CALIFORNIA ATTORNEY'S FEES

Appealability: Losing Party’s Failure To Appeal Separate Fee Order, Where Court Made Clear Fees Was Separate Issue, Doomed Further Review

 

Failure to Provide Fee Motion Papers and Reporter’s Transcript of Fee Motion Clinched the Affirmance.

     Goesch v. Hennagan, Case No. H037259 (6th Dist. Oct. 31, 2012) (unpublished), authored by Justice Elia on behalf of a 3-0 panel, is another stark reminder of two important points necessary to preserve appellate jurisdiction/review: (1) appeal from a postjudgment fee order, and (2) providing the fee proceeding paperwork and a reporter’s transcript of the fee hearing to the appellate court.

     Losing litigants got hit with an adverse costs award of $5,847.01 and adverse fee order of $50,000 after losing a quiet title action, claiming that there was no basis for a fee award under contract or under the old CCP § 128.5 sanctions provision.

     They lost their bid for an overturn on appeal.

     The first problem was that losers did not separately appeal the postjudgment fee order, an appellate no-no. The record in the case showed that the court realized that fees should be addressed in a separate proceeding, despite signing off on a boilerplate judgment granting fee entitlement to the winners but leaving the amount for a different day. However, notwithstanding this boilerplate, there are cases recognizing that the loser must appeal a later fee order where the record actually shows the trial court recognized that both entitlement and fee amounts had be adjudged in a separate hearing--which was the case in Goesch. (See, e.g., Silver v. Pacific American Fish Co., Inc., 190 Cal.App.4th 688, 692-693 (2010); Norman I. Krug Real Estate Investments, Inc. v. Praszker, 220 Cal.App.3d 35, 45 (1990); Colony Hill v. Ghamaty, 143 Cal.App.4th 1156, 1172 (2006); DeZerega v. Meggs, 83 Cal.App.4th 28, 44 (2000).)

     However, the second flaw was equally daunting--losers failed to provide the fee motion paperwork or the transcript of the motion hearing, which also precluded effective appellate review. End result was that the fee order was sustained upon review.

Probate: Trustee Not Entitled To Attorney’s Fees In Contest Regarding Trust’s Responsibilities To Pay Beneficiary’s Living Expenses

 

Cited Probate Code Sections 2622.5, 11003, and 17211 Did Not Provide Fee Entitlement.

     Dohr v. Lintz, Case No. G046091 (4th Dist., Div. 3 Oct. 31, 2012) (unpublished), authored on behalf of a unanimous panel by Acting Presiding Justice Rylaarsdam, shows that a fee claimant needs to have a firm fee entitlement basis in order to uphold a fee award. That did not happen in this one.

     In essence, a trustee gained attorney’s fees of $87,000 for winning a petition for instructions concerning the trust’s responsibility to pay the beneficiary’s living expenses. The fee petition was squarely based on Probate Code sections 2622.5, 11003, and 17211.

     On appeal, the fee order was reversed. Reason? No fee entitlement shown based on the cited Probate Code provisions. Sections 2622.5 involves guardianships/conservatorships, while section 11003 concerns settlement of an account in the administration of a decedent’s estate--no trust applicability was at issue under the case under consideration.

     That left Probate Code section 17211, which did apply to trust proceedings. However, the rub was that the case involved a petition for instructions about trust obligations, not an accounting about the trust’s assets--with 17211 focusing on a trust accounting. (Leader v. Cords, 182 Cal.App.4th 1588, 1599 (2010) [17211 does not broadly apply to petitions concerning the internal affairs of the trust, but relates to trust accountings].) Given this reality, no fee entitlement upheld the fee award, overturned on appeal.

Fee Clause Interpretation/Section 1717: Broadly Worded Fee Clauses In Loan Documents And Guaranties Allowed Bank Entitlement To Substantial Fee Recovery

 

“Touching Upon” Language Found Especially Persuasive.

     Case law under Civil Code section 1717 allows for recovery of fees on a contract claim, and is augment by cases applying Code of Civil Procedure section 1021 if the contractual fees clauses are broad enough to encompass tort claims. Bank, a prevailing cross-defendant below on certain tort claims, did have sufficiently broad fees clauses in loan documents and guaranties to justify a substantial award against losing cross-complainants.

     The trial court in SCC Acquisitions, Inc. v. Central Pacific Bank, Case No. G045718 (4th Dist., Div. 3 Oct. 30, 2012) (unpublished) was faced with a prevailing bank that had very broad fees clauses in its loan documents and guaranties, including language covering any matters related to the loan documents or the loan and “touching” upon the guaranties. Based on these very broad contractual provisions, the trial court awarded bank, in full, its requested fees of $779,570.97 for prevailing below.

     The fee order was affirmed in a 3-0 decision by our local appellate court, authored by Justice Moore.

     The fee language was very expansive, covering tort claims arising out of the loan agreement--with special emphasis given to the “touching upon” verbiage. That was certainly enough to affirm the conclusion that the fee award was correct. (Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th 1338, 1342-1344 (1992); Lerner v. Ward, 13 Cal.App.4th 155, 159-160 (1993).)

Costs: Prevailing Government Entity Not Entitled To Claimed Costs For Preparing Clerk’s Transcript On Appeal

 

Taxing Party Validly Shifted Burden, Which Was Based On Hearsay “Estimate” Obtained From Court Clerk, and County Did Not Meet Its Burden.

     Although routine costs are generally proven on a prima facie basis by a verified costs memorandum, this does not mean that an objecting party cannot raise objections which may shift the burden to the other side. In that case, other side, be careful how you respond, as the next case demonstrates.

     In Lee v. County of El Dorado, Case No. C069049 (3d Dist. Oct. 30, 2012) (unpublished), County of El Dorado prevailed against an in pro per plaintiff both at the trial level and in a prior unpublished appellate decision in which appellate costs were awarded to County. It filed a costs memorandum seeking $456 for the preparation of a clerk’s transcript. Plaintiff actually objected to the costs item, and County opposed by submitting the declaration of a legal assistant who said she inserted this “estimate” based on a court clerk who provided her the estimate.

     Plaintiff appealed and won this one.

     County indeed was entitled to seek this item as costs; although it does not have to really pay this cost, Government Code section 6103.5(a) allows the item to be recovered under the general costs statute in the court’s discretion--apparently under the assumption that another government employee had to spent time actually preparing the clerk’s transcript so that the item is recoverable. (Guillemin v. Stein, 104 Cal.App.4th 156, 164, 166 (2002).)

     However, plaintiff’s objection to the “estimate” did serve to shift the burden of proof to the County, which could not surmount the hearsay nature of the substantiation or speculative “estimate” challenge. Reversed as to this item, and in pro per can recover his costs on appeal--interesting reversal of fortune.

Upside down parachute.  1863.  Library of Congress.

Arbitration/Class Action: Attorney Failing To Arbitrate, Litigate, Or Appeal Was Not Entitled To Arbitrator Allocation Of Fees In Class Action Case

 

Moral of the Story .... Be Careful What You Ask For (Or Don’t Ask For).

     Here is a very interesting arbitration/litigation saga about attorneys and clients bickering over how to divide class action attorney’s fees. It also shows an objecting attorney that you better be careful how you proceed (and the objecting attorney is a well known class action practitioner).

     McCall v. Morris Polich & Purdy (The Quisenberry Law Firm), Case No. B239142 (2d Dist., Div. 5 Oct. 30, 2012) (unpublished) is a situation where two defendant law firms were conflicted out based on representing both salaried managers and hourly workers, with a third firm (Quisenberry) substituting in for the salaried managers and another counsel coming in to represent the hourly workers (although the new hourly workers counsel was not involved in the fee dispute). Third firm (Quisenberry) eventually negotiated a settlement on behalf of the salaried managers class, with the first two defendants filing a notice of lien in the wage/hour class action. A court hearing then resulted in a fee award of $380,000, but the trial judge refused to allocate the fees between the two defendants and Quisenberry. Third law firm then argued that the conflict interest disqualified the two defendants from any fees, but this motion was denied. Then, the trial judge ordered the $380,000 to be escowed, payable to the two defendants and third law firm, while clients went to binding arbitration against the defendants. Clients did file an arbitration proceeding, but only against the two defendants, with a court denying defendants’ requests to include Quisenberry in the arbitration. An arbitrator eventually allocated 65% of the fee award to the two defendants and 35% to Quisenberry. However, on a petition to confirm the award filed by defendants, another superior court judge corrected the award to strike the 35% allocation to Quisenberry because he was not a party to the arbitration.

     Quisenberry appealed, but lost.

     The arbitrator did not have the power to allocate the fee because Quisenberry was not a party to the arbitration. However, the arbitrator could determine the quantum meruit amount owed to the two defendants who did have an arbitration clause with clients (the class representatives). The trial court did well to correct the award by striking the 35% allocation to Quisenberry. (Ikerd v. Warren T. Merrill & Sons, 9 Cal.App.4th 1833, 1837, 1842-1846 (1992); Jones v. Humanscale Corp., 130 Cal.App.4th 401, 411-412 (2005).)

     So, what could have Quisenberry have done to avoid this affirmance of the corrected arbitration award? These options, according to the appellate court: (1) file suit to adjudicate his rights to the $380,000 fee fund created by the prior superior court judge; (2) institute litigation to bring all interested parties into court pursuant to CCP 1281.2(c) [the provision allowing a trial court discretion on how to deal with arbitration parties and nonparties]; (3) seek to stay the arbitration in order to resolve the dispute in the judicial forum; (4) agree to be a part of the arbitration between class representative clients and defendants; or (5) challenge the prior superior court judge’s final order regarding the fee fund and conflict rulings. Corrected arbitration award affirmed.

Requests For Admissions/Section 1717: Plaintiff Suing Under Breach Of Promissory Note And Fraud Suffers $41,117 Apportioned Adverse Fee Award Under Civil Code Section 1717, Affirmed on Appeal

 

Denial of RFA Costs-of-Proof Sanctions to the Defense Also Sustained.

     Both sides of the litigation in Terry v. Myers, Case Nos. B216925/B220128 (2d Dist., Div. 3 Oct. 29, 2012) (unpublished) probably went away very unhappy with the results of the Civil Code section 1717 fee award and the refusal to award costs-of-proof sanctions for plaintiff’s denial of pretrial requests for admissions.

     The case involved a plaintiff “investor” who provided a promissory note to an alleged defendant promoter, both of whom were apparently scammed by third parties. Plaintiff sued for breach of a note (with a fees clause) and fraud (alleging he was the victim of a Ponzi scheme). The trial court found that plaintiff failed to meet his burden on the litigated claims. The lower court then did two things: (1) awarded defendant $41,117 out of a requested $388,190 under section 1717; and (2) refused to award RFA costs-of-proof sanctions to the defense in the requested amount of $238,190 arising out of plaintiff’s pretrial denial of certain RFAs.

     Both orders were affirmed on appeal.

     The lower court did not apply an inappropriate sliding scale of fault, after determining the $41,117 was justified because defendant won on only a small number of claims. Because it could determine that the contract and tort theories were not interrelated and involved different proof presentations, no discretion was abused by discounting for the proper claim “victories.”

     With respect to the RFA denials, the Court of Appeal determined that plaintiff had a reasonable basis to deny many of them, given that they involved legal conclusions rather than facts. This “reasonable belief” ground is an express exception that will justify not imposing RFA costs-of-proof sanctions. (Code Civ. Proc., § 2033.420(b)(3)-(4).)

Family Law: Second Appeal Is Not A Charm For Husband

 

$70,000 Needs-Based Award Affirmed So Wife Can Prepare for Trial.

     Husband, in a prior appeal, did not convince the appellate court to overturn a $200,000 needs-based fees award in favor of wife. He didn’t in a second appeal of a $70,000 fees award made to wife so she could prepare for a 7-day hearing.

     The appellate court in Marriage of Hofer, Case No. B233788 (2d Dist., Div. 6 Oct. 29, 2012) (unpublished) determined that husband had much more ability to pay, but did nix wife’s request for $200,000 given that she had access to $100,000 awarded previously so some contribution by her was warranted. Husband also diminished his challenge by admitting he had already paid his own attorney $258,000 and posted a $300,000 cash bond in the prior appeal--certainly demonstrating he had assets and cash flow. Also, no case law prohibits the trial court from making an order requiring husband to borrow if need be. Given that the future hearing was expected to last 7 days and involved complex accounting issues, $75,000 was anything but an excessive award. Affirmed.

Sanctions: $354 Million Contempt Judgment Against Marcos Estate Affirmed By Ninth Circuit

 

$100,000 Per Day Penalty Also Sustained.

     As reported by Leigh Jones in an October 25, 2012 post at The National Law Journal, the Ninth Circuit Court of Appeals recently upheld a $354 million contempt judgment against the Estate of Ferdinand Marcos and in favor of a human rights class action group in a suit where plaintiffs sued alleging summary executions, tortures, and other human right violations committed by the Marcos regime. The contempt judgment followed in connection with an earlier $2 billion judgment against the estate, with the contempt ruling aimed at attempts by Imelda Marcos and her son Ferdinand, Jr. to move money out of the estate so as to avoid paying the $2 billion judgment. The Ninth Circuit also sustained a $100,000 per day penalty imposed by the district court.

Lady Bird Johnson, Ferdinand Marcos, LBJ, Imelda Marcos.  Sept. 14, 1966.  Marion S. Trikosko, photographer.  Library of Congress.

Insurance: Insured Had Incentive To Keep Costs Reasonable When Duty To Defend Dispute Occurred And Insurer Internal Billing Guidelines Not Contained In Policy Cannot Steer Fee Reasonableness Determination

 

U.S. District Judge So Rules in N.D. Illinois Decision.

     We thank our friends at NALFA for calling the next decision to our attention (as posted on in their Attorney Fee Blog).

     In Philadelphia Indemnity Ins. Co. v. Chicago Title Ins. Co., USDC, N.D. Ill. Case No. 09 C 7063 (June 10, 2012), an insurer challenged an insured’s billings because they were not reasonable and did not comply with the insured’s internal billing guidelines. Both challenges were rebuffed.

     The district judge determined that neither argument prevailed under the circumstances before him.

     First, the insured was paying for defense efforts at a time when the insurer had contested the duty to defend, meaning that the insured had every incentive to keep defense costs reasonable. In this regard, the court followed parallel reasoning expressed in Taco Bell Corp. v. Continental Cas. Co., 388 F.3d 1069 (7th Cir. 2004)

     Second, the insured’s internal billings guidelines were not incorporated into the insurance policy such that they could not on hindsight basis be considered to drive a fee reasonableness determination by the court.

In The News . . . . Brea Wins Ballot Measures T and U Dispute, But Has Spent Close To $80,000 In Defense Of Suit Brought By City Council Candidate Steve Vargas

 

     As reported by Lou Ponsi in the October 26, 2012 online issue of The Orange County Register, Brea City Council candidate Steve Vargas brought a suit challenging the city clerk’s alleged omission in allowing attribution of oppositions to two ballot measures to the entire city council rather than just two city councilmen who wrote the opposing arguments. (The ballot measures were Measure T, which would limit the city manager’s salary and require that the official live in town, and Measure U, which would impose mandatory time frames for public record requests.) Mr. Vargas, after receiving an adverse decision on the merits, lost his bid for a new trial from Orange County Superior Court Judge Robert Moss. Brea’s city attorney has indicated that the tab for the city’s defense of the suit is approaching $80,000.

Eskimo Town Council.  1900 – 1923.  Library of Congress.

Unlicensed Contractors: Landowner Using Unlicensed Contractor To Cut Trees Cannot Be Vicariously Liable For Fee Recovery Under CCP § 1029.8

 

$50,148 Fee Award Gets Reversed.

     Code of Civil Procedure section 1029.8(a) authorizes a fee award against an “unlicensed person who causes injury or damage to another person as a result of providing goods or performing services for which a license in required.” The next case explored whether fee recovery could be had not against the unlicensed contractor, but against the person utilizing the services of the contractor in a tree cutting damages action.

     Rony v. Costa, Case Nos. A128596/A128836 (1st Dist., Div. 1 Oct. 26, 2012) (published) is a situation where one neighbor unaesthetically had an unlicensed contractor remove overhanging tree limbs from a neighboring Monterey cypress in order to make way for an outdoor pizza oven in neighbor’s back yard. Well, that proved to be a costly decision--likely eclipsing the delight of the pizzas--because a trial court awarded the impacted neighbor $22,530 in actual damages, doubled to $45,060 under a statutory double-damages provision after testimony demonstrated that the Monterey cypress was left somewhat denuded. However, the lower court also assessed $50,148 in attorney’s fees against losing neighbor, reducing the requested fees by 20%.

     Losing neighbor appealed both the merits and fee judgments, losing on the merits but winning a reversal as to the fees award.

     The reason is that the statutory language in section 1029.8 is only directed against the unlicensed contractor, who was not a party to the suit. The appellate court determined that the statutory language was clear, that the Legislature knew how to impose vicarious liability (but not do so in this area), and that the general respondeat superior statute (Civ. Code, § 2338) did not provide a basis to engraft vicarious fee liability under section 1029.8.

Allocation/SLAPP: SLAPP Fees Go POOF For One Defendant, But Other Defendant Has To Apportion On Remand For Fee Recovery

 

$82,048 Joint Fee Award Goes Away, But One Defendant Has Another Swing At It.

     Given that we are in the midst of the World Series between the Giants and Tigers (the Giants having a 2-0 lead at present), it is fitting we review a SLAPP post where one defendant lost fees when a SLAPP grant was reversed, but another defendant has another swing at fees when the SLAPP grant was affirmed as to him--but with a remand order to apportion out fee work only relating to the winning defendant.

     That is exactly what happened in Park Wellington Owners’ Assn. v. Edwards, Case No. B235623 (2d Dist., Div. 4 Oct. 25, 2012) (unpublished).

     Two defendants won SLAPP motions, with the lower court jointly awarding them mandatory fees of $82,048. However, one defendant’s grant was overturned on appeal, so no fees on that one. The other defendant’s SLAPP grant was sustained, but the appellate court ordered the case back so that fee work could be apportioned out with respect to what winning defendant incurred.

     Plaintiffs requested fees against the losing defendant (based on the SLAPP fee provision allowing such fees if the motion is determined to be frivolous or motivated by delay), but the appellate court found there was no such showing given only a minimal merit demonstration is required to defeat a SLAPP motion. (Fashion 21 v. Coalition of Humane Immigrant Rights of Los Angeles, 117 Cal.App.4th 1138, 1149 (2004).)

Costs/Billing Record Substantiation: Unredacted Billing Records Adequately Described Services

 

However, Failure to File Costs Memorandum Meant $80,758.75 Costs Award Went Away.

     In Bustamante v. T.O. IX, LLC, Case No. B241233 (2d Dist., Div. 6 Oct. 25, 2012) (unpublished), plaintiffs lost a real estate purchase fraud case against defendants, with the purchase contract containing a fees clause. A judicial referee awarded attorneys fees totaling about $1,119,000 to four law firms representing the various defendants (yep--no typo, showing how fees can be ruinous to losing litigants) and costs totaling $80,758.75.

     Plaintiffs appealed. They lost the fee challenge, but won the costs challenge, although that may be a small victory given the size of the total fee awards.

     The main challenge to the fee awards was that redacted billings made review of the services provided impossible. However, the record showed that the referee ordered defendants to provide unredacted billings to be reviewed in camera. A big problem for plaintiffs/appellants is that they did not provide this information to the appellate court by asking that it be unsealed. Nevertheless, the records that were provided did have a sufficient description of services.

     As far as the costs award was concerned, the defense lost that one became they failed to file a costs memorandum which impeded plaintiffs’ ability to file a motion to tax costs. Thus, the costs award was ordered stricken by the appellate court.

Costs/Deadlines/Eminent Domain: Defendant Condemnee’s Failure To Timely File Costs Memorandum Was Fatal For Recovery Of Appellate Costs

 

Also, U.S. Supreme Court Brief Printing Costs Cannot Be Awarded as Costs By State Courts.

     Defendant condemnee was allowed the opportunity, after a prior appeal, to seek costs under Code of Civil Procedure section 1268.720, a statutory provision allowing appellate costs in an eminent domain proceeding in the court’s discretion (Los Angeles Unified School Dist. of L.A. County v. Wilshire Center Marketplace, 89 Cal.App.4th 1413, 1419 (2001)), even though he had been denied quite a few of previously requested costs in the earlier appellate proceeding. Defendant yet again sought certain appellate costs for filing fees, motion fees, court reporter fees, and U.S. Supreme Court brief printing costs. The trial court again granted the motion to tax costs, except this time it was for all of them.

     Defendant’s appeal was unsuccessful in People ex rel. Dept. of Transp. v. Constant, Case No. E054542 (4th Dist., Div. 2 Oct. 24, 2012) (unpublished).

     The reasons were primarily two-fold: (1) defendant did not timely file a post-appellate costs memorandum within 4 months of the remittitur issuance (Cal.Rules of Court, rule 8.278); and (2) the costs of printing briefs in the U.S. Supreme Court may not be awarded by the state courts (Citizens Against Rent Control v. City of Berkeley, 181 Cal.App.3d 213, 223-224 (1986)).

     Although normally landowner yet again gets his costs on appeal in an eminent domain action, appellate court can depart from that rule, and this case presented a rare circumstance for it to say that each side would bear their own costs of appeal--ending this one once and for all, likely. (Eastern Municipal Water Dist. v. Superior Court, 157 Cal.App.4th 1245, 1256 (2007) [appellate court’s departure from landowner costs obtaining appellate costs rule “should be rare”].)

Section 998: Inconsistent Language In 998 Offer Foiled Winning Plaintiff’s Attempt To Recover Post-Offer Costs Along With Lump-Sum, Unallocated Nature Of Offer

 

$129,701 In Taxed Costs Was the Result.

     The next case is somewhat of a chilling reminder to carefully word CCP § 998 offers, making sure the offer/acceptance sections are consistent and insuring that the offeror is covering how fees and costs are to dealt with if the offer is accepted. Also, offers must be allocated where there are multiple defendants, with lump-sum offers not passing muster.

 Chilling reminder.  Chilling room.  1940.  John Vachon, photographer.  Library of Congress.

     Tapia v. Jones, Case No. B234511 (2d Dist., Div. 8 Oct. 25, 2012) (unpublished) is a situation where plaintiffs in a broadside car incident recovered substantial jury awards after sending a rejected 998 offer that offered to allow defendant to settle by stipulating to a $99,999.00 judgment in plaintiffs’ favor “plus taxable costs incurred to date of judgment.” However, aside from the lump-sum nature of the offer, there was another rub: the acceptance line parroted the judgment amount, but ended with “each side to bear its own costs of litigation.” Based on this inconsistency, the trial court taxed $129,701 of the requested $140,652 in costs (awarding only $10,951) based on the invalidity of the 998 offer.

     This result was affirmed in a 3-0 opinion written by Justice Rubin.

     The appellate court agreed that the 998 offer was ambiguous so that it was too uncertain to qualify as one under section 998--based on the ambiguity presented based on the different wording on “taxable costs.” (Bias v. Wright, 103 Cal.App.4th 811, 820-821 (2002).) Also, the lump-sum offer to multiple defendants without any indication of allocation among the defendants also made the offer too uncertain. (Taing v. Johnson Scaffolding Co., 9 Cal.App.4th 579, 583 (1992).)

     Structure your 998 offers carefully, allocating out in multi-party situations and follow the procedural requirements set forth in section 998 itself, making sure the offer and acceptance sections are consistent in nature.

Appealability/Appeal Sanctions: Failure To Provide Adequate Record Doomed Challenge That Fees Should Have Been Awarded

 

Appeal Sanctions Denied Because No Declaration Filed to Support Fee Request.

     Preserving claims for trial court error depends on raising the argument below and providing an adequate record to the appellate court. Violation of either principle likely means an appeal will be unsuccessful. Likewise, with respect to appeal sanctions, one must follow the California Rules of Court, filing a separate motion and declaration supporting the requested sanctions in a timely and proper manner.

     Transgressions by both sides in Serna v. Polanco, Case No G046323 (4th Dist., Div. 3 Oct. 24, 2012) (unpublished) [with similar appellate causes involving Ms. Polanco not discussed because they are largely duplicative in facts and results] meant that a request for fees and appellate sanctions were rejected.

     Defendant appealed an adverse restraining order against her and also requested an an award of attorney’s fees. Both sides requested appellate sanctions under CRC, rule 8.276.

     Both sides’ requests were denied.

     Although defendant’s appeal on the merits of the restraining order was moot because the order expired by its terms, the attorney’s fees order was certainly in play as far as whether positive money should flow to her. (Building a Better Redondo, Inc. v. City of Redondo Beach, 203 Cal.App.4th 852, 866 (2012).) However, the fee request was flawed because defendant failed to provide an adequate appellate record--nothing indicated the request was even made to the trial court and she cited no authority for fee entitlement.

     The dueling appellate sanctions requests by both sides were rejected because neither filed a declaration with the sanctions motions supporting the monetary amounts requested, a violation of CRC, rule 8.276(b)(1).

     The opinion was written by Justice Ikola on behalf of a unanimous panel.

POOF!/Prevailing Party: Partial Reversal Of Result In Landscape Easement Agreement Dispute Means $146,000 Fees/Costs Award Goes POOF!

 

On Remand, Reversal Might Mean that No One Prevailed or Even Other Side Prevailed.

     Where one side prevails across the board and obtains a fees/costs award, reversal on an important issue will usually overturn the entire award because the prevailing party determination might be different--either no side prevailed or even the original loser has now prevailed if loser’s relief is significantly greater from a pragmatic perspective.

     No better case illustrates this result than the recent unpublished opinion issued in Kientz v. Jarvis, Case No. B228486 (2d Dist., Div. 7 Oct. 24, 2012) (unpublished).

     Respondents had won on all issues in a landscape easement dispute involving an easement agreement with a fees clause. The lower court later awarded respondents $125,000 in fees (out of a requested $154,000) and $21,000 in costs (out of a requested $34,000).

     Those awards went POOF! on appeal. The reviewing court primarily reversed the lower court’s findings that the appellants were prohibited from trimming mature trees in the landscape easement and that the easement was exclusive in nature. As a result, the discretionary prevailing party determination under Civil Code section 1717(b)(2) had to be reassessed on remand based on the merits reversal--after all, the trial judge now had to determine whether anyone prevailed after respondents’ more limited success in light of the appellate reversal.

Civil Rights: Fee/Costs Award Against Losing § 1983 Plaintiff Vacated Because Civil Rights Claims Were Not Frivolous In Nature

 

Ninth Circuit Affirms § 1983 Defense Summary Judgments, But Does Not Find Plaintiff’s Claims Were Groundless, Without Foundation, Frivolous, or Unreasonable in Nature.

     42 U.S.C. § 1988 has a tough standard for prevailing defendants to hurdle in order to gain attorney’s fees recovery against a losing plaintiff in a § 1983 civil rights case: entitlement only happens “when plaintiff’s claims are groundless, without foundation, frivolous, or unreasonable.” (Karam v. City of Burbank, 352 F.3d 1188, 1195 (9th Cir. 2003).)

     Although plaintiff lost summary judgments on § 1983 claims in Tsao v. Desert Palace, Inc., Case Nos. 09-16233/09-17535 (9th Cir. Oct. 23, 2012) (published), the Ninth Circuit vacated about $21,500 in fee/costs awards to the defense in rendering a published decision demonstrating why plaintiff’s claims were far from frivolous (although ultimately unsuccessful when the reviewing court affirmed the SJM rulings). Section 1988’s high standard was not forded in this one.

Car fording creek.  Sept. 1940.  Marion Post Wolcott, photographer.  Library of Congress.

Section 998: Failure To Beat Defense 998 Can Expose Jury Winning Plaintiff To Costs Judgment Against Plaintiff

 

     Although the appellate court rejected plaintiff’s sole argument on review that future medicals should have been awarded, Hanamaikai v. Howard, Case No. H037346 (6th Dist. Oct. 24, 2012) (unpublished) is a sober reminder of how CCP § 998 is a potent costs-shifting provision in a case where attorney’s fees are not available to either side.

     There, plaintiff won $39,954 in past economic loss (mainly medical expenses) from a jury in a low-speed auto collision case, with the trial court proposing an additur of $25,000 for past pain and suffering damages which the defense accepted. However, the trial judge did not increase for any future medical expenses, a determination sustained by the appellate court. However, here is the rub: the defense offered to settle under CCP § 998 for $101,000, an offer apparently rejected by plaintiff. That rejection had repercussions, with the defense obtaining a net positive judgment of $63,557.89 (i.e., $123,511.89 in defense costs minus the $59,954 in damages awarded to plaintiff). Ouch!

SLAPP/POOF!: Reversal Of SLAPP Grant In Qui Tam Actions Means Fee Recovery To The Defense Goes POOF!

 

     We know by now that winning defendants get mandatory, reasonable fee recovery after winning a SLAPP motion. (Code Civ. Proc., § 425.16(c)(1).) However, a reversal of a SLAPP grant invokes our “POOF!” principle on the fee award.

     Defendants in People ex rel. Strathmann v. Acacia Research Corp., Case Nos. G045390 et al. (4th Dist., Div. 3 Oct. 24, 2012) (published) learned that lesson all too well. At the trial court level, they won a SLAPP grant in a tam qui action and then obtained a fee award against plaintiff in the sum of $100,660.50 (out of a requested little over $101,000).

     That all went POOF! when the SLAPP grant was reversed on appeal. The appellate court decided that the qui tam action fell within an express exception to SLAPPable suits, which meant the fee award tumbled and costs on appeal were awarded to plaintiff. The interesting issue on remand is whether plaintiff can gain appellate fees for winning if they convince the lower court that the SLAPP motion was made frivolously (given the appellate court opinion noting indicia of fraud in former germane litigation).

     The opinion was authored by Justice Fybel on behalf of a 3-0 panel of our local Santa Ana appellate court.

Costs: Lower Court’s Disallowance Of Costs Of Digitally Scanning Exhibits And Creating Graphics Was No Abuse Of Discretion

 

Modern Technology Notwithstanding, Reasonably Necessary Versus Convenience Is Judgment Call, With Deference Given to Trial Judge.

     Complementary to our contemporaneous post on Parks v. Port of Oakland is the appellate court’s affirmance of a decision to disallow certain high technology trial costs in Dodds v. Meng, Case Nos. D058766/D059409 (4th Dist., Div. 1 Oct. 23, 2012) (unpublished).

     There, a lower court granted defendants’ motion to tax costs, disallowing $6,051.14 of $11,840.27 sought for the cost of digitally scanning exhibits and creating graphics (although some projector expenses were allowed), finding they were only convenient (nonrecoverable) rather than reasonably necessary for the litigation (recoverable, see Code Civ. Proc., § 1033.5(c)(2)).

     On appeal, the reviewing court found that the trial judge’s disallowance decision did not fall outside the range of permissible options. El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4th 612, 620 (2007), although encouraging the use of modern technology and countenancing recovery of such expenses, did not stand for the blanket proposition that disallowance of costs is necessarily an abuse of discretion. The particular trial circumstances have to be taken in account, with the disallowance in this cause not resulting in an abuse of discretion.

     BLOG UNDERVIEW--This case also has interesting discussions on the right to a jury trial and proper measure of damages recovery in California shareholder derivative actions.

Costs: Expedited Deposition Transcripts, Litigation Support, And Deposition Reporter Holiday Per Diem/Different Transcript Formats/Transcript Production Fees Can Be “Reasonably Necessary”

 

Other Cases Finding These Costs Nonrecoverable Are Distinguishable.

     There are two important principles at play in the next case we discuss with respect to recovery of routine costs by a prevailing party: (1) the lower court has a large latitude of discretion to award costs “reasonably necessary to the conduct of the litigation’’ (rather than merely convenient or beneficial to its preparation), with the caveat that they be reasonable in amount (Code Civ. Proc., § 1033.5(c)(2), (c)(3)); and (2) the lower court’s determination on the “reasonably necessary” fit is reviewed for a clear abuse of discretion and a miscarriage of justice, placing a heavy burden on the challenging appellant (Chaaban v. Wet Seal, Inc., 203 Cal.App.4th 49, 52 (2012)).

     Parks v. Port of Oakland, Case Nos. A131903/A132101 (1st Dist., Div. 4 Oct. 22, 2012) (unpublished) involved a losing party’s challenge to a lower court award granting winner recovery of expedited deposition transcript fees, litigation support expenses, messenger fees for handling deposition transcripts, and deposition reporter expenses such as parking, a holiday per diem, fees for different transcript formats, and transcript production fees.

     Port of Oakland.  1939.  Library of Congress.

In The News . . . . Law Firms Offering Cut-Rate Fees To Keep Lawyers Occupied

 

However, Law Partners At Top Firms Now Make 23 Times What Average U.S. Worker Makes, Up From 11 Times From 25 Years Ago.

     In her October 15, 2012 post at the ABA Law Journal, Debra Cassens Weiss indicates that Bruce MacEwen believes that U.S. law firms are offering cut-rate fees to clients to keep their attorneys occupied and cover fixed costs. He also observed that, 25 years ago, average partner pay at the nation’s top firms was 11 times higher than the average U.S. worker, but that now has spiked to 23 times higher now.

     We note that the increase in income equality noted by the ABA Law Journal article is simply one example of a general trend in income distribution:  “A 2011 study by the CBO^] found that the top earning 1 percent of households gained about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America's the income distribution.”  See the Wikipedia article on “Income inequality in the United States.”

In The News . . . . U.S. Trustee Chapter 11 Proposed Guidelines Mulled, Avandia MDL Fee Request Revealed, Delaware Supreme Court Refuses To Revisit Large Shareholder Lawsuit Fee Award, Fannie Mae/Freddie Mac Legal Fees Spent To Defend Ex-Execs On The Rise

 

     We thank our friends at the National Association of Legal Fee Analyses (NALFA) for recent posts on its Attorney Fee Blog, which we have culled and now summarize for you.

U.S. Trustee Proposed Guidelines.

     NALFA’s September 1, 2012 post: The U.S. Trustees Program met in May of this year to discuss proposed billing guidelines designed to curb rising fees in Chapter 11 bankruptcy cases, with the proposed guidelines actually contained in the post. (So far, for example, $1.6 billion in feees have been netted in Lehman Bros.’ Chapter 11 case, according to the post.)

Avandia MDL Class Action Lawyers Request Up To $143.75 Million in Fees.

     September 20, 2012 post: Lawyers in the Avandia MDL case are requesting up to $143.75 million in attorneys fees and costs under the common benefit doctrine, which amounts to 6.25% of the settlements reached to date.

Delaware Supreme Court Lets Stand Shareholder Law Fee Award of $305 Million.

     September 21, 2012 post: The Delaware Supreme Court refused to revisit its $305 million fee award, believed to be the largest ever, in a shareholder derivative lawsuit brought on behalf of Southern Cooper Corp. shareholders.

Fannie Mae and Freddie Mac Legal Expenses Soar to Defend Ex-Executives.

     September 27, 2012: Legal bills for defense of former executives at Fannie Mae and Freddie Mac are estimated to total $97 million for former CEO Franklin D. Raines and others, about $37 million of which has already been paid by the government.

B of A Class Action Attorneys Seek $150 Million in Fees.

     October 1, 2012: Attorneys in the Bank of America class action involving the Merrill Lynch acquisition will seek to recoup $150 million in attorney’s fees (6% of the settlement fund, which is lower than the 11.1% median usually seen in securities cases).

JP Morgan Chase Ups Third Quarter Legal Expense Reserve.

     October 18, 2012: JP Morgan Chase & Co. has set aside an additional $684 million in the third quarter of this year for litigation expenses, apparently for more residential subprime mortgage suits and for defense of some class actions.

SLAPP: Denial Of SLAPP Fees To Defendants Reversed Because Action Was Indeed Frivolous

 

Lower Court’s Refusal to Award Fees Reversed.

     CCP § 425.16(c)(1) requires a mandatory award of sanctions if the trial court determines an anti-SLAPP motion is frivolous or intended to cause unnecessary delay.

     Plaintiff in Shukartsi v. Kesselman, Case No. B235190 (2d Dist., Div. 8 Oct. 19, 2012) (unpublished) lost a SLAPP motion, with the appellate court affirming the determination that the claims did not arise from protected activity. However, the lower court refused to award the defense sanctions under section 425.16(c)(1). That latter determination was reversed in Shukartsi, with the appellate court determining that no reasonable attorney would file such a meritless motion. Not only was the matter remanded for the trial court to fix motion fees to the defense, but defendants also gets to put in a request for appellate fees as a result of their victory. Double ouch!

Retainer Agreements: Client Losing Fees Of $18,000 To Attorney On Cross-Complaint Lost Arbitration And Billing Statement Challenges

 

     In Gao v. Lin, Case No. B236041 (2d Dist., Div. 4 Oct. 19, 2012) (unpublished), client lost his malpractice action, but attorney recovered $18,000 on his cross-complaint for unpaid fees, even though the trial court reduced the requested $23,562 based on duplicative work and inefficiencies.

     Client’s challenges to the fees award were not found persuasive on appeal.

     Although the retainer agreement did have an arbitration clause, arbitration was waived because client litigated in a judicial forum and never even mentioned arbitration until after he lost in court. As for a challenge to the sufficiency of the billing statements, the lower court did reduce the request for some items and certainly had an exhibit before him detailing the work.

Private Attorney General (CCP §1021.5): Winning Nonprofit Entites Entitled To Postjudgment 1021.5 Fees Totaling $45,555.50

 

Plaintiffs Appealed on Significant CEQA Fire Impacts, Quino Protection, and Water Supply Impacts Issues.

     Plaintiffs in Preserve Wild Santee v. City of Santee, Case Nos. D055215/D061030 (4th Dist., Div. 1 Oct. 19, 2012) (published) certainly deserve accolades for hanging in there and prevailing on CEQA challenges to fire impacts, Quino protection, and water supply impacts issues relating to the EIR for a development project in Santee’s Fanita Ranch area.

     Certain defendants challenged that plaintiffs did not prevail and the lower court did not adequately explain the basis for the award, even though they were awarded $45,555.50 in postjudgment fees under California’s private attorney general statute, CCP § 1021.5.

     The appealing defendant were not able to deflect the fee award; and, in fact, the appellate court found that plaintiffs (who also appealed) won some more challenges--Quino protection and water supply impacts--that cemented the determination that they prevailed. The reviewing court did not bat an eye in determining that vindication of key CEQA issues made plaintiffs the prevailing parties. (Center for Biological Diversity v. County of San Bernardino, 185 Cal.App.4th 866, 892-893, 895 (2010).)

     As far as the argument that the trial court had to make a more detailed explanation of the fee award, this one lost because no statement of decision was ever requested by Santee or the appealing developer. (Ketchum v. Moses, 24 Cal.4th 1122, 1140-1141 (2001) [one of our Leading Cases].)

     BLOG UNDERVIEW--So what is a Quino? It is shorthand for Quino Checkerspot, an endangered species, that is a member of the brush-foot butterfly family, needing large, unfragmented habitat areas having open scrub vegetation with larval host plants, nectar sites, and small to large topographic rises in close proximity.

Quino Checkerspot.  Wikipedia.

Settlement: Fees Clause In Settlement Agreement With CCP § 664.6 Enforcement Rights Gave Fee Recovery To Prevailing Party Ex-Wife

 

Attacks on Jurisdiction Rebuffed, Garnering $15,592 in Fees When Motion to Void Judgment Denied.

     We commend all litigators to read the unpublished decision in Stone v. Stone, Case No. B239097 (2d Dist., Div. 4 Oct. 18, 2012) (unpublished). It involves husband’s attempt to void a settlement agreement/merged judgment reached in a bitter dispute with ex-wife and his children. However, it has discussions of recurring issues arising under CCP § 664.6, the statutory enforcement mechanism for settlement agreements in California state courts. It talks about subject matter jurisdiction, personal jurisdiction, severability of settlement provisions, and parol evidence issues of interest all around.

     Wife was found to be the prevailing party entitled to fees under the settlement agreement fees clause, meaning that the $15,592 fee recovery from the trial court was affirmed--and she gets a chance to seek fees for seemingly winning on appeal.

Civil Rights: Alamo v. Practice Mgt. Information Corp. Now Published/Citable

 

General Verdict Acquiescence By Defense Sealed Propriety of Fee Award.

     In our September 24, 2012 post, we discussed Alamo v. Practice Mgt. Information Corp., Case No. B230909 (2d Dist., Div. 7 Sept. 24, 2012), which was unpublished at the time of original issuance. The opinion affirmed a FEHA fee award to plaintiff as prevailing party based on the defense acquiescing in a general verdict so as to be estopped from arguing a lack of fee entitlement basis. We can now report that Alamo has been published through an October 18, 2012 order entered on the appellate court’s own motion.

Arbitration/Fee Clause Interpretation/Prevailing Party: Dismissed Arbitration Still Meant Litigant Prevailed, Santisas Notwithstanding

 

Party Getting Dismissed Arbitration Proceeding Entitled to Fees.

     Lakeside Club Villas, Inc. v. LB Property Mgt., Inc., Case No. B236001 (2d Dist., Div. 5 Oct. 16, 2012) (unpublished) is an interesting case showing how the breadth of a fees clause awarding fees/costs in an arbitration will garner a litigant a fee recovery, even though the arbitration was dismissed and the rule might have been different in the case of dismissed court action (where contractual fees would likely be precluded under Santisas v. Goodin, 17 Cal.4th 599, 617 (1998) [one of our Leading Cases].)

     Here, plaintiff HOA sued defendant under various claims arising under a management agreement containing an arbitration clause. Defendant successfully moved to compel arbitration, and plaintiff filed an arbitration demand with JAMS. The parties then settled, and plaintiff dismissed the arbitration--apparently not deciding the fee/costs issue in the settlement. [BLOG POINTER--Resolve the fees/costs issue in this type of settlement agreement.] Then, plaintiff moved to recover fees, seeking $11,680 and obtaining an award of $10,278. Defendant appealed, arguing plaintiff was not a prevailing party in the arbitration.

     Defendant was unsuccessful on appeal.

     The problem here was that the defense might have won under the Santisas rule. However, the fees clause did allow recovery of costs to the prevailing party in an arbitration. Although the arbitration was not completed, it was commenced with the filing of the arbitration demand such that the ultimate dismissal did not negate the fact that the dispute was submitted to arbitration, meaning that plaintiff won--the fees were awardable as costs pursuant to CCP § 1032.

POOF!: Reversal To Allow For Trade Secret Amendment Means $63,960.30 Fee Award Goes POOF

 

Reversal for Leave to Assert Statutory Trade Secret Claims Means Trial Court Award Goes Away . . . For Now.

     When a judgment is reversed on appeal, an attorney’s fees award often gets reversed as premature until further proceedings decides who wins or whether a party eventually wins on a fee entitled basis.

     That lesson was demonstrated well in FLF, Inc. v. Barney & Barney, LLC, Case Nos. A131131/A132329 (1st Dist., Div. 2 Oct. 16, 2012) (unpublished). There, even though a party won $63,960.30 in attorney’s fees based on a defense of a breach of contract and promissory estoppel claims, the appellate court reversed after finding that a party should be allowed to amend to state a statutory trade secrets claim (which itself has a fee-shifting clause) and affirmed the promissory estoppel result (which the trial court found could be found to have arisen out of the contractual agreement). However, as a result of the reversal, the $63,960.30 award went POOF!

Civil Rights: Federal First Circuit Court Of Appeals Finds That Fee Reduction For Rejecting Pretrial Settlement Above Amount Of Eventual Damages Was Improper

 

Attorney Should Not Be Penalized for Civil Rights Plaintiff’s Choice To Go To Trial.

     As reported at Law Blog on October 12, 2012, the First Circuit Court of Appeals has issued an interesting civil rights fee decision in Diaz v. Jiten Hotel Mgt., Inc., Case No. 11-2400 (1st Cir. Oct. 12, 2012).

     Diaz involved a housekeeper plaintiff suing defendant hotel employee for age discrimination, civil rights, and defamation, among other things, Two claims, the federal and state age counts, proceeded to trial, with plaintiff eventually winning $7,650 on the state law claim. Diaz’s attorney then sought a fee recovery of $139,622. The district judge decided that the proper lodestar was only a third ($44,766), given that only 2 of 6 claims went to trial, a proportionate reduction that the appeals court found was proper. However, the district judge also reduced fees more -- down to $25,000 -- after learning that hotel offered, but plaintiff rejected, a $75,000 pretrial settlement offer.

     On appeal, the First Circuit reversed and remanded the fee award for restudy. It found that the district judge improperly focused upon the rejection of the settlement as a basis for reducing the award. A civil rights lawyer should be not be forced to throttle a client into a settlement, given the settlement decision lies with the client and it would be unfair to punish the attorney for a “hindsight” wrong decision. Also, hotel defendant did not use the settlement fee/costs shifting offer of judgment procedure under FRCP 68, such that “it cannot use its informal offer as a sword.”

     The appeals court further decided that plaintiff was not entitled to prejudgment interest on the fee award (because it was not part of the original compensatory judgment), but was entitled to postjudgment interest on any fees award eventually awarded.

Prevailing Party/Special Fee Shifting Statute: Fee Denial To Attorney In Contempt Proceeding Reversed And Remanded To Determine Existence of Attorney-Client Relationship Giving Rise to Fee Recovery

 

First Aftermath of Published Rickley v. Goodfriend Decision

     On July 30, 2012, we posted on Rickley v. Goodfriend, 207 Cal.App.4th 1528 (2012) (Rickley I), which reversed  a fee denial reversed, based on CCP § 1218 which does allow contempt proceeding fee-shifting in the right circumstances. The matter was remanded, however, to determine if there was an attorney-client relationship between attorney and homeowners (given that attorney was one of the co-plaintiff homeowners)--making sure that attorney was outside of the Trope v. Katz in pro per prohibition.

     Recently, the same appellate court remanded one of the fee denials in trial court proceedings based on Rickley I. Although the opinion is really just a remand and breaks no new ground, here is the slip opinion information for your reading pleasure: Rickley v. Goodfriend, Case No. B238965 (2d Dist., Div. 7 Oct. 15, 2012) (unpublished). (Rickley II).

In The News . . . . B of A New Billing Arrangement Questioned, Wisconsin Supreme Court Mulls Over Whether To Suspend Lawyer On Billed Hours Representations To Partners, And 2011 Proposition 65 Settlements Went Mainly To Attorneys

 

B of A Discount Proposal to Attorneys Getting More Customer Referrals From It Draws Uproar.

     As reported by Debra Cassens Weiss in an October 11, 2012 post on the ABA Journal, some legal experts are in an uproar over the Bank of America seeking a credit on its annual attorney’s fees payables based on account of customer business it sends to preferred provider law firms. At least one ethics expert opines that this is an ethic rule violating referral in return for money, while one partner of a large U.S. law firm sees no problem with the arrangement.

Wisconsin Supreme Court Hears Oral Argument in Interesting Suspension Case.

     Ms. Weiss, in an earlier October 10, 2012 post, informs us that the Wisconsin Supreme Court recently heard oral arguments over whether to suspend a lawyer accused of lying to his partners about his billable hours even though he correctly billed clients for his work efforts.

Results Are in On Where 2011 Proposition 65 Settlements Go.

     Forbes, in an October 10, 2012 online post in its “Business” section, reports that, according to the California Office of the Attorney General, 74% of Proposition 65 settlement awards in 2011 went to pay attorney’s fees and costs.

Discovery: $105,492.25 In Discovery Sanctions Against Defendant And Its Attorney Sustained For Evasive Responses And Inordinate Meet And Confer Broken Promises

 

Trial Court Has Some Interesting Discussion of Trees Along the Way.

     DK Art Publishing, Inc. v. City Art, Inc., Case No. B229122 (2d Dist., Div. 5 Oct. 11, 2012) (unpublished) is a sober reminder that game playing in discovery proceedings can result in serious sanctions that will indeed be affirmed upon review by an appellate tribunal.

     In this one, a discovery referee made recommendations that were for the most part followed by a trial court after observing that plaintiff did not get requested information from defendant City Art after one year of meeting/conferring, inclusive of 55 meet/confer letters, two hours of in-person sessions, seven telephonic sessions lasting over 4 hours, and multiple withdrawn motions to compel by plaintiffs based on broken promises. In total, the trial court awarded $105,492.25 to plaintiff and against defendant City Art and its attorney, not surprisingly prompting an appeal.

     After dismissing challenges to the discovery referee’s disclosures and the appointment process, the appellate court affirmed the discovery sanctions. The discovery sanctions were justified under Code of Civil Procedure section 2023.030(a), which authorizes sanctions for evasive responses and counterproductive meet/confer activity. The appellate court found no substantial justification for the defense activities during discovery. Finally, defense counsel was liable for sanctions under Ghanooni v. Super Shuttle of L.A., 20 Cal.App.4th 256, 261 (1993) because he was an active participant in the discovery abuse and the case does not narrowly hold that he was only liable for advice given to the client in the discovery context.

     BLOG UNDERVIEW--We especially liked some of the trial court’s comments made during the discovery sanctions proceedings. Here you go. “Said the court: ‘There's an old saying that a friend of mine who lives down in the south, in Louisiana, said. “If you don't want my peaches, don't shake my tree.” [¶] You had a little tree-shaking going on here, and certainly in the early stages. And apparently it has become now a case that has well exceeded George Washington and any given cherry tree. [¶] It is most unfortunate. It is absolutely most unfortunate. However, I think the defendants brought it on. Not you, present counsel, but I believe the defendants and their counsel are all responsible for bringing us to the point. [¶] The evasiveness and the failures that were initiated back in 2008 and which have continued since the appointment of the referee were stunning.”

Design drawing for stained glass window showing George Washington in uniform, with rays of divine light, and icons: rifle, cherry tree, axe, Masonic pyramid/all-seeing-eye, Great Seal of the United States; with text "One was a soldier".  Library of Congress.

Family Law: Needs-Based $9,000 Fee Award To Wife And Failure To Award Fees To Husband For 271 Sanctions Award Against Wife Were No Abuses of Discretion

 

Income Earning Disparity Was Tangible and Failure to Provide More Information on 271 Request Was Fatal.

     Husband challenged two things in Marriage of Smith, Case No. B232161 (2d Dist., Div. 8 Oct. 10, 2012) (unpublished): (1) a needs-based Family Code 2030/2032 fee award of $9,000 to wife; and (2) refusal to award him attorney’s fees after the court sanctioned wife $1,000 under Family Code section 271 based on a lack of complete candor with respect to asset disclosure.

     His appeal was not persuasive.

     With respect to the needs-based award, there was a disparity in earning capacities/incomes even though wife had some inheritance money in the bank. As far as the $9,000 amount, that too was okay because wife’s requested fees encompassed several years of litigation and the lower court was familiar with her counsel’s efforts.

     Husband had requested an award of fees based on the 271 sanctions against wife. The trial court wanted him to submit more information on this request, something he apparently did not do. This failure to provide more data was damning on his appeal of the issue.

Special Fee Shifting Provision: Defense Costs In School District Case Was A Proper California Public Records Act Request

Fair Game

     In Grossman v. Superior Court, Case No. E056931 (4th Dist., Div. 2 Oct. 10, 2012) (unpublished), the Riverside-based appellate court issued a writ determining that a California Public Records Act request for how much counsel was paid for defending a school district case was a proper request, akin to “fair game” information on salaries paid to public employees and not protected by Government Code section 6254(b)’s “pending litigation” exception to mandatory disclosure.

Landlord/Tenant And SLAPP: Plaintiffs’ Failure To Separately Appeal SLAPP Order Precluded Appellate Review And Defense Entitled To Fee Recovery Under the Mobilehome Residency Law Because Plaintiffs’ Dismissed Complaint Was Based On MRL Violati

 

Collateral Order Doctrine and MRL “Arising From” Principles Explored.

     In Hall v. West, Case No. D060402 (4th Dist., Div. 2 Oct. 10, 2012) (unpublished), defendants moved to SLAPP plaintiff’s extant complaint, prompting plaintiffs to obtain leave to file a second amended complaint and then dismissing the action without prejudice. The trial court proceeded to award SLAPP fees to the defense in the amount of $4,200. Later on, the lower court awarded attorney’s fees of $19,133.75 to the defense for the entire action based upon fee clauses in the mobilehome rental agreements between tenants and landlord. Plaintiffs appealed.

     Unfortunately, the appeal of the SLAPP fee award was dismissed. Reason? Plaintiffs failed to timely appeal the separate fee order within 60 days of its service. The appellate court agreed with City of Colton v. Singletary, 206 Cal.App.4th 751, 781-782 (2012) [discussed in our June 1, 2012 post] that a collateral order was involved having to be separately appealed. It found Doe v. Luster, 145 Cal.App.4th 139 (2006) distinguishable (applying only to an order denying SLAPP fees) and would not follow the decision where the appeal was from an order granting SLAPP fees to the defense.

     However, the notice of appeal was sufficiently broad to encompass review of the $19,133.75 fee order. The lower court certainly had post-dismissal jurisdiction to award fees and costs, although the voluntary dismissal without prejudice barred a contractual fee award under Civil Code section 1717. That brought the appellate court to consider whether fees could be awarded under plaintiffs’ tort claims because they arose out of the Mobilehome Residency Law (MRL) which has a fee-shifting provision in Civil Code section 798.85. After surveying the law on what type of claims “arise from the MRL,” the appellate court decided that plaintiffs’ claims were based on MRL violations even though no direct statutory claims were alleged. (Del Cerro Mobile States v. Proffer, 87 Cal.App.4th 943, 945-948 (2001), but also discussing SC Manufactured Homes and MHC Financing.) Second fee order affirmed.

Mr. Timothy Rack Rent, an old miserable landlord, & his neighbour Lease-hold, a country attorney.  Jonathan Spilsbury, engraver?  18th century.

Prevailing Party: Second District, Division 1 Adopts Bright-Line Test That “Of Counsel” Attorney Successfully Representing Firm Not Entitled To Recoup Fees For Firm Under Trope Prohibition

 

Close of Relationship Between Firm and “Of Counsel” Found Dispositive.

     Presiding Justice Mallano, on behalf of a 3-0 panel of the Second District, Division 1, adopted a bright-line test in Sands & Associates v. Juknavorian, Case No. B232686 (2d Dist., Div. 1 Oct. 10, 2012) (published). The appellate court decided that a firm represented by “of counsel” in a fee dispute cannot recovery attorney’s fees as the prevailing party based on the Trope v. Katz self-representation prohibition. This was based upon the closeness of the relationship between a law firm and “of counsel” (a single, de facto firm). (See People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc., 20 Cal.4th 1135, 1153 (1999).) Justice Mallano also provided a nice summary of the leading cases in this area--PLCM Group, Gilbert, Witte, Carpenter, Mix, and Ramona--in adopting a bright-line rule in the “of counsel” context.

_________________________________________________________________________________________

Special Fee Shifting Statute: District Court’s Denial Of Fees To Successful Plaintiff In BLM Grazing Permit Dispute Was Justified Under EAJA

 

Post-Fire Crisis Management Decisions Justified BLM’s Grazing Permit Position, Even Though Found Ultimately Unsuccessful.

     Western Watersheds Project v. Ellis, Case No. 11-35464 (9th Cir. Oct. 9, 2012) (published) involved an attorney’s fees dispute that, as the Ninth Circuit observed early on in its opinion, “added a rancorous coda to long-running grazing permit litigation in Idaho that was ably overseen by the district court.”

     Plaintiff challenged the Bureau of Land Management”s (BLM’s) renewal of grazing permits in the Jarbidge Resource Area of Southern Idaho. The district court found plaintiff’s challenges to the permits had merit. The parties entered into a settlement agreement which was disrupted dramatically when a massive fire swept through the area (destroying most of the grazing land), with plaintiff then again successfully challenging post-fire BLM grazing decisions. However, the district court denied attorney’s fees to plaintiff under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d)(1)(A).

     The fee denial was affirmed by the Ninth Circuit.

     The district court found that the post-fire decisions, although incorrect, were crisis decisions that were far from unjustified in nature given the circumstances. The federal appeals court refused to parse the BLM’s agency decision from its litigation strategy, as plaintiff wanted it to do. The post-fire crisis certainly justified BLM’s attempt to salvage something from an utter calamity.

Chacon, Mora County, New Mexico. United States forest ranger in the general store issuing grazing permits to Spanish-American ranchers. Jan. 1943.  John Collier, photographer.  Library of Congress.