CALIFORNIA ATTORNEY'S FEES

English Rule: Swiss Law Required Remand So That Prevailing Plaintiff Obtained Fee Recovery

Fourth District, Division 3 Holds that Choice-of-Law Clause Drives Fee Result.

     Who says that our California intermediate appellate courts do not face gnarly issues even in a relatively routine breach-of-contract dispute. Not us. The next one had some wild issues, not to mention a Swiss choice-of-law clause—meaning that the English Rule applied to the dispute. Wait until you see how this panned out.

     In Applera Corp. v. MP Biomedicals, LLC, Case No. G038984 (4^th Dist., Div. 3 Apr. 30, 2009) (certified for publication), a patent licensing dispute erupted into a much more complicated controversy between successor parties who raised jurisdictional and standing issues of a complex nature because patent law was at least on the periphery of the dispute. In the end, plaintiff’s $1.125 million contract judgment was affirmed, in a 3-0 decision by the Fourth District, Division 3 (authored by Justice Ikola).

    

  Swiss Cheese.  Madison, Wisconsin.

Library of Congress

Costs: “Unity Of Interest” Doctrine Gives Discretion To Trial Courts In Awarding Routine Costs

Second District, Division 5 Also Finds Discovery Referee, Mediation, and Computerized Document Control/Exhibit Costs Can Be Discretionarily Awarded.

     In Henderson v. County of Los Angeles, Case No. B209871 (2d Dist., Div. 5 Apr. 29, 2009) (unpublished), defendant sheriff prevailed after the trial court directed a verdict on certain claims in a civil rights excessive force case. Certain costs were awarded to the prevailing sheriff. Plaintiff appealed, with the Second District penning an interesting decision on some narrow routine costs issues—affirming in the process.

Civil Code Section 1717: Contractual Clause Cannot Enlarge Breadth Of Reach Of Section 1717 Recovery For Contract-Based Claims

Fourth District, Division 3 Reaffirms the Principle in Recent Unpublished Opinion.

     Day to day, our intermediate appellate courts confront controversies involving application of Civil Code section 1717, the statutory provision that allows for enforcement of contractual fees clauses in favor of prevailing parties. However, the wording of the fees clauses themselves, for solely contractual claims, cannot trump the actual limitations of or discretion allowed to trial judges under section 1717. Our local Court of Appeal made this clear in the next unpublished decision that we examine.

     In LQNN, Inc. v. Lanvesco, Case No. G040998 (4^th Dist., Div. 3 Apr. 28, 2009) (unpublished), a commercial tenant did prevail in a lease dispute with landlord on an amended rescissionary claim. Naturally, the lease had a broadly-worded attorney’s fees clause allowing a grant of fees to the party who prevails “on trial or appeal.” Even though the lower court had found there was no prevailing party even though ruling in favor of tenant (because no side was awarded damages), tenant lost its bid to obtain an award of appellate fees under the lease clause after landlord lost its appeal of the rescissionary decision. Tenant appealed, and also lost its second bid for fees in a 3-0 decision authored by Justice Aronson on behalf of the Fourth District, Division 3.

Civil Code Section 1717: Prevailing Nonparty to Settlement Agreement With Fees Clause Could Not Be Awarded Fees Where Enforcement Action Did Not Focus On Settlement Agreement

Fourth District, Division 3 Finds Section 1717 Cannot Be “Bootstrapped” Into Fee Entitlement For Breach of Contract With No Fees Provision.

     Civil Code section 1717 focuses on mutuality of remedy for enforcement of contractual attorney’s fees clauses. However, it is not a statutory dragnet to enforce an oral settlement with no fees clause or to seek recovery under a written settlement agreement with a fees clause where that is not the object of an enforcement action.

     Splain v. Hogard, Case No. G040895 (4^th Dist., Div. 3 Apr. 28, 2009) (unpublished) dealt with this very issue, finding that a prevailing nonparty’s ultimate win did not allow for fee entitlement under a settlement arrangement.

Probate: Trust Payment Of Attorney’s Fees Must Be Documented Specifically Once Objections Are Made

First District, Division 1 Makes the Point for Specific Substantiation in Recent Unpublished Decision.

     Probate law requires more specific substantiation to justify trust payments of attorney’s fees than is required in civil litigation—although our recent posts have still lobbied that time sheets and detailed breakdowns are advisable no matter what the context. The need for greater particularity in probate proceedings is shown in our next case, Krivy v. Krivy, Case No. A121561 (1^st Dist., Div. 1 Apr. 28, 2009) (unpublished).

To Seal or Not To Seal …. That Is the Question!

Sharon Stone Inadvertently Got Her Wish In Fee Dispute Lawsuit With Former Attorney.

     In case you do not know it, sealing court records is not the norm and takes an exceptional showing for most civil cases. The standards are stringent and set forth in California Rules of Court, rules 2.550, 2.551, and 8.160. However, the next news item shows that entertainers frequently lobby for sealing of records, sometimes inadvertently getting their requests granted through mere processing errors.

     Sharon Stone, the well-known actress gaining lasting fame from “Basic Instinct,” and two film companies were sued by attorney William Jacobson in Los Angeles County Superior Court. Mr. Jacobson sought to recover $107,000 in unpaid legal services, plus interest. The superior court judge expressed doubt that the case records should be sealed when the defense brought a request to do so. After all, court records are not sealed just because the parties want to keep the dispute private in nature. However, the court records inadvertently were sealed, but recently were released after the matter had settled earlier this year.

     In an April 25, 2009 article, “Secret Sharon Stone Lawsuit Was Routine Fees Matter,” written by Anthony McCartney (and available for viewing on Starplus Entertainment News Blog), a free press advocate is quoted as saying there was little or no justification for the sealing in such a run-of-the-mill civil lawsuit.

     BLOG OBSERVATION—Ms. Stone apparently nixed using a private judge to adjudicate the matter. We would think that contractual arbitration would have had a better shot at keeping matters private, because many providers (such as JAMS) have confidentiality rules and stringent destruction of documents policies. See, e.g., JAMS Comprehensive Arbitration Rule 26.

Private Arbitration Sanctions: Second Circuit Finds Inherent Authority Under FAA To Sanction Attorneys for Losing Party In Arbitration Proceedings

Ninth Circuit Apparently Agrees, Also.

     We would like to thank Hon. Lawrence C. Waddington (Ret.), former Los Angeles County Superior Court judge who is now a neutral with JAMS, for contributing an April 21, 2009 post on enBanc, the Los Angeles County Bar Association’s blog, about a recent Second Circuit decision that has fee implications.

     In ReliaStar Life Ins. Co. of N.Y. v. EMC National Life Co., 2009 WL 941173 (2d Cir. 2009), the Second Circuit Court of Appeals held that the Federal Arbitration Act (FAA) allows an arbitrator to assess attorney’s fees as a sanctions for the bad faith conduct of attorneys for the losing party in a contractual arbitration proceeding. Apparently, the Ninth Circuit agreed in a much earlier decision. See Todd Shipyards Corp. v. Cunard Line, Ltd., 943 F.2d 1056 (9^th Cir. 1991).

     We thank Judge Waddington for his post.

     BLOG OBSERVATION—Co-contributor Mike recalls that Judge Waddington, while on the bench, helped him settle a couple of cases pending in Los Angeles County Superior Court, West District (Santa Monica).

Attorney’s Fees In the News – And Legal Fees Just Keep Dominating Several News Stories!

Montrose Chemical Defense: Is An Associate Worth $450 An Hour?

     Latham & Watkins, a high-powered, national law firm based out of Los Angeles, has been defending Montrose Chemical Corp. in a toxic tort case, with Montrose being insured by Century Indemnity Co. L&W and the insurer have apparently been locked in a nasty battle about reasonableness of fees. Accordingly to an April 22, 2009 article by Debra Cassens Weiss, “Is Associate Worth $450 Hourly? Fee Cited in Latham Dispute” (available for reading at the ABA Journal website), L&W billed about $21.8 million in a four-year period ending 2006 in defending Montrose, and Century Indemnity paid about $5.8 million of the tab. They are still jousting on what is reasonable, with various claims being exchanged back and forth. (The insurer seems to be particularly mad about the fact L&W billed more than $330,000 for internal communications and memoranda between attorneys on the case.) L&W billed fees ranging from $380-$450 per hour for lawyers, while the insurer said reasonable hourly rates would range from $140-$180 an hour.

     One of the most interesting aspects of the controversy is the insurer’s challenge to the $450 hourly rate for an “unlicensed” L&W associate—a charge denied by L&W (which says the associate, a former judicial clerk, was licensed at the time). Co-contributors Marc and Mike have no real comment, except to note that Mike just now bills out at $450 an hour after being licensed for almost 30 years.

Jurupa School District Member Hit with Anti-SLAPP Fees and Appeals.

     Jurupa Unified School District board member Michael Rodriguez sued the District and two individuals (a superintendent and a former board member) for due process, civil and equal protection violations arising out of his January 2007 censure by board members. Mr. Rodriguez apparently lost an anti-SLAPP motion brought by the defendants, being assessed with an adverse award of attorney’s fees amounting to around $47,970. Mr. Rodriguez has appealed to the Fourth District, Division 2 Court of Appeal, so we are sure to report on the result in an upcoming post. For more information on the case, see Sandra Stokley’s story, “Jurupa schools lawsuit heading to Court of Appeal and beyond,” in the April 22, 2009 Press Enterprise (pe.com).

Davis Attorney Ordered to Pay $65,000 in Fees to Chico Newspaper.

     Fees awarded to prevailing defendants in anti-SLAPP motions are becoming more and more common, especially when the defendant is a newspaper with more stringent protections from libel claims. Paul Boylan, a Davis, CA attorney, knows about this all too well.

     Mr. Boylan apparently represented a Willows newspaper and was awarded $100,000 in attorney’s fees in a lawsuit against the Sacramento Valley Mirror. His fee award did not last that long as far as savoring the fruits of his victory.

     In November 2008, Mr. Boylan filed a lawsuit in Butte County Superior Court claiming defamation and negligence against the Enterprise-Record, Chico’s local newspaper based on comments posted on a message board for ChicoER.com readers hosted by Topix.net. Newspaper filed a SLAPP motion, Mr. Boylan dismissed his action, and Judge Barbara Roberts awarded the paper a little over $65,000 in fees and costs (based on decisions that indicate a dismissal of a complaint before a SLAPP motion is heard does not divest the trial court of jurisdiction to decide the motion and award fees to the prevailing party). So, in the end, Mr. Boylan had to give back a fair amount of what he had earned from the earlier lawsuit.

     For more on this one, see “Lawyer ordered to pay Enterprise-Record legal fees,” posted April 24, 2009 at the ChicoER.com website.

Mobile Park Owner Awarded Millions in Fees After Homeowners Lose Rent Control Lawsuit.

     San Rafael residents in the rent-controlled mobile home park known as Contempo Marin lost a protracted lawsuit by park owner Equity LifeStyle Properties, Inc. in United States District Court for the Northern District of California. Based on a recent U.S. Supreme Court decision, Equity won a constitutional challenge to the rent-control ordinance, such that rents will go up after a stay of 10 years in enforcement of the favorable judgment. Also, District Judge Vaughn Walker ordered that San Rafael pay $1.8 million in fees to Equity.

     More details on this case can be found in Jennifer Upshaw’s article “San Rafael, homeowners lose Contempo Marin rent-control lawsuit,” posted April 21, 2009 on marinij.com.

Billionaire Allen Stanford Wants Release of $10 Million to Pay Legal Fees to Fight Ponzi Scheme Charges.

     Billionaire Allen Stanford, two aides and three of his companies are accused by the Securities and Exchange Commission of involvement in a Ponzi scheme for high-yield certificates of deposit issued by Stanford International Bank in Antigua. His assets were frozen on February 17, 2009 by a court-appointed attorney in the case, effectively stymieing his efforts to pay his team of defense attorneys. Mr. Stanford has moved to have District Judge David Godbey release the funds, beyond his efforts of obtaining an advance of defense costs from certain insurance policies (likely D&O). Mr. Stanford has argued in court papers that the SEC has no proof of a Ponzi scheme, with the collapse of his financial network resulting from governmental seizure of the firm.

     Richard Scrushy, founder of HealthSouth Corp., was successful in obtaining a lift of frozen assets so that he could pay defense costs. This was an important win, because he was eventually acquitted in 2005 in a criminal accounting case.

     For more detail on this item, see Anna Driver’s story “Allen Stanford seen in hard fight for legal fees,” posted April 23, 2009 at uk.reuters.com. (BLOG OBSERVATION—Co-contributors Marc and Mike successfully opposed a preliminary injunction sought in a civil federal securities case that sought to try up a defendant’s access to company funds for his defense, even though the management agreement allowed defendant to use these funds for defending against the securities lawsuit. This win made it possible for defendant to continue his defense and paved the way for a settlement that was favorable in nature.)

Class Action: Class Representative Incentive Agreements That Created Conflicting Interests Required New Consideration Of Fee Award To Objectors And Class Counsel

Ninth Circuit Requires Reexamination of Fee Denial to Objector’s Counsel and Fee Award to Class Counsel.

     For the plaintiff class action practitioners out there which follow our blog, the next decision is must reading. Not only does it highlight the fiduciary and ethical duties involved in the process, but counsels that incentive agreements should not be structured in an attorney-client retainer agreement in such a way that they create conflicts between the class representatives and the rest of the class. That is what happened in the next case, with potentially wide-ranging repercussions. Fortunately, it did not tank the class action settlement. However, the situation did require reconsideration of the fee denial to objectors pointing out the issue and the fee award to class counsel caught up in the conflict.

     Rodriguez v. West Publishing, Case Nos. 07-56643 et al. (9^th Cir. Apr. 23, 2009) (for publication) involved the $49 million class action settlement between BAR/BRI class members and West Publishing/Kaplan Inc. Lawyers for the class were set to collect up to $12.25 million in fees (calculated on a lodestar, enhanced by a 1.75 multiplier, up to 25% of the settlement fund). (BLOG OBSERVATION—In the Ninth Circuit, class counsel can be awarded attorney’s fees under either a lodestar or straight percentage of settlement fund approach. Powers v. Eichen, 229 F.3d 1249, 1256 (9^th Cir. 2000).) However, several objectors challenged the settlement on various grounds. Their objections on the incentive agreements to 5 class representatives hit a receptive chord with the Ninth Circuit.

Default Judgment Set Aside Fee Awards: Defendants Get To Challenge Fee And Costs Awards Under 15-Day CRC Rules

Second District, Division 3 So Holds in Unpublished Decision on a Novel Issue.

     This next decision, although unpublished, maybe should be. It is the first decision that we have seen establishing that defendants have the deadlines available for purposes of striking or taxing costs to challenge attorney’s fees and costs awarded as a condition of vacating and setting aside a default judgment.

     Baek v. A-Team Construction, Inc., Case No. B199437 (2d Dist., Div. 3 Apr. 24, 2009) (unpublished) involved a plaintiff owner-defendant general contractor dispute in which a hefty $1,337,407 default judgment was entered against general contractor.  [For the A-Team Intro., click here.] Defendant moved to set aside the default judgment under Code of Civil Procedure section 473. After a hearing on the motion, the trial court allowed plaintiff another week to file a supplemental declaration on the fees expended for pursuing the default judgment and other litigation matters. However, nothing was said about any defense opposition to the fees to be claimed. Plaintiff requested fees and costs totaling $31,738.88, and the court—one week after plaintiff filed the supplemental declaration and with no time given to the defense to contest—set aside the default judgment and awarded plaintiffs $20,097.88 in attorney’s fees and costs, to be paid by defense counsel (an amount subsequently reduced to $18,897.88 after the trial court denied a defense motion for reconsideration and a motion to tax plaintiff’s supplemental declaration fee/costs requests). The parties settled the case, with defendant paying $7,500 to plaintiff (yes, you read it right, $7,500) but with the $18,897.88 fee award remaining in place. (BLOG OBSERVATION—Yet, again, the fee award became the primary point of contention.) Defense counsel appealed both the original fee award and reconsideration denial.

Mission Statement: Fees As The Tail Wagging The Litigation (Or Arbitration) Dog

Result in Recent Unpublished Decision Shows How Attorney’s Fees May Eclipse the Amount in Controversy.

     Our Mission Statement reflects that attorney’s fees are frequently the tail that wags the litigation dog, meaning that recovery of fees may be essential to a prevailing party trying to vindicate its interest in a case with an amount in controversy that could be eclipsed by the fees expended on attorneys. [See Wikpedia article on Dog Communication]. This principle also applies to contractual arbitration proceedings.

Pres. Johnson and Friend               Pres. Nixon and Friend

     An example comes from the result detailed in Thee Aguila, Inc. v. Tseheridis, Case No. G040066 (4^th Dist., Div. 3 Apr. 24, 2009) (unpublished), a 3-0 decision authored by Justice Fybel.

SLAPP and Fee Substantiation: Itemized Billing Statements/Evidence About Reasonableness Of Hourly Rate And Hours Expended Not Required In Fee Proceedings

Fourth District, Division 3 Finds Sufficient Substantiation in Attorney Declaration Attesting to Actual Number of Hours Worked and Attorney’s Billing Rate.

     Many practitioners might think that itemized billing statements and evidence on reasonableness of rates/hours expended are essentials in a fee petition proceeding. Although highly advisable, the next case reinforces that such detailed substantiation is not required in state fee proceedings.

     In Maas v. Coastal Animal Services Authority, Case No. G040536 (4^th Dist., Div. 3 Apr. 24, 2009) (unpublished), defendant won $5,500 in attorney’s fees as the prevailing party on an anti-SLAPP motion, because the SLAPP statute has a mandatory fee-shifting provision favoring prevailing defendants. The trial court made the fee award based on submission of defendant’s attorney’s declaration attesting to the actual number of hours worked and the attorney’s billing rate. The submitted substantiation did not include the itemized billing statements or evidence that the billing rate and hours spent were reasonable. Plaintiff challenged this substantiation as being inadequate.

     The Fourth District, Division 3, in a 3-0 decision authored by Acting Presiding Justice O’Leary, disagreed.

Civil Rights: Ninth Circuit Denies Panel Rehearing and Rehearing En Banc Petitions in McCown v. City of Fontana

Decision Reversing $200,000 Fee Award and Remanding for Reconsideration.

     In our December 25, 2008 post, we reviewed McCown v. City of Fontana, 550 F.3d 918 (9^th Cir. 2008), which reversed and remanded a $200,000 fee award in a civil rights case (42 U.S.C. sec. 1983).

     The Ninth Circuit recently denied panel rehearing and rehearing en banc petitions, reissuing an amended opinion in light of these developments on April 24, 2009.

ADA: Reversal Of Lawsuit Based On Lack Of Standing Requires Vacating Of Monetary Sanctions

Ninth Circuit Reverses District Court’s Sanctions Order.

     In an American with Disabilities Act (ADA) case, a district judge dismissed a lawsuit based on plaintiff’s lack of standing and imposed monetary sanctions against plaintiff and his counsel for bringing a frivolous case. The Ninth Circuit reversed the standing determination, which also meant that the sanctions order “went away.”

     Because the Ninth Circuit had subsequently found standing in a similar situation, Doran v. 7-Eleven, 524 F.3d 1034, 1041 (9^th Cir. 2008), reversal was required in this case before it, where the summary judgment motion was decided before issuance of Doran.

     The reversals came in Wilson v. Kayo Oil Company, Case Nos. 07-56765 & 08-55444 (9^th Cir. Apr. 24, 2009) (published per curiam opinion).

FEHA: $1,059,350.60 Fee Award, Based on 1.5 Multiplier, Affirmed On Appeal

Use of Multiplier Appropriate Even Where Substantial Punitive Damages Also Were Awarded.

     Bimbo Bakeries, known for selling such brands of Orowheat and Entemann’s, suffered an adverse jury verdict based on plaintiff’s complaint for wrongful termination, gender and pregnancy discrimination, and violation of related California statutes. The jury awarded plaintiff $340,700 in compensatory damages and also assessed $2 million in punitive damages against Bimbo Bakeries. Because section 12965(b) of the Fair Employment and Housing Act (FEHA) permits the trial court to award attorney’s fees and costs to a prevailing party, the lower court also awarded plaintiff fees in the amount of $1,059,350.60 using a 1.5 multiplier. Bimbo Bakeries appealed use of the multiplier.

     The First District, Division 4, in Lopez v. Bimbo Bakeries USA, Inc., Case Nos. A119263 & A119720 (Apr. 23, 2009) (unpublished), rejected defendant’s arguments relating to the use of the multiplier.

           1939 World's Fair. Wonder Bakery.  Library of Congress.

Requests For Admission: Denial Of Seven Key Admissions Justified $32,400 Attorney’s Fees Award

Fourth District, Division 2 Affirms Fee Award, Even Though $182,469.75 In Fees Were Requested.

     Under our category “Requests for Admissions,” we have surveyed cases where courts have granted or refused substantial attorney’s fees award to litigants claiming that they had to prove facts that were unreasonably denied with respect to pretrial discovery requests for admission. Here is a decision where the party seeking RFA sanctions requested $182,469.75 in fees and was awarded only $32,400 in fees, with the latter decision affirmed on appeal.

     In Kelly v. LaMunyon, Case No. E044897 (4^th Dist., Div. 2 Apr. 23, 2009) (unpublished), plaintiffs, the purported buyers, and defendants, the purported sellers, engaged in protracted, bitter litigation over whether a residential purchase transaction had occurred. The facts were somewhat goofy, but clearly husband on the defendants’ side had never signed a purchase agreement and claimed he knew of no conduct that indicated that he had consented to the sale—after all, the money that was paid was by plaintiffs seeking to enforce a sale was rental for the use of the property by mother of one of the plaintiffs. Also, plaintiff never listed the property as an asset in a chapter 7 bankruptcy petition. (By the way, all of this involved litigation over a City of Canyon Lake condominium unit with a $135,000 purchase price.) Defendants eventually won and sought attorney’s fees for plaintiffs’ denial of RFAs about whether they had entered into an enforceable sales contract with plaintiffs. Defendants asked for $182,469.75 in fees for having to prove facts denied in the RFAs. The trial court only awarded $32,400 in fees against plaintiffs, and neither side challenged the amount of fees awarded by the lower court. Plaintiffs, though, did contest the correctness of the decision to award fees in the first place.

Private Attorney General Statute: CEQA Petitioner Denied Fee Award Because Cost Of Litigation Did Not Transcend Personal Stake In Litigation

Second District, Division 6 Upholds Fee Denial Under CCP Section 1021.5.

     Under our category “Private Attorney General Statute,” we have examined the requirements—more stringent than one might assume—for awarding prevailing litigants attorney’s fees under California’s private attorney general statute (Code of Civil Procedure section 1021.5). There are many elements to satisfy, including establishment that “the necessity and financial burden of private enforcement … are such as to make the award appropriate.” (Sec. 1021.5(b).) The next litigant failed to obtain fees because he did not satisfy this essential requirement.

     CEQA petitioner, in Lopate v. City of El Paso de Robles, Case No. B208066 (2d Dist., Div. 6 Apr. 22, 2009) (unpublished), challenged a senior retirement community and church expansion developments adjacent to his residence. City adopted a mitigated negative declaration under CEQA, and petitioner filed a mandate petition challenging that the City violated CEQA by not requiring a full-fledged environmental impact report. Developer abandoned the project, City rescinded its approvals, and petitioner dismissed his lawsuit. He then sought $25,833.25 in attorney’s fees under section 1021.5. City opposed, and the trial court denied the motion on the ground that the cost of litigation did not transcend petitioner’s personal stake in the lawsuit.

SLAPP Two-Fer: Fees Go POOF! Because No Amended Complaint On File And HOA Director Stung With Fees After Losing SLAPP Appeal

Second District, Division 7 Issues Two Unpublished Opinions on SLAPP.

     In our category “SLAPP,” we have explored cases where defendants have been victorious in winning mandatory attorney’s fees awards after prevailing in anti-SLAPP motions. The statutory basis for such fee entitlement is Code of Civil Procedure section 425.16(c). Division 7 of the Second District recently issued two unpublished decisions in the area.

Looney v. Moore, Case No. B198586 (2d Dist., Div. 7 Apr. 22, 2009) (unpublished)

      An individual defendant won a SLAPP motion against plaintiff in a hearing that followed in the wake of a prior hearing in which defendant Los Angeles County’s demurrer to a first amended complaint was sustained with leave to amend. Before a second amended complaint could be filed, the trial court granted individual defendant’s anti-SLAPP motion (terminating the action as to that defendant) and ordered plaintiff to pay individual defendant $6,360 in attorney’s fees as mandated by section 425.16.

     Plaintiff appealed …. and won! Because the first amended complaint was wiped out by the demurrer ruling, there was no operative complaint on file. “With no operative complaint in place during the state of limbo, however, there was no operative causes of action for the trial court to evaluate and, thus, no basis upon which to make a determination.” (Slip Opn., at p. 7, citing Cohen v. Superior Court, 244 Cal.App.2d 650, 656 (1966) and Malick v. American Sav. & Loan Assn., 273 Cal.App.2d 171, 174 (1969).)

     POOF! Both the SLAPP ruling and fee award were reversed.

Ariz v. Beverly Glen Park Homeowner’s Association, Inc. (2d Dist., Div. 7 Apr. 22, 2009) (unpublished)

     In this one, a former member of a homeowner association board of directors sued the HOA, her neighbors, former neighbors, and HOA’s president for various torts after she was removed from the board and as chairperson of the architectural/landscape committee. HOA filed an anti-SLAPP motion, won, and was granted fees in an amount to be determined in a separately noticed motion.

     Plaintiff’s appeal was not successful, although it is must reading for HOA practitioners on the “public forum” and “public issue” prongs of the SLAPP statute. In the end, HOA’s actions were found to be protected by the common-interest privilege established by Civil Code section 47(c)(1).

     Attorney’s fees were properly awarded under section 425.16, which is a mandatory fee-shifting statute. Plaintiff argued that HOA’s typographical error in referencing “section 425(c)” precluded the fee award. “Frivolous,” was the retort of the Court of Appeal and … HOA was also entitled to fees for prevailing on appeal.

Costs Memorandum Following Voluntary Dismissal: Court Of Appeal Determines No Proposed Judgment Needs To Be Additionally Filed

First District, Division 3 Disagrees With Weil & Brown Treatise Commentary.

     After plaintiff voluntarily dismissed her action, two defendants timely filed cost memoranda, but did not submit proposed judgments in addition to the memoranda. Plaintiff argued that the failure to submit these extra proposed judgments barred recovery of costs based primarily on a commentary found in Weil & Brown’s venerable “Civil Procedure Before Trial” practice treatise published by The Rutter Group. The trial court rejected the notion that the failure to file the proposed judgment document rendered meaningless the costs memorandum, approving the two cost bills after taxing a few items. Plaintiff, still disgruntled, appealed.

     The First District, Division 3, in Fries v. Rite Aid Corporation, Case No. A120488 (Apr. 22, 2009) (certified for partial publication), affirmed the costs judgment. California Rules of Court, rule 3.1700 plainly states that a costs memorandum must be served and filed within 15 days after, among other things, service of written notice of entry of judgment or dismissal. That was plain enough to show that the entry of the dismissal triggered the time to file a cost memorandum, with no authority supporting the view “that a voluntarily dismissed defendant must file a proposed judgment of dismissal together with the memorandum of costs.” (Slip Opn., at p. 5.)

Fee-Sharing Agreement: Defendant Clients Not Entitled To Attorney's Fees Where No Fee Entitlement in Fee-Sharing Agreement

Fourth District, Division 3 Finds Fees Clause in Contingency Agreement Was Inconsequential.

     Earlier, in our September 21, 2008 post, we reported on Strong v. Beydoun, 166 Cal.App.4^th 1398 (2008), where defendant clients owed no unjust enrichment recovery to an attorney who failed to obtain clients' signatures to a fee-sharing agreement with clients' other counsel. The fee-sharing agreement was unenforceable because clients did not sign it and suing attorney was barred from recovering any form of compensation from them.

     We now have the follow-up proceedings. After having won, prevailing defendants moved for attorney's fees, claiming they were prevailing parties under the contingent fee agreement containing a fees clause. The request was denied by the trial court. Clients appealed, and fared no better.

     The Fourth District, Division 3 in Strong v. Beydoun, Case No. G040238 (4^th Dist., Div. 3 Apr. 22, 2009) (unpublished) affirmed the fee denial. Presiding Justice Sills, on behalf of a 3-0 panel, found there was no fee clause, implied or otherwise, in the fee-shifting agreement that would give defendants a basis for fee recovery. The contingency fee agreement was immaterial, because losing attorney had sued under an unjust enrichment theory instead. The reciprocity principle of Civil Code section 1717 did not kick in because attorney would have been entitled to fee recovery in any event.

Off Topic: Falling D&O Coverage Raises Fears of More Difficult Settlements of Plaintiff Securities Class Actions/Derivative Suits

Settlements May Depend More on Personal Contributions from Sued Officers and Directors, Reports Recent Article from The National Law Journal.

     According to Amanda Bronstad’s April 17, 2009 article, “As D&O Coverage Falls, Plaintiffs Lawyers Fees at Risk,” published in The National Law Journal and available for reading at LAW.COM, plaintiff shareholder actions—mainly securities class action or derivative suits—may get harder to settle with the shrinking nature of D&O insurance available for purchase or use.

Civil Code Section 1717: Court Of Appeal Affirms Award Of One Half Of Requested Fees Based On Tardiness of Raising Compulsory Cross-claim Waiver Issue

Rationale Parallels Result by Different Division of Second District in Superior Property of Carson v. Regency Outdoor Advertising.

     In our April 17, 2009 post, we examined Superior Property of Carson LLC v. Regency Outdoor Advertising, Inc., a Second District, Division 3 unpublished decision that affirmed a substantial fee award under Civil Code section 1717, but only after the trial court reduced fees to the prevailing defendants based on their tardiness in relying on the proper lease (after taking a position that a different lease applied throughout earlier junctures of the litigation). Now, we have a Division 2 opinion affirming a similar fee award that was reduced because the winning litigant belatedly raised a preclusive issue late in overall proceedings.

     Pearl v. Deitch, Case No. B203762 (2d Dist., Div. 2 Apr. 20, 2009) (unpublished) involved a protracted battle, through several lawsuits, between plaintiff tenant and defendant landlord over a purchase option on a Santa Monica condominium unit. The parties eventually reached a settlement agreement with a fees clause under which plaintiff was paid some money, agreed to vacate by a certain date, and agreed to be responsible for damages to the unit after a specified date. Charges of waste and then malicious prosecution (in the wake of dismissal of the waste action) went back and forth in the court system. Defendant and her attorneys even won $13,435 on an anti-SLAPP motion by which the malicious prosecution claim was dismissed. Plaintiff then sued for breach of contract or (alternatively) rescission of the settlement agreement, but that was finally disposed of by a judgment on the pleadings—with the trial court determining that the claims should have been raised in one of the prior actions after unsuccessfully raising the preclusion issue before the appellate court in the prior appeal of the anti-SLAPP motion grant.

Off Topics: Here Is A Three-Fer—Bankruptcy Work Booming, Rehab Investment Companies Get Substantial Fee Arbitration Award, And Mepco Obtains Fee Award Against Saddleback Valley Unified School District

Bankruptcy Fees Are Awhirl In Lehman Brothers Bankruptcy.

     The bankruptcy of Lehman Brothers Holdings Inc. has certainly been a financial boon for many involved law and investment banking firms.

     Christopher Scinta and Linda Sandler, in their April 13, 2009 article “Lehman Brothers Law Firm Weil Gotschal Seeks $55 Million in Fees” (available for viewing at Bloomberg.com), report that Weil Gotshal & Manges LLP, led by partner Harvey Miller, is seeking approval of $55 million in fees from the bankruptcy court in the Lehman Brothers bankruptcy case, which covers debtor bankruptcy work for the period September 15, 2008-January 31, 2009. Partners and “of counsel” attorneys charged an average of about $824 per hour, according to the fee bankruptcy filings.

     Others must be equally delighted by the bankruptcy. Lazard Freres & Co., Lehman’s investment banker which helped sell various Lehman assets for about $1.54 billion, is seeking $6.6 million in compensation for the same period of time. Milbank Tweed Hadley & McCloy LLP, representing Lehman’s unsecured creditors’ committee, is seeking $12.1 million in fees, while Houlihan Lokey Howard & Zukin Capital Inc., the committee’s investment banker, has asked for $2.2 million for work performed during the same rough time frame.

     A hearing on these requests has been set before the bankruptcy court for May 13, 2009. (Both the U.S. Trustee’s Office and bankruptcy court have quite a lot of control over fee approval, with the former being able to object to requests (with its objections given substantial weight in many instances) and the latter being the ultimate arbiter of what fees get paid and when.)

     Lynn LoPucki, a UCLA law professor and frequent critic of the bankruptcy process, has estimated that Weil could see as much as $209 million in fees from this case and that, overall, bankers, accountants and lawyers might obtain judge-approved charges of $906 million.

 

   UCLA School of Law

 

Oxford Street Properties and Affiliates Awarded $1 Million in Attorney’s Fees in Los Angeles Rehabilitation Project Arbitration.

     JAMS arbitrator Richard Chernick recently ordered Rehabilitation Associates and Fedora Investment Corp., represented by Hollywood sole practitioner Lance J. Robbins, to pay $20 million to Oxford Street Properties and certain affiliates relating to fraud and economic duress claims arising from the attempted rehabilitation of the disused 102-year-old Main Mercantile Building in downtown Los Angeles into loft-style apartments. Mr. Chernick also awarded the prevailing parties $10 million in punitive damages and $1 million in attorney’s fees.

     Mr. Robbins is apparently a landlord himself who has gained some press attention in the past based on citations for violating city building codes, as reported by Mindy Farabee in her April 17, 2009 article, “Property Firm Is Awarded $30 Million in Loft Debacle,” appearing in the Los Angeles Daily Journal.

General Contractor Mepco Wins About $765,000 in Fees From Saddleback Valley Unified School District in San Diego Litigation.

     Mepco Services, a Downey-based general contractor hired to renovate Esperanza Special Education School in Mission Viejo, recently won a San Diego County Superior Court action against the Saddleback Valley Unified School District.

     Specifically, the school district was ordered to pay about $1.4 million to Mepco for a troubled renovation at the Mission Viejo special-education school. Also, Mepco was awarded about $765,000 in legal fees on April 16, 2009 by San Diego County Superior Court Judge Frederic Link—even after some photocopying charges were ordered stricken from the fee/cost requests.

     For more details on this case, see Scott Martindale’s April 16, 2009 article published in The Orange County Register’s Local section.

Family Law: Wife Was Not Entitled To Attorney’s Fees Award Under Family Code Section 2030

First District, Division 3 Affirms Fee Denial; Wife Also Hit With $4,000 in Sanctions Under Section 271.

     Ex-wife was married over 18 years to a successful attorney, who was apparently generous in both support payments and settlement equalizations in dissolution proceedings—at least according to the Court of Appeal. There were substantial assets to divide, and wife was deemed capable to earning $65,000-$75,000 a year (although not working since 2002). The trial court found ex-wife’s job search was inadequate. Ex-husband also may have “overpaid” support payments, with wife receiving assets having substantial equity. Wife then sought attorney’s fees and costs of $34,343 under Family Code section 2030, the “needs” based fee-shifting provision in family law proceedings. Husband sought attorney’s fees and costs of $23,932 under sections 2030 and 271 (the latter being a sanctions-based fee provision based on a litigant’s uncooperative, cost-driving-up actions). Trial court denied both parties’ fees/costs requests, but did assess $4,000 against wife as a section 271 sanction. Wife appealed the refusal to award her fees and costs, but did not challenge the $4,000 in sanctions.

     On appeal, the First District, Division 3 affirmed the denial of fees to ex-wife under section 2030 in Marriage of Baylocq and Wilberding, Case No. A121732 (1^st Dist., Div. 3 Apr. 17, 2009) (unpublished).

Unruh Act: Court Of Appeal Affirms $12,436 Attorney’s Fees Award Based On Limited Success Of Plaintiff

 

In a Split Opinion, Second District, Division 6 Rejects Plaintiff’s Requested $24,871.75 In Light of His Recovery of $4,000 Minimum Statutory Damages.

     In cases involving mandatory fee-shifting statutes (such as the Unruh Act, Civil Code section 52(a)), we have seen an emerging theme that encompasses a large number of attorney’s fees recoveries: the success of the litigant usually has a great deal to do with the fee award in connection with the trial court’s discretionary decision making calculus. The next decision we examine is no exception to this observation even though a dissenting justice saw things differently.

     Plaintiff in Barrette v. Costco Wholesale Corp., Case No. B202606 (2d Dist., Div. 6 Apr. 16, 2009) (unpublished) won minimum statutory damages of $4,000 under the Unruh Act arising out of a violation under the American with Disabilities Act (ADA, 42 U.S.C. sec. 12182). The small award was the result of defendant moving quickly to put policies in place to rectify future ADA violations. The trial court awarded plaintiff only about one half of requested fees--$12,436 out of the sought-after $24,871.75 lodestar (originally, plaintiff sought $27,278, but the trial court eliminated $2,856.25 to reach the lodestar amount). Plaintiff appealed, claiming a higher fee award was in order.

Nearly $900,000 In Attorney’s Fees Affirmed In Billboard Litigation

 

Second District, Division 3 Finds Defendant Lessors Prevailed Despite Claim of “Triplicative” Work By Three Law Firms.

     The next one is a wild one and illustrates that substantial attorney’s fees will be awarded under Civil Code section 1717 once the court determines which litigants “prevailed” by achieving their main objectives in the germane litigation.

     In Superior Property of Carson LLC v. Regency Outdoor Advertising, Inc., Case No. B203251 (2d Dist., Div. 3 Apr. 16, 2009) (unpublished), certain billboard lessors prevailed in a protracted lawsuit involving wild claims of what lease governed (an October 10 or 11 document) and whether lessors were judicially estopped after many of them had earlier banked on the October 11 lease—but then shifted course late in the litigation and stood on the October 10 lease, which was indeed found governing by the trial court following a bench trial. Because the plaintiff wanted removal of the billboard and defendants prevented this from happening, the trial court determined the defendants were the prevailing parties under Civil Code section 1717 (based on the existence of fee clauses in both leases) and awarded the three defendants collectively $892,944 in fees—after all, each defendant had its own counsel to defend its interests. Plaintiff appealed.

Discovery Sanctions: $90,000 Monetary Sanction, Out of Requested $230,087, Affirmed On Appeal

 

 

First District, Division 5 Sustains Sanctions For Production of Laptop With Deleted or Scubbed Computer Files.

     For all of you e-discovery fans out there, here is one where a substantial monetary sanctions—one that could have been much larger—was affirmed on appeal for a defendant’s production of a laptop with deleted and “scrubbed” computer files after a court order had been entered mandating inspection of her computers and computer storage devices.

     In OZ Optics Limited v. Hakimoglu, Case No. A118565 (1^st Dist., Div. 5 Apr. 15, 2009) (unpublished), the Court of Appeal found that defendant’s action in producing a “scrubbed” laptop violated her discovery obligations and constituted a misuse of the discovery process.

Section 998: Plaintiff With Unity of Interest Cannot Reject 998 Offer Without Requesting Clarification From Offeror

 

Third District Reaffirms Validity of Peterson in Unpublished Decision Involving Individual Plaintiff Who Could Compromise Both Personal and Representative Issues.

     In Van Alstyne v. Carter, Case No. C056440 (3d Dist. Apr. 14, 2009) (unpublished), plaintiff lost a crop damage case involving $1,200 in damages and an injunctive request after defendants defensed plaintiff through nonsuit motions and a jury verdict in their favor. Defendants filed a costs memorandum seeking, among other items, $66,525 in expert witness fees based on a Code of Civil Procedure section 998 offer that was rejected by plaintiff. (The 998 offer from the defense was extended to plaintiff, both in his individual capacity and as a trustee of a close knit revocable trust, offering to settle the litigation for $25,001.) The trial court did grant defendants $15,920.83 in ordinary costs, but taxed the expert witness fees claimed in the costs memorandum in entirety. (In layman’s terms, the lower court denied the expert witness fees, even though the 998 offer—if valid—would have allowed the defendants to recoup these expenses.) Defendants appealed this ruling.

Sanctions: $1,857.50 Sanctions Against Insurer Vacated As Unauthorized Under Statute Or Court Rule

 

Second District, Division 7 Reverses Award in Published Decision.

     For years, insurance carriers have raised due process concerns to their participation in mediation and mandatory settlement conferences, although more and more court rules require their participation in these processes. However, the next case illustrates that carriers are not subject to “bad faith” settlement negotiation sanctions in the absence of an explicit court rule authorizing same—which was missing in the situation before the appellate court. Also, even with such a rule, the case raises doubts that a carrier can be penalized for bad faith settlement sanctions in any event.

     In Vidrio v. Hernandez, Case No. B207391 (2d Dist., Div. 7 Apr. 13, 2009) (certified for publication), the Second District, Division 7 reversed a $1,857.50 monetary sanctions imposed against an insurer because of a trial court’s belief that it had failed to negotiate in good faith at a mandatory settlement conference, despite the fact that the carrier attended the conference, met all procedural MSC requirements, but only offered a pittance of what the lower court apparently felt was fair.

Special Fee Shifting Ordinances: Can Rent Stabilization Ordinances Result In Fee Exposure?

You Betcha, Just Ask East Palo Alto—As the Next Post Shows.

     Page Mill Properties, the largest residential landlord in East Palo Alto, has been doing battle in court with the city over the proper interpretation of certain rent exemption decisions made by the East Palo Alto Rent Stabilization Board under the local rent stabilization ordinance.

     Can these types of ordinances result in fee shifting? Yes they can. See the ordinance for East Palo Alto, Section XV.A.5.

In-House Counsel Fee Shifting Compensation: Lodestar Is the Presumptive Measure

PLCM Is the Leading Case Under Civil Code Section 1717, And Likely In Other Contexts.

     We would like to thank Michael J. Ireland, General Counsel of Majestic Investment Group in Woodland Hills, for this message: “I don’t know if there are many of us out there, but I would like to see cases discussing calculation of fees awards to In House Counsel.” We have not seen any along the way since we have been blogging in this area, but set forth what seems to be California law on the subject. Put another way, this one is for all you California in-house counsel out there that get involved in litigation with fee-shifting clauses or statutes.

Off Topic: Top List Of Law Firms Laying Off Nonpartner Attorneys

April 2009 Issue of The American Lawyer Provides Top Ten List.

     Who says lawyers are recession proof? Not at all, according to a top ten list of large law firms that have laid off nonpartner attorneys in recent times, as surveyed in an article printed in the April 2009 issue of The American Lawyer.

     Here is the top ten plus honorable mention list according to the April 2009 article, specifying number of nonpartner attorneys cut and percentage cut from nonpartner population:

• Orrick (CA headquartered) -- 140 cut; 19.86%;
• White & Case (N.Y. hdqtr) -- 270 cut; 15.43%;
• Pillsbury (CA hdqtr) -- 55 cut; 14.29%;
• Cooley (CA hdqtr) -- 52 cut; 12.97%;
• Bryan Cave (Midwest hdqtr) -- 58 cut; 11.22%;
• Latham (CA hdqtr) -- 190 cut; 10.84%;
• McDermott (Midwest hdqtr) -- 60 cut; 10.64%;
• Faegre & Benson (Fla hdqtr) -- 29 cut; 10.62%;
• Proskauer (N.Y. hdqtr) -- 58 cut; 10.58%; and
• Wilson Sonsini (CA hdqtr) -- 45 cut; 10.09%.

     Honorable mention went to Holland & Knight (Fla. headquartered), which cut 70 lawyers—a high score, but with the cuts also inclusive of partner layoffs.

     Interestingly enough, the top ten layoffs were dominated by California- and Midwest-headquartered firms. The only explanation coming from the article was that New York firms have a different culture and management style, with layoffs “not in their DNA.” At least two large New York firms—Weil, Gotshal and Sullivan & Cromwell—dodged layoffs because of their involvement in restructuring work.

     For more information, see Vivia Chen’s article, “And The Winner Is …” in the April 2009 The American Lawyer at page 24.

Retainer Agreements: Quantum Meruit Award of $22,670.24 To Discharged Contingency Fee Attorney, After Offsets, Is Affirmed On Appeal

Fourth District, Division 2 Construes “Recovery” Fee Retainer Language Against Drafting Attorney.

     The next decision demonstrates that practitioners need to be careful how they draft retainer agreements. Because the drafter is usually an attorney, any ambiguity will likely be construed in favor of the client. That is what occurred in the next case, involving a discharged contingency fee attorney hoping to get more than a quantum meruit award under a contingency fee agreement. It did not happen.

     In Strickland v. Mason, Case No. E044910 (4^th Dist., Div. 2 Apr. 10, 2009) (unpublished), attorney entered into a contingency fee arrangement with client to recover loans client had made to her daughter and daughter’s boyfriend between a 5 year period of time. Client agreed to certain contingency arrangements “of any money recovered” at various points of the legal proceedings, with attorney granted a lien on “any recovery [client] may obtain in the court action ….” In the discharge and withdrawal provisions of the retainer agreement, client could discharge attorney at any time, with attorney entitled to the reasonable value of her services at a $200 hourly rate “payable upon any collection of funds in this matter.”

Homeowner Associations: Third District Reverses Fee Award Under Civil Code Section 1354, But Remands For Recalculation Based On Corporations Code Section 317

 

Third District Gives Mixed Blessing to Fee Victor.

     What happens when a fee award is not sustainable on one ground but correct on another? Answer: a remand, with directions to recalculate the award under the proper fee entitlement statute. The next case—Klamath River Development Co. v. Preston, Case Nos. C054002 & C055369 (3d Dist. Apr. 9, 2009) (unpublished)—illustrates this end result in a recently issue unpublished decision out of the Third District.

E-Discovery: Outside Law Firm and One Of Its Partners Stung By Fees And Expenses For Not Producing Native Formatted Database

U.S. Magistrate Finds No Substantial Justification For Not Producing Materials As Called For in Defense Discovery Requests.

     In our post of July 30, 2008, we reported on the Qualcomm decision, where substantial discovery sanctions were imposed upon attorneys for e-discovery disputes that were not discovered until during the course of trial. The next case involves sanctions imposed against attorneys, albeit at pretrial stages before the occurrence of a trial.  Once again, discovery bytes back.

     U.S. Magistrate Judge Karla R. Spaulding, in Bray & Gillespie Mgt. LLC v. Lexington Ins. Co., 2009 U.S. Dist. LEXIS 21250, 2009 WL 546429 (M.D. Fla. Mar. 4, 2009), found that a plaintiffs’ outside law firm and one partner had to jointly and severally pay the reasonable attorney’s fees, costs, and expenses for motions for sanctions relating to the defense’s successful efforts in obtaining a previously unproduced database in native format, as well as the expenses of the defense forensic computer expert and the costs to examine/convert the information into usable form—likely hundreds of thousands of dollars.

Off Topic: Stevens’ Criminal Case Gets Dismissed And Phil Spector Incurs Large Legal Bills In Defending Criminal Charges From The Clarkson Shooting

CelebriTrials Linked by Large Legal Fees

Stevens Case Is Dismissed.

     Over the weekend, in our April 5, 2009 post, we discussed the criminal trial of former Senator Ted Stevens—which likely cost him at least $2 million in legal fees to defend.

     Earlier this week, U.S. District Judge Emmet Sullivan dismissed the case at the Attorney General’s request, but appointed an outside lawyer to investigate the conduct of six members of the prosecution team about allegedly not providing exculpatory evidence to the Stevens’ defense team. The investigation could lead to reprimands, disbarment, and even criminal charges as against the attorneys subject to investigation.

     A good editorial on the whole story—“Not-so-even on Stevens”—can be found in the April 9, 2009 Opinion section of The Orange County Register.

Phil Spector Spends Plenty of Legal Fees In The Clarkson Criminal Case.

     Phil Spector is no neophyte to the music world or to using attorneys in lawsuits over royalties. It has been reported that he spent up to $5.7 million in legal bills over a 20-year period in litigation over certain music royalty rights. That legal spending has spilled over and escalated in the criminal trial over the Clarkson shooting.

     Mr. Spector has had no less than 11 criminal defense attorneys representing him during the course of the case, supplemented by 4 investigators, 5 paralegals, a jury consultant, numerous expert witnesses, and a slew of consultants never called as trial witnesses. The final tally is not known, but one criminal defense attorney charged $1 million for one year of representation and the expert witnesses charged over $500,000. The public record also shows that he has in the past couple of years borrowed $2.1 million from certain of his assets.

     To show you how expensive (not to mention emotionally draining) trials can be, Mr. Spector and the Westin Bonaventure Hotel recently wrangled over a $105,000 bill for stays during his first trial (which resulted in a mistrial). Although the matter was settled, it does illustrate the magnitude of costs of a lengthy trial—even though the expense only related to staying near the criminal court venue for the trial.

     For more details on the expenses relating to the Clarkson criminal trial, see Harriet Ryan’s article “Spector’s long legal battles may be sapping his fortune,” which was reported in the April 8, 2009 issue of The Los Angeles Times.

Civil Code Section 1717 And Anti-SLAPP: Fee Awards Affirmed Where Merits Determinations Were Sustained On Appeal

Dalis v. Reinhard, Case No. H031637 (6^th Dist. Apr. 8, 2009) (unpublished).

     In this one, defendant was awarded $353,607.96 in attorney’s fees when he prevailed on 12 of 13 causes of action in an action brought by a Trust upon a nonrecourse promissory note with a fees clause. Defendant did prevail, and the merits defense judgment was affirmed when the appellate court found the nonrecourse note was not unconscionable in nature. That meant the fee award was left intact for a jubilant defendant.

Jubilant spectators at football game.  1943.  Library of Congress.

Conlon v. Teters, Case No. D052357 (4^th Dist., Div. 1 Apr. 8, 2009) (unpublished).

     Here, defendant won an anti-SLAPP motion, which carries a mandatory award of reasonable attorney’s fees and costs by the trial court. The lower court awarded defendant fees of $6,916. This award held up when the appellate court sustained the merits of the lower court’s determination that defendant properly “SLAPPed” claims based on the Civil Code section 47(b) absolute official proceedings privilege.

Class Action POOF!: Plaintiffs Lose $253,800 Summary Judgment Award And $107,000 Postjudgment Attorney’s Fees Award Then Evaporates

Fourth District, Division 1 Reverses Summary Judgment Grant Under Marijuana Reform Statute Involving Job Applicants.

     The next case is an interesting one, although it again illustrates the POOF! principle—if a merits judgment is reversed, the fees award vanishes with it.

     Larson v. Casual Male Stores, LLC, Case Nos. D051554 & D052185 (4^th Dist., Div. 1 Apr. 8, 2009) (unpublished) focused on Labor Code sections 432.7 and 432.8.

Family Law: Husband Withholding Financial Information Hit With $8,000 Fee Award

Second District, Division 6 Affirms Award Based on Family Code section 271.

     We have under our category “Family Law” discussed on many occasions the application of Family Code section 271, a sanctions-designed statute allowing attorney’s fees to be assessed against a family law litigant that is uncooperative, subverts resolution of disputes, and increases the costs of the overall dispute. That section came to bite the husband in the case we next discuss.

     Husband was ordered to pay $8,000 in fees incurred by wife (at a clip of $1,000 per month) based on activities in moving to modify a child support order. The award was based on section 271, because husband had not provided all the requested financial information to wife in the child support modification battle. (The fee award could have been more, because wife requested fees of $12,207).

     The Second District, Division 6 affirmed in Marriage of Davis, Case No. B203268 (2d Dist., Div. 6 Apr. 8, 2009) (unpublished). There was no basis for finding an abuse of discretion, the governing standard, based on the record presented before the appellate panel. “[Husband] may not withhold his financial records and now complain that the limited information he has produced does not support the trial court’s order.”

Appeal Sanctions: Attorney Losing Discovery Sanctions Is Also Hit With Appellate Sanctions Of $23,343,75

Second District, Division 8 Gives a “Double Whammy.”

     In line with suggestions we have made in prior posts, appellate practice in California is a specialty. Do not get involved and do not lightly appeal abuse of discretion rulings unless you consult an appellate specialist or have practiced before the California appellate courts. The next case is a stark reinforcement of the wisdom of these suggestions.

     A contentious family law surrogacy dispute involved “parents” squabbling about numerous subjects, primarily centering about mother’s lifestyle, child’s support requirements, sperm donor’s (dad’s) child visitation rights, and overall paternity issues.

     Dad’s attorney was hit with $5,000 in discovery sanctions after discovery was sent covering, among other things, subjects such as mother’s topless dancer, actress, and Internet bikinis enterprising activities. Dad’s attorney was miffed at these sanctions and appealed as objector.

     Attorney lost both the merits and more in Abbot v. Kitts, Case No. B200824 (2d Dist., Div. 8 Apr. 7, 2009) (unpublished). The discovery sanctions were found justified by the appellate court. However, it went farther. The panel found that attorney’s appeal was frivolous under Code of Civil Procedure section 907, citing In re Marriage of Flaherty, 31 Cal.3d 637, 650 (1982) [one of our Leading Cases] in support of the result. Mother was awarded an extra $23,343.75 for attorney’s frivolous appeal.

     Quote of the Day—“ … an attorney is never justified in taking such wholly unmeritorious positions before the court, even if requested to do so by a client. It is the attorney, not the client, who is the professional occupying a trusted position as an officer of the court. He must resist the misguided or improper urgings of his vengeful, angry, or merely ignorant client.” (Bauer, J., sitting by assignment, on behalf of the 3-0 panel.)