However, $10,030.65 Costs Request Denied.
By now, a lot of us are familiar with the Stephanie Clifford (aka Stormy Daniels) case against President Daniel J. Trump, which had been litigated both in federal courts and the Los Angeles County Superior Court (LASC). In fact, Ms. Clifford got tagged with some SLAPP fees at the federal stage. What happened eventually was that Ms. Clifford, who brought a declaratory relief suit based on a nondisclosure agreement with a fees clause, sought to invalidate a nondisclosure where $130,000 was wired to her through Michael Cohen’s trust account. Eventually, the defendants which included President Trump, although he did not sign the nondisclosure agreement, signed a covenant not to sue and acknowledged that the settlement agreement was never formed. Based on this, defendants moved to dismiss the suit for lack of subject matter jurisdiction in the federal court and remanded the case back of the LASC, which dismissed the case with prejudice upon Ms. Clifford’s request to do so after the defense filed a motion.
Then, Ms. Clifford moved to recover $64,440.65 in fees and costs under both Civil Code section 1717 and the federal removal statute (28 U.S.C. §1447(c)) in Clifford v. Trump, Case No. BC696568 (L.A.S.C.). L.A. County Superior Court Judge Robert B. Broadbelt III, in a detailed order entered on August 17, 2020 after substantial briefing by both sides, granted Ms. Clifford $44,100 in fees against President Trump, but denied $10,030.65 in costs.
The lower court found that fees were warranted under section 1717 because Ms. Clifford prevailed given that she achieved her main litigation objective by having the defendants attempt to enforce the nondisclosure agreement against her. The result was a procedural dismissal, but a final resolution unlike cases where a procedural dismissal was temporary with no resolution of the merits. Because President Trump was not a signatory to the nondisclosure agreement with a fees clause, the assigned state judge had to confront whether there was a nonsignatory exception under section 1717 which applied. He determined there was, finding that President Trump was a third-party beneficiary of the nondisclosure agreement. With respect to the contention that fees were allowable under the federal removal statute, this did not provide an entitlement basis because the federal court never determined that removal was improper. Judge Broadbelt found that the lead counsel’s fees were reasonable, but that fees claimed by local counsel were not substantiated by competent evidence (because lead counsel could not competently testify about their efforts in cursory fashion). On the $10,030.65 costs request, it was denied because Ms. Clifford did not prevail under the routine costs statute—she obtained no net recovery and neither side obtained any relief. Beyond that, Ms. Clifford failed to file a costs memorandum, a requirement for obtaining costs most of the time in California state courts.
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