Deadlines, Section 998, Section 1717: Not Attaching 998 Offer To Costs Memorandum Is Not Fatal, But Fifth District Panel Finds Trial Judge Lacked Jurisdiction To Enter Post-Trial Section 1717 Fee Motion After Appeal Of Merits Judgment

We Think Panel Erred On The Trial Judge Lacking Jurisdiction To Entertain Fee Motion.

            In Swinerton Builders v. Fresno Plumbing & Heating, Inc., Case No. F069825 (5^th Dist. July 31, 2018) (unpublished), a general contractor won an indemnity dispute against a plumbing contractor under a subcontract with an indemnification/fees clause. The jury entered a compensatory award in favor of general contractor (which was appealed), and the trial judge later entered a substantial costs award for expert fees after the defense rejected a CCP § 998 offer and even later entered a $399,854.90 attorney’s fees award based on Civil Code section 1717.

            The Fifth District affirmed the compensatory award, affirmed the costs award, and reversed the fee award without prejudice to it being the subject of another fee application.

            With respect to the costs award, the defense principally challenged that it was erroneous to award expert witness fees where the 998 offer was not attached to plaintiff’s cost memorandum. The appellate panel determined that this was not the law, based on reasoning in Jones v. Dumrichob, 63 Cal.App.4^th 1258, 1267 (1998), which does not require that bills, invoices, statements, or any other such documents be attached to the memorandum given that counsel’s statement that costs were true and correct is prima facie evidence of propriety. The defense argued that Behr v. Redmond, 193 Cal.App.4^th 517, 538 (2011) was authority for the proposition that the 998 offer had to be attached, but the Fifth District panel found Behr was distinguishable because the costs claimant never provided the 998 offer at any time (with the plaintiff in this case so doing along the way) and it “would decline to follow” Behr and follow Jones instead.

            That brought the discussion to the fee order. The appellate panel determined, based on the appellate automatic stay of CCP § 916(a), that the trial judge lacked jurisdiction to entertain the section 1717 fee motion during the pendency of the appeal on the merits. However, it did not bar renewal of the motion given that “we are aware of nothing that will prevent the trial court from rewarding attorney fees on remand.”

            BLOG OBSERVATION—We believe that the appellate court got it wrong on the automatic stay issue. Rather, a post-trial section 1717 fee motion is an ancillary order not stayed by the filing of an appeal so as to be properly entertainable by the trial judge. (See Bankes v. Lucas, 9 Cal.App.4^th 365, 368 (1992); see also Doe v. Luster, 145 Cal.App.4^th 139, 144 (2006) [SLAPP context].)