CALIFORNIA ATTORNEY'S FEES

Family Law And Discovery: $9,000 Joint/Several Sanctions Award Against Ex-Wife and Her Attorney Reversed On Appeal

Fourth District, Division 2 Finds Substantial Justification for Motion to Quash Subpoenas

     Code of Civil Procedure section 1987.2 provides for an award of reasonable expenses and attorney’s fees to a party making or opposing a motion to quash a subpoena if his/her actions were made in bad faith or undertaken without substantial justification. Usually, the “substantial justification” part of the equation is key because it is very rare to have sufficient proof of bad faith.

     In Marriage of Nelson, Case No. E048975 (4^th Dist., Div. 2 Aug. 30, 2010) (unpublished), ex-wife and her attorney were jointly and severally sanctioned $9,000 by the lower court for bringing certain motions to quash subpoenas addressed to institutions holding the divorced parties’ accounts, motions which followed earlier rulings by which wife was ordered to reimburse $53,034 in community property funds used to fight a Marvin v. Marvin oral contract battle against husband (notwithstanding the absence of any fee shifting mechanism to reallocate fees).

Lee Marvin in Cat Ballou

     The appellate court reversed the $9,000 in subpoena sanctions because it found there was “substantial justification” in bringing the motions to quash. Specifically, the subpoenas were untimely and issued after the applicable discovery cutoff. Given the correctness of this timeliness challenge, it was error to assess sanctions against ex-wife and her attorney.

Civil Rights: $104,000 Fee Award Against Losing Civil Rights Plaintiffs Reversed

 

Defendant Did Not Meet Christiansburg Standard for Recovery of Fees.

     In the civil rights area, 42 U.S.C. § 1988(b) is by no means an equal fee-shifting provision. It favors winning plaintiffs. Conversely, a winning defendant must prove the plaintiff’s civil rights action was frivolous, unreasonable, or without foundation in order to be entitled to an award of attorney’s fees as the victor.  Christiansburg Garment Co. v. EEOC, 434 U.S. 42, 421 (1978).

     Losing plaintiffs in the next case, who lost a civil rights suit upon summary judgment in a protracted suit over a non-permitted residential wall resulting in a misdemeanor criminal prosecution, were assessed with $103,893.30 (out of a requested $174,733.30) in fees, payable to the winning municipality.

     However, on appeal, the Second District, Division 2—in Greenberg v. City of La Canada Flintridge, Case No. B213717 (2d Dist., Div. 2 Aug. 30, 2010) (unpublished)—reversed the fee award against plaintiffs.

     Reasons? The trial court failed to make express factual findings and legal conclusions to satisfy the Christiansburg standard. (See Cohn v. Papke, 655 F.2d 191, 195 n.3 (9^th Cir. 1981).) Beyond that, plaintiffs did survive a demurrer such that their action could not be said to lack any basis. (Sussman v. Bank of Israel, 56 F.3d 452, 457 (2d Cir. 1995).)

Civil Code Section 1717: Litigant Winning On Implied Contract Theory Cannot Use Nonsignatory Reciprocity Principles To Bootstrap Itself Into Fee Recovery

Fourth District, Division 3 Does Not Buy “Reverse Bootstrap” Theory Under Section 1717.

       (Excerpted from photo in Wikipedia article on “Bootstrapping”)

     One cannot ignore the reciprocity principle underlying Civil Code section 1717, which makes a unilateral contractual fee-shifting clause mutual in nature—and does so in a variety of circumstances. For example, there are numerous cases recognizing that a nonsignatory defendant to a contract can recover fees as the prevailing party if the signatory could have recovered fees. (See, e.g., Hsu v. Abbara, 9 Cal.4^th 863, 870 (1995); Korech v. Hornwood, 58 Cal.App.4^th 1412, 1418-1419 (1997); Manier v. Anaheim Business Center Co., 161 Cal.App.3d 503, 507 (1984); Jones v. Drain, 149 Cal.App.3d 484, 490 (1983).)

     However, can a contractual signatory winning on an implied contract theory—not based on a written contract—obtain section 1717 fees because the nonsignatory defendant might be able to recover fees as the prevailing party?

     No, said the Fourth District, Division 3 in Security Commercial Holdings Corp. v. Ly, Case Nos. G042338/042500 (4^th Dist., Div. 3 Aug. 30, 2010) (unpublished), authored by Acting Presiding Justice O’Leary on behalf of a 3-0 panel. The appellate court found that the “none [of the authorities cited in the first paragraph of this post] considered or allowed the sort of bootstrapping [signatory plaintiff] advocates.” (Slip Opn., p. 20.) The trial court erred in awarding $48,468 in attorney’s fees in favor of signatory plaintiff and against nonsignatory defendant under these circumstances, requiring that the award be stricken from the judgment.

Equity And POOF!: Appellate Court Reverses CCP § 473 Relief For Late Filing Of Attorney’s Fees Motion

Reversal Meant $94,072.50 Fee Award Evaporated.

    Here is one showing that appellate courts will try to do equity depending on the facts of a particular dispute. (And, by making this comment, we in no way mean they ignore the law—quite to the contrary, as we have seen in numerous posts.) Unfortunately, for plaintiff and her attorneys, the result meant that a $94,072.50 fee award went POOF! on appeal.

     Williams v. Ablakhad, Case No. B214364 (2d Dist., Div. 1 Aug. 27, 2010) (unpublished) involved a donnybrook of a dispute between defendant used car dealer and one of his customers (plaintiff Williams). By the time the opinion we discuss came down, the parties were already on their third appeal.

Sanctions: Litigants’ Attorney and Litigant Properly Sanctioned For Failure To Have A Person With Settlement Authority Participate In Court-Ordered Mediation

L.A. Local Rule, Based on CCP § 575.2(a), Authorizes Sanctions For Violation of Local Rules.

     If you are ordered to appear in a mediation, do it (obviously)! However, an attorney must make sure that he/she has a client representative with settlement authority when representing a corporate or public entity client present or on stand by for the mediation (or at least obtain permission to have the person attend telephonically if the person cannot personally attend). If not, you and your client could be sanctioned under applicable local superior court rules. And, the sanctions order will likely stick on appeal.

     An attorney and his clients in Ellerbee v. County of Los Angeles, Case No. B216848 (2d Dist., Div. 1 Aug. 27, 2010) (unpublished) were sanctioned jointly and severally in the amount of $6,194 for defendants’ failure to have someone with settlement authority participate in a court-ordered mediation. The defendants were public entities, and the sanctions were awarded to plaintiff’s attorney to cover the costs he incurred in preparing for and attending the mediation.

     Losing defendants appealed the sanctions award.

     No go, on appeal.

     L.A. Superior Court Local Rule 12.15 and CRC 3.894(a) require the attendance of a client representative with settlement authority on stand-by basis during the course of a mediation. In turn, Code of Civil Procedure section 575.2(a) authorizes sanctions for violation of local rules if the local rules authorize such a penalty. L.A. Local Rule 7.13 did just that, permitting the trial judge to impose sanctions for failure to comply with local rules, not to mention CRC 2.30(b) authorizing sanctions against a party and/or its attorney “for failure without good cause to comply with the applicable rules.

Thomas Worth, artist. 1883.  Library of Congress.

In The News . . . . Plaintiff Nonprofit Only Garners $162,500 Attorney’s Fees Award In Madera County Superior Court Action Involving California Voting Rights Act

$1.2-1.8 Million Fee Request Not Honored Against Madera Unified School District.

     In our November 16, 2009 “In the News” post, we discussed lawsuits being pressed under the California Voting Rights Act for shutting out minority participation in school district elections. School districts either had to pay or were potentially billed for millions of dollars in these lawsuits being prosecuted in different California venues.

     One of the largest potential fee requests arose out of a 2008 lawsuit brought by the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area against Madera Unified School District, which did not contest it. Plaintiff’s attorneys billed the district for $1.2 million, an amount later reported to have been increased to $1.8 million.

     In an order issued on August 23, 2010, Madera County Superior Court Judge James Oakley reduced the requested amount of $162,500, calling this amount “fair and reasonable.”

     Cities and school district had feared fee exposure in these cases, with the Madera case being one of the most closely watched matters. For more details on this one, see Michael R. Blood’s August 26, 2010 posted article “Judge slashes Calif. Election case attorney fees” in the mercurynews.com.

Undertaking And Cases Pending: California Supreme Court To Decide If Appellate Costs Include Recovery Of Interest On Sums Borrowed to Fund A Letter Of Credit Securing A Surety Bond On Appeal

Rossa v. D.L. Falk Construction Accepted for Review on August 11, 2010.

     In Cooper v. Westbrook Torrey Hills, 81 Cal.App.4^th 1294, 1300 (2000), the Court of Appeal confirmed that interest paid on sums borrowed to obtain a cash deposit undertaking on appeal were recoverable costs of appeal under California Rule of Court 8.278(d)(1)(F).  However, more recently, the First District in Rossa v. D.L. Falk Construction, 181 Cal.App.4^th 438 (2010) decided that recoverable costs of appeal did not encompass interest expended by an appellant to obtain a letter of credit to secure a surety bond undertaking for an appeal (even though the LOC premium payment was recoverable).

     This anomaly in treatment between appeal bonds and cash deposits in lieu undertakings likely inspired the California Supreme Court to grant review of Rossa by a 7-0 vote on August 11, 2010. The issue presented for review is: “Does California Rules of Court, rule 8.278(d)(1)(F), which permits a successful appellant to recover ‘the costs to obtain a letter of credit as collateral,’ allow the recovery of interest paid on sums borrowed to fund a letter of credit used to secure a surety bond?” We will let you know how our state supreme court rules when its opinion is issued in the future.

In The News . . . . Ventura County Community College District (VCCCD) Has Spent $638,660 In Legal Fees And $170,722 In Investigator Expenses Over Three Years In Probe Of Former Ventura College Basketball Coach Greg Winslow

 

Includes Fees on Related Suit filed by Winslow’s Former Assistant Coach.

     As reported by Cheri Carlson and Jean Cowden Moore in an August 14, 2010 posted article on vcstar.com (Ventura County Star), VCCCD has spent the sums referenced in our “In the News” title in its probe of Greg Winslow, former Ventura College basketball coach who was eventually put on unpaid leave and charged by the District Attorney’s Office with depositing basketball program donations and gym rental payments into his personal bank account as well as allowing out-of-state players to pay in-state tuition rates.

     Dr. James M. Meznek, VCCCD’s Chancellor, is quoted as saying that the expenses are due to the fact Mr. Winslow “really lawyered up.” Most of these expenses have been paid from the general fund.

     The criminal trial is expected to start in September of this year, with Mr. Winslow pleading not guilty to all charges and with his criminal attorney questioning the justification for all the expenses paid to date.

     The $800,000 expenditure includes costs the VCCCD has spent on a wrongful termination suit filed by Jeff Theiler, Mr. Winslow’s former assistant coach.

     In a subsequent statement posted on vcstar.com on August 23, 2010, Dr. Meznek has defended the expenditures as necessary “to protect the integrity of our colleges.”

Family Law Two-Fer: One Attorney Fee Award Reversed, The Other Affirmed Under Family Code Sections 2030/2032 and 271

The Reversal: Marriage of Schneider, Case No. B215675 (2d Dist., Div. 7 Aug. 24, 2010) (Unpublished).

     This one involved Colorado litigation by ex-husband about ex-wife’s misappropriation of his personal property in a storage facility, which followed apparently contentious California dissolution proceedings. Husband claimed the misappropriated property was worth $363,000, but a Colorado jury only found ex-wife only took property worth $40,000. However, under Colorado law, ex-husband recovered nothing because, in tort actions there, a 70% fault allocation to him required entry of judgment in ex-wife’s favor. Ex-wife then sought $516,981 in “needs based” fees under Family Code section 2030 and sanctions under section 271 of 516,981 (inclusive of $164,036.25 in Colorado defense expenses) for California/Colorado efforts. Ex-husband filed a dueling fee motion for section 271 sanctions of $376,000 against ex-wife. However, the trial court severed consideration of fees relating to the Colorado action.

     What did the lower court do with respect to prior California proceedings? Ex-wife was awarded $225,000 in 2030 fees and $10,000 in 271 sanctions, while ex-husband was denied any 271 sanctions against ex-wife, determinations affirmed in a prior appeal (Schneider I).

     So what happened with respect to “related” Colorado proceedings? Ex-wife sought additional fees of $490,790.35, while ex-husband asked for fees as 271 sanctions. The trial court ordered ex-husband to pay $100,000 (out of the requested $490,790.35) to ex-wife, but also directed ex-wife to pay $10,000 to ex-husband as 271 sanctions.

     Now, what happened on appeal? Actually, a reversal. The appellate court found no evidence supporting the trial court’s implicit premise that ex-wife’s misappropriation was accomplished in bad faith, bolstered by the jury’s conclusion that only 12% of the total property value sought by ex-husband was compensable. The reduction of ex-wife’s fees was unfounded because she did not initiate the Colorado fight. The matter was remanded to have the trial judge prepare findings to justify any fee reductions. Finally, the 271 sanctions to ex-husband were overturned primarily given that ex-wife was forced to defend the misappropriation action brought by ex-husband in Colorado.

The Affirmance: Marriage of Gimple and Parker, Case No. A123565 (1^st Dist., Div. 2 Aug. 24, 2010) (Unpublished).

     This one contains very scholarly discussions of the standards governing awards under sections 2030/2032 and 271, which we commend for reading.

     Although the fee awards were not that substantial (under $15,000 to ex-husband), they were affirmed under the deferential abuse of discretion standard because the family law judge did consider factors in additional to financial circumstances and had a global perspective of the dissolution dispute, a critical factor found necessary by our local Santa Ana court in Alan S. v. Superior Court, 172 Cal.App.4^th 238, 251-255 (2009)—a decision being oft-cited by other courts in the family law area. Beyond that, the Court of Appeal did find that some dated income and financial statements may have been considered, but determined reliance on them was nonprejudicial in nature (with prejudice being a key appellate concern in reviewing a lower court decision). See, e.g., Burkle v. Burkle, 144 Cal.App.4^th 387, 403 (2007); In re Marriage of Falcone & Fyke, 164 Cal.App.4^th 814, 822-823 (2008). The fee awards were affirmed, in this one.

             BLOG BONUS:  YouTube advertisement for divorce attorney . . . .

Lawyer Ad

 

Appeals Sanctions: Frivolous Appeal Draws $6,750 Sanctions Against Appellants

Requested Sanctions of $14,623.91 Are Pared Down to $6,750.

     In Girardi v. Princess Cruises, Case No. B217192 (2d Dist., Div. 7 Aug. 24, 2010) (unpublished), appellants were found to have prosecuted a frivolous appeal based on the standards set forth in the California Supreme Court in In re Marriage of Flaherty, 31 Cal.3d 637, 650 (1982) [one of our Leading Cases]. The objective lack of merit to the appeal was substantive basis for the appellate court's frivolousness determination.

     Respondent requested to recoup $14,623.91 in attorney's fees as the appropriate sanction. So what did the Court of Appeal? It issued sanctions of $6,750. Reason? Respondents' counsel's time to cure the incomplete record filed by appellants and preparing/attending oral argument was a little too hefty. In doing so, the appellate panel believed that preparing for and attending local oral argument on a single-issue, nonmeritorious matter "reasonably should consume no more than five hours of attorney time." (Slip Opn., p. 10.)

Workers’ Compensation: Recent Article Suggests That WC Premiums Have Gone Up Recently Due, In Part, To Higher Legal Costs

 

Editorial from The Orange County Register So Opines.

     As reported in an August 24, 2010 editorial printed in The Orange County Register’s Opinion section, there is a pending proposal to hike workers’ compensation premiums for businesses up to 29.6% for the “pure premium” rate (the rate businesses pay their insurers for coverage). If approved, it would reflect costs increases between January 1, 2009 and January 1, 2011.

     The editorial goes on to analyze why the premiums may need to go up.

     Earlier, in 2004, workers’ compensation reforms were passed in California to curtail rising costs. Central to the reforms was adoption of American Medical Association (AMA) guidelines used by other states to judge the severity of an injury. Although higher medical costs and the economy (laid off people file more claims as they leave) were contributing factors, higher legal costs also are contributing to the proposed surge in rates. Jerry Azevedo reportedly told The Register that two recent cases—Alvaraz-Guzman (Alvaraz v. Environmental Recovery Services and Guzman v. Milpitas Unified School District) and Ogilvie (Ogilvie v. San Francisco)—led to higher legal expenses, because they allowed workers’ compensation attorneys to surmount AMA guidelines. Although the costs data is not broken down, The Register roughly estimates that increased legal fees well could account for nearly half of the increase in costs.

Workers compensation: 

“Union Hospital - Lewis Palmer - 14 years - 455 Peckham St. - Rope hauler in Estes Mill, making mop rope. Began April 25th. Hand cut by rope May 18th. Laid up one month. Wages $4.60 - compensation $4. Goes on Sunday hikes with his crowd. Location: Fall River, Massachusetts.”  Lewis Wickes Hines, photographer.  June 22, 1916.  Library of Congress.

Pleading: If You Want To Recover Fees In Default Judgment, Make Sure Basis and Prayer For Fees Are Included In Complaint

 

Fourth District, Division 1 Strikes Fees From Default Judgment For Failure to Plead Fees in Complaint.

     Here is one of those nuts and bolts decisions that reminds all litigators to plead fee entitlement and include a prayer for fees in their complaints if they want to recoup fees at the default judgment stage of litigation.

     In Law Office of Don Detisch v. Woolley, Case No. D055281 (4^th Dist., Div. 1 Aug. 23, 2010) (unpublished), plaintiff was granted a default judgment, including $3,110 in attorney’s fees as part of collection efforts. The problem was that plaintiff never expressly requested an attorney’s fees award in its complaint. On appeal, the Fourth District, Division 1 found that the default judgment only could encompass the relief sought in the complaint, requiring that the fee award had to be stricken. (Wiley v. Rhodes, 223 Cal.App.3d 1470, 1474-1475 (1990) [no default attorney fee award where fee entitlement not pled in the complaint and no fee demand included in the prayer]; Becker v. S.P.V. Construction Co., 27 Cal.3d 489, 495 (1980) [default judgment fee award reversed became complaint did not pray for attorney’s fees].)

     So, the lesson here is to plead fee entitlement and include a fee prayer in the complaint—at the outset—in the event a named defendant fails to appear and is subject to judgment under the default judgment procedure.

First District, Division 5 Gives the “Thrill of Victory” to Winning Litigant on Appeal.

     The next case is more important for construction practitioners dealing with Coleman-related compensation issues where the good faith negotiations between the parties do not result in any agreement on price. However, it also shows you that our Mission Statement is still very prophetic—attorney’s fees awards may be the tail that truly wags (and awards the winning) litigation dog. It certainly did in the next case we look at.

  Cave Canem:  Beware of Dog.

     Ted Jacob Engineering Group, Inc. v. The Ratcliff Architects, Case No. A122932 (1^st Dist., Div. 5 Aug. 23, 2010) (certified for partial publication) demonstrates this point in dramatic fashion. There, plaintiff subcontractor won a $1,080,698 general verdict against defendant contractor. Later, plaintiff moved for an award of attorney’s fees under the parties’ contract pursuant to statute, with the trial court awarding $2,253,411.97 in fees.

     Result on appeal? Affirmance on all issues, plus plaintiff gets to seek recovery of costs and fees for its win on appeal. For plaintiff, the thrill of victory; for defendant, the agony of defeat. So it goes on these types of appellate battles.

In The News . . . . Different Attorney’s Fees Issues Dominate The News

Developer to Pay Sierra Club’s Fees in Dispute over City of Lakeport Project.

     As reported by Denise Rockenstein in an August 17, 2010 post on RecordBee.com, developer Cristallago will pay the attorney’s fees incurred by the Sierra Club in a settlement approved in relation to a mixed-use resort community project located near City of Lakeport. Sierra Club challenged the EIR in court, but reached a settlement to stay the litigation pending developer’s compliance with certain conditions. Cristallago is to pay Sierra Club $35,000 in attorney’s fees as part of the settlement.

Selling Pot to Pay for Legal Expenses . . . Not Advisable!

     In an August 19, 2010 article in newsreview.com, a Northern California man allegedly directed his 19-year-old girlfriend to sell pot to pay for his legal expenses in a pending criminal case. Well, girlfriend was caught, which led law enforcement agents to man’s home, where large tubs of dried marijuana in various stages of processing were discovered. These developments have led to more criminal charges being advanced man.     

Victorious Proposition 8 Lawyers May Move to Recover Fees.

     Most everyone is following the legal battle over the constitutionality of Proposition 8, California’s gay marriage ban. However, MercuryNews.com in an August 19, 2010 post reports that the lawyers overturning the ban—if successful on appeal—may seek attorney’s fees and court courts. However, they may try to wait until the Ninth Circuit rules on the propriety of U.S. District Judge Vaughn Walker’s decision.

Livingston Councilman Questions City Attorney Pay.

     In the aftermath of the City of Bell scandal

(where the city manager’s annual salary was more than $700,000 and part-time council members were making $100,000 a year), Central California city Livingston has some at least one councilman questioning the jump in city attorney’s fees to between $50,000-$100,000 per month. Interestingly enough, Livingston’s former city attorney was from the same firm that represented City of Bell. For more details on the controversy as well as reader comments, see Mike North’s August 20 post at mercedsunstar.com.

Washington Court of Appeal Unseals Billing Records in Criminal Case.

       Unsealed:  Expedition members skinning a seal.  c1881-1884.  Library of Congress.

      A Division III Court of Appeals panel in Spokane, Washington agreed that a trial court was correct in offering to unseal billing records to the Yakima Herald-Republic in its ongoing battle for access to $2 million in court-appointed defense attorney billing records in a 2005 double murder case. The appellate panel decided that no privilege attached to the identity of an attorney’s client and the fees charged for representation. (See Chris Bristol’s article “Ruling favors requests for records of murder trial attorney fees,” posted on August 19 at yakima-herald.com.)

Orange County Employees Retirement System (OCERS) Spent $31,360 in Losing Effort to Keep Secret the Names and Pensions of Retirees Making $100,000+ Per Year.

     As reported by Tony Saavedra in an August 21, 2010 article in The Orange County Register, OCERS spent $31,360 in its lost battle under California’s public records act to keep secret the names and pensions of retirees making at least $100,000 a year. OCERS bucked the fact that two judges in Contra Costa and Stanislaus counties ruled that this information should be public. Orange County Superior Court Judge Luis Rodriguez sided with the other courts in ordering disclosure of the information in a lawsuit by the California Foundation for Fiscal Responsibility (with support from The Orange County Register). OCERS recently disclosed that it paid $29,000 to reimburse CFFR plus in-house counsel fees of $2,360 in the public records action loss.

Orly Taitz Gets Her Sanctions Stay Request to Be Entertained by Full U.S. Supreme Court.

     If you have followed our blog for the last year or so, “birther” advocate Orly Taitz’s battles have been chronicled in this category in the past. You would know that she was sanctioned $20,000 by one federal court judge, with a lien being recorded/filed on August 16, 2010 after the Eleventh Circuit affirmed the sanctions award some time ago. In July 2010, she asked that U.S. Supreme Court Justice Thomas stay the sanctions order, a request that was denied. Ms. Taitz then asked Justice Alito to do the same. On August 10, 2010, he decided that the request would be referred to the entire court for a decision. So stay tuned—there is will be more on this one!

 Stay Tuned.

Lake Forest BodyCentre Will Appeal Orange County Superior Court’s Decision Awarding Fees and Costs to City of Lake Forest under California’s Red Light Abatement Act.

Statue of unknown sex worker.

Amsterdam.

     On July 21, 2010, Orange County Superior Court Judge David Chaffee awarded City of Lake Forest $456,962 in attorney’s fees and $45,000 in costs, which were assessed against Lake Forest BodyCentre under the state’s Red Light Abatement Act, not long after the city shut the business down for conducting prostitution and lewd acts—as reported by Erika I. Ritchie in an August 20 article in The Orange County Register.

     The appellants in the case have decided to bond the award while the appeal is processed before the Fourth District, Division 3. According to an attorney representing the city, this is seventh appeal filed by the BodyCentre defendants, while appellants’ counsel expresses confidence in a reversal. I guess we will have a future post on this situation.

     BLOG OBSERVATION—Co-contributors Marc and Mike prosecuted and defended a contract/trade secrets trial before Judge Chaffee within the last year. They enjoyed the experience, winning across the board—with even the principal of plaintiff/cross-defendants admitting in open court that Judge Chaffee was fair in the way he conducted the entire trial.

                      BLOG BONUS – Red Light District Tourist Guide, Amsterdam.

Private Attorney General Statute: Second District, Division 3 Affirms Denial Of CCP § 1021.5 Fees To Litigant Where It Alone Benefited

Also, Fee Expenditure Was Not Disproportionate to Claimed Damages.

     We have another case to add to our category “Private Attorney General Statute.” Here, the lack of benefit to a larger class of persons and failure to show disproportionate fee expenditures meant that fees were properly not awarded under Code of Civil Procedure section 1021.5.

     In New West Charter Middle School v. L.A. Unified School Dist., Case No. B215777 (2d Dist., Div. 3 Aug. 19, 2010) (certified for publication), New West obtained writ relief requiring LAUSD to provide facilities to charter school in-district students on an equivalent basis, but only with respect to New West and LAUSD’s withdrawal of a specific offer for co-location to Fairfax High School. New West was awarded $175,630.32 in damages following writ noncompliance. However, the trial judge denied New West requested fees of $226,000 under the private attorney general statute, primarily on the basis that New West’s victory did not provide significant benefit to a large class of individuals.

     New West’s appeal of the fee denial did not result in any change.

     The fee denial was affirmed, whether a de novo or abuse of discretion standard was used, because the benefit below was to New West alone. According to the appellate panel, this was not a “test case” on the school district’s obligations to in-district students. Beyond that, the financial burden of the litigation was not disproportionate, given the comparison between fees of $226,000 to New West’s claim seeking $1 million in actual damages. (This conclusion may have been driven by the appellate court’s observation, in a footnote, that New West did not incur any fees because its counsel’s prosecution of the case was undertaken under a contingency agreement.)

Class Actions: Ninth Circuit Determines That Class Counsel Fee Motions Cannot Be Set For Hearing Before Persons Can File Objections To Fee Requests

 

No Bright-Line Rule Is Set, But Timing of Motions Must Take into Account Timing of Objections to Actual Fee Request Submissions on Due Process Grounds.

     This next case should be of keen interest to class action practitioners.

     The Ninth Circuit, in In re Mercury Interactive Corp. Sec. Litig., Case No. 08-17372 (9^th Cir. Aug. 18, 2010) (for publication), ruled that a district judge abused its discretion under Federal Rule of Civil Procedure 23(h) in setting an objection deadline for class members regarding a fee request on a date before the deadline for lead class action counsel to file their fee motion.

    

     [Above:  “I object! The gentleman from Pennsylvania objects, the gentleman will reduce his objection to writing.”  American cartoon, between 1800-1840.  Library of Congress.]

     The district judge approved a 25% percentage of recovery from a common fund amounting to class action attorney’s fees of $29,375,000 in a stock option backdating securities case, when the supporting fee submissions showed class counsel expended a lodestar value of $8,396,593.20. The problem was that two objectors lobbied for a lower 18% percentage of recovery, even though they objected before seeing the class action attorneys’ fee submissions. The fee award was challenged.

     The appealing parties were successful and the fee award reversed, because Circuit Judge Tashima (on behalf of the majority) found that Rule 23(h) requires a district court to set the deadline for objection to class counsel’s fee request on a date after the fee submissions have been filed, a rationale further bolstered on due process grounds. This was especially justified where a common fund was involved. Although the majority refused to adopt a “bright-line rule” with respect to Rule 23(h) fee motion timing, the schedule at least requires that any objections be filed after the fee motion itself is filed.

     Circuit Judge Bybee agreed that the district judge erred with respect to the scheduling, but dissented because he found that the scheduling challenge had been waived.

POOF!: Fee Awards On Both Sides Went Away With Reversal of Rescissionary Judgment

 

Fourth District, Division 2 So Rules in Unpublished Opinion.

     Reversal on appeal can have dire consequences, not to mention that fee awards can become moot. That is what happened in H & H Investments Co., Inc. v. Chang, Case Nos. E046900/E047471 (4^th Dist., Div. 2 Aug. 17, 2010) (unpublished).

    

                      Fortuna.  Albrecht Durer.  ca 1502.

     Briefly stated, plaintiff was allowed to rescind a loan transaction, but defendant appealed—including a lower court determination that defendant was liable for fees and costs of $48,962.65. Cross-defendant appealed a “tort of another” fee award of $40,000 in favor of plaintiff/cross-complainants. Because the crucial award of rescission against defendant was reversed, the fee awards were moot and fell as well. Or, put another way, they went POOF!

Homeowners Associations: $65,707.80 Fee Award To HOA Affirmed On Appeal.

 

Block Billing Per Se Will Not Tank a Fee Request.

     Under our category "Homeowner Associations," we have reviewed numerous decisions where homeowners or HOAs feel the sting of "victory or defeat," even if ABC's famous "World of Sports" mantra was not directly in play. Well, we have another one to share with you—where the homeowner got stung with bearing hefty fees.

      Another Mantra:  Allen Ginsberg chants Hare Krishna

     Lakeshore View Homeowners' Assn. v. Tu, Case No. A123298 (1^st Dist., Div. 1 Aug. 17, 2010) (unpublished) was a case where defendant homeowner lost a case against a HOA, even though a partial set-off was granted. The net judgment to HOA was $23,584.68, after the set-off of $4,000 in homeowner's favor. Later, HOA filed to recoup attorney's fees of $109,513, but the trial judge awarded fees of $65,707.80. Homeowner appealed, contesting only the amount of the fee award.

Family Law: Borson Motion For Fees Denied To Third Party Joined As A Claimant In Her Daughter’s Dissolution Action

 

Third Party Claimant May Have No Standing to Receive 2030 Needs Award in Dissolution Proceeding, While Attorney May Lack Standing to Appeal Borson Motion Denial.

     The interesting thing about this blog is what we learn each day from reading and then posting on various decisions. Here, we learned about motions brought under Marriage of Borson, 37 Cal.App.3d 632 (1974).

     A Borson motion is one where an attorney expecting to be discharged by a client in a dissolution dispute may file a motion pursuant to Family Code section 2030 seeking attorney’s fees and costs as long as the attorney is still counsel of record and has the former client’s express/implied consent to bring the motion. The rationale behind this motion is it is one brought on behalf of the former client because it avoids circuity in litigation—former counsel suing client for fees, with client in turn asking the court to order the ex-spouse to pay attorney instead under section 2030. In the next case we discuss, a Borson motion filed by an attorney representing a third party claimant joined in a dissolution proceeding (mother of the ex-wife) sought fees for his work on behalf of the third party. Attorney appealed a fee denial (one without prejudice), a determination affirmed on appeal in Marriage of Calienes, Case No. B217517 (2d Dist., Div. 7 Aug. 17, 2010) (unpublished).

     In a scholarly review of the law relating to Borson motions, Presiding Justice Perluss—on behalf of a 3-0 panel—initially observed that there was a split opinion on whether a lawyer had standing to appeal directly from the denial of a Borson motion. (Compare In re Marriage of Kelso, 67 Cal.App.4^th 374, 383 n. 3 (1998) [yes] with In re Marriage of Tushinsky, 203 Cal.App.3d 136, 142 (1988) [no; attorney not aggrieved for appeal purposes].)

     Beyond that, appealing attorney cited no authority—with the appellate panel also finding none—to support the proposition that a third party claimant is eligible for a “needs based” fee award under section 2030. The panel questioned whether this could be so, given that section 2030’s purpose was to level the playing field for spouses, not joined third parties.

     However, these issues did not have to be resolved. Reason? The record showed no abuse of discretion in denying the motion. It demonstrated that wife had defrauded husband over the course of the proceedings, using funds to arrange a transaction that accrued to the benefit of her mother (the third party) rather than the community. Given that the trial court concluded it would not be equitable to force ex-husband to pay ex- mother-in-law’s fees, the appellate panel had no basis to overturn the denial of the Borson motion.

Costs And 998: Second District, Division 7, Through P.J. Perluss, Gives Us A Two-Fer Tutorial On Costs and CCP § 998

     Presiding Justice Perluss, on behalf of the same panel of the Second District, Division 7 (yet in two separate unpublished decisions), gives us some good teachings on routine costs and Code of Civil Procedure section 998 issues.

Costs: Mixed Result Means Prevailing Party Determination is in Lower Court’s Discretion.

     In Cordier v. Swanson Realty Group, Inc., Case No. B214960 (2d Dist., Div. 7 Aug. 16, 2010) (unpublished), SRG defeated Cordier’s complaint by winning a motion for judgment on a fraudulent conveyance complaint, one that led to a dismissal of the complaint—an event that independently triggers routine costs “prevailing party” status. However, Cordier won an anti-SLAPP motion on one count in SRG’s cross-complaint, but did not prevail on the other—with SRG dismissing the other count after Cordier dismissed SRG from Cordier’s complaint, even though Cordier recovered $5,437.50 (out of a requested $10,380) in fees on the anti-SLAPP win, but never sought any cost recovery. Eventually, both sides moved for costs, but the trial judge only awarded $400 to SRG. Cordier appealed, but lost. Because the case was a mixed-results case and Cordier did recover anti-SLAPP fees under a separate scheme, the trial court did not abuse its discretion in determining that SRG prevailed in knocking out Cordier’s complaint based on the theory that its judgment had been satisfied (which, in turn, knocked out any fraudulent conveyance claim).

998: Ambiguous Offer to Joint Defendants Did Not Shift Expert Witness Fees.

     Pursley v. Philippe, Case No. B209435 (2d Dist., Div. 1 Aug. 16, 2010) (unpublished) involved a case where personal injury wife won $835,369 against four jointly liable defendants (most based on vicarious liability) and personal injury husband won $25,000 against the same defendants. They appealed a denial of substantial expert witness fees as costs resulting from defendants’ rejection of their separate Code of Civil Procedure section 998 pretrial settlement offers. After all, defendants had denied wife’s offer to settle each claim for $399,999.99 and had rejected husband’s offer to settle each claim for $9,999.99. This cost denial was sustained. Reason? Plaintiffs’ 998 offers were far from certain, because one might construe wife as wanting nearly $1.6 million ($400,000 x 4) and husband wanting nearly $40,000 ($10,000 x 4). To make it clear (for example), wife should have made an unapportioned offer to the four defendants, collectively, to settle the entire action for $399,999.99 since her claims were based solely on their vicarious liability for one defendant’s negligence—an offer that need not be apportioned. (Steinfeld v. Foote-Goldman Proctologic Medical Group, Inc., 50 Cal.App.4^th 1542, 1549 (1996).) The 998 offers were uncertain and, thus, invalid as a matter of law. (Also, there is a discussion on some routine costs, but the 998 issue was the paramount one, in our view.)

Civil Rights And Prior Decision Update: Silguero Court Still Denies Fee Recovery Under A Petition For Rehearing

FEHA-Based Fees Not Allowable to Other Defendants.

     In our July 30, 2010 post, we reviewed Silguero v. Creteguard, Inc., Case No. B215179 (2d Dist., Div. 1 July 30, 2010) (certified for partial publication), where a fee award went POOF! upon reversal of a demurrer sustained in favor of certain defendants.

     However, apparently other defendants filed a petition for rehearing before the appellate court, arguing their fee awards should have been sustained as against plaintiff even though they were not involved directly in the demurrer reversal. Well, this petition did not work. The appellate panel found that, as to the fee award in favor of two defendants, FEHA claims were not involved and—even if they were—plaintiff’s action was not unreasonable, frivolous, groundless or without foundation, again reaffirming that FEHA fees are not a favored remedy with respect to winning defendants.

     Note—This part of the opinion was unpublished, and remains that way. (See Silguero Order Modifying Opinion and Denying Rehearing, posted August 16, 2010 on the Calgov website.)

Equity: Bona Fide Purchaser Rule Did Not Prevent Constructive Trust Being Granted To FTC When Attorney Did Not Properly Make Inquiry As To Source of Funds

However, Equitable Receipt of Fee Principle Used to Allow Reasonable Fee Before Freezing of Client’s Assets.

     This next case is an important, sobering one for any civil practitioners defending clients charged with Federal Trade Commission (FTC) Act violations, counseling that there is a duty of inquiry with respect to attorneys’ acceptance of retainers so as to avoid forfeiture/disgorgement under FTC freeze or other equitable orders. Pay attention closely to this one.

             Freezing.  Library of Congress. 1924.

     In FTC v. Network Services Depot, Case No. 09-15684 (9^th Cir. Aug. 16, 2010) (for publication), a district judge determined that attorney’s fees were paid from his client’s unlawful FTC activities and imposed a constructive trust over a portion of those fees. Specifically, the attorney representing the FTC-targeted client was paid $375,000 in a flat fee agreement, with the district judge requiring return of all but $136,700—a sum that the court, in equity, permitted the attorney to retain as fees rightfully earned up to the date of the freezing of client’s assets.

     Among other things, the Ninth Circuit affirmed the fee rulings.

     Constructive trust is an equitable remedy, with the federal court of appeals finding use of the remedy was justified where commingled funds (some from unlawful activities) had been used to pay attorney. Appellants mainly relied on the bona fide purchaser rule, arguing that client’s attorney accepted the ill-gotten money in good faith and after a diligent review of the circumstances. Not so much, in essence, was the Ninth Circuit’s response.

     Attorney had a duty of inquiry into the source of the funds under the circumstances, a duty he did not fulfill by primarily relying on the contrary representations of his client. (FTC v. Assail, Inc., 410 F.3d 256, 266 (5^th Cir. 2005).)

     However, this was not the end of the matter. The district judge did not err in allowing attorney to retain $136,700 (although the request was more) for fees incurred by attorney before client’s assets were frozen. Equity, equity, equity.

     An important case to read by attorney representing litigants involved in alleged FTC violations. The case was authored by U.S. District Judge Rebecca R. Pallmeyer (N.D. Ill.), sitting by designation, on behalf of a 3-0 panel.

In The News . . . . San Bernardino County Plans To Appeal Adverse $51,000 Fee Award In Action Against Local Public Attorney’s Union

State Board Had Exclusive Jurisdiction Over the Matter, Leading to Fee Award Against County.

     As reported by Joe Nelson in an August 10, 2010 post entitled “County to appeal judge’s decision on paying attorney’s fees” San Bernardino County has decided to appeal an adverse attorney’s fees order of more than $51,000 against it.

     Apparently, the fee award came in an action commenced by San Bernardino County against the San Bernardino County Public Attorney’s Association, trying to bar prosecutors from serving as union delegates for deputy public defenders. A superior court judge in December 2009 dismissed the lawsuit on the ground that the state Public Employment Relations Board had exclusive jurisdiction over the matter. Then, subsequently, the union moved for fees and was awarded more than $51,000 by another superior court judge.

     Because this may well go the distance on appeal, we will report to you later on what happens at the appellate level.

Special Fee-Shifting Statutes: Ninth Circuit Reverses Attorney’s Fees Awards in Echostar/NDS Case

Reversal is a $22 Million Swing for the Corporate Litigants.

     In our December 11, 2008 post, we reported on C.D. Cal. U.S. District Judge David O. Carter’s fee awards in EchoStar Satellite Corp. v. NDS Group PLC, Case No. 8:03-cv-00950-DOC-JTL. There, EchoStar was awarded $12,972,547.91 in fees and NDS was awarded $8,968,118.90 in fees in a detailed district court decision finding that both parties prevailed under some fee shifting statutes. (E.g., Cal. Pen. Code, § 593e(d); Communications Act [47 U.S.C. § 605(e)(3)(B)(iii)]; Digital Millennium Copyright Act [17 U.S.C. § 1203(b)(5)].) Both sides appealed, and the Ninth Circuit reversed and remanded—although handing NDS a major victory on appeal.

     The Ninth Circuit, in an unpublished memorandum decision from both appeals (Case Nos. 09-55005/09-55633 [9^th Cir. Aug. 4, 2010]), reversed the fee awards in a way to deny fees to EchoStar and grant NDS fees of $17,936,237.80 plus reasonable costs—a $22 million swing of fortune from NDS’ perspective (owing a net $4 million in fees to owed $18 million in fees). How did this occur? We now tell you.

     Both Judge Carter and the Ninth Circuit did not disagree on the standard governing which party prevailed in the litigation—the assessment was a practical one, but not allowing this status to be conferred on one who has a purely technical or de minimis success. (See Donner Mgmt. Co. v. Schaffer, 48 Cal. Rptr. 3d 534, 542-543 (2006) [state law]; Parents of Student W. v. Puyallup Sch. Dist. No. 3, 31 F.3d 1489, 1498 (9^th Cir. 1994) [federal law].) However, they had sharply different perceptions on who prevailed with regard to EchoStar. The Ninth Circuit ruled that EchoStar did not prevail on a practical level: the focus of its suit—a December 2000 Internet posting alleged to have compromised security—was rejected by the jury (with NDS prevailing on this primary claim). EchoStar, instead, only recovered $45.69 (which was trebled), $1,500 in statutory damages, $284.94 in restitution, and a permanent injunction against NDS for a technical violation of the Communications Act and the California Penal Code (conduct not really disputed by NDS)—hardly a significant victory to the reviewing court. NDS, in turning away the intercept claims alleged to be worth billions, was the prevailing party in the view of the appellate court. NDS requested total fees of $23,914,983.74, a figure that Judge Carter indicated should be reduced by 25% down to $17,936,237.80 no matter what the eventual award (a discretionary reduction found reasonable by the Ninth Circuit). So, in the end, NDS got about $18 million in fees and EchoStar got nada in a dramatic swing on appeal.

     For more information on this decision, see Alison Frankel’s August 12, 2010 post at Law.com, which also contains a link to the Ninth Circuit’s memorandum decision.

Discovery Sanctions: $2,500 Sanctions Award Reversed Because Nothing Showed Attorney Advised Client’s Failure To Appear At Deposition

Second District, Division 8 Believes Attorney Was Blameless Under the Circumstances.

     In Scarola v. Dedicated Talent Agency (Pettigrew), Case No. B220482 (2d Dist., Div. 8 August 13, 2010) (unpublished), attorney for an apparently uncooperative cross-complainant was sanctioned $2,500 after her client failed to appear for a deposition in New York (even though defense counsel asked for $18,000, with the sanctions also jointly imposed against cross-complainant). Attorney appealed, and won a reversal.

     The basis for sanctions was misuse of the discovery process under Code of Civil Procedure section 2023.030(a). However, under this ground, an attorney may only be penalized for advising disobedience, with the burden of proving that no such advice was given resting with the attorney. (Corns v. Miller, 181 Cal.App.3d 195, 200-201 (1986).) In fact, sanctions have been reversed in other cases where the facts demonstrated that the attorney tried to convince the client to submit to a particular discovery process. (See, e.g., Ghanooni v. Super Shuttle, 20 Cal.App.4^th 256, 261 (1993).) If the evidence shows an attorney is blameless, it is an abuse of discretion to impose sanctions against counsel. (Weinkauf v. Superior Court, 64 Cal.2d 662, 665 (1966).)

     The circumstances in Scarola showed that cross-complainant’s counsel did try to get her client to appear for the deposition in New York, and that defense counsel appeared to travel out for the deposition even though being warned that the client would not be present for a deposition. Obviously, the appellate panel believed that attorney was blameless, expressing the view that defense counsel should have promptly sought a protective order that the deposition be held in Los Angeles (where defense counsel practiced) or that cross-complainant pay defense counsel’s fees and expenses for traveling to New York. (Code Civ. Proc., § 2019.030(a), (b); Snyder v. Superior Court, 9 Cal.App.3d 579, 586 (1970) [statutory predecessor to § 2010(b)].) Also, the reviewing panel did not believe that attorney had to inform opposing counsel of any client control problems (although it was obvious that there were problems), because to do so would likely breach a lawyer’s ethical duty to keep confidential any communications with a client. (Slip Op., p. 10.)

     The end result was a reversal of the sanctions against attorney, although the sanctions remained against cross-complainant (who apparently did not appeal the order).

Insurance And Costs: Substantial Brandt Recovery Sustained And Routine Costs Award Reversed/Affirmed

First District, Division 4 Discusses Brandt And Routine Costs In Catholic Priest Molestation Insurance Dispute.

     Howard v. American National Fire Ins. Co., Case Nos. A121569 & A123187 (1^st Dist., Div. 4 Aug. 11, 2010) (certified for publication) is a virtual primer for insurance litigators, involving substantial upholding of a substantial bench trial award against an insurer for bad faith failure to defend, settle and indemnify a case involving an insured bishop who retained a priest in a Catholic diocese accused of molesting a third party plaintiff. However, the decision also discusses Brandt recovery of fees and some postjudgment routine cost awards. That is where we pick up.

     Brandt [one of our Leading Cases] is a California Supreme Court case holding that an insured can recovery attorney’s fees in a bad faith insurance action as long as the fees were incurred to recover policy benefits. (Actually, the fees are recovered as damages in those situations.) Here, the trial court reviewed detailed time records, concluded that 57.44% of the attorneys’ time was attributable to insurance policy contract claims, and awarded half because the contingency fee contract with plaintiffs promised 50% of any total recovery to the attorneys. This came to $661,719.97 as fee “damages.” Although carrier challenged the computation on appeal, the First District, Division 4 found no error, determining the court had properly allocated out non-contract work and followed the post-Brandt methodology for calculation approved in Cassim v. Allstate Ins. Co., 33 Cal.4^th 780, 811-812 (2004).

     That brought the appellate court to some attacks of the total costs awarded to plaintiffs in the amount of $93,827.07. The first item challenged was $46,542.32 for plaintiffs’ fees paid to a private JAMS judge, an item that had to be reversed based upon the parties’ agreement to split the cost of the JAMS judge equally (“divided and borne” language in their agreement). Deposition costs of $44,588.78 were sustained, because all of the depositions were intertwined in the claims against the defendant insurer and no authority supported allocating costs to a codefendant for whom litigation remained pending. The trial court correctly did not award $9,400 in expert witness expenses, because the witness was not a court-ordered witness. Finally, $2,368 in attorney meals for an out-of-town attorney attending a deposition was a properly allowable cost in the discretion of the trial judge. (Code Civ. Proc., § 1033.5(a)(3).) The Howard court refused to interpret Ladas v. California State Automobile Assn., 19 Cal.App.4^th 761, 774-775 (1993) as establishing an absolute rule prohibiting reimbursement for attorney meal expenses “under any and all circumstances,” with meal expenses being “reasonably necessary” for out-of-state counsel who attends a local deposition if the lower court finds they are appropriate.

Requests for Admission: Only Party, Not Party’s Attorney, Can Be Exposed To Costs Of Proof Fee Order

Also, Second District, Division 3 Decides Fee Award Not Tethered to Actual Costs of Proof of Denied Admissions.

     Here is a “biggie” under our category “Requests for Admissions,” a just published Second District, Division 3 decision—Estate of Manuel, Case Nos. B210701/B215380 (2d Dist., Div. 3) (Aug. 10, 2010) (certified for partial publication)—authored by Acting Presiding Justice Croskey on behalf of a 3-0 panel. There, parties and their attorneys, on an allocated basis, were held liable for all of the attorney’s fees of an opponent incurred after the date of the denial of certain RFAs, aggregating a fee award of $52,779.50. Costs of proof award reversed for two reasons.

     The first part of the decision holds that costs of proof fees under Code of Civil Procedure section 2033.420(a), which allows an award of attorney’s fees for failure to admit the truth of a request for admission (subject to certain exceptions), can only be imposed against parties, not their attorneys. This result was dictated by the unambiguous language of section 2033.420(a), as well as federal cases that had reached the same result under Federal Rules of Civil Procedure, rule 37(c) (the federal civil rule analog provision).

     The second part of Estate of Manuel, though unpublished, found that the trial court overdid it with respect to the award of fees. After all, there was reasonable basis for the litigant to deny requests on the testamentary capacity issue, and fees devoted to mediation efforts had no nexus to disputed facts at issue in the RFAs. A remand was appropriate, directed to limit the costs of proof award to the actual costs of proof.

Sanctions: Longstanding Family Battle Draws Unusual “Order Of Shanda” As Sanctions By Bankruptcy Judge

Use of Yiddish Word in Order Found Appropriate for Family-Based Tragedy.

     Now we describe one of the most unusual (and amusing, but candid) sanctions orders entered by Judge Cristol in In re Herskowitz, 166 B.R. 764 (S.D. Fla. 1994).

     In this case, the judge entered an “Order of Shanda” that was inspired out of these events. Susan Chaney, debtor’s sister, asked for an award of sanctions against her sister for bringing a meritless motion for continuance of a hearing that followed in a case where the sisters and two other relatives had been engaged in 17 years of bitterly contested litigation. Debtor’s main basis for a continuance was that she had a cold, a ground found wanting by the judge after an exhaustive search of legal authority. The jurist noted that debtor Judith Herskowitz had a history of wanting to go forward with scheduled matters. However, Judge Cristol also observed that the litigation had been bitter between family members and that it was likely both sisters were entrenched in the battle, because it usually takes “two to tango.”

     The judge denied the continuance request and granted the sanctions request. With respect to sanctions, he ordered “that Ms. Herskowitz shall obtain and mail to Ms. Chaney, at least five days before Susan Chaney’s next birthday, a birthday card which contains the words “Happy Birthday Sister” and the signature of Ms. Herskowitz. The card shall not contain any negative, inflammatory or unkind matters but may contain an overture to family reconciliation and settlement.”

     As the judge explained in a footnote, “shanda” is Yiddish for shame. He noted that Yiddish was supplanting Latin as the spice of American legal argot, with “shanda” being entirely descriptive of what was at play in a controversy he dubbed as tragic in nature.

Deadlines, Special Fee-Shifting Statutes And In The News: Good Good Good Vibrations on Appeals—Depends on Your Point of View . . .

Sanctuary Records Group Seeks Appellate Attorney’s Fees After Defensing Right Of Publicity/Lanham Act Claims Against Beach Boys Writer Mike Love

Katy Perry Create a Stir With Ending Lines in Hit “California Gurls.”

     Sanctuary Records Group Ltd. defensed Mike Love, one of the writers for “The Beach Boys,” in a lawsuit alleging right of publicity/Lanham Act claims involving distribution of Mail on Sunday and Good Vibrations in the United Kingdom and Ireland.

     Sanctuary was also awarded attorney’s fees of $149,264.75 under California’s right of publicity fee shifting statute (Civ. Code, § 3344(a)) and the Lanham Act (15 U.S.C. § 1117(a), which allows a fee award where the defendant acted maliciously, fraudulently, deliberately, or willfully). Love appealed the adverse rulings to the Ninth Circuit, which affirmed in a recent published decision earlier this year.

     Now, Sanctuary has sought to recoup attorney’s fees for their successful work to the tune of $67,495. The successful appellate work for Sanctuary was performed by

     Gregory J. Aldisert and Gregory S. Gabriel of Kinsella Weitzman Iser Kump & Aldisert LLP.

     This appellate fee motion does demonstrate the differences between how fees for appellate work are claimed at California state and federal court levels. At the state level, winning appellate attorneys having a basis for fee entitlement generally have 40 days after the remittitur is issued to seek fees, with the prevailing practice to seek them before the trial court judge assigned to the case. (See Cal. Rules of Court, rules 3.1702(c)(1), 8.278(c)(1).) However, winning appellate attorneys in cases decided by the Ninth Circuit generally have 14 days after the deadline for filing a petition for rehearing (which is 14 days from issuance of the appellate court opinion) in which to file a motion to recover appellate attorney’s fees. (9^th Cir. Rule 39-1.6(a); Fed. R. App. P. 40(a)(1).) Also, the appeal fee request is heard by the Ninth Circuit itself, although certain parties can ask to have the matter transferred for consideration by the district judge or ask an appellate commissioner to make a recommendation/issue an order about the amount of fees to be awarded. (9^th Cir. Rules 39-1.8, 1.9.)

     In the News Extra: Mike Love apparently enjoys singer Katy Perry, who has a hit single in California Gurls. However, some controversy has arisen from the fact, at the end of the song, Snoop Dogg says “I wish you all could be California Gurls” (which contrasts with the line “I wish they all could be California Girls” from The Beach Boys’ California Girls legendary hit of 1965).

     Hat tip to our friend/appellate specialist Ben Shatz at Manatt Phelps for providing us a copy of Sanctuary’s appellate fee motion in Love v. Wilson, Case No. CV-05-97798-ABC (C.D. Cal.), Case Nos. 07-56008/07-56568 (9^th Cir.).

Prevailing Party And Costs: Voluntary Dismissal Of Prior Action Did Not Give Rise To Fees, But Did Give Rise To Costs, When There Was On-Going Litigation Between Parties

Second District, Division Four Reversed Costs Denial, Affirmed Fees Denial.

     The next case shows that courts pragmatically gauge prevailing party status when in comes to fees and costs awards—costs may be mandatory upon a voluntary dismissal, but not necessarily an award of attorney’s fees in the same circumstance (with the fees award being the much bigger, but more elusive prize).  M&M Media Group, Inc. v. Regency Outdoor Advertising,, Inc., Case No. B217015 (2d Dist., Div. 4 Aug. 6, 2010) (unpublished) does illustrate the difference between prevailing party status for costs and fees, with different standards very much in play.

Above:  A Regency billboard on top of the Whisky A Go Go.

Source:  http://www.you-are-here.com/sunset/gogo.jpg

Prevailing Party: Details of Plaintiff/Defendant Contract Litigation Insurance

 

Sonoma Risk Insurance Agency Offers New Products to Manage Litigation Risks.

     In our August 3, 2010 post, we discussed a recent article written by Kevin B. Martin in the August 2010 edition of The Orange County Lawyer. Mr. Martin is CEO of Sonoma Risk Insurance Agency, which offers contract litigation insurance underwritten by individual member companies of Zurich in North America. The insurance, subject to certain terms and exclusions, will cover court-ordered attorney's fees in contract cases depending on the amount of coverage purchased by a particular plaintiff or defendant. (Of course, these contract cases will be ones with contractual fee clauses.)

     Co-contributors Marc and Mike were intrigued and met recently with Mr. Martin, who was formerly a partner with Bingham McCutchen. Here are the highlights of the contract litigation insurance policies offered through Sonoma Risk:

· Plaintiff Contract Litigation Insurance (PCLI) or Defendant Contract Litigation Insurance (DCLI) are designed to insure plaintiffs or defendants in contractual lawsuits against the risk of paying their adversaries' attorney's fees if unsuccessful in prosecuting or defending against breach of contract claims.

· The insurance policies must be purchased within 60 days of filing of a contract-based complaint (for PCLI) or within 60 days of service of a contract-based action (for DCLI).

· The insurance policies will pay whatever a court adjudicates to be reasonable attorney's fees after a merit-based "prevailing party" adjudication in a contract action. (This occurs even if there are tort or statutory claims involved, as long as the court finds they were intertwined with the contract claims for purposes of a fees award.)

· The insurance policies are subject to four exclusions and non-coverage caveats: (1) "bad boy" fraud; (2) no fees awarded if there is a resolution other than a merits-based prevailing party determination; (3) no fees awarded for post-rejection fees incurred after rejection of a Code of Civil Procedure section 998 offer (although pre-offer fees are covered); and (4) fees awarded as discovery sanctions or bad faith conduct sanctions.

· The carrier reserves the right to appoint, at its own expense, counsel to oppose a fee petition or represent the client in an appeal of a fees award.

· The insurance will follow if the plaintiff is compelled to arbitration by defendant; however, the insurance coverage will not remain if plaintiff compels arbitration or if the defendant under a DCLI compels arbitration.

     These insurance products are intriguing, given that 90% of lawyers in a recent survey said they would advise clients of insurance that can minimize their financial risk in litigation and 82% of clients surveyed indicated that they expect their attorneys to advise them of insurance that can minimize their financial risk in litigation. (Also, keep in mind that Bureau of Justice statistics show that defendants lose 2 out of 3 contract cases at trial.)

     Mr. Martin can be reached at 310.954.1522 ext. 224 or at kmartin@sonomarisk.com, for those readers who are interested. You can contact Sonoma Risk for the premium structure --it seems to be reasonable in nature.

Settlement Stipulation: Stipulation To Arbitrate Clearly Waived Right To Appeal Arbitrator’s Award

 

Fourth District, Division 3 Honors Stipulation By Its Terms on Forfeiture of Appellate Rights.

     Appellate courts will enforce the bargains struck between parties, even when they involve waivers of fundamental rights (such as the right to appeal). That happened in the next case we discuss.

     In Fridman v. Beach Crest Villas Homeowners Assn., Case G042757 (4^th Dist., Div. 3 August 4, 2010) (unpublished), the parties stipulated to have their dispute resolved through binding arbitration. As part of the stipulation, they also agreed “[a]ll rights to jury trial, the right to trial de novo, and appeal are waived” and included a specific reference to California Rules of Court, rule 3.817(c), which states that a judgment entered under this rule is not subject to appeal. The trial court found in favor of homeowner, awarding him $100 in emotional distress damages and then awarding him $110,000 in attorney’s fees—all arising from a dispute about the installation of an air conditioning unit. HOA appealed.

     Justice Fybel, on behalf of a 3-0 panel, dismissed the appeal. The stipulation to arbitrate was clear and unequivocal in waiving appellate rights, so there was little to do but enforce the parties’ bargain. (Pratt v. Gursey, Schneider & Co., 80 Cal.App.4^th 1105, 1107 (2000).) He has a scholarly discussion of cases dealing with contractual waivers of appellate rights, but found this waiver was clear and express.

Off Topic: Answers To Actors Portraying ABA’s Top 25 Greatest Fictional Lawyers

Answers from August 3, 2010 Post.

Here are the actors portraying the ABA’s 25 greatest fictional lawyers as listed in the August 2010 edition of the ABA Journal:

1. Frank Galvin – Paul Newman.

2. Paul Biegler – Jimmy Stewart. Side note – the prosecutor in Anatomy of a Murder was none other than George C. Scott.

3. Perry Mason – Raymond Burr.

4. Charles W. Kingsfield Jr. – John Houseman.

5. Henry Drummond – Spencer Tracy.

6. Lawrence Preston – E.G. Marshall.

7. Jack McCoy – Sam Waterston.

8. Horace Rumpole – Leo McKern.

9. Chief Judge Dan Haywood – Spencer Tracy.

10. Sir Wilfrid Robarts – Charles Laughton.

11. Alan Shore – James Spader.

12. Vincent “Vinny” Gambini – Joe Pesci.

13. Lt. Daniel Kaffee – Tom Cruise.

14. Arnie Becker – Corbin Bernsen.

15. Arthur Kirkland – Al Pacino.

16. Hans Rolfe – Maximilian Schell.

17. Mitchell Stephens – Ian Holm.

18. Ally McBeal—Calista Flockhart.

19. Sandy Stern – Raul Julia.

20. Patty Hewes – Glenn Close.

21. Michael Clayton – George Clooney.

22. Jake Brigance – Matthew McConaughey.

23. Rusty Sabich – Harrison Ford.

24. Forrest Bedford – Sam Waterston.

25. Jonathan Wilk – Orson Welles.

Notables: 

     Rudy Baylor – Matt Damon (The Rainmaker); Andrew Beckett – Tom Hanks (Philadelphia); Denny Crane – William Shatner(Boston Legal); Eddie Dodd – James Woods (True Believer); Alicia Florrick – Julianna Margulies (The Good Wife); Owen Marshall – Arthur Hill (Owen Marshall: Counselor at Law); Ben Matlock – Andy Griffith (Matlock); Portia – Lizzy Carter (2009); Lynn Collins (2004); Ngarimu Daniels (2002); Andree Debar (1953); Sybil Thorndike (1922); Nellie Huton Briton (1916); Lois Weber (1914); Florence La Badie (1912); Julia Swayne Gordon (1908) (The Merchant of Venice); Ned Racine – William Hurt (Body Heat); Adam Schiff – Steven Hill (Law & Order); and David Wilson – Ken Howard (1984 TV); Theodore Roberts (1916 movie) (The Tragedy of Pudd’nhead Wilson).

     To the above, Mike and Marc would add: Arthur Banister – Everett Sloane (The Lady from Shanghai); Clinton Judd  -  Carl Betz (Judd for the Defense); and Charley Malloy - Rod Steiger (On the Waterfront).

     Greatest in pro per:  Hans Beckert – Peter Lorre (M).

 

Homeowners Associations And Section 1717: Homeowner Demonstrating Inapplicability of CC&Rs Entitled To Fee Award Under Civil Code Section 1717

Reciprocity Principle Underlying Section 1717 Required Reversal of Fee Denial.

     Here is a decision emphasizing that Civil Code section 1717 reciprocity principles will prevail, even where a successful litigant shows that the contract (in this case, CC&Rs) was inapplicable. The fees clause had to be construed as mutual in nature. The lower court did not do so, but that is why reviewing courts are around—as you readers shall soon see.

     In Discovery Bay Property Owners Assn., Inc. v. DiFate, Sr., Case No. A127505 (1^st Dist., Div. 2 August 4, 2010) (unpublished), homeowner beat a HOA challenge to his installation of multiple curb cuts for additional driveways through the sidewalk area in front of his lot. The CC&Rs had a fees clause pertaining to enforcement of any recorded restrictions. Homeowner then sought to recover $2,057.89 in costs and $46,833.23 in attorney’s fees (under Civil Code section 1717 and Civil Code section 1354). HOA did not oppose the cost request and did not argue that the fee request was unreasonable. However, HOA argued fees were inappropriate because the trial court found the CC&Rs inapplicable in resolving the dispute. The trial court said “no” to the homeowner’s fee request.

     On appeal, the Court of Appeal said “yes” to the homeowner’s fee request.

     Boiled down to its essence, the appellate panel found that the fee denial would make a mockery of section 1717’s overarching reciprocity principle. After all, section 1717 allows recovery of fees in a contract fee dispute with a fees clause where the litigant proves the contract is invalid, inapplicable, unenforceable, or nonexistent. (Santisas v. Goodin, 17 Cal.4^th 599, 611 (1998) [one of our Leading Cases].) Because CC&Rs are the equivalent of contracts, the reciprocity rule is triggered under section 1717 even though the prevailing party obtains no affirmative relief. (14859 Moorpark Homeowner’s Assn. v. VRT Corp., 63 Cal.App.4^th 1396, 1410 (1998); Foothill Properties v. Lyon/Copley Corona Associates, 46 Cal.App.4^th 1542, 1555 (1996).) Because HOA would have been entitled to fees under section 1717 had it won, the same goes for winning homeowner.

     Although a reversal was required to consider fee entitlement on remand, the appellate panel did address the unclean hands argument by HOA—that homeowner’s strident litigation conduct required an outright denial. Not so. Litigation conduct cannot be used to determine who prevailed, but is probative on the issue of the reasonable amount of fees to be awarded. (EnPalm, LLC v. Teitler, 162 Cal.App.4^th 770, 775-778 (2008).)

     End result: remand to determine the reasonable fees to be awarded homeowner.

Family Law: Well-Heeled Ex-Wife Does Not Recoup Requested $692,000 In Attorney’s Fees For Document Sealing Battles In Marital Dispute

 

Second District, Division 8 Affirms Trial Court’s Conclusion That Fees Not Justified Under “Needs Based” Family Code Section 2030.

     Ex-wife, whose resources were in the eight figures (given that ex-husband was wealthy based on his ownership interest in a private held Delaware corporation), sought to recoup $692,000 in attorney’s fees for efforts in attempting to unseal some confidential documents from both ex-husband and the corporation. The primary basis for the request was the “needs based” fee shifting statute codified at Family Code section 2030. The trial court denied the fee request, finding (1) ex-wife did not need a fee award given that her net worth was well into eight figures; (2) it did not matter than ex-husband was wealthier than ex-wife; (3) the prior sealing of corporate documents had not hampered ex-wife’s ability to actually use them in the dissolution proceeding; (4) ex-wife’s position in the marital proceedings was not compromised one iota; and (5) the sealing battles were not “related” to the dissolution proceeding under section 2030.

    

                    Above:  (1) seals; (2) Great Seal; (3) ceiling.

Although wife appealed the fee denial, the Court of Appeal affirmed in Marriage of Armour and Ritter, Case No. B218221 (2d Dist., Div. 8 August 3, 2010) (unpublished).

     The appellate panel agreed that the sealing battles were not “related” (a determination reviewed under the substantial evidence test) because they did not impact ex-wife’s ability to protect her interests in the marital proceedings. (In re Marriage of Seaman & Menjou, 1 Cal.App.4^th 1489, 1496-1497 (1991) [dealing with the predecessor statute to section 2030].) Furthermore, the 2-to-1 difference in net worth between ex-husband and ex-wife, alone, did not justify a fee award given that ex-wife did have parity given her substantial net worth. (Alan S. v. Superior Court, 172 Cal.App.4^th 238, 251-252 (2009) [purpose of section 2030 is parity, not redistribution of money from the greater income party to the lesser income party].) Finally, the reviewing court rejected the notion that she vindicated some private attorney general public right, finding she cited no authority for engrafting Code of Civil Procedure section 1021.5 factors into the fee parity decision-making process under section 2030.

     BLOG UNDERVIEW—Bad pun coming (word play on Armour)—ex-husband was obviously no longer an “amour” but did avoid fee exposure in the appeal by the disgruntled ex-wife.

Costs and 998 Expert Witness Fees: Court Of Appeal Affirms Most Of Trial Court Decision Awarding Routine Costs, Denying Expert Witness Fees, and Denying Attorney’s Fees

First District, Division 5, Except for a $49 Adjustment, Tells Everyone to Go Home But For a Minor $1,000 Appellate Sanctions.

     Salvio Street, LLC v. Lee, Case Nos. A122408/A123080 (1^st Dist., Div. 5 July 29, 2010) (unpublished) is an interesting case, not just for the legal issues, but because it demonstrates how pragmatic appellate courts are when reviewing costs/fees issues after years and years of litigation. Yep, you guessed it—they affirm (with minor adjustments), reminding litigants that enough is enough. Or, as our post suggests, time for everyone to go home (if any house is remaining after the expenditure of costs and fees)!

     In this “long-running saga” over the ownership of certain real property in the Bernal Heights neighborhood of San Francisco (the appellate court’s words, not ours), Salvio Street sought to quiet title to the property, but an attorney representing two parties claiming an ownership in the property (Lien and Yen) actually claimed his own separate interest in the property based on a fee agreement with his two clients. Salvio Street won, with attorney found to have no interest in the property. Salvio Street was awarded $8,190.05 in costs (out of a requested $13,183.97), but was denied any award of attorney’s fees (out of a requested $176,470.75). [Salvio Street relied on the fees clause in the Woo-Lien-Yen Purchase Agreement, which was involved in a prior appeal in the long-running saga.] Salvio Street and attorney Lee both appealed.

 

                                                                                                       Sources:  Yahoo Maps – Satellite view (left); Wikipedia (right)

Off Topic: Can You Name the ABA’s Top 25 Greatest Fictional Lawyers?

A Fun One to Give a Try.

     In the August 2010 edition of the ABA Journal, there is an article ranking the 25 greatest fictional lawyers. Excepted from the list is the likely most famous of all, Atticus Finch (from To Kill a Mockingbird) as portrayed by Gregory Peck. Now, we give you the ABA’s list of 25 greatest fictional lawyers. Can you name the actor who played him or her? Give it a try; answers will be posted tomorrow.

1. Frank Galvin from The Verdict; creator: Barry Reed.

2. Paul Biegler from Anatomy of a Murder; creator: John D. Voelker.

3. Perry Mason from Perry Mason; creator: Erle Stanley Gardner.

4. Charles W. Kingsfield Jr. from The Paper Chase; creator: John Jay Osborn Jr.

5. Henry Drummond from Inherit the Wind; creators: Jerome Lawrence/Robert E. Lee.

6. Lawrence Preston from The Defenders; creator: Reginald Rose.

7. Jack McCoy from Law & Order; creator: Dick Wolf.

8. Horace Rumpole from Rumpole of the Bailey; creator: John Mortimer.

9. Chief Judge Dan Haywood from Judgment at Nuremberg; creator: Abby Mann.

10. Sir Wilfrid Robarts from Witness for the Prosecution; creator: Agatha Christie.

11. Alan Shore from Boston Legal; creator: David E. Kelley.

12. Vincent “Vinny” Gambini from My Cousin Vinny; creator: Dale Launer.

13. Lt. Daniel Kaffee from A Few Good Men; creator: Aaron Sorkin.

14. Arnie Becker from L.A. Law; creators: Steven Bochco/Terry Louise Fisher.

15. Arthur Kirkland from And Justice for All; creators: Valerie Curtin/Barry Levinson.

16. Hans Rolfe from Judgment at Nuremberg; creator: Abby Mann.

17. Mitchell Stephens from The Sweet Hereafter; creator: Russell Banks.

18. Ally McBeal from Ally McBeal; creator: David E. Kelley.

19. Sandy Stern from Presumed Innocent; creator: Scott Turow.

20. Patty Hewes from Damages; creators: Glenn Kessler/Todd A. Kessler/Daniel Zelman.

21. Michael Clayton from Michael Clayton; creator: Tony Gilroy.

22. Jake Brigance from A Time to Kill; creator: John Grisham.

23. Rusty Sabich from Presumed Innocent; creator: Scott Turow.

24. Forrest Bedford from I’ll Fly Away; creators: Joshua Brand/John Falsey.

25. Jonathan Wilk from Compulsion; creator: Meyer Levin.

     Among notable characters not quite fitting into the ABA’s Top 25, include Rudy Baylor (The Rainmaker); Andrew Beckett (Philadelphia); Jackie Chiles (Seinfeld); Denny Crane (Boston Legal); Eddie Dodd (True Believer); Alicia Florrick (The Good Wife); Tom Hagen (The Godfather); Owen Marshall (Owen Marshall: Counselor at Law); Ben Matlock (Matlock); John Milton (The Devil’s Advocate);Portia (The Merchant of Venice); Ned Racine (Body Heat); Adam Schiff (Law & Order); and David Wilson (The Tragedy of Pudd’nhead Wilson).

     To the above, Mike and Marc would add: Arthur Banister (The Lady from Shanghai); Clinton Judd (Judd for the Defense); and Charley Malloy (On the Waterfront).

     Greatest in pro per:  Hans Beckert (M).

Prevailing Party: Orange County Lawyer Article Discusses Middle Ground To English And American Rules On Fee Shifting

 

After the Event or Legal Expense Insurance Is the Middle Ground Discussed.

    Kevin Martin, founder and CEO of Sonoma Risk Insurance Agency, has written an interesting article, aptly entitled “Leveling the Playing Field in Contract Disputes,” in the August 2010 edition of The Orange County Lawyer.

     In some statistics directly relevant to this blog, he states that a quick search of reported California cases in the last year shows that more than $14 million have been awarded in the form of “loser pay” fees, with the average award being approximately $300,000. As he observes, serious money—wow (and then some)!

    Mr. Martin then contrasts the English rule (loser pays) with American rule (each side bears its own fees), but indicates that contractual fee shifting provisions often convert the American rule into a loser pays situation. He then argues that there is a middle ground: ATE (After the Event Insurance) or LEI (Legal Expense Insurance) products, which emerged in the English and Welsh insurance markets. According to a recent report from the Manhattan Institute’s Marie Gryphon, ATE insurance is now purchased for three in four civil lawsuits in the British market. Mr. Martin observes that actual experience shows that this type of contract litigation insurance actually deters the filing of frivolous actions.

     Now, he also discusses the fact that equivalent insurance products are available in the United States to cover attorney’s fees awarded against plaintiffs pursuant to “loser pays” provisions. Such insurance can be purchased within 60 day of the commencement of litigation and covers all attorney’s fees imposed under an adverse ruling.

     Interesting option. Mr. Martin did not discuss the carriers offering this insurance or the premium structure for such coverage. If anyone has had experience or has feedback on these features of this insurance, let us know by using the feedback email listed on our home page.

In The News . . . . Treasury Department May Give Write-Off Relief to Gross Contingency Attorneys and Orly Taitz Has A Busy “Birther” Summer

 

$1.6 Billion Tax Write-offs At Issue Over 10 Year Period.

     In Boccardo v. Commissioner, 56 F.3d 1016 (9^th Cir. 1995), the Ninth Circuit Court of Appeals held that lawyers who represent clients in “gross fee” contingency fee cases—those situations where the lawyer pays off all the expenses and the lawyer and client later divide up any gross recovery later—are not extending loans to clients such that litigation costs are deductible as business expenses under Internal Revenue Code section 162(a). The IRS issued a “Field Service Advice” (IRS FSA 442) in 1997 instructing staff members to follow Boccardo only in the Ninth Circuit but disallow deductions in other circuits. Since then, two Tax Court decisions appear to line up with the Ninth Circuit’s view in Boccardo. See, e.g., Pelton & Gunther v. Commissioner, T.C. Memo. 1999-339, Doc. 1999-32749, 1999 TNT 196-58; Baddell v. Commissioner, T.C. Memo. 2000-303, Doc 2000-24769, 2000 TNT 188-8.

     However, there are signs that the U.S. Department of Treasury may soon rule that gross contingency attorneys may be getting deductions in all circuits for fronting expenses in these types of contingency fee cases, with the estimated costs of the write-offs at almost $1.6 billion over a 10-year period. Congressional legislation in both 2008 and 2009 stalled on this front. Treasury isn’t commenting, at least yet.

      Above:  Sec. of Treasury Dept. Office.  Library of Congress.

     If Internet comments from one website are any indication (see July 14, 2010 post and comments at SayAnythingBlog.com), individuals responding to the possible tax write-offs are somewhat evenly divided, with many individuals expressing the sentiment that contingency attorneys should be able to deduct expenses in the year that they are incurred just like Corporate America or that the current system results in an artificially delayed deduction that is unfair in nature.

     For more on this, see the July 15, 2010 post entitled “Is a Big Tax Break for Plaintiffs’ Lawyers on the Way?” at The Wall Street Journal website. For more information on Boccardo and tips for structuring contingency fee agreements for deductibility purposes, see Robert W. Wood, “Lawyers Who Deduct Client Costs: Revisiting Boccardo,” Tax Notes, June 14, 2010, pp. 1287-1290.

Ms. Taitz Continues to Fight Sanctions from Birther Case.

     In past posts in our “In the News” category, we have reported on the $20,000 sanctions imposed on local attorney Orly Taitz in a “birther” case brought in a Georgia federal court. Ms. Taitz is still fighting the sanctions award. As reported by Martin Wisckol in “The Buzz” (August 2, 2010 The Orange County Register), Ms. Taitz requested Associate Justice Clarence Thomas of the U.S. Supreme Court to stay the fine. This request was summarily dismissed on July 15, 2010, but Ms. Taitz is questioning why the dismissal did not have Justice Thomas’ signature on it. Ms. Taitz apparently has resubmitted the stay request to Associate Justice Samuel Alito. We can only say that the summer is still busy for Ms. Taitz in her continuing battles to demonstrate that President Obama is not a natural-born citizen for presidential qualification purposes.

Special Fee Shifting County Ordinance: County Fee Shifting Ordinance Is Constitutionally Valid

First District, Division 3 Sustains Sonoma County Ordinance in Public Nuisance Action from Constitutional Attack.

     Sonoma County was awarded $17,429.10 in attorney’s fees in a public nuisance action against unsuccessful defendants under Sonoma County Code section 1-7(b), which allows fees to a prevailing party in a public nuisance abatement action as long as fees are capped at the level of reasonable fees incurred by the county in the same action. Losing defendants argued that the county ordinance fee shifting provision was unconstitutional under equal access, due process, and equal protection grounds.

     Defendants lost these constitutional challenges in County of Sonoma v. Brazil, Case No. A122913 (1^st Dist., Div. 3 July 30, 2010) (unpublished).

     In doing so, the Brazil panel observed that courts repeatedly have found no federal or state constitutional infirmity in legislative enactments limiting when and how much compensation an attorney may obtain when he/she represents a client in civil litigation. (Roa v. Lodi Medical Group, Inc., 37 Cal.3d 920, 932 & n.10 (1985); Bernardo v. Planned Parenthood Federation of America, 115 Cal.App.4^th 332, 360-367 (2004).)