CALIFORNIA ATTORNEY'S FEES

Homeowner Associations: Homeowners Can Obtain Access to Attorney Invoices Sent to Homeowner Associations

 

Recent Los Angeles Time Article Explores the Subject.

     Does a homeowner in a common interest residential subdivision project have the right to review attorney invoices for services rendered to a homeowners association? You betcha. Smith v. Laguna Sur Village Community Assn., 79 Cal.App.4^th 641 (2000) so held.

     For a nice, short article on the subject (also describing the statutes under which homeowners can obtain the invoices), see Stephen Glassman and Donie Vanitzian’s March 29, 2009 Los Angeles Times article entitled “Homeowners have the right to inspect attorney invoices.”

Family Law: Husband Outscores Wife In Obtaining $14,000 Net Fee Award

Family Code Section 271 Is Broader than Just Encompassing Activities that Frustrate Settlements.

     Both former spouses got hit with attorney’s fees under Family Code section 2032 and 271, although husband was the “net” winner with $14,000 due after offsetting wife’s fee award. The amount was to be paid from wife’s sequestered escrow funds.

     Wife lost her appeal of the fee award in Marriage of Folkert, Case No. B201124 (2d Dist., Div. 1 Mar. 30, 2009) (unpublished). Although arguing that she was impermissibly punished for simply frustrating settlement, the appellate panel observed that section 271 is broader—encompassing activities that increase litigation costs, such as wife’s refusal to prepare or agree to a proposed judgment. Aside from that, wife admitted she had assets of $130,300, which showed she had the ability to pay (a determination supported by the fact the $25,000 was to be paid from escrowed funds representing a partial share of wife’s proceeds from the sale of the former home). No abuse of discretion was found with respect to the fee award.

Civil Code Section 1717 and Fee Clauses Interpretation: Appellate Court Reverses $1,370,604 Fee Award Because Some Recovery Was On Uncovered Fraud Counts And Winner’s Limited Success Required Some Further Apportionment

First District, Division 4 Believed Award Needed to Apportion Out Some Fraud Work and Take Into Account Plaintiff’s Limited Success on the Promissory Note Claims.

     Who says that appellate courts blindly rubberstamp fee awards by trial courts? The next case certainly demonstrates that this is not the case, with the reviewing courts making sure that substantial fee awards do not encompass work on uncovered substantive claims, that apportionment was done in certain areas, and that a litigant’s limited success was properly taken into account.

     In Khazan v. Braynin, Case No. A114369 (1^st Dist., Div. 4 Mar. 30, 2009) (unpublished), plaintiffs did prevail on note foreclosure actions involving $300,000 and $57,000 promissory notes, although they did not recover on their fraud and RICO claims. The fees clauses in the promissory notes were narrow—allowing recovery “should suit be commenced to collect this note or any portion thereof.” The trial court then awarded a whooping $1,370,604 in fees to plaintiffs, broken out by applying a 1.5 multiplier on a $850,732 lodestar (out of a requested lodestar of $944,952) sought by a veteran attorney with about 45 years of experience and also awarding a full $94,506 in fees to another of their attorneys. (The veteran was awarded $400 per hour and the other attorney was awarded $285 per hour.) Defendants lost an appeal on the merits, but did win a reversal of the fee award.

Eureka!: Upheld Anti-SLAPP Motion Means Upheld Fee Award

Fee Award Gets Affirmed Automatically If No Other Challenge Is Made Apart From Rejected Underlying Merits Arguments.

     Eureka! is likely the cry when a merits judgment is affirmed and no challenge is otherwise made to a fee award.

     Birkner v. Lam, Case No. 121981 (1^st Dist., Div. 3 Mar. 30, 2009) (unpublished) was an anti-SLAPP proceeding that generated much prior litigation (and some published decisions) on the interaction between the anti-SLAPP statute and the scope of the Civil Code section 47 litigation privilege. At last, the appellate court rejected challenges to the anti-SLAPP motion grant, which had also produced an award of attorney’s fees to the defense totaling $62,087.50. Because the merits challenge was rejected and no other separate challenge was made to the fee award, EUREKA!—the fee award was upheld also.

                          Library of Congress.  Engraving.  1860-70.

Civil Code Section 1717: Trial Court Erred In Denying Fee Award To Defendant Defeating A Lease Purchase Option Specific Performance Claim

Second District, Division 1 Reverses Fee Denial as Too Restrictive.

     We have reviewed many decisions involving interpretation of contractual fees clauses, which involve a construction of the ambit of Civil Code section 1717. In the next case, the appellate court reversed based on the determination that the lower court interpreted the scope of the fees clause too restrictively. Contractual interpretation is a nice issue on appeal, because it is a judicial function in the absence of conflicting parol evidence.

     Dayco Funding Co. v. Schneider, Case No. B196591 (2d Dist., Div. 1 Mar. 27, 2009) (unpublished) involved a defendant who defeated a specific performance claim based on a purchase option provision in a residential lease agreement. The lease clause provided that “[i]n the event that legal action is undertaken by any party to enforce the terms of this lease or to recover possession of the premises, the prevailing party shall be entitled to recover from the other party all costs incurred in connection with such action, including reasonable attorney fees and collection costs, with or without suit.” The trial court did not award fees to defendant under this provision.

     The appellate court reversed.

     It found that (1) Civil Code section 1717 did apply, (2) defendant won decisively because plaintiff failed to achieve its litigation objective, and (3) there was no support for the conclusion defendant was not entitled to fees because the lease was “limited to the terms of the tenancy.” Rather, because the opposite losing party would have been entitled to fees based on the broadly-worded lease option provision, the section 1717 mutuality principle required the same result with respect to defendant. (Care Construction, Inc. v. Century Convalescent Centers, Inc., 54 Cal.App.3d 701, 705-706 (1976), disapproved on unrelated grounds in Canal-Randolph Anaheim, Inc. v. Wilkoski, 78 Cal.App.3d 477, 497 (1978).)

Family Law: A Two-Fer—Family Code Section 271 Award Affirmed And $1.2 Million Civil Code Section 1717 Stipulated Award Upheld On Appeal

Two Second District Decisions Are Surveyed.

Marriage of Kaufman, Case No. B196632 (2d Dist., Div. 4 Mar. 27, 2009) (unpublished)

     In this one, wife—after remarrying in a very public ceremony—was ordered to pay her former husband’s attorney’s fees of $15,000 under Family Code section 271 (out of a requested $42,000 in fees), payable in $500 monthly installments. The award was affirmed after wife appealed.

     Section 271 is a sanctions statute allowing a family law judge to award fees against a party that has litigated or protracted proceedings in a way that is uncooperative or not conducive to settling the proceeding.

      Wife’s primary challenge was that she was not permitted to submit live testimony, with the family law judge relying upon written declarations in deciding the section 271 fee request. That due process argument was not found persuasive: “Although section 271 requires that a party facing sanctions be given an opportunity to be heard, it does not specify the format for such a hearing. If the appellant is given an opportunity to submit declarations, but not live testimony, the hearing requirement of section 271 is satisfied . . .” (Slip Opn., at p. 14, citing In re Marriage of Petropoulos, 91 Cal.App.4^th 161, 178-179 (2001) [California’s “hearing” requirement does not necessitate oral presentation, unless the context of other language indicates a contrary intent].)

Marriage of Yuen, Case No. B201276 x-ref. B195293 (2d Dist., Div. 1 Mar. 27, 2009) (unpublished)

     This second case is for those with very rich pocket books.

     In 2000, husband was ordered to pay more than $56 million (yes, you read this correctly--million) in spousal support to former wife in periodic payments through 2009, with this order containing a fees clause in favor of the prevailing party in any “enforcement proceedings.” The parties then entered into a 2002 agreement purporting to modify the 2000 order, although the particulars were not disclosed—even though huge amounts were still at issue.

     After husband failed to pay Molly in August 2003 and thereafter, former wife moved to confirm spousal support arrearages and to declare the 2002 agreement invalid. The trial court decided that the 2002 agreement was enforceable, determining husband owed past spousal support arrearages of $46,193,076. (Earlier, the appellate court affirmed the determination in substantial part, but reduced everything by about $5.2 million.)

     Wife then moved to recoup over $1.88 million in attorney’s fees and costs incurred in attempting to enforce the spousal support arrearages. Before this motion could be heard, the parties entered into a “stipulation” stating that wife would be allowed fees and costs of $1.2 million if the family law judge granted wife’s fees motion. The trial court did grant her motion, and husband appealed.

     In upholding the award, the appellate court found that wife’s motion was akin to a declaratory relief action—which is an “action on the contract” for purposes of awarding fees under Civil Code section 1717. Husband tried to argue that former wife did not succeed in invalidating the 2002 agreement, but the appellate panel found that this did not impact her ability to recover on the later stipulation relating to an appropriate fee award. “[Husband] cites no authority for the proposition that a party entitled to attorney’s fees for prevailing on a motion must separate out, and cannot recover, fees incurred in advancing unsuccessful arguments in support of that motion. We are aware of no such authority. We therefore reject [husband’s] argument.” (Slip Opn, at p. 5.)

Is A Prevailing Party Still Entitled to Attorney’s Fees When A Claim Is Defeated By Mootness?

Ninth Circuit Holds That Fees Are Still In Order, Although Circuit Judges Are Badly Splintered on the Issue.

     The next issue—whether a prevailing party is entitled to attorney’s fees under a fee-shifting statute where the controversy has been mooted—may be destined for U.S. Supreme Court review. The opinions of the circuit judges in an amended decision, Center For Biological Diversity v. Marina Point Development Co., Case No. 06-56193 (9^th Cir. Mar. 27, 2009 amended) (for publication), may have sealed the fate for this particular issue.

American Bald Eagle.   Library of Congress.

CCP Section 128.7: Client Cannot Appeal Or Seek Writ Review Of Sanctions Assessed Solely Against Client’s Attorney

Client Is Not Aggrieved or Does Not Have Beneficial Interest for Purposes of Seeking Review of Attorney Sanctions Order.

     Attorneys get socked with a $12,504 sanctions order under Code of Civil Procedure section 128.7 in construction defect litigation. Their client then appeals or seeks writ review of the adverse order. Result? Client has no real skin in the game, so that attorneys should have appealed or sought writ review themselves (as objectors).

     This was the ruling of the Fourth District, Division 1 in Government Employers Ins. Co. v. Tower Glass, Inc., Case Nos. D051649 & D051846 (4^th Dist., Div. 1 Mar. 26, 2009) (unpublished).

    

Off Topic: Criminal Justice Act Attorneys Get Needed Pay Raise

Congress Raises Rates $10 Per Hour After 2005 Survey Shows Menial Net Compensation to CJA Attorneys.

     After March 11, 2009, attorneys accepting assignments under the federal Criminal Justice Act (CJA) get a $10 per hour pay raise for representing defendants financially unable to retain counsel in federal criminal proceedings. The rates have been raised from $100 to $110 per hour (although rates went up to $175 per hour for capital cases). However, case maximum fee caps also apply depending on the type of criminal case involved.

     Nationwide, CJA appointments go 58% to federal defenders and 42% to private attorneys on the CJA panel.

     The rate hike was likely inspired by a 2005 survey showing CJA attorneys incurred $64 per hour overhead on these cases, meaning they netted just $36 per hour before taxes.

     For more information on the pay hike, see Marcia Coyle’s article, “Congress Raises Fee For Federal Court-Assigned Counsel,” in the March 27, 2009 edition of the New York Law Journal.

CCP Section 1021.5: $571,237.75 Fee Award Reversed And Remanded Because Trial Court Applied Improper “Out Of Proportion” And “Weighing” Tests

Fifth District Remands to Have Fee Award Decided Under the Proper Legal Standard.

     This is probably a semi-POOF! (POO) post, but we would surmise that winning CEQA challenger will get still get significant fees on remand.

     In Madera Irrigation Dist. v. Madera County Bd. of Supervisors (Freels), Case No. F054218 (5^th Dist. Mar. 26, 2009) (unpublished), plaintiff successfully brought a CEQA challenge that the County had failed to show there was a sufficient water supply for a mixed use residential, commercial and institutional project located near the San Joaquin River. The trial court awarded plaintiff $571,237.75 in attorney’s fees under Code of Civil Procedure section 1021.5, the “private attorney general” fee statute. County appealed.

     The cause was reversed and remanded because the trial court did not apply the correct legal standard. The main flaw was that the lower court framed the test as being whether plaintiff’s beneficial interest was “out of proportion” to the public’s beneficial interest and whether the public interest’s was “greater” than plaintiff’s beneficial interest. Relying on Vasquez v. State of California, 45 Cal.4^th 243, 250-251 (2008) [one of our Leading Cases], the appellate panel determined that the trial court’s test was “nowhere found in the law.” (Slip Opn., at p. 9.) Aside from this mistake, the lower court failed to apply the statute’s factor “(b)” requirement that “the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate.”

     However, the Fifth District did give a major victory to plaintiff on an issue raised by County under section 1021.5. It argued that section 1021.5 fees are precluded if the primary purpose in initiating litigation is the vindication of a litigant’s own interests. Not so, said the Court of Appeal. The appellate panel found nothing in Williams v. San Francisco Bd. of Permit Appeals, 74 Cal.App.4^th 961 (1999), Terminal Plaza Corp. v. City and County of San Francisco, 177 Cal.App.3d 892 (1986), or Save Open Space Santa Monica Mountains v. Superior Court, 84 Cal.App.4^th 235 (2000) that supported County’s position.

     The case was remanded for application of the proper standard; a semi-POOF for a substantial fee award—at least at this point in time!

                                              *   *   *

Have some Madeira, M'Dear

WOW Factor—Argument That Fees Were Shockingly Excessive—Is Coined By Court of Appeal In Unpublished Decision

 

Fourth District, Division 1 Rejects WOW Argument and Affirms Fee Award To Winner in Appeal of Summary Judgment Ruling.

     If you are a reader of our blog, you know that we have a POOF! category—our way of designating cases where fee awards vanish after there has been reversal of any underlying merits judgment on appeal. We now have another category—WOW! (A variant of Holy Cow, Batman!). This refers to litigants’ arguments that fees were shockingly excessive. The Fourth District, Division 1 gets credit for this one, which was coined in Parker v. Winslow, Case No. D053063 (4^th Dist., Div. 1 Mar. 26, 2009) (unpublished).

     Parker involved a situation where a trial court awarded successful defendant/respondent full requested attorney’s fees and costs of $40,636.35 after she successfully fended off plaintiffs/appellants’ appeal of a summary judgment in favor of respondent in a residential property nondisclosure/fraud case. (Earlier, respondent had won $34,798 in fees for trial work in winning the summary judgment.) Plaintiffs were not pleased, and filed over 80 pages of detailed appellants’ briefing as well as orally arguing the cause before the appellate court. Plaintiffs lost on appeal, the fee award followed, and plaintiffs appealed the fee award for defendant’s appellate work.

     The appellate panel had little difficulty affirming the appeal fee award, notwithstanding plaintiffs’ suggestion that $12-13,000 was the reasonable range for an award. The full amount of what was requested happened to be justified primarily by the tenacious litigation strategy pursued by plaintiffs both at the trial and appellate levels—which led to the appellate dismissal of plaintiffs’ “WOW” argument. (Ketchum v. Moses, 24 Cal.4^th 1122, 1141 (2001).) The trial court did not have to issue a statement of decision on the fee award and did not have to give explanations for denying plaintiffs’ objections to specific items in the billings. (Maria P. v. Riles, 43 Cal.3d 1281, 1294 (1987).) The award was affirmed, and defendant was awarded costs on appeal—which means another fee petition for this second appellate win will likely be pursued by the victorious defendant.

Inverse Condemnation: Winning Litigant Awarded Only $45,039.10 In Fees/Costs Out Of Requested $414,103.49

Third District Sustains Fee Award Where Litigant Won Only $1,034 For a Temporary Taking.

     Code of Civil Procedure section 1036 requires a mandatory award of reasonable costs, disbursements, and expenses (including reasonable attorney, appraisal, and engineering fees) actually incurred to a prevailing party in a trial or an appellate inverse condemnation proceeding. Even under section 1036, the trial court begins with the lodestar touchstone—an examination of the time spent and reasonable hourly compensation of each attorney. (Ketchum v. Moses, 24 Cal.4^th 1122, 1131-1132, 1134-1135 (2001) [noting application of lodestar analysis in inverse condemnation cases].) The next case demonstrates that courts will not hesitate to award only a small portion of fees based on a litigant’s limited success in an inverse condemnation matter.

     In Hauselt v. County of Butte, Case No. C056502 (3d Dist. Mar. 24, 2009) (unpublished), plaintiff only recovered on one temporary taking claim to the tune of $1.034, after the trial court primarily adjudged that the County was entitled to immunity for certain storm work. Plaintiff sought $414,103.49 in fees and costs pursuant to section 1036—based on payments to five attorneys and six different expert witnesses. The trial court found that plaintiff had prevailed, but only had limited success on an “afterthought” type of claim, awarding him $10,000 in fees, $10,000 in expert witness fees, and other costs and expenses adding up to $45,039.10.

    

CCP Section 664.6: Reserve Jurisdiction Or Forfeit The Ability To Enforce Fee Settlements

Fourth District, Division 3 Strictly Enforces Jurisdictional Retention Dictates.

     Code of Civil Procedure section 664.6, we hope, becomes well known to litigators and other attorneys hoping to summarily enforce settlement agreements in pending California actions. Without going into all of its nuances (which include strict requirements that the parties themselves assent to the settlement terms), there is a nice settlement retention proviso allowing for dismissal and settlement tradeoffs: “If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” That proviso was determinative in the next case, Hetman v. Santa Ana Unified School Dist. (Quintilone II), Case No. G040214 (4^th Dist., Div. 3 Mar. 25, 2009) (unpublished).

SLAPP: Cross-Defendant In Massage Room Dispute Recovers $48,692 In Fees And Costs In Winning An Anti-SLAPP Motion

First District, Division 5 Also Awards 1.2 Multiplier For Anti-SLAPP Lodestar Motion Work.

     The next case illustrates that, in the right situation, a trial court will even award a multiplier on anti-SLAPP motion work performed by a successful cross-defendant.

     In Ortega v. Morales, Case No. A120684 (1^st Dist., Div. 5 Mar. 25, 2009) (unpublished), cross-defendant won an anti-SLAPP motion in which certain defamation claims arising out of a massage room dispute were dismissed. Winning cross-defendant sought to recovery $57,185 for fees and costs incurred in connection with the anti-SLAPP motion, an opposition to the opponent’s motion for relief, and “fees on fees”, to be adjusted upward by a multiplier of 1.5. Eventually, the trial court awarded cross-defendant fees and costs of $48,692, allowing a 1.2 multiplier for work on the anti-SLAPP motion segment after reducing anti-SLAPP hours by 10% across the board.

Civil Harassment: Prevailing Defendants May Obtain Discretionary Awards Of Attorney’s Fees

First District, Division 4 So Rules In Interpreting CCP section 527.6(i).

     Krug v. Maschmeier, Case No. A121940 (1^st Dist., Div. 4 Mar. 25, 2009) (certified for partial publication) determined that a prevailing defendant in a civil harassment action can recover attorney’s fees even if the action was not frivolous or not brought in bad faith.

Family Law: Court Of Appeal Affirms $50,000 Attorney Fee Award Against Husband

Wife Only Receives $50,000 Despite Claiming To Have Spent Over $200,000, With Husband Claiming He Had Paid $169,000 In Past Attorney’s Fees and $20,000 In Expert Fees While Still Owing $116,000 In Attorney’s Fees.

     The next case involves an award illustrating how expensive and resource draining family law contests can become when they are bitterly contested and protracted in nature.

     In Marriage of Reddy, Case No. 206268 (2d Dist., Div. 4 Mar. 24, 2009) (unpublished), ex-husband was ordered to pay $50,000 in attorney’s fees to ex-wife under Family Code sections 2030 and 2032, which involves an assessment of the relative “needs” of each side and which attempts to level the playing field so that the impecunious side can obtain representation. (The $50,000 award was payable in $1,000 monthly installments.) Husband appealed.

Britney Spears Conservatorship: $2.7 Million Paid To Lawyers During The First 11 Months

Entertainment Conservatorships Do Not Come Cheap.

     Since a conservatorship was put in place for 27-year-old singer Britney Spears, the attorney’s fees have really soared. No less than 17 lawyers and firms have had a hand in Ms. Spears’ business and personal affairs since then, according to a March 24, 2009 Los Angeles Time article, “Lawyers surround Britney Spears,” authored by Harriet Ryan.

     The price tag? Answer: At least 2.7 million paid in lawyers’ fees and costs during the first 11 months of the court-appointed conservatorship.

     Even for a singer, this takes your breath away!

Link to Britney Spear's Womanizer Video on Youtube

 

Civil Code Section 1717: Without Prejudice Dismissal Of Apartment Fire Damage Suit Did Not Give Rise To Fee Exposure

 

Second District, Division 4 Applies Santisas in Affirming Denial of Fees.

     In our category “Leading Cases,” we have listed Santisas v. Goodin, 17 Cal.4^th 599 (1998), which held that a voluntary dismissal of contractually-based claims will not lead to fee exposure under Civil Code section 1717. However, Santisas did leave open the exception that the breadth of a fees clause might give rise to fees for covered tort or statutory claims. The next case followed Santisas, determining that the narrow fees clause at issue only covered contract-based claims that were dismissed by the plaintiff. Hence, plaintiff did not face fee exposure.

Fee Sanctions Under $5,000: Not Appealable

Second District, Division Two Applies CCP section 904.1(a)(12) in Venue Transfer Dispute.

     A.Z. Mashiah, Ltd. v. Christopher Ranch, LLC, Case No. B204185 (2d Dist., Div. 2 Mar. 23, 2009) (unpublished) reminds us all that only a sanctions order greater than $5,000 is immediately appealable under Code of Civil Procedure section 904.1(a)(12), one of the key appeal jurisdictional subdivisions.

     There, defendant lost a venue transfer battle and his attorney was sanctioned $2,090 under Code of Civil Procedure section 396b(b), which authorizes a court to order fees against a venue loser (with the fees being the personal liability of the attorney as between attorney and losing client in such an instance). Defendant and his attorney appealed the adverse rulings.

     Both lost. Defendant lost because a venue transfer order can only be reviewed through an appellate mandate petition. (Code Civ. Proc., sec. 400.) Attorney lost because the $2,090 sanctions order was not immediately appealable under section 904.1(a)(12), but could only be reviewed on appeal from any final judgment or by extraordinary writ petition. (Code Civ. Proc., sec. 904.1(b).) Thus, both appeals were dismissed.

FEHA: Court of Appeal Affirms Award Of Lower Fee Award To Winning Plaintiff

First District, Division 4 Sustains Fee Award of $676,001 Based on a 1.25 Multiplier, Rather than Plaintiff’s Requested $940,590.87 Lodestar Plus a Proposed 2.0 Multiplier.

     The First District, Division 4, in the unpublished decision of Tarver v. City and County of San Francisco, Case No. A116731 (1^st Dist., Div. 4 Mar. 23, 2009) (unpublished), has penned a nice opinion showing the deference that appellate courts will give to well-reasoned decisions by trial courts, even where the lower courts reduce proposed lodestars and award diminished multipliers.

SLAPP: Litigant Successfully Vacating Sister State Judgment Denied A Fee Award Under the Anti-SLAPP Scheme

Second District, Division 8 Rebuffs Defense Effort to Obtain $49,000 Anti-SLAPP Fee Recovery.

     A putative judgment debtor in a sister state judgment proceeding successfully moved to vacate entry of a $56,768 Washington sanctions judgment. Judgment debtor also moved to SLAPP the judgment entry, with the lower court not mentioning SLAPP when vacating the motion for entry of judgment on other grounds. Judgment debtor moved for recovery of $49,000 in attorney’s fees and $527 in costs under the anti-SLAPP scheme. The trial court denied any fee/costs recovery, finding no free speech or petition activity by judgment debtor and also determining that the request to recoup fees for 92 hours in attorney time for preparing a 5-page motion was unreasonable “by any measure.”

     Did judgment debtor win on appeal?

     No go, ruled the Second District, Division 8 in American Economy Ins. Co. v. Sanai, Case No. B202352 (2d Dist., Div. 8 Mar. 23, 2009) (unpublished). “[Appellant’s] interpretation of the anti-SLAPP statute would in effect render all applications to enforce judgments susceptible to the claim they are suits seeking to chill or punish the exercise of free speech or petition rights. That would be an absurd result, and it finds no support in the statute, the cases, or common sense.” The appellate court sustained the denial of fees by the lower court.

Fee Clause Interpretation: Narrow Provision Requires Elimination Of Fee Award From Default Judgment

First District, Division 2 Determines Fee Clause Only Allows For Recovery of Fees in Arbitration Proceeding.

     Unless there is ambiguity or mistake, courts are generally charged with enforcing contracts as written. This applies equally to fee clauses in contracts, as the next unpublished decision illustrates.

     In Quraishi v. Delta Pools and Patios, Inc., Case No. A120697 (1^st Dist., Div. 2 Mar. 13, 2009) (unpublished), plaintiff pool company recovered a default judgment for $42,582.50 in compensatory damages, $2,640 in prejudgment interest, $14,325.90 in attorney’s fees, and $618 in costs against the owners of the property where the pool was being installed. Property owners appealed. Although they lost the challenge to the broader default judgment, they did gain a reduction in compensatory damages and elimination of the fee award in entirety.

Ambiguous Figure.  Sir John Tenniel's illustration of the Caterpillar for Lewis Carroll's Alice's Adventures in Wonderland

Labor Code Violations: Trial Court Award Of $236,760 To A Single Prevailing Plaintiff Affirmed On Appeal

First District, Division Two Sustains Lower Court’s Application of 1.5 Multiplier.

     Labor Code section 218.5 authorizes a mandatory award of attorney’s fees to a prevailing party in any action for nonpayment of wages if any party requests fees and costs upon initiation of the action. Labor Code section 1194(a) mandates an award of reasonable fees and costs to an employee recovering unpaid minimum wages or overtime compensation. These two statutes were the ones that led to a substantial fee recovery by a prevailing single plaintiff, with the Court of Appeal sustaining the award on appeal.

     In Ahmed v. Good Nite Management, Inc., Case No. A120400 (1^st Dist., Div. 2 Mar. 19, 2009) (unpublished), plaintiff won a bench trial by which he was awarded $293,999.55 in compensation for overtime and missed meal periods. The defendant hotel claimed he was an exempt employee, but that defense did not prevail. Plaintiff was able to take advantage of the four-year limitations reach-back period under Business and Professions Code section 17200. Plaintiff was also awarded attorney’s fees under sections 218.5 and 1194(a) in the amount of $236,760. Hotel appealed, but did not overturn either the merits or fee determinations.

Appellate Sanctions: $5,000 Frivolous Appeal Sanctions Assessed Where Limitations, Res Judicata, and Mootness Considerations Were At Play

Second District, Division 8 Assesses Sanctions on Appeal.

     “It is clear that appellant feels strongly that he has been aggrieved and that the passage of time has not weakened that conviction. While one can sympathize, on a human level, with such a feeling, it is nevertheless true that disappointed expectations, no matter how deeply felt, are not a license to engage in repeated and blatantly meritless litigation. In this case, [respondent], not to speak of the judicial system, has had to bear the costs of litigation, including this appeal, which is bereft of even a colorable appearance of legitimacy.”

     This passage from Estate of Pitts - James St. Julian v. Jewish Family Service of Los Angeles, Case No. B195805 (2d Dist., Div. 8 Mar. 13, 2009) (unpublished) set up what was to follow (namely, sanctions) and again counsels that litigants consult attorneys with expertise in appellate matters before seriously pursuing appeals of adverse determinations.

     Appellant brought an appeal on matters that were time barred, resolved by past rulings (under res judicata principles), or were moot based on the death of a personal representative seven years earlier. The appellate panel found the appeal to be frivolous, awarding sanctions of $5,000 jointly and severally against appellant and his counsel.

     St. Julian

POOF!: Summary Judgment Reversal In City’s Favor Causes Tumble Of $245,130 Fee Recovery By Plaintiff

Fourth District, Division 1 Gives Domino Effect to Reversal.

     POOF! again strikes.

     City of San Diego obtained a partial reversal of a summary judgment in favor of a plaintiff who had also been awarded postjudgment fees of $245,130 under Government Code section 996.4, which pertains to a public employee’s right to reimbursement of defense costs incurred in litigation arising from the performance of his/her job duties.

     In City of San Diego v. Means, Case No. D052499 (4^th Dist., Div. 1 Mar. 12, 2009) (unpublished), both sides raised very interesting argument as to why the fees should or should not have been awarded—a virtual primer for any practitioners needing to make arguments about Government Code section 996.4’s reach (and construction of one of its exceptions in section 995.4(a)). However, the appellate panel concluded that the reversal of the judgment meant the matter was not yet “final, final”—after all, the complicated issues raised on the fee award “may settle or otherwise be resolved without the parties’ further resort to his court.” Although plaintiff could renew the defense costs reimbursement request after the remaining counts were resolved upon remand, the Court of Appeal dodged having to resolve the complicated issues. POOF! (for the time being).

Costs: Trial Courts Have Discretion To Order Reimbursement of Interpreter Fees As Costs

Fourth District, Division 3 So Rules in Unpublished Decision.

     In Nguyen v. Nguyen, Case No. G040316 (4^th Dist., Div. 3 Mar. 11, 2009) (unpublished), a litigant won a bench trial and filed a costs bill, including a request for reimbursement of $2,700 for a Vietnamese interpreter for trial. The trial court awarded $4,200 for interpreter fees, although it erroneously included $1,500 more—an arithmetic error later corrected by the appellate court.

     Losing party appealed this award of interpreter costs, but lost on appeal. Justice O’Leary, writing for a 3-0 panel of the Fourth District, Division 3, determined “[t]he cost is not expressly allowed or disallowed under Code of Civil Procedure section 1033.5, subdivisions (a) and (b), and thus is within the court’s discretion under subdivision (c)(4), which provides, ‘Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.’” The accurately-claimed $2,700 in interpreter fees were allowed on appeal.

                         Judicial Discretion - Judge Roy Bean

Post-Judgment Enforcement and Fraudulent Conveyance: Fees Are Awardable Based On Jury Determination That Parties Conspired/Aided and Abetted In Efforts To Avoid Enforcement of Judgment Against Predecessor

Second District, Division 7 Also Decides That Alter Ego Should Have Been Added As a Defendant For Purposes of Exposure to Anti-SLAPP Fees.

     The next case shows that appellate courts will reinstate fee exposure where they are convinced that a party was part and parcel of a scheme to evade a judgment or was held liable as an alter ego.

     Red Hill Enterprises v. Gould, Case No. B193939 (2d Dist., Div. 7 Mar. 18, 2009) (unpublished) arose out of a judgment owing by defunct judgment debtor Learning Tree University (with the judgment containing a contractual fees clause relating to enforcement efforts). Learning Tree affiliates then lost a jury verdict by which they were found to have attempted to make fraudulent conveyances and conspired/aided and abetted in efforts to avoid the prior judgment. In addition, one of the individual affiliates was found to have been Learning Tree’s alter ego. (Earlier, Learning Tree lost an anti-SLAPP motion for which fees were awarded.) The trial court, however, denied fee motions brought against the affiliates in connection with the fraudulent judgment avoidance verdict and denied a motion to make the individual affiliate liable for satisfaction of the anti-SLAPP fee judgment.

     On appeal, the party challenging the fee orders was granted reversal.

Family Law: Split Decision On Correctness Of Family Law Code Section 271 Fee Awards

First District Affirms, While Fourth District Reverses.

     Under our category “Family Law,” we previously have explored Family Code section 271, which authorizes a family law judge to award fees to a family law litigant where the other side fails to promote settlement or fails to reduce the costs of litigation by being uncooperative. Two recent decisions reviewed section 271 orders, coming to different results as to the propriety of the orders.  Marriage of Moody, Case No. A121691 (1^st Dist., Div. 5 Mar. 11, 2009) (unpublished) and Marriage of Burns, Case No. D053065 (4^th Dist., Div. 1 Mar. 13, 2009) (unpublished).

Tie workers driving steel wedges into a pine log to split, Pie Town,     New Mexico.  Russell Lee, photographer.  1940.  Library of Congress.

SLAPP: Review of Recent Decision Granting Or Denying Attorney’s Fees Requests To Winners Of Anti-SLAPP Motions.

Two Second District Decisions, One Sixth District Decision Are Discussed.

     Under our category “SLAPP,” we have reviewed decisions granting and denying fee requests to successful winners in anti-SLAPP motions. Here are three recent ones to add to the database: Dodson v. Irving Pomerantz & Associates, Case No. B195289 (2d Dist., Div. 3 Mar. 11, 2009) (unpublished), Silas v. Dion-Kindem, Case No. B208655 (2d Dist., Div. 1 Mar. 11, 2009) (unpublished), and Fullenwider v. Lifland, Case No. H033277 (6^th Dist. Mar. 13, 2009) (unpublished):

  slapp motion

Family Law: Pendente Lite Fee Denial Reversed For Failure To Consider Family Code Section 2030/2032 Factors; Appellate Costs Reduction Reversed For Legal Error And For Allowing Satisfaction Through Installment Payments

Fourth District, Division 3 Also Has Some Comments on Systemic Problems Plaguing Family Law Courts in Orange County.

     The next case is not only interesting for the legal issues discussed, but equally poignant in the way its weaves in a discussion of problems plaguing family law dockets in Orange County (and likely other California counties as well). Presiding Justice Sills, who steers administration of the Fourth District, Division 3, authored the decision in Alan T.S., Jr. v. Superior Court (Mary T.), Case No. GH041034 (4^th Dist., Div. 3 Mar. 18, 2009) (certified for publication).

     The case boiled down to the family judge’s determination to assess a fee award of $9,000 against an in pro per husband (out of a requested $35,000 fee request) and her striking about $3,000 (out of a requested $6,000 appellate costs request) from husband’s costs bill submitted after winning a prior appellate court reversal of a child custody order, with wife only having to pay the $3,000 costs award through $150 monthly installments. Both orders were reversed in a very detailed opinion written by Justice Sills on behalf of the 4/3 panel.

    

Civil Code Section 1717 Fees Go POOF! Following Reversal of Summary Judgment Order

 

Second District, Division 7 Finds Mutual Mistake Gave Rise to Rescission, Overturning a Landlord Win and Favorable Attorney’s Fees Award.

     Here is another POOF!

     The Second District, Division 7, in Howard v. Encino Group Retail LLC, Case No. B204865 (2d Dist., Div. 7 Mar. 18, 2009) (unpublished) reversed a summary judgment in favor of landlord, determining that dentist tenants were entitled to rescission of the lease based on mutual mistake given that the premises were subject to zoning restrictions preventing the space from being used for medical or dental purposes. The appellate panel rejected landlord’s argument that the tenants had contractually agreed to assume the risk that the space could not be used.

     The POOF! aspect of the reversal is this: the trial court awarded landlord $66,654 in damages and $332,553.49 in fees under a lease fees clause. The reversal meant the fee award went tumbling, with summary judgment being entered in tenants’ favor on the mutual mistake defense. Tenants also won costs on appeal.

Contempt Attorney’s Fees Under Code Of Civil Procedure Section 1218(a) Are Vacated Based On Failure To Apportion And On Due Process Grounds

 

Fourth District, Division 3 Also Finds That Fee Clarifying Substantiation in Reply Brief Was Too Late Unless Opponent Given Opportunity for Further Response.

     Code of Civil Procedure section 1218(a) provides for attorney’s fees to “the party initiating the contempt” for fees which that party incurred “in connection with the contempt proceeding.” It is not a general prevailing-party-at the-end-of-litigation-statute (such as Civil Code section 1717), but is limited to fees incurred with regard to a specific contempt proceeding. In the next case, our local Court of Appeal reversed a $25,000 contempt fee award under section 1218 for failure to apportion and on due process grounds.

      In Gates v. Pfeiffer, Case No. G039450 (4^th Dist., Div. 3 Mar. 17, 2009) (unpublished), a family restraining order battle involving multiple family members finally peaked when a contempt order was entered against one of the family members who happened to be a licensed attorney representing other involved family members. After obtaining a contempt order, the winning party sought to seek $41,630.08 in fees under section 1218(a) based on one-page, cursory invoices. Attorney opposed, and the winning party boosted the total to $90,631.49 but did provide more detail in reply papers

--albeit asking for fees based on all work done in the matter rather than just isolating the time spent on the contempt. The lower court awarded $25,000 in fees, a determination reversed on appeal.

     Presiding Justice Sills, on behalf of a 3-0 panel, found the fee award should have been denied on two grounds.

Permissive Fees In A Family Civil Harassment Lawsuit Properly Denied Where Inadequate Record Presented Below And Trial Court Found Fees To Be Unreasonable In Amount

 

Second District, Division 3 Sustains Denial of Fees under Family Code section 6344(a).

     The next case reinforces the notion that if you are going to appeal, make sure you develop an adequate record on review—especially so when a fee entitlement statute is permissive and any fee ruling is scrutinized under the abuse of discretion standard.

     Family Code section 6344(a) gives the court discretion in deciding whether to award attorney’s fees and costs to the prevailing party in a restraining order matter; in other words, it is permissive in nature. In Mironov v. Mironov, Case No. B206527 (2d Dist., Div. 3 Mar. 17, 2009) (unpublished), brother challenged a court’s denial of a requested $15,470.50 in attorney’s fees after he successfully obtained a restraining order against his sister. The trial court found sister’s fee opposition to be persuasive and observed that the amount of brother’s requested fees was “outrageous for a restraining order.” Brother appealed this denial ruling.

Requests For Admissions: Court Of Appeal Reverses Denial Of Fees And Remands For New Determination

 

Fourth District, Division 1 Determines Denial of RFA Fees Was Abuse of Discretion and Needed Another Look.

     In our category “Requests for Admissions,” we have surveyed past decisions which have considered Code of Civil Procedure section 2033.420, which authorizes a trial court to award attorney’s fees and costs to litigants having to incur expenses to prove the truth of denied requests for admissions at a subsequent trial. In the next case, an appellate court actually reversed a denial of fees and remanded for further proceedings to determine if fees were justified in the RFA context.

Post-Judgment Enforcement Undertakings: No Attorney’s Fee Entitlement In Governing California Statute

Second District, Division 6 Considers Scope of CCP Section 720.260.

     Code of Civil Procedure section 720.260(c) allows a creditor with a competing claim to prevent release of funds to a secured party or lienholder claiming priority by posting an undertaking in favor of secured party/lienholder to “[i]ndemnify the secured party or lienholder against any loss, liability, damages, costs, and attorney’s fees, incurred by reason of the enforcement proceedings.” The next case explored whether this meant that the winning lienholder also obtains entitlement to fees in the subsequent action on the undertaking in which lienholder prevailed.

CLE Fee Dispute Program in SF This Week

 “Attorney Fee Disputes In a Volatile and Uncertain Economy”

    This CLE program on attorneys’ fees is being held this week in San Francisco.

    March 19, 2009

    Golden Gate Law School

    San Francisco, CA

    Noon-5pm (with lunch buffet)

POOF!: Civil Rights Fees Award Of $260,782.50 Is Vacated Upon Reversal of Qualified Immunity Ruling

Ninth Circuit Takes Away Substantial Section 1983 Fee Award.

     Federal appeals court, too, illustrate our POOF! principle—substantial fee awards vanish when a favorable merits determination is reversed upon review.

     In Johnson v. Walton, Case Nos. 07-55935, 07-56238 & 07-56547 (9^th Cir. Mar. 13, 2009) (for publication), two plaintiffs were awarded a total of $80,100 in damages stemming from an alleged illegal search and seizure by a Los Angeles County sheriff officer under 42 U.S.C. sec. 1983. Officer’s summary judgment based on qualified immunity was denied. The district judge granted judgment in favor of plaintiffs and against officer, with the jury subsequently awarding the $80,100 damages award. Plaintiffs were then awarded fees and expenses totaling $260,782.50 under section 1988.

     Officer appealed and won a reversal based on the qualified immunity defense. So, what naturally followed? You guessed it – POOF! – the attorney’s fees/expense award was also vacated with the reversal of the judgment against officer.

Real Estate Litigation: Aggressive Litigation Posture By Opponent Can Gain Civil Code Section 1717 Winner Almost All of Its Attorney’s Fees In Contentious Case.

Second District, Division 6 Affirms Substantial Fee Award Based on “Tenaciousness” Factor.

     For all attorneys winning contentious real estate litigation with a contractual fees clause, you may have a good chance of recouping most of your fees on behalf of clients under Civil Code section 1717, especially where your opponent was aggressive and tenacious throughout the litigation. Peak-Las Positas Partners v. Bollag, Case No. B205091 (2d Dist., Div. 6 Mar. 16, 2009) (certified for publication) is a classic embodiment of how this principle may play out in the real estate litigation context.

Winning County Teacher's Challenge To $180,000 Fee Award Under Education Code Section 44944(e)(2) Affirmed

Second District, Division Two Finds No Abuse of Discretion in Not Awarding $300,670 in Attorney's Fees to Winning Teacher.

     The next case concerns a statutory fee-shifting statute—Education Code section 44944(e)(2). It also is an interesting illustration of how appellate courts vary in finding whether a lower court should have articulated the basis for its fee award for purposes of satisfying the abuse of discretion standard.

Estoppel And Fee Clause Interpretation: Losing Broker Using MLS Was Not Liable To Winning Seller For Fees Just Because Broker Pled Fee Recovery And When Fees Clause Did Not Encompass Losing Broker

First District, Division Five Follows Blickman Turkus and Sessions Decisions.

     This next case is a virtual paradigm for students of fees clauses in exclusive listing agreements involving MLS brokers who sue sellers and then lose. It deals with judicial estoppel and fee clause interpretation issues frequently seen in these types of disputes.

     Menasco v. Nagel, Case No. A121570 (1^st Dist., Div. 5 Mar. 9, 2009) (unpublished) involved a plaintiff real estate broker who found buyers for an interested defendant seller, even though the seller's exclusive listing agreement was with a separate broker posting on the multiple listing service (MLS). Plaintiff sued defendant when he failed to consummate a sale of defendant's residence to several ready, willing, and able buyers, alleging breach of contract and third party beneficiary contractual theories. Plaintiff's complaint referenced the MLS broker-defendant listing agreement (which had a fees clause) and sought entitlement to fees under that clause. Plaintiff lost to seller, with the trial court awarding $17,387.50 in attorney's fees based upon the fact that plaintiff had asked for fees in his complaint.

     The First District, Division 5, in a 3-0 decision authored by Presiding Justice Jones, reversed the fee award.