Fourth District, Division 1 Affirms $779,955.97 Postjudgment Fees/Costs Award.
The next case covers several cross-over issues: fees clause interpretation; apportionment between covered and noncovered claims; and reasonableness of fees.
Here we go.
In Urquhart v. Del Mar Country Club, Case No. D052711 (4th Dist., Div. 1 Sept. 28, 2009) (unpublished), a couple who were members in the country club reached a settlement agreement with the Del Mar Country Club under which an easement dispute was resolved and country club allowed a membership to couple’s son under certain conditions. Couple initiated a lawsuit claiming, among other things, that country club was required to quitclaim some property to them under the settlement agreement and that country club terminated their memberships as retaliation for suing. Because the case involved primarily contractual interpretation, the trial court granted summary judgment to country club (a determination that was upheld on appeal). The lower court also ordered couple to pay country club postjudgment fees/costs totaling $779,955.97 (gulp!, broken down as $720,636.85 in fees and $59,319.12 in costs). Couple also appealed this award, naturally.
The Fourth District, Division 1, unfortunately for couple, affirmed across the board.
Based upon a very broad fees clause in the membership agreements between the parties, the appellate panel found that the parties can by contract agree that fees will be shifted in any litigation (whether sounding in contract or tort), although normally a more narrowly worded fees clause only encompasses contractual claims. (Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338, 1341 (1992) [relying on Code of Civil Procedure section 1021].)
Couple argued that the lower court erred in not apportioning country club attorney time between contract and tort claims. The problem here is that apportionment is a discretionary tool for the lower court, which does not have to do so where if it is impracticable to so divide when there are common legal and factual issues involved. (Bell v. Vista Unified School Dist., 82 Cal.App.4th 672, 687 (2000).)
Finally, in the one that may have hurt the most, couple challenged the fee award as outrageous in amount. Actually, the appellate court agreed that the “fees do appear rather astounding” for a dispute involving mainly contractual interpretation issues over a small amount of property subject to the easement controversy. However, couple waived the excessiveness challenge by failing to contest the attorney hourly rates or time expended at the lower court level. (City of Santa Paula v. Narula, 114 Cal.App.4th 485, 494 (2003).)
BLOG UNDERVIEW—The moral of this case is to make sure you make an excessiveness challenge, if contesting a fee recovery, with specific evidence or objections in the lower court. If not, you will likely be subject to a similar waiver argument or given “short shrift” attention by the appellate court. (Compare Christian Research v. Alnor, 165 Cal.App.4th 1345 (2008), reviewed in our December 31, 2008 “Top Ten Decision” list, where Justice Aronson—in an oft-cited decision—sustained the ability of trial judges to make wholesale reductions in sought-after fees where specific challenges to excessiveness/unreasonableness were made.)