CALIFORNIA ATTORNEY'S FEES

Appealability: Appellant’s Failure To Specify Appeal From Postjudgment Order Denying Motion To Tax Costs Did Not Encompass Award Of CCP § 998 Expert Fees To Defendants, Requiring Dismissal Of The Appeal

Appellant Sealed His Fate Based On Oral Argument Concessions.

            Gallegos v. Tesoro Sierra Properties, LLC, Case No. B282757 (2d Dist., Div. 3 June 19, 2019) (unpublished) is a case where an appeal was dismissed for lack of clarity in what was included in the notice of appeal.  Appellant only appealed a judgment and then postjudgment motion denying a motion for new trial, never mentioning an appeal of a post-trial motion denying a motion to tax expert witness costs awarded to the defense based on a CCP § 998 offer.  Where there are several “judgments” at issue, this case reinforces that an appellant needs to be clear in the notice of appeal, because generally postjudgment motions involving fees and costs awards are appealed separately.  (Filbin v. Fitzgerald, 211 Cal.App.4^th 154, 173 (2012); Norman I. Krug Real Estate Investments, Inc. v. Praszker, 220 Cal.App.3d 35, 45-47 (1990).)  Although appellant argued there was ambiguity when he just checked the Judicial Council form box indicating an appeal from a postjudgment order, he sealed his fate by conceding at oral argument that the appeal was only from the judgment and order denying his motion for new trial.  LESSON FROM THIS ONE:  Specify the postjudgment order from which you are appealing, especially if it involves adverse attorney’s fees or costs rulings if you want to be safely within the appellate court’s jurisdiction to have review on the merits. 

Employment: $6,845.50 Fee Award Against Unsuccessful Plaintiff Ex-Employee In Labor Commissioner Appeal Was No Abuse Of Discretion

Fee Entitlement Existed And Amount Of Requested Fees Was Reasonable In Nature.

            In Gonzalez v. Lucky Seven Dragons, Inc., Case No. B289269 et al. (2d Dist., Div. 3 June 20, 2019) (unpublished), in pro per plaintiff, ex-employee appealed an adverse Labor Commissioner decision in favor of ex-employer.  Plaintiff gained nothing on his appeal to the superior court, which later awarded employer its requested $6,845.50 in attorney’s fees and some other costs.  The 2/3 DCA affirmed.   Fee entitlement was mandatory under Labor Code section 98.2(c), which is enacted to discourage meritless appeals from Labor Commissioner rulings.  (The losing party only needs to be unsuccessful; the other side does not have to prove the appeal was frivolous.)  With respect to amount, employer claimed $375 per hour rates for a practitioner licensed since 2005 and $155 for a paralegal, very reasonable for the Los Angeles venue. 

Consumer Statutes, Lodestar: Lodestar Analysis Governs A Song-Beverly Act Fee Recovery Despite A Contingency Fee Arrangement

Contingency Fee Arrangement Has Probative Value, But It Is No Dispositive Indicator.

            Litigants and their counsel in lemon law cases must keep in mind that the there is an attorney’s fees shifting provision, Civil Code section 1794(d), which allows fees to the prevailing product buyer “based on actual time reasonably expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.”  However, many of these cases are taken on a contingency basis.  So, for a prevailing plaintiff buyer in these cases, what is the measure of recovery where the Song-Beverly Act fee-shifting provision allows for recovery of “actual time expended” by buyer’s attorneys?

            The answer is the classic lodestar, not impacted by any percentage of recovery, said the 2/7 DCA in Hanna v. Mercedes-Benz USA, LLC, Case No. B283776 (2d Dist., Div. 2 June 18, 2019) (published). 

            After four CCP § 998 offers by the defense, plaintiff accepted the fourth one indicating that Mercedes would pay plaintiff “a sum equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time reasonably incurred in connection with the commencement and prosecution of this action pursuant to Civil Code Section 1794(d), to be determined by court motion if the parties cannot agree.”  They could not.  Plaintiff then requested $274,615.82 in fees and costs (inclusive of a 1.5 multiplier on the lodestar request of $172,712.50).  [NOTE TO ALL—The car purchase was for $52,948.54, showing you how hefty lemon law fees can be if a resolution is not accomplished early on, although it looked like Mercedes tried here.]  After an opposition and reply, the lower court awarded $60,869 in fees, principally based on limiting recovery of fees after a certain date to $15,000 due to its interpretation of the contingency agreement between plaintiff and her counsel.

            The problems here were basically three-deep in number.  First of all, the fee limitation after a certain date was error given that additional fees incurred to establish liability or damages are properly includable in a fees award under section 1794(d), even though settlement efforts produced the additional “recovery.”  Second, although the contingency agreement could be considered in awarding fees, the lower court misread the retainer which applied actually to all time expended.  However, the third reason was the killer:  the lodestar approach, not a contingency arrangement, is the governing standard for fee awards in the Song-Beverly Act area.

Consumer Statutes: In Pro Per Plaintiff Bringing Frivolous CLRA Claim Hit With Adverse Attorney’s Fees Of $54,486

Admissions On The Merits And As To Sham Allegations Sealed The Result.

            In Joseph v. CVS Pharmacy, Inc., Case No. B288641 (2d Dist., Div. 7 June 17, 2019) (unpublished), an in pro per vexatious litigant lost a Consumer Legal Remedies Act (CLRA) suit against CVS after a demurrer was sustained without leave.  CVS moved for CLRA fees based on the fact that the suit was brought in bad faith.  It requested $94,997, but the trial judge awarded CVS $54,486 instead.  The 2/7 DCA affirmed.  With respect to a prevailing CLRA defendant, it must show that the case was brought in subjective bad faith.  (Corbett v. Hayward Dodge, Inc., 119 Cal.App.4^th 915, 924 (2004).)  That burden was not difficult to meet given plaintiff’s admissions on the merits and in prior sham pleadings.  Affirmed. 

Fee Clause Interpretation, Section 1717: Fraud-Based Claim Upon Narrow Unilateral Fees Clause Was Not Broad Enough To Allow Fees To Prevailing Fraud Plaintiffs

However, Appellate Court Reversal Of Guaranty Rescission Denial Did Trigger Fee Recovery Under Broad Bilateral Fees Clause.

            If readers follow us over the years (or if you are new to us, welcome), the actual wording of a contractual attorney’s fees clause can be critical in terms of whether it allows fee entitlement.  The disparate language in fees clauses under a lease and guaranty actually led to different results in Orozco v. WPV San Jose, LLC, Case No. H044014 (6^th Dist. June 17, 2019) (published).

            Orozco involved a situation where a plaintiff lessee successfully sued for fraud in the negotiation of a lease because lessor’s agent failed to disclose that there was a lease with a competing-type of food tenant after indicating that there were no other prospects on board.  (NOTE TO TENANTS:  Ask landlord for an exclusivity clause in order to truly protect yourselves.)  However, that was not true, there was a competing lease in the pipeline.  Plaintiff tenant opened with good revenue fanfare, but that died after the competing tenant came aboard.  Plaintiff and an affiliate sued for fraud in the lease negotiation and rescission, with lost profits being awarded on the fraud claims but with rescission being denied (with the lease guarantor seeking rescission of the guaranty).  The lower court denied attorney’s fees to the suing tenant and guarantor.

            The Sixth District affirmed the denial of fees to plaintiffs based on its fraud victory.  The problem was that the predicate lease fees clause was narrow and unilateral to Landlord, limited to disputes “arising from the provisions of this Lease or any default hereunder.”   Even under Civil Code section 1717, the narrow language of the lease fees clause did not encompass a tort dispute which was not one grounded “on the contract.”  However, the appellate court reversed the lower court’s denial of rescission of the guaranty.  The guaranty lease clause was much different.  The guaranty included a provision entitling a prevailing party in “an action against the other arising out of or in connection with this Guaranty” the right to “recover from the other attorneys’ fees and costs, including collection costs incurred.” This expansive language, which applied to any prevailing party (unlike the unilateral language of the lease’s attorney’s fee provision) was sufficient to encompass Orozco’s fraud action and rescission remedy. (Lerner v. Ward, 13 Cal.App.4th 155, 159– 161 (1993) [clause allowing fees in any action or proceeding arising out of the agreement includes a fraud action arising out of the agreement].) So, the matter was remanded to allow the guarantor to obtain some fee recovery, out of a denied initial fee request of $700,000. 

History: The Supreme Court Case Pennoyer v. Neff (1878) Began As An Attorney’s Fees Dispute

Don’t Know Much About History . . .

            With this post, we inaugurate a new sidebar category: History.

            Who knew? It turns out that the Supreme Court case, Pennoyer v. Neff, 95 U.S. 714  (1878) started out as an attorney’s fees dispute. It is remembered as a landmark case about personal jurisdiction, but that’s not how it started.

            John H. Mitchell, an attorney, did legal work for Marcus Neff, sued for fees, and obtained a judgment of $300. The judgment was used to attach land owned by Neff in Oregon, worth $15,000, and it was later bought at a sale upon the judgment and transferred to Sylvester Pennoyer. The wrinkles are: (a) Neff was never personally served; and (b) he did not yet have a land grant for the land when he was sued by Mitchell for attorney fees in 1866. Mitchell only began to levy execution later, when presumably Neff did obtain title.

            Neff was “served” by publication, because he was out-of-state and could not be found. When he learned about the loss of his land, he brought an action against Pennoyer to recover the property, and won. Pennoyer appealed, and the case went to the US Supreme Court.  

            The SCOTUS syllabus states the primary holding: “A personal judgment is without any validity if it be rendered by a State court in an action upon a money demand against a nonresident of the State who was served by a publication of summons, but upon whom no personal service of process within the State was made, and who did not appear; and no title to property passes by a sale under an execution issued upon such a judgment.” If the property had been attached at the beginning of the action, then there would have been in rem jurisdiction. But it wasn’t.

            Justice Stephen Johnson Field, who had earlier been the fifth Chief Justice of California, authored the opinion. Field is famous. A dissent was written by Justice Ward Hunt, who objected that the distinction between allowing the state to ordain the power to sell property of non-residents at an execution sale if the property is attached at the beginning of a lawsuit, before judgment, but not at the end of a lawsuit, is a “refinement” that cannot be sustained. Hunt feared difficulty quieting title to land would be the result of the court’s ruling.

            Hunt is obscure. Wikipedia wryly notes: “His most notable contribution came while riding circuit in New York, where he presided over The United States v. Susan B. Anthony. Citing the 14th Amendment, Susan B. Anthony argued that she was constitutionally guaranteed the right to vote and had not broken the law when she voted in the 1872 election. Justice Hunt refused to allow Anthony to testify on her own behalf, allowed statements given by her at the time of her arrest to be allowed as 'testimony,' explicitly ordered the jury to return a guilty verdict, refused to poll the jury afterwards, and read an opinion he had written before the trial even started. Hunt found that Anthony had indeed broken the law and fined Anthony $100 (which she refused to pay).”

            Mitchell became US Senator from Oregon. In 1905, he was indicted, convicted, and sentenced in the Oregon Land Fraud Scandal. He appealed, but before the appeal could be heard, he died of complications from a tooth extraction.

            BONUS: Sam Cooke sings "Don't Know Much About History." 

Mediation: Less Than Compulsory Mediation Clause Was Satisfied Even Though Cross-Complaint Filed Without Additional Mediation By Prevailing Party Actually Participating In Mediation On The Complaint

Fee Award Of $375,813 In Capital Call Dispute Affirmed In Favor Of Prevailing Party.

            Ocean Tomo, LLc v. PatentRatings, LLC, Case Nos. G055429/G056063/G056829 (4^th Dist., Div. 3 June 13, 2019) (unpublished) shows how the wording of a mediation condition precedent clause can be determinative with respect to fee qualification.

            A prevailing party in a capital call dispute won attorney’s fees totaling $375,813 under an LLC Operating Agreement fees clause stating that LLC members “pledge to attempt to resolve any dispute amiably without the necessity of litigation.”  The facts demonstrated that the prevailing party participated in mediation before the plaintiff/minority LLC member filed suit but did not mediate further before the prevailing party filed a cross-complaint.  Losing party argued the mediation provision was not complied with on appeal.  Not so.

            The 4/3 DCA, in an opinion authored by Justice Fybel, affirmed the fee award.  The “pledge to attempt” language was not akin to mandatory mediation language like that in CAR form contracts.  Aside from that, prevailing party did participate in mediation sessions such that his filing of a cross-complaint months later did not fall outside of the spirit of “ADR attempt” resolution language contained in the fees clause. 

Landlord/Tenant: $2,503,141 Fee Award To San Francisco Under Rent Ordinance And Health & Safety Fee Provisions Affirmed On Appeal

Fee Entitlement Bases Existed, And Amount Of Fee Award Was Not Erroneous.

            Health and Safety Code section 17980.7(b)(1) has a mandatory fees and actual costs provision to be applied for State Housing Law violations where the lower court finds a building substantially endangers residents’ health and safety.  San Francisco has a Rent Ordinance (Adm. Code, § 37.10B(c)(5)) containing a mandatory fees and costs provision triggered upon a finding of tenant harassment.  Both of these fee entitlement bases were at issue in City & County of San Francisco v. Kihagi, Case No. A152933 (1^st Dist., Div. 1 June 13, 2019) (unpublished).

            What happened was that appellant landlords were successfully sued by City and County of San Francisco (City) for illegally harassing their tenants and violating state/local building and housing laws.  City sought its attorney’s fees to the tune of $2,606,741 based on the Health and Safety Code and Rent Ordinance provisions discussed above.  The trial judge eventually awarded $2,503,141 after reducing the hourly rates of one of the deputy attorneys and reducing also for some duplication.  (Costs of $201,279.75 out of a requested $234,135.54 were also awarded, an award not challenged on appeal.)

            Landlords’ appeal of the fee award was not disturbed at all.  Fee entitlement solidly was established under state statute and the local ordinance, with actual expenses meaning what it said—attorney’s fees were pegged to the lodestar market approach, not something different (such as lower rates charged by private attorneys practicing in the municipal law sector or “internalized” governmental costs).  With respect to the amount of fees awarded, the attorney submissions were detailed enough such that detailed billings were unnecessary under the circumstances.  The fact that public employee counsel rates were lower did not detract from the fact the lodestar market approach should prevail, especially given the hourly rates claimed were well below market anyway. 

Arbitration, Section 998: $1,036,773.68 Fees/Costs Award To Losing Arbitration Claimant Affirmed On Appeal

Arbitrator’s Consideration of 998 Offer After Close Of Evidence Did Not Alter The Result.

            In Hartzler v. 110 Management, Inc., Case No. B290134 (2d Dist., Div. 4 June 12, 2019) (unpublished), property manager of Amy Lee Hartzler, who co-founded the rock band Evanescence, sued for alleged unpaid commissions under a management agreement with a mandatory arbitration provisions and a mandatory attorney’s fees/costs provision in favor of the prevailing party.  The matter proceeded to arbitration and, after the close of evidence, Ms. Hartzler disclosed a CCP § 998 offer for $100,000.  Property manager only won $4,833.66 in unpaid commissions, a tiny fraction of amounts claimed as owing, with the arbitrator deeming Ms. Hartzler to be the prevailing party.  She won $1,036,773.68 in fees and costs under the fees clause.  The lower court confirmed the arbitration award.

            Property manager, obviously “mad as a wet hen,” appealed.  Didn’t work.  The appellate court, in line with the lower court, believed that property manager was challenging the merits of the arbitrator’s rulings, something that is generally unreviewable (and was unreviewable here).  On the 998 issue, Mr. Hartzler’s disclosure of the 998 offer after the close of evidence did not affront section 998, which only indicates that the offer “cannot be given in evidence upon the trial or arbitration.”  It also found that Heimlich v. Shivji, the Second District appellate district recently reversed by the California Supreme Court (see our May 30, 2019 and May 31, 2019 posts), did not dictate a contrary result.  Substantial fee/costs award affirmed.

Equity: United Grand Corp. v. Malibu Hillbillies Decision Is Now Certified For Publication

Case Dealt With Striking Landlord’s Fee Prayer Based On Misconduct.

            In our May 25, 2019 post, we discussed United Grand Corp. v. Malibu Hillbillies, LLC, Case No. B283833 (2d Dist., Div. 8 May 22, 2019), which was unpublished at the time.  The case dealt with a situation where the 2/8 DCA affirmed a lower court’s striking of a fee prayer by a landlord based on litigation misconduct.  We can now provide an update:  the opinion was certified for publication on June 12, 2019. 

Private Attorney General: First District, Division 4 DCA Affirms $558,052.50 In Favor Of Developer Partially Challenging Park Impact Fees Under CCP § 1021.5

Limited Reversal Did Not Require A Remand, With The Appellate Court Showing Financial Incentives Were Not Outweighed By Financial Burdens To Challenging Developer.

            Plaintiff developer, whose project was up in the air, challenged a City of Alameda ordinance under which park impact fees of $1.6 million might be imposed on the future project, if any such project even materialized.  The lower court found that the City’s impact fees were infirm in some respects, with the appellate court sustaining most of them but disagreeing on one item.  After that, developer moved for attorney’s fees under the private attorney general statute, being awarded $558,052.50 by the lower court. 

            City’s appeal of the fee award was unsuccessful in Boatworks, LLC v. City of Alameda, Case No. A151063 (May 16, 2019) (published). 

            Section 1021.5’s elements were satisfied.  City argued that the partial reversal required a remand, but the limited nature of the reversal convinced the appellate court that no change would have occurred as to the fee award.  The most interesting part of the opinion is the discussion of financial incentives/burdens—the cost/benefit analysis required under Whitley, our Leading Case No. 14.  City argued that developer was on the hook for $1.6 million in impact fees such that its financial interest exceeded the burdens (the eventual fees awarded).   Not so, said the Court of Appeal.  More remote probabilities had to be factored in, such as litigation counsel’s belief that there was at best a 50% chance of success, which narrowed the number down to $800,000; and, further, there was at best a 50% chance the project would go through anyway, such that the real number was $400,000—less than the litigation burden against the City.  Fee award affirmed. 

Minors: High-Profile Law Firm Successfully Representing Minor In Wrongful Death Action Entitled To $11-12 Million In Fees

Common Count “Mistake” Claim Against Law Firm Went Away On Appeal Based On Denial Of Tort Claims, With Disgorgement Of Prior Fees Soundly Rejected.

            A.M. v. Lieff Cabraser Heiman & Bernstein, LLP, Case Nos. B269624 et al. (2d Dist., Div. 3 June 11, 2019) (unpublished) involved a high-profile law firm’s representation of a minor in a wrongful death action.  After the case was concluded, a guardian ad litem sued the firm for malpractice, other torts, and a common count, in the process trying to undo a minor’s compromise order awarding significant fees to the law firm after obtaining a $55-56 million trial recovery and after obtaining a $24 million lower settlement driven by Chrysler’s post-trial bankruptcy.  Guardian ad litem also sought disgorgement of $1.6 million in fees and costs earlier paid to the firm.  The 2/3 DCA actually found that the law firm did nothing wrong, reversing a common count “mistake” award and validating prior rejections of tort claims against the firm.  In the end, the firm received somewhere between $11-12 million in fees and costs, if our math is correct.  Actually, based on probate minor’s compromise award standards, this does not strike us as being out of the realm and a good result to end this dispute given the mega-settlement which was at issue.

Ethics, Off Topic: Default Vacated By 4/3 DCA Panel In Stark Reminder That Law Is A Profession, Not A Business Only—Civility And Professional Courtesies Are Still Virtues

A Stirring Ethical Opinion, Which Every Attorney Should Read.

            We acknowledge that this post on Lasalle v. Vogel, Case No. G055381 (4^th Dist., Div. 3 June 11, 2019) (published) is not related to attorney’s fees, but it is worthy of a post and a reminder to all California attorneys that we are both officers of the court and have an ethical responsibility to act with civility.

            The facts are not complicated.  A quick default was taken, and a set-aside motion was denied.  The appellate court reversed the result based on the particular circumstances. 

            But that was not the end of the matter.  The 4/3 DCA, in an eloquent opinion, stressed that the law is still a profession, not a business only.  Scorched earth, feet-to-the-fire attitudes should not be condoned (especially in litigation).  Rather, attorneys need to provide advance warnings of draconian default maneuvers and follow the simple mandate of CCP §583/130, where parties are to cooperate with each other in bringing an action to resolution in reasonably diligent fashion. 

            We thank Acting Presiding Justice Bedsworth for this very salient opinion, authored on behalf of the 4/3 DCA panel.

Appeal Sanctions, Arbitration: $55,764.40 Fee Award By An Arbitrator In Defective Car Case Could Not Be Reviewed On The Merits

Appeal Sanctions Was Not Imposed For Frivolous Appeal Because Respondent’s Request Was Patently Excessive.

            Justice Goethals, in Housen v. Ultimate Autoline, Case No. G055878 (4^th Dist., Div. 3 June 10, 2019) (unpublished), reminds litigants and practitioners that the merits of arbitrator’s decisions are by and large not reviewable and that the arbitrator has limited powers to revise/correct awards (the latter being known as the “anti-revision rule”).  He, on behalf of his panel, did so based on his perception that these principles “may be surprising even to experienced practitioners.”

            In this one, the arbitrator basically granted total relief to a car owner in a fraud/Song Beverly Act hybrid action as against the dealer, dealer’s principal, and loan paper holder standing in the shoe of the dealer.   (The arbitrator even awarded one component that was wrong, but it was not corrected so the merits could not be reviewed.)  To add insult to injury to the defense’s perspective, the arbitrator also awarded $55,764 in fees to plaintiff (the full request).  The appellate court confirmed that the merits of the compensatory and fee awards could not be second-guessed.

            What is very interesting about this opinion is the discussion on appellate sanctions.  Respondent moved for sanctions, seeking $47,795 for fees expended on the frivolous appeal.  The 4/3 DCA panel did believe that the appeal was frivolous, but it was taken aback when respondent’s counsel at oral argument indicated he was requesting just over $12,000 in sanctions.  Given that the initial request was patently excessive, the appellate court refused to award sanctions of any amount to respondents.  (BLOG COMMENT—Key takeaway here is to make sure your sanctions requests are reasonable and documented with precision; don’t make an inflated request and think a “scale back” at oral argument will necessarily save the day.  It might, but do not count on it.) 

Prevailing Party, Section 998, Section 1717: Host Of Section 1717 And 998 Issues Are Considered In Attorney’s Fees Dueling Requests

Equitable Claims Can Be “On The Contract,” Parties Losing On Their Complaint And Cross-Complaint Meant That Neither Side Prevailed; One Litigant Beat 998 Offer Based On Non-Monetary Value And The Fact That The Composite Joint Nature Of Offer Had To Be Considered, But Matter Had To Be Remanded For Prevailing Party Determination Based On An Earlier Reversal As To Plaintiff’s Fee Motion.

            Justice Fybel and two other colleagues on our local Santa Ana appellate court considered a host of attorney’s fees issues in Copenbarger v. Morris Cerullo Word Evangelism, Case Nos. G055129/G055131 (4^th Dist., Div. 3 June 10, 2019) (unpublished).

            The backdrop is that plaintiff’s complaint sought damages for breach of a settlement agreement in a hard-fought ground lease/sublease dispute, initially winning $118,000 in damages.  However, that judgment was reversed as a matter of law the other way in a prior appellate opinion.  One defendant cross-claimed, attempting to reform the settlement agreement but was unsuccessful in obtaining specific performance of the reformed agreement.  There were dueling motions for attorney’s fees.  Before the prior appeal was decided, the lower court denied the defense motion for attorney’s fees based on the cross-complaint, because those claims were denied.  However, it granted plaintiff’s motion for fees to the tune of $176,190 (out of a requested $328,500).

            In this second appeal, the 4/3 DCA panel affirmed the fee denial as to the defense, but it remanded the fee determination on plaintiff’s motion for a revisit of the prevailing party determination.  Many issues were addressed in this opinion.

            First, the defense argued that its cross-complaint should not have been considered under Civil Code section 1717 because the pleading only asserted equitable claims for reformation and specific performance, not “on the contract” under section 1717.  Wrong, said the appellate court.  Equitable claims can be on the contract (Kachlon v. Markowitz, 168 Cal.App.4^th 316, 347 (2008); In re Tobacco Cases I, 193 Cal.App.4^th 1591, 1601 (2011)), even when a plaintiff was not seeking to enforce the contract (Wong v. Davidian, 206 Cal.App.3d 264, 270 (1988)).  Here, the cross-complainant sought specific performance of a “reformed” settlement, which certainly is on the contract.  Given that neither side obtained relief on their pleadings, the trial court easily could determine that no side prevailed.

            Second, cross-complainant argued that its cross-complaint was only “defensive,” but that was rebuffed because it sought reformation and specific performance rather than sticking to its original strategy of seeking only to rescind the settlement agreement.  Beyond that, however, the trial court has discretion to find a cross-complainant a prevailing party in a “defensive” situation; it is not obligated to do so.  (Cussler v. Crusader Entertainment, LLC, 212 Cal.App.4^th 356, 368 (2012).)

            Third, the cross-complainant contended that plaintiff was liable for fees because it did not beat an unaccepted CCP § 998 offer for $100,000 and non-monetary consideration.  Based on the prior appellate reversal, plaintiff did not beat the monetary compensation.  But that brought the appellate court to the nonmonetary component, which it was able to value based on email clarification from the 998 offeror’s counsel (a practice encouraged in Prince v. Invensure Ins. Brokers, Inc., 23 Cal.App.5^th 614, 623 (2018)).  The nonmonetary valuation was at least $359,000, and after deduction of the $100,000 monetary payment, the total value of the 998 offer was $259,000—something which plaintiff/cross-defendant obtained in defeating the cross-complaint, beating the 998 offer.  However, despite the nonmonetary value of the 998 offer, the one defendant had to show that plaintiff did not beat the 998 offer, which was joint as to two defendants—something which the defense could not do based on the total 998 offer valuation.  (Agreeing with the comparison approach of Kahn v. The Dewey Group, 240 Cal.App.4^th 227, 242-244 (2005) and disagreeing with the contrary solitary approach of Winston Square Homeowner’s Assn. v. Centex West, Inc., 213 Cal.App.3d 282, 294 (1989).)

            Last, based on its earlier reversal of the monetary judgment in plaintiff’s favor, the appellate court determined that the proper course was to reverse the order granting fees to plaintiff and remand to redetermine prevailing party status.  The lower court would have to do so based on the fact neither side ultimately received what they wanted based on the complaint and cross-complaint. 

Judgment Enforcement: Where Judgment Debtor Resisted Efforts To Allow Payment To Judgment Creditor Despite Court Deposit, Judgment Creditor Entitled To Seek Postjudgment Enforcement Fees And Costs

Although Judgment Interest Ceased, Judgment Creditor Was Entitled To Seek Fees/Costs To Obtain Satisfaction—Any Other Result Would Be Mischievous!

            Wertheim, LLC v. Currency Corporation, Case No. B277633 (2d Dist., Div. 1 June 6, 2019) (published) was a situation where judgment creditor Wertheim obtained a bonded judgment in its favor but encountered a judgment debtor which continuously fought Wertheim’s efforts to obtain payment of the judgment from an appeal bond issuer’s deposit with the court.  However, judgment debtor Currency was able to convince a lower court that Wertheim’s motion for postjudgment enforcement fees was untimely.

            The 2/1 DCA, in a 3-0 opinion authored by Acting Presiding Justice Chaney, reversed and remanded for a merits determination on Wertheim’s motion for fees and costs.  That conclusion was dictated by the fact that the appeal bond issuer’s bond deposit was not a judgment “satisfaction” under CCP § 685.030(d) and other complimentary postjudgment enforcement statutory provisions because Wertheim could never get access to the disputed funds so the judgment could be paid given Currency’s actions in blocking access to the interpled funds.  Although judgment interest did cease, the deposit did not thwart Wertheim’s efforts to obtain postjudgment fees and costs given that Currency fought Wertheim’s ability to obtain access to the interpled funds; otherwise, unintended mischievous results would occur.

            BLOG COMMENT—Co-contributor Mike was one of the appellate counsel on the case, and gives great congratulations to lead appellate counsel Matthew D. Kanin as well as to co-counsel Jay Rahimi. 

Probate, Substantiation Of Reasonableness Of Fees: Trustee Benefiting Herself, Not The Trust, Not Entitled To Reimbursement Of $500,000 In Attorney’s Fees And Costs In Various Probate Proceedings

Besides That, Fee Substantiation Of A Re-created, Severely Redacted Nature Did Not Support Fee Recovery. 

            Decedent in In re Andersen Family Trust, Case Nos. B286565/B286867 (2d Dist., Div. 4 June 5, 2019) (unpublished) left about $1.3 million in assets to three beneficiaries, one of which was designated as the trustee.  After a to-do on distribution of assets which was largely won by beneficiaries, trustee sought $500,000 in attorney’s fees and costs for doing battle in various proceedings with the beneficiaries.  The lower court denied the request on several grounds.

            The 2/4 DCA affirmed.  The main problem was that trustee failed to do an allocation, with most of the work relating to protection of trustee’s own interests rather than for the benefit of the trust—with the trust’s benefit being of pivotal concern when it comes to reimbursement of fees and costs in the probate arena.  (Whittlesey v. Aiello, 104 Cal.App.4^th 1220, 1231 (2002).)  Beyond that, the fee substantiation was flimsy, consisting of re-created time and severely redacted billing entries such that the lower court was correct in concluding it was impossible to apportion fees for trustee’s versus the trust’s true interest. 

SLAPP: Real Parties In Interest In A Development Project Case Have A Stake To SLAPP, With Their Motion Not Frivolous And Requiring A Reversal Of Fees In Favor Of Petitioners

$28,795.70 In Fees Went Away Because SLAPP Motion Was Not Frivolous.

            In Rudisill v. California Coastal Commission (Xingyun, LLC), Case No. B289179 (2d Dist., Div. 2 June 5, 2019) (published), Real Parties were interested in a development project in Venice brought by certain petitioners against the Coastal Commission and City of Los Angeles.  Real Parties lost a SLAPP motion, based on the trial court’s perception they were not directly sued in the case and the claims in the petition did not arise from protected petitioning conduct.  The lower court then hit Real Parties with $28,795.70 in attorney’s fees for filing a frivolous SLAPP motion.

            Real Parties’ appeal was successful.  On the first impression “merits” issue, the 2/2 DCA concluded that Real Parties in a mandamus proceeding qualified as persons directly affected for purposes of an anti-SLAPP motion.  Once that was decided, there was enough proof to show that the petition claims arose from Real Parties’ petitioning activities, such that is was an abuse of discretion to grant frivolous fees “sanctions” against them. 

In The News . . . . Plaintiffs’ Attorneys In Latino Voting Rights Case Seek $22.3 Million In Fees And Expenses As Counsel For Prevailing Plaintiffs Against The City of Santa Monica

City Is Appealing The Merits Determination Of Voting Rights Violations; Plaintiffs’ Lead Counsel Estimates City Spent Between $13-20 Million On Defense Side.

     As reported by Jorge Casuso in “Voting Rights Attorneys Seek More Than $22 Million In Legal Costs” in an updated June 4, 2019 post in the Santa Monica Outlook, Plaintiffs’ attorneys are seeking $22.3 Million in attorney’s fees and expenses after a superior court judge ruled that Santa Monica’s at-large election system discriminates against Latino voters, a Voting Rights Act victory for which there is fees/costs-shifting.  City has filed an appeal on the merits.   Plaintiffs’ lead counsel estimates that the defense spent between $13-20 million in opposing efforts.  Plaintiffs’ attorneys are seeking compensation for hourly rates between $740-975 per hour, with one attorney estimating that the defense attorneys bill out at between $1,000-$1,500 per hour.  Right now, a hearing has been requested for late August of this year.

Intellectual Property: Ninth Circuit Affirms $121,423.01 Fee Award Under Copyright Act After Defendants Prevailed On An Invalid Copyright Defense

Appeals Court Sustained District Judge’s Application Of Fogerty Factors, Finding That A Technical Defense “Win” Does Not Impede A Fee Award In This Area.

            Defendants prevailed in Gold Value International Textile, Inc. v. Sanctuary Clothing, LLC, No. 17-55818 (9^th Cir. June 4, 2019) (published) based on a “technical” defense that plaintiff’s copyright was invalid based on inaccurate information in its copyright application, with the merits determination affirmed on appeal.  Losing plaintiff also appealed the district court’s award of $121,423.01 in attorney’s fees to the defense under 17 U.S.C. § 505 of the Copyright Act, applying the factors for such an award as enunciated in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). 

            The Ninth Circuit affirmed the fee award as well.  It found that the district court did not abuse its discretion in concluding that (1) defendants prevailed; (2) they had modest success, albeit on a “technical” defense; (3) the result encouraged defendants to advance meritorious defenses in copyright cases; (4) plaintiff advanced some objectively unreasonable legal positions during the course of the litigation; (5) defendants were worthy of compensation for being the prevailing parties; and (6) the fee award would tend to deter litigants from pursing copyright cases based on invalid registrations.  The federal appeals court also determined that it has never held that prevailing on a “technical” defense was precluded as a ground for awarding fees under 17 U.S.C. § 505, with this opinion cementing that reality.