Code Of Civil Procedure section 685.040 Entitled Plaintiff Only To Fees Incurred On The Single Cause Of Action On Which He Prevailed.
Code of Civil Procedure section 685.040 allows a judgment creditor to recover reasonable and necessary attorneys’ fees incurred in enforcing a judgment if the underlying judgment includes an award of attorneys’ fees to the judgment creditor.
In Hadaegh v. Khaligh, Case No. B291303 (2d Dist., Div. 7 January 22, 2020) (unpublished) Plaintiff filed an action to enforce a prior judgment – also alleging causes of action for fraud, fraudulent transfer, aiding and abetting fraudulent transfer, civil conspiracy, and resulting trust against Judgment Debtor and Other Defendants.
The trial court granted Plaintiffs’ motion for judgment on the pleadings as to the enforcement of the prior judgment, and Plaintiff continued to litigate the remaining causes of action for another 15 months before voluntarily dismissing them without prejudice.
Plaintiff then moved for attorneys’ fees in the amount of $204,575 pursuant to Code Civ. Proc. section 685.040 as the earlier judgment included attorneys’ fees. After some reductions for fees incurred for actions against Other Defendants, the trial court awarded Plaintiff $171,687.50 against Judgment Debtor.
Judgment Debtor appealed – arguing that a Chapter 7 Bankruptcy she had previously filed had discharged the attorneys’ fees and costs from the underlying judgment (although the underlying judgment was otherwise found to be nondischargeable) thereby “forever barr[ing] any claim for attorney’s fees, costs or expenses involved in or related to” the underlying judgment, and that the trial court had abused its discretion in awarding Plaintiff attorneys’ fees on the causes of action he voluntarily dismissed.
The 2/7 DCA agreed with Judgment Debtor’s argument as to the fees awarded on the dismissed causes of action – finding Plaintiff not entitled to fees incurred for causes of action for which he did not prevail. However, Judgment Debtor’s argument related to her earlier Chapter 7 discharge of fees went nowhere. Judgment Debtor had waived that argument by failing to timely raise it in the trial court. Nonetheless, the 2/7 DCA included a nice discussion of this issue – ultimately finding the argument meritless.
The judgment was reversed with direction to determine the reasonable and necessary attorneys’ fees Plaintiff incurred prior to the trial court’s grant of judgment on the pleadings.
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