CALIFORNIA ATTORNEY'S FEES

In The News . . . . City of Newport Beach Audits Recent Litigation Costs

Results of the Audit Are Due Next Month.

     As reported by Jeff Overley in his article “Newport to examine its rising legal costs” in the May 30, 2010 edition of The Orange County Register, the City of Newport Beach has decided to audit its litigation costs and fees.

     In the past decade, annual litigation expenses billed to the City Attorney’s Office have increased to nearly $3 million in 2010 from a low of roughly $500,000 a decade ago. (This amount does not include the costs of handling pre-litigation claims, the precursors to many lawsuits.) Results of the audit are due next month. However, at least one council member—Leslie Daigle—believes that the legal increases are unsustainable. “If these increases in legal costs continue,” council member Daigle is quoted as saying, “we're really going to blow out the budget.”

     Men fishing off of the Newport Beach pier, late 1800s.

Consumer Statutes And Section 998: Plaintiff’s Waiver Of Fees In Accepting 998 Offer Binds Plaintiff

Second District, Division 3 Also Finds 998 Fee Waiver In Not Illegal under California’s Lemon Law.

     The next case, involving the interplay between Code of Civil Procedure section 998 pretrial offers and California consumer/civil fee shifting statutes, basically holds plaintiff to the bargain reached when he accepted the 998 offer made by defendants.

     In Anderson v. Sullivan Motor Cars, LLC, Case No. B212091 (2d Dist., Div. 3 May 27, 2010) (unpublished), plaintiff sued under various consumer statutes and a car purchase agreement. Certain defendants made a 998 offer to rescind the contract, take back the vehicle, and pay plaintiff $27,000 conditioned upon a release of all defendants and plaintiff’s express waiver of “any claim for attorney’s fees or costs.” Plaintiff accepted the settlement, but then moved to recover attorney’s fees under various fee shifting statutes (the Rees-Levering Motor Vehicle Sales and Finance Act, the Consumer Legal Remedies Act [CLRA], and Civil Code section 1717). The trial court denied the motion on several grounds: (1) because the plaintiff filed a dismissal with prejudice, it lacked jurisdiction to rule on the motion; (2) the dismissal acted as a retraxit; (3) plaintiff was not a prevailing party under Code of Civil Procedure section 1032(a)(4); (4) plaintiff was not the prevailing party pursuant to Civil Code section 1717(b); (5) even if plaintiff were deemed the prevailing party, his acceptance of the 998 offer and execution of a general release waived his claim for fees; and (6) nothing in another consumer scheme prevented waiver of fees as part of a settlement with defendants.

     Plaintiff appealed, but lost his attempts to recoup attorney’s fees.

In The News . . . . BP Petroleum/AG Contingency Law Cap And Fee Requests/Recoveries By Variety, Orange County Parks Legal Defense Fund, And Stevie Wonder Dominate The News.

Florida Politics: BP Petroleum Spill/AG Contingency Lawyer Cap.

     We know we would like this one, when the article begins this way: “Nobody likes attorneys until they need one, and then they want the smartest, orneriest, hardest-line lawyer they can get.”

      Well, the crimp in this for the Florida attorney general is recent legislation passed, effective June 1 of this year, which caps contingency fees at $50 million on contract work for the Office of the Attorney General. Of course, this is a real bummer given the BP Petroleum oil spill fiasco.

     However, before the deadline, prominent Florida attorney Fred Levin filed a class action lawsuit in Pensacola federal court over the BP spill. The attorney general, come July 1, may not be able to afford the Levin-headed “Dream Team” on this case. Luckily, the Florida governor can, through legislation that allowed Mr. Levin’s court case to go forward.

     For more on this one, see Paul Flemming’s article “Recent cap on legal fees means AG can’t hire the best to sue BP,” available for reading in the May 21, 2010 posting on news-press.com.

Variety Intends to Seek SLAPP Fees After “SLAPPing” Iron Cross Filmmaker.

     As reported by Matthew Belloni in a May 18, 2010 on-line post, Hollywood trade paper Variety won a SLAPP motion against Joshua Newton, the filmmaker behind “Iron Cross,” (see trailer) who sued the paper for printing a negative ad (after allegedly seducing him to pay ads and an awards season screening series for “Iron Cross”). Variety has indicated it will seek fee recovery against Mr. Newton, although its fee request will be less than $20,000.

     Compare that to a Virginia man who sued Fox after appearing in “Borat” and then got SLAPPed out of the court. The Virginia man was ordered to pay more than $43,000 in fees. Ouch!

City of Huntington Beach Hit With $650,000 Adverse Fee Order in Senior Center Dispute.

     An Orange County Superior Court judge recently ordered Huntington Beach to pay about $650,000 to Parks Legal Defense Fund, a group of residents who won a CEQA lawsuit involving a senior center the city wants to build in Central Park. The group of residents had asked for $995,000, but only a partial fee award was granted. It is unclear whether the award will be paid from the city’s general fund, given that the city has an expected $3 million budget gap for the next fiscal year. In December, the City Council voted to appeal the adverse merits decision (which likely means the fee award might be appealed also, with the city not needing to post a bond during the appeal).

     See more on this developing story in Annie Burris’ May 26, 2010 article “H.B. must pay $650,000 for senior center suit,” available for reading at ocregister.com.

Stevie Wonder and Two Persons Awarded $325,525 in Fees in Ex-DJ Lawsuit.

     Finally, the legendary Stevie Wonder and two KJLH employees were awarded $325,525 in attorney’s fees after claims brought by ex-KJLH disc jockey Clifton Winston were dismissed in a Los Angeles County Superior Court action. The lawsuit revolved around Mr. Winston’s apparent claims for defamation and emotional distress stemming from an April 18, 2007 radio broadcast of a voicemail from a woman who apparently implied that plaintiff had gotten her pregnant during an extramarital affair (although not specifically identifying Mr. Winston). Mr. Wonder’s company, Taxi Productions, Inc., operates the radio station airing the broadcasted email.

     See more details in the May 27, 2010 post, “Wonder Awarded Lawyer’s Fees After Suit Dismissed,” which can be found at the cbs2.com website.

Federal Fee Shifting Awards: U.S. Magistrate Judge In Northern California Awards $800,000 In Attorney’s Fees To Defendant Under CAN-SPAM Act

Fees Were Appropriate By Analogy to Similar Fee Shifting Provision of the Copyright Act.

     In 2003, Congress passed CAN-SPAM Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act. Now, a United States District Magistrate Judge has awarded defendant attorney’s fees of over $800,000 under a fee shifting/sanctions provision of the CAN-SPAM Act.

     U.S. Magistrate Judge Joseph C. Spero of the Northern District of California, on May 19, 2010, ordered a plaintiff Internet marketing company named ASIS Internet Services to pay over $800,000 in fees to defendant online marketer Azoogle after finding ASIS had acted unreasonably when it sued Azoogle over some unsolicited emails that plaintiff received during a three-week period in 2005.

     Earlier, the Ninth Circuit affirmed a summary judgment ruling against ASIS in the case, agreeing that ASIS could not show the requisite standing and also had not produced evidence that Azoogle “procured” the emails.

     In attempting to fend off the fee recovery, ASIS argued that Azoogle, as a prevailing defendant, should not recover anything based on CAN-SPAM Act’s remedial purpose. However, Magistrate Judge Spero disagreed, finding more persuasive an analogy to a similar fee shifting provision in the Copyright Act that allowed imposition of fees as sanctions when a plaintiff acts unreasonably.

     The magistrate judge did reject awarding another $100,000 in expert fees because the CAN-SPAM Act does not provide for such an award.

     The case is ASIS Internet Services v. Optin Global, Inc., Case No. 05-05124 (N.D. Cal.).

FRCP Rule 11: Plaintiffs’ Withdrawal Of Claims By A Dismissal Without Prejudice, Through Service of A Motion to Amend Adding Other Claims, Satisfied Rule 11 Safe Harbor

Ninth Circuit So Holds in 2-1 Decision, Drawing a Sharp Dissent.

     Federal Rule of Civil Procedure 11(b) has a safe harbor by which a party may deflect exposure if it timely withdraws claims identified by the opponent within 21 days after service of the safe harbor request. At issue before the Ninth Circuit was this issue: whether plaintiffs properly withdrew challenged claims during the safe harbor period when they dismissed them without prejudice by serving a motion to amend that deleted the offending claims. The answer to that question drew very disparate conclusions by a panel of the Ninth Circuit Court of Appeals.

     In Sneller v. City of Bainbridge Island, Case No. 09-35056 (9^th Cir. May 25, 2010) (for publication), the majority, in an opinion authored by Circuit Judge Tashima, held that plaintiffs did not face sanctions, reversing a sanctions order entered by a district judge under both Rule 11 and 28 U.S.C. § 1927.

     The majority found that plaintiffs were not required to dismiss the withdrawn claims with prejudice and properly withdrew them through filing of the new motion to amend. (This occurs because a motion for leave to amend under Rule 15 constitutes an effective withdrawal of claims.) With respect to the new claims added to the motion to amend, the proper procedure for challenge was to file a new Rule 11 motion.

     The sanction under section 1927 was reversed because (1) the district judge erroneously imposed it against both counsel and client (even though the section only authorizes imposition of sanctions against counsel), and (2) the lower court made no finding that counsel acted with the purpose to unreasonably and vexatiously multiply the proceedings.

     Circuit Judge Tallman, in dissent, surveyed the past conduct of plaintiffs and found it to be intolerable, if not frivolous in nature. He believed that there was invited error, given that plaintiffs had even asked the district judge to rule on the Rule 11

motion—conduct inconsistent with claiming safety under the safe harbor provision. The dissent believed the majority took a more charitable view of the plaintiffs’ behavior than did the district judge who observed it firsthand, justifying an opinion that departed company with the majority’s rationale.

SLAPP: Appellate Court Confronts A Maze Of Judgment Satisfaction Issues In Ruling On Payments Of Multiple SLAPP Fee Awards

First District, Division Five Decision is a Law Professor’s Dream on Judgment Enforcement/Acknowledgment Issues.

     By now you know (if you have followed our blog or will soon know) that defendant winners of SLAPP motions are entitled to a mandatory award of reasonable attorney’s fees. See our category “SLAPP” to see other catalogued decisions on this topic.

     The next case is a law professor’s dream and one that we will just summarize in short fashion, because it involves a maze of judgment enforcement/acknowledgment issues with respect to payment of SLAPP fee awards. The decision is Lucky United Properties Investment, Inc. v. Lee, Case No. A124965 (1^st Dist., Div. 5 May 28, 2010) (certified for full publication).

Homeowner Associations: Trial Court’s Denial Of Separate Fee Requests For Prevailing In Homeowner Dispute Was Erroneous

Lower Court Erred in Failing to Find Fee Entitlement, to Determine Prevailing Party Status, or to Make Any Apportionments in Summarily Denying Diverse Defense Fee Requests.

     Trial courts do have a duty to examine fee entitlement, to determine prevailing party status, and to make any apportionments when examining diverse fee requests by different defendants. Failure to do so may result in a reversal and remand, as it did in the next unpublished decision.

     Wesbey v. Toll CA IV, L.P., Case No. D054191 (4^th Dist., Div. 1 May 27, 2010) (unpublished) involved different developer, HOA, and homeowner defendants who prevailed in an access easement dispute with other plaintiff homeowners. Plaintiffs had brought an action alleging numerous theories, but among them were claims based on the CC&Rs—which usually carry fee entitlement under Civil Code section 1717 and/or Civil Code section 1354(c). However, the trial court was unconvinced that the case really involved CC&Rs, even though the defendants did have to defend against some claims that were based on them. It summarily denied the fee requests brought by the different defendants.

     The Fourth District, Division 1 reversed and remanded with directions to separately address the prevailing party status or need for apportionment as to each defendant. Fee entitlement was evident based on either section 1717 or 1354, with the appellate court providing the lower court some apportionment guidance on remand. (See Bell v. Vista Unified School Dist., 82 Cal.App.4^th 672, 686-687 (2000).)

Insurance: Cumis Arbitration Not Justified Where No Agreement Or Determination Exists That Conflict Exists Between Insurer and Insured

Second District, Division 3 Agrees that Arbitration Premature Until Conflict Exists.

     Here is a Cumis arbitration case that should be of interest to insurance practitioners.

     In Savvy Property Mgt. v. United National Ins. Co., Case No. B214549 (2d Dist., Div. 3 May 24, 2010) (unpublished), defendants in a tenant uninhabitability suit tendered defense of the matter to their insurance company, which accepted subject to a complete reservation of rights and subject to a right to seek reimbursement of any fees/costs advanced in favor of the insured. Defendants, as plaintiffs, bought a declaratory relief action against carrier, as well as sought an order compelling arbitration of the amount of hourly fees for independent Cumis counsel. The trial court denied the motion to compel arbitration under Civil Code section 2860(c). Plaintiffs appealed.

                   1868.  Library of Congress.

Special Fee Shifting Statutes: Award Of Partial Fees To Winning Defendants In Statutory Action For Injunctive Relief Under CCP § 527.6(i)

Trial Court Appropriately Apportioned Out Fee Work Unrelated to Statutory Injunctive Relief Claim.

     Generally, no award of attorney’s fees is available in an invasion of privacy action. However, in a statutory action for injunctive relief under Code of Civil Procedure section 527.6(i) (a statutory harassment/violence statute), the prevailing party may be awarded court costs and attorney’s fees in the court’s discretion.

     The trial court in Kempton v. Harris, Case No. B210894 (2d Dist., Div. 3 May 24, 2010) (unpublished) awarded some winning defendants $57,407.29 in fees and costs under section 527.6(i), out of a requested $161,515. Defendants appealed from the lower court’s decision to apportion out significant fees for work not related to the statutory harassment/violence claim.

     On appeal, the fee award decision was affirmed. The conduct giving rise to a section 527.6 award differs from that which provides a basis for tort recovery for invasion of privacy. Because a considerable portion of the requested fees was incurred before the 527.6 claim was alleged, the lower court did not err in its apportionment decision. However, because the defendants beat back plaintiff’ challenges to the adverse merit judgment, they were entitled to fees on appeal.

Special Fee Shifting Statute: Fee Recovery Under Business and Professions Code Section 809.9 Remanded For Determination If Losing Party Acted In Bad Faith

Second District, Division 8 Reverses $45,728.75 Fee Award Against Los Angeles Metropolitan Medical Center, But Remands For Bad Faith Determination.

     Business and Professions Code section 809.9, a specialized fee shifting provision, provides that in any suit brought to challenge an action taken or a restriction imposed which must be reported to the California Medical Board, the trial court must, at the conclusion of the action, award to a substantially prevailing party the costs of suit, including reasonable attorney’s fees, if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith. Section 809.9 is a sanctions statute similar to former Code of Civil Procedure section 128.5. (Mir v. Charter Suburban Hospital, 27 Cal.App.4^th 1471, 1483-1485, & n. 5 (1994).) Section 809.9 was the centerpiece of the fee discussion in the next case we examine, Bode v. Los Angeles Met. Med. Center, Case No. B208687 (2d Dist., Div. 8 May 26, 2010) (unpublished).

     Above:  Graduate register nurse receives instructions in anesthesiology from a doctor.  1946.  Library of Congress.

Private Attorney General Statute: CEQA Winner Entitled To Substantial Fee Recovery As Well As Fees For Prevailing On Appeal

 

Fourth District, Division 1 Affirms $265,715.55 Fee Award Under CCP Section 1021.5.

     In Center For Biological Diversity v. County of San Bernardino, Case Nos. D056652/D056648 (4^th Dist., Div. 1 May 25, 2010) (certified for partial publication; fee discussion not published), two nonprofit organizations successfully challenged the County of San Bernardino’s approval of an open-air human waste composting facility under CEQA. Subsequently, the trial court awarded winners $265,715.55 in attorney’s fees pursuant to California’s private attorney general statute, Code of Civil Procedure section 1021.5. (Winners had requested fees of $263,708, augmented by a 1.5 multiplier.) The trial court reduced the lodestar request to $159,863.70, nearly 60%, before increasing the lodestar by a 1.5 multiplier—which brought the total to $239,990.55, with another $25,725 in “fees on fees” accounting for the difference in reaching $265,715.55.)

     County and real party in interest (real party being the project developer) appealed the merits and fee judgments.

Section 998: Joint Offers To Husbands and Wives Are Likely Valid On A Prospective Basis

Second District, Division 7 Indicates It Will Not Follow Weinberg, But Does So On A Going Forward Basis.

     The next opinion is interesting to show how appellate courts, when rejecting one of their prior decisions for failing to consider an important argument, will apply its new perspective only on a prospective basis in order to prevent unfairness to the litigants relying on the old precedent.

     In Barnett v. First National Ins. Co. of America, Case No. B203310 (2d Dist., Div. 7 May 26, 2010) (certified for partial publication on the 998 issue), defendant carrier won a jury verdict in an insurance coverage dispute over damage to plaintiffs’ house. Prior to trial, defendants served plaintiffs with an unaccepted $100,000 Code of Civil Procedure section 998 offer, which was jointly addressed to both plaintiffs. The trial court denied a motion for award of expert witness fees under section 998 by finding the single offer made to two plaintiffs was invalid in nature.

     The Court of Appeal affirmed, but in the process retracted from a prior decision out of Division 7.

     In Weinberg v. Safeco Ins. Co. of America, 114 Cal.App.4^th 1075, 1087 (2004), a similar 998 offer was found invalid because wife’s and husband’s damages for emotional distress were separate claims with variant degrees of injury. However, Division 7 indicated it would not follow Weinberg in the future because the prior decision had ignored a crucial legal distinction: a joint settlement offer made to husband and wife need not be allocated between them because, under community property principles, the spouses have equal interests in all proceeds. Thus, the apportionment problem that usually invalidates joint 998 offers is not present in these situations.

      However, in order to be fair to the litigants in Barnett, Division 7 indicated that it would disregard Weinberg on a prospective basis only, nevertheless affirming what the trial court did because the state of the law was different before it issued its new decision. (Newman v. Emerson Radio Corp., 48 Cal.3d 973, 978-979 (1989).)

     We should also note that the unpublished portion of the decision has a very good discussion of such topics as a weather exclusion in an insurance policy, ensuing losses, and efficient proximate causation—topics of interest to all of you insurance coverage practitioners or attorneys embroiled in coverage litigation.

Husband and wife, New Madrid County, Missouri, May 1938.  Lee Russell, photographer.  Library of Congress.

Attorney’s Lien: Do Attorney’s Liens Have Priority Over Medical Liens?

 

Fourth District, Division 3 Says “Yes,” But Reverses on a Procedural Point.

     In Christopher B. Mears, a Professional Corp. v. REM Physical Therapy, Case No. G042204 (4^th Dist., Div. 3 May 24, 2010) (unpublished), the appellate court agreed with Gilman v. Dalby, 176 Cal.App.4^th 606 (2009) [reviewed in our August 13, 2009 post] that an attorney’s lien for fees and costs has priority over a medical lien for services.

     However, the Court of Appeal, in a 3-0 opinion authored by Justice Rylaarsdam, had to reverse because the trial court sustained a demurrer to a medical provider’s cross-complaint against attorney without leave by going beyond the face of the cross-complaint in making the ruling. The appellate panel did note that the lower court may have been correct in its dismissal of the medical provider’s cross-complaint, but remanded for the proper assessment—terming the victory as possibly “only a Pyrrhic one.”

Special Fee Shifting Statutes: U.S. Supreme Court Decides That ERISA Fee Recovery Does Not Depend On “Prevailing Party” Status

 

No Merits Judgment Necessary, Says Unanimous High Court.

    In Hardt v. Reliance Standard Life Ins. Co., Case No. 09-448 (U.S. May 24, 2010), the U.S. Supreme Court unanimously ruled that, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(g)(1) gives district courts discretion to award fees to either party, even if the fee claimant is not a “prevailing party.”

     The Fourth Circuit had vacated a district court’s fee award to a disabled worker under ERISA because the defendant voluntarily paid benefits before any merits judgment was entered (i.e., the district court gave the defendant time to reassess the benefits application before granting summary judgment to the plaintiff).

     In reversing the Court of Appeals, the high court ruled that because Congress failed to include “prevailing party” limiting language in section 1132(g)(1), the Fourth Circuit’s construction otherwise would be tantamount to “invent[ing] a statute rather than interpret[ing] one.”

Arbitration: Parties’ Stipulation To Allow Post-Arbitration Fee Recovery Allows Fees For Sustaining Arbitration Award On Appeal

 

Sixth District Honors Parties’ Stipulation Relating to Fee Recovery.

     In Kontoudakis v. Beri-Scott Co., Case No. H034544 (6^th Dist. May 24, 2010) (unpublished), the parties’ stipulation for arbitration had an important fee recovery provision. That provision stated: “Should either party be forced to seek enforcement of the arbitration award beyond simply filing it with this court, they shall be entitled to an award of all costs, fees and expenses including attorneys’ fees to be paid by the party against whom enforcement is ordered.” So, does this encompass attorney’s fees incurred when prevailing on appeal for purposes of enforcing the arbitration award?

"Facebook Like" Feature Has Been Added to the Footer of Our Blog Posts

 

Easy Way for Facebook Users to Share Our Posts

     If you like one of our posts, and you subscribe to Facebook, the new "Facebook Like" feature, which has been added as a footer to our posts, provides you with an easy way to share the post with friends and colleagues.

     This is how our Typepad platform describes the new feature:

     "If a Facebook user hits the "Like" button at the end of a post, they highlight your post to their Facebook friends with an update to their own Facebook profile and a link back to your post. Any one who's friends with that person will see that update in their own Newsfeeds."

Interest on Attorney’s Fees Award: Interest Runs From Date of Fee Award, Not Earlier

Fourth District, Division 3 Agrees With Trial Court—“This Is An Easy One.”

     It is not that often that an appellate court agrees with a trial court’s assessment that “this is an easy one.” Well, you have that end result in the next case we review.

     In Golden Rain Foundation v. Lyon, Case No. G042358 (4^th Dist., Div. 3 May 20, 2010) (unpublished), defendant won an attorney’s fees award of $105,000 under the Davis-Stirling Act and private attorney general statute (out of more than $250,000 in requested fees). However, losing plaintiff got in a beef with defendant about when it had to pay interest on the fee award. Plaintiff paid interest on the fee award accruing from the date of the fee award, whereas defendant insisted upon an additional payment of interest running from the date of the underlying merits judgment. Finding this an “easy one,” the trial court found that plaintiff owed nothing more, with interest only accruing from the date of the fee award.

     Defendant appealed. The appellate court liked with the trial court’s analysis.

     Justice Ikola, writing on behalf of a 3-0 panel, agreed that the fee award was not certain until the trial court ruled on the motion. Hence, interest did not run until the date of the fee award. This result occurred both under Civil Code section 3287(a) (prejudgment interest liquidated statute) and Code of Civil Procedure section 685.020(a) (interest accrues on a separate judgment, with the fee award being a separate judgment).

     Easy as pie, the Court of Appeal ruled in affirming the case involving denial of more interest to the winning defendant on a “paid” fee award.

Section 1717 And Trope v. Katz: Second District Publishes Recent Lockton Decision.

    In our April 24, 2010 post, we reported on Lockton v. O’Rourke, an interesting Second District, Division 4 unpublished decision on how Trope v. Katz operates in the context of a broadly worded fees clause. Well, we can now report that the appellate panel ordered Lockton published on May 10, 2010. It is now citable.

                                The Printer’s Workshop.  Abraham Bosse. c1642.

Non-Taxable Federal Costs: District Courts Can Award Non-Taxable Costs Under the Fair Credit Reporting Act

Ninth Circuit So Holds in 2-1 Decision; Dissent Thinks Majority Decision Allows Recovery of Non-Taxable Costs as Attorney’s Fees in Most Fee-Shifting Statutes.

     The next case is an interesting one, provoking a 2-1 decision on an important issue: when are non-taxable costs awardable as attorney’s fees under federal fee-shifting statutes. The question did not get an undivided answer, as a recent Ninth Circuit decision shows.

     In Grove v. Wells Fargo Financial California, Inc., Case No. 08-56964 (9^th Cir. May 20, 2010) (for publication), a 2-1 Ninth Circuit panel potentially held that $6,770.60 in non-taxable costs (cost of postage, faxes, travel, mediation services, and deposition video conferencing services—items that are not specified taxable costs) might well be “attorney’s fees” under the Fair Credit Reporting Act, relying on decisions such as Missouri v. Jenkins, 491 U.S. 274, 285 (1989) and numerous other circuit decisions construing similar language in federal fee-shifting statutes. The case was remanded for the district court to determine if the non-taxable costs were recoverable because they would normally be included in the fee billed by lawyers in the prevailing community.

     Circuit Judge Rymer, in dissent, thought the majority decision was too broad in nature, requiring the federal court of appeals to determine whether Congress intended recovery of non-taxable costs under FCRA. She seemed to suggest that the test adopted by the majority was not narrow enough, meaning that “attorney’s fees” language in all federal fee-shifting statutes would sweep non-taxable costs within its scope if the majority perspective was followed.

Eminent Domain: Substantial Inverse Condemnation Fee Award Reversed Because Trial Court Did Not Explain Why It Chose Contingency Fee Amount Versus Hourly Fee Amount

 

Lower Court Failed to Analyze the Factors in Yuki.

     After plaintiffs won a bench award of over $3.4 million in a nuisance/inverse condemnation action, the Second District, Division Two, in Karim v. City of Pomona, Case No. B210049 (May 18, 2010) (unpublished), reversed a favorable attorney’s fees award in favor of plaintiff homeowners under Code of Civil Procedure section 1036 in the amount of $1,184,145.52, with section 1036 providing that the trial court must award prevailing plaintiffs in an inverse condemnation action their reasonable, actually incurred attorney’s fees. (This reversal apparently did not impact a hefty, additional cost award of $510,700.31.) The principal reason was the lower court’s failure to analyze the section 1036 “reasonable fee” factors listed in People ex el. Dept. of Transportation v. Yuki, 31 Cal.App.4^th 1754, 1771 (1995).

SLAPP Two-Fer: High SLAPP Fee Award Cannot Surmount Abuse Of Discretion Review Standard And Partial SLAPP Wins On Appeal Allow Entitlement To Partial Fee Recovery

 

Watts v. Curry, Case No. B213862 (2d Dist., Div. 6 May 17, 2010) (unpublished)

     The first sentence of this decision told us it was written in the distinctive writing style of Presiding Justice Gilbert: “A series of seemingly petty, yet niggling, acts fueled by anger and frustration precipitated this unfortunate lawsuit.”

     A homeowner was arrested for burglary, after taking certain HOA minutes from the HOA office to review. Charges were later dismissed with prejudice. Homeowner sued the HOA and certain others for malicious prosecution, false arrest, breach of fiduciary duty, negligence, and civil rights violations. Homeowner’s suit was SLAPPed, with the lower court apparently awarding substantial attorney’s fees against homeowner (although the amount is not mentioned in the decision).

     On appeal, fee award affirmed. “[Homeowner’s] argument that the fee award is excessive does not clear the high hurdle imposed by the abuse of discretion standard.” (Slip Opn., p. 4.)

Warner v. City of Citrus Heights Police Dept., Case No. C060482 (3d Dist. May 18,

2010) (unpublished)

     In this one, defendants appealed an outright denial of their SLAPP motion. The Third District, on appeal, decided the lower court should have SLAPPed three counts of the complaint but agreed that three claims were properly not SLAPPed.

     So, in light of this partial reversal, were defendants entitled to mandatory fee shifting under the SLAPP statute (Code Civ. Proc., § 425.16(c))? Yes, said the Court of Appeal. The appellate court observed that defendants who prevail in part on an anti-SLAPP motion are entitled to a partial award of attorney’s fees under section 425.16. (ComputerXpress, Inc. v. Jackson, 93 Cal.App.4^th 993, 1016-1020 (2001).) “We think the same rule applies to partial victory on appeal.” (Slip Opn., p. 50.) The cause was remanded so that the trial court could determine those partial fees awardable to defendants for their successful SLAPP work both at the trial and appellate court levels.

Probate: Elder Financial Abuse Fees Affirmed Where Impacted Party Never Challenged Basis For Award In Probate Proceedings Below

 

Second District, Division 6 Upholds Fee Award Exceeding $49,000.

     In order to avoid a waiver, a litigant needs to challenge fee entitlement in proceedings below.

     Porco v. Helm, Case No. B211138 (2d Dist., Div. 6 May 17, 2010) (unpublished) involved a trustee who was removed via a petition which requested “such attorney’s fees as may be allowable by law.” A fee request under the elder financial abuse statutes (Welfare and Institutions Code sections 15610.30(a) and 15657.5(a)) was made in an unopposed motion for judgment on the pleadings. Trustee never contested the fee entitlement in the proposed statement of decision or in the motion where fees were fixed by the lower court.

Fee Clause Interpretation And Settlement Exclusion: Court Of Appeal Reverses Trial Court Refusal To Grant Attorney’s Fees To Prevailing Supplier In Water Clarification Building Fire

 

Third District Finds Settlement Agreement Carve-Out Preserved Right to Seek Fees Under Indemnity Agreement Clause.

     Bravo to the attorneys representing a prevailing party in the next case. They properly worded a partial settlement agreement carve-out so as to preserve their client’s ability to seek fees under a contract once the client prevailed against its opponent after a jury trial.

    In F & H Construction, Inc. v. I. Kruger, Inc., Case No. C058312 (3d Dist. May 17, 2010) (unpublished), a general contractor hired by a water agency to upgrade a water treatment plant (F & H) purchased a water clarification system from supplier Kruger. After the agency complained about a sagging problem in the system, a spark emitted from a welding instrument by F & H employees started a fire causing extensive damage to the building in which the system was located. F & H sued Kruger and others for costs spent in rebuilding the building and for extra work. After a flurry of cross-complaints from the other parties, Kruger settled a cross-claim for moneys due under a purchase order, expressly excepting from the partial settlement any claims involving the fire. For example, the settlement agreement excepted “the claims presently asserted by F & H in the suit against KRUGER for damages and/or indemnity for the loss caused by the fire …, and defenses thereto ….” A jury found that Kruger was not negligent in the fire incident given that it had no supervisory control over the F & H welding employees. However, the trial court refused to award Kruger attorney’s fees as the prevailing party under a fees clause in the parties’ purchase agreement.

Family Law: Section 271 Sanctions Award Of $4,000 Affirmed Where Wife Had No Substantiating Evidence Or Took Inconsistent Positions On Application Of Governing Precedent

$4,000 Out of $25,000 Expended by Husband Found to be No Abuse of Discretion.

     Link to our category “Family Law” to discover lots of posts on Family Code section 271. This statutory provision allows family law judges to sanction cantankerous litigants with attorney’s fees for failing to promote settlement or cooperation in family law proceedings. It has in the past, and still does, result in many, many fee awards against surprised litigants. The next case we look at is no exception.

     Marriage of Reyes, Case No. B217033 (2d Dist., Div. 2 May 17, 2010) (unpublished) involved a section 271 sanctions award against wife and in favor of husband, who expended about $25,000 in fees and costs battling numerous dissolution proceeding battles. The record showed that wife brought many claims without substantiating evidence and then argued (quite inconsistently) that a governing precedent should only apply in her favor but not for the benefit of her husband.

     Wife appealed. She didn’t do so well.

     The record showed no abuse of discretion in the award. Beyond that, she did have assets to pay the $4,000 award, and wife did not support her fee award with the requisite attorney declaration. No problem affirming this one, said the appellate court.

Cases Under Review: California Supreme Court Accepts Review of Jankey v. Lee

Preemption Issue Between State and Federal Disability Schemes Under Consideration in Fee Shifting Area

     For the week of May 10, 2010, the California Supreme Court accepted review of Jankey v. Lee, No. S180890, a former First District, Division 4 decision which we reported on in our February 6, 2010 post (formerly published at 181 Cal.App.4th 1173).

     Jankey affirmed an attorney’s fees award of $118,458 to a prevailing defendant under the California Disabled Persons Act’s fee shifting provision (Civil Code section 55) despite the fact that the federal analog, the American with Disabilities Act, only allows a defendant to recover fees if plaintiff’s action was “frivolous, unreasonable, or groundless.” Jankey awarded fees to the defense without factoring in the heightened standard applicable to defendant fee claimants under the federal statute.

     The issue framed by the state supreme court in its weekly press release on cases accepted for review reads like this: “Is an award of fees to a prevailing defendant under the California Disabled Persons Act (Civ. Code, § 54 et seq.) inconsistent with, and therefore preempted by, the federal American with Disabilities Act (42 U.S.C. § 12101 et seq.)?”

       Kiss of Death:  Richard Widmark, as gangster Tommy Udo, pushes disabled woman in wheelchair down a flight of stairs.

In The News . . . . Strange Twist: Arizona’s New Anti-Immigration Statute Contains Citizen Suit Fee Shifting Provision

Uncivil Rights

     A lot of fervor and controversy has swirled over Arizona’s passage of a new immigration statute which authorizes lawsuits by “any state resident” against any official or agency of the state “or its political subdivisions” that adopts any policy “that limits or restricts the enforcement of federal immigration laws . . . to less than the full extent permitted by federal law [sic].” Not only are daily penalties provided for, but the real twist is that the resident who brings the suit shall be entitled to recover costs incurred in bringing the lawsuit, including attorney’s fees.

     For more information and a commentary on the penalty/fee shifting aspects of this new statute, see a May 11, 2010 post in The Huffington Post by Steven P. Croley, a law professor at the University of Michigan Law School.

Fee Substantiation: When Trial Court Bases Denial Of Fees On Independent Grounds, Address Both Grounds On Appeal Or Face Affirmance For Failure To Rebut Correctness Of Trial Court Ruling

Second District, Division 5 Sustains Fee Denial Based on Failure to Address Fee Substantiation Inadequacies.

     The next case we examine teaches a staple of appellate law: make sure you address all of the trial court’s reasons for a ruling on appeal. If you don’t, risk having the appellate court affirming based on the failure to show error—which did happen in Coastal Law Enforcement Action Network v. Cal. Coastal Comm’n, Case No. B219526 (2d Dist., Div. 5 May 13, 2010) (unpublished).

Deadlines: Plaintiff's Reliance on Adversary’s Fee Motion Extension, Despite Failure to File Written Stipulation, Was Excusable Neglect For CCP Section 473 Purposes

 

Fourth District, Division 2 Finds Renege by Adversary Trumps Neglect to Comply With a Clear Rule.

     Under California Rules of Court, rule 1702(c)(2), any stipulation to extend the time for filing a motion for attorney’s fees on appeal must be filed with the court before the original time has expired. The next case involves a situation where a fee claimant did get several extensions of fee motion filing time from an adversary, who then argued that a fee motion was untimely submitted because claimant’s counsel failed to file a timely written stipulation.

     The Fourth District, Division 2 did not like what the adversary did, especially when it argued the time preclusion and opposed claimant’s Code of Civil Procedure section 473 motion for relief, which was denied by the trial court (with claimant losing the chance to recoup fees).

     In Ron Burns Construction Co., Inc. v. Moore, Case No, E047077 (4^th Dist., Div. 2 May 11, 2010) (certified for partial publication), the appellate court found that, although the law frowns on attorney’s neglect to comply with a clear rule, “it positively glowers at another attorney’s exploitation of such neglect as an excuse to break his word.”

In The News . . . . Wells Fargo Gets Hit With Legal Fees In Broker Raiding Case And Wife Of Alleged Embezzler Seeks Legal Fees Incurred In Seeking Return of Personal Property From Huntington Beach

 

Wells Fargo Advisors LLC Ordered to Pay $948,000 in Fees/Costs to Stifel Nicolaus & Co., Inc.

     Wells Fargo Advisors LLC has been ordered by the Financial Industry Regulatory Authority Inc. arbitration panel to pay $633,000 in attorney’s fees to Stifel Nicolaus & Co., Inc. and $282,000 in fees to Chris Nielsen, a former A.G. Edwards branch manager in Grass Valley, CA who left in October 2007 with several Edwards brokers to set up shop for Stifel. A.G. Edwards & Sons Inc., now part of Wells Fargo, brought a raiding suit against Stifel and Mr. Nielsen, lost the arbitration, and were ordered to pay fees to the prevailing parties.

     Last December 2009, Wells Fargo was ordered to pay $1.1 million in legal costs to Stifel in a South Carolina case involving four legacy Edwards brokers, with arbitrators ruling that Wells Fargo attorneys may have misled a South Carolina federal court about video surveillance used in getting a restraining order against the brokers. Wells Fargo seeks to vacate the arbitration ruling in a May 13, 2010 scheduled court hearing.

     For more details on these stories, see Dan Jamieson’s May 10, 2010 article “Wells Fargo loses another A.G. Edwards raiding case to Stifel” in InvestmentNews.

Janelle Mercuro Asks for $8,400 in Legal Fees from City of Huntington Beach.

     Janelle Mercuro is the wife of a San Clemente man who was arrested for allegedly embezzling $365,000 from professional skater/MTV reality show star Ryan Sheckler, and who later took a plea deal and was convicted of two grand theft felony counts.  Now, she has filed three claims against the City of Huntington Beach. The claims involve lost property and fees she incurred as a result of the investigation of her husband by the Huntington Beach police. With respect to legal fees, Ms. Mercuro is asking for $8,400 for expenses she accrued while trying to get back personal property such a computer taken during the police investigation.

     Annie Burris and Jon Cassidy have the full story in an article, “Wife of embezzler seeks thousands,” published in the May 11, 2010 edition of The Orange County Register.

     BLOG UNDERVIEW—Happy second birthday to this blog. Co-contributors Marc and Mike did their inaugural post on May 11, 2008. It seems like yesterday. Mike does not know how Marc has tolerated him these last two years, while Marc (wisely) has taken the Fifth.

SLAPP: Law Firm “Saddled” With $76,275 SLAPP Fees Award For Failure To Make An Untimely Objection 19 Months “After The Horse Left The Barn”

U.S. District Judge Says “Nay” to Untimely Objection, Refusing to Follow Unpublished State Court Decision and Finding “The Horse Relevant to the Objection Left the Barn” Long Ago.

     Here is an interesting development that Mr. Ed of an erstwhile television series (the proverbial “horse, of course, of course”) would be proud of. It also deals with a SLAPP fee issue that will need to be confronted by a court in a published decision, assuming the matter is raised by an attorney spurred to timely action.

Mr. Ed and the Dodgers

     As background for the situation, we surveyed Foster v. Warner, 2008 WL 2445106 (Cal. Ct. App. 2008), an unpublished state intermediate appellate decision in our June 19, 2008 post. This decision held that an attorney cannot be held liable for an adverse SLAPP fee award, with only the client bearing such a burden. However, a federal district judge recently bridled at that result.

     In Mory v. City of Chula Vista, Case No. 07-CV-462 JLS (WVG) (Doc. No. 198, filed May 7, 2010), U.S. District Judge Janis L. Sammartino granted defendants’ SLAPP motion and eventually awarded them $76,275.00 under the SLAPP fee-shifting provision. The fee award was entered jointly and severally against Plaintiff and her counsel Jackson DeMarco Tidus & Peckenpaugh. Relying on Foster v. Warner, JDTP challenged the award as against it (the law firm). The only problem was that JDTP waited more than 26 months after defendants’ SLAPP motion filing and more than 19 months after the initial SLAPP order to raise an objection to the district judge’s February 11, 2008 order granting the SLAPP order and implicating that fee liability would be joint and several. Based on this procedural context, District Judge Sammartino found JDTP’s objection to be untimely. She colorfully put it this way: “The horse relevant to this objection left the barn with the issuance of the anti-SLAPP Order on February 11, 2008.” (5/5/10 Order, p. 4 of 5.)

     With respect to Foster v. Warner, the district judge also went on to indicate her disagreement with the decision. The district court examined other California intermediate decisions indicating the SLAPP statute should be construed broadly in order to effectuate its purpose, one which advocated in favor of joint and several liability for fee award liability. Apparently, District Judge Sammartino viewed Foster as a horse of another color, “because it fails to consider or implement the explicit legislative directive of broad statutory construction.” (Id.)

     BLOG UNDERVIEW—The losing law firm, in an earlier federal decision written by U.S. Senior District Judge Shadur, was told that it made an argument emulating the attempted creativity of alchemists of old. (See our June 11, 2009 post on San Diego Police Officers’ Assn. v. San Diego City Employees’ Retirement System.) With the recent order on the SLAPP motion, both equestrians and alchemists should be delighted with the outcomes.

     Full Disclosure: Co-contributors Mike and Marc are former members of the JDTP stable, but have moved on to green pastures.

I got a horse right here . . .

In The News . . . . Silverado-Modjeska Recreation & Park District Pleads For Reversal Of Fee Award That Could Bankrupt It

     In our December 26, 2009 post, we reported on the misfortune of the Silverado-Modjeska Recreation & Park District, which was ordered to pay a prevailing developer about $358,000 in attorney’s fees. Well, there is a follow-up to this brewing saga.

     District, which has an annual budget of $222,304, has appealed the $358,000 fee award. It claims that the hourly rates of developers’ attorneys, ranging between $792-$845 per hour, were “astronomical” in nature and not adequately supported except for one associate attorney’s “belief” that the rates are the prevailing rates in the Orange County legal community.

     Next up is the developer/respondent’s brief. As well put by Teri Sforza, staff writer for The Orange County Register, in her OC Watchdog May 7, 2010 article, “We’ll keep you posted, as the toad and the day care center hang in the balance”—a reference to some of the issues in the underlying environmental dispute that eventually resulted in the contested fee battle.

Above:  An illustration by E. H. Shepard for the 1930 edition of Kenneth Grahame’s The Wind in the Willows.

 

Appealabiliy: Prior Appellate Reversal Of Attorney’s Fees Award Seals Fate For Supplemental Fee Award Appeals By Both Sides

One Supplemental Fee Order Is Summarily Reversed on Appeal; Another is Dismissed as Moot.

      Here is a post that only appellate practitioners can love. However, we examine all decisions across the board (and do argue on appeal ourselves, on occasion). So, here you go.

      Plaintiff appealed a fee award awarding bank more fees in obtaining a previous fee recovery, and bank appealed from the supplemental fee award on the ground it should have been higher. Then, before these two appeals could be heard, an appellate court reversed the initial fees and costs award to the bank in an opinion that we reported on in a December 1, 2009 post. So, how did the Court of Appeal deal with the subsequent appeals?

     The answers lie in Gaggero v. First Federal Bank of California, Case No. B210900 (2d Dist., Div. 1 May 7, 2010) (unpublished).

     And, the winning answers are ….. (1) bank’s supplemental fee orders were summarily reversed so that no fee orders were intact -- a dismissal of Gaggero’s appeal would not have accomplished the desired end, because it would have left the supplemental fee award as a final, enforceable order (cf. Weinstat v. Dentsply Internat., Inc., 180 Cal.App.4^th 1213, 122 (2010)); and (2) bank’s appeal for higher fees was dismissed as moot.

     Sounds good to us!

Which Matters Most: The Dog or The Litigation Fee Tail? Appellate Practice on Review of Attorneys' Fees Awards

05/11/2010

Presented by: Association Committee Meeting

Subsection/Committee: Appellate Courts

Program Information:
This meeting will explore ways to present fee petitions to obtain successful trial and appellate results; standards of review; statements of decisions and specificity in trial court fee orders; discovery in fee proceedings; and appellate issues encountered in diverse areas such as SLAPP awards, private attorney general awards, Brandt fees, Section 1717 fees, and class action fees.

Speakers:
Marc D. Alexander, Adorno Yoss Alvarado & Smith
Hon. Richard D. Fybel, California Court of Appeal
William Michael Hensley, Adorno Yoss Alverado & Smith
Hon. Robert M. Mallano, Second District Court of Appeal

Location:
California Court of Appeal
300 South Spring Street
Los Angeles, CA

Room: Employees Lounge

Times:
Registration: 4:30 PM
Program: 4:30 - 6:00PM

Prices:

Appellate Courts Committee Members
FREE

1.5 hrs CLE credits including Appellate Specialization and Ethics

Registration Code: 010914

Event Start Date: 05/11/2010 Time: 04:30 PM

Event End Date: 05/11/2010 Time: 06:00 PM

For more information about program registration, click here.

E-Discovery: New York Law Journal Dissects U.S. District Judge Scheindlin’s Pension Committee Decision

     In our February 27, 2010 post, we provided some highlights from The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, which was amended some in a January 15, 2010 order. This decision can now be found at 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. Jan. 15, 2010). Pension Committee revisited U.S. District Judge Scheindlin’s prior Zubulake decisions and defined the standards of preservation for e-discovery since those opinions were issued.

     Now, Michael Hoenig has written a February 23, 2010 article “’Pension Committee’ Clarifies E-Discovery Requirements” for the New York Law Journal. The article contains a good synopsis of the decision in a question-and-answer format.

Family Law: Mother Entitled to Attorney’s Fees Award Under Hague Abduction Convention Even For Pro Bono Lawyer Services

Attorney’s Fees, Transportation/Lodging, and Appellate Expenses Appropriate Under 42 U.S.C. § 11607(b)(3).

     42 U.S.C. § 11607(b)(3) provides that a court “ordering the return of a child” under the Hague Convention on the Civil Aspects of International Child Abduction shall award “necessary expenses incurred by or on behalf of the petitioner . . . unless the respondent establishes that such order would be clearly inappropriate.”

     In Cuellar v. Joyce, Case No. 09-35068 (9^th Cir. May 7, 2010) (for publication), the Ninth Circuit decided that pro bono lawyer services to a successful petitioner, reasonable transportation and lodging for her attorney to attend oral argument and post-argument mediation, and the cost of shipping appellate briefs and other filings are within the ambit of expenses recoverable under section 11607(b)(3).

     To listen to an audio of the November 4, 2009 argument to the Ninth Circuit in the underlying case, click here.  The panel consisted of Justices Kozinski, Fisher, and Paez.

Private Attorney General Statute: Trial Court Incorrectly Denied Fee Request Based on “Prematurity”

Fourth District, Division 2 Found Focus Was Improperly on Prospective Future Decisions Rather Than on the CEQA Rights Already Vindicated by Plaintiff.

    In Save Round Valley Alliance v. County of Inyo, Case No. E048236 (4^th Dist., Div. 2 May 6, 2010) (unpublished), the Fourth District, Division 2 reversed a trial court’s denial of private attorney general fees to a non-profit alliance which blocked a development in Inyo County based on an inadequate EIR even though it was far from clear that the project would be blocked in the future or that the alternatives were ever feasible. Just to show you how expensive these battles can be, the Alliance sought to recover $472,961.40 in claimed attorney’s fees under Code of Civil Procedure section 1021.5 (California’s private attorney general statute) from either the county and/or developer.

     The trial court denied on the basis that the fee request was premature. After all, the judge reasoned, it was far from clear that local agencies would block the development project in the future.

     The appellate court did not like this “prematurity” rationale adopted by the lower court. The flaw in this analysis was that the lower court failed to focus on the CEQA/EIR rights already vindicated rather than prospective decisions to be made by the developer/public agencies regarding the future of the project. This was error with respect to denying fees on the “public right” and “significant benefit” components of section 1021.5.

     This meant that the matter had to be remanded for a reconsideration of the fee request. However, the appellate court made clear that it was not prejudging how the lower court should rule. In an interesting footnote (footnote 7), the Court of Appeal did observe that the lower court could still rationally conclude that no significant benefit was conferred on a large group of persons because the alternative land exchange was, in fact, never feasible. So, in the words of many a newsperson, stay tuned for another possible fee litigation roundelay in this expensive battle.  

Construction Prompt Payment Statutes: Last Contractual Installment Payment Is Not A Retention Giving Rise To Attorney’s Fees Under Civil Code Section 3260(g)

Second District, Division 5 Also Rules that Fee Recovery Does Not Have to be Pled and that Civil Code Section 3260.1 Does Not Authorize a Fee Award.

     We have done some past posts on California’s construction prompt payment statutes, designed to insure that retention payments are not wrongfully withheld by owners or other construction professionals. The next case primarily focuses on the difference between a contractual installment payment versus a retention under one of the prompt payment statutes allowing for fee shifting.

     In Yassin v. Solis, Case No. 215201 (2d Dist., Div. 5 May 6, 2010) (certified for partial publication—fee discussion published), the Second District, Division 5 reversed a $36,205.14 fee award to residential homeowners in a payment dispute action brought by the contractor. The basis for the award was Civil Code section 3260(g), which allows fee recovery to a prevailing party in a wrongfully withheld retention payment dispute between owner and contractor.                                                Photo above:  dam under construction.

 

Apportionment Two-Fer: No Need To Fee Allocate Where Claims Or Proof Are Intertwined In Nature #

1: Legal Services Agreement Was Foundation For Both Contract/Tort Claims, Resulting in Substantial Fee Award.

     In Gaggero v. Knapp, Petersen & Clarke, Case No. B207567 (2d Dist., Div. 8 May 6, 2010) (unpublished), former client sued former law firm for breach of contract, breach of fiduciary duty and professional negligence (among others) in connection with 5 matters handled by the firm. All of the claims centered on a legal services agreement, with a fee clause. After defensing the claims, law firm moved for, and received, $1,202,994.50 in attorney’s fees as the prevailing party under Civil Code section 1717. Although former client argued that it was error to not apportion fees between contract and noncontract claims, the appellate panel disagreed and affirmed that apportionment was required. The trial court found the claims and proof were intertwined, so that “it would be impossible to divvy up this cause of action, because they are so intertwined” from both a claim and proof perspective. The appellate court found that this determination was no abuse of discretion.

#2: Issues Common to Swap Document (With No Fees Clause) and Credit Agreement (With Fees Clause) Meant No Apportionment Needed.

     Rossco Holdings Inc. v. Bank of America, N.T. & S.A., Case Nos. B209201 c/w B213607 (2d Dist., Div. 3 May 6, 2010) (unpublished) involved a case that went to arbitration, having two important documents—a swap document (without a fees clause) and a credit agreement (with a fees clause). Bank won and was awarded $721,456 in attorney’s fees and $203,254.46 in costs by the arbitrators. Supplemental fees of about $500,000 more were granted after a contentious arbitration confirmation battle. On appeal, losing party argued that the lower court erred in not apportioning fees between the covered credit agreement and noncovered swap agreement. Not so, said the appellate panel. All of the fees awarded related to Bank’s efforts to confirm the arbitration award, with all the claims being intertwined in nature.

     BLOG BONUS COVERAGE—Rossco Holdings also addressed a recurring argument that a prior appellate decision providing “each party is to bear its own on costs on appeal” precludes an award of attorney’s fees. The Court of Appeal rejected this argument, relying on the reasoning in Butler-Rupp v. Lourdeaux, 154 Cal.App.4^th 918, 924-928 (2007)—must reading for all attorneys confronted with this issue.

EEOC Title VII Administrative Proceedings: Federal Courts Have Subject Matter Jurisdiction Solely Over Prevailing Parties’ Claims To Recover Title VII Administrative Proceeding Fees

Title VII Claims Do Not Have To Be Asserted in Federal Case Seeking Only Fees.

     In Porter v. Winter, Case No. 07-17120 (9^th Cir. May 5, 2010) (for publication), the Ninth Circuit determined that federal courts have subject matter jurisdiction over claims brought solely by a prevailing plaintiff to recover attorney’s fees incurred in Title VII administrative proceedings under 42 U.S.C. § 2000e-5(k). (See also New York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 66 (1980).)

     The Ninth Circuit, in doing so, rejected the argument that Carey only allowed subject matter jurisdiction where plaintiff’s complaint alleged both substantive Title VII claims in addition to a claim for fees. The federal court of appeals sided with the Eighth Circuit in Jones v. American State Bank, 857 F.2d 494, 497 (8^th Cir. 1988) on this issue, departing company with the contrary view of the Fourth Circuit in Chris v. Tenet, 221 F.3d 648, 654 (4^th Cir. 2000).

     Defendant also contended that Carey had been limited by the Supreme Court’s subsequent decision in North Carolina Department of Transportation v. Crest Street Community Council, Inc., 479 U.S. 6 (1986). The Ninth Circuit held that Crest Street did not modify or overrule Carey, agreeing with the stances on this issue of the Eighth Circuit in Jones, supra, 857 F.2d at 498 & n.10 and the Tenth Circuit in Slade v. U.S. Postal Service, 952 357, 360-61 (10^th Cir. 1991). On this issue, the Ninth Circuit sided with the two other circuit courts as against a contrary determination, again by the Fourth Circuit, in Chris, supra, 221 F.3d at 654-55.

FEHA/RFA Fee Shifting: Trial Court Did Not Abuse Discretion In Denying Defense Fee Request Of $204,723

Standard of Review Was Determinative in This One.

     When statutes give trial court discretionary calls on fee requests, appellate courts review such calls under a very deferential standard of review. This deferential standard—abuse of discretion--was determinative in the next case we review.

     In Ross v. Frank, Case No. B211125 (2d Dist., Div. 1 May 4, 2010) (unpublished), four non-employer defendants prevailed in a FEHA case but were denied their request for an award of attorney’s fees in the total sum of $204,723. Defendants had sought fees under two bases: (1) Government Code section 12965(b) [in FEHA cases, “the court, in its discretion, may award to the prevailing party reasonable attorney’s fees and costs ….”]; and (2) Code of Civil Procedure section 2033.420(a) [failure to admit a proper request for admission gives rise to fees unless the court determines an objection to the request was sustained, a response was waived, the admission was inconsequential, the denying party had a reasonable basis to believe that party would prevail on the matter, or there was other good reason for the denial].

     Defendants appealed.