CALIFORNIA ATTORNEY'S FEES

Homeowner Associations, Special Fee Shifting Statutes: Error In Lower Court’s Narrow Interpretation Of Civil Code Section 5975(c) Led To Reversal Of Attorney Fees Denial To Prevailing Defendants

Gravamen Of Plaintiff’s Complaint Was On Enforceability Of The Governing Documents.

            In Alexander v. Singletary, Case No. D075943 (4^th Dist., Div. 1 January 21, 2020) (unpublished), one of five homeowners in a common interest development unsuccessfully sought judicial declaration that the governing documents were unenforceable as to him, and for partition from the development.

            As prevailing defendants, the other four homeowners moved for section 5975(c) (Davis-Stirling Act fee-shifting provision) attorneys’ fees.  The lower court denied – concluding Plaintiff’s action did not seek “to enforce” the governing documents.

            Two of the four defendants appealed, and the 4/1 DCA reversed – finding Plaintiff’s entire action revolved around the enforceability of the governing documents within the meaning of section 5975(c), and that Plaintiff could not avoid the fee provision simply because he phrased his complaint to seek a finding that the governing documents are “unenforceable.”

            The 4/1 DCA’s reversal applied only to the two defendants who appealed, with judgment considered final as to the two non-appealing defendants.

Arbitration, Sanctions: 4/3 DCA Affirms $50,000 Code Civ. Proc. Section 128.5 Sanctions Awarded Against Client And Attorney For Their Frivolous Litigation and Dilatory Tactics

Broad Language In The Parties’ Retainer Agreement Authorized Arbitrator’s Review Of Ancillary Matters – Such As Litigation Conduct Rationally Related To The Underlying Dispute.

            In ATG Electronics, Inc. v. The Mulcahy Law Firm, Case No. G056931 (4^th Dist., Div. 3 January 16, 2020) (unpublished), Law Firm claiming Former Client owed almost $100,000 in outstanding legal bills demanded arbitration pursuant to the parties’ retainer agreement. In response, Former Client filed a complaint in O.C. Superior Court alleging fraud, breach of fiduciary duty, claims for restitution and declaratory relief – seeking compensatory and punitive damages, and attorney fees.  Law Firm successfully moved to compel arbitration. Former Client then filed a counterclaim against Law Firm, with the same allegations, and a response asserting numerous affirmative defenses against Law Firm’s claim.  In the end, the arbitrator found the case to be a simple dispute about unpaid attorney fees, Former Client’s actions as a “despicable effort to ‘stiff’” Law Firm, Former Client’s affirmative defenses nothing but “red herrings” intended to avoid payment of the legal fees, and Law Firm’s fees as “reasonable and extremely necessary” – awarding Law Firm $119,931.15 in damages, arbitration fees and future interest.  Additionally, the arbitrator awarded $25,000 in monetary sanctions, under Code Civ. Proc. § 128.5, against Former Client and its counsel for what he found to be “bad faith activities or tactics that are frivolous” for the lawsuit filed in superior court, and another $25,000 for asserting affirmative defenses and pursuing a counterclaim that were meritless.

            Former Client (and its counsel) fared no better on appeal of the sanctions award.  In a 3-0 opinion authored by Justice Moore, the 4/3 DCA found the arbitrator had not exceeded his authority – given the broad language in the arbitration provision of the parties’ retainer agreement did not limit the arbitrator’s review and thereby allowed his review of ancillary matters.  Additionally, pursuant to the principles underlying Moncharsch v. Heily & Blase (1992) 3 Cal.4^th 1 and Heimlich v. Shivji (2019) 7 Cal.5^th 350 [reviewed in our May 30, 2019 post], the 4/3 DCA reminded that an arbitrator’s decision is generally not reviewable for errors of fact or law, and that by voluntarily agreeing to arbitration in their retainer agreement, the parties had agreed to bear the risk of uncorrectable legal or factual error in return for a quick, inexpensive, and conclusive resolution to their dispute.

Family Law: No Abuse Of Discretion In $200,000 Section 271 Sanctions Award Against Wife Even If Amount Includes Future Fees And Costs To Be Incurred As A Result Of Wife’s Conduct

The 4^th District Ordered A Remand, However, To Allow The Lower Court To Review The Award To Ensure It Is Limited Only To Attorneys’ Fees And Costs, And To Prepare An Order That Includes Information Regarding The Basis For The Sanctions Amount

            Family Code § 271 authorizes a court to impose attorney’s fees and costs as a sanction to encourage cooperation between the parties and attorneys where a party’s/attorney’s behavior is such that it unnecessarily increases the cost of the litigation or frustrates settlement of the case.  These sanctions are limited only to attorney’s fees and costs – whether already incurred or to be incurred in the future.

            Such sanctions, including future fees/costs, were issued in Menezes v. McDaniel, Case No. D074434 (4^th Dist., Div. 1 December 18, 2019) (unpublished), certified for publication on January 15, 2020, where Wife had failed – for years – to comply with the lower court’s order to transfer title of a property in Brazil to Husband.

            On appeal, the 4/1 DCA found no abuse in discretion with the lower court’s finding that Section 271 sanctions were warranted – nor with its decision to award both past and future fees/costs, connected with Wife’s failure to comply, as sanctions.  However, the 4/1 DCA was unable to determine from the lower court’s order whether the $200,000 improperly included Husband’s travel costs to and from Brazil and/or calculations for  vacation time Husband was forced to take to travel to Brazil to deal with the property transfer issue.  For that reason alone, remand was necessary to allow the lower court to review the award amount and to prepare an order clearly delineating the basis for the sanctions amount.

Family Law: Ex-Husband’s Challenge To Denial Of $150,000 In Need-Based Fees Affirmed On Appeal

Both Sides Spent A Ton; Both Sides Had Income to Fight; Both Sides Got What They Got After Seven Years Of Litigation.

            Needs-based fees under Family Code sections 2030 and 2032 have to be based on a consideration of the total circumstances.  Some litigants ignore this basic reality, but Ettenger v. Ettenger, Case No. H044184 (6^th Dist. Jan. 13, 2010) (unpublished) reminds us that this is the reality in most situations.

            In this one, ex-husband spent $340,000 in the dissolution action (owing another $17,000), while ex-wife spent $400,000 (and owed another $18,000).  Yikes!  Ex-wife had the better cash-flow income, with ex-husband seeking another $150,000 in needs-based fees, a request denied by the lower court.

            That determination was affirmed by the Sixth District.  It sustained the lower court’s conclusions that (1) neither side lacked access to funds based on distributions made earlier in the case, (2) ex-wife did not unilaterally drive up the costs of litigation; and (3) both parties had contributed to the cost of the litigation.  The appellate court found nothing wrong in the denial of fees to ex-husband, independently finding that ex-husband had plenty of liquid of funds to engage counsel to fight in the dissolution—something he did, maybe not something which was prudent in the long run.  Finally, the lower court was not obligated to issue a statement of decision in ruling on a needs-based fee request or a Family Code section 271 sanctions request.  (In re Marriage of Fong, 193 Cal.App.4^th 278, 296 (2011) [section 271]); In re Marriage of Askmo, 85 Cal.App.4^th 1032, 1040 (2000) [pendente lite attorney’s fees].) 

Private Attorney General: Prevailing Petitioner In Drunk Driving Out-Of-State Conviction Case Was Properly Denied $240,459.72 In Attorney’s Fees Under CCP § 1021.5

Relatively Small Class Of Individuals Involved, Plus An Attenuated Public Interest, Justified Denial Of Fees.

            In Villarreal v. Gordon, Case No. B291027 (2d Dist., Div. 1 Dec. 19, 2019) (unpublished), certified for publication on January 10, 2020, a petitioner prevailed on a mandate writ petition by which the DMV was not going to give effect to his Arizona DUI conviction under a Driver License Compact between California and other states to identify out-of-state DUIs if certain conditions are met.  Petitioner then sought $240,459.72 in attorney’s fees under the private attorney general statute.  The lower court denied the request, reasoning that the benefit affected a reasonably small class of persons with multiple drunk driving convictions in California and other states and that the avoidance of increased sanctions for out-of-state convictions was not the type of public benefit to be vindicated under section 1021.5. 

            The 2/1 DCA affirmed, agreeing with the conclusions of the lower court.  Indeed, after reviewing the record below, the appellate court also found that petitioner could not competently prove the number of persons who were benefitted by the judgment below. 

Family Law: Preemptive Sanction Against Future Conduct Not Allowable Because It Impedes The Ability Of Litigation To Defend Litigant’s Interests And Gives No Opportunity To Withdraw The Offensive Conduct

Preemptive Sanction Order Reversed, Although Court Of Appeal Was Sympathetic To What Family Law Judge Was Attempting To Do.

           In the acrimonious dissolution case of Marriage of Richards, Case No. G056626 (4^th Dist., Div. 3 Jan. 9, 2020) (unpublished), ex-wife continually interrupted the family law judge and filed 11 matters in one month, prompting the lower court to issue an OSC re sanctions which ultimately indicated that ex-husband would be awarded sanctions for having to oppose any future motions.  The 4/3 DCA, in an opinion authored by Presiding Justice O’Leary, reversed.  CCP §§ 128.5 and 128.7 only deal with an existing action, tactic, or filing, such that the lower court’s order did not properly allow ex-wife an opportunity to withdraw an offensive motion.  Besides that, fundamental rights were involved:  “We conclude a preemptive award unfairly impedes the ability of a litigant to raise a defense or take appropriate legal action in the case,” which was illustrated by the fact that not all of ex-wife’s motions had been frivolous in the past.

Civil Rights, Costs: Winning FEHA Plaintiff Properly Awarded $64,356 In Expert Witness Fees Through Costs Memorandum Procedure

Plaintiff Did Not Necessarily Have To File Noticed Motion Where Trial Court Did Exercise Discretion In Awarding Them Through The Costs Memorandum Process.

            A FEHA plaintiff won a very nice jury verdict of $2 million in compensatory damages and $6.1 million in punitive damages (reduced on appeal to $4.264 million based on a net worth issue) against a defendant for whistleblower retaliation, disability discrimination, medical leave discrimination, wrongful termination, and intentional infliction of emotion distress.  The trial judge also awarded plaintiff $64,356 in expert witness fees after plaintiff filed a costs memorandum objected to by the defense but granted nonetheless by the lower court.   (FEHA allows these types of expert witness fees to prevailing plaintiffs in the discretion of the lower court.)

            The 2/7 DCA, in Joseph-Mitchell v. SEIU Local 721, Case No. B289210 (2d Dist., Div. 7 Jan. 8, 2020) (unpublished), affirmed.  Interpreting Anthony v. City of Los Angeles, 166 Cal.App.4^th 1011 (2008), the appellate panel concluded that a memorandum of costs or filed motion on FEHA expert witness fees will do the trick, especially where the trial judge did exercise discretion in awarding those fees.   So, a noticed motion was not necessary under the circumstances.

Section 1717, Settlement: Settlement Agreement Silent As To Allocation Of Attorney’s Fees/Costs Did Not Bar Section 1717 Fee Recovery By Prevailing Alter Ego Defendant

$15,806.50 Fee Recovery Affirmed, Plus Fees/Costs On Appeal.

            The next case shows how one needs to make fees/costs recovery explicit under a settlement agreement; if not, a later prevailing party not involved may get attorney’s fees and costs.

           In J Sylvester Construction, Inc. v. Standeford, Case No. G057337 (4^th Dist., Div. 3 Jan. 8, 2020) (unpublished), contractor sued a subcontractor performing unlicensed plumbing work under a subcontract with a prevailing party fees clause.  Later, both parties entered into a settlement agreement that was silent as to an allocation of attorney’s fees and costs.  However, contractor continued to prosecute a suit against individual defendant Standeford based on an alter ego theory, with defendant defensing that claim.  The lower court then awarded $15,805.50 in fees pursuant to the contractual fees clause and Civil Code section 1717.

            The 4/3 DCA, in an unpublished decision authored by Justice Moore, affirmed.  The problem for appellant was that the settlement did not address an allocation of attorney’s fees such that fees still could be awarded to the alter ego prevailing defendant.  The appellate court also directed that Standeford was entitled to fees on appeal for winning. 

History, Books: Co-Contributor Marc Reviews Miriam Pawel's Book, "The Browns of California"

Co-Contributor Marc Has Reviewed The Browns of California in the Most Recent Issue of California Litigation.

    The full title of the book is: The Browns of California: The Family Dynasty That Transformed a State and Shaped a Nation. The review appears in California Litigation, the journal of the California Lawyers Association, Vol. 32, No. 3, p. 46 (2019). With the permission of the California Lawyers Association and its publication California Litigation, we are republishing the article and making it available by clicking here.

Appealability, Discovery, Sanctions: $3,456.70 In Fee Sanctions Based On Denial Of Postjudgment Discovery Order Upheld On Appeal

Motion Denying Discovery Order Is Nonappealable, But 2/8 DCA Treated It As Mandate Petition; CCP § 128.5 Principles Were Not Involved, Because Discovery Sanctions Were At Issue Instead.

            The 2/8 DCA in Dalessandro v. Mitchell, Case No. B293472 (2d Dist., Div. 8 Dec. 17, 2019 unpublished), but certified for publication on January 3, 2020, dealt with a plaintiff who had a postjudgment discovery motion denied for failure to affix postage to the demand (making service improper) and who was also assessed (along with his counsel) with discovery sanctions of $3,456.70.  Plaintiff appealed.

            On a liminal jurisdictional issue, the appellate panel did agree that the postjudgment discovery was not appealable, acknowledging a split in authority but siding with the non- appealability decisions.  However, it did exercise discretion to treat the appeal as a mandate petition so the merits could be heard expeditiously.

            Because there was no postage attached to the discovery demand, service was improper such that sanctions were warranted.  Plaintiff’s argument that there was noncompliance with CCP § 128.5(f) by failing to give “safe harbor” leeway was bogus because the lower court issued fees as sanctions for discovery abuse.  Nothing demonstrated that an opposing party had to meet and confer with respect to alerting the demanding party to defects in discovery requests (such as improper service).  Finally, opposing party did request sanctions in his motion to compel opposition, a perfectly valid way of presenting the issue to the lower court. 

Arbitration, Prevailing Party, Section 1717: Trial Court Properly Found That Respondent Did Not Prevail For Fee Recovery Even Though She Did Obtain A Ruling Denying A Petition To Confirm The Arbitration Award And Did Obtain A Vacatur Ruling

The Lower Court’s Discretionary Determination That No One Prevailed Was Affirmed On Appeal.

            In Goraya v. Stephens, Case No. F078335 (5^th Dist. Jan. 3, 2020) (unpublished), property seller and property buyer submitted to arbitration and settled, with the listing agent joined as a party in the arbitration at his own request, eventually obtaining an award for commission and attorney’s fees against property seller.  Seller’s arbitration claims against listing agent were found to lack merit.  Listing agent petitioned to confirm the award, which was opposed, and seller requested to vacate the award against seller.  The lower court refused to confirm the arbitration award and in fact vacated it—results which held up when listing agent’s appeal was dismissed as being untimely.  Seller then filed a motion for attorney’s fees against listing agent based on a contractual fees clause in the listing agreement, with the lower court denying the fee motion because it found that seller was not the prevailing party.

            The fee denial was sustained on appeal.  Under Civil Code section 1717, there was no “clear winner” such that the trial judge’s conclusion that each party had won-loss-tied record of 1-1-1 supported the determination that there was no prevailing party.  Seller then claimed she was entitled to fees under CCP §§ 1293.2 and 1032.  Section 1032 did not yield any definitive result, because both parties prevailed under that statutory provision. 

Mediation: Voluntary Settlement Discussions Before Judge Intermediary Qualify As A Mediation For Purposes Of Satisfying Contractual Fees Clause Condition Precedent Requirement

Non-Judge, Too, Does The Trick, But VSCs – Different From MSCs – Meet The Criteria Also.

            Lateef v. Dutt, Case No. A150824 et al. (1^st Dist., Div. 2 December 31, 2019) (unpublished) involved a trial court denial of attorney’s fees to a landlord under a lease clause requiring that the parties attempt mediation before suing for damages in court.  The record showed that the parties attended various voluntary settlement conferences before judge intermediaries, but they could not resolve the matter.  A bench trial largely resulted in a “win” for landlord, to the tune of $211,795.80 in various damages or other relief.  Landlord moved for $225,000 in fees, including unlawful detainer expenses, a request denied in entirety by the lower court.  The 1/2 DCA reversed because it found that attending VSCs did satisfy the mediation requirement, even though a mandatory settlement conference would not.  In reaching this conclusion, it found that dictionary definitions showed a mediation could be done via a VSC or by a mediation before a non-judge.  However, it found that $42,920 in requested fees were not proper, because they were reached in a UD action which was voluntarily dismissed (Santisas precluding fees) and which in any event was filed too late after the apt 60-day deadline. 

Year In Review – 2019

Year End Wrap-Up: Mike and Marc’s Top 20   Decisions in 2019

Supreme Court Room (Room 129), California State Library & Courts Building, 914 Capitol Mall, Sacramento, Sacramento County, CA

Part 2 of 2—Prevailing Party, Sanctions, and CCP § 998 Decisions Predominated In Our Last Top 20 Decisions.

            Here we go with the last Top 20 decisions to round out our 2019 Top 20 list.

10.  PREVAILING PARTY.  Cole v. Hammond, 37 Cal.App.5^th 912 (2d Dist., Div. 4 July 24, 2019)—authored by Justice Collins; discussed in our July 26, 2019 post:  Defendants winning mandatory dismissal of an action based on the case not being tried within 5 years of commencement were prevailing parties under contractual fees clause. 

9.  PREVAILING PARTY/SANCTIONS/SECTION 1717.  De la Carriere v. Greene, 39 Cal.App.5^th 270 (2d Dist., Div. 8 Aug. 28, 2019)—authored by Presiding Justice Bigelow; discussed in our Aug. 28, 2019 post:  Plaintiff’s work on post-judgment motions to obtain dismissal of cross-appeal by defendant prevailing at trial were not allowable under Civil Code § 1717 because defendant was prevailing party in the overall matter, requiring reversal of lower court’s fee award to plaintiff; plaintiff’s alternative CCP § 128.5 ground for affirmance did not work because lower court did not rule on this ground and only an appellate court can award sanctions for frivolous appellate work.

8.  SANCTIONS.  Marriage of Sahafzadeh-Taeb and Taeb, 39 Cal.App.5^th 124 (1^st Dist., Div. 1 Aug. 26, 2019)—authored by Justice Banke; discussed in our Aug. 26, 2019 post:  Recent amendments to CCP § 128.5 establish that subjective bad faith is required under § 128.5, while only objective bad faith is required under CCP § 128.7.

7.  SECTION 998.  Hersey v. Vopava, 38 Cal.App.5^th 792 (2d Dist., Div. 8 Aug. 14, 2019)—authored by Justice Stratton; discussed in our Aug. 15, 2019 post:  Rejecting offeree which rejected first and second CCP § 998 offers is entitled to addition of pre-offer fees/costs up through date of second offer when the offeree ultimately prevails at trial, with these pre-offer fees/costs being added to the judgment for purposes of determining who prevailed under section 998.

6.  EMPLOYMENT/SECTION 998.  Scott v. City of San Diego, 38 Cal.App.5^th 228 (4^th Dist., Div. 1 Aug. 1, 2019)—authored by Justice Guerrero; discussed in our Aug. 2, 2019 post:  Based on a legislative amendment effective January 1, 2019, nonfrivolous FEHA actions, even where the defense served a successful CCP § 998 offer, cannot give rise to routine costs recovery against unsuccessful plaintiff employee.

5.  FAMILY LAW.  Marriage of Bittenson, 41 Cal.App.5^th 333 (2d Dist., Div. 6 Oct. 22, 2012)—authored by Justice Yegan; discussed in our Oct. 24, 2019 post:  Family Code § 2034 establishes that a Family Law Attorney’s Real Property Lien to secure payment of attorney divorce fees is conditional such that a family law judge can revisit the propriety of it and can even expunge or limit the lien later on.

4.  POSTJUDGMENT ENFORCEMENT.  Highland Springs Conference and Training Center v. City of Banning, 255 Cal.Rptr.3d 331, 2019 WL 6208344 (4^th Dist., Div. 2 Nov. 21, 2019)—authored by Presiding Justice Ramirez; discussed in our Nov. 23, 2019 post:  Fees/costs incurred in successfully adding judgment debtors to a judgment under CCP § 187, including successful appellate work, should be classified as prejudgment costs not governed by the Enforcement of Judgments Law’s procedures/deadlines.

3.  FEE CLAUSE INTERPRETATION/PREVAILING PARTY.  Regency Midland Constr., Inc. v. Legendary Structures, Inc., 41 Cal.App.5^th 994 (2d Dist., Div. 8 Nov. 7, 2019)—authored by Justice Wiley; discussed in our Nov. 8 post:  A general contractor prevailed for purposes of a contractual fee award where the lower court upheld contractor’s retention withholding as to subcontractor even though contractor did not win all of its desired relief; just like statutory interpretation, when construing the text of an agreement, “read read read the contract.”

2.  CIVIL RIGHTS.  Beames v. City of Visalia, 2019 WL 6907528 (5^th Dist. Dec. 19, 2019)—authored by Justice Smith; discussed in our Dec. 23, 2019 post:  Plaintiff was entitled to fees under 42 U.S.C. § 1988 where a substantial federal civil rights claim was pled and plaintiff prevailed on a factually-related non-civil rights claim having merit.

1.  SPECIAL FEE SHIFTING STATUTE.  City of Los Angeles v. Metropolitan Water Dist. of So. Cal., 255 Cal.Rptr.3d 202, 2019 WL 6123675 (2d Dist., Div. 8 Nov. 19, 2019)—authored by Justice Stratton; discussed in our Dec. 1, 2019 post:  Successful party/intervenor was entitled to fee recovery in a California Public Records Act proceeding and a reverse-CPRA action, agreeing with Pasadena Public Officers Assn. v. City of Pasadena, 22 Cal.App.5^th 147, 157 [reviewed in our April 15, 2018 post].

PENDING CALIFORNIA SUPREME COURT REVIEW—ONLY ONE CASE.  K.J. v. Los Angeles Unified School Dist., S241057. (B269864; nonpublished opinion; Los Angeles County Superior Court; BC505356.) Petition for review after the Court of Appeal dismissed an appeal from an order in a civil action. This case presents the following issue: Does the Court of Appeal lack jurisdiction over an appeal from an order imposing sanctions on an attorney if the notice of appeal is brought in the name of the client rather than in the name of the attorney?

Consumer Statutes: Patel Decision Now Published

Song-Beverly Act Plaintiff Receiving No Damage Award Can Still Be A Prevailing Party, And There Can Be More Than One Prevailing Plaintiff Where Two Plaintiffs Are Involved.

            In our December 18, 2019 post, we discussed Patel v. Mercedes-Benz USA, Case No. B293813 (2d Dist., Div. 4), which was unpublished at the time.  The case decided that there can be more than one prevailing plaintiff for Song-Beverly Act fee shifting purposes in a lemon law case, where one plaintiff did not obtain money but did achieve his litigation objective by having the car company return lease payments.  The opinion also refused to limit fee recovery to just the second prevailing plaintiff, remanding for a reconsideration of the fee award.  Patel was certified for publication on December 31, 2019. 

Year In Review – 2019

Year End Wrap-Up: Mike and Marc’s Top 20  Decisions in 2019

Courtroom three, James R. Browning U.S. Court of Appeals Building, San Francisco, California

Part 1 of 2—CCP § 998 Decisions Were Front and Center in Early 2019, With Other Issues Spread Across the Board.

            It is the Holiday season, and we continue our tradition to present our personal top 20 decisions from our blog postings during 2019, keeping in mind they are simply a distillation of what we selectively picked as important.  Day in and day out, California appellate courts and the Ninth Circuit decide fees issues—and we do not mean to take away from the jurisprudence in other areas of the law, given that first impression or emerging issues were addressed at various points during the year.

20.  MEDIATION.  Berkeley Cement, Inc. v. Regents of the University of California, 30 Cal.App.5^th 1133 (5^th Dist. Jan. 7, 2019)—authored by Presiding Justice Hill; discussed in our January 8, 2019 post:  Voluntary, non-court ordered mediation expenses are not categorically unreasonable with respect to being awarded as routine costs, with the trial judge having discretion to allow them if reasonably necessary for the litigation.

19.  SECTION 998.  Licudine v. Cedars-Sinai Medical Center, 31 Cal.App.5th 918 (2d Dist., Div. 2 Jan. 3, 2019)—authored by Justice Hoffstadt; discussed in our January 4, 2019 post:  In evaluating whether a CCP § 998 offer is made in good faith, three factors are most pertinent:  (1) how fair into the litigation the section 998 offer was made; (2) the information available to the offeree prior to the section 998’s offer expiration (such as voluntary exchanges of information or the relationship between the parties); and (3) whether the offeree let the offeror know it needed more information, plus the offeror’s response to such a request. 

18.  ARBITRATION/SECTION 998.  Heimlich v. Shivji, 7 Cal.5th 350 (Cal. Supreme Court May 30, 2019)—authored by Justice Corrigan; discussed in our May 31, 2019 post:  Rejected CCP § 998 offer should not be presented before the arbitrator in the merits phase of an arbitration; a party has until 15 days after issuance of a final award to submit a cost request asserting rejection of the section 998 offer to the arbitrator, with the arbitrator having power to consider the request and amend any award accordingly.

17.  APPEALABILITY/ETHICS.  Levinson Arshonsky & Kurtz LLP v. Kim, 35 Cal.App.5^th 896 (2d Dist., Div. 1 May 29, 2019)—authored by Assigned Justice Weingart; discussed in our May 30, 2019 post:  A trial court’s denial of a petition to compel a Mandatory Fee Arbitration Act arbitration is not appealable, but must be challenged through an extraordinary writ petition.

16.  EMPLOYMENT/SECTION 1717:  Dane-Elec Corp. v. Bodokh, 35 Cal.App.5^th 761 (4^th Dist., Div. 3 May 24, 2019)—authored by Justice Fybel; discussed in our May 26, 2019 post:  Labor Code § 218.5(a)’s prohibition of not allowing attorney’s fees recovery by prevailing employers (unless the trial judge determines the wage nonpayment claims were brought in bad faith) controls over Civil Code § 1717’s right to contractual fees in a case where the contractual claim is inextricably intertwined with the wage claims.

15.  PRIVATE ATTORNEY GENERAL.  Sweetwater Union High School v. Julian Union Elementary School Dist., 36 Cal.App.5^th 970 (4^th Dist., Div. 1 June 4, 2019)—authored by Justices Nares; discussed in our June 9, 2019 post:  In a charter school dispute, plaintiff’s partial success justified CCP § 1021.5 fee recovery because charter school issue is of public interest and the revenue gain from increased enrollment as a result of partial success was trivial when compared to litigation expenses on the Whitley financial burden/incentive prong of § 1021.5.

14.  REQUESTS FOR ADMISSION.  Samsky v. State Farm Mutual Auto. Ins. Co., 37 Cal.App.5^th 517 (2d Dist., Div. 8 June 26, 2019)—authored by Justice Stratton; discussed in our June 30, 2019 post:  Denial of “costs of proof” sanctions under CCP § 2033.420 is reversed because the lower court improperly put the burden of proving the nonexistence of RFA denial exceptions on the RFA propounding party rather than the RFA responding party.

13.  FAMILY LAW.  In re Marriage of Ciprari, 32 Cal.App.5^th 83 (2d Dist., Div. 1 Feb. 6, 2019)—authored by Assigned Justice Currey; discussed in our June 25, 2019 post:  Even though ex-wife could pay for attorney’s fees, “needs-based” fees request analysis requires a more nuanced review where ex-husband had run up litigation expenses and over-litigated the dissolution case.

12.  CONSUMER STATUTES (a two-fer).  Hanna v. Mercedes-Benz USA, LLC, 36 Cal.App.5^th 493 (2d Dist., Div. 2 June 18, 2019)—authored by Presiding Justice Perluss; discussed in our June 19, 2019 post:  Under lemon law fee-shifting statute (Civ. Code § 1794(d)), fee recovery for a prevailing car buyer is based on lodestar analysis, unimpacted by percentage of recovery contingency analysis, and Morris v. Hyundai Motor America, 41 Cal.App.5th 24 (2d Dist., Div. 7 Sept. 16, 2019)—authored by Assigned Justice Stone; discussed in our Sept. 17, 2019 post:  relying on Hanna, trial judge properly reduced lemon law fee request of $191,668.75 to an actual fee award of $73,864 based on lodestar reductions, reducing for duplication, high hourly rates, non-complexity of the case, and failure to use legal professions with lower billing rates.

11.  POSTJUDGMENT ENFORCEMENT.  Wertheim, LLC v. Currency Corp., 35 Cal.App.5th 1124 (2d Dist., Div. 1 June 6, 2019)—authored by Justice Chaney; discussed in our June 10, 2019 post:  Appeal bond issuer’s deposit into court was not a satisfaction of judgment under CCP § 685.030(d) where judgment debtor blocked judgment creditor’s efforts to obtain recovery of the deposited funds.

            Happy Holidays to our readers!

Family Law: $15,000 “Needs-Based” Award To Ex-Husband, Where Ex-Wife’s Parents Had Funded $290,000 In Her Child Custody Battle Fees, Was Appropriate Under Family Code Section 2030

Not Improper To Factor In Ex-Wife’s Parents’ Significant Funding Of Litigation.

            In Marriage of Janssens, Case No. C085986 (3d Dist. Dec. 26, 2019) (unpublished), ex-wife and ex-husband were engaged in a contentious dissolution battle over child custody issues relating to their son.  Earlier, a family law judge had ordered ex-wife to pay ex-husband $15,000 in “needs based” fees because ex-wife’s parents had funded about $194,000 in her fees up to that point.  Later, ex-husband requested another $100,000 in “needs based” fees, given that ex-wife’s parents had now funded about $290,000 in the custody battles.  The trial judge ordered that an additional $15,000 in attorney’s fees be paid to ex-husband, even though ex-wife had yet to pay him the prior award.  The Third District had no problem affirming this award, even though ex-husband did not file a respondent’s brief (probably because he could not afford it).  The moneys loaned by ex-wife’s parents certainly could be considered in the equation, such that the lower court award was not even close to an abuse of discretion under the circumstances.

Legislation: California Consumer Privacy Act Of 2018 Becomes Law On January 1, 2020

Does It Have An Attorney’s Fees Clause?—Not An Express One, But It Does Have A Catchall Which Will Be The Subject Of Judicial Interpretation.

            On January 1, 2020, the California Consumer Privacy Act of 2018 (CCPA) becomes law.  It is a wide-ranging law that impacts more than 500,000 U.S. companies doing business with California residents.  It provides California residents with a panoply of rights as to their personal information.  Among other things, the CCPA provides that a California resident may bring a private right of action under the CCPA against an impacted business for failure to implement and maintain reasonable security procedures/practices appropriate to the nature of the information resulting in an unauthorized access, exfiltration, theft, or disclosure of unencrypted or nonredacted personal information—with a recent amendment clarifying that this private right of action only applies to data breaches and no other CCPA violations.

            However, despite the private right of action granted to California residents, the law does not include an express provision allowing prevailing plaintiffs to recovery their attorney’s fees, although it does include catchall language allowing the court to award “[a]ny other relief the court deems proper.”  So, that broad language will be the subject to court interpretation, although we could see cases where successful plaintiffs request fees under California’s private attorney general statute—especially in class action cases.

            Interestingly enough, a study commissioned by California’s Attorney General estimates that “initial compliance” with the CCPA may, for its part, cost the estimated 500,000 affected American firms about $55 billion, as summarized in an article in the December 21, 2019 issue of The Economist.  Stayed tuned for developments in the attorney’s fees area. 

Deed Of Trust, POOF!, Prevailing Party, Section 1717: $427,951.93 Fee Award Based On Deed Of Trust Fee Provision Went POOF! Because Nonjudicial Foreclosure Purchaser Relied On Trustee’s Deed Upon Sale Having No Fees Clause

Purchaser’s Action Against Tax Authorities Did Not Really Focus On Deed Of Trust With Fees Clause.

            CP III Rincon Towers, Inc. v. Assessment Appeals Bd. of the City and County of San Francisco (Rincon EF Realty LLC), Case No. A155714 (1^st Dist., Div. 4 Dec. 17, 2019) (unpublished) shows that Civil Code section 1717”s “on the contract” requirement can sometimes lead to no fee recovery based on what contract is involved as the gravamen of a litigant’s action rather than simply a backdrop to the dispute.

            What occurred in this one was that a prior owner (Rincon) purchased a property, financing the property with a $110 million loan with a lender who later sold the loan to CP III.  The original deed of trust had various fees clauses.  Rincon filed four tax assessment applications.  CP III, after acquiring the loan, purchased the property at a nonjudicial foreclosure sale and obtained a trustee’s sale upon sale, including rights to some personal property (possibly the tax assessment applications), which had no fees clauses.  CP III then sought to become a party to the tax assessment proceedings, ultimately being denied the opportunity in three of the four proceedings.  Rincon filed a motion for attorney’s fees under Civil Code section 1717 based on the deed of trust fees clauses, with the lower court awarding it as against CP III a sum of $427,951.93.

            CP III wisely appealed, because the fee award went POOF! upon review by the 1/4 DCA.

            The appellate court determined that CP III was relying on the trustee’s deed with no fees clause rather than basing its rights to intercede in the tax assessment proceedings upon the deed of trust (which had the fees clauses).  In determining whether an action is “on the contract” under Civil Code section 1717, a contract with a fees clause will not provide fee entitlement if it is only a backdrop of a case rather than an agreement which is critical (rather than merely peripheral) to the overall nature of the dispute.  (Orozco v. WPV San Jose, LLC, 36 Cal.App.5^th 375, 407-408 (2019) [discussed in our June 19, 2019 post]; Pellegrini v. Weiss, 165 Cal.App.4^th 515, 533-535 (2008).)  Here, after a careful review of the gravamen of CP III’s action, the reviewing court determined that the trustee’s deed, not the deed of trust, was the “trigger point” for fee entitlement—and it did not have a fees clause.  So, the fee award went POOF!

Special Fee Shifting Statute: Plaintiff Elder Losing Restraining Order Against Defendant Properly Subject To Fee Exposure

Welfare And Institutions Code Section 15657.03(t) Did Allow For Fee Shifting.

            In Baca v. Sukert, Case No. D074512 (4^th Dist., Div. 1 Dec. 24, 2019) (unpublished), plaintiff elder, after winning a fleeting TRO which was dismissed, lost an elder abuse restraining order against defendant property manager in a longstanding feud with the place she was staying and its property manager.  Welfare and Institutions Code section 15657.03(t) allows for a discretionary award of attorney’s fees and costs to a prevailing party in this type of dispute.  The trial court granted defendant property manager all of his requested $14,699.25 in fees and $40 in costs.  Plaintiff’s appeal did not change things.  First, plaintiff failed to oppose the fee motion, such that any arguments were forfeited in response.  (Blackburn v. Charnley, 117 Cal.App.4^th 758, 769 (2004).)  Beyond that, on the merits, the fee award was no abuse of discretion given the acrimonious background of the entire litigation, despite the appellate court conceding the award was more substantial than it had seen in other cases.

SLAPP TWO-FER: $40,200 And $5,250 SLAPP Mandatory Fee Awards Affirmed On Appeal

Also, Plaintiff In One Matter Was Not Entitled to Fees For Frivolous SLAPP Motion Where Defendant Partially Prevailed By Knocking Out Allegations.

            1.  Spencer v. Sinclair, Case No. C082485 (3d Dist. Dec. 23, 2019) (unpublished): One defendant won a SLAPP motion, requesting $51,196 in mandatory attorney’s fees (with reasonableness of the amount requested being at issue).  The trial judge awarded $40,200 (inclusive of $60 in costs).  Plaintiff argued that no fee recovery was allowable because the attorney was representing himself; however, the record showed that although that was true for some defendants, one of the defendants independently retained the attorney such that there was the requisite separate attorney-client relationship under SLAPP jurisprudence.

            2.  Drevaleva v. Dept. of Industrial Relations, Case No. A155165 et al. (1^st Dist., Div. 4 Dec. 23, 2019) (unpublished): Defendant was partially successful on a SLAPP motion, knocking out a libel claim and successful/unsuccessful in knocking out some negligence allegations.  The trial court awarded defendant $5,250 in attorney’s fees, representing 21 hours at $250/hour.  The appellate court concluded this was reasonable, not to mention that under Baral (a recent state supreme court case) a lodestar analysis should be used when some allegations are stricken but others are not.  Because the time spent on the successful work overlapped with the unsuccessful work, the fee award was proper.  With respect to plaintiff’s argument that fees were warranted because defendant’s motion was frivolous (since the trial judge denied plaintiff’s fee request), this did not resonate because partially prevailing for a defendant is not equivalent to frivolous given that defendant did knock out some allegations.