Lodestar/Special Fee Shifting Statute: Lodestar, Not Cost-Plus Method, Governs Fee Recovery Under Special Red Light Abatement Fee Shifting Statute

 

First District, Division 4 Finds McCullough Reasoning Inapt; Also Refuses to Upset Cost Award to City in Separate Appeal.

     In City of Santa Rosa v. Patel, Case Nos. A124199/A124452 (1st Dist., Div. 4 Dec. 21, 2010) (certified for publication), City of Santa Rosa prevailed in a red light abatement action and was awarded $152,506.17 based on a “cost-plus” method to calculate fees under Civil Code section 3496(b), which provides for recovery fees in a nuisance abatement action in which a governmental agency seeks to enjoin the use of a building or place being used for prostitution. City had sought recovery of $274,857.25 under the lodestar method.

     City’s appeal was successful.

     The lower court should have applied the lodestar method rather than the “cost-plus” method under numerous cases, since section 3496(b) has no express directive otherwise. It erred in relying upon inapt reasoning from City of Oakland v. McCullough, 46 Cal.App.4th 1, 6 (1996). The matter was remanded for a recalculation of City’s fees using the lodestar method.

     A companion appeal involved defendants’ challenge to an award of routine costs to City as well as $77,710.22 in demolition costs. In City of Santa Rosa v. Patel, Case No. A122961 (1st Dist., Div. 4 Dec. 21, 2010) (unpublished), the appellate court determined that defendants’ failure to file a motion to tax costs waived the right to object to the cost award on appeal. (Douglas v. Willis, 27 Cal.App.4th 287, 289-290 (1994).)