Allocation/Section 1717/Substantiating Reasonableness Of Fees: Realtor/Broker Defensing Sellers’ Tort Claims And Winning Broker Compensation Cross-Claim Gets Contractual Fees Against Real Estate Plaintiffs/Sellers

 

Not Every Attorney Must Attest to Substantiation of Hours in Fee Petition.

     In Anelle v. Tran, Case No. G048072 (4^th Dist., Div. 3 Apr. 15, 2014) (unpublished), realtor/broker defendants defensed plaintiffs/sellers’ tort claims from a failed real estate transaction and also recovered listing compensation on a cross-claim where the listing agreement did contain a fees clause in favor of a prevailing party “regarding the obligation to pay compensation under [the] Agreement.” Defendants moved to recover attorney’s fees of almost $365,000 despite not having a valid memorandum of costs on file, with plaintiffs arguing that fees were not recoverable without a filed costs memorandum, fees were not awardable for defensing the tort claims, and inadequate substantiation in support of the fee petition was provided. The lower court disagreed, awarding defendants $241,355.29 in fees under Civil Code section 1717.

     Sellers’ appeal did not change the result.

     The appellate court could find no requirement that a valid memorandum of costs was a prerequisite for filing a fee motion where a court determination of fees was required, although “perhaps it is the better practice to file both [a costs memo and a fee motion].”

     Although section 1717 does not apply to tort claims, an exception exists where defense of noncontractual claims is necessary to succeed on the contractual claim. (Siligo v. Castellucci, 21 Cal.App.4^th 873, 879 (1994).) No apportionment was required—and none was made by the lower court—where the claims were intertwined and allocation was impracticable.

     Plaintiffs also argued that the fee substantiation was deficient because only a supervising attorney provided a declaration about the work effort behind the fee request. Our local appellate court found that this was an onerous, unworkable requirement: “. . . plaintiffs’ proposed requirement that every attorney who ever worked on the case submit a separate declaration is neither legally required nor particularly useful.” (Slip Opn., p. 12, also citing In re Sutter Health Uninsured Pricing Cases, 171 Cal.App.4^th 495, 512 (2009).)

     Justice Moore wrote the 3-0 opinion on behalf of the 4/3 panel hearing the matter.