Special Fee Shifting Statute/Equity: Conditioning Leave To File Cross-Complaint Upon Payment Of $80,000 In Fees To Other Side Was No Go

 

Condition Was Too Much of a Sanction, Because Fees Not Causally Related to Cross-Complaint Filing.

     In a convoluted fee dispute between former client and attorney, the trial court granted attorney leave to file a cross-complaint, but conditioned on attorney paying client some $80,000 to compensate her for attorney’s fees she incurred in preparing for an arbitration hearing aborted in part due to attorney’s actions.

     Attorney appealed this “sanctions” order in Mitzner v. Fox, Case No. C061263 (3d Dist. July 19, 2011) (unpublished).

     Care to hazard a guess on the result? If you said reversal, you won!

     Code of Civil Procedure section 426.50 does authorize the trial court to grant leave to file a cross-complaint upon “such terms as may be just to the parties” as long as the requesting party acted in good faith. However, nothing in the statute or legislative comments allowed the court the authority to impose a fee “sanction” for conduct unrelated to any injustice that arose from the filing of the cross-complaint, which is exactly what the lower court did here.