$281,577 Paid For Public Work Contractor Appeal Work Did Not Begin To Match Potential Fallout If Things Went Differently.
Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc., Case No. B291036 (2d Dist., Div. 8 May 22, 2019) (unpublished) is an interesting example of how the financial interest prong of CCP §1021.5, the private attorney general statute, is analyzed by intermediate appellate courts where a “prevailing” defendant eventually won, but had a significant stake and then still tried to recoup fees from the losing litigant—even though the successful party obtained no affirmative recovery.
Here, a bidding contractor sued the lowest bidder on 23 public work contracts for interference and other claims. The trial court sustained a demurrer on all claims, but the intermediate appellate court reversed on the interference count. Eventually, the California Supreme Court granted a petition by the lowest bidder, which won at a highest level. However, not content to let things stand, the “prevailing” lowest bidder sought attorney’s fees of $603,308.22 even though it had only paid its attorneys $281,577. The trial court denied the fee request.
The 2/8 DCA, in a 3-0 decision authored by Presiding Justice Bigelow, affirmed, although on different grounds. The lower court found that no public interest was implicated; however, affirmance nonetheless was appropriate because the financial interest prong of § 1021.5 was not satisfied.
The lowest bidder argued that there should be a “special” standard of review because of the California Supreme Court decision in its favor. Not really, said the appellate court, the appellate court is in the same position as the trial court, so why would things go any differently?
But that really took things into the financial interest prong of section 1021.5, putting the Whitley analysis front and center. (See our Leading Case No. 14 on Whitley.) Lowest bidder put a lot of reliance on Los Angeles Police Protective League v. City of Los Angeles, 188 Cal.App.3d 1 (1986), but this Court—in line with others—refused to apply the methodology in a case where the party seeking fees obtained no financial recovery—the case here, with the party only avoiding $14 million in connection with respect to 23 public work contract and avoiding plaintiffs’ alleged lost profits of $1.5 million. The interference claim, if adjudicated to the end, could have had an adverse impact on lowest bidder given an indication in its prior appellate pleadings (even before the California Supreme Court) about the possible draconian results of the interference claim if not reviewed. So, in the end, $280k-plus was not a bad investment, but it could not be shifted adversely so as to tag the opposing party for its advocacy otherwise.
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