CALIFORNIA ATTORNEY'S FEES

Costs, Deadlines, Fee Clause Interpretation: Lender Defending Against Borrower’s Attempts To Enjoin Eventual Nonjudicial Foreclosure Properly Awarded $9.235 Million In Fees

However, Costs Award Of $332,704.20 Reversed For Failure To Timely File A Costs Memorandum, Although The Appellate Court Did Indicate Lower Court Could Entertain CCP § 473 Default Motion Based On Surprise If Lender Wanted To Renew Costs Issue.

            This next case, Rincon EV Realty LLC v. CP III Rincon Towers, Inc., Case Nos. A155104/A155284 (1^st Dist., Div. 4 June 10, 2021) (unpublished), is an interesting borrower/lender case which has yo-yoed between lower and appellate courts for several years after the lender eventually nonjudicially foreclosed on Rincon Towers (a San Francisco apartment complex).  However, lender did prevail in an action initiated by borrower to forestall foreclosure, with lender then seeking substantial attorney’s fees and costs under a Loan Agreement clause.  After an initial reversal and remand, lender sought $12.2 million in fees and costs, with the lower court awarding $9,235,712.93 in fees, but with it deferring a cost ruling until a new cost memorandum was filed.  Lender did that, claiming $909,548.03 in costs, $357,603.06 in statutory fees and $551,944.97 in costs awardable under the Loan Agreement.  The lower court only awarded statutory costs, reducing the request down to $332,704.30 as far as a court order.  Borrower appealed.

            Borrower argued that lender could not obtain contractual fees because the loan was non-recourse; however, the problem here was that the Loan Agreement contractual fees clause did apply to situations where the lender had to defend against a borrower’s action, rather than commence a lender action or suit against borrower seeking a monetary judgment.  Beyond that, the contractual “proceeding” language did not preclude lender from bringing a fees motion, because a “proceeding” was more akin to an “action” that lender did not commence.  Borrower next argued that the fee award was precluded by anti-deficiency California borrower protections, but that contention was not successful because borrower brought an unmeritorious suit to which lender had to respond—an action which did not implicate a lender attempting to renege on a non-recourse loan.  (See Jones v. Union Bank of California, 127 Cal.App.4^th 542, 547-548 (2005); Passanisi v. Merit-McBride Realtors, Inc., 190 Cal.App.3d 1496, 1509 (1987).)  So, the substantial fee award was affirmed on appeal.

            That brought the appellate court to the costs award, which was a little tricker to resolve.  The 1/4 DCA agreed that the costs memorandum was untimely filed, past the 15-day notice of entry filing deadline even though there were some issues still pending in the appellate court—the best measure was to protectively file it, something lender did not do by quite a bit of time.  However, that did not end the matter.   The appellate court was sympathetic to the fact that the complex procedural context of the case might have been a surprise to the lender such that a CCP § 473 discretionary motion to allow the filing of the belated costs memorandum might be successful.  But it did not want to do that, reversing the smaller component of the costs award (the larger component were damages, and rejected because they were not pled and were not subject to damages proof below) and remanding to the lower court to decide if discretionary default relief should be granted.  So, there might be hope on the cost component for lender.

Special Fee Shifting Statutes: Additional Fees Sought By Prevailing Party In Government Property Code Enforcement Proceeding Not Allowed Under Government Code Or Municipal Code

Form Of The Action Was Important—Absence Of An Abatement Order Was Crucial To Determination That No Further Fees Were Required.

            Fratus v. County of Contra Costa, Case No. A157397 (1^st Dist., Div. 1 June 10, 2021) (unpublished) is one of those cases were prevailing parties, in the overall sense, should have been entitled to additional fees, but they simply did not satisfy the legal requirements for the same. Without proper legal entitlement, additional fees were not warranted.

            This was a decades-old battle between real estate owners on Dutch Slough Road in Oakley and Contra Costa County relating to County wanting corrections to certain building and zoning code violations, mainly relating to the propriety of permitting residence occupancy for two separate properties.  We will say that property owners did prevail in earlier rounds such that they obtained $7,500 in fees against County under Government Code section 800 (a capped fee statute).  But owners wanted more, arguing they should recover fees under Government Code section 25845 [a prevailing party, under a particular ordinance, shall obtain attorney’s fees “in any action, administrative proceeding, or special proceeding to abate a nuisance”] and Contra Costa Ordinance section 114-6.426(a) [attorney’s fees may be recovered by a prevailing party under abatement proceedings where county, at the initiation of the proceeding, seeks to recover its own fees].  Property owners’ request for additional fees was denied, an order affirmed by the 1/1 DCA.

            Owners’ primary problem was that no abatement order was ever issued so as to trigger fee entitlement under the Government Code or Contra Costa Ordinance.  County’s pursuit of administrative fines did not depend on commencement or resolution of an abatement proceeding—note the distinction, administrative fees versus abatement remedies.  Because no ultimate order arose under the abatement ordinance, no further fees were justified.  In this area, form did prevail over substance!

Costs: SCOTUS Determines That Circuit Courts, Not District Judges Absent A Reference, Determine Whether To Deny Or Reduce Taxation Of Appellate Costs

Brightline Rule Adopted By SCOTUS On This Issue.

            In City of San Antonio v. Hotels.com, L.P., 593 U.S. __, Case No. 20-334 (U.S. May 27, 2021), the U.S. Supreme Court interpreted Federal Rule of Appellate Procedure 39 to vest in the circuit courts whether certain appellate costs would be denied or reduced.  San Antonio argued that the district court had discretion to do that, but SCOTUS rejected this approach by adopting a “bright-line” approach that the appellate court determines what is to be awarded, unless it refers it to the district judge for determination.  The case involved a supersedeas bond determination of $2.2 million, with the appellate court’s determination being dispositive and with the district court not being able to alter that determination. 

Family Law, Probate, Sanctions: Lower Court Properly Sanctioned Putative Spouse’s Attorney $3,617.50 Under CCP § 128.7 For Filing A Frivolous Putative Spouse Petition

Putative Spouse Failed To Show She Had A Legal Marriage With The Respondent Under Indian Law, Based On A Res Judicata Finding In A Prior Conservatorship Petition Proceeding.

            The problem for putative spouse and her attorney in Nijjar v. Nijjar, Case No. F078265 (5^th Dist. June 10, 2021) (unpublished) is that they earlier lost a conservatorship position by which she claimed to be the lawful spouse of the proposed conservatee under Indian law.  In the earlier proceeding, there were various inconsistencies in her and other witnesses’ testimony such that the trial judge found no competent evidence that a legal marriage took place between the two.  Losing putative conservator then filed a putative spouse petition, which triggered respondent (the winning putative conservatee in the previous proceeding) to send a Code of Civil Procedure section 128.7 motion.  The safe harbor period expired such that respondent filed the 128.7 motion, including a request for sanctions against petitioner’s attorney, and a request for dismissal of the putative spouse petition.  The lower court granted the 128.7 motion, dismissed the petition, and imposed monetary sanctions on petitioner’s attorney in the amount of $3,617.50.

            Even though no appeal was taken from the judgment of dismissal (given that the sanctions were below the $5,000 appealability threshold of CCP § 904(a)(11), (12)), the Fifth District went ahead as treating the appeal from the judgment of dismissal given that everyone briefed the merits and respondent did not move to dismiss the appeal.  Also, even though better practice was for the aggrieved attorney to appeal, notices of appeal are to be liberally construed to include the attorney who filed the appeal on behalf of a party.

            That brought the appellate court to the merits of the 128.7 sanctions order.  The principal problem was that the “no legal marriage” finding in the conservatorship proceeding had res judicata effect in the putative spouse petition proceeding.  But there was more.  Petitioner’s good faith belief in the validity of the marriage was not supported and, even under the “good faith” test of Family Code section 377.60(b), the evidence was not there, especially given the findings in the conservatorship proceeding.  With respect to showing improper purpose prong of section 128.7, documents showed that petitioner had a history of filing repetitive pleadings to reargue positions she had lost earlier.  The sanctions order was affirmed.

BLOG OBSERVATION—This unpublished opinion also had some instructive points on what should and should not be included in an appellant’s appendix, not to mention some formatting requirements.  (We would remind readers that e-filing is now mandatory in the DCAs, and you have to benchmark items in the appendix—which requires extra work and attention.)

Employment: Employee Winning Only $32.00 On Unpaid Wages/Penalties Was Entitled To A Remand To Seek Additional Attorney’s Fees And Routine Costs

Lower Court Awarded Just $3.20 In Fees Under CCP § 1031; Only Costs Solely Incurred On Losing FEHA Claims Had To Be Excluded So As To Require A Remand.

            FEHA is a statute which has very liberal fee- and costs-shifting provisions, as interpreted by a very robust California jurisprudence under the governing statute.  Moreno v. Bassi, Case No. F078400 (5^th Dist. June 8, 2021 partially published; fee and costs issues published) is yet another case law addition to this jurisprudence.

            In this one, plaintiff was awarded $32.00 in unpaid wages/penalties under Labor Code claim, losing on all FEHA claims, losing on some non-FEHA claims, and prevailing on some non-FEHA claims.  The lower court did this: (1) awarded her $19,523 in costs; and (2) $3.20 in attorney’s fees based on a CCP § 1031 formula multiplying the wages recovered by 20%. 

            The costs award got reversed because the only costs which were barred were those due solely (and solely is an important caveat) to inclusion of the FEHA claims because plaintiff did not prevail on them and the defense did not prevail on them given that the lower court found they were not frivolous in nature. However, plaintiff was entitled to costs on the non-FEHA claims, including costs related to non-FEHA claims intertwined with the FEHA claims, the Fifth District agreeing with the analysis in Roman v. BRE Properties, Inc., 237 Cal.App.4^th 1040, 1059 (2015) to the same effect.

            On the fee issue, the lower court needed to exercise its discretion under Labor Code section 1194 to award reasonable attorney’s fees for the unpaid wage victory given that section 1194 was specific and overrode the more restricted formula under CCP § 1031. 

Probate: Trustee Removal Petition Fee Request Properly Denied And Beneficiary’s Fee Request Correctly Denied Given Accounting Was Rejected For Future Determination

Trustee Removal Petition Fees Are Discretionary In Nature.

            In Albrecht v. Albrecht, Case No. B306601 (2d Dist., Div. 4 June 7, 2021; posted June 8, 2021) (unpublished), successor trustee appealed a probate court’s order declining to award fees for an opposing side’s demurrer to a petition to remove the trustee.  Beneficiary moved for fees and costs incurred during the administration of the trust despite an order that an accounting had been rejected for not meeting formalities, a further fees request also denied.  The appellate court affirmed.  On the petition to remove a trustee, fees are discretionary under Probate Code section 15642(d), which requires determinations that the removal petition was filed in bad faith and contrary to settlor’s intent.  Here, the lower court determined that the other side’s failure to comply with a settlement agreement contributed to confusion such that the discretionary fee request should be denied—no abuse of discretion.  On the second request, the denial of accounting without prejudice meant that any fee award to beneficiary was premature until further events developed. 

Lodestar, SLAPP, Special Fee Shifting Statutes: 2/8 DCA Affirms Fee Award To Prevailing SLAPPing Defendant That Was Greater Than The Fees Paid For Defense By His Insurer

An Attorney Accepting A Reduced Rate From A Client Is Not Precluded From Seeking A Reasonable Hourly Rate Pursuant To The Lodestar Method.

            In Pasternack v. McCullough, Case No. B302137 (2d Dist., Div. 8 June 7, 2021) (unpublished), prevailing defendant on a special motion to strike was awarded $146,010 out of his requested $330,420 in attorney fees. (Code Civ. Proc. §425.16(c)(1).) Plaintiff appealed – arguing that there was no need for the trial court to set a reasonable hourly fee in this case because the fee award should have been limited to the significantly lower amount defendant’s insurer paid for his defense. 

            The 2/8 DCA disagreed – finding the prevailing lodestar adjustment method to be the proper method for determining fees in this case as the SLAPP fee provisions do not provide for restrictions on how the fees are to be calculated.  (Ketchum v. Moses, 24 Cal.4th 1122, 1136 (2001) [our Leading Case No. 8].)  Additionally, the panel found that California law is well-established in allowing an attorney who accepts a reduced rate from a client to seek a reasonable hourly rate pursuant to the lodestar method.  (Chacon v. Litke, 181 Cal.App.4th 1234, 1260 (2010) [discussed in our January 19, 2010 post]; PLCM Group, Inc. v. Drexler, 22 Cal.4th 1084 (2000) [our Leading Case No. 1].)

            In this case, the trial court properly determined the market rate for defendant’s attorneys based on their experience and complexity of the case instead of narrowly focusing on the “package rate” defendant’s attorneys accepted from defendant’s insurer in this matter.  Additionally, the trial court thoroughly examined the record and reduced both the time and hourly rate claimed by one of defendant’s attorneys, which significantly reduced the award from the original request, and clearly demonstrated that the trial court exercised its discretion.

Tort Of Another: $250,000 Tort Of Another Fee Award, As Damages, Affirmed Because Substantial Benefit “Defense” Involves Consideration Of The Equities

Positive Gains Were Outweighed By Harm To Bank’s Reputation And Its Years Of Struggles With Regulators/Federal Criminal Prosecutors.

            The “tort of another doctrine” is a nuanced one allowing attorney’s fees to be awarded as damages in certain situations.  Fees under this doctrine may be mitigated by consideration of special benefits that the alleged tortfeasor brought to the positive side of the suing plaintiff.  Gateway Bank, F.S.B. v. Metaxas, Case No. A158793 (1^st Dist., Div. 2 June 3, 2021) (published) establishes that the special benefits “defense” is driven by equities, such that simply an arithmetic consideration of positive benefits must be balanced against negative benefits which can consist of both monetary and nonmonetary factors.

            What happened in this case is that defendant/appellant, the president and CEO of plaintiff Gateway Bank, was sued by the bank based on certain transactions with a third party (with that third party using Bank as a warehouse lender) after the bank ran into trouble in the Great Recession.  Appellant pled guilty to criminal bank fraud charges, with the Bank battling numerous regulator and federal criminal prosecutor efforts.  Eventually, some positive monetary gain came from the third-party transaction.  The Bank sued for fraud, fraudulent omission, and breach of fiduciary duty, winning these claims against appellant.  Then, on the capital loan transaction, an appointed referee found damages of $382,154, $250,000 being “tort of another” damages.  Appellant argued that the positive “special benefits” required a finding that tort of another fees should not be allowed.

            The First District, Division 2 rejected the challenge.  It found that the “special benefits” defense in the tort of another area was equitable based such that both monetary and non-monetary considerations should be evaluated, as they were by the referee.  Here, the positive side was outweighed by the harm to bank’s reputation, as well as expenditure of financial resources to battle regulators, federal criminal prosecutors, and indemnify appellant in certain actions. 

Appealability: $75,105 In Labor Code Fees Award To Plaintiff Was Affirmed

Defendants Failed To Properly Appeal Postjudgment Fees Award, As Well As Not Presenting Adequate Appellate Record.

            In Hernandez v. Princess Windows, LLC, Case No. B302750 (2d Dist., Div. 2 June 1, 2021) (unpublished), plaintiff employee won wage/hour and rest break claims/penalties against defendant, totaling $58,861.  Based on fee-shifting statutes, another $75,105 in attorney’s fees were awarded to plaintiff.  Defendant never appealed the subsequent fee award.  That was bad, given the court had no jurisdiction to entertain a review of this order.  Beyond that, defendant never provided the fee award as part of the appellate record and a prior motion to augment the record was denied.  In sum, the fee award was affirmed.

Class Action: Ninth Circuit Reverses And Remands Class Counsel Fee Award Where There Were “Red Flags” Of Collusion About Distribution Of Funds Between Class And Its Counsel

Inordinate Fee Distributions, Clear Sailing Provisions, And Reverter Of Reduced Fees Award To Defendant Were Storm Warnings In This Particular Case.

            Briseno v. Henderson (ConAgra Foods, Inc.), Case No. 19-56297 (9^th Cir. June 1, 2021) (published) is a must review for any clients and practitioners in the class action area.  It certainly shows the Ninth Circuit will use In re Bluetooth Headset Products Liab. Litig., 654 F.3d 535 (9^th Cir. 2011) [discussed in our August 25, 2011 post] to judge class action settlement fee terms at the post-certification stage (even though Bluetooth was at the pre-certification stage).  Numerous “red flags” led to a reversal and remand of the fee award in this case, with the Ninth Circuit indicating that the presence of these factors, singularly or in the aggregate, would not lead to a reversal unless the circumstances dictate otherwise—as they did in this case.

            The class action case involved a challenge to a natural labeling of Wesson Oil which was alleged to be deceptive.  The parties reached a small per unit of oil bottle settlement with the class, with the parties valuing the settlement at around $95 million, $67 million for cash payouts and $27 million for injunctive relief—with the Ninth Circuit determining that the injunctive relief valuation was virtually worthless later on in the published opinion.  However, the actual “redemption” results showed only $8 million was shelled out, with $7 million going to class counsel for fees and costs (net result:  $1 million to the class).  There were other areas of the settlement which showed a hefty settlement was reached with the defense at the largesse for class counsel, such that the result had to be overturned for a restudy.

            The Ninth Circuit, in strong terms, reversed and remanded.  Three factors primarily led to this result:  (1) plaintiffs’ counsel was going to receive a disproportionate distribution of the settlement, roughly 90%, despite the small “redemption rates” and the worthless injunction evaluation; (2) the parties agreed to a “clear sailing clause,” which could be neutral, but was not here given ConAgra’s settlement negotiations indicating they would not pay anywhere near the set upward “optics” established in the overall compromise (put another way, it was banking on a low “redemption” rate); and (3) the settlement contained a “reverter” where any reduced fees to class counsel went back to ConAgra, another indication of collusion. 

Family Law: $4,500 Attorney’s Fees Award Reversed, Without Prejudice For Renewal, Based On Claiming On A Different Section Than Section 271

Litigant Will Get Another Shot At It.

            In In re Marriage of Orr and Traina, Case No. H046090 (6^th Dist. June 1, 2021) (unpublished), a litigant won a $4,500 attorney’s fees award as a sanction under Family Code section 271 against the other side.  That was reversed and remanded, without prejudice, because litigant only claimed the fees under CCP § 128.7.  Litigant got another shot at it upon remand.

Private Attorney General: No Abuse Of Discretion In Trial Court’s Award To Plaintiffs Of $66,345.50 In Section 1021.5 Attorney Fees Where Plaintiffs’ Personal Benefit Outweighed Plaintiffs’ Litigation Costs.

The Significant Public Benefits Achieved In This Case Were Very High – Impacting Over 7,500 Water District Customers Facing An Unconstitutional Rate Increase Of Approximately 200%.

            In KCSFV I, LLC v. Florin County Water District, Case No. C088824 (3^rd Dist., May 28, 2021) (published; fee discussion unpublished), plaintiffs succeeded in their petition for writ of mandate and complaint for declaratory and injunctive relief – claiming Water District had violated Proposition 218 (approved by California voters in 1996 to restrict the ability of state and local governments to impose taxes and fees) with its December 2016 water rate increase.  Plaintiffs then moved postjudgment for, and were awarded, $66,345.50 in Code of Civil Procedure § 1021.5 attorney fees.  Defendants appealed both the judgment and postjudgment fees order, and the Third District affirmed.

            As to the fees, the panel disagreed with each of defendants’ arguments, and found plaintiffs met their required showing under § 1021.5 and were entitled to fees.  Plaintiffs’ action vindicated an important public right and conferred a significant benefit on a large class of persons as over 7,500 Water District customers, facing an unconstitutional rate increase of approximately 200%, benefited directly from plaintiff’s action.  Because the significant public benefits achieved were very high, there was no abuse of discretion in the trial court awarding fees where plaintiffs’ personal benefit outweighed the litigation costs.  (Los Angeles Police Protective League v. City of Los Angeles, 188 Cal. App.3d 1, 10 (1986).)

            Finally, defendants argued that the trial court abused its discretion by failing to reduce plaintiffs’ fees for redactions, block-billing, and because plaintiffs did not prevail on every legal theory they advanced.  Again, the Third District found no abuse of discretion – disregarding defendants’ conclusory arguments not supported by reasoning.  (United Grand Corp. v. Malibu Hillbillies, LLC, 36 Cal.App.5^th 142, 153 (2019).)

Choice Of Law: $81,705 Fee Award Based On Settlement Agreement With Hawaii Choice Of Law Reversed On Appeal As A Matter Of Law

The Defense Relied On California Procedural And Substantive Law At The Trial Court Level, Such That Invoking Hawaii Law Was Unfair Given The Settlement Agreement Had No Fee Clause.

            McLaughlin v. Machen, Case No. H045869 (6^th Dist. May 28, 2021) (unpublished) was an interesting choice of law case where plaintiffs lost certain claims against defendant based on California’s statute of limitations, with the defendant awarded $81,705 in attorney’s fees under Hawaii law (which has a statute allowing prevailing party fees for claims like the one raised) even though a prior settlement between the parties, with a Hawaii choice of law clause, had no express contractual fees provision.

            The Sixth District reversed the fee award.  It did so on unfairness grounds:  the defense had relied on California procedural and substantive law, with Hawaii having a longer statute of limitations on the primary claim versus the shorter California limitations period which led the lower court to find the claims were time barred.  This unfairness distinguished the situation from a somewhat similar fact pattern involving a Swiss choice of law clause in Applera Corp. v. MP Biomedicals, LLC, 173 Cal.App.4^th 769 (2009), reinforced by the fact California law would not have allowed a fees award given the existence of no fees clause in the settlement agreement.

            BLOG OBSERVATION AND KUDOS:  As recently announced on the courts.ca.gov website, Justice Ikola—who authored Applera—is retiring from the 4/3 DCA bench effective July 1, 2021 (where he served for 18 ½ years) after a 47-year legal career including a prior seat on the Orange County Superior Court bench.  Co-contributor Mike, who attended an OCBA seminar earlier this year, believes Justice Ikola will be retiring to Michigan.  A little earlier, his colleague Justice Aronson was announced as retiring from the 4/3 DCA bench effective June 15, 2021 (where he served for about 20 years) after a 46-year legal career including a prior seat on the Orange County Superior Court bench, too.  We wish them both well, and thank them for their service on the bench—co-contributor Mike has argued before them often over the years.

In the News, SLAPP: Rep. Maxine Waters Awarded $53,590 In SLAPP Fees/Costs For Defending Herself In A Defamation Suit Against Political Foe Joe E. Collins III

SLAPP Fee/Costs Request Was Reasonable, Rejecting That Under $30,000 Should Be Awarded.

            On May 27, 2021, a Los Angeles County Superior Court judge ruled that Rep. Maxine Waters should be awarded $53,590 in attorney’s fees and costs under a mandatory SLAPP fee-shifting provision for SLAPP-ing a defamation action brought against her by political foe Joe E. Collins III, according to an on-line post by City News Service.  The judge found that Rep. Waters did not act with malice towards Mr. Collins.   The defense requested a fees/costs award of under $30,000, but the lower court found that the requested hourly rate and work effort, both, were warranted. 

Employment, Section 1717: Defendant Winning Independent Contractor Determination Against Real Estate Agent Under Labor Commissioner And De Novo Superior Court Action Was Entitled To $72,519.03 In Fees

Fees Were Justified Based On Broad Contractual Fees Clause.

            In Peng v. F.M. Tarbell Co., Case No. B307484 (2d Dist., Div. 2 May 27, 2021) (unpublished), a plaintiff—a licensed real estate agent—lost a fight on whether he was an employee, versus an independent contractor, both at a Labor Commissioner and a superior court de novo level.  The problem for plaintiff was that there was a broad contractual fees clause in an independent contractor agreement which encompassed “any action, proceeding, or arbitration” between plaintiff and Tarbell “arising from or related to the agreement.”  The lower court awarded Tarbell contractual fees of $72,519.03, the full ask.  (Of interest, plaintiff was disputing $20,168.01 in unpaid wages under Labor Code provisions.)  The fee award was affirmed based on the broad contractual fees clause. 

Private Attorney General: $129,000 CCP § 1021.5 Fee Award In Groundwater-Extraction Cap Decision Was No Abuse of Discretion

Even An Objective Whitley Analysis Justified The Lower Court Decision, Especially Where The Ultimate Award Was Less Than The Requested $240,000 In Fees.

            Under our category “Private Attorney General,” we have posted on numerous decisions on fee awards under CCP § 1021.5.  Many involve the costs/benefit “financial prong” analysis required under Conservatorship of Whitley, 50 Cal.4^th 1206, 1214-1215 (2010) [our Leading Case No. 14].  Here, the trial court decision to order a reduced fee request was warranted based on an objective, costs-benefit analysis under Whitley.

            In Gomes v. Mendocino City Community Services Dist., Case No. A160420 (1^st Dist., Div. 4 May 27, 2021) (unpublished), plaintiff obtained partial success in his challenge to a groundwater-extraction cap that the District applied to his property, in a published decision.  Plaintiff had some draconian options to pay (likely $141,000) or to abandon with a reducing to property value up to $59,000.  After his win, plaintiff moved to recover $240,000 in section 1021.5 fees, with the lower court awarding $129,000 to plaintiff as against the District.

            District’s appeal on the Whitley financial prong did not prevail.  Under an objective “costs-benefit” analysis, plaintiff demonstrated enough of a range to show that his expenditure in fees deserved section 1021.5 compensation, especially given the uncertainties in outcome:  plaintiff’s potential upside was $141,000 if he did not decide to abandon his well as a source of groundwater or at least a $59,000 property loss if he did abandon much less puruse an extraction permit including possibly more loss of property value.  Given these ranges of uncertainty, the section 1021.5 fees expenditures certainly were way beyond what plaintiff could have recovered personally in this case—given the analysis is not a post facto review.

Appealability: Incorrect Date In Notice Of Appeal, Corrected In Civil Case Information Statement, Did Not Mean Appeal Was Untimely

But Appeal Was Denied On The Merits.

            In Ko v. Liang, Case No. B303813 (2d Dist., Div. 8 May 27, 2021) (unpublished), appellants appealed a fee award based on failing to satisfy a pre-condition mediation requirement, something decided long ago.  Ultimately, appellant lost on the merits.  However, respondent argued that the appeal was untimely based on a typo in the notice of appeal, even though this was corrected in the Civil Case Information Statement which must be filed in the appellate court.  This typo did not mean the appeal could not go forward because it was untimely—after all, notices of appeal are liberally construed and the error was corrected in the subsequent Statement.  With that said, appellant lost on the merits. 

Fee Clause Interpretation: “Arising Out Of” Language In Escrow Agreement Did Encompass Fraudulent Concealment Victory By Plaintiff Buyers Against Defendant Seller And Affiliates

$412,500 Fee Award Under Escrow Fees Contract Clause Affirmed On Appeal.

            In Kim v. Lee, Case Nos. B295665/B303317 (2d Dist., Div. 7 May 26, 2021) (unpublished), plaintiff buyers won a fraudulent concealment claim against defendant seller/affiliates.  The buyers then moved for an attorney’s fees award under a broad escrow fees clause containing “arising out of” language relating to disputes between the two sides.  The lower court awarded buyers $412,500 out of a requested $591,936 in fees (disregarding a positive multiplier request).  The appellate court affirmed the fee award based on a de novo review of the contractual fee clause.  This sort of broad language has been held to cover torts in instructive earlier cases, so there was no reason to find otherwise given the similarity of the fees clause language to clauses in those previous published appellate court decisions.  (See, e.g., Lerner v. Ward, 13 Cal.App.4^th 155, 160 (1993); Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4^th 1338, 1344 (1992).)

Section 998: Arriagarazo Decision Of April 30, 2021 Now Published

Where Section 998 Offer Did Not Expressly Reference Dismissal Of Action, Entry Of Judgment By Accepting Offerees Was Proper.

            In our April 30, 2021 post, we discussed Arriagarazo v. BMW of North America, LLC, Case No. C090980 (3d Dist. May 26, 2021) (published), which was unpublished when first issued on April 30, 2021.  It held that a section 998 acceptance contemplates entry of judgment, as opposed to a dismissal of the action, unless the 998 offer expressly indicates dismissal as a condition otherwise.  The Third District certified this opinion for publication on May 26, 2021.  

Fee Clause Interpretation, Settlement: Post-Settlement Fee Efforts Were Not Compensable Under Specifically Crafted Fees Clause Agreed To By The Parties

About $2.2 Million In Fees, Plus Multiplier, Denied To Plaintiff In Supplemental Fee Request.

            Willis v. L.A. County Waterworks Dist. No. 40, Case No. F082766 (5^th Dist. May 26, 2021) (unpublished) is an example of where a carefully crafted fees clause in a settlement agreement may govern supplemental fee requests by a claiming party.

            This had to do with a plaintiff/class representative in the Antelope Valley Groundwater cases which, previously, had been awarded pre-settlement fees of about $3.8 million.  The parties reached a settlement agreement allowing for post-judgment fees under very specific circumstances.   Plaintiff moved for supplemental fees of $1.558-2.143 million plus a positive multiplier.  However, both the trial and appellate courts agreed the supplemental fee request should be denied because the predicate “triggers” for a supplemental fee request were not met, per the settlement agreement fees clause.  No extrinsic evidence was introduced, such that the review of the “triggers” was a de novo look-at, and the fees clause did not allow for supplemental fee recovery.