CALIFORNIA ATTORNEY'S FEES

Probate: Trustee Who Was Not Removed And Found To Have Acted In Good Faith, Albeit Surcharged For Some Claimed Expenses, Was Allowed Some Fee Recovery

 

Suing Beneficiary Not Entitled to Fee Recovery Given Trustee’s Actions Were Found to Not To Be in Bad Faith.

     Lowe v. Holk, Case No. E053071 (4th Dist., Div. 2 Apr. 26, 2012) (unpublished) involved a fight between trustee son and beneficiary daughter over certain assets of father and trustee son’s administration of the trust estate. Beneficiary daughter was denied certain surcharge requests for attorney’s fees incurred by trustee son that were charged to the trust as well as daughter was denied her request for reimbursement of fees.

     Historic American Buildings Survey.  Alex Bush, photographer.  1937.  Alabama.  Library of Congress.

     Those determinations were affirmed on appeal, contrary to daughter’s challenges.

     With respect to her claim that certain fees incurred by son should not be paid by the trust, the appellate court found no abuse of discretion in allowing him some fee recovery given that the probate court concluded the son acted in good faith and denied daughter’s request to remove him as trustee. Son was surcharged about $141,657.58 in certain expenses, but he did mainly prevail on the removal request and gained a finding that he acted in good faith--good enough to gain affirmance under the deferential abuse of discretion standard of review.

     Beneficiaries, generally, have to bear their own attorney’s fees in probate proceedings. However, there is an exception under Probate Code section 17211(b) in situations where the trustee’s opposition to an accounting challenge is found to be unreasonable and made in bad faith. The finding that trustee acted in good faith was the end of the story, bolstered by his actions in delaying to see if the depressed real estate market would improve only to liquidate when it was clear that the market was flaccid.

Private Attorney General/Insurance/Requests For Admissions: Insured Prevailing In Auto Insurer Action Properly Denied Fees Where No Large Class Of People Benefited And Plaintiff Failed To Allocate Fees Between Policy Benefit Work/Work Incurred In Proving

 

Lack of Allocation Was Fatal for Brandt and RFA Issues.

     Insured prevailed in a suit against auto insurer for making repairs rather than declaring the car a total loss. However, insured was denied requested fees of $500,000 ($250,000 plus a 2 multiplier) even though claiming them under one of three theories: (1) California’s private attorney general statute (CCP § 1021.5); (2) recouping policy benefits under Brandt v. Superior Court, 37 Cal.3d 813, 817 (1985); and (3) fees incurred to prove up facts that were denied by insurer in requests for admissions (CCP § 2033.420).

     The fee denial was affirmed in Benning v. Wawanesa Gen. Ins. Co., Case No. D058442 (4th Dist., Div. 1 Apr. 26, 2012) (unpublished).

     The first ground--CCP § 1021.5--was not satisfied because the insured’s win did not benefit a large class of people or the general public.

     The second ground--Brandt policy benefit fees--failed because insured sought compensation for all work, not making an allocation which was insured’s burden under Cassim, a post-Brandt case clarifying contingency fee recovery in these situations. (The Rutter Group treatise recommends to practitioners that an accounting allocation is necessary to separate true Brandt fees from nonrecoverable bad faith/tort fee work.)

     The third ground--CCP § 2033.420--did not justify fees, again, because of insured’s failure to allocate fees only to the work needed to prove up facts at trial from denied RFAs. Again, the lack of allocation was fatal because the fee request did ask for reimbursement for time occurring well before the RFAs were denied.

     If there is a practice tip emanating from this decision, it is that winning plaintiffs need to allocate time to recoverable tasks when claiming fees under Brandt or the RFA costs-shifting provision.

Special Fee Shifting Statute: Denial Of Attorney’s Fees To City Was Legally Erroneous Under CCP § 1021.7

 

Plaintiff’s Case Was Brought and Prosecuted Without Reasonable Cause, But Remanded So Discretion Could Be Exercised.

Above: The Federal Theatre presents "I want a policeman" by Rufus King & Milton Lazarus. Fastest moving comedy of the season : First time in San Diego. Federal Arts Project.  1936-41.  Library of Congress.

      Code of Civil Procedure section 1021.7 is a special fee-shifting statute that allows a court, in its discretion, to award reasonable attorney’s fees to the defense if an action brought against a peace officer/public entity employing a police officer--arising out of the performance of a peace officer’s duties--is found to have been not filed or maintained in good faith and with reasonable cause.

     After the appellate court directed the dismissal of plaintiff’s remaining claims as time-barred, City requested 1021.7 fees, but the lower court did not grant them.

     That prompted another appeal, with City convincing the appellate court that the action was brought/prosecuted without reasonable cause such that the matter had to be remanded for a true exercise of discretion in McMillin v. City of Foster City, Case No. A132043 (1st Dist., Div. 1 Apr. 25, 2012) (unpublished).

     Although finding that section 1021.7 “has received little judicial attention,” the appellate court found persuasive cases construing similar language in CCP § 1038--permiting a Torts Claim Act defendant to recover fees if the action was not brought “with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint.” Both sections are intended to serve as a substitute for malicious prosecution suits by governmental entities, which have been held to be prohibited by the state Constitution from so suing.

     Here, finding either element as lacking sufficed with respect to City’s burden of proof under section 1021.7. The appellate court found plaintiff’s action to be frivolous because (1) negligent police investigations are protected by the Government Code section 821.6 immunity; (2) no lack of probable cause underlying an arrest occurred due to no arrest and there were facts to support probable cause for an arrest anyway; (3) plaintiff’s nolo plea to a criminal conviction for his conduct showed he was not wrongfully detained in any event; and (4) plaintiff’s claims were untimely based on failing to satisfy the tort claim deadlines predicate to the litigating the claims in court.

     Even though the action was filed without reasonable cause, the matter was still remanded because section 1021.7 is not mandatory such that the lower court had to exercise its discretion on the City’s request.

Family Law: $1,500 Attorney’s Fees Award Under Family Code Section 271 Reversed Because No Prior Notice Given Against Sanctioned Party

 

Sanction Imposed After Oral Request At Hearing Overturned on Appeal.

     In Kleytman v. Pechonkina, Case No. A130779 (1st Dist., Div. 2 Apr. 24, 2012) (unpublished), ex-husband was assessed $1,500 in attorney’s fees as a Family Code section 271 sanction for filing a motion for reconsideration that was denied. Usually, that might not be a problem, but there was a fly in the ointment: the fee request was made orally at a hearing, giving ex-husband no prior notice of what was coming. That, our readers, was a due process violation requiring reversal of the sanctions award.

Section 998: 998 Offer Made Jointly To Husband And Wife In Personal Injury Case Is Valid

 

Second District, Division 3 Follows Division 7’s Barnett Decision.

     In our May 28, 2010 post, we discussed Barnett v. First National Ins. Co. of America, 184 Cal.App.4th 1454 (2010), where the Second District, Division 7 overruled a prior decision and held that a CCP § 998 offer made jointly to a husband and wife in a personal injury case was valid because a cause of action for personal injury is community property and either spouse has the power to accept the offer on behalf of the community.

     We now report that the Second District, Division 3 also validated a similar 998 offer, following Barnett and expressly determining that it was correctly decided. Division 3 did so in Farag v. ArvinMeritor, Inc., Case No. B233137 (2d Dist., Div. 3 Apr. 24, 2012) (certified for publication).

Homeowners Associations: Defendant Beating Plaintiffs Based On Finding No Involvement By A Davis-Stirling Common Interest Development Was Entitled To Attorney’s Fees As Prevailing Party Under Civil Code Section 1354(c)

 

Turner Law Firm Wins Full Attorney’s Fee Request At Trial Court Level.

     We would like to thank and extend kudos to Keith Turner of the Turner Law Firm for winning an interesting attorney’s fees battle under the fee-shifting provision contained in the Davis-Stirling Act (Civ. Code, § 1354(c)).

     His client defendant Eric Yeldell was sued by 48 plaintiff lot owners for violating the building size limitations contained in recorded CC&Rs, premised on the theory that the tract where everyone had property was a “common interest development” under the Davis-Stirling Act, which indeed contains the section 1354(c) fee-shifting provision.  Los Angeles Superior Court case no CASE NB. BC398978, Judge Richard Fruin

     Defendant won the lawsuit by proving that Plaintiffs were not situated in a common interest development such that the Act did not apply.

     When it came time to claim attorney’s fees, Plaintiffs mainly argued that there was no fee entitlement where the Davis-Stirling Act was found inapplicable to the dispute. The defense, on the other hand, argued otherwise by analogy to Civil Code section 1717 reciprocity cases allowing recovery even where a contract is held invalid and Mechanical Wholesale Corp. v. Fuji Bank, Ltd., 42 Cal.App.4th 1647 (1996) (a stop notice case where a winner was entitled to fee recovery under the Civil Code section 3176 fee-shifting provision even though the stop notice claim was invalid, with defendant only needing to defeat the claim for fee entitlement purposes). The analogies were found persuasive by the trial court, which awarded full fees to Mr. Turner’s defendant client.

     Finally, the fee motion came down to whether all 48 individual plaintiffs were at risk for the awarded fees. Yes, they were, said the lower court, given cases indicating that the general presumption is fees are a joint obligation against multiple parties and that plaintiffs were united in interest against the same defendant. (Friends of the Trails v. Blasius, 78 Cal.App.4th 810, 838 (2000); Acosta v. SI Corp., 129 Cal.App.4th 1370, 1376 (2005).)

     Interesting case to report on and thanks for the heads up, Keith. Also, Mr. Turner has a blog, Pacific View Rights Center blog, which can be accessed at our home page on the right hand side.

Appealability/Arbitration: Motions Denying Reconsideration And 473 Relief Of Fee Denial, Following A Win On An Arbitration Motion To Compel Denial, Were Not Appealable

 

Third District Distinguishes Otay River In The Process.

     Here is one for all of you procedural buffs, involving a dismissal of an appeal of a motions for reconsideration/473 relief of a fee request denial after the appellant beat back a motion to compel arbitration. The problem here was that the earlier motion to compel arbitration denial did not preclude a future motion, which was granted, such that any fee determination would have to await what happens in a judgment based on more subsequent events.

     Fleur du Lac Estates Assn. v. Mansouri, Case No. C068693 (3d Dist. Apr. 23, 2012) (certified for publication) involved a situation where defendant/homeowner/appellant sought to recover fees/costs for prevailing in an earlier proceeding to compel arbitration against HOA about alleged nonconforming patio improvements which were subject to HOA removal demands. Appellant moved to recover $209,075.14 in attorney’s fees after winning an earlier writ proceeding by which HOA’s motion to compel was denied. The trial court found the fee motion/costs memo to be untimely, further denying a motion for reconsideration and CCP § 473(b) (mistake/excusable neglect) relief. That prompted appellant’s appeal from the reconsideration and § 473 denials.

     Appellant’s appeal was dismissed.

     The Third District essentially determined that the matter was not conclusively determined for fee purposes, even on a finite basis, so as to allow for appealability of the fee denial at this stage. HOA did file a second petition to compel arbitration, which was granted because it did produce the proof missing from the first showing. Even though there was an argument to be made as to whether contractual arbitration statutes or general appellate statutes applied, the Court of Appeal concluded that the reasoning under the applicable general appellate jurisdictional statutes could have equal force to cases like the one before it. It found that cases like Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796, 803 (2008) were distinguishable because the order before it was not final on the issue of whether arbitration between the parties could be compelled. (In Otay River, the petition to deny arbitration was grounded on the fact that the claims arose out of an agreement only allowing for litigation of disputes--final, no further issues remaining as far as compelling arbitration was concerned.)

     However, to make sure that appellant had some comfort, the appellate court confirmed that appellant would be able to challenge the fee denial later down the line, on appeal from any final judgment entered in the proceeding. (Benjamin, Weill & Mazer v. Kors, 195 Cal.App.4th 40, 80 (2011).) So, ultimate solace went to appellant, allowing her to try again for fees once the final battle was won--despite the apparent substantial expenditure of resources by both sides even up to this juncture of the case.

     For further comments on the arbitration aspects of the case, check out the post on California Mediation and Arbitration.

SLAPP: $10,000 Frivolous SLAPP Fee Award Against Cross-Defendants Reversed On Appeal

 

Appellate Court Divergence on First SLAPP Prong Drove Reversal of SLAPP Fee Award.

     SLAPP fee awards against defendants/cross-defendants are allowable, but not mandatory as against losing plaintiffs--losing defendants’ efforts must be found to be frivolous in nature, a much higher burden of proof. In the next case, the trial court denied cross-defendants’ SLAPP motion, later determining that they should pay cross-defendants $10,000 in fees for the SLAPP motion found to be frivolous.

    Charles Green Bush, artist.  c1890.  Library of Congress.

     On review, the fee award was reversed in Adcock v. Goldstein, Case No. B233480 (2d Dist., Div. 4 Apr. 20, 2012) (unpublished).

     The problem in this one was there was conflicting intermediate appellate authority relating to the proper interpretation of the SLAPP first prong under the facts of this case. Given this divergence in opinion, it followed that a reasonable attorney could bring a SLAPP motion on behalf of cross-defendants based on the conflicting decisional law--something which undermined a frivolousness determination.

Allocation/Class Actions/Common Fund/Private Attorney General/Paralegal Time: Court Of Appeal Finds Plaintiffs/Defendant Allocation Of Attorney’s Fees In Common Fund Case Was Fair, But Reverses Refusal To Award For Certain Attorney/Paralegal Time

 

Remand to Determine What Portion of Attorney and Paralegal Time Was “Administrative” in Nature.

     Collins v. City of Los Angeles, Case No. B228882 (2d Dist., Div. 3 Apr. 20, 2012) (certified for publication) is a class action case where two class representatives on behalf of a class obtained a judgment-based common fund recovery for emergency response costs for persons driving under the influence of alcohol/drugs. Although requesting a lodestar of $634,761 and an additional $150,000 delay enhancement, plaintiff was awarded attorney’s fees of $577,691 under California’s private attorney general statute (CCP § 1021.5). The lower court ordered that 40% of the fees should be paid from the class restitution fund and the remaining 60% should be paid by City of Los Angeles. However, the trial court did exclude certain fees requested for attorney and paralegal work on the ground they were only “administrative” and non-recoverable.

     The private attorney general fee apportionment was sustained on appeal. The necessity, financial burden requirements, and “interests of justice” elements of CCP § 1021.5 justified this allocation, especially where fees should be paid by the opposing party rather than from a common fund recovery in the right circumstances. (Slip Opn., p. 20.) The appellate court also has an interesting discussion of whether the court in a § 1021.5 case must peg the possible class action benefits to the actual recovery versus the estimated value of the case (or, realistic expected recovery), opting to go with the latter approach--departing company from Robinson v. City of Chowchilla, 202 Cal.App.4th 382, 402 and fn. 6 (2011) in the process. Finally, the “full monetary value of the judgment” had to be considered--which might include actual monetary recovery and other direct financial benefits provided to the plaintiff.

     That brought the appellate court to a reduction for “administrative” tasks by attorneys and paralegals. Here, the appellate court believed that the trial court did abuse its discretion by denying compensation for attorney and paralegal time of a normally compensable nature. Simply because an expert labeled the tasks as “administrative” was too overbroad to deny compensation altogether. Remand on this point.

Appeal Sanctions: $22,000 Is Price Of Frivolous Appeal Against Defendants And Their Counsel

 

Creative Argument Okay, But Better Not Base Appeal on Rejected/Sanctioned Argument In Another Case That Was Affirmed On Appeal.

     We can only guess that some practitioners believe that appellate courts will not thoroughly research a matter or miss something along the way. Not likely, as this next opinion shows.

     In this one, defendants lost a SLAPP motion against plaintiff court reporting company, and then appealed. They raised the same argument that had been rejected and sanctioned in another trial court and affirmed on appeal by another appellate court--even though defense counsel, too, actually was involved in the prior case. Bad idea to appeal, because that had repercussions on attorney’s and clients’ pocketbooks.

     The Second District, Division 4 in Personal Court Reporters, Inc. v. Rand, Case No. B229358 (2d Dist., Div. 4 Apr. 20, 2012) (certified for publication) involved defendants’ appeal of the SLAPP denial. Although acknowledging that counsel ordinarily should have the freedom to file appeals based on creative arguments with little hope of success, basing the argument on an already rejected/sanctioned argument invoked application of “the principle of ‘once burned, twice shy’”, especially given counsel’s involvement in the prior case producing sanctions. (Slip Opn., p. 9.)

     The price of the defense’s frivolous appeal? Plaintiff requested $26,837.50, but the appellate awarded it $22,000, jointly and severally, against defendants and their counsel after eliminating some duplicative/unnecessary charges.

     The opinion also has an interesting discussion of the independent frivolous appeal prongs of frivolousness or delay motivation, with the appellate court noting that these independent constructs actually are used together--with the total lack of merit of an appeal viewed as evidence that appellant must have intended it only for delay. (In re Marriage of Gong and Kwong, 163 Cal.App.4th 510, 516 (2008) [surveyed in our May 30, 2008 post].)

In The News . . . . Los Angeles Times Has Interesting Story On L.A. Cities’ Spending On Attorneys Fees, As A Dollar Amount, Percentage Of Budget, And Per Capita

 

     On April 19, 2012, the Los Angeles Times had some interesting data compilations showing the annual totals, percentage of city operating/redevelopment budgets, and per capita spending on city attorneys for the 2005-2010 budgets.

     Los Angeles was the winner in spending: about $133 million per year spent on the City Attorney, but this only translated to 1% of the budget and $29 on a per capita basis.

     Vernon was the per capita winner, having annual costs of $10.6 million--about 3.8% of the budget but $98,234 per capita based on a population of 114 (yep, 114) having a median income of $38,625 per person.

     Signal Hill won the percentage of budget award, averaging annually $1.45 million or 4.3% of its budget.

     The primary reason costs went up for city attorney spending? Fighting corruption (a la City of Bell).

     Here is the data set in case you want to see the charts for each category, seeing what cities were in the “top of their class.”

Fighting corruption.  Wanda Newman and Teresa Philips and their dog Cammi pose in Batman outfits for Do Dah Day, Birmingham, Alabama.  May 15, 2010.  Carol M. Highsmith Collection, Library of Congress.

Arbitration/Prevailing Party/Section 1717: Prevailing Party On Sole Contract Claim Entitled To Fees

 

“Each Side Bear Own Costs” Appellate Directive Did Not Bar Later Fee Request.

     Tenzera, Inc. v. Osterman, Case No. B228189 (2d Dist., Div. 3 Apr. 19, 2012) (partially published; fee discussion not published) presented a situation where, after remand from a prior appellate opinion in the same case, a trial court denied attorney’s fees requests to a contractual prevailing party in arbitration proceedings and based on pursuing a previous appeal based on two grounds: (1) the appellate court directive in the earlier matter denying costs on appeal was determinative of the fee request; and (2) defendants did not prevail.

     The appellate court reversed. “Each side bearing own costs” language in the previous appellate opinion did not determine who should bear their own attorney’s fees on appeal. The Court of Appeal cited Mustachio v. Great Western Bank, 48 Cal.App.4th 1145, 1149-1150 (1996) for this proposition, which is also supported by Butler-Rupp v. Lourdeaux, 154 Cal.App.4th 918, 925-928 (2007). Also, defendants did obtain an unqualified victory in defensing the contract cause of action in the arbitration proceedings, entitling them to fees. (Civ. Code, § 1717; Scott Co. v. Blount, Inc., 20 Cal.4th 1103, 1109 (1999).) So, the matter goes back to have the lower court reconsider defendants’ request for more than $124,000 in fees to pursue the prior appeal. (The appellate court did cite Butler-Rupp for the lower court’s “broad discretion” to award reasonable attorney’s fees.)

     BLOG UNDERVIEW – Co-contributor Marc, in his California Mediation and Arbitration blog (which you can hyperlink to on our home page), has posted a commentary on the arbitration aspects of this opinion, including whether prejudgment interest accrues while the arbitration result is pending on appeal – an issue of first impression in California.

POOF!: Reversal of $42.2 Million Award Based On Guaranty Meant $760,797 Fees/Costs Award Went POOF!

 

     The Second District, Division 1, in GE CCMC 2005-C1 Plummer Street Office Limited Partnership v. NRFC NNN Holdings, LLC, Case No. B229879 (2d Dist., Div. 1 Mar. 29, 2012) (certified for publication), reversed a $42.2 million award in favor of a guaranty holder, finding a guaranty “bad boy” provision was not triggered when a lease was abandoned by lessee affiliate of guarantor. What did that also mean? You guessed it, the $760,797.50 fees/costs award in favor of guaranty holder also went POOF!--quite a turnaround on appeal.

Homeowner Associations/Prevailing Party: HOA Winning Preliminary Injunction That Produced Repairs To Homeowner’s Deck Was The Prevailing Party Even After HOA Dismissed Complaint Without Prejudice After Repairs Made

 

Homeowner Had to Pay Fees of About $35,000, But Appellate Court Had To Face An Olio Of Civil Code Section 1354 “Prevailing Party” And Stay/Preliminary Injunction Bond Issues.

     Okay, here we go with another homeowners association (HOA)-homeowners fight that, ta! da!, produced an ultimate fight over who was owed attorney’s fees and costs. HOA won this one, both in the trial and appellate courts.

     HOA had homeowner’s decks replaced after water was leaking into another homeowner’s domain. However, homeowner would not provide access or remove items so that subsequent warranty repairs could be made, prompting HOA to seek and obtain a preliminary injunction to gain access to the deck and have homeowner remove items so repairs could be completed. HOA posted a $30,000 preliminary injunction bond. After the repairs were made, HOA dismissed its complaint without prejudice. HOA sought fees/costs of $24,017, homeowner sought fees/costs of $36,528.50, and homeowner sought to enforce liability against the preliminary injunction bond. The lower court awarded HOA its sought-after fees, awarded HOA additional fees of $10,621 for having to pursue a couple of additional motions, and stayed homeowner’s attempt to enforce liability on the preliminary injunction bond until the appellate court decided who indeed prevailed.

     HOA got the better of it on appeal in Highlands Owners Assn. v. Cobler, Case No. B216797 (2d Dist., Div. 4 Apr. 17, 2012) (unpublished), in a very analytical 3-0 decision authored by Presiding Justice Epstein.

     HOA, indeed, was the prevailing party under Civil Code section 1354, the CC&R enforcement fee-shifting provision, with the determination being made on a practical level. The appellate court rebuffed the suggestion that the prevailing party test for general routine costs statute should also apply to fee determinations under section 1354, undertaking an examination of the legislative history on costs statute changes to show that it should not. The practical analysis of who achieved litigation objectives is the governing standard under section 1354. (Salehi v. Surfside III Condominium Owners Assn., 200 Cal.App.4th 1146, 1153 (2011).)

     Whether or not HOA failed to participate in the ADR process mentioned in Civil Code section 1369.580 was irrelevant to the “prevailing party” determination, although it might impact the amount of any fee award.

     The appeal of the fee/costs award under section 1354 did not prevent the trial court from awarding additional fees and costs incurred by the HOA on other motions, because they were akin to future damages. (Warsaw v. Chicago Metallic Ceilings, Inc., 35 Cal.3d 564, 574 (1984).)

Probate/Conservatorship: 40% Reduction In Conservatorship Requested Fees Was No Abuse Of Discretion

 

Appellate Court Also Discusses Timing of Fee Petition As It Relates To Conservatorship Final Accountings Under Local S.F. Court Rule.

     Conservatorship of Xie, Case No. A133079 (1st Dist., Div. 3 Apr. 17, 2012) (unpublished) was a situation where the appellate court affirmed a trial court’s 40% reduction of fees and costs claimed from a conservatorship estate, based mainly on deductions for expenses that benefited conservatee’s wife (not the conservatorship) and for administrative, clerical tasks that should not have been claimed as fees.

     However, what caught our eye was the appellate court’s discussion of the proper timing of a fee petition in a conservatorship case.

In The News . . . . Average Billing Rates Are Going Up, Even Faster For Top-Billing Lawyers

 

TyMetrix Legal Analytics-Corporate Executive Board Recent Study So Shows.

     As reported in an April 16, 2012 post by Leigh Jones on Thomson Reuters News & Insight, a recent study analyzing billing data from about 120,000 attorneys (at 4,000 law firms) found that overall rates have increased by more than 4% since 2009, compared with a moderate 2.3% boost from 2008-2009 and a larger 8.2% jump in the boom years of 2007-2008.

     The TyMetrix Legal Analytics-Corporate Executive Board study--released on April 16, 2011--also confirms that aveage billing rates climbed to $540/hour in 2011, a leap from $435 in 2007. Not surprisingly, partners who bill over $800/hour had their rates increase at nearly three times the rate charged by contemporaries billing less than $300/hour.

     Some have surmised that some “bet-the-company” cases and big transactions are price insensitive, while competitiveness for routine work has grown.

     “O! then, I see, Queen Mab hath been with you. . . .

     She is the fairies’ midwife, and she comes . . .

     O’er lawyers’ fingers, who straight dream on fees.”

--SHAKESPEARE, Romeo and Juliet, Act 1, scene 4.

c1874.  Library of Congress.

Judgment Enforcement Two-Fer: Improperly Issued Writ Of Execution Before Entry Of Fee Award Had To Be First Challenged In Trial Court Quash Proceeding First And Attorney’s Fees Judgment Paid By One Group Of Defendants Extinguished Judgment For Offse

 

Rivas v. Altawood, Inc., Case No. E049597 (4th Dist., Div. 2 Apr. 18, 2012) (unpublished).

     In this one, while the matter was on appeal, the trial court vacated an attorney’s fees award. However, a mix up occurred and a subsequent writ of execution was issued based on the fees award. The appellate court easily found the writ was improperly issued (after all, there was no necessary fee award predicate), but found that appellant’s remedy was to move to quash the writ of execution in the trial court. If that had been done and appellant appealed from a denial of a quash request, that order could have been reviewed.

Matusek v. Benn, Case No. B229234 (2d Dist, Div. 3 Apr. 18, 2012) (unpublished).

     The second in our series involved a situation where plaintiff and one defendant group got “dueling” fee awards, with plaintiff prevailing on some claims and the defense non-suiting on one claim (the claims all having fee entitlement bases). The twist in this one was that one group of defendants satisfied the adverse judgment, including the award of fees and costs. Plaintiff argued that the non-satisfying defendant had to have her fee/costs judgment “offset” against that defendant’s fee/costs judgment. Not so, said the appellate panel. The reason was that the prior defendants’ satisfaction of plaintiff’s fees/costs award effectively extinguished that award because there can only be one satisfaction for an injury--meaning no offset was available. (McCall v. Four Star Music Co., 51 Cal.App.4th 1394, 1398 (1996).)

Section 1717/Reasonableness Of Fees: Promissory Note With Fees Clause Was “Action On The Contract” In Trust Deed Cancellation, Quiet Title, Declaratory Relief, Injunctive, Fraud And Slander Of Title Action

 

Dismissal for Failure to Prosecute Did Make Defendant the Prevailing Party.

     In Halamandaris v. Sephos, Case No. C065819 (3d Dist. Apr 18, 2012) (unpublished), plaintiff’s action for the various claims described in our heading above was dismissed for failure to prosecute. The backdrop for all claims was a promissory note with a fees clause. The trial court awarded the defense attorney’s fees of $75,000, even though the cost bill was filed before entry of judgment.

     The appellate court did not go with plaintiff as far as fee award challenges on appeal.

     California courts liberally construe “on a contract” language under Civil Code section 1717, with all claims incorporating reference to the promissory note. Also, plaintiff expressly asked for cancellation of the note. These allegations supplied the necessary nexus to conclude the action was one “on a contract.” (California Wholesale Material Supply, Inc. v. Norm Wilson & Sons, Inc., 96 Cal.App.4th 598, 605 (2002).)

     Even though the costs memorandum was filed before entry of judgment, such premature filing does not divest the lower court of jurisdiction to award fees where a judgment was subsequently entered--although the consideration is a discretionary one. (Parker v. City of Los Angeles, 44 Cal.App.3d 556, 565-566 (1974).)

     Finally, the amount of fees awarded was no abuse of discretion. The request was for $93,185.41, with the lower court reducing the award down from the request by nearly $20,000. Deference was accorded to this decision on appeal.

Indemnity: Public Employee Who Incurred Legal Fees/Costs During Course Of Law Enforcement Investigations Not Leading To Any Court Proceedings/Actions Not Entitled To Reimbursement Under Government Code Sections 995/996.4 Or Labor Code Section 2802

 

Lack of Court or Judicial Proceedings Was Dispositive.

     Ms. Thornton, near the end of her term as a Board member of the California Unemployment Insurance Appeals Board, was appointed as an ALJ for the Board, a hire that was subsequently investigated by the State Auditor and Sacramento District Attorney’s Office for potential Government Code/state conflict of interest law violations. Ms. Thornton retained an attorney to assist with the investigations, incurring fees and costs when counsel dealt with the investigating authorities. Then, she made a claim under the Government Claims Act for reimbursement of fees/costs, but the claim was rejected. She brought a civil suit seeking reimbursement, basing her claims upon Government Code section 996.4 and Labor Code section 2802.

     The lower court’s sustaining of a demurrer without leave was affirmed in Thornton v. Calif. Unemployment Ins. App. Board, Case No. D058635 (4th Dist., Div. 1 Apr. 17, 2012) (certified for publication).

     Reimbursement was not appropriate under Government Code sections 995 and 996.4 because it could only be triggered if there was a commencement of a civil action or judicial proceeding in court, not by just law enforcement agency investigations.

     So, too, no fees or costs were covered by Labor Code section 2802, because that provision only required the employer to cover third-party claims arising out of a lawsuit against the employee arising out of the course and scope of her employment, again not encompassing expenses incurred in responding to law enforcement investigations. Even if section 2802 could be stretched that far, it would be “trumped” anyway by the specific provisions of Government Code section 996.4 under the “specific over general” cannon of statutory interpretation.

Employment: Second District, Division 3 Holds That Fee Award For Wage/Hour/Itemized Wage Statement Violations Is Payable To Attorney, Not Client, Unless Fee Agreement Provides Otherwise

 

Appellate Court Issues Mandate in Favor of Attorney Over $300,000 Labor Code Fee Award.

     The Second District, Division 3, in Henry M. Lee Law Corp. v. Superior Court (Chang), Case No. B235305 (2d Dist., Div. 3 Apr. 16, 2012) (certified for publication), decided that a $300,000 fee award under Labor Code wage/hour/itemized wage statement fee-shifting provisions should be made payable to the attorney, not the client, in the absence of the fee agreement dictating otherwise. In doing so, the appellate panel applied the reasoning from Flannery v. Prentice, 26 Cal.4th 572, 578-581 (2001), a FEHA case. It issued mandate to vacate an order denying attorney’s motion to make the recovery payable to his law corporation.

     BLOG UNDERVIEW--Interestingly enough, there are some federal cases that take the opposite approach in the social security disability benefits and civil forfeiture areas--holding that the fee recovery belongs to the client rather than the attorney. (See, e.g., Astrue v. Ratliff, 130 S.Ct. 2521 (2010) [discussed in our June 16, 2010 post] (social security disability case); U.S.A. v. $186,416.00 U.S. Currency, 642 F.3d 753 [discussed in our April 26, 2011 post] (Astrue applied in a 2-1 decision in the civil forfeiture area).)

Appeal Sanctions: Don’t Mess Around On Appeal--Otherwise, Pay A Lot Of Fees May Result On Remand And Attorneys Maybe Get Disciplined

 

Appellate Courts Are Not Messing Around With Frivolous Appeals.

     Cowabunga, appellate (surf) fans. This next one is bound to be quoted on the topic of frivolous appeals. Here are the beginning lines: “Some appeals are filed to delay the inevitable. This is such an appeal. It is frivolous and was ‘dead on arrival’ at the appellate courthouse.’”

     Thanks to Justice Yegan, we have a memorabe one in the appellate sanctions archive in Brown v. Wells Fargo Bank, NA, Case No. B233679 (2d Dist., Div. 6 Apr. 16, 2012) (certified for publication).

     Although we have to surmise a bit, residential subprime borrower was facing foreclosure and was trying to derail a nonjudicial foreclosure of her home. She did obtain a preliminary injunction, but on condition that borrower deposit $1,700 a month in a client trust account in lieu of a bond toward delinquent mortgage payments. Borrower did not make any payment, forcing lender to move ex parte but resulting in a denial ---albeit with stern warnings from the lower court that payments needed to be made and no “free house” was in the offing. After lender filed papers showing no payments had been made, the lower court dissolved the preliminary injunction so that the trustee’s sale could go forward. Borrower appealed, which the appellate court indicated effectively “stayed” the trustee’s sale.

     The appellate court found that the appeal was frivolous, given nothing showed an abuse of trial court discretion in dissolving the preliminary injunction. Because the trustee’s sale was delayed for over two years with the help of counsel, the appellate court was not pleased with what happened. The bank did not ask for sanctions, but that did not end the matter. The appellate court ordered that bank would be awarded reasonable attorney’s fees on remand and the clerk of the reviewing court was ordered to send a copy of the opinion to the State Bar for consideration of possible discipline with respect to borrower’s appellate counsel (also borrower’s counsel at the trial level).

Deadlines/Pro Per Representation: Losing Party Not Entitled To Costs Because Filed Too Late, Not Entitled To Fees Based On Pro Per Representation

 

    

Deadlines/Pro Per Representation: Losing Party Not Entitled To Costs Because Filed Too Late, Not Entitled To Fees Based On Pro Per Representation

 

     Although losing defendants probably did not prevail to begin with, their appeal of a lower court’s denial of fees and costs was rebuffed in Connolly v. Trabue, Case No. A131984 (1st Dist., Div. 2 Apr. 10, 2012) (partially published; fee/costs discussion not published).

     The costs memorandum was filed past the 15 day deadline in Cal. Rules of Court, rule 3.1700(a), reason enough to deny a costs award. With respect to attorney’s fees, defendants represented themselves in pro per, and this cannot result in fee recovery. (PLCM Group, Inc. v. Drexler, 22 Cal.4th 1084, 1092 (2000).)  [Actually, the lower court found losing defendants could not get this relief because they did not prevail; sounds good to us, but the appellate court affirmed the denial orders on the grounds we discussed above.]

     Also, the case is must reading for litigators involved in prescriptive easement disputes, establishing that laches is not a proper defense in these types of cases.

Eminent Domain/Settlement: Condemnee Was Paid Promised Litigation Expenses Under Settlement Agreement At Trial Level

 

However, Remand Was Necessary to Fix His Litigation Expenses on Appeal.

     Department of Transportation reached a settlement with condemnee for a right of way purchase under which DOT agreed to pay a certain sum inclusive of interest, fee, and costs. DOT paid. Condemnee, not satisfied, filed a costs memorandum claiming $38,957.50 in costs and fees, which judgment was entered by the lower court. However, DOT moved to vacate based upon the settlement agreement where payment was made inclusive of fees and costs under Code of Civil Procedure section 1268.610 (the eminent domain fee/costs-shifting provision), with the lower court vacating based on the terms of the compromise.

     Condemnee appealed, but was rebuffed in People ex rel. Dept. of Transportation v. Scotti, Case No. C067075 (3d Dist. Apr. 12, 2012) (unpublished).

     The reason was pretty simple: he already was paid his lower court fees and costs as part of the right of way settlement purchase.

     However, that was not quite the end of the matter. Based on the contractual settlement agreement, condemnee argued “well, what about my litigation expenses on appeal?” Good point, appellate court said, remanding for a determination of his recoverable litigation expenses on appeal.

Consumer Statutes/Reasonableness Of Fees: Trial Court Awarding $6,245.54 Of Settling Consumer’s Requested $35,287.46 In Fees Under Consumer Legal Remedies Act Was No Abuse Of Discretion

 

Lower Court Could Conclude Consumer’s Requested Fees Were Padded in Making Reduced Award.

     Plaintiff consumer reached a settlement with Sears, Roebuck for a gift card dispute under the Consumer Legal Remedies Act, preserving the ability to seek reasonable fees and costs from the lower court under the compromise. (CLRA does have a fee-shifting provision codified in Civil Code section 1780.) Consumer sought to recoup $35,287.46 in fees, but was only awarded $6,245.54.

     Consumer’s appeal in Hopper v. Sears, Roebuck and Co., Case No. H036754 (Apr. 12, 2012) (unpublished) was unsuccessful.

     The lower court demonstrated it used the proper lodestar analysis and did express its view that the request seemed inflated and unreasonable, using a certain date for incurred fees as the reasonable value of services for the original $2,500 dispute involving the gift cards. It was no abuse of discretion for the trial judge to conclude that the request was unreasonably inflated, permitting it to reduce the award (as was done) or deny it altogether. (Bernardi v. County of Monterey, 167 Cal.App.4th 1379, 1394 (2008); Gorman v. Tassajara Development Corp., 178 Cal.App.4th 44, 101 (2009).)

Assignment/POOF!: Limited Partner’s Assignment Of His Fraud Claim Did Not Pass Rights Under Limited Partnership Agreement To Assignee So That He Could Obtain The Benefit Of Fee Clause Recovery

 

$1.34 Million Fee Award Went POOF!

     Miske v. Bisno, Case Nos. A127596 et al. (1st Dist., Div. 4 Apr. 12, 2012) (partially published, including fee discussion) is an interesting case where the defrauded limited partner was treated as an innocent third party which produced a $1.4 million fraud compensatory verdict result. The defrauded limited partner assigned the fraud claim to another, which led the trial court to award attorney’s fees of another $1.34 million to the assignee based on a broad fee clause encompassing the dispute contained in the limited partnership agreement.

     However, the fee award was reversed on appeal (or went POOF!). The rub was that assignor/defrauded partner only assigned the fraud claim, not the limited partnership agreement rights containing the fees clause. Assignee was never made a substitute limited partner from the assignment process. This result should definitely be a good lesson for you transactional attorney folks out there for purposes of structuring assignments which also allow the assignee the benefits of a potential fee recovery.

     BLOG UNDERVIEW--Co-contributors Marc/Mike’s former colleagues at Jackson DeMarco Tidus & Peckenpaugh, Larry Resnick and Greg Regier, tried the case for losing party Mr. Coxeter, and did beat back a much higher damages request at the trial level. On appeal, they teamed up with Jerome Falk and his appellate team at Howard Rice (now merged with Arnold & Porter) to overturn the fee award.

Appeal Sanctions: Price Is Going Up For Frivolous Appeal Exposure

 

Up:  First District, Division 1 Imposes $16,257 Against Ex-Husband.

     The First District, Division 1 demonstrates that the price for prosecuting a frivolous appeal has gone up: in Marriage of Kononchuk and Mouradian, Case No. D058615 (1st Dist., Div. 1 Apr. 13, 2012) (unpublished), ex-husband was sanctioned $16,257 by the appellate court for a frivolous appeal based on attorney declaration testimony about the expenses ex-wife incurred on appeal.

Probate/Reasonableness Of Fees/Substantiation Of Fees: Lower Court Award Of Fees, Before Prior Appellate Decision Reviewing Compensatory Award, Had To Be Reversed When Appeals Court Substantially Scaled Back Compensatory Award

 

Scaling Back to One Fifth Meant that a Fee Fixing Remand Was Necessary.

     Here is a very pragmatically-based decision from our local Fourth District, Division 3 appellate court, dealing with a situation where a lower court fixed fees on the premise that a higher compensatory award was in play when a prior appellate court decision dashed the underpinnings of the fee award assumption in later proceedings.

     In Stephens v. Gaustad, Case No. G045464 (4th Dist., Div. 3 Apr. 11, 2012) (unpublished), a trial court found that reasonable attorney’s fees of $175,000 (out of a requested $246,277) should be awarded to two beneficiaries by a trustee contesting their accounting without reasonable cause and in bad faith so as to trigger fee entitlement under Provbate Code section 17211(b). However, the premise of the fee award was that beneficiaries recovered compensatory damages somewhere in the neighborhood of $220,000. However, the appellate court only affirmed about $45,400 of compensatory damages in favor of beneficiaries, only one-fifth of the recovery on which the trial judge predicate the fee award.

     Our local appellate court, in a 3-0 panel decision by Acting Presiding Justice Rylaarsdam, reversed and remanded.

     The problem was that fees really had to be recalculated given the trial judge’s reliance on the higher--by nearly four-fifths--compensatory award which was not by any means a close approximation to the actual award affirmed later on appeal after fixing of the $175,000 fee award. A remand was necessary. (Cf. City of Long Beach Redevelopment Agency v. Morales, 157 Cal.App.4th 287, 289, 291, 295 (2007) [eminent domain action; mathematical error of less than 2% percent in evaluating public’s agency final offer for unreasonableness required a remand for reconsideration].) Even the trial judge indicated that no more than $52,000 in fees were justified if the $220,000 judgment was not in play.

      There also was an interesting discussion on block billing, which may lead us to predict that our local appellate court believes that these type of entries should lead to a discount, but not an outright denial--even though there is California precedent that allows a discretionary denial altogether. In this opinion, the Court of Appeal seemed to condone generalized entries to protect the attorney-client privilege--with other unpublished decisions being critical of severe redactions on this basis--although still allowing trial court discretion on acceptance of entries to reign supreme. (Jaramillo v. County of Orange, 200 Cal.App.4th 811, 829-830 (2011).) Here, however, the trial court did reduce fees by about $71,000, so that might have been enough and any error was harmless. We will have to await how state appellate courts deal with block billing entries, although the trend seems to be tilting in favor of a reduction rather than an outright denial of fees.

Fee Clause Interpretation: Subcontractor Defeating General Contractor’s Cross-Defense Entitled To Fee Recovery Under Broadly Worded Fee Clause

 

Subcontractor Prevailed, With Dismissal of Protective Cross-Complaint Being Inconsequential.

     The Second District, Division 6, in Toro Enterprises v. Pavement Recycling, Case No. B234627 (2d Dist., Div. 6 Apr. 9, 2012) (unpublished), reversed a trial court’s denial of an attorney’s fees award to a subcontractor which defensed general contractor’s cross-complaint against it on summary judgment, after which sub dismissed its protective cross-complaint.

     The reversal of the fee denial hinged on the breadth of a fees clause in the subcontract, which covered “any dispute resolution between the parties . . . arising under or relating to the terms and conditions of the Subcontract.” The word “dispute resolution” was broad, not being limited just to arbitrations. It made no difference that sub did not win anything on its cross-complaint, because sub prevailed by “defensing” general’s cross-complaint against sub.

Pending Cases: Kirby Argued, With California Supreme Court Justices Sounding Skeptical That Meal/Rest Break Claims Give Rise To Plaintiff Fee Exposure Under Labor Code Section 1194

Kirby v. Immoos Fire Protection

      For those of you following Kirby v. Immoos Fire Protection, Case No. S185827, there is an interesting article by Cynthia Foster in an March 6, 2012 post from The Recorder (Essential California Legal Content). The article suggests that the California Supreme Court appears wary from the flow of the oral argument to find plaintiffs are subject to fee exposure under Labor Code section 1194 with respect to suits centering on meal/rest break claims. However, the question seemed more open to debate is whether it holds that fees can be sought by the defense under a different CCP provision, which one plaintiffs’ attorney is quoted as saying are “not as automatic.” We shall find out soon given that opinions normally are issued within 90 days of submission after oral argument.

Section 1717: Defendants Winning Appeal Where Settlement Agreement Had Fees Clause Were Entitled To Recovery During Motion Enforcement Proceedings

 

Given that Plaintiff Should Have Dismissed But Didn’t, Motion Was Equivalent of a Section 1717 “Separate Action” Under the Circumstances.

     Remember the law school principles of performance excused by the other’s side breach and frustration of purpose? Well, those types of principles drove the result in the next case.

     In Miller v. Bush, Case No. C065203 (3d Dist. Apr. 10, 2012) (unpublished), defendants were awarded $9,918.75 in post-appeal attorney’s fees after defendants prevailed in an earlier appeal by sustaining a defeat of plaintiff’s motion to enforce a settlement with a fees clause under CCP § 664.6 (a procedure that allows a party to enforce a settlement through a law and motion procedure in an existing action). Plaintiff’s main challenge in this second fee was that the prior motion loss did not occur in a separate “action,” a predicate to fee recovery under Civil Code section 1717.

     Nope, not under the circumstances of “this contorted and lengthy litigation.” Plaintiff was obligated to dismiss the prior action under the settlement agreement, but didn’t, instead trying to unsuccessfully enforce the settlement through a law and motion procedure in the action that should have been dismissed. Based on this interesting procedural twist, the appellate court found that the “motion” functioned as the equivalent of an “action” under the circumstances, meaning the fee award was proper.

Family Law: Failure to Award Needs-Based Award Was Not Erroneous

 

Determining Who Actually “Prevailed” Can Be Considered In Needs-Based Calculus.

     Wife was disappointed when a family law judge refused to award “needs-based” attorney’s fees under Family Code sections 2032 and 4320, apparently based in large part on the perspective that she did not “prevail” during the litigation.

     Our local Santa Ana appellate court found it was not improper to consider this factor in Marriage of Juergens, Case Nos. G043884 et al. (4th Dist., Div. 3 Apr. 10, 2012) (unpublished). “Neither Family Code section section 2032 nor Family Code section 4320 precludes the court from giving consideration to this factor” (slip opn., p. 39), wrote Justice Moore on behalf of a 3-0 panel in affirming the denial of fees to wife for the time frame under consideration.

Section 1717: Borrower Prevailing On Demurrer Sustained Without Leave Is Prevailing Party Despite Lender’s After-the-Fact With Prejudice Dismissal In The Wake Of A Fee Motion

 

Case Proceeded to a Determinative Stage, So Fees Were Recoverable In Order to Prevent Procedural Gamesmanship.

     The problem here was that the demurrer without leave ruling was a “determinative adjudication” that could not be undone by a dismissal, whether with or without prejudice. (Goldtree v. Spreckels, 135 Cal. 666, 672-673 (1902); Wells v. Marina City Properties, Inc., 29 Cal.3d 781, 789 (1981); Vanderkous v. Conley, 188 Cal.App.4th 111, 114-115, 117 (2010).) Fee award goes to the Borrower in this one.

     Bank loses a demurrer without leave to amend against borrower based on anti-deficiency prohibitions. Borrower then moves to recover attorney’s fees based on contractual fee clauses, with Bank responding by dismissing the action with prejudice. Ah, ha, cries Bank, you--the Borrower--cannot prevail based on the dismissal. The trial court did not buy it awarding Borrower attorney’s fees of $8,400 and $534.72 in costs.

     On appeal by Bank, neither did the appellate court when sustaining the fee/costs award in Bank of America, N.A. v. Mitchell, Case No. B233924 (2d Dist., Div. 4 Apr. 10, 2012) (certified for publication).

Family Law: $40,000 Section 271 Sanctions Award Against Husband Was No Abuse of Discretion

 

Payout to Wife at $750/Month Was Reasonable.

     Husband was found by a family law judge to have withdrawn community funds without wife’s consent, rented out a family home unilaterally, ignored income and expense declaration filing deadlines, was dilatory during the discovery process, and presented a disorganized trial brief that prolonged the trial. As a result, the family law judge awarded wife $40,000 in fees as sanctions under Family Code section 271 (a fee-shifting section that punishes uncooperative/litigation prolonging behavior), with the amount being ordered paid out in monthly $750 installments.

     Husband’s appeal in Marriage of Pesner, Case No. G045318 (4th Dist., Div. 3 Apr. 10, 2012) (unpublished) was unsuccessful, in a 3-0 opinion authored by Acting Presiding Justice Rylaarsdam.

     The record certainly contained conduct justifying the award under section 271. Husband claimed poverty, but the family law judge properly fashioned an installment payout that segued in with the equity husband had in some assets and with his $3,742 monthly income admission.

“She might be angry now, for all he knew. He concluded to let well enough alone.”  George Hand Wright, artist.  1918?  Library of Congress.

Off Topic–Legal Humor

Off-Topic . . . . A Little Bit of Humor on Jury Voir Dire

Okay, we digress a bit, but we share this gem from the recent American Bar Association Journal, a classic for any litigator.

Posted by ARog: "A judge in our court likes to tell about voir dire in a criminal trial where the charge was conspiracy to distribute cocaine base. The judge's questioning went like this:

Judge: Does anybody on the panel know the defendant or any of the lawyers?

Prospective juror: I do.

Judge: Which person do you know?

Prospective Juror: The defendant.

Judge: How do you know the defendant?

Prospective juror: I bought crack from him.

The judge excused the entire panel."

The Age of Drugs. Illustration shows the interior of a drugstore with an elderly man, the pharmacist, dispensing a "Bracer" to a crowd of eager consumers, while a young girl secures a bottle of "Soothing Syrup." On the counter are bottles and packets of "Arsenic, Strychnine, Antipyrin, Nerve Stimulant, Opium, Cocaine" and "The Needle." Signs on the wall state "The Killem' Quick Pharmacy," "Open all night," and "Prescriptions carefully compounded." The saloon keeper leans against a column and laments that he cannot "begin to compete with" the drug trade. Louis Dalrymple, artist.  Library of Congress.

In The News . . . . Nevada Supreme Court Sustain District Judge’s Halving Fee/Costs Award To Two Attorneys Successfully Settling On Behalf Of Brain-Dead Young Girl.

 

     We thank an April 5, 2012 article in the Las Vegas Sun for reporting that the Nevada Supreme Court recently affirmed a district judge’s cutting in half a fees/costs request in favor of two attorneys--from the $130,000 request to an actual award of $63,466--who obtained a $238,000 settlement for a brain-dead young girl (with a good chunk of the proceeds going to Medicaid). This state supreme court found this cutting back of the request was proper given that the young girl would receive less than the two attorneys and there had been some glitches in the case requiring attorneys to spend more time than necessary. The supreme court did remand the matter back to the state district court for purposes of determining how the $68,466 should be divided between the two attorneys.

Section 998: Costs Award Affirmed Where Defendant’s Separate 998 Offers Beat Plaintiffs’ Recovery

 

No Abuse of Discretion Shown, Although Requested Costs Cut About $4,500.

     When you appeal, you must show legal error or some manifest abuse of discretion. Plaintiffs/appellants did not do that in Barany v. Andron, Case No. A130891 (1st Dist., Div. 5 Apr. 6, 2012) (unpublished).

     There, a defendant sent out two separate successive 998 offers, meaning that plaintiffs were defensed in a car negligence case and were liable for post-offer cost shifting given that they had to put on expert witness testimony at trial. The defense requested about $20,000 in costs (mostly expert witness fees), and was awarded $15,446.11 by the trial court.

     Plaintiffs were simply wrong in arguing that the 998 offers were ineffective, because they rejected them and failed to obtain a more favorable judgment. (Saakyan v. Modern Auto, Inc., 103 Cal.App.4th 383, 389 & n. 6 (2002).) The costs award containing some components for retention of expert costs was no abuse of discretion or “patently absurd.” Costs award affirmed.

Appealability/Family Law: Original Fee Awards Repeated In Later Omnibus Order Had To Be Appealed Earlier

 

Wife’s Appeal from Three Awards Dismissed for Lack of Appellate Jurisdiction.

     Wife obviously was unhappy with three different fee awards entered against her at various times in Marriage of Powell and Powell, Case No. A129916 (Apr. 5, 2012) (unpublished): one that she pay $120,000 to husband for losing a prior appeal and based upon ex’s financial need; another $115,000 as monetary sanctions for her breach of fiduciary duty to husband; and the third as her share of an allocation from a note balance payable to husband for his attorney’s fees.

     However, her appeal was dismissed. Reason? She had failed to appeal each of these three orders, each of which was final and appealable at the time, at the appropriate juncture along the way. (See Sarracino v. Superior Court, 13 Cal.3d 1, 9 (1974); In re Marriage of Skelley, 18 Cal.3d 365, 368 (1976); In re Marriage of Tharp, 188 Cal.App.4th 1295, 1311 (2010) [with Tharp reviewed in other respects in our October 2, 2010 post].) Simply because these earlier final orders were restated in a later judgment did not restart the time to appeal the previous orders. (In re Shaun R., 188 Cal.App.4th 1129, 1139-1141 (2010); Torres v. City of San Diego, 154 Cal.App.4th 214, 222 (2007).) Simply put, the appellate court lacked jurisdiction to entertain review of wife’s appeal from the “later” judgment incorporating the earlier fee awards.

Family Law Two-Fer: Can’t Offset Section 271 Sanctions Against Child Support And Judgment Roll Appeal Shows No Abuse Of Discretion In 271 Award

 

Marriage of Rice and Eaton, No. C066860 (3d Dist. Apr. 4, 2012) (partially published; 271 discussion unpublished).

     Although the published part is an interesting discussion of the impact of Department of Child Support Services contempt proceedings on wife’s OSC to obtain enforcement of delinquent child support payments, the unpublished part relating to fees reversed a $1,000 award of fees as sanction under Family Code section 271 against wife. After all, she obtained a reversal of the lower court’s ruling on the DCSS contempt proceedings impact. Furthermore, the sanctions could not be ordered as an offset to the prior child support order because it could not be retroactively modified when it came to accrued arrearages/interest thereon. (In re Marriage of Hamer, 81 Cal.App.4th 712, 722 (2000).)

Marriage of Shubin, Case No. C067326 (3d Dist. Apr. 4, 2012) (unpublished).

     Wife appealed a trial court order directing her to pay $10,000 in fees to husband as sanctions pursuant to section 271. She elected to proceed on a clerk’s transcript, known as a judgment roll appeal. The problem with using this procedure is that the evidence is conclusively presumed as sufficient to support the decision below. Without the reporter’s transcript of the hearing at which 271 fees were imposed, it was impossible to conclude there was an abuse of discretion in this one.

In The News . . . . D.C. Gun Law Fee Dispute Resolves And Local Las Vegas O.J. Criminal Defense Lawyer Sues Lead Criminal Attorney For Claimed Unpaid Fees

 

$1.5 Million in Fees Is the Settlement Payout Number to Plaintiff’s Counsel.

     We have reported on this before, but an April 3, 2012 post on The Blog of Legal Times informs us that Plaintiff’s counsel has reached a settlement in a landmark D.C. gun case that went all the way to the U.S. Supreme Court. A trial judge awarded counsel $1.17 million, although the attorneys had asked for more than $3 million. Negotiations started after counsel appealed the fee award to the D.C. Circuit, with the parties reaching a compromise--$1.5 million in fees to counsel.

Local Las Vegas Criminal Attorney Sues Florida Lead Counsel For Unpaid Compensation in O.J. Simpson Nevada Criminal Case.

     Remember O.J. Simpson’s Nevada criminal trial resulting in a conviction? Sure you do; now the fee aftermath is reported in The Washington Post. Las Vegas attorney Gabriel (Gabe) Grasso, who was local counsel to Mr. Simpson, has now sued lead criminal attorney Yale Galanter (of Florida), claiming that he was only paid $15,000 out of $250,000 in promised fees. Mr. Galanter has been quoted as saying he will fight and that Mr. Grasso was paid everything he was supposed to get. Stay tuned on how this one will pan out.

Section 998: Two $10,000 998 Offers To Two Affiliated Plaintiffs Were Valid And Not Token In Nature

 

However, Costs for Outside Counsel Research in the Guise of Expert Witness Needed to be Reevaluated.

     In Azoulay v. Valley View Medical Clinic Inc., Case No. G044942 (4th Dist., Div. 3 Apr. 3, 2012) (unpublished), defendants won a partnership dispute against plaintiff physical therapist, and the trial court denied plaintiff’s motion to tax $35,740 in costs requested by defendants (mainly for expert witness fees but $20,000 for research by an outside counsel on an illegality defense) after plaintiff rejected two separate 998 offers from the defense (one to plaintiff individually and one for his affiliated business).

     The motion to tax costs denial was remanded. Although the offers were valid (stand alone offers presenting no apportionment issues among multiple parties) and were not token (made fairly close to trial with plaintiff being able to pocket $20,000 and obtain a valuable costs waiver, Adams v. Ford Motor Co., 199 Cal.App.4th 1475, 1487 (2011)), the amount of the costs award had to be reevaluated. Expert witness fee are compensable upon rejection of a valid 998 offer, but the $20,000 claimed for an outside attorney doing illegality defense legal research in the guise of being an expert witness had to be examined again. Big difference between a true expert witness and someone designated as an expert but only acting as outside counsel--so, lower court look at it again to see if it was a 998 cost to be recouped (or portions thereof).