CALIFORNIA ATTORNEY'S FEES

In The News . . . . A Couple of Recent Surveys Show How the COVID-19 Pandemic Has Impacted Law Firm Revenue

Law Firms Have Been Hit Hard, Also.

            According to a May 18, 2020 post by Lyle Moran on the ABA Journal website, roughly 81% of law firms suffered a revenue drop during the pandemic, with 27% of the reporting firms in a recent survey by Martindale-Avvo stating that they had seen business decline by more than half.  Cloud-based Clio reported that the pandemic had resulted in a 40% drop in the number of new legal matters opened each week in the U.S. compared with the number in late February 2020.  Nearly 20% of the Martindale-Avvo survey reporting firms said they had to lay off and furlough staff.  More than 60% of the reporting attorneys indicated their belief that it will take from four months to a year for their firms to revert back to the pre-pandemic status quo.

Employment: Betancourt Decision Now Published—Labor Code Fee Entitlement And Outstanding Defense Opposition To Fee Motion

Reversal Of $280,794 Fee Recovery As A Matter Of Law Because No Fee Entitlement Was Found.

            On May 1, 2020, we posted on Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (2d Dist., Div. 8 April 30, 2020), an unpublished decision at the time, where the 2/8 DCA reversed as a matter of law a $280,794 fee award under various Labor Code provisions where the defense did an outstanding job of showing why entitlement did not lie.  We can now report that this decision was certified for publication on May 21, 2020.  We again commend readers to review this decision to show how a superior fee opposition was done in this particular matter.

Consumer Statutes: Lemon Law Plaintiff, Only Awarded $2,221.95 In Fees/Costs Out Of $163,205.60, Has Order Reversed Given That She Achieved Triple The Amount Communicated In Informal/Section 998 Offers During The Course Of The Litigation

Given Substantial Reduction In Lodestar Request, De Novo Review Resulted In A Reversal.

            We can definitely tell you that there has been a surge in published and unpublished decisions on the proper standards to be employed in awarding fees under the Song-Beverly Act, commonly known as California’s Lemon Law.  The next unpublished decision joins the ranks.

            In Palombi v. Chrysler Group LLC, Case No. A156166 (1^st Dist., Div. 3 May 20, 2020) (unpublished), plaintiff buying a $25,749 Dodge Avenger had engine/transmission problems that apparently could not be solved, taking her vehicle to an authorized repair facility 11 times over a 16 month period of time.  She finally filed suit under the Lemon Law against the car distributor, which shortly resulted in an informal offer to make restitution of the purchase price and other items as well as asking for “a fully executed Release for all defendants.”  After discovery was ongoing, defendant served four CCP § 998 offers (some of which had ambiguous release and other terms), with plaintiff accepting the fourth offer by which she would be paid $75,000 and reasonable costs, expenses, and attorney’s fees under the Lemon Law (by stipulation or by court-determined motion) in exchange for a case dismissal with prejudice.

            Plaintiff moved for $163,205.60, $19,445.60 in costs, and $95,840 in fees (plus a 1.5 multiplier on the lodestar fee request).  The defense principally argued that the initial informal offer to settle for around $25,000 made further litigation efforts unproductive.  The trial judge bought it hook, line, and sinker, only awarding $1,750 in fees and $471.95 in costs for an aggregate of $2,221.95.

            The 1/3 DCA panel reversed.

            Based on the substantial lodestar fee reduction, the appellate court independently reviewed whether the proper legal principles were followed with respect to the fee award—and they were not.  The defense position ignored these key points:  (1) plaintiff obtained almost a tripling in value over the prior defense offers as far as an actual recovery (from $25,000 to $75,000), hardly limited success under the circumstances; (2) plaintiff was within her rights to reject settlement offers that had unfavorable or vague terms (such as undefined releases or undefined vehicle condition return language such as “undamaged condition (save normal wear and tear)”); and (3) plaintiff did “prevail” within the Lemon Law fee-shifting language, with no obligation to prove that she would have won on the civil penalties issue. 

            Here is a close-to-concluding language by the appellate court: “[Defendant] essentially urges that we adopt a rule requiring that a buyer must abandon a claim to civil penalties when the vendor offers restitution of the original purchase price.  We decline to do so.  Such a rule is particularly inappropriate where, as here, the vendor’s settlement offer features the unfavorable and invalid terms outlined above.”  (Slip Op., p. 13.)

SLAPP: Winning SLAPP Plaintiff Seeking Attorney’s Fees For A Frivolous SLAPP Motion Did Not Have To Comply With 21-Day Safe Harbor Notice Requirement Of CCP §128.5

4/2 DCA Opinion Counsels That A Plaintiff In This Situation To Ask For Attorney’s Fees In The Opposition To The SLAPP Motion.

            For readers of our blog, you probably know by now that a plaintiff defeating a frivolous SLAPP motion can be awarded reasonable attorney’s if the frivolity standards of CCP §128.5 are satisfied.  (CCP §425.16(c)(1).)  But under CCP §128.5(f), there is the need to give a 21-day “safe harbor” notice so that a party is given the opportunity to withdraw the offending pleading.  So, how does this all work for a plaintiff who opposes a SLAPP motion and believes it is frivolous in nature?

            The answer has been provided by the 4/2 DCA in Changsha Metro Group Co., Ltd. v. Xuefeng, Case No. E073322 (4^th Dist., Div. 2 May 20, 2020) (published). 

            After construing the two statutory schemes in pari materia (fancy Latin for “in tandem”), the appellate court concluded that no 21-day “safe harbor” notice needs to be given where a winning plaintiff included a fees request in opposition papers to the SLAPP motion.  This result counsels that plaintiffs believing the motion to be frivolous should include a fee request in opposition papers so as to allow the defense an opportunity to reply and to avoid the safe harbor notice requirements. 

Private Attorney General, SLAPP: $86,000 Requested Fee Award In SLAPP And Private Attorney General Contexts Had To Be Remanded For A Possible Award

Election Candidate Issue Was One Of Public Interest.

            In Sandlin v. McLaughlin, Case Nos. G057264/G057420 (4^th Dist., Div. 3 May 19, 2020) (unpublished), a trial judge denied a writ petition by a litigant challenging certain election candidate statements even though the real parties had a pending anti-SLAPP motion.  Later, the lower court denied the SLAPP motion as moot as well as related attorney’s fees motion under the private attorney general statute for a requested $86,000 in fees.

            Real parties got another crack on their fee motions. 

            Their SLAPP motion was not “mooted” by the merits resolution; otherwise, the SLAPP fee-shifting statutes would be a mockery.  With respect to the private attorney general issue, Real Parties were successful (they defeated the writ petition in entirety), and election law issues are ones of public interest.  So, real parties get to go again on their fee requests.  Acting Presiding Justice Aronson authored the 3-0 decision. 

SLAPP: $33,621 SLAPP Fee Award Affirmed On Appeal

Defense Request Of $448,745 Was Rejected By Lower Court, Which Defense Did Not Object To On Appeal.

            Just to tell ya, Newport Harbor Offices & Marina, LLC v. Morris Cerullo World Evangelism, Case Nos. G056117/G056511 (4^th Dist., Div. 3 May 19, 2020 (unpublished) is a long-standing battle with many appeals.  Defendants won a SLAPP order and were awarded mandatory fees in a malicious prosecution action by the other side.  Various defendants requested $448,745 in fees, but they were awarded only $33,621 in total.  Defendants won the merits on appeal, and they did not file a cross-appeal.  With that said, the fee award in their favor was affirmed. 

Appeal Sanctions: $15,000 Sanctions To Appellate Clerk Is The Verdict For A Frivolous Appeal

Frivolous Appeal, In Tandem With Citations Outside Of Appellate Record, Sealed The Deal.

            In Brown v. Butler, Case No. D075348 (4^th Dist., Div. 1 May 19, 2020) (unpublished), the appellate court, on its own motion, requested briefing on why the appealing party and his attorney should not pay sanctions for a frivolous appeal, based on the merits and citing matters outside of the appellate record.  Well, we like to stay on top of these things and can report that $15,000 was the sanctions for a frivolous appeal, payable to the clerk of the appellate court.

Family Law: $15,000 In Section 271 Sanctions And $25,000 In Breach Of Fiduciary Duty Fees Were No Abuse Of Discretion

Even If Explanations Could Have Been Clearer, No Prejudice Shown By Appealing Ex-Wife.

            Presence of prejudice is a critical factor in any appeal.  The next case, Marriage of Effner, Case No. D074478 (4^th Dist., Div. 1 May 18, 2020) (unpublished), so demonstrates.

            There, ex-wife—who was found by the lower court to have diverted assets to her own benefit—was hit with Family Code section 271 sanctions of $15,000 and with attorney’s fees under Family Code section 1101(g) for not being candid with respect to treatment of assets.

            The appellate court affirmed these orders.  Ex-wife could point to no support for her argument that the trial judge had to make a detailed explanation on her ability to pay with respect to the section 271 sanctions given his rather pointed remarks at the oral hearing.  On the section 1101(g) issue, ability to pay is a concern and the lower court’s reasoning was somewhat cursory, but no prejudice was demonstrated based on its comments on the section 271 sanctions issue (which inferentially tended to show ex-wife did have the financial resources to pay the fees order). 

Private Attorney General: Intervener Media Organizations In Reverse-PRA Action Were Entitled To CCP § 1021.5 Fees Because Trial Court Improperly Conditioned Their Intervention On Striking Their Requests For Fee Recovery

This Condition For Intervention By Intervenors Of Right Was Unreasonable In Nature.

            It now seems established that attorney’s fees under the private attorney general statute, CCP § 1021.5, are available to intervening parties in a reverse-Public Records Act (PRA) case.  (Pasadena Police Officers Association v. City of Pasadena, 22 Cal.App.5^th 147, 159 (2018) [discussed in our April 15, 2018 post]; City of Los Angeles v. Metropolitan Water District of Southern California, 42 Cal.App.5^th 290, 306 (2019) [discussed in our December 1, 2019 post].) 

            However, in Carlsbad Police Officers Association v. City of Carlsbad, Case No. D075723 (4^th Dist., Div. 1 May 18, 2020) (published), the 4/1 DCA faced an issue of first impression for intervenors with respect to a trial court condition granting their intervention motion.  But first we describe the procedural context for the issue being decided by the appellate court.

            Eight police officer associations filed a “reverse-PRA action” to prevent disclosure of certain police misconduct/use of force records under Senate Bill No 1421.  Several media organizations moved to intervene, a request granted by the trial court but with an unusual condition to the ability to intervene:  interveners would have to strike their requests to attorney’s fees under section 1021.5.  Later, the lower court agreed with the merits of interveners’ argument as to why police records had to be disclosed.

            The appellate court reversed the intervention “fee striking” condition order.  Media organizations were interveners as of right, which means that any conditions on intervention had to be narrowly circumscribed.  The 4/1 DCA did not view the fee striking condition as even a close call, because it thwarted the interveners’ rights to vindicate public interests.  The matter was remanded, but the media interveners’ right to appellate expenses was only allowed with respect to costs and fees relating to the appeal against the police associations, not certain cities or their police chiefs. 

            BLOG OBSERVATION—This decision does have a scholarly discussion about conditions which can be granted in connection with an intervention request.

Class Actions: Ninth Circuit Holds That There Is No “Bright-Line Rule” For Percentage-Of-Recovery Benchmark In Megafund Class Action Settlements And That Variance Of Requested From Fees From A Class Counsel’s Upfront Bid In The Case Should Be Consi

Higher Fee Awards/Cost Award Remanded For Reconsideration.

            Class action attorneys, especially those representing the class, will want to read the Ninth Circuit’s opinion in In re Optical Disk Drive Products Antitrust Litig., Nos. 17-15065 et al. (9^th Cir. May 15, 2020) (published).  There, the Ninth Circuit remanded for reconsideration of some fee/costs awards to class counsel in megafund settlement situations.  Class counsel had moved in two cases, respectively, for 25% of the fund (with counsel’s sealed upfront bid for the case being 12-13% of the fund) and for 21% of the fund (with the sealed bid being 12% of the fund). In remanding the eventual awards by the district court (which largely adopted class counsel’s requests), the federal court of appeals held that (1) the size of the fund in megafund settlements is a relevant consideration for which there is no “bright-line” benchmark or sliding-scale approach, although the 25% benchmark for smaller cases is of little assistance in megafund cases; and (2) the variance between a competitive bid, upfront fee structure by class counsel and the requested fees is a relevant concern, with the bid becoming the starting point for determining a reasonable fee—with that bid amount subject to adjustment upward or downward depending on circumstances not contemplated at the time of the bid as long as the district court provides an adequate explanation for any variance.

Fee Clause Interpretation: Successor Trustee Of Decedent LLC Member Entitled To Recover Attorney’s Fees As Prevailing Party In Litigation Against The LLC

Although Successor Trustee Was Not A Member Within the Operating Agreement’s Definition, His Status As Deceased Member’s Legal Representative Exercising Membership Rights Qualified Him For Fees Under The Operating Agreement.

            In Premiere Raspberries, LLC v. Dutra, Case No. H045594 (6^th Dist. May 14, 2020) (unpublished), the Sixth District affirmed an attorney’s fees award to the successor trustee of a limited liability company’s deceased member, with the successor trustee decedent’s rights under the LLC operating agreement.  Although determining that successor was not a “member” under the operating agreement, fee entitlement was existent because successor qualified as a legal representative exercising membership rights—a status allowing recovery of fees in the amount of $16,612.50.  In the process, the appellate court provided a good discussion of California LLC statutes, both the Beverly-Killea Limited Liability Company Act and the subsequent California Revised Uniform Limited Liability Company Act.

Fee Clause Interpretation, Prevailing Party: $290,000-Plus Fee Award To Cross-Complainant Engineering Firm Affirmed On Appeal Because Fees Clause Was Broad Enough To Encompass Quantum Meruit Claims

Adverse Party Should Have Paid Around $57,000 To Other Side, And, If So, It Would Have Been The Prevailing Party!

            Tristar Realty Group, LLC v. Koury Engineering & Testing, Inc., Case No. B294535 (2d Dist., Div. 8 May 14, 2020) (unpublished) is a result demonstrating how the prevailing party determination in a case, where a discretionary call is at issue, many times turns on the equities of the matter.

            In this one, engineering firms and a real estate developer hiring the firms got into a dispute over a “not to exceed” contract even though some of the testimony showed that the developer orally agreed and by some conduct intended to pay the engineering firms for post-Thanksgiving work of between $57,000-$59,000.  In the end, engineering firms obtained a $46,609.91 net judgment after offset of a small recovery to the developer under a quantum meruit theory. The lower court then determined that engineering firms were the prevailing parties, awarding them something north of $290,000 in attorney’s fees under a contractual fees clause.  Developer appealed.

            The 2/8 DCA affirmed.

            The pertinent fees clause encompassed any legal action or other proceeding, including a declaratory relief action, brought to enforce the contract “or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement.”  This broad language allowed for recovery on both contract and noncontract claims, such as under the quantum meruit theory.  (Maynard v. BTI Group, Inc., 216 Cal.App.4^th 984, 993 (2013).). The appellate court also found helpful the discussion on the “in connection with” language contained in Mountain Air Enterprises, LLC v. Sundowner Towers, LLC, 3 Cal.5^th 744, 758-760 (2017).  Engineering firms were the prevailing parties because they defeated developer’s $477,000 damages claims, even though developer did defeat firms’ $290,000 contract claims.  To developer’s rhetorical argument that it should just have paid the $290,000 “extortionistic” claim given that the eventual fee award was higher, the 2/8 DCA panel responded that if the developer had paid for the $57,000 in post-Thanksgiving work, it would have been the prevailing party. 

Partition: Trial Judge Did Not Erroneously Order One Sibling In Partition Action To Pay A Greater Share of Attorney’s Fees Than Other Sibling Parties Based On Being Obstreperous During The Course Of The Litigation

Appealing Sibling Ordered To Pay $95,896.43 Out Of $184,847.52 Fee/Costs Award For Partition Litigation Expenses.

            In a partition action, the court has discretion to apportion the costs of the action among the parties in proportion to their interests or “such other apportionment as may be equitable.”  (Code Civ. Proc., § 874.040.)  These costs encompass the reasonable attorney’s fees incurred or paid by a party for the common benefit.  (Code Civ. Proc., § 874.010(a).)  In doing so, both these provisions provide flexible avenues for the trial courts to allocate costs or fees against a party pressing spurious matters (Forrest v. Elam, 88 Cal.App.3d 164, 174 (1979)) or require a party to bear its own fees under certain circumstances (Lin v. Jeng, 203 Cal.App.4^th 1008, 1025-1026 (2012); see also Orien v. Lutz, 16 Cal.App.5^th 957, 968 (2017)). 

            These principles were fully at play in Nyberg v. Moacanin, Case No. B293594 (2d Dist., Div. 5 May 14, 2020) (unpublished), a partition action involving four siblings where a sale of an Old Town Pasadena building was ordered in light of them being tenants in common.  The problem is that one of the siblings apparently was abusive and impeded efforts to list the property for sale, as well as opposed some reasonable steps in the partition action.  The trial judge decided that this sibling should pay $95,896.43 out of the $184,847.52 in fees and costs incurred in the course of the partition action.  Sibling hit with this award appealed, but the 2/5 DCA affirmed.  The facts of record showed no abuse of discretion given sibling’s conduct which was not conducive to selling the property and getting the matter to a resolution. 

Miscellaneous, Default Judgments: 4/3 DCA Vacates Default Judgment And Remands To Determine If CCP § 425.11 Notice Of Damages Was Filed

If Not, Default Judgment Is Void; If So, Then Inefficiency/Lodestar Factors Must Be Considered On Remand.

            Although unpublished, Alshamlan v. Arabian Restaurants, Inc., Case No. G057543 (4^th Dist., Div. 3 May 12, 2020) (unpublished) is must reading for disabled rights plaintiffs’ attorneys seeking a default judgment against a target defendant.

            There, a balance-challenged plaintiff, after being refused lunch service at a restaurant which would not allow him to have his service dog Geo with him, filed a single-incident complaint under the Unruh Civil Rights Act, Disabled Persons Act, American with Disabilities Act, and Business and Professions Code section 17200.  The complaint did not specify any amount of damages, with plaintiff making a prayer for an injunction and “general, compensatory, and statutory damages” under the California disability statutes, trebled according to statute.  Plaintiff also prayed for an award of statutory attorney’s fees.  Plaintiff then filed for entry of a default judgment, requesting issuance of a permanent injunction and $40,311.33 in monetary damages--$25,000 in damages, $14,680 in fees, and $631.33 in costs.  The injunction request was based on the ADA and the damages/fees/costs based on the California disability statutes and ADA (fees and costs under the ADA, because only an injunction could be issued under that statute).  At the prove-up hearing, the trial court refused to award the requested $25,000 damages because no specific amount was alleged in the complaint.  However, it did award $5,000 in statutory minimum damages.  The trial judge further declined to issue the proposed injunction on the basis it was overbroad.  It rejected plaintiff’s request for over $14,000 in fees, finding $1,800 to be the reasonable fee award—expressing worry that the requested amount was way over the local rule default judgment guidelines.

            The 4/3 DCA, in a 3-0 decision authored by Justice Goethals, reversed and remanded.  The principal basis for the reversal/remand was the fact that plaintiff may not have served a notice/statement of damages under CCP § 425.11 to impart actual notice of the amounts of special and general damages being sought.  If one had not been filed, the default judgment was directed to be vacated on the basis it was void.  If the statement had been filed, the appellate court provided some additional guidance to the trial judge on the fees issue, given plaintiff had appealed on the ground that the fee award was too low.  The lower court should consider plaintiff’s limited success and other lodestar/reduction factors in fashioning a fee award if the statement of damages had been filed.

            BLOG COMMENT—Justice Goethals also discussed how the damages calculations under the state disability statute are confusing in the default judgment context, providing a good roadmap on how they are to be calculated.  A good primer for plaintiff disability attorneys seeking default judgments. 

Reasonableness Of Fees, Retainer Agreements: Lower Court Properly Denied Attorney’s Fees And Costs For Winning $7,580 Against Ex-Client In Fee Collection Case

Reason Was That Matter Should Have Been Brought As Limited Civil Case Rather Than An Unlimited One.

            Code of Civil Procedure section 1033 grants a trial court discretion to deny, in whole or in part, a plaintiff’s recovery of litigation costs, including attorney’s fees, where the plaintiff brought the action as an unlimited civil case but obtains a judgment for money damages in an amount that could have been recovered in a limited civil case. 

            In U.S. Construction Law v. Kinder, Case No. D074911 (4^th Dist., Div. 1 May 12, 2020) (unpublished), plaintiff law firm sued to recover over $68,000 in fees from ex-client for representing her in a cabin repair case alleging $75,000 in damages, a case where the causes of action which could have given ex-client fee recovery, if successful, were ejected through a summary judgment motion—which prompted law firm to withdraw.  Ex-client cross-complained for breach of fiduciary duty and negligence in the handling of the action from which law firm sought to collect the $68,000-plus in fees.  The jury only awarded law firm $7,580 in damages out of the requested $68,000-plus.  Law firm then sought attorney’s fees as the prevailing party under a contractual fees clause in the retainer agreement.  The trial judge denied the request in entirety based on the view that the cabin repair suit should not have been brought in the first place (but certainly not as an unlimited case) and the fees sought for the work were unreasonable.

            The 4/1 DCA affirmed, finding the fee/costs denial to be no abuse of discretion.  The cabin repair suit was not well-founded, and the law firm did not show good judgment in filing it as an unlimited case.  Although the trial court even expressed that a denial is an unusual ruling, that ruling was justified under the circumstances. 

Intellectual Property: Ninth Circuit Determines, In Case Of First Impression, That A Declaratory Relief Victory On Copyright Abandonment Qualifies For A Potential Fees Recovery Under 17 U.S.C. §505

Fee Denial Vacated And Remanded To Consider Whether It Qualifies Under Discretionary Copyright Fee-Shifting Statute Guidelines.

            The Ninth Circuit, in Doc’s Dream, LLC v. Dolores Press, Inc., No. 18-56073 (9^th Cir. May 13, 2020) (published), reversed a district judge’s determination in denying a copyright fees request under 17 U.S.C. §505 as a matter of law.  In a case of first impression, it determined that section 505 fees potentially were recoverable where copyright litigants won a declaratory relief victory on copyright abandonment.  The Ninth Circuit vacated the fee denial and remanded so that the district judge could then weigh the discretionary factors to determine if a fee award was justified under section 505. 

            BLOG CONGRATS—We noticed our friend Ben Shatz of Manatt Phelps was winning lead counsel for the appealing parties.  Congrats, Ben!

Special Fee Shifting Statute: Arace Decision Now Published

Welfare And Institutions Code § 15657.5(a) Mandates An Award Of Reasonable Attorney Fees/Costs Against Defendant Found Liable For Financial Abuse Under The Elder Abuse Act Even If Damages Are Not Awarded.

            We discussed the then unpublished case of Arace v. Medico Investments, LLC, Case No. E071194 (4^th Dist., Div. 2) in our March 25, 2020 post.  The case involves defendants’ unsuccessful appeal of attorney’s fees and costs awarded against them after a jury found them liable for financial abuse and neglect claims under the Elder Abuse Act.  Defendants claimed the award was made in error because the jury had awarded plaintiff damages only on the neglect claims – with no damages awarded on the financial abuse claim.  However, as the 4/2 DCA pointed out, the jury’s finding that defendants were liable for financial abuse mandated an award against them for plaintiff’s reasonable attorney’s fees and costs – pursuant to Welfare and Institutions Code section 15657.5(a) – even if no other form of relief was granted by the jury.  Arace was certified for publication on May 11, 2020.

Probate: $117,436.24 Section 17211(b) Fees Award Affirmed On Appeal Against Trustee Who Was Found To Have Acted In Bad Faith

Although Appealing The Section 17211(b) Fees Award, Trustee Argued Against The Prior Bad Faith Finding And Not Against The Amount Of Fees Awarded Or Beneficiary’s Statutory Entitlement To Them.

            In Cronin v. Hurst, Case No. G057303 (4^th Dist., Div. 3 May 8, 2020) (unpublished), a trustee, who was found to have engaged in self-dealing and acting in bad faith in the administration of his mother’s revocable living trust, appealed a Probate Code section 17211(b) attorney fees award against him of $117,436.24.  

            On appeal, the trustee did not argue against the amount of fees awarded or the beneficiary’s statutory entitlement to the fees.  Rather, he argued that his due process rights were violated because the fees had been awarded without a noticed motion, and that the trial court had failed to consider evidence that he had acted in good faith in administering the trust.

            The 4/3 DCA found his arguments without merit and affirmed.

            As to the noticed motion, the appellate panel found that a noticed motion is not required for a trial court to make a determination that a beneficiary is entitled to fees.  Probate Code § 17211(b) gives discretion to a trial court to award attorney fees to a trust beneficiary contesting the trustee’s account and conduct as was the case here.  Following a full trial on these issues, the trial court issued a statement of decision finding the trustee had acted in bad faith and without reasonable cause.  Additionally, based upon its finding of bad faith, the trial court properly exercised its discretion to surcharge the trustee attorney fees and costs – an order that can be made in the statement of decision.  (612 South LLC v. Laconic Limited Partnership 184 Cal.App.4^th 1270, 1284 (2010).)  Once the trial court made the determination that the beneficiary was entitled to the section 17211(b) statutory fees, the only necessary noticed motion related to the fees was for the “prove-up” of the amount of fees to be awarded – a noticed motion that was brought by the beneficiary in this matter.

            As to the trustee’s evidence of good faith administration argument, the trustee did not appeal the order granting beneficiary’s petition wherein trustee was found to have acted in bad faith.  Beyond that, the record did not reflect – nor did the trustee contend – that he was denied the opportunity to present evidence at trial that he did not act in bad faith or engage in self-dealing. 

Family Law: Family Code §§ 1101(g) And 271 Sanctions Order Against Father Affirmed On Appeal

Purpose Of These Sanctions Is To Spur Candidness Between Parties To Dissolution Action.

            In Marriage of Gutierrez, Case No. B291507 (2d Dist., Div. 8 May 6, 2020) (published), among other things, father was sanctioned under Family Code §§ 1101(g) [fee sanctions against spouse violating fiduciary duty of disclosing assets] and 271 [sanctions for prolonging litigation/not promoting settlement] when he failed to make proper disclosures about a different house.  Father appealed to no avail, misunderstanding the nature of these statutory provisions.  They are not designed to punish past wrongs, but instead were enacted to spur good conduct in terms of both sides being candid with each and the court.  Here was the takeaway by the deciding panel: “Couples dissolving their bonds thus must grasp the importance of candor. They, and their attorneys, must understand concealment will be costly and counterproductive.”  (Original emphasis.)

Homeowner Associations, SLAPP: $2,510 SLAPP Fee Award Affirmed Because No Opposition Filed At Trial Level

Fifth District Did Not Have To Decide If Indigency Of Plaintiff, An Argument Not Raised Before The Trial Judge, Could Justify A Fee Reduction Under SLAPP Fee Statute.

            The plaintiff/appellant in Cruz v. Abdelaziz, Case No. F077506 (5^th Dist. May 6, 2020) (unpublished) got SLAPPed and then failed to file an opposition to a defense fee request, resulting in an adverse fee award of $2,510.  Plaintiff appealed, principally arguing that his indigency was a factor which was not considered.  Although the Fifth District acknowledged that this is a factor for a losing homeowner in a Davis-Stirling Act fee-shifting dispute (Garcia v. Santana, 174 Cal.App.4^th 464, 476-477 (2009)), this indigency argument was not raised below and thus was waived, especially given the lack of an opposition by plaintiff.  Fee order affirmed.

            BLOG COMMENT—Although the case did not involve an HOA dispute, we cross-reference to our topical category “Homeowner Associations” for readers who may need to use the reasoning in Garcia.