

            Defendants timely appealed, but all of the post-judgment orders were affirmed.

            Plaintiff’s fee/costs award was proper because the lower court was not required to deny a fee/costs request where the compensatory award in an unlimited matter was one which could have been awarded by a limited jurisdiction court—it was a discretionary decision, and there was no abuse of discretion under the circumstances.  The defense argued that the lower court should have apportioned fees between compensable wage/hour claims and non-compensable meal/rest break claims, but the trial judge’s determination that the fees were inextricably intertwined ended the challenge based on the interrelated nature of proof relating to all of these claims.  Finally, the fees were not grossly inflated and unreasonable given there was fairly detailed fee substantiation and the trial court observed the conduct of counsel in a fee request which was not hugely substantial in nature—bolstered by a more than half reduction in requested fees.

            The interesting part of this opinion is whether the alter ego defendants, who sent a CCP § 998 offer which was successful, were properly refused costs requested against plaintiff.  The problem here was that the Labor Code costs-shifting provisions were inapt for these defendants, such that section 998 was the only avenue--but it could not prevail over the more specific employment costs-shifting provisions.  The 4/2 DCA panel acknowledged that Plancich v. United Parcel Service, Inc., 198 Cal.App.4^th 308, 310-312 (2011) might dictate a different result under Labor Code section 1194, but the panel disagreed with Plancich’s analysis and sided with the view that the one-sided, pro-plaintiff statute prevailed over section 998 (which dealt only with section 1032 costs).  On the alter ego defendants’ argument that fees and costs were justified under Labor Code section 218.5, no fees/costs-shifting was warranted based on the lower court’s finding that plaintiff did not bring the alter ego case in bad faith; she presented proof of same, but simply lost.  All post-judgment orders affirmed.

Appealability, Equity: Losing Party’s Failure To Appeal Earlier Fee Order Forfeited Challenges

However, Amending Fee Order Nunc Pro Tunc To Correct Clerical Error Was No Abuse Of Discretion.

            Trans World Sourcing, Inc. v. Prend, Case No. E071712 (4^th Dist., Div. 2 Oct. 14, 2020) (unpublished) is a situation where two dismissed defendants moved for attorney’s fees of $27,263.63, each, and for costs of $3,859.49, each, against plaintiff.  Plaintiff did not oppose the motion, which was granted although the order mistakenly stated it was for fees and costs of $3,859.46 rather than including the separate, higher fees amount.  The defendants quickly moved to correct the error, with the lower court requiring a CCP § 473 clerical error motion.  Defendants obliged, and the lower court corrected the fees/costs award nunc pro tunc to reflect the true fees amount in granting the section 473 motion.  Plaintiff appealed, but to no avail.  It had forfeited challenges to the earlier fee ruling on the merits based on no opposition and on Plaintiff’s failure to appeal the ruling.  Although Plaintiff could contest the section 473 order, it was no abuse of discretion for the trial judge to correct a transparent clerical error. 

Probate: Interim Fees Awardable Out Of Trust Were Compensable To Attorney Assisting Trustee On Appeal

No Appellate Costs Awarded Per Se, But Probate Court Has Broad Powers To Award Attorneys Assisting Trusts Even On An Interim Basis.

            A beneficiary/removed trustee was flummoxed that the probate court approved the successor trustee’s request for payment of interim attorney’s fees and costs incurred in representing the trust on appeal out of the trust.  That determination was appealed in Blickenstaff v. Cumming, Case No. E073007 (4^th Dist., Div. 2 Oct. 14, 2020) (unpublished), but affirmed.  The reason was that the probate court has broad powers to aid the trust in defending itself on appeal, as was the case here even though interim fees/costs were awarded.  (Rudnick v. Rudnick, 179 Cal.App.4^th 1328, 1333 (2009).)