Plaintiff’s Request For $819,171.75 In Fees Was Inflated, With $150,000 Settlement Amount Being Much Lower Than The Damages Being Sought, Forget Demands In Mediation.
With 2020 drawing to a close, we can say there have been a surge in decisions on who is a prevailing party under Civil Code section 1717 where the results have been mixed or far from clear. Bonacci v. Maranhas, Case No. B298194 (2d Dist., Div. 5 Dec. 29, 2020) (unpublished) is yet another example of where a party garners no attorney’s fees and costs after accepting a “cost of defense” pretrial offer and after presenting an inflated fee request.
In this one, plaintiffs in a residential lease dispute brought 17 causes of action, including a FEHA, retaliatory eviction, and residential inhabitability warranty claim against defendant landlord. Two months before trial and before a summary adjudication motion could be heard, defendant served a CCP § 998 offer for $150,000 which internally was based on the defense’s estimates on what it would cost to try the case going forward. Plaintiffs accepted the 998 offer, but they then moved to recover attorney’s fees of $819,171.75 in attorney’s fees (inclusive of a 1.5 multiplier) based on fee shifting provisions under FEHA and the residential inhabitability warranty statutes—fee entitlement was not at issue. The lower court decided that no one prevailed, given that the defense only settled for cost of defense (not settling for what plaintiffs truly wanted) and that the fee request was inflated based on the settlement result.
The 2/5 DCA affirmed, because this type of prevailing party determination was fact bound and it was no abuse of discretion. Neither party achieved their litigation goals: plaintiffs got nowhere close to the potential damages, while the defense had to pay some not insubstantial change (i.e., a trial costs of defense settlement). The fee request, also, was inflated when compared to the settlement recovery. Plaintiffs argued that the lower court factored in a $1 million settlement demand by them in mediation proceedings, but the record below did not show that this was an influential factor at all.
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