CALIFORNIA ATTORNEY'S FEES

Homeowner Associations, Private Attorney General: Lower Court Got It Right In Denying Fees To Homeowner And HOA Which Did Not Meet Their Main Litigation Objectives, And Homeowner Was Not Successful Party Or Provided A Significant Benefit Under CCP § 102

Ending Appellate Court Comment Urges Homeowners and HOAs To Work It Out, Rather Than Run To Court, Saying “Amen” To Trial Judge’s Closing Observation.

            In Artus v. Gramercy Tower Condominium Assn., Case No. A161265 (1^st Dist., Div. 2 Mar. 30, 2022) (published), a homeowner sued an HOA over election voting rules and sale/leasing guidelines.  Homeowner lost one claim on demurrer, a second claim on an anti-SLAPP motion, and dismissed three others as moot based on unilateral changes to rules/guidelines by the HOA.  Then, both sides moved for prevailing party fees under the Davis-Stirling fee shifting provision, with homeowner also claiming fees under the private attorney general statute; both sides asked for over $300,000 in fees.  They submitted 1,867 pages of fee proceeding paperwork, and then charts and 217 more pages when the trial judge asked for more information.  The trial judge denied both fee motions in a detailed ruling, prompting an appeal by both sides (who had been before the appellate court before in the same dispute).

            The 1/2 DCA affirmed.  It initially decided that the abuse of discretion standard applied, even as to entitlement, because there was no clear “winner take all” prevailing party.   With respect to homeowner’s Davis-Stirling fee request, homeowner only obtained one out of four of her litigation objectives, obtaining some changes by the HOA to some rules/guidelines (many of which were technical in nature).  On the HOA side, HOA did not achieve its objective to fight Dr. Artus forever as far telling it how to govern, even though it did unilaterally make changes—to make changes after fighting so hard was a difficult pill to swallow as far as showing it pragmatically prevailed.  Finally, on homeowner’s 1021.5 request, she was not “successful” and the changes made by HOA did not benefit a wide number of other HOA members. 

            However, the appellate court had to quote and endorse the trial judge’s ending observation in this closing part of its opinion:  “‘I’m aware that there has been a long history of disputes between Dr. Artus and this association, I’m trying to send a message here. And that message is, don’t run to court. Run to try to work things out. Both sides.” To that we say ‘Amen.’”

Private Attorney General: Appellate Court’s Reversal Of Grant Of Peremptory Writ Of Mandate Discharge Directives Also Gave Rise To Reversal Of Denial Of CCP § 1021.5 Fees.

Also, Trial Judge Applied An Inapt Catalyst Theory To The Plaintiff’s 1021.5 Fee Request.

            In Community Venture Partners v. Marin County Open Space Dist., Case Nos. A161851/A162374 (1^st Dist., Div. 4 Mar. 28, 2022) (unpublished), the appellate court reversed the granting of District’s motion to discharge a peremptory writ of mandate in a land use case and the denying of plaintiff’s motion for attorney’s fees under CCP § 1021.5.  It found that the lower court misconstrued what was needed to discharge the writ, so that the fee denial request had to be revisited.  The lower court determined that plaintiff was not the successful party, but the appellate court tried to head off future error by reminding the lower court that a catalyst theory was not in play—so that success on any significant issue with benefit was the correct legal standard for review even though not indicating how the trial judge should rule on remand.

Block Billing, Reasonableness Of Fees: Even With Block Billing, $170,000 Fee Award—After A $64,000 Reduction—Was No Abuse Of Discretion

Block Billing Criticisms Are Fair, Depending On The Circumstances.

            Simons v. Superior Court, Case No. B309885 (2d Dist., Div. 3 Mar. 25, 2022) (unpublished) is a situation where the appellate court affirmed a Civil Code section 1717 fee award, even with high hourly rates and block billing, when the fee factual finder awarded $170,000 after reducing the requested fees by $64,000.  The appellate court confirmed that criticisms of block billing were justified, but its application depends on the nature of the billings.  The fee finder’s reductions were ample such that nothing more needed to change. 

Requests For Admission: Costs-Of-Proof Sanctions Properly Denied Based On Ambiguity Of Requests And No Substantial Importance For Negligence Issues In Play

No Abuse Of Discretion Demonstrated.

            In Cleveland v. Taft Union High School Dist., Case No. F080084 (5^th Dist. Mar. 25, 2022) (unpublished), plaintiff obtained a $2 million negligence verdict against District in assessing the threat posed by a student who shot plaintiff in the stomach with a shotgun.  Plaintiff then moved for RFA costs-of-proof sanctions under CCP § 2033.420 for denying RFAS about “violent threats” for incidents occurring 11 months before the shooting.  Both the trial and appellate court agreed that no RFA sanctions should be levied against the defense.  The term “violent threats” was ambiguous, so that alone justified denial of sanctions.  Beyond that, however, these previous incidents were not crucial to a determination of negligence to an event occurring 11 months later, such that the trial judge could reasonably determine that the RFAs were not of substantial importance in the case. 

Private Attorney General: $118,089.00 Fee Award For Litigant Partially Prevailing On CEQA Claim Affirmed On Appeal

Traffic Correction In EIR Justified The Award.

            Once you prevail on a significant CEQA issue, fee entitlement under the private attorney general statute is likely the general rule, to the chagrin of municipalities and developers.  However, the trial judge still has discretion to make reductions as in a normal civil fee dispute, as United Homeowners Association II v. Peak Capital Investments, Case No. B308682 (2d Dist., Div. 4 Mar. 24, 2022) (unpublished) demonstrates.

            Here, the trial judge awarded $118,089 under CCP § 1021.5 out of the fee request of $169,651.50.  Because the traffic issue was significant, the fee entitlement challenge on appeal was unsuccessful.  Then, that brought the appellate court to the amount of the fee award.  There were deductions for block billings, duplication, and other issues—all affirmed, with the reviewing panel determining that the trial judge’s “math” behind the fee award not having to be perfect. 

Arbitration: Where Arbitration Costs Are Only Allowed To Be Granted By An Arbitator, That Contractual Clause Is Binding

Subsequent Post-Trial Proceeding Costs Not Subsumed In Contractual Clause.

            In Crowder v. Freeman, Freeman & Smiley LLP, Case No. B309001 (2d Dist., Div. 1 Mar. 22, 2022) (unpublished), an appellate court reversed a superior court fee denial relating to arbitration proceedings, where only the arbitrator was allowed to award fees and costs.  The appellate court enforced the plain meaning of the arbitration fee provision, which only allowed for the arbitrator to award costs. 

Consumer Statutes, Preemption: FTC Holder Rule Was To Be Applied Retroactively Such That Attorney’s Fees Denial Should Be Reversed

Civil Code Section 1495.5 Recent Enactments Sealed The Result.

            The Fifth District, in Reyes v. Beneficial State Bank, Case No. F080827 (5^th Dist. Mar. 2022) (published), had to confront a FTC Holder Rule argument that it capped attorney’s fees as “recovery” by its terms.  The appellate court, relying on Pulliam (see our Feb. 2, 2021 post), agreed that this was the case, but reversed an attorney’s fees denial because Civil Code section 1459.5 retroactively nullified the impact of this rule so that the Holder Rule cap did not apply. 

Arbitration, Mediation: $38,000 Fee/Costs Award By Arbitrator To Prevailing Seller Was No Abuse Of Discretion

Arbitrator’s Ruling That Seller Did Not Unreasonably Refuse Mediation Was Upheld.

            Unless an arbitration agreement has language indicating that the arbitrator’s award is subject to review under a heightened standard for legal error, it will be close to impossible to reverse an arbitrator’s legal, much less factual, determinations.  Faro v. Garnero, Case No. C093870 (3d Dist. Mar. 21, 2022) (unpublished) demonstrates that in a fees/costs award context.

            There, seller in a real estate disclosure dispute prevailed, later awarded $38,000 in fees and costs after the arbitrator decided that seller did not unreasonably refuse to mediate (“it was open to interpretation”) under a contract which required mediation as a condition precedent to arbitration.  Buyer’s appeal did not change the result.  The main problem was that the arbitration agreement did not call for anything other than a deferential review of the arbitrator’s legal and factual determinations, which can be based on “justice and equity.”  There was no heightened requirement that the arbitrator’s decision could be reviewed for legal errors.  So, the arbitrator’s call that Seller did not refuse mediation was the “end game” call. 

Family Law: Family Code Section 2020 Denial Of Fees To Ex-Wife Was No Abuse Of Discretion Given The Record Created By Ex-Husband

2030 Fee Orders Are Guided By An Abuse Of Discretion Standard With Respect To The Parties’ Ability To Pay.

            Ex-wife, in Marriage of Ian W. and Margot H., Case No. A160486 (1^st Dist., Div. 4 Mar. 21, 2022) (unpublished), was under the misapprehension that Family Code section 2030 fees were mandatory in any event.  That notion was cleared up on appeal.  Although there was some disparity in financial resources, ex-husband showed he was tapped out via prior orders and expending $600,000 in dissolution fees.  The trial court denied ex-wife’s 2020 fee request without prejudice.  Her appeal was unsuccessful.  Ex-husband showed that he paid some substantial child support and ex-wife litigation expenses already, which justified the denial of fees—given that ex-husband went into debt to defend himself in the divorce proceedings. The fee denial, under the circumstances, was no abuse of discretion. 

Appealability, Arbitration: Trial Court’s Denial Of Motion For Costs And Attorney’s Fees Incurred In Opposing And Conducting Arbitration Proceedings Denied As Interlocutory Because Merits Of Action Was Not Yet Decided

Lots Of Arguments Raised, But Merits Had To Be Decided To Determine Who Prevailed.

            What occurred in Harris v. University Village Thousand Oaks CCRC LLC, Case No. B311972 (2d Dist., Div. 6 Mar. 21, 2022) (unpublished) is that a lower court’s confirmation of an arbitration award was reversed because the appellate court determined that the arbitration clauses were void.  Plaintiffs, thinking they prevailed, sought costs on appeal and in the arbitration, as well as attorney’s fees in the prior appeal and the arbitration.  The lower court denied the substantial fee and costs requests relating to appellate and arbitration expenses, without prejudice to renewing upon a merits-based adjudication in the lawsuit.

            The 2/6 DCA affirmed.  The fundamental reason for sustaining the lower court’s order was that the fees/costs denials were interlocutory because the merits of the underlying case had not been finally determined; this meant the orders were not appealable until future events occurred to establish a prevailing party.  However, for purists and appellate attorneys, this is nice reading on these issues: (1) split in thinking on when an appellate court ruling on costs is an independent judgment for appeal purposes—discussing Rostack Investments, Inc. v. Sabella, 32 Cal.App.5^th 70, 79, which talks about Barnes versus Krikorian; and (2) split in thinking on whether a trial court order granting attorney’s fees on appeal was appealable under the collateral order doctrine—discussing Apex LLC v. Korusfood.com, 222 Cal.App.4^th 1010, 1015 n. 1 (2013), which talks about Barnes and Krikorian split on the issue—but it did not have to get into the weeds because it was dealing with a fee denial, not an order to pay fees. 

Special Fee Shifting Statutes: $71,075.075 Grant Of Attorney’s Fees To California Public Records Act Petitioner Reversed Because Minimal/Insignificant Results In Document Disclosure May Allow For Denial Of Fees Altogether

Minimal/Insignificant Standard Is Applicable to CPRA Fees, Even Though the Statute Has Mandatory Prevailing Party Fee Language.

            Riskin v. Downtown L.A. Property Owners Assn., Case No. B309814 (2d Dist., Div. 3 Mar. 17, 2022) (published) dealt with a situation where a petitioner under the California Public Records Act (CPRA) obtained a $71,075.75 attorney’s fees award based on mandatory prevailing party fee language, even though petitioner only obtained one document.  The opposing party had argued that the “success” was minimal or insignificant such that the trial judge had discretion to deny fees altogether. The lower court felt constrained by the mandatory language in awarding what it did.

            The 2/3 DCA reversed, in an opinion authored by Orange County Superior Court Judge Kimberly A. Knill, sitting by designation as an appellate justice.  The panel determined that a minimal/insignificant standard did exist under CPRA, in line with “dicta” in Los Angeles Times v. Alameda Corridor Transportation Authority, 88 Cal.App.4^th1381, 1391-1392 (2001) and with other appellate cases not denouncing that standard.  So, where a requestor only obtains partial relief under the CPRA, the minimal or insignificant standard applies so as to allow fee denial altogether if the circumstances show this should be the fair result.

Prevailing Party, Section 1717: Despite Some Partial Appellate Issue Reversals, Plaintiff Water Authority Prevailed Under A Contractual Fees Clause So As To Be Entitled To Fees And Costs For Achieving Litigation Success On Important Water Rate Issues

Prevailing On “Water Rates Not Set Pursuant To Law” Issue Drove The Conclusion.

            Without going into a detailed discussion of the prolonged dispute between the parties, San Diego County Water Authority v. Metropolitan Water Dist. of Southern California, Case No. A162168 (1^st Dist., Div. 3 Mar. 17, 2022) (unpublished) shows that a “prevailing party” determination under Civil Code section 1717 focuses on the importance of litigation objectives rather than some collateral losses along the way.

            Briefly put, plaintiff won an initial judgment that defendant’s water rates charged under an exchange agreement, which had a contractual fees clause, were legally noncompliant and awarded a $234 million judgment to plaintiff.  The lower court then awarded about $9 million in contractual attorney’s fees to plaintiff, but only for phase one work of a two-phased trial.  In a prior appeal, the appellate court reversed some issue findings on the water rates, but it did affirm that the rates were noncompliant in certain areas.  It also determined that contractual fees should be awarded for both phases of the trial.  On remand, plaintiff obtained a $44 million judgment on the contract plus ancillary declaratory relief as to rate noncompliance.  Because the judgment benefited plaintiff, its ratepayers, and others in the defendant’s service area, the lower court determined plaintiff was the prevailing party for fees and costs.  (The amount of the fees award is not described, but the requested costs were $326,918.34—so the fee award had to be substantial.)

            The 1/3 DCA affirmed the fees and costs awards.  The water rate adjudication did fall within the exchange agreement such that contractual fee entitlement was clear.  Plaintiff did prevail based on winning some important water rate challenges benefiting both themselves and others.  Costs were properly awarded because they are expressly allowed under section 1717, such that no separate routine costs analysis under CCP § 1032 needed to be engaged in. 

Consumer Statutes: $406,154.25 Fee Award Under The Song-Beverly Act And The CLRA Affirmed Despite Reversal of CLRA Restitutionary Award

Despite Finding Defendant Made A Proper Offer Of Correction, CLRA Injunctive Relief and Fee Entitlement Under The Lemon Law Justified Entry Of The Trial Judge’s Fee Award.

            In DeNike v. Mathew Enterprise, Inc., Case No. H046718 (6^th Dist. Mar. 16, 2022) (unpublished), plaintiff suing for vehicle problems under the Song-Beverly Consumer Warranty Act (Lemon Law) and Consumers Legal Remedies Act (CLRA) obtained a jury verdict that defendant violated both Acts, determining that plaintiff was entitled to an award of $36,192.79 as well as injunctive relief under the CLRA.  The trial judge awarded plaintiff $406,154.25 in attorney’s fees, the lodestar request plus a 1.5 multiplier.  On appeal, the 6^th District vacated the CLRA jury verdict after determining that restitution was not warranted based on an appropriate correction offer by the defendant.  The injunctive relief was not disturbed.

            Defendant appealed the fees award based on the reversal of the CLRA jury verdict, but that did not change the award in favor of plaintiff.  Defendant argued that under Benson v. Southern California Auto Sales, Inc., 239 Cal.App.4^th 1198, 1212 (2015), no attorney’s fees could be collected in a CLRA case where a proper correction offer was made by a defendant.  The Sixth District, however, did not believe that Benson applied to the Lemon Law claim and jury verdict under that Act, such that the fee order was justified for that reason.  However, the appellate court also determined that it did not have to go that far because plaintiff did obtain CLRA injunctive relief, which justified fees and with Benson expressly declining to address the issue of fee entitlement if injunctive relief was obtained.  So, the trial court did not have to reconsider its fees ruling such that it stood after the judgment was modified via the published decision to delete the CLRA restitutionary jury verdict. 

Private Attorney General: 4/2 DCA Reverses Private Attorney General Fee Denial In Housing Plan Dispute With City Of Desert Hot Springs, Remanding For Determination Of Amount To Be Awarded

Private Enforcement Necessity Prong Does Not Require Causation, With The Litigation Vindicating Important Affordable Housing Rights For A Large Class Of People.

            Plaintiffs sued the City of Desert Hot Springs and related parties to force a long overdue obligation to revise the housing element of the city’s general plan.  The city had missed numerous deadlines in the past relating to a housing plan, stalled further during prelitigation negotiations with plaintiffs, and only later entered into a stipulated judgment to adhere to certain housing plan guidelines after a suit was filed.  Plaintiffs then moved to recover $328,255 in attorney’s fees under CCP § 1021.5, California’s private attorney general statute.  The trial judge’s tentative was to award a reduced amount of $121,485 in fees, but he then pivoted to award nothing.  He reasoned plaintiffs did not cause the city to eventually agree to the deadline, because it was in the process of doing so—meaning that private enforcement necessity was not shown.

            The 4/2 DCA reversed and remanded for the trial judge to determine the amount of fees to be awarded to plaintiffs in Garcia v. City of Desert Hot Springs, Case No. E075523 (4^th Dist., Div. 2 Mar. 16, 2022) (unpublished).  Legally, causation is irrelevant on the private enforcement necessity prong of section 1021.5, just that public enforcement is not sufficiently available as was shown by city’s conduct along the way.  (City of Sacramento v. Drew, 207 Cal.App.3d 1287, 1298 (1989).)  Beyond that, plaintiffs did vindicate an important affordable housing public issue impacting a large class of people.  Finally, because plaintiffs did achieve their litigation objectives, the appellate court determined that the lower court erred by not awarding $94 in routine costs to plaintiffs. 

Family Law: $33,500 Family Code Section 6344 Fee Award Was Properly Imposed

Due Process Was Provided, And Ability To Pay Did Not Need To Be Considered.

            In Khuwaja v. Ladak, Case No. B306355 (2d Dist., Div. 2 Mar. 15, 2022) (unpublished), a litigant was hit with a $33,500 fee award under Family Code section 6344(a), which allows a discretionary award of fees and costs to a prevailing party in a petition for a domestic violence restraining order (DVRO).  The other side appealed based on due process and ability to pay grounds.  The appellate court affirmed.  The fee request was set for a noticed hearing, and the aggrieved party opposed, so no due process problem existed.  Section 6344(a), unlike subdivision (b), does not contain any ability to pay consideration, only that the litigant prevail—even though the trial court has discretion to grant in the first instance.  Ability to pay was not a factor here, even though it was not properly raised in the opposition anyway.

Special Fee Shifting Statutes: Civil Harassment Fee Award Reversed Where No Noticed Motion Was Filed To Claim Fees

Issuance Of Fee Order At The Actual Harassment Hearing Was Improper.

            Due process does matter, and reasonableness of fees are usually determined through a noticed motion, as Bullock v. Anderson, Case No. B309230 (2d Dist., Div. 4 Mar. 15, 2022) (unpublished) makes clear.  What happened here is that a lower court dismissed a civil harassment restraining order petition without prejudice and awarded fees to the other side.  The fees order was reversed based on the failure of the prevailing party to file a noticed motion, usually required to determine one is a prevailing party and to determine the reasonableness of fees.  The oral request at the end of the merits hearing did not satisfy due process requirements. 

Costs: 4/1 DCA, In A Majority Decision, Affirms That Deposition Costs Taken In Another Related Case, Not The Case Where Costs Are Claimed, Cannot Be Claimed As Costs

Dissent Found That Stipulation By The Parties To Use In Another Case Where Both Cases Were Pending Should Have Allowed Costs Recovery In The Case Where Costs Were Claimed.

            In Anderson v. Way West, Inc., Case No. D077648 (4^th Dist., Div. 1 March 14, 2022) (unpublished), majority and dissenting opinions came to different conclusions on whether deposition costs incurred in another case were recoverable in a second case where the parties stipulated that the deposition could be used in the second case. 

            Relying on In re Bauer’s Estate, 59 Cal.App.2d 161, 163, the majority determined that a “bright line” rule was preferable by which the deposition costs in a prior case should not be allowable in costs in another matter, whether concluded or still pending, and notwithstanding any stipulation to allow use of the deposition in another matter.

            The dissent saw things differently.  Based on a distinction in Bauer’s that the prior case had actually concluded, the dissent would fashion this rule:  (1) when the parties agree after a case concludes that a previously taken deposition can be used in another proceeding, that agreement does not change the fact that the costs of the deposition were incurred in the first action alone (so no costs could be imposed); and (2) when the parties agree before taking a deposition that it will serve as discovery in two or more pending cases, the costs of that deposition are incurred in each of those actions (costs can be imposed). 

Consumer Statutes, Reasonableness Of Fees: 4/2 DCA Affirms Trial Court’s Almost $400,000 Haircut To Prevailing Song-Beverly Plaintiffs’ Fee Request

The Panel Found No Abuse Of Discretion In Trial Court’s Finding That The Hourly Rate And Number Of Hours Requested Were Excessive For A Case That Was Not Complex And Involved Little, If Any, Law And Motion Work.

            In Mallonee v. Toyota Motor Sales, Case No. E075088 (4^th Dist., Div. 2 March 10, 2022) (unpublished), Song-Beverly plaintiffs filed an unlimited action concerning a Prius they had purchased that they believed to have electrical issues. Following an eight day trial, the jury awarded plaintiffs the $19,559.88 their counsel argued for in closing arguments, which consisted of $6,519.96 (representing the amount plaintiffs paid toward the car before it was totaled in an accident) and a Song-Beverly penalty of $13,039.92.  Afterward, plaintiffs moved for $307,316 in fees, plus a multiplier of .4 – for a total of $430,242.40 in requested fees – and submitted time records showing that nine attorneys spent about 780 hours on the case, and paralegals/law clerks spent another 143.4 hours on the case.  However, the trial court found the work performed in the case did not justify the fee request – given the case was not complex and involved little, if any, law and motion work – and awarded $40,875 after reducing the number of attorneys necessary and reasonable for the case to two, reducing their and the paralegal’s hourly rates, and reducing the attorneys’ reasonably expended hours to a combined total of 135 and the paralegal’s to 25 hours.

            Plaintiffs appealed – arguing that the trial court improperly reduced the fee award based on the amount of the jury award.  Not so, said the 4/2 DCA. First, trial courts have the discretion to significantly reduce fee awards or award no fees at all when a fee request is unreasonably excessive.  (Chavez v. City of Los Angeles, 47 Cal.4th 970, 990 (2010); Christian Research Institute v. Alnor, 165 Cal.App.4th 1315, 1318-1319 (2008); Guillory v. Hill, 36 Cal.App.5th 802, 815 (2019); and 569 East County Boulevard LLC v. Backcountry Against the Dump, Inc., 6 Cal.App.5th 426, 432 fn. 7 (2016).)  Second, although the trial court had commented that it was “bothered” that the case should have been a limited jurisdiction case, the comment was not a final finding and could not impeach the trial court’s written ruling (Key v. Tyler, 34 Cal.App.5^th 505, 539, fn. 16 (2019)), and the written ruling confirmed that the fee award was reduced because the trial court found it to be excessive.

Special Fee Shifting Statutes: Trial Court’s Attorney Fees Award Of $10,295 To Prevailing Defendant In Civil Harassment Action Affirmed On Appeal

Plaintiff Voluntarily Dismissed The Civil Harassment Action, And Failed To Show That The Trial Court Acted Arbitrarily Or Unreasonably Under Highly Deferential Discretion Standard.

            Code of Civil Procedure section 527.6(s) allows a trial court to award attorney fees to the prevailing party in a civil harassment proceeding.  In Firsov v. Zhukovsky, Case No. H047913 (6^th Dist., March 8, 2022) (unpublished), self-represented plaintiff – who voluntarily dismissed a civil harassment action on the day of the hearing on the matter – appealed the trial court’s award of $10,295 in section 527.6(s) attorney fees to prevailing defendant.  In addition to unsupported arguments regarding attorney defendants’ ability to have legal representation in in civil harassment actions and unsubstantiated claims regarding defendant’s alleged false statements, plaintiff argued that the fee award should be reversed because the trial court failed to consider his financial circumstances in determining what, if any, amount of fees were reasonable.

            The Sixth District was not persuaded and affirmed.  The trial court’s determinations as to prevailing party and amount of fees award are discretionary, and plaintiff failed to show that the trial court acted arbitrarily or unreasonably in reaching its decision.  (PLCM Group, Inc. v. Drexler, 22 Cal.4th 1084, 1095 (2000) [No. 1 in our list of Leading Cases].)  Additionally, a trial court is permitted to consider a party’s financial condition in determining a reasonable fees amount, but is not necessarily required to do so. Because the record in this action was silent as to the trial court’s consideration of plaintiff’s financial condition, the panel had to presume the trial court considered all required factors in determining the amount of the fee award. 

Family Law: Trial Court’s Denial Of Additional Attorney Fees Award To Husband Affirmed Despite Failure To Make Explicit Findings Under Section 2030

Failure To Make Required Findings Under Family Code Section 2030 Requires Reversal Only Where A Reasonable Probability Exists That A More Favorable Result To The Appealing Party Would Have Been Reached If Explicit Findings Were Made

            In Marriage of Callas, Case No. C093353 (3^rd Dist., March 8, 2022) (unpublished), husband who had been awarded Family Code § 2030 fees sought reversal of the trial court’s decision to deny him an additional attorney’s fees award because the trial court failed to make the required findings as to financial disparity and whether an award of fees is appropriate. 

            The Third District affirmed.  Based on the earlier fees award to husband, the trial court impliedly found a financial disparity between husband and wife even though it failed to make explicit findings under section 2030.  That implied finding was not challenged by either party, and husband did not claim the earlier award was unjust or unreasonable at the time it was awarded – nor did he do so on appeal.  Additionally, husband failed to show that a reasonable probability exists that he would have been awarded additional fees if the trial court had made explicit findings under section 2030. (In re Marriage of Morton, 27 Cal.App.5^th 1025, 1051 (2018).)

OFF TOPIC: Justice Fybel of the 4/3 DCA Set To Retire Effective March 31, 2022

He Was An Appellate Jurist For Over 20 Years, Also Contributing To Broader Legal And Community Issues.

            Our local Santa Ana appellate court will have a different complexion in the near future. Earlier, Justices Aronson and Ikola retired, becoming retired neutrals at JAMS.  Now, we can report that Justice Richard D. Fybel has announced his retirement from the 4/3 DCA effective March 31, 2022.

            Justice Fybel has authored 2,000 opinions (200 of which are published) during his 20-year tenure on the appellate bench.  Co-contributors Mike and Marc have argued in front of him on several matters, reinforcing publicized perceptions about his careful legal scholarship and efforts to be fair to the parties appearing before him on any given panel.  He also has co-authored a judicial ethic treatise “California Judicial Conduct Handbook” as well as lectured/written on the legal system during the Holocaust and Nuremberg Trials.  Justice Fybel further served as president of Irvine’s University Synagogue. 

            We wish him well in his retirement.

Family Law: Trial Court’s Award Of $28,000 In Attorney Fees And $2,000 For Court Reporter Costs As Sanctions Against Wife For Breach Of Fiduciary Duty Affirmed On Appeal Even Though Husband’s Moving Papers Did Not Address The Breach

Exceptions To The General Rule That A Court May Consider Only The Grounds For Relief Specified In A Notice Of Motion, Or Request For Order, Applied In This Case.

            In Marriage of Torres, Case No. D078469 (4^th Dist., Div. 1 February 25, 2022) (unpublished), wife appealed the trial court’s order awarding husband $28,000 in attorney fees and $2,000 for court reporter costs as sanctions for breach of fiduciary duty – arguing that her right to due process was violated by the trial court’s order because husband did not request the fees/costs, and had not pled breach of fiduciary duty in his moving papers.  The 4/1 DCA disagreed and affirmed the trial court’s order.

            This case fell within two exceptions to the general rule that a court may consider only the grounds for relief specified in a notice of motion (or request for order in family court) – that failure to include a ground in the notice does not preclude relief if that ground was specified in the supporting papers or was raised without objection at the hearing on the motion. (Fredrickson v. Superior Court, 38 Cal.2d 593, 598 (1952); Lohman v. Lohman, 29 Cal.2d 144, 151 (1946); Kinda v. Carpenter, 247 Cal.App.4th 1268, 1277 (2016); Luri v. Greenwald, 107 Cal.App.4th 1119, 1126-1127 (2003).)  Husband addressed wife’s breach of fiduciary duty in a supplemental declaration and memorandum when he became aware of it – which the trial court deemed as serving as the “functional equivalent” of amending the request for order.  Additionally, husband’s attorney raised the issue of wife’s breach of fiduciary duty in an opening statement and questioned her extensively on the issue – with no objection from wife’s attorney.

Sanctions: 2/2 DCA Establishes A “Bright Line” Rule That A CCP § 128.5 Motion Cannot Be Heard Any Sooner Than 22 Days After Motion Service So The Full 21-Day Safe Harbor Period Is Honored

Also, The Appellate Court Denied Request For Substantial Appellate Fees Based On The Law Of The Case/Waiver Doctrines.

            Broadcast Music, Inc. v. Structured Asset Sales, LLC, Case Nos. B304809/B306245 (2d Dist., Div. 2 Feb. 24, 2022) (published) has two interesting additions to jurisprudence in the appellate fees and 128.5 sanctions areas, tethered to the procedural history of the case.

            In prior lower court proceedings, Currency Corp., a party in an interpleader action involving a musical royalty dispute, obtained summary judgment against Structured Asset Sales, later moving for contractual attorney’s fees under Civil Code section 1717 and sanctions under former Code of Civil Procedure section 128.5 in a requested amount of $176,869.09.   The lower court awarded the full amount under section 128.5, with Currency not taking any action on the contractual fee request which was not ruled upon.  The appellate court reversed the sanctions award on technical grounds in a prior appeal by Structured, further denying Currency’s request for appellate fees under Civil Code section 1717 because no lower court fee award had been entered under section 1717. 

            That, unfortunately, did not end things.  Currency filed a motion in the lower court seeking $209,385 in appellate fees under section 1717 relating to the results achieved in the prior appeal.  This request was denied by the trial court.  In an effort to obtain a withdrawal of Currency’s fee motion, Structured served and then subsequently filed a section 128.5 sanctions motion based on the theory that the fee request was frivolous based on the appellate court’s refusal to award appellate fees in its resolution of the prior appeal.  The sanctions motion was denied based on the trial court’s perception that the fee motion had been resolved on the 2lst day of the “safe harbor period” such that the full 21 days for Currency to withdraw its fee motion had not transpired.

            The 2/2 DCA, in an opinion authored by Justice Ashmann-Gerst, affirmed both orders in appeals brought separately by Currency and Structured.  The fees motion was precluded by the law of the case and waiver principles, given that Currency never pressed the lower court for a hearing on section 1717 fees and put “all of its eggs in one basket” by only pursuing the sanctions motion—with the appellate court rejecting the 1717 appellate request in the first appeal, which was law of the case.

            With respect to the sanctions motion, the appellate panel established a “bright line” rule for the timing on the hearing of a section 128.5 motion.  In line with an advisory comment by the Rutter Group civil procedure treatise, the 2/2 DCA held that a 128.5 sanctions motion cannot be heard until 22 days after the motion is served.  Structured was close, but the resolution of the Currency’s fees motion on the 21^st day was a little short of what was required.

Sanctions: Monetary Sanctions Of $11,562.50 Imposed Against Plaintiff’s Counsel For Frivolous Motion To Recall Remittitur To Clarify That SLAPP Defendants Were Precluded From Recovering Appellate Fees Because Each Party Was Ordered To Bear Its Own Costs

The 2/4 DCA Found That Any Reasonable Attorney Would Have Expected It To Follow Its Decision In Stratton Which Specifically Held That An Appellate Court’s Directive That Parties Are To Bear Their Own Costs On Appeal Does Not Preclude Award Of Appellate Attorney Fees.

            In a previous appeal filed by both plaintiff and defendants, the 2/4 DCA affirmed the trial court’s order granting in part and denying in part an anti-SLAPP motion filed by defendants. In its opinion, the panel ordered that the parties bear their own costs on appeal – an order that was repeated in the subsequently issued remittitur.  However, the panel did not address the issue of attorney fees because it had not been raised by the parties. Afterward, defendants filed a motion in the trial court to recover appellate attorney fees under the anti-SLAPP statute – arguing the 2/4 DCA’s costs order did not preclude their recovery of appellate attorney fees, and citing the 2/4 DCA’s decision in Stratton v. Beck, 30 Cal.App.5th 901 (2018) [discussed in our December 9, 2018 post] which held that, under California Rules of Court, Rule 8.278(d)(2),  an appellate court’s directive that parties are to bear their own costs on appeal does not preclude an award of appellate attorney fees.

            In response to defendants’ fee motion, Plaintiff’s counsel filed an unsuccessful motion to recall the remittitur so that plaintiff would not “have to address” the claim of attorney’s fees in Anabi Oil Corp. v. iFuel, Case No. B301899 (2d Dist., Div. 4 February 24, 2022) (unpublished).  Speculating that the panel intended its costs order to resolve the unbriefed issue of fee entitlement against defendants, plaintiff’s counsel argued that “it would not make sense” to allow defendants to recover appellate attorney fees while denying them costs, but did not address Stratton – something that did not bode well for plaintiff’s counsel when defendants’ request for monetary sanctions was addressed.

            Although admitting to having reviewed Stratton before filing the recall motion, plaintiff’s counsel claimed he thought it was distinguishable from this case as it involved fees under the Labor Code. The panel was not impressed - finding that any reasonable attorney would have expected it to follow Stratton despite “the different underlying basis for the attorney fee award . . . .” Additionally, addressing the importance of candor toward the court, the panel found that plaintiff’s counsel violated the Rules of Professional Conduct by failing to address Stratton (Rules Prof. Conduct, rule 3.3(a)(2) (rule 3.3)), and that he continued to exhibit a lack of candor in addressing the sanctions issue by misrepresenting the motion to recall the remittitur as a neutral request for clarification.  Plaintiff’s counsel and his firm were hit with $11,562.50 in monetary sanctions for filing a frivolous motion. (California Rules of Court, Rule 8.276(a)(3).)

Fee Clause Interpretation, Indemnity: Landlord Prevailing In Breach Of Contract Action Watches $496,757.31 Fee Award Disappear On Appeal

The Parties’ Leases Did Not Include Attorney Fees Provisions, And The Trial Court Erred In Finding That The Leases’ Third Party Indemnity Provisions Permitted Recovery Fees In A Direct Breach Of Contract Action

            In Blackburn v. County of San Diego, Case No. D076904 (4^th Dist., Div. 1 February 24, 2022) (unpublished), the trial court awarded $496,757.31 in attorneys’ fees to the prevailing landlord plaintiff in a breach of contract action against the County of San Diego – finding the language of the indemnity provisions in the parties’ leases to be so broadly worded that they allowed plaintiff to seek direct indemnity from tenant in the form of attorney fees.

            Citing its previous decision in Alki Partners, LP v. DB Fund Services, LLC, 4 Cal.App.5th 574 (2016) [discussed in our October 24, 2016 post], the 4/1 DCA reversed – finding nothing in the indemnity provisions to suggest that the provisions were not limited to third party claims – nor anything that specifically addressed the issue of, nor expressly permitted, recovery of attorney fees in an action on the contract between the parties.  “To find a right to attorney fees in a direct action under an ordinary indemnity provision, as here, would invest every agreement containing a standard third party indemnity clause with a prevailing party attorney fee clause. This is particularly inappropriate because section 1717, subdivision (a), which governs the award of contractual attorney fees, applies only when the contract ‘specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party . . . .’ The indemnity clause here does not ‘specifically’ refer either to actions to enforce the contract or to the prevailing party. Rather, it is a third party indemnity clause. The court erred in construing it otherwise.” (Alki Partners, supra, 4 Cal.App.5th at p. 606.)

SLAPP: 2/5 CCA Affirms Order Granting Attorneys' Anti-SLAPP Motion After Previous Attorney Sues New Attorneys For Advising Client Not To File Complaint Drafted By Previous Attorney

It's About The Attorneys Fees . . . 

        Attorney Richard Pech, in pro per, sued attorneys Stephen Doniger and Alan Burroughs, alleging that Doniger and Burroughs advised Pech's client not to file a complaint Pech drafted, thereby depriving Pech of the ability to collect attorney's fees. Defendants filed an anti-SLAPP motion and were able to strike a cause of action for interference with contract, on the grounds  that their advice to Pech was protected and that Pech was unlikely to win on the merits. The trial court's order granting the anti-SLAPP motion was affirmed on appeal. Pech v. Doniger et al, B309781 (2/5  2/18/22) (Moor, Rubin, Kim).

        COMMENT: We know that the granting of an anti-SLAPP motion risks shifting motion-related fees incurred by the successful party on to the loser. What is somewhat unusual, though not unique, about this case, is that the protected activity itself related to an underlying fee dispute, since Pech claimed that the advice of the new attorneys to Pech's client caused him to lose attorneys fees. What was protected here through the anti-SLAPP motion was the new attorneys' (alleged) advice to file the complaint drafted by Pech. And the court did not have to decide whether such advice was actually given, concluding that if it had been given, it would have been protected speech.

        Interestingly, in an earlier appeal involving the clients, the Court of Appeal had concluded: "The clients were entitled to control their litigation activities by instructing Pech not to file the complaint that he had drafted for them, but we concluded the clients’ instruction not to file a complaint was not an exercise of their right to petition. Therefore, the clients’ conduct at issue in Pech I was not the type of activity protected by the anti-SLAPP statute."

Sanctions: 1/5 DCA Affirms $11,900 In CCP 128.5 and 128.7 Sanctions Against Defendants In Partition Action Who Pursued Quiet Title Despite Having Previously Lost Quiet Title Action At Appellate And Lower Levels

Pursuant To The Law Of Preclusion, Defendants’ Conduct Was Sanctionable Where They Filed A New Complaint, Based On The Same Facts, To Relitigate Issues They Had Already Lost Through Previous Litigation.

            In U.S. Bank Nat. Assn. v. Rosenblum, Case No. A161511 (1^st Dist., Div. 5 February 23, 2022) (unpublished), the trial court issued Code Civ. Proc. §§ 128.5 and 128.7 sanctions in the amount of $11,900 against husband and wife defendants who filed a counter-complaint for quiet title and cancelation of a deed of trust, encumbering 50% of their real property, in a partition action brought by plaintiff trustee seeking to have the real property sold and the proceeds divided between it and defendants.

            The problem for defendants was that the 1/5 DCA had already made a determination, in favor of trustee, as to these issues in a previous action brought by wife and based on the same set of facts. As a result, the trial court found defendants’ cross-complaint was “objectively and subjectively unreasonable” and filed for an improper purpose whereby defendants were trying to relitigate issues they had already lost.

            The 1/5 DCA found no error in the trial court’s conclusion that the cross-complaint was frivolous and affirmed. The panel’s decision in the appeal from the previous action barred defendants’ cross-claims in the partition action pursuant to the law of preclusion – which helps to ensure that a dispute resolved in one case is not relitigated in a later case. ” (Samara v. Matar, 5 Cal.5th 322, 326 (2018); see also Bucur v. Ahmad, 244 Cal.App.4th 175, 191 (2016) [“Filing a new complaint based on the same facts to evade a ruling made in a previous litigation constitutes sanctionable conduct.”].)

Family Law: No Abuse Of Discretion In Trial Court’s Award Of One-Half Of Wife’s Requested Needs-Based Attorney Fees, And Wife Failed To Show Prejudice Regarding The Trial Court’s Failure To Make Express Findings Under § 2030

“Just For Right Now” Award Meant Wife Could Ask For More Down The Road, And Wife Had Burden Of Demonstrating She Was Prejudiced By Trial Court’s Failure To Make Express Findings.

            In Marriage of Davda and Tejeda, Case No. B310091 (2d Dist., Div. 6 February 23, 2022) (unpublished), Wife appealed trial court’s order awarding her with one-half of the $10,000 she requested in Fam. Code § 2030 attorney’s fees to challenge limitations in a premarital agreement – arguing that the $5,000 award did not create parity in the parties’ financial abilities to obtain legal representation, and that the trial court had failed to make the required express findings, under  Fam. Code § 2030(a)(2), regarding the parties’ respective finances and needs.

            The 2/6 DCA affirmed.  As to the amount of the trial court’s award, there was no abuse of discretion.  The panel found the award reasonable given that discovery was ongoing and the trial court stated that Wife may “ask for more” as the award was “just for right now.” As to the express findings, Wife did not meet her burden of demonstrating prejudice regarding the lack of express findings.  (In re Marriage of Morton, 27 Cal.App.5th 1025, 1051 (2018) [harmless error test where express findings not made pursuant to section 2030].)