Reasonableness Of Fees: Trial Court Did Not Abuse Its Discretion In Denying Plaintiff Creditor His Requested Fees Where Debtor Invalidated A “Penalty” Structured Settlement

Creditor Properly Recovered Only $2,500 Out Of A Requested $15,730 In Fees Against Debtor.

            In Murphy v. Combat Sports Academy, LLC, Case No. A153937 (1^st Dist., Div. 5 May 24, 2019) (unpublished), a plaintiff creditor structured a settlement with defendant debtor by which a stipulated judgment would be entered for $150,000 from a “true” discounted settlement amount of $32,800 if debtor failed to timely pay under a specified payment schedule.  Debtor did pretty well, but it owed about $6,600 before not paying anymore.  Creditor then sought to obtain entry of the $150,000 after crediting debtor for its actual payments.  The lower court, after reversing itself from prior rulings, finally determined the settlement arrangement was a penalty, and that only $6,600 was owed by debtor based on the “true” settlement amount after credit for payments.  Creditor also was awarded $2,500 out of a requested $15,730 in attorney’s fees for his efforts in obtaining the lower judgment amount.  The appellate court affirmed the trial court’s reduced award based on debtor winning the penalty argument and on creditor only obtaining a much reduced judgment than what was being sought all along.