Lots Of Fee Decisions On Variant Issues Come Out On June 21, 2011

 

Choice of Law--California Law Applies Across the Board If It Is the Governing Choice of Law on Fee Issues.

     In our prior posts of June 11, 2008 and January 21, 2010, we discussed decisions indicating that Civil Code section 1717’s reciprocity principle is a fundamental California interest trumping unilateral fee clauses governed by other state laws that do not allow for reciprocity in California-venued actions. Aronson v. Advanced Cell Technology, Case No. A129336 (1st Dist., Div. 4 June 21, 2011) (certified for publication) contained another twist in this area: a trial court determined that a Massachusetts contractual fees clause that was unilateral had to be interpreted as reciprocal based on Civil Code section 1717 in a California lawsuit suing on the contract involving the Massachusetts fee provision. However, the lower court also determined that the plaintiff’s pre-trial dismissal prevented an award of fees under Santisas, which denies fees in a case where there is a voluntarily dismissal of a claim giving rise to fees under section 1717. On appeal, defendant tried to get an overturn of the fee denial (which involved a $645,542.40 request), but was rebuffed. Defendant discordantly argued that while California law governed the reciprocity impact of the clause, the pre-trial dismissal prevailing party analysis should be governed by Massachusetts law allowing for recovery despite the dismissal. Nope--the same law applies to the variant fee issues. “[O]nce a court concludes that it will apply a California statute to determine whether to award attorney fees, a determination of whether a party is a prevailing party as defined by that same statute is not a separate issue to be analyzed pursuant to Nedlloyd.”

Family Law--Trial Court’s Failure to Rule On Needs-Based Request Was An Abuse of Discretion Where No Complete Absence of Proof.

     A family law judge’s denial of needs-based fees to ex-wife was reversed as an abuse of discretion in In re Marriage of Kostandy, Case No. B225582 (2d Dist., Div. 1 June 21, 2011) (unpublished). The reason for the reversal is that ex-wife had introduced evidence on some of the needs-based factors, with the lower court erroneously indicating there was a complete absence of proof when there wasn’t. On remand, a decision had to be made on the fee request.

Private Attorney General Statute--Refusal to Grant Fee Award to Plaintiff Prevailing in Height Restriction Ordinance Win Overturned on Appeal.

     Plaintiff, in Save Arden-Oaks v. Sacramento County Bd. of Zoning Appeals, Case No. C059387 (3d Dist. June 21, 2011) (unpublished), successfully enforced local zoning ordinances limiting residential building heights for the Arden Oaks area. However, the trial court denied plaintiff any fees under Code of Civil Procedure section 1021.5. This fee denial was reversed by the Third District, ruling in the process that the lower court misanalyzed the public benefit and financial burden elements of California’s private attorney general statute. In short, the zoning height restriction interpretation from the lower court protected the Arden Oaks neighborhood into the future (impacting the entire neighborhood, both present and future residents)--a clear public benefit. Also, plaintiff’s nonpecuniary motives were irrelevant and it did not have to produce precise evidence about the financial burden incurred--meaning the third element was satisfied in this one.

Reasonableness of Fees--Defense Tenacity in Litigating Justified $106,000 Fee Award In $115,000 Promissory Note Collection Action.

     Finally, the Fifth District in Salwasser v. Salwasser, Case No. F060867 (5th Dist. June 21, 2011) (unpublished) reminded us that litigation tenacity is a factor that can be weighed as far as determining the reasonableness of a fee award under Civil Code section 1717. It affirmed a $106,480 fee award (out of a requested $116,445) in a promissory note collection case involving a principal amount of $115,000. The reason? The defense’s litigation tenaciously, driving up the costs, was a factor properly weighted in awarding fees that were almost as much as the amount at stake in the entire controversy. (Peak-Las Positas Partners v. Bollag, 172 Cal.App.4th 101, 114 (2009).)