CALIFORNIA ATTORNEY'S FEES

Tort of Another: Purchasers Of Challenging Driveway Recoup Fees From Prior Action Against Prior Owner/Contractor For Negligent Construction Of Driveway Impairment

Sixth District Determines Trial Court Properly Applied “Tort of Another” Doctrine in Favor of Landowners With the Challenging Driveway.

     Co-contributors Marc and Mike have written an article on when attorney’s fees may be awarded as damages in certain cases. (See “When the American Rule Doesn’t Apply: Attorney’s Fees as Damages in California Litigation,” California Litigation, Vol. 21, No. 3 (California State Bar 2008), available for reading with thanks to the State Bar on our November 13, 2008 post.) One such instance occurs if the “tort of another” doctrine applies. The next opinion affirmed a fee award based on this doctrine.

     Bennett v. M. Lewis, Inc., Case No. H032813 (6^th Dist. May 29, 2009) (unpublished) involved residential purchasers who had to sue when their adjoining neighbors tried to prevent them from using a driveway turnout. The parties reached a settlement in which residential purchasers obtained legal title to the turnout area. Residential purchasers subsequently sued the prior owner and contractor which constructed the driveway for nondisclosure and negligent construction. Following a bench trial, residential purchasers were awarded damages against defendants on the negligent construction claim in the amount of $32,531.31, some of which included attorney’s fees they had incurred in the prior litigation against their adjoining neighbors. Among other challenges, defendants challenged the award of fees under the “tort of another” doctrine.

Family Law Awards: Wife Required To Pay One-Half Of Fees For Attorney Representing Minor Child In Custody Dispute

First District, Division Four Affirms Fee Award Made Under Family Code section 3153(a).

     Family Code section 3153 allows a court to order parents to pay the attorney’s fees for a court-appointed attorney for a minor in a custody dispute. The family law judge must consider the parent’s ability to pay in making this determination and the financial resources of the parties in setting the amount that a parent pays. (Cal. Rules of Court, rule 5.241(b)(1).)

     In Marriage of Heierle and Assawasuksant, Case No. A118255 (1^st Dist., Div. 4 May 29, 2009) (unpublished), mother was ordered to pay one-half of legal fees ($14,083) for her child’s attorney in a custody dispute under section 3153.

     Mother appealed, but the fee award was affirmed.

Special Fee Shifting Statute: Third District Affirms $29,674 Fee Award Against Sacramento County In A Contempt Proceeding To Enforce Injunction Abating A Nuisance

Court of Appeal Enforces Faces the Conflict Between Civil Code Section 1717 and Government Code Section 25845(c).

     Civil Code section 1717 is straightforward in allowing for mutual recovery of attorney’s fees in California by a prevailing party where a contractual clause so authorizes such a recovery. However, sometimes this provision seemingly comes into conflict with other statutes. For example, Government Code section 25845(c) limits the amount of prevailing party attorney’s fees to those incurred by the losing county in an action, administrative proceeding, or special proceeding to a abate a nuisance, but only if the attorney’s fees were authorized by a county ordinance. However, Government Code section 25845(b) also makes clear that the recovery of attorney’s fees not predicated upon a county ordinance “shall be in addition to and shall not limit any prevailing party’s right to recover costs pursuant to [Code of Civil Procedure] section 1032 and 1033.5 [with section 1033.5 including as costs attorney’s fees authorized by contract] …”

     The collision between these Civil Code and Government Code sections was confronted by the Third District, recently, in County of Sacramento v. Sandison, Case No. C058396 (3d Dist. May 29, 2009) (certified for partial publication).

Costs After 998 Offer Rejected: Losing Plaintiff In Toxic Mold Case Hit With Costs Of $331,167.52

 

Second District, Division 4 Rejects Plaintiff’s Protest to Cost Award, After Defense Prevailed and Recouped Expert Fees Through 998 Cost Shifting.

     Co-contributors Marc and Mike have litigated several cases (usually, fraud or nondisclosure cases) in which plaintiffs have attempted to recover damages for exposure to “toxic mold.” These cases are extremely expert intensive, with the expert fees on the mold issues eclipsing many of the other expenses. The losing side on a mold case may have exposure for hefty expert witness expenses as costs, a sobering reality that should be factored in before the case is adjudicated on the merits. The next opinion is a good “real time” illustration of the substantial costs that can (and will) be assessed against a losing mold plaintiff in the right circumstances.

     Dee v. PCS Property Management, Inc., Case No. B186000 (2d Dist., Div. 4 May 28, 2009) (certified for partial publication on a May 11, 2009 filed opinion) involved a plaintiff tenant who lost a jury defense verdict in a lawsuit stemming from her exposure to mold in an apartment she was renting. Plaintiff was ordered to pay the defense $331,167.52 in costs after she rejected a Code of Civil Procedure section 998 offer, with most of the costs being defense expert witness expenses. Plaintiff appealed.

Some Historical Trivia . . . In Pro Per Protections Go Back To English Statutes Enacted During Reigns of Henry VII And Henry VIII

Indigency Protections Go Way Back.

     Yesterday, we did a post on Garcia v. Santana, an interesting Second District decision that held that financial condition was a factor to consider when awarding fees under Civil Code section 1354(c), a fee-shifting statute under the Davis-Stirling Act.

     Here is some trivia for you history buffs out there.

     Indigents’ rights of access to the courts go back to English days. Specifically, a statute passed under the reign of King Henry VII in 1495 provided for waiver of pretrial fees and costs with respect to indigents. Later, under the reign of Henry VIII, another statute was enacted that provided relief from automatic payment of costs of the opponent should the indigent litigant lose. The 1495 statute is even quoted in full in Justice Johnson’s concurrence in Baltayan v. Getemyan, 90 Cal.App.4^th 1427, 1437-1438 (2001).

     Interestingly enough, Justice Johnson in Baltayan concluded that “access trumps comfort,” meaning that the scales of justice had to tip in favor of indigent access to the courts. In Garcia, Acting Presiding Justice Woods penned his own concurrence expressing discomfort with the breadth of this conclusion by Justice Johnson. Justice Woods cited vexatious litigant countervailing protections as a basis for his discomfort with the breadth of the bright line rule endorsed by Justice Johnson in Baltayan.

 

                          Henry VII (left, attributed to Michael Sittow).  Henry VIII (right).

                          (Wikipedia).

Private Attorney General Statute: Trial Court Properly Awarded Plaintiffs $336,350 In Fees Rather Than Requested $1.49 Million (And Correctly Denied 2.0 Multiplier)

First District, Division 5 Determines Trial Court Properly Applied Serrano III Factors.

     Even under fee-shifting, public interest statutes, our California Supreme Court in Serrano v. Priest, 20 Cal.3d 255, 49 (1977) (Serrano III) mandated that multiple factors be used to increase or decrease a lodestar figure requested by victorious litigants. In the next case we discuss, the lodestar was decreased based on various factors. The disgruntled plaintiffs, who requested an award of $1.49 million plus a 2.0 multiplier after winning a publicized high school student editorial battle with a school district, were only awarded $336,350 in attorney’s fees under Code of Civil Procedure section 1021.5, with no one contesting student’s entitlement to fees. (Plaintiffs were represented by Pacific Legal Foundation, an entity receiving private support for purposes of bringing public interest lawsuits.) Plaintiffs appealed the trial court’s lodestar decreases under Serrano III. How did they do?

     Plaintiffs overall lost in Smith v. Novato Unified School District, Case No. A122105 (1^st Dist., Div. 5 May 28, 2009) (unpublished). The appellate panel found the lower court did not commit error in reducing the lodestar ($672,700) for (1) time spent on successful claims, (2) various Serrano III factors, and (3) substantial padding in the form of inefficient or duplicative efforts by multiple attorneys involved on plaintiffs’ behalf.

Family Law Awards: Court Of Appeal Reverses Family Code Section 2030 Award Against Husband Based On Consideration Of Erroneous Factors

Fourth District, Division 2 Finds Family Law Judge Relied on Inappropriate Factors.

     Here is one, even in this category, that we do not see often. A family law judge is reversed for considering inappropriate factors in awarding attorney’s fees to a wife under Family Code section 2030, the “needs” oriented fee-shifting statute. The lesson seems to be that where both spouses are equiposed in income and there is an error in factoring in expenses or other factors, a reversal may follow.

     In Marriage of Rue-Las, Case No. E045425 (4^th Dist., Div. 2 May 28, 2009) (unpublished), husband was ordered to pay wife $21,361.50 as his share of wife’s attorney’s fees under Family Code section 2030. Although reviewed under an abuse of discretion standard (In re Marriage of Cheriton, 92 Cal.App.4^th 269, 314 (2001)), the appellate panel reversed the fee award for two reasons.

Appellate Review: Include The Oral Argument Transcripts … Or Risk Affirmance Based On An Inadequate Record

First District, Division 4 Applies a Cardinal Appellate Principle.

     As we have stressed in past posts on appellate practice, litigants needs to make sure that they provide an adequate appellate record for review of fee determinations. If they do not do so, affirmance is a foregone conclusion. The next case illustrates this well.

     Zarate v. Manuel, Case No. A120686 (1^st Dist., Div. 4 May 28, 2009) (unpublished) involved an award of $69,753.97 in fees to a prevailing party successfully suing to enforce a written settlement agreement even though the party requested an award of $107,702.50. The party hit with the adverse fee award appealed, but did not include any record of the oral proceedings on the fee motion.

     That was a big mistake.

Special Fee Shifting Provisions: Financial Condition Of Indigent Litigant Is A Factor To Consider

Second District, Seven 7 So Holds Under Civil Code Section 1354(c), But Splinters Badly in the Process.

     We all know that fundamental access to the courts is more than just rhetoric; it is a bulwark of our whole legal system. This principle took “front and center” importance in the next case, where entitlement to fees was not in doubt under a special mandatory fee-shifting statute. What was in doubt was whether the financial condition of the losing indigent litigant should be taken into account—the “pocketbook” factor frequently factored into the mix of things, especially a fee award. The lower court denied fees on the indigency basis alone, a determination that was reversed and remanded—but not necessarily for why you might think. (So, read on!)

     Plaintiff, a housing cooperative tenant who was represented for a time by counsel but then proceeded in pro per, lost an unopposed summary judgment motion against owner, which moved for mandatory attorney’s fees of $48,328 under Civil Code section 1354(c) (a fee-shifting clause under the Davis-Stirling Act that we have frequently discussed under our category “Homeowner Associations”). The trial court denied fees based on plaintiff’s financial condition alone.

     In Garcia v. Santana, Case No. B206513 (2d Dist., Div. 7 May 28, 2009) (certified for publication), the Second District, Division 7—in a published opinion generating majority, concurring, and dissenting opinions—reversed and remanded.

People living in miserable poverty.  August 1936.  Elm Grove,      Oklahoma.  Dorothea Lange, photographer.  Library of Congress.

Fee Clause Interpretation: Narrowly Drawn Settlement Agreement Fees Provision Applying to Affirmative Enforcement Action Does Not Cover Defensive Use

Fourth District, Division 1 Finds Gil v. Mansano Persuasive.

     The next case demonstrates that both trial and appellate courts will interpret contractual fee clauses by their terms—if the scope is narrow, the fee recovery will be narrow and restricted in application.

     In Tesh v. LeTourneau, Case No. D052873 (4^th Dist., Div. 1 May 26, 2009) (unpublished), son of a declining mother challenged the transfer of mother’s assets into a court-approved trust. Son (brother) and daughter (sister), among other parties, participated in a mediation that produced a settlement agreement with a release of future claims (except about including a certain McDonald’s lease in the trust) and a narrowly drawn fees clause, to wit: “If any action or proceeding is instituted to enforce or interpret any right or obligation under this Agreement, the prevailing party shall be entitled to receive … his or her costs of such action or proceeding, including reasonable attorneys’ fees, … and all other costs incurred in enforcing or interpreting this Agreement.” Son brought an action to prevent inclusion of the McDonald’s lease in the trust and to nullify the settlement agreement. Son won issue number one and lost issue number two. The trial court awarded daughter some limited attorney’s fees to the extent it covered son’s efforts to rescind or terminate the settlement agreement, but denied fees on other issues. After an appellate court rejected son’s appeal of the adverse determinations, daughter/sister then moved for more fees after prevailing on the trust validity issues. The probate court denied the motion, finding that the settlement fees clause did not encompass “defense of Trust validity as a basis for a fee award. Instead, fees were to be awarded to the prevailing party in any action brought ‘to enforce or interpret any right or obligation under th[e] Agreement.’” Daughter/sister appealed.

Private Attorney General Statute: Lodestar Fee Award Affirmed, But Multiplier Determination Remanded For Further Consideration

First District, Division 1 Suggests Trial Courts Should Explain Multiplier Determinations With Some Specificity.

      For all of you attorneys practicing in areas that may trigger application of the private attorney general statute (Code of Civil Procedure section 1021.5), the next case will be of great interest. Not only does it highlight some discrepancies in adjudging fee awards under section 1021.5, the decision comes out and urges trial judges to explain their grants of multipliers with some degree of specificity.

      Americans for Safe Access v. County of Alameda, Case Nos. A121390, A122619 (1^st Dist., Div. 1 May 22, 2009) (unpublished) involved plaintiffs' summary adjudication and permanent injunction wins about the integrity of certain electronic voting machines under Elections Code section 15630. Plaintiffs' law firm, which specialized in elections law, requested a section 1021.5 fee award of $1,055,255.26 (a $519,207.26 lodestar, based on attorney hourly rates of $410-625, enhanced by a 2.0 multiplier). Plaintiffs submitted detailed billing and fee survey information to supports its request, with County mainly opposing the hourly rates being claimed. The trial court did reduce the hourly rates and awarded a total fee award of $875,182.80 (awarding a 2.0 multiplier found as an appropriate enhancement). County appealed.

     It lost on the merits judgment and the lodestar fee component, but obtained a reversal and remand with respect to the multiplier.

Family Law Award: Court of Appeal Validates Using "Estimated" Future Fees When Awarding Fee Recovery

Unpublished Decision Unremarkably Affirms Section 271 Sanctions and Awards Appellate Sanctions, But Remarkably Does Approve of "Estimated" Future Fee Approach in Fee Contests.

     The next decision we survey is not remarkable for its results: it affirmed a Family Code section 271 sanctions award of $9,500 and then imposed appellate sanctions of $7,500 for a frivolous appeal against a pro. per. litigant. Read on to find what we find interesting about Marriage of Parker, Case No. D053213 (4^th Dist., Div. 1 May 22, 2009) (unpublished).

Uniform Trade Secrets Act: Appellate Court Affirms Hefty Fee Awards Against Plaintiff Where Trade Secrets Claims Were Made In Bad Faith

 

Sixth District Applies Gemini/Stilwell Bad Faith Test in Two Unpublished Companion Decisions.

     In our March 3, 2009 post on K.C. Multimedia, Inc. v. Bank of America Technology & Operations, we discussed a Sixth District Court of Appeal decision that affirmed a $1,114,930 attorney’s fees under Civil Code section 3426.4. That provision authorizes a discretionary award of attorney’s fees against a litigant bringing a misappropriation claim in bad faith. The Sixth District also affirmed two hefty section 3426.4 fee awards in the next companion decisions that we discuss.

     In Augeas Corp. v. Brown, Case Nos. H031275 & H032082 (6^th Dist. May 21, 2009) (unpublished), the Sixth District sustained a fee award of $194,990.25 (full amount requested) against Augeas, while it affirmed another fee award of $100,000 (out of a requested $114,317.85) against Augeas in Augeas Corp. v. Krupski, Case Nos. H031423 & H032156 (6^th Dist. May 21, 2009) (unpublished).

Routine Costs: Parties Obtaining Rescission Properly Determined Not A Prevailing Party For Purpose Of Costs Award

First District, Division 2 So Holds in Lengthy Unpublished Opinion.

     In our category “Costs,” we have explored Code of Civil Procedure section 1032’s definition of prevailing party for purposes of a costs award. Although there are mandatory triggers requiring an award of costs to defined prevailing parties, the trial court has discretion to award or not award costs in instances where (1) a party recovers “other than monetary relief and in situations other than as specified” (section 1032(a)(4)); and (b) another statute allows costs to be considered in a discretionary (rather than matter of right) fashion (section 1032(b)). Those provisions dictated the result in the next decision we explore.

     Hogan v. DeAngelis Construction, Inc., Case Nos. A117321, A118257, A120840 (1^st Dist., Div. 2 May 20, 2009) (unpublished) concerned disgruntled purchasers who sued for both damages and rescission on multiple theories relating to their purchase of a home on Gardenview Place in Santa Rosa for the purchase price of $499,000. Seller early on in the litigation opted to accept buyers’ offer to rescind. What followed was a trial on the remaining claims, with the appellate court ultimately affirming adjunct awards of rescissionary consequential damages to buyers (after giving sellers significant offsets) and reversing a duplicative fraud damages award by the jury. The trial court then refused to award buyers routine costs of $41,058, determining that there was no prevailing party.

     The First District, Division 2 affirmed the costs ruling, in a 3-0 opinion penned by Justice Haerle.

Civil Code Section “Prevailing Party” . . . . Court Of Appeal Reverses Determination That Property Seller Getting $29.75 Million Properties Back Was Not The Winner For Fee Purposes Where Buyer Got Back $1.13 Million Deposit

Fourth District, Division 1 Rejects “You Won One, I Won One” Scoreboard Approach to Section 1717.

     This next case shows that appellate courts do indeed apply a pragmatic test when deciding whether a “prevailing party” determination rightfully gauged who obtained greater relief for purposes of awarding attorney’s fees under Civil Code section 1717. (For more discussion of the pragmatic test, go to our Leading Case list and locate Hsu v. Abbara, 9 Cal.4^th 863, 875-877 (1995).)

     Silver Creek, LLC v. Blackrock Realty Advisors, Inc., Case No. D052587 (4^th Dist., Div. 1 May 20, 2009) (certified for publication) involved a situation where a trial court determined no party prevailed for section 1717 fee recovery purposes even though seller obtained its objective of keeping properties worth $29.75 million but having to refund a $1.13 million purchase deposit to the unsuccessful buyer. (During court testimony, seller’s witnesses indicated that seller’s goal was to get the properties back on the market, not keep buyer’s deposit.) Because each side had won an issue, the lower court concluded there was no unqualified “winner.”

     That determination was reversed on appeal.

Diocese Fee Battle Ends . . . Fees Denied Because SLAPP Motion Was Not Frivolous

 

Orange County Superior Court Judge Colaw So Rules.

     In our May 4, 2009 post, we discussed a fee battle brewing in Orange County Superior Court after St. James Church’s SLAPP motion eventually lost in a case against the Episcopal Diocese of Los Angeles. That battle has now taken place so that we can report the result.

     Code of Civil Procedure section 425.16(a)(3) provides that the court must award reasonable attorney’s fees and costs to a plaintiff beating a SLAPP motion but only if the motion to strike was frivolous or solely intended to cause unnecessary delay. Diocese sought fees from St. James and certain volunteer directors under this provision.

     Diocese did not prevail. On May 15, 2009, Orange County Superior Court Judge Thierry P. Colaw denied the Diocese’s fee motion. Although the SLAPP procedure had never before been used in a church property dispute, Judge Colaw ruled that the motion was not frivolous, and had been brought in good faith by experienced and well-qualified defense counsel. In his tentative, Judge Colaw rhetorically asked whether the case could be considered to be frivolous when the underlying motion was granted, given that the Court of Appeal issued a 70-page opinion explaining its holding and the California Supreme Court granted review (which only happens to resolve unsettled issues of law) and explained its ruling in a lengthy opinion after consideration of numerous amici briefs for both sides.

     For more details on this proceeding, see “Superior Court Denies Episcopal Diocese’s Motion For Attorneys’ Fees,” posted May 15, 2009 by Karen Bro on the St. James Anglican Church website.

        Jerusalem.   The Anglican Church.  Library of Congress.

Federal Discovery In Post-Trial Fee Proceedings: San Diego Federal Magistrate Rules Discovery Must Be Discrete and Limited in Nature

Magistrate Also Rules that Post-Trial Expert Fee Declarations Are Not Subject to Pre-Trial Expert Report Disclosure Requirements.

     This next post discusses a topic that we have seen very few decisions on: the scope of federal discovery in post-trial fee proceedings, which are usually based on affidavits or declarations submitted by the attorneys requesting fees or experts opining on the reasonable hourly rate or reasonableness of fees being requested in a certain case.

     U.S. Magistrate Judge Ruben B. Brooks, who sits in the United States District Court for the Southern District of California, made these useful points in rulings (click here: Download May182009OrderbyRBB) in Gonzales v. Arrow Financial Services LLC, Civ. No. 05cv0171 JAH (RBB) (S.D. Cal. May 18, 2009) (Document 237) in a fee proceeding by which winning plaintiffs’ attorneys have sought fee recovery under the Fair Debt Collections Practices Act (federal statute and California counterpart with fee-shifting provisions):

• The court may determine that discovery under F.R.Civ. P Rules 26-37 would be useful to the parties only “on rare occasion” (F.R.Civ. P. 54 advisory committee notes on 1993 amendment to Rule 54(D)(2)(C));
• A district court does not abuse its discretion by refusing to allow the opposing party to take additional discovery and instead relying on affidavits and argument on the motion for attorney’s fees in making its decision (Williams v. Alioto, 625 F.2d 845, 849 (9^th Cir. 1980));
• Limited discovery was in order for purposes of producing any contemporaneous time billing records where one attorney added some additional time from reconstructed records or recollection;
• Limited discovery also was proper to show the actual rates that attorneys had charged clients in other cases where fee petitions were brought;
• Post-trial declarations by fee experts relating to reasonableness of hourly rates or other issues do not require compliance with expert report disclosure requirements under F.R.Civ.P. 26 (Rule 26(a)(2)(A),(B) applies to trial experts; see also McCulloch v. Hartford Life & Acc. Ins. Co., 223 F.R.D. 26, 29 (D.Conn. 2004) [experts offered solely on the issue of reasonable attorney’s fees “are exempt from providing a report”]); and
• No deposition discovery of the fee experts was warranted, under the circumstances, because it would merely prolong litigation on the fee motion (Williams, supra, 625 F.2d at 849 [opposing party not entitled to discovery if plaintiff has submitted sufficiently detailed affidavits in support of the fee petition]).

SLAPP Two-Fer: Two Fee Awards Affirmed

$9,387.50 Appellate Fees Awardable After Appeal Court Dismisses Appeal Without Written Decision.

     Stevens v. Paul, Case No. A122993 (1^st Dist., Div. 2 May 18, 2009) (unpublished) confronted an unusual procedural situation: plaintiff lost a SLAPP motion (hit with $5,155 in fees); appealed and lost in a summary non-written dismissal order; plaintiff was assessed further fees of $9,387.50 for the appellate loss; and appealed the second fee order.

     The principal claim of error—given that plaintiff did not challenge the basis or amount of the fee award—was that the trial court could not determine his opponent was the prevailing party or award fees on appeal without a written opinion.

     Wrong, said the Court of Appeal. An appeal dismissal only requires a written order, unlike a “cause” which requires a written opinion because it is a determination on the merits. By analogy to Wilkerson v. Sullivan, 99 Cal.App.4^th 443, 447 (2002), which found that a voluntary dismissal of an appeal did not prevent the lower court from awarding SLAPP fees to the dismissed party, the appellate panel found no substantive difference with the involuntary dismissal in the case before it. Because the defendant did prevail on appeal, the $9,387.50 fee order was affirmed.

Trial Court’s Denial of Fee Request Without Prejudice Allowed Renewal of SLAPP Fee Request in Separate Post-Dismissal Motion, Resulting in $23,429 Award.

     In a second procedurally distinctive situation, the Second District, Division 7 took on a SLAPP fee award of $23,429 ($5,345.50 less than requested, apportioning out work on a demurrer win) that was considered in a post-dismissal motion after the trial court required the SLAPP winners to provide more detail rather than just resting on a fee request in the SLAPP motion itself. Losing plaintiff argued that this was tantamount to an improper reconsideration motion, a contention that did not win on appeal.

     This very situation was considered in Rubin v. Nangano, Case No B206028 (2d Dist., Div. 7 May 18, 2009) (unpublished). The appellate panel believed that a lower court had discretion to dismiss a fee request without prejudice and require a separate fee motion—a situation that it did not consider to be analogous to the filing of a reconsideration motion. (Cf. Farber v. Bay View Terrace Homeowners Assn., 141 Cal.App.4^th 1007, 1015 (2006) [denial of a motion without prejudice invites a renewed motion later; whether to dismiss without prejudice or continue the motion until a later date is “an administrative matter of calendar management”].) The renewal option was also found advantageous to plaintiff, determined by the Court of Appeal to be “a precaution that benefited [plaintiff] more than anyone.” (Slip Opn., at pp. 15-16.) The fee award was affirmed and found reasonable in amount, given that the lower court did reduce the request by the work on the unrelated demurrer proceedings.

Attorney’s Fees In the News …. Newport Beach Police Sgt. Neil Harvey’s Hearing For Payment Of $2.14 Million In Requested Fees Will Occur in June 2009

His Attorneys Are Seeking a $1 Million Lodestar Plus a Multiplier.

     According to a May 14, 2009 article by Joseph Serna in the Daily Pilot, civil attorneys representing Newport Beach police Sgt. Neil Harvey, who obtained a favorable civil rights award of $1.2 million from a jury earlier this year, will be moving for $2.14 million in fees from the City of Newport Beach, CA sometime in June 2009. The fees totaled more than $1 million, but they are seeking twice that based on a multiplier request.

     So, stay tuned in June 2009, when we report back on how he did on the motion.

May 2009 Issue of The American Lawyer Has Two Articles of Interest

Rules of the Road For Creating Alternative Fee Arrangements Versus Pure Hourly Rates.

     Peter D. Zeughauser (formerly with The Irvine Company) is now a consultant who frequently writes about client-attorney fee arrangements. In his article “Alternative Reality” (pp. 75-76), he offers these “rules of the road” for creating an intelligent alternative fee structure:

• Understand each other’s position;
• Follow the money (flat rates work best for “cost pool” cases and contingency fees work well for “results pool” cases);
• Avoid windfalls;
• Share the risk—and the rewards (hybrid fee arrangements often do this);
• Avoid capped fees; and
• Always have a reopener.

2008 Shows Attorneys Are Also Impacted by the Economy.

     In a special report entitled “The Party’s Over” (pp. 105-186), The American Lawyer reported that 2008 was one of the worst years for the top 100 American law firms surveyed in the report. Average revenue per partner decreased 1%, while average head count rose 4.5% (which outpaced average gross revenue growth of 4.1%). Average 2008 compensation for all partners in the top 100 slipped 4.2% (however, don’t feel too sorry, because that amounted to $960,976). The biggest slips hit well-known New York firms (with 7 out of the 10 biggest decliners being venued there), with Washington, D.C. having 5 out of the top 10 revenue-per-lawyer gainers for 2008.

     BLOG BONUS COVERAGE—Jill Redhage, Daily Journal Staff Writer, has written an article in the May 13, 2009 Los Angeles Daily Journal—“Legal Work Drops Sharply in L.A., Not S.F.—in which she confirmed the downturn in most California legal markets. Based on the Hildebrandt Peer Monitor Economic Index released May 10, 2009, demand for legal services in San Francisco in the first quarter 2009 only dipped 1.2% from the same time frame in 2008, while demand dropped 8.2% from the prior 2008 first quarter in 33 legal markets worldwide. How did other well-known U.S. or English cities do? They all dipped on the demand side in first quarter 2009 versus first quarter 2008 as follows: New York—9.5% decrease; Washington, D.C. and London—12% decrease; Chicago and Los Angeles—8% decrease. The main bright spot was bankruptcy work, which was up 13.2% first quarter 2009 as compared to the first quarter 2008.

Family Law Award: “Feliz Navidad” …. Hardly, In the Feliciano Divorce Saga

Fourth District, Division 3 Reverses Denial of Wife’s Request for Family Code section 271 Sanctions.

      The next case showcases a 30-year divorce saga between Jose and Janna Feliciano, who co-wrote and produced many popular songs, with one of the most famous being Feliz Navidad. A family law judge determined that Janna would not share in certain artist royalties and refused her request to impose Family Code section 271 sanctions upon Jose based on evidence he had been uncooperative and obstreperous for decades. The Fourth District, Division 3 got the dispute when Janna appealed from these adverse rulings.

     Janna won her appeal on both fronts in Marriage of Feliciano, Case No. G039357 (4^th Dist., Div. 3 May 15, 2009) (unpublished). In a 3-0 decision authored by Justice O’Leary, the appellate panel found that the family law judge erroneously denied the section 271 sanctions request solely because no current income and expense declarations had been filed by either side. Section 271 is clear in not requiring such submissions as a jurisdictional requirement; rather, all that was required was to give Jose notice of the sanction request and an opportunity to be heard. Beyond that, the Court of Appeal felt that Jose should not have prevailed on the request simply by not responding to it and not filing financial information if he thought it was truly necessary. The fee award denial was reversed and remanded for further action (with the fee request likely to be a big number—given that Janna had filed some documents indicating that she had expended over $400,000 in fees!).

Construction Surety Bond Fee Issues: What Is Good For The Goose (Obligor) Is Good For The Gander (Surety)

Second District, Division 5 Confirms That Surety Is Usually Liable For Fees If Obligor-Obligee Contracts Calls For Fees.

     This next case should be of interest for you practitioners who practice construction law involving payment/performance bonds issued by a surety. Usually, the bonds confirm a tripartite arrangement between the obligor (in the next case, the subcontractor), the obligee (the contractor), and the surety (usually an insurance company). However, there is a twist when the contractor has also obtained a similar bond from the same surety running in favor of the property owner. What happens when there is a liability determination and subsequent fees award? Answer: Depends on the factual situation and web of relationships, as the next decision makes clear.

     In First National Ins. Co. v. Cam Painting, Inc., Case No. B200830 (2d Dist., Div. 5 May 15, 2009) (certified for publication), surety on subcontractor’s bond paid out on a claim, but allocated the loss 50/50 between both the subcontractor and contractor bonds (given that the same surety was on the hook for the same project). After a trial, the lower court awarded damages and assessed attorney’s fees in favor of surety and against contractor based on the contractor bond. (These rulings broke down as a 50/50 divide on damages and $25,203 in attorney’s fees awarded jointly and severally against the contractor and subcontractor bonds.) These determinations were reversed because the lower court should have fixed the entire loss on the subcontractor bond running in favor of contractor, because the claim centered around subcontractor’s failure to pay a supplier. “The coincidental fact that [surety] also bonded [contractor] did not dilute its obligation to [contractor] as obligee on the [subcontractor] bond.” (Slip Opn., p. 11.)

Family Law Awards: Fee Award Reversed Because Trial Court Failed To Specify Basis For Award And Requesting Party Did Not Provide Proper Notice of Request

Fourth District, Division 2 Remands For Proper Determination, Using Applicable Legal Principles.

     In our category “Family Law Awards,” we frequently have surveyed decisions in which attorney’s fees were awarded to one side in a family law dispute based on “need” (Family Code sections 2030 and 2032) or as a “sanctions” because of litigious conduct (Family Code section 271). The next case reversed and remanded a fee award because the trial court never specified the statutory basis for the award and there no evidence of record that supported a “need” based award.

     Husband in Marriage of Condoluci, Case No. E046238 (4^th Dist., Div. 2 May 14, 2009) (unpublished) was ordered to pay $750 in attorney’s fees to ex-wife’s probate estate. He appealed, and won (at least for the time being).

     The Fourth District, Division 2 reversed because neither the wife’s attorney nor family law court specified the particular statutory basis for the award and received no evidence concerning the relative financial positions of the parties. These defects were fatal. No section 2030/2032 awards were justified without current financial information from both sides (which would include information about assets in wife’s estate). As to awarding fees as a sanction under section 271, the requesting party did not do so under proper notice as far as motion timing rules or did not specify the basis upon which the request was made. So, the appellate panel reversed and remanded without prejudice to the trial court making a proper award of fees. Who says appellate jurists do not pay attention to due process concerns? This case shows they do.

Mobilehome Residency Law: Fees Awardable To Prevailing Party Even If He/She Is Not A “Homeowner”

 

First District, Division 5 Interprets Civil Code Section 798.85 Fee-Shifting Provision.

     Civil Code section 798.85 is a special fee-shifting provision arising under the Mobilehome Residency Law (MRL, Civil Code section 798 et seq). It provides: “In any action arising out of the provisions of this chapter the prevailing party shall be entitled to reasonable attorney’s fees and costs. A part shall be deemed a prevailing party for the purposes of this section if the judgment is rendered in his or her favor . . . .” The next decision explores whether a prevailing party must be a “homeowner” for purposes of fee recovery under section 798.85. The First District, Division 5 answered “no” on the issue.

     In De Los Santos v. KOMAR, LLC, Case No. A121043 (1^st Dist., Div. 5 May 14, 2009) (unpublished), plaintiffs won an $8,000 interference award against mobile home park, with the trial court indicating that park also violated Civil Code section 798.4(a) in unreasonably failing to approve plaintiffs’ new buyer for their mobile home. Then, plaintiffs were awarded $18,630 in attorney’s fees pursuant to section 798.85. Defendant appealed.

Eminent Domain: Prevailing Defendant Landowner Entitled To Routine Costs

 

Fourth District, Division 2 Acknowledges General Rule on Appeal.

     Code of Civil Procedure section 1268.720 sets out a general rule that a defendant landowner is entitled to his costs on appeal, a rule not restricted to the situation of whether or not he prevails. The purpose of the rule is to ensure that the landowner receives a net sum at the conclusion of eminent domain proceedings that represents just compensation for the property. (Los Angeles Unified School Dist. v. Wilshire Center Marketplace, 89 Cal.App.4^th 1413, 1419 (2001).) Departures from this rule should be rare, the courts have held. (City of Los Angeles v. Ricards, 10 Cal.3d 385, 390 (1973).)

     In People ex rel. Dept. of Transportation v. Constant, Case Nos. E044802, E045320 & E046012 (4^th Dist., Div. 2 May 13, 2009) (unpublished), a trial court refused to award defendant landowner—who did obtain a successful verdict after losing some interim appellate writ petitions—costs totaling $10,032.47 requested under sections 1268.710 and 1268.720 as well as Revenue and Taxation Code section 50811. The trial court taxed these costs based on the State’s argument that landowner was not entitled to any “litigation expenses” under section 1250.410.

     On appeal by landowner, the Fourth District, Division 1 reversed for a simple reason: landowner was not claiming costs under section 1250.410, but under sections 1268.710 and 1268.720—with section 1268.710 codifying the principle that the property owner must be reimbursed for costs allowable under section 1033.5. No basis for departure had been established by the State, so that the matter was remanded to the lower court for redetermination of the appropriate costs under sections 1268.710 and 1268.720.

Insurance: Brandt Fees—Provide Your Fee Agreement … Or Risk Bad Things!

Fourth District, Division One, in Unpublished Decision, Strongly Urges Disclosure of Fee Arrangement Between Client and Attorneys in Brandt Setting.

     In our category “Insurance,” we previously explored an insured’s ability to recoup Brandt fees for pursuing the benefits of contractual benefits under an insurance policy. In fact, the co-contributors to this blog have written an article last year, in California Litigation, addressing many of the issues that arise in this area of the law. (See our post of November 13, 2008.) Now, we report on an unpublished decision that strongly urges all prevailing insureds to reveal their fee arrangement to lower courts considering Brandt fee awards.

     Leeper-Johnson v. Prudential Insurance Co. of America, Case No. D051166 (4^th Dist., Div. 1 May 13, 2009) (unpublished) involved a plaintiff winning a judgment of more than $15 million against Prudential based on breach of contract and insurance bad faith claims. $14 million of the judgment represented punitive damages, a sum which was reduced by the trial court to $4 million (not accepted by plaintiff)—a 3:1 punitive-to-compensatory damage ratio that was deemed proper notwithstanding reversal of a past economic damages component and elimination of attorney’s fees (which were remanded, as we discuss below). However, plaintiff also was awarded costs and $548,408.84 in attorney’s fees, also challenged by Prudential on appeal.

     Prudential won a remand for reconsideration of the fee award.

CDPA: Plaintiff Awarded $3,000 Fees Out Of Requested $33,918.20 Where He Only Recovered $1,000 Statutory Damages

Second District, Division 5 Finds No Abuse of Discretion, But Provides Tantalizing Dicta on Statement of Decision Requirements in Unpublished Decision; It Also Reminds Everyone to Provide a Reporter’s Transcript on Appeal.

     The next case may seem mundane, but does give some insights into the thought process of judges when confronting fee awards where very limited success is involved. Beyond that, it does contain the seeds for an argument that California law may need to change in the area of disabilities and civil rights awards, with some statement of decision (albeit concise) required to justify an award or denial of fees in these substantive areas of the law.

     Canady v. C & CH, LLC, Case No. B210316 (2d Dist., Div. 5 May 13, 2009) (unpublished) involved what may seem to be a routine appeal—a plaintiff recovering $1,000 in statutory damages under the California Disabled Persons Act, Civil Code section 54.3(a), sought to recover $33,918.20 in attorney’s fees but was only awarded $3,000 instead. (CDPA, Civil Code section section 54.3(a) does allow for recovery of fees by a plaintiff winning damages.) Given the limited success by plaintiff and other factors allowing the appellate court to conclude that the claimed hours were unreasonable based on the routine nature of the action, the matter could have stopped here and the decision would be unremarkable except to show how fee awards are usually discounted in cases where the damages award is small and the success is limited in nature. Guess what? There is more to the case, on two fronts.

Prevailing Party In U.S. Tax Proceeding: 26 U.S.C. Section 7430 Allows Award Of Fees To Prevailing Party Even Though Paid By A Third Party

Noncontingent Obligation to Repay Fees or Contingent Obligation to Repay In Event of Recovery Justifies Fee Award Under Section 7430, the Ninth Circuit Rules.

     The U.S. Tax Code, 26 U.S.C. section 7430(a), (c), permits a discretionary award of litigation costs, including attorney's fees paid or incurred for attorney services, to the prevailing party in any civil tax proceeding brought by or against the United States, unless the United States' position was substantially justified and subject to the prevailing party having net worth under certain limits. Furthermore, the prevailing party must show that it exhausted IRS administrative remedies and did not unreasonably protract the tax proceedings that generated fees in the first place. However, what happens if a third party (albeit a related corporate affiliate also sued) paid the fees for an individual prevailing party? Has the prevailing party still "incurred" fees for purposes of an award under section 7430? The Ninth Circuit has recently answered "yes" to this question.

     In Morrison v. Comm'r of Internal Revenue, Case No. 06-75332 (9^th Cir. May 13, 2009) (for publication), the Ninth Circuit adopted a broad definition of "incur" under section 7430, holding that a taxpayer can "incur" attorney's fees if he assumes either (1) a noncontingent obligation to repay the fees advanced on his behalf at some later time, or (2) a contingent obligation to repay the fees in the event of their eventual recovery. In coming to this conclusion, it sided with the reasoning of the Federal Circuit in an EAJA case because of the immaterial differences between section 7430 and the EAJA. (See Ed A. Wilson, Inc. v. General Servs. Admin., 126 F.3d 1406, 1407, 1410-1411 (Fed. Cir. 1997).) It also found support in decisions where courts had awarded fees to petitioners represented by pro bono counsel in related legal contexts. (Slip Opn., at pp. 5759-5760.)

Civil Code Section 1717: Absence Of Contractual Fees Clause Means Fee Award Must Be Reversed

Second District, Division 3 Finds No Incorporation of Other Fees Clauses to Sustain Award.

     One side to a joint venture agreement was vindicated completely with a defense jury verdict and was then awarded attorney’s fees of $75,000 (300 hours at a $250 hourly rate, out of a fee request in the $210-240,000 range). The problem for the prevailing party was that the joint venture agreement had no fees clause. This infirmity resulted in a reversal of the award in Markoff v. Aaronoff, Case No. B204532 (2d Dist., Div. 3 May 12, 2009) (unpublished).

     Although there were fees clauses in unsigned documents exchanged in joint venture negotiations, there was nothing to show an intent by the parties to be bound by the unsigned documents. (Contrast Pilcher v. Wheeler, 2 Cal.App.4^th 352, 353-355 (1992) [attorney’s fees request denied where parties did not intend unsigned construction contract with fees clause to be part of the bargain] with Boyd v. Oscar Fisher Co., 210 Cal.App.3d 368, 378-380 (1989) [although commercial purchasing contract between merchants had no fees clause, subsequent invoices with fee clauses were binding based on UCC battle of the form principles].) Nothing demonstrated that the parties intended to incorporate the unsigned contract fees clause into the signed joint venture agreement, meaning there was no predicate for fee entitlement.

     The Second District, Division 3 joined the majority view on the “estoppel” issue, determining that the losing parties’ prayer for fees did not create an estoppel when there was no fee entitlement basis to the contrary. (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4^th 858, 898-899 (2008) [discussed in our May 18, 2008 post]; Sessions Payroll Management, Inc. v. Noble Construction Co., 84 Cal.App.4^th 671, 674-675 (2000); see also our category “Estoppel” for discussion of the majority and minority viewpoints on this issue.)

     Winning parties tried to use third party beneficiary and assignee theories, but nothing demonstrated that the purchase agreement between the losing parties and the property seller (which had a fees clause, but to which the winners were not signatories) was made for the benefit of the winners. With respect to the assignee argument, losers were not suing as the assignees of the purchase contract but under the joint venture agreement without a fees clause. These crucial factual distinctions made unavailing use of these other theories for fee recovery.

     End result: $75,000 in fee recovery went POOF! based on the absence of a fee entitlement anchor in the contract that bound the litigants.

CCP Section 998: Make Sure Offers Are Targeted Against Specific Defendants And Are Certain In Nature

Second District, Division 6 Reinforces the Lesson in Workers’ Comp Lien Dispute.

     We have, on many occasions, discussed Code of Civil Procedure section 998, a fee-shifting statute based upon an offer of compromise. (See our category “Section 998” for more information on this area of the law.) Two of the things that must be paid attention to in most section 998 offers are: (1) making sure offers are apportioned among parties with divergent interests; and (2) making sure offers are certain and unambiguous. These principles came into play in the next case, rendering the 998 offers by the prevailing party unenforceable in nature.

     In American Safety Casualty Ins. Co. v. Mothershead, Case No. B206494 (2d Dist., Div. 6 May 12, 2009) (unpublished), real property owners had made a section 998 offer upon a workers’ compensation carrier and injured worker to settle the matter. Neither offer was accepted, and real property owners were absolved after a jury trial. Owners then requested $100,526.27 in costs (including $47,402.62 in expert witness fees) based on their perception of having beat the other parties under section 998. The lower court found the section 998 offers were invalid. Real property owners appealed.

Family Law Awards: Needs Award Must Be Heard Within 15 Days of Motion or OSC

Third District Reverses Lower Court Deferring Award for Unspecified Period.

     Marriage of Shurr, Case No. C057456 (3d Dist. May 12, 2009) (unpublished) does remind us that procedural time limits do exist for a reason and are frequently enforced by their terms. A trial court failed to hear wife’s request for an award of attorney’s fees under Family Code section 2030 based on “need.” It deferred the decision to an unspecified time. The appellate court reversed and remanded, finding that section 2031(a)(2) required that the fee request be heard within 15 days of the hearing on the motion or order to show cause. Reason for the reversal: “The court erred in failing to consider wife’s application during this timeframe.”

Family Law Awards: Section 2030 Award Affirmed In Favor Of Wife

Fourth District, Division 1 Finds Husband Had Income and Assets More Than 1600% Greater Than Wife.

     As the next case illustrates, most "needs"-based awards under Family Code section 2030 are reviewed under the deferential abuse of discretion standard. When that standard is used, an affirmance follows in most situations.

     Marriage of Carson, Case No. D053025 (4^th Dist., Div. 1 May 12, 2009) (unpublished) involved a family law judge's award of $12,000 to wife based upon need under Family Code section 2030, to be paid "forthwith." The evidence showed that husband had assets of $326,700, an average net monthly income of $2,634, and monthly expenses of $1,924. By contrast, wife had $20,100 in assets, no income from wages, and monthly expenses of $2,310. Husband did not like the award, and appealed.

SLAPP Fees …. Double Up On Attorney Use And Expect Reduction By Reviewing Courts

Second District, Division 8 Remands for Reduction Due to “Doubling Up” And Augmentation For Prior Fees That May Have Avoided Repetitive Work.

     Two sets of successful defendant attorneys were awarded, respectively, $100,000 and $50,000 for their efforts in obtaining SLAPP wins for their clients. Each set of attorneys had two counsel involved (with Cumis counsel being the second set of attorneys for one defendant). Losing plaintiff appealed both orders, obtaining reversals and a remand with further directives by the Second District, Division 8 in Jarrow Industries, Inc. v. Kokozian & Nourmand, LLP, Case No. B199597 (2d Dist., Div. 8 May 11, 2009) (unpublished).

Civil Code Section 1717: Absence Of Fees Clause Means One Award Reversed, While Remaining Award Was No Abuse of Discretion

Second District, Division 8 Reinforces that Contemporaneous Time Record Submission Is Not a Fee Recovery Requirement.

     This next case illustrates two important principles under Civil Code section 1717: (1) you need some fee entitlement basis—either a statute or contractual fees clause; and (2) California state law is more lenient on fee substantiation, although it is highly suggested that detailed time records be supplied to the scrutinizing judge.

     In Isaac v. Lozano, Case No. B202499 (2d Dist., Div. 8 May 11, 2009) (unpublished), plaintiff won a $369,940 verdict on various counts (which had to be reduced because the trial court allowed a “double recovery”) and even later won a $191,297.30 fees award (based on a contractual fees clause) against two defendants. (This was the full amount of fees requested by plaintiff.) Both defendants appealed the fee award, with one winning and the other losing.

     One defendant won because she was not a signatory on the promissory note containing the fees clause. Nothing showed that she assumed any obligations to pay fees under the note. So, the fee award was reversed as to her—based on no fee entitlement basis.

     Different matter as to the remaining defendant, who was a signatory to the note with the fees clause.

Workers Compensation: No Fees Awardable Where An Employer Or Insurer Disputes A Specific Treatment Request For Applicant Employee Previously Awarded Future Industrial Injury Treatments

California Supreme Court Construes Scope of Labor Code Section 4607.

     Labor Code section 4607 provides that the Workers’ Compensation Appeals Board (WCAB) can assess reasonable attorney’s fees as a cost upon a party who unsuccessfully institutes proceedings to terminate an award of an employee/applicant for continuing medical treatment. The issue before the California Supreme Court was whether section 4607 allowed for fee recovery if a party unsuccessfully challenges a specific treatment request rather than requesting a termination of a future treatment award.

     In Smith v. WCAB, Case No. S150528 (Cal. May 11, 2009) (published), our state supreme court answered “no” to the issue. The statutory language was clear in only covering termination requests, which challenge the continuing necessity for the WCAB’s award of future treatment. By contrast, the specific treatment contest only challenges the reasonableness of the specific sought-after medical care—far different from a termination of care altogether. This result was buttressed by section 4651.3, which authorizes a fee award where an employer unsuccessfully files a petition alleging that an employee’s disability has decreased or terminated. “The fact that the Legislature used both ‘decrease’ and ‘terminate’ in section 4651.3, but only ‘terminate’ in section 4607 suggests that it knew how, if it so chose, to fashion a broader remedy.” (Slip Opn., at pp. 9-10.)

     This was a 7-0 decision authored by Justice Moreno.

M & M Are Quoted in May 11, 2009 Daily Journal Article Concerning Attorney's Fees

Article by Daily Journal Staff Writer Dhyana Levey is Entitled "Students May Have to Pay Attorney Fees After Losing ADA Lawsuit".

     Calattorneysfees co-contributors Mike Hensley and Marc Alexander are quoted in today's Daily Journal regarding attorney's fees issues in a lawsuit brought by students with learning disabilities against the Association of Medical Colleges to get extra time to take the MCAT.    The students, who were awarded more than $2 million in attorney's fees in the trial court, have been dealt a reversal of fortune, and now face potential exposure to attorney's fees. 

     As we celebrate the first year anniversary of our blog, we note that we are being contacted with increasing frequency by the press to comment on attorney's fees issues.

Happy First Birthday ….. To Us!

     Believe it or not, we have been doing this blog for one year now, beginning with our inaugural post on May 11, 2008.

     We would like to thank our readers and fellow bloggers, many of whom were nice enough to offer tips, provide us leads on cases or topics to discuss, or “hat tip” us on cross-over issues. Hope we have been of some use to all of you in the blogosphere!

 

Attorney’s Fees In the News … Guardian Battle For Octuplets And Weiss-Trutanich L.A. City Attorney Campaign Battle

Nonprofit Group Files Suit For Guardian Appointment Over Suleman Octuplets.

     The Suleman octuplets have gotten a lot of press. Well, recently, a nonprofit group (A Minor Consideration) has filed suit requesting appointment of a guardian to steward the money generated by the octuplet twins borne to Octomom Nadya Suleman.

                     Dionne quintuplets ca. 1934.  Wikipedia.

     The nonprofit group—formed by Paul Petersen, a former child actor on “The Donna Reed Show” (a group advocating for children in the entertainment business)—tapped attorney Gloria Allred to file the Orange County Superior Court action. The primary basis for the suit is the fear that the money generated from revenue-generating publicity actions would not be used for the benefit of the octuplets. It is an unusual action, because most guardianship proceedings are brought by parties with closer ties to the children.

     Any attorney’s fees from the suit would be paid from the children’s estate if the court determines that a benefit was conferred from the guardianship.

     For more details on this action, see Bethania Palma Markus’ May 4, 2009 article “Gloria Allred files suit on octuplets’ behalf”. (Also, it is a little unclear from the article whether Mr. Petersen or his nonprofit group is suing, so we apologize if we got it wrong!)

     BLOG TRIVIA—Who did Mr. Petersen play on “The Donna Reed Show”? Answer: Jeff Stone, the youngest son of the Stone family. By the way, the show ran for eight seasons between 1958-1966. (For some of us, brings back memories, doesn’t it?)  Click here to hear Paul Petersen sing, "My Dad."

L.A. City Attorney Battle Spotlights Possible Hiring of Outside Counsel From Candidates’ Affiliations With Prior Firms or Clients.

     Westside councilman Jack Weiss and defense lawyer Carmen Trutanich are campaigning for the Los Angeles city attorney position. Both sides have raised conflicts of interest which they assert may cause the city attorney’s office to hire expensive outside counsel to avoid conflicts arising from each campaign’s affiliation with prior law firms or clients.

     Mr. Weiss claims that the city attorney might have to hire costly outside counsel, if Mr. Trutanich was elected, based on Trutanich’s representation of private defense clients that would be adverse to the city in the future. Preposterous, says Mr. Trutanich, and you may have the same egg on your face—after all, Mr. Weiss, you worked for Century City-based Irell & Manella and represented two billboard companies that may well be adverse to the city at some stage given the litigiousness of many of those businesses.

     The conflict issue surfaced based on a 2006 California Supreme Court ruling involving Cobra Solutions that resulted in disqualification of the San Francisco city attorney’s office because the city attorney had gained confidential information from a defendant sued by the city for a kickback scheme. Both sides said the supreme court decision is “very fact-specific” and deny it will have much impact. I guess we will have to see who wins and what the future holds before seeing which side had the better “crystal ball” on this issue.

Legal Malpractice: Payment Of Attorney’s Fees To Correct Scrivener’s Error Is “Actual Injury” For Purposes Of Attorney Malpractice Statute of Limitations

Fourth District, Division 1 Explores “Cross Over” Issue of How Fees Have Implications in Lawyer Malpractice Cases.

     Remember when we all studied for the California Bar examination? (Probably most of you are glad those days are over.) Well, we were drilled about spotting “cross-over issues” or those issues that had implications for more than one area of substantive law. That is what we have in the next case—where payment of attorney’s fees will constitute “actual injury” so as to prevent tolling of the one-year California statute of limitations governing attorney malpractice actions (Code of Civil Procedure section 340.6).

     Section 340.6 provides that a legal malpractice action must be commenced within one year after the plaintiff discovers or reasonably should have discovered the facts constituting the wrongful act or omission. Under this statute, the period is tolled during the time plaintiff has not sustained “actual injury.” So, what do attorney’s fees have to do with actual injury? The next case tells us.

     In Hazewinkel v. Macgurn, Case No. D053432 (4^th Dist., Div. 1 May 8, 2009) (unpublished), son/beneficiary of the trust of his deceased father retained an attorney and paid him fees to correct a scrivener’s error by a former attorney erroneously amending a trust in a way that gave father’s disinherited ex-wife a claim to the trust and certain assets in it. However, son did not move to sue for legal malpractice until a year after actually paying some fees to the nonsued attorney retained to correct the problem in probate proceedings. That was enough “actual injury” to trigger the running of the statute of limitations, a point established by the California Supreme Court in Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison, 18 Cal.4^th 739, 750-751 (1998).) Paying a second attorney fees to untangle the first attorney’s error constitutes “actual injury.” (Id. at 751.)

Eminent Domain: Trial Court Did Not Abuse Discretion In Denying Litigation Expenses To Defendant Awarded $214,610 Verdict After Plaintiff’s Best $45,000 Pretrial Offer

First District, Division Two Stresses that Mathematical Relation Factor Is But One Factor For Consideration.

     In our December 23, 2008 post on the unpublished opinion of City of Visalia v. Harrah, we reviewed Code of Civil Procedure section 1250.410(b) which allows the award of litigation expenses (including attorney’s fees and costs) to a winning condemnee after consideration of a multi-factored test to gauge the reasonableness of condemner’s pretrial offer, namely, (1) the amount of the difference between the [condemner’s pretrial] offer and the compensation award, (2) the percentage of the difference between the offer and award, and (3) the good faith, care and accuracy in how the amount of the offer and amount of [condemnee’s] demand, respectively, were determined. (Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp. (MTA), 16 Cal.4^th 694, 720, 722 (1997).)

     Recently, the First District, Division 2 had the opportunity to review an award denying litigation expenses to a winning condemnee where the jury awarded the defendant $214,610 and condemner’s best pretrial offer was $45,000 (only 21% of the actual jury award). Condemnee’s final demand was for slightly over $220,000, which was reduced to $150,000 after an unsuccessful mediation.

     The appellate panel in State Route 4 Bypass Authority v. Pomeroy, Case No. A118442 (1^st Dist., Div. 2 May 7, 2009) (unpublished) affirmed the denial order.