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 21st day was a little short of what was required.
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