CALIFORNIA ATTORNEY'S FEES

Section 1717: Interim Award Of Contractual Fees Under Civil Code Section 1717 Are Not Allowable Unless All The Claims In An Action Are Resolved

Premature Award Of $1.1 Million In Fees By Group Of Plaintiffs Reversed.

            A group of tenant plaintiffs in Chen v. Valstock Ventures, LLC, Case No. A161885 (1^st Dist., Div. 4 July 29, 2022) (published) won about $1.1 million in an interim fee award against a defendant after winning a summary adjudication motion on their declaratory relief contract claim.  However, tenants had remaining non-contract claims to be resolved.  The 1/4 DCA reversed.  After an examination of the language and policies underlying Civil Code section 1717, the Rules of Court, and other statutes, it determined that interim section 1717 fee awards are impermissible, especially given that a summary adjudication order is not appealable and that section 1717 envisions a final judgment, dismissal, or other final disposition before fee requests can be pursued. 

Deeds Of Trust, Fee Clause Interpretation: Borrower Losing Wrongful Foreclosure Action Was Properly Assessed With Contractual Attorney’s Fees Under the Note To The Tune Of $878,067.11

“Security First”/Antideficiency Arguments Did Not Prevail Because Contractual Fee Exposure For Wrongful Foreclosure Claims Were Independent Contractual Obligations.

            This next appeal is a somewhat related appeal to our independent July 26, 2022 post regarding sanctions awarded against plaintiff borrower’s attorney for violation of trial preparation rules.  In Shiheiber v. JPMorgan Chase Bank, N.A., Case No. A160189 (1^st Dist., Div. 2 July 28, 2022) (unpublished), plaintiff lost wrongful foreclosure claims against lender (the merits ruling affirmed in an earlier appeal), with the trial judge assessing $878,067.11 in contractual fees against borrower and in favor of lender based on a promissory note fee clause.

            That fee award was affirmed on appeal, with borrower not challenging the amount of the award, but only challenging fee entitlement.  Because the wrongful foreclosure loss triggered contractual fee exposure under separate loan documents, the fee award was legally warranted.  (See Passanisi v. Merit-McBride Realtors, Inc., 190 Cal.App.3d 1496, 1507-1509 (1987); Flynn v. Page, 218 Cal.App.3d 342, 349 (1990); Jones v. Union Bank of California, 127 Cal.App.4^th 542, 551 (2005).)  These cases establish “that a foreclosure sale does not extinguish or preclude enforcement of a prevailing party attorney fee clause in the loan instruments.  Such a provision represents a separate contractual covenant, distinct from the covenant to repay the loan on specified terms, that is simply intended to alter the traditional American rule that each side bear their own attorney fees in the event of litigation between them.”  (Slip Opn., p. 9.)  The promissory note clause was broad enough to encompass tort wrongful foreclosure claims.  (Yoon v. Cam IX Trust, 60 Cal.App.5^th 388, 391, 393 (2021).)  So, the fee award was upheld.

Section 1717: If You Claim A Redlined Draft Agreement Is The Contract And You Lose, Fee Exposure Can Occur

4/1 DCA Affirms Fee Award Where Pleadings Made It Clear That Redlined Draft Agreement Was The Operative Contract By Losing Plaintiff.

            Plaintiff lost a demurrer without leave founded upon contractual breach, duty to negotiate in good faith, and promissory estoppel claims, a determination affirmed on appeal because the letter of intent made it clear there was no agreement until a formal contract was agreed to and signed and because there was a draft redlined agreement with multiple changes which was never accepted.  The lower court then awarded $104,545 in attorney’s fees, the full request, based on a contractual fees clause in the redlined draft and under Civil Code section 1717.

            The fee award was upheld by the 4/1 DCA in Evans v. Bosa Development California II, Inc., Case Nos. D078272/D078818 (4^th Dist., Div. 1 July 27, 2022) (unpublished).  The LOI showed there was no duty to negotiate in good faith, although the redlined draft agreement showed that this did take place.  Defendant beat the contractual breach and derivative promissory estoppel claims such that it proved the nonexistence of the contract, entitling the defense to fees under section 1717.  (Hom v. Petrou, 67 Cal.App.5^th 459, 465 (2021).

Private Attorney General: Where Plaintiff Did Vindicate Users Of Dangerous Condition Area But Obtained A $1.326 Million Damage Award, Cost/Benefit Analysis Supported Denial Of CCP § 1021.5 Fee Recovery

Case Was Not Unusual For Allowing A Fee Award Under Cases Which Did Allow Under Rare Circumstances Where A Benefit Exceeded Litigation Costs.

            In Williams v. County of Sonoma, Case No. A162966 (1^st Dist., Div. 5 July 27, 2022) (unpublished), plaintiff won $1.326 million in a jury verdict against County for a public property dangerous condition where, on a bicycle, she struck a pothole.  In a prior appeal, County argued that she assumed the risk, but the appellate court rejected that argument based on the particular facts of the case—a narrow decision, although published.  Plaintiff then filed to recover lodestar attorney’s fees of $112,710 against County under CCP § 1021.5.  The lower court denied them based on the reasoning that her costs/benefits in the litigation, given the substantial jury verdict (even if discounted by 50% as far as hindsight expectancy which did occur), did not fall within unusual cases warranting such an award.

            The 1/5 DCA affirmed.  The appellate court did a nice review of “unusual cases” warranting a 1021.5 award where litigant’s expected benefits exceeded its actual costs.  The problem is that plaintiff did not fall within these categories because the published decision was quite narrow, plaintiff was not seriously impecunious, and her judgment was of the type that could fund an attorney to litigate the matter.  [If you want to know the “unusual cases” distinguished, they are Los Angeles Police Protective League v. City of Los Angeles, 188 Cal.App.3d 1, 10 (1986); City of Oakland v. Oakland Police & Fire Retirement System, 29 Cal.App.5^th 688, 703, 708 (2018); and Beasley v. Wells Fargo Bank, 235 Cal.App.3d 1407, 1418 (1991).]

Appeal Sanctions, Sanctions: $950 Sanctions For Violating Pre-Trial Preparatory Local Rules Affirmed On Appeal

Panel Also Issues Cautionary Warning For Badly Written, Nonpersuasive Appellate Briefs In The Future.

            The 1/2 DCA, in Shiheiber v. JPMorgan Chase Bank, N.A., Case No A160188 (1^st Dist., Div. 2 July 25, 2022) (published), affirmed a $950 sanctions award against an attorney for violating local pre-trial preparatory filing rules under Code of Civil Procedure section 575.2, even noting the trial judge was generous in awarding only this amount which was below State Bar reporting requirements.  Attorney, on appeal, advanced arguments rejected by the appellate panel:  that section 575.2 was limited only to pre-trial proceedings (no), and there was a necessity to have a bad faith demonstration (no).  It also published to indicate that appellant’s appellate briefing was dismissed and totally unpersuasive, warning practitioners that the Division will award appeal sanctions in the future for this type of briefing.  (The Division also indicated that respondent did not properly ask for sanctions in a separate noticed motion, only in respondent’s brief, which is in violation of CRC directives, so it would have been disingenuous to award sanctions given this error by the other side.)

Deadlines, Judgment Enforcement: $38,115 In Attorney’s Fees For Prior Appeal And Judgment Enforcement Reversed As A Matter Of Law, Leaving About $26,055 In Fees Intact

Prior Appeal Fees Were Untimely Sought And Judgment Enforcement Request Related To A Judgment Without A Fees Clause Award.

            In Peng v. F.M. Tarbell Co., Case No. B317907 (2d Dist., Div. 2 July 25, 2022) (unpublished), a trial judge awarded an additional $64,170 in attorney’s fees relating to appeal expenses and judgment enforcement costs as against appellant.  The 2/2 DCA affirmed, but it modified the award to reflect that $38,115 had to be excluded as a matter of law.  Specifically, $14,715 related to work on a first appeal, costs which were not timely claimed under the 40-day post-remittitur deadline in light of the costs being requested in connection with the second appeal.  The “stricken” other $23,400 amount was infirm because it did not constitute judgment enforcement costs recoverable because the judgment did not contain a fee award at the time the enforcement costs were incurred.  (Conservatorship of McQueen, 59 Cal.4^th 602, 605, 608-610 (2014) [efforts by a party to oppose an appeal from an underlying judgment are not efforts undertaken to enforce the judgment but to defend it against reversal or modification].)

Arbitration: FAA Does Not Preempt State Court Provisions Requiring Business To Timely Pay Its Share Of Arbitration Expenses In An Arbitration Involving An Employee Or A Consumer

Order Compelling Arbitration Was Vacated And $2,310 In Monetary Sanctions Against Company Affirmed On Appeal.

            The California Legislature recently enacted Code of Civil Procedure sections 1281.97, 1281.98, and 1281.99 which obligate a company which drafts an arbitration agreement relating to an employee or a consumer to pay its share of arbitration fees no later than 30 days after the due date, with a failure to do so being a material breach of the arbitration agreement that gives the employee or consumer, in addition to a mandatory award of attorney’s fees and costs related to the breach as well as other discretionary sanctions, the options of either (1) continuing to arbitrate, with the company paying fees and costs related to the arbitration as a whole, or (2) withdrawing from arbitration and resuming the litigation in a judicial forum.

            In Gallo v. Wood Ranch USA, Inc., Case No. B311067 (2d Dist., Div. 2 July 25, 2022) (published), the lower court vacated an order compelling arbitration and awarded $2,310 in monetary sanctions against a company which paid late its arbitration expenses under the state statutory provisions.  The defense argued that the result was preempted by the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.  The appellate court agreed with the trial court’s conclusion that the result was not preempted by the FAA, in line with consonant federal court decisions. 

Appeal Sanctions: Unsuccessful Patent Infringement Plaintiff, Losing Summary Judgment Motion Badly, And Its Counsel Are Jointly And Severally Assessed With Frivolous Appeal Sanctions Of $107,748.27

This Was A 2-1 Opinion, With A Reduction For Sanctions Motion “Fees On Fees”; Dissent Felt That Just A Weak Appeal Did Not Warrant Sanctions.

            Under Federal Rules of Appellate Procedure 38, a circuit court may award “just damages and single or double costs to the appellee” if an appeal is determined to be frivolous.  The Federal Circuit, in Pop Top Corp. v. Rakuten Kobo Inc., No. 2021-2174 (Fed. Cir. July 14, 2022) (nonprecedential order), used this rule to assess frivolous appeal sanctions of $107,748.27 against an unsuccessful patent infringement plaintiff badly losing a summary judgment motion which also did not go well on the merits appeal of the summary judgment later, as well as its counsel.  Apparently, the district court also issued Federal Rules of Civil Procedure 11 sanctions, although only the dissenting opinion alludes to this fact and that order was still under appeal. 

            Appellee then moved for attorney’s fees and double it costs of $140,964.46, inclusive of $53,216.19 in “fees on fees” for presenting the appeal sanctions motion before the Federal Circuit.  The majority of justices, in the order, granted the appeal sanctions request, but reduced it to $107,748.27, because it found that 83 hours to brief the sanctions motion as compared to 107.6 hours to respond to the appeal showed that $20,000 instead was the reasonable amount for “fees on fees.”  The sanctions award was assessed jointly and severally against plaintiff/appellant and its counsel.  The majority found the appeal frivolous based on its weakness and appellant’s misrepresentation about appellee’s position throughout the appeal.

            The dissent saw things differently, believing that even a weak appeal is something which does not justify appeal sanctions.  The dissent said this in part: “Litigation by its nature reflects the spin of advocacy, and the right of appellate review is a safeguard to the rule of law.  The judicial burden of reviewing a weak appeal or receiving one-sided argumentation does not warrant the sanction of award of attorneys’ fees.”

Sanctions: CCP §§ 128.5 And 128.7 Sanctions Motions Are Noncompliant Unless Filed 22 Days After Service Of The Unfiled “Safe Harbor” Motion

4/2 DCA Followed Broadcast Music Opinion From Earlier This Year.

            It looks like we are getting a gathering consensus from the intermediate appellate courts on the compliant timing for filing a CCP § 128.5 or 128.7 sanctions motion after service of the “unfiled, but served” safe harbor motion.  Agreeing with the conclusion of the 2/2 DCA in Broadcast Music, Inc. v. Structured Asset Sales, LLC, 75 Cal.App.5^th 596, 605 (2022) [reviewed in our March 12, 2022 post], the 4/2 DCA in Transcon Financial, Inc. v. Reid & Hellyer, APC, Case No. E076728 (4^th Dist., Div. 2 July 22, 2022) (published), reversed 128.5 and 128.7 sanctions because the motion was filed one day early.  Put another way, the true sanctions motion after expiration of the “safe harbor” period can be filed no earlier than 22 days after service of the unfiled, safe harbor pleading to be compliant.

Special Fee Shifting Statute: Plaintiff DUI Accused Was Properly Granted Attorney’s Fees Of $3,640 Because DMV’s Determination Was Arbitrary And Capricious After Suspension Order Was Stayed And Then Vacated, In A 2-1 Opinion By The Fifth District

Plaintiff Additionally Entitled To Fees On Appeal, Subject To The Applicable $7,500 Cap.

            Isenberg v. Dept. of Motor Vehicles, Case No. F082435 (5^th Dist. July 22, 2022) (unpublished) is an interesting 2-1 opinion by the Fifth District on the propriety of a $3,640 attorney’s fees award to a prevailing plaintiff in a DUI suspension matter before the DMV.  It also is a must read for DUI criminal/administrative practitioners on the topics of the “rising blood-level defense” and rebuttal to the three-hour presumption under the Vehicle Code.

            What happened here is that a plaintiff whose driver’s license was suspended for an alleged DUI incident happened to get the suspension stayed and eventually vacated through a civil writ proceeding before the superior court, with the vacatur of the order occurring because plaintiff was criminally acquitted of charges.  Government Code section 800 is a fee-shifting provision which allows a prevailing party to obtain fees at the rate of $100 per hour and capped at $7,500 for an arbitrary and capricious administrative proceeding decision.  The superior court awarded $3,640 after determining plaintiff prevailed and the DMV’s decision was arbitrary and capricious given its ultimate concession that plaintiff had rebutted the three-hour presumption under the Vehicle Code.

            The Fifth District was divided in affirming, by a 2-1 vote.  It determined plaintiff did achieve her litigation result in getting the driver’s license suspension revoked.  The real issue devolved into whether the DMV’s determination was arbitrary and capricious.  The majority determined it was given that the .08 BAC presumption was rebutted by plaintiff’s expert based on a “rising blood-level defense.”  However, the dissent viewed the DMV hearing officer determination differently, meaning that plaintiff did not rebut evidence still showing alcohol level above the limit even if the presumption disappeared because it was rebutted.  In the end, the fee award was affirmed, with the majority indicating that plaintiff could seek appellate fees for winning yet again subject to the $7,500 cap of Government Code section 800. 

Lodestar, Private Attorney General, Reasonableness Of Fees: FEHA Fee Recovery To Plaintiff’s Attorney Affirmed As Far As Reductions But Remand Issued To Determine Reasonable Hourly Rate Based On Out-Of-Town Rates

Plaintiff’s FEHA Request Was Reduced Drastically, But The Award Likely Will Go Up Some When Out-Of-Town Rates Are Considered—Although The $700,000 Award Was Substantial.

            When you are doing appellate work on abuse of discretion issues, the primary issue may be whether the lower court used the correct legal principles as far as reaching its discretionary decision.  That principle was in play to lead to a limited remand on a fee recovery in Elizondo v. Dept. of Transportation, Case No. C088987 (3d Dist. July 22, 2022) (unpublished).

            In this one, FEHA plaintiff won a $605,000 jury verdict, with the trial court later awarding over $700,000 in attorney’s fees, inclusive of a 1.2 positive multiplier out of a $4 million request (we kid you not), and $117,488.60 in costs (with the costs award largely affirmed on appeal).  The thrust of plaintiff’s appeal was that more fees should be awarded, with the principal contention being that much higher out-of-town hourly rates should have been awarded by a Bay Area attorney versus much lower rates for San Joaquin County attorneys, given that the venue was San Joaquin County.

            The Third District affirmed the fee award, except to remand with a trial court exploration of higher out-of-town hourly rates.  The lower court awarded $350 per hour to plaintiff’s counsel even though Bay Area rates were more in the $825 per hour range.  What led to the reversal was a good evidentiary showing by plaintiff’s counsel that local attorneys in Stockton and Sacramento would not take the case such that local counsel rates were not germane, with the lower court not applying the correct legal principles on out-of-town rates once plaintiff made this evidentiary showing.  With that said, the matter was remanded to look at a higher out-of-town hourly rate, but that did not detract from affirmed conclusions that the lodestar fee request was inflated for lack of preparation by plaintiff’s counsel at some junctures of the litigation, billing for political activities, billing for travel to conferences which could have been attended telephonically instead, billing for ministerial tasks, billing for unrelated administrative proceedings not expressly allowable under FEHA (see K.I. v. Wagner, 225 Cal.App.4^th 1412, 1423 (2014)), overlitigating the case, and billing for unproductive legal research.  Also, no private attorney general fees were justified because simply vindicating one plaintiff in a FEHA case did not meet the significant benefit prong of CCP § 1021.5.

Civil Rights: EAJA Attorney’s Fees Were Properly Denied In Immigration Matter Where It Took A Ninth Circuit En Banc Panel To Decide, Over The Vote Of Three Dissenting Justices, On The Ultimate Merits Issue.

Novelty And First Impression Of The Issue Showed That The Government’s Position Was Substantially Justified For EAJA Purposes.

            In Medina Tovar v. Zuchowski, No. 21-35664 (9^th Cir. July 21, 2022) (published), plaintiffs invalidated a regulation limiting derivative U-visas to spouses married at the time of the filing of the principal petition.  Plaintiffs moved for costs and attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412, but the district court denied the request because it concluded the government’s position was substantially justified.  The Ninth Circuit affirmed.  Simply because plaintiffs prevailed was insufficient, not creating any adverse presumption in favor of a costs/fee recovery.  Here, there was a novel, first impression issue which took an en banc circuit court to ultimately decide, over the votes of three dissenting justices and with the prior three judge decision being 2-1 on the merits issue.  The government’s position was not out of bounds. 

Prevailing Party: Lower Court’s Determination That Cross-Defendant Did Not Prevail In Lawsuit, Where Cross-Defendant Paid Some Settlement Funds To Plaintiff and Dueling Summary Adjudication/Motions Were Granted, Was No Abuse Of Discretion

Cross-Defendant Did Not Obtain Its Crucial Litigation Objectives.

            Catalina Media Development, LLC v. Thyssenkrupp Elevator Corp., Case Nos. B306012/B309162 (2d Dist., Div. 1 July 20, 2022) (unpublished) demonstrates how a discretionary no “prevailing party” determination is not easily overturned unless it is lopsided in nature.

            In this one, a servicer responsible for elevator maintenance was sued on cross claims by the owner of a building when a personal injury plaintiff allegedly was injured in an elevator incident. The servicer lost a summary adjudication motion on the duty to defend under a contractual indemnification clause vis-à-vis owner, both sides settled with plaintiff (servicer paid $99,000 and owner $11,000), and owner lost a summary judgment by servicer under which servicer had no ultimate liability to owner.  The lower court granted routine costs to servicer and against owner based on the summary judgment on owner’s cross-complaint, but it denied any attorney’s fees to servicer.

            Servicer’s appeal of the “no prevailing party” determination as to fees did not result in any change.  With respect to main litigation objectives, servicer did not achieve them because (1) it did not get its legal defense costs paid; (2) it did not beat back the obligation to pay owner’s defense costs under a duty to defend analysis; and (3) it did have to pay plaintiff some settlement moneys.  The dueling rulings on the summary adjudication/judgment motions was evidence that the parties got mixed results.   

Equity: Appellate Court Agrees To Stipulated Reversal Of Postjudgment Fee Award Given Merits Reversal

However, It Does Raise The Issue Of Whether Stipulated Reversals Specifically Apply To Postjudgment Fee Orders.

            This next post is likely of interest to appellate practitioners, because sometimes appellate issues are very technical if not arcane in nature. 

            In Mid-Wilshire Property, L.P. v. Dr. Leevil, LLC, Case No. G059899 (4^th Dist., Div. 3 July 20, 2022) (unpublished), a merits judgment against plaintiffs was reversed.  That left plaintiffs’ appeal of an adverse $476,353.55 in attorney’s fees to the former prevailing party.  The parties stipulated to a summary reversal of the postjudgment attorney’s fees award based on the merits reversal.

            The appellate court granted it, but only after drawing attention to an interesting postjudmgent, appellate issue.  Specifically, stipulated reversals under Code of Civil Procedure section 128(a)(8) only relate to judgments, not to other appealable orders such as a postjudgment orders awarding attorney’s fees.  However, given that the reversal of the fee order was inevitable based on the merits judgment reversal, there was no reason to not grant the stipulated reversal request—even if it was unclear whether the presumption against stipulated reversals applies to a postjudgment fee order. 

Private Attorney General: $66,725 CCP § 1021.5 Fee Award To Real Party In Interest Reversed Under Private Enforcement Necessity Prong

Court Of Appeal Found That Real Party’s Contribution Was Duplicative Of City’s Opposition On The Controlling Issue.

            In Oak Hill Park Co. v. City of Antioch (Let Antioch Voters Decide), Case No. A162604 (1^st Dist., Div. 4 July 18, 2022) (unpublished), real party in interest won a $66,725 private attorney general award based on its opposition to plaintiff’s pre-election challenge to a local ballot initiative.  However, the appellate court saw things differently based on the facts its efforts were duplicative of the city’s opposition on the controlling issue so that real party’s efforts to defend the initiative were neither necessary nor productive.  In doing so, the reviewing court relied upon the constructs set forth in Committee to Defend Reproductive Rights v. A Free Pregnancy Center, 229 Cal.App.3d 633, 642-644 (1991), finding the undisputed facts showed the award was an abuse of discretion based on city’s carrying of the load on this particular issue.

Civil Rights, Landlord/Tenant: Frivolous FEHA Case By Plaintiffs In Rental Dispute Justified $228,123.77 Attorney’s Fees, Expert Fees, And Costs Award In Favor Of Prevailing Defendant Owner

No Abuse Of Discretion Shown, With Prior Denial Of Summary Judgment Not Disqualifying Owner From Award Of FEHA Fees Under The Right Circumstances.

            FEHA has a pro-plaintiff fee shifting statute; however, under the right circumstances, a prevailing defendant can obtain fee shifting against a plaintiff where the case is shown to be frivolous in nature.

            That was the case in Bonhage v. Rawson, Case Nos. H047362 et al. (6^th Dist. July 18, 2022) (unpublished), which involved two plaintiff friends’ Unruh Act and FEHA case against defendant owners and brokers for failing to rent to them based on “unmarried persons” discrimination.  Brokers got out on a summary judgment motion, owner’s summary judgment motion was denied, and plaintiffs lost their case against owner after a full trial.  The lower court determined plaintiffs’ case was frivolous, awarding owner $228,123.77 in attorney’s fees, expert fees, and other costs under the FEHA statutory provision.

            The result was affirmed on appeal.  Under an abuse of discretion standard, the lower court could conclude that plaintiffs had no evidence of discrimination, especially given that the owner had rented to other unmarried couples before, and that the rental transaction fell out because the plaintiffs could not agree on a rental sharing agreement.  Finally, the caselaw in this area shows that a prior denial of a summary judgment to an eventually prevailing defendant does not disqualify that defendant from a frivolous FEHA fee recovery.

POOF!, Prevailing Party: Court Of Appeal Determines That Defendant Did Not Prevail Such That $454,071.50 Fee And Additional Costs Award To County Went POOF!

This Was A 2-1 Decision; Dissenting Justice Would Have Given Deference To Trial Court’s Reversed Prevailing Party Determination.

            Just to show how prevailing party determinations can be to subject to different interpretations, we now post on Youssef v. County of Los Angeles, Case Nos. B302773/B306187 (2d Dist., Div. 1 July 15, 2022) (unpublished).  The equities clearly figured into the result on appeal.

            What happened here is that plaintiff filed suit against L.A. County for failure to live up to the terms of a wrongful termination settlement agreement, failing to classify his termination as a voluntary resignation in its computer systems.  Along the way, County stipulated that it had not complied and agreed to provide a direct human resource contact to divulge no more than basic information about his former employment with the County.  However, a jury found that plaintiff suffered no damages and County did not breach the settlement agreement by providing information to prospective employers.  The lower court granted $454.071.50 in attorney’s fees to County as the prevailing party and against plaintiff under a settlement agreement fees clause, as well awarding routine costs to County.

            The 2/1 DCA reversed the fees and costs awards as a matter of law, in a 2-1 opinion.  The majority decided that the County’s stipulation effectively granted plaintiff injunctive relief and that County had admitted that it breached the settlement agreement, which occurred years into the litigation.  Although plaintiff failed to obtain damages, he achieved his main goal to require the County to comply with the settlement agreement.  That meant that no party prevailed such that the huge fee award against plaintiff was unjust.  The dissenting justice saw things differently:  plaintiff did not garner damages and the County was vindicated as to prospective employer liability—such results vindicated the lower court’s prevailing party determination even though the majority came to the opposite result.

            BLOG OBSERVATION—The result in this case reminds me of what Retired Judge Tevrizian (now an independent neutral) used to sometimes say about cases where an attorney’s fees award was a matter of discretion, “pocketbook” may mean that fees are not awarded under the right circumstances.  That seemed to be the case here. 

SLAPP: $5,081.25 SLAPP Fee Award To Defense Sustained On Appeal

Attorney Disqualification Efforts Properly Excluded.

            This one is interesting because it evokes the old adage “be content with what you have; rejoice in the way things are.”  In Elliott v. Maland, Case No. D078935 (4^th Dist., Div. 1 July 15, 2022) (unpublished), a partially successful SLAPP defendant sought $23,976.50 in attorney’s fees but the trial court disallowed $13,805 relating to attorney disqualification efforts and then reduced further for only partial success on the SLAPP motion.  Defendant appealed, seeking more fees, but the appellate court found the lower court’s reduction for disqualification efforts was no abuse of discretion (they were not inextricably intertwined with SLAPP work) and the further reduction for partial success on the SLAPP motion was the proper result under case law.

Sanctions: $7,725 In CCP § 128.7 Sanctions Affirmed For Filing A Frivolous Complaint

Justice Perren References The Pierian Spring In His Authoring Of The Opinion.

            Here is how the opinion in Ben-Yashar’el v. Kirschbaum, Case No. B315184 (2d Dist., Div. 6 July 15, 2022) (unpublished) starts out:

          "A little learning is a dangerous thing;

           Drink deep, or taste not the Pierian spring:

           There shallow draughts intoxicate the brain,

           And drinking largely sobers us again.”

                --Alexander Pope, An Essay on Criticism, 1711.

            This quote segues nicely into both a lower and appellate court’s conclusion that dismissal of a quiet title action and award of $7,725 in CCP § 128.7 sanctions against an in pro per plaintiff was proper, where plaintiff tried to claim that a cashed check in the amount of $800 to a trustee on a Thousand Oaks property worth $30 million, stemming from a goofy ad, somehow created a binding real estate purchase agreement.  Trustee tried to dissuade plaintiff from pursuing the action, even sending out the section 128.7 “safe harbor” warning notice to no avail.  Both the demurrer grant without leave dismissal and sanctions order were affirmed in a 3-0 decision authored by Justice Perren based on the frivolous nature of the pleading.

            BLOG EXPLANATION:  In Greek mythology, the Pierian Spring in Macedonia was sacred to the Muses (the inspirational goddesses of literature, science, and the arts) and the Pierides (the nine sisters defying the Muses into a song contest which the sisters lost, with the defeat meaning they were turned into birds).  The spring was believed to be a fountain of knowledge for whoever drank from it.  Justice Perren’s writing style in this one shows that his other colleagues on the panel, Justices Gilbert and Yegan, are inspiring him.

Special Fee Shifting Statute: Fifth District Confronts A Similar Causation Issue Under The California Public Records Act On The Same Day

Result Was The Same:  Attorney’s Fees Request Were Properly Denied Based On Lack Of Causation.

            The Fifth District, in Austin v. City of Taft, confronted a causation situation under the California Public Records Act (CPRA).  We posted on this case.  The same day, it also decided a similar situation with the same result in J.A. v. County of Madera, Case No. F083546 (5^th Dist. July 14, 2022) (unpublished).

            There, a CPRA petitioner wanted information about a police shooting of a relative, with the County responding that it would produce the responsive materials after the district attorney had completed its investigation into the shooting.  Petitioner’s counsel and the County had many exchanges in which County reiterated it would produce the information as soon as the investigation was complete.  Petitioner filed a petition to compel disclosure; however, before the matter could be heard, County honored its promise and produced the information after the investigation had been concluded.  The lower court found the petition to be moot and denied a request for attorney’s fees by petitioner.

            The Fifth District affirmed, relying on much of the reasoning and case analysis which supported the result in Austin.  There was a lack of causation because the CPRA litigation did not motivate the delayed production, because County all the time indicated it would produce responsive information to the CPRA request.  That being said, the fee request was properly denied.

Costs: Challenges To Three Items Of Awarded Routine Costs Were Rejected On Appeal

Electronic Filing Fees, Messenger Costs For Serving Reply Papers, and Private Court Reporter Fees Were At Issue.

            Plaintiff losing her case was hit with a relatively small routine costs award.  On appeal in Koerber v. Encyclopaedia Britannica, Inc., Case No. B312047 (2d Dist., Div. 2 July 13, 2022) (unpublished), plaintiff to no avail challenged three items of the costs award.  In affirming, the 2/2 DCA reasoned in these ways why the costs were proper: (1) electronic filing fees are recoverable under CCP § 1033.5(a)(1); (2) overnight courier or messenger fees for serving a reply brief are discretionarily allowable if reasonably necessary to the litigation (Foothill-De Anza Community College v. Emerich, 158 Cal.App.4^th 11, 30 (2007)), with overnight service of replies being one of the recognized service methods; and (3) private court reporter service expenses are authorized under CCP § 1033.5(a)(11) [not capped as they are for court reporter services provided by the court under the Government Code], with $425 not being a patently unreasonable charge. 

Laffey Matrix, Probate, Sanctions, SLAPP: Lower Court Did Not Err In Fixing SLAPP Defense Fees In Two Defendants’ Favor

Also, A Probate Court Properly Sanctioned Attorney For Violating Local Rule Page Limitations.

            In Tukes v. Richard, Case Nos. B307242 et al. (2d Dist., Div. 8 July 12, 2022) (published), plaintiff lost SLAPP motions against two defendants, with the lower court awarding mandatory prevailing party fees of $49,071.50 and $26,905, respectively, after making some downward adjustments for duplicative work by the firms representing different defendants.  Also, a litigant’s counsel was sanctioned $4,000 (out of a requested $8,085) for failing to comply with local rule page limitations in filing certain pleadings.  Different appeals were taken, but these two results were affirmed.

            As to the SLAPP fees, here were the takeaways: (1) fees expended in monitoring another action are compensable when necessary to prosecute the SLAPP motion; (2) prevailing on a standing issue does mean that a defendant prevailed for SLAPP fee recovery purposes; and (3) a trial court has discretion to use the Laffey Matrix when it comes to establishing attorneys’ reasonable hourly rates in California state courts even though some courts decline to utilize it (Syers Properties III, Inc. v. Rankin, 236 Cal.App.4^th 691, 702 (2014)).

            On the sanctions order, California Rule of Court, rule 2.30 does authorize a probate court to impose sanctions for failure to comply with applicable rules without good cause, including an award of “fees on fees” for bringing the sanctions motion.  The award was no abuse of discretion under the circumstances.

            BLOG OBSERVATION—Appellant on the fees awards misquoted and mischaracterized attorney declarations on appeal, which we believe led to a loss of credibility before the panel—which only gently chided Appellant on this transgression.

Appealability, SLAPP: 2/7 DCA Affirms Its Conclusion In Earlier Published Opinion That Denial Of SLAPP Fees To Plaintiff After A Defense SLAPP Denial Is Not Immediately Appealable

In Doing So, It Disagreed With Different Conclusions By Two Sister Appellate Courts.

            Kaplan v. Davidson, Case No. B312826 (2d Dist., Div. 7 July 11, 2022) (unpublished) highlights a rift between this Division and other sister appellate courts on the question of whether denial of attorney’s fees to a plaintiff after a merits denial of a SLAPP motion is appealable.  The 2/7 DCA, in the earlier decision of Doe v. Luster, 145 Cal.App.4^th 139, 142 (2006), concluded it was not immediately appealable.  Later, other appellate courts came to a completely different conclusion.  (Baharian-Mehr v. Smith, 189 Cal.App.4^th 265, 275 (2010); Chitsazzeh v. Kramer & Koslow, 199 Cal.App.4^th 676, 680 n. 2 (2011).)  Now, after considering the issue yet again, the Kaplan panel confirmed that Doe was correct and did not endorse the other sister court decisions, finding that the Legislature did not indicate such a denial order was immediately appealable under Code of Civil Procedure sections 425.16 or 904.1.  It did not rule out that an extraordinary writ of mandate petition might be proper under the right circumstances.

Equity, Judgment Enforcement: Lower Court’s Denial Of Fees To Judgment Debtor In State Case Based On ERISA Fee Shifting Statute and Denial Of Judgment Debtor’s Motion To Tax Costs Were Both Sustained On Appeal

ERISA Fee Entitlement Not Shown And The Winning ERISA Argument Was Not Raised Until Judgment Creditor’s Assignee Racked Up More Judgment Enforcement Expenses.

            Everyone does need to keep in mind, within certain legal strictures, that attorney’s fees awards are frequently driven by the equities of a case.  Coastline JX Holdings LLC v. Bennett, Case No. G059552 (4^th Dist., Div. 3 July 7, 2022) (published) demonstrates that perfectly.

            This case involved very protracted, tenacious litigation between a judgment creditor’s assignee and judgment debtor, with a lower court eventually concluding that certain assets of the debtor were exempt from levy based on ERISA protections even though those winning arguments were raised deep into the proceedings such that the trial judge had to exercise inherent authority to redetermine the dispositive issue.  Judgment creditor was granted some additional post-judgment enforcement costs under CCP §§ 685.040 and 685.070 (with judgment debtor’s motion to tax costs being denied).  The lower court also denied judgment debtor’s request for attorney’s fees as the “prevailing” party.

            The 4/3 DCA affirmed, in an opinion authored by Orange County Superior Court Judge Linda Marks, sitting by assignment.  With respect to the fee denial, it was correct because (1) judgment debtor brought it with no invitation to do so by the lower court, and (2) judgment debtor provided no authority that this was a true ERISA action which allows prevailing party fees as opposed to raising an ERISA argument in a civil state court action.  Furthermore, granting fees to judgment debtor would be inequitable given his stalwart resistance to the other side’s collection efforts.  On the post-judgment costs awarded to judgment creditor’s assignee, that ruling was no abuse of discretion given that the ERISA argument was raised late in the game and the issues were complex, justifying the costs claimed by the other side. 

Allocation, Section 1717: $125,000 Fee Award To A Defendant Winning At The Pleading Stage Affirmed On Appeal

This Decision Has A Nice Discussion Of The Policies Underlying Civil Code Section 1717.

            There is a nice discussion of the policies underlying Civil Code section 1717 and the claims which trigger fee exposure under this statute in Engage BDR, LLC v. Amobee, Inc., Case No. B309263 (2d Dist., Div. 8 July 7, 2022) (unpublished).

            There, a Master Agreement formed the backdrop for plaintiff’s contract, usury, and declaratory relief claims, with that Agreement containing a fees clause which had no recitation that each party to the contract was represented by counsel.  The trial judge sustained demurrers and entered judgment in favor of defendant, later awarding about $125,000 in attorney’s fees and declining to apportion the fees.

            The 2/8 DCA, in an opinion authored by Justice Wiley, affirmed. 

            Initially, the panel explored how Civil Code section 1717 expands a contractual attorney’s fees clause: (1) the first way is reciprocity, with a unilateral fees clause deemed to apply to both parties; and (2) the second way is “broadened scope,” which means a narrow fees clause applies to the entire contract unless the contract specifies that counsel represented the parties; and, if not, section 1717 broadens the fees provision absent the recitation.

            It then examined whether plaintiff’s claims were “on the contract,” determining that the contract breach claims obviously were, the usury/restitution claims were (Del Mar v. Caspe, 222 Cal.App.3d 1316, 1335 (1990)), the economic duress claim relating to entry into the contract were, and the declaratory relief claims related to the contracts (City and County of San Francisco v. Union Pacific Railroad Co., 50 Cal.App.4^th 987, 999-1000 (1996)). 

            The fees clause was broadened because there was no specific recitation that the parties were represented by counsel.  Although there were some other more amorphous references, section 1717 requires that parties of roughly equal power need to make this recitation to demonstrate legal sophistication so that the fees clause is narrowed in scope.  The “broadened scope” rationale applied.

            No apportionment was required because all of plaintiff’s claims involved shared common issues.  Also, because plaintiff did not specifically identify what attorney billings were duplicative until a supplemental brief which was filed too late and not entertained, plaintiff waived its challenges to the reasonableness of the fees requested by defendant.

            BLOG OBSERVATION—Although appellate jurists are good writers, we will note that Justice Wiley has a distinctive writing style.  We would put him in company, on that front, with his contemporaries such as Justices Manella, Ashmann-Gerst, Perluss, Gilbert, Yegan, and Bedsworth.

Fee Clause Interpretation: Denial Of Attorney’s Fees Was Reversed Because Debt Extension Agreement Was Inextricably Interrelated With Loan Agreement Containing A Fees Clause

Looking Only At The Debt Extension Agreement Was Too Myopic In Nature.

            In Cable v. O’Neill, Case No. D079096 (4^th Dist., Div. 1 July 7, 2022) (unpublished), debtor defaulted under a loan agreement containing a contractual fees clause.  Creditor and debtor then entered into a debt extension agreement not having a fees clause, but obviously referencing the original loan agreement and inextricably interrelated to that first agreement.  The lower court recognized plaintiff creditor was a prevailing party after entering judgment for the unpaid loan amount, but it denied fees because there was no fees clause in the subsequent extension agreement.  The 4/1 DCA reversed, finding that the two agreements were inextricably interrelated such that fees should be awarded on remand to plaintiff creditor.

Class Actions: Lower Court Reduction Of Lodestar Fees From Preliminary Amount To A Lesser Reduced Amount In A Final Order Was No Abuse Of Discretion

Preliminary Approval Amount Was $1.04 Million, But Final Amount Sustained On Appeal Was $880,000.

            In Turman v. Parent, Case No. G060330 (4^th Dist., Div. 3 July 6, 2022) (unpublished), after a decade of litigation producing several appellate decisions, all things must come to rest, parties or counsel notwithstanding.  That finally occurred in this case, despite class counsel yet again wanting to maximize attorney’s fees for an additional amount—something which did not occur.

            What happened here is that a preliminary class action settlement order awarded class counsel $1.04 million in fees.   However, after more hearings, the fee award was reduced to $880,000.  Class counsel was not happy, appealing to no avail.

            Plaintiffs initially argued that a more detailed explanation of the fee award was required, but no statement of decision is required, no statement of decision was requested, and the advocated Kerkeles decision was a civil rights decision not apropos when it comes to California state court decisions.  The real problem for class counsel was a credibility problem:  they first proposed $1.04 million but then got greedy and said the real lodestar was $2.807 million.  Not a good idea, with neither the trial nor appellate courts buying the significant “pivot” in positions.  In fact, the $880,000 fee award equaled 40% of the $2.2 million gross settlement, with the $1.04 million prior amount being 47% of the gross settlement.  The end-all in this case was summarized this way: “Plaintiffs do not offer any authority that the trial court’s final attorney fee award, constituting 40 percent of a multimillion dollar class action gross settlement amount, is inappropriate, unreasonable, or arbitrary given the history and circumstances of this case.”  (Slip Opn., at p. 16.)  The award was no abuse of discretion. 

            Orange County Superior Court Judge Linda Marks, sitting by designation, authored the 3-0 decision by the 4/3 DCA.

Private Attorney General: Although Vindicating A Conceptually Important Interest, The Discretion Invested In The Governmental Entity On A Fact-By-Fact Basis Properly Supported A Trial Court’s Refusal To Award Fees

Factual Nature Of The Specific Issue Was Dispositive.

            Litigants which win some relief against a municipality may be entitled to private attorney general fees under CCP § 1021.5.  However, there are several elements they must surmount, including a paramount concern that they vindicated a significant benefit on behalf of the public or a large class of persons. 

            Unfortunately, the lower court in Cassilly v. City of Los Angeles, Case No. B311132 (2d Dist., Div. 8 July 6, 2022) (unpublished) found that a conceptually important right was vindicated but it was not a “significant benefit” in denying fees to partially prevailing plaintiffs.   The appellate court agreed. 

            Plaintiffs did win a narrow dispute against Los Angeles based on whether a historical assessment needed to be made to demolish and rebuild a house in the Venice area of L.A.  The trial court granted very narrow relief on whether a survey creating a presumption of a historical resource was in play, but it did not rule out that a further historical resource assessment or EIR might be needed in the future, given some discretionary decisions in this area by the city.  The city did some technical amendments in line with the lower court’s ruling.  Plaintiffs then moved for CCP § 1021.5 attorney’s fees, which were denied.

            Both the lower and appellate courts acknowledged that because CEQA rights were involved, a “conceptual” important right was involved.  But that is where the discussion dovetailed into the factual weeds of the case.  The problem is that the survey issue did impact some Venice property owners, but the city’s discretion on the issue made it a fact-by-fact determination, with no proof showing a uniform municipal practice of requiring a EIR across the board.  Given the discretionary nature of decision making on this issue and lack of a uniform policy, the fee denial was affirmed on appeal.

Appealability, Class Actions: Ninth Circuit Decides It Has Pendent Appellate Jurisdiction To Review A Non-appealable Interim Fee Award Inextricably Intertwined With The Merits Of The Appealable Orders

Judicial Economy Seemed To Be The “Flavor” Here.

            In Bowerman v. Field Asset Services, Inc., Nos. 18-16303/18-17275 (9^th Cir. July 5, 2022) (published), a “first impression,” narrow appellate pendent jurisdictional issue was under consideration by the Ninth Circuit.  (Appellate practitioners might salivate, others not so much—but we post on it nevertheless.)  However, we can report that the Ninth Circuit lined up consistently with sister circuit courts on the issue.

            This was a situation where a district judge entered an interim $5 million fee award for the class after a class certification order and partial summary judgment orders in favor of the class, most of which were appealable.  Defendants appealed the non-fee appealable orders and the interim fee order.  Many of the appealable orders were reversed on appeal.

            So, could the Ninth Circuit also entertain the defense appeal of the interim fee order, which might be deemed non-appealable?  Answer:  You betcha.  Because the fee order was inextricably intertwined with other appealable district court orders, it only made sense that the Ninth Circuit could exercise pendent appellate jurisdiction in connection with the fee award.  The Ninth Circuit sided with other sister circuit courts coming to the same result.  Once this legal issue was decided, the federal Court of Appeals vacated the fee award to await what happens on later in the case in further proceedings—a result driven by judicial economy, we think.

Civil Rights, Default Judgments: Ninth Circuit Reverses District Judge’s Entry Of ADA Fees Pursuant To Local Schedule For Default Judgments Rather Than Entertain Fee Motion Requesting Lodestar Fees Where Plaintiff Opted For The Non-Fee Schedule Option

This Was A 2-1 Decision, With The Dissent Indicating Plaintiff Did Not Properly Tee This Issue Up Before The District Judge.

            The Ninth Circuit, in the 2-1 decision of Machowski v. 333 N. Placentia Property, LLC, No. 21-55673 (9^th Cir. July 1, 2022) (published), decided that where an ADA plaintiff indicates that the litigant will file an attorney’s fees motion, such an indication signals that the litigant is opting out of having default judgment attorney’s fees determined by a local C.D. California district court schedule and wants to request additional fees through a noticed motion.  The district judge sua sponte only entered the scheduled fees of $1,000 in connection with the default judgment, with the Ninth Circuit vacating the fee award and remanding so that plaintiff’s increased fee request could be entertained.  The dissent believed that plaintiff’s indication was not clear enough to override what the district judge did in the absence of having actual proof of what increased fees were being sought.  The majority opinion also found that the local rule allowing fee motions to be filed 14 days after entry of a judgment took precedence over the default judgment local rule stating that the increased fee request had to be filed immediately upon entry of the default judgment.

            There actually are some open issues left undecided by both the majority and dissenting opinions.  The first issue is whether the local rule applies at all where only nonmonetary (injunctive) relief is awarded under a default judgment.  The second is whether an attorney’s fees award under the Central District fee schedule is a reasonable fee under the ADA.  The third issue is whether the ADA mandates the use of a lodestar method in awarding fees.  Stay tuned for some more jurisprudence down the line!

Costs: Plaintiff Unsuccessfully Appeals Postjudgment Costs Order Awarding $3,451.11 To Prevailing Defendants Arguing That His Deposition Testimony Should Have Been Precluded And Therefore Was Not A Recoverable Cost

Plaintiff’s Challenge To The Costs Order Was Precluded As It Ultimately Attacked A Prejudgment Order That Plaintiff Did Not Appeal And Did Not Challenge In Appeal Of The Judgment And Underlying Summary Judgment Ruling.

            In Lopez v. Irvine Company LLC, Case No. G059354 (4^th Dist., Div. 3 July 1, 2022) (unpublished), defendants defeated plaintiff’s housing discrimination claims through a summary judgment motion.  Afterward, the trial court awarded defendants $3,451.11 out of the requested $4,463.01 in costs, which included $1,956.95 in costs associated with plaintiff’s deposition.  Plaintiff argued on appeal that his deposition testimony should have been precluded due to defendants’ failure to disclose that the company providing the deposition services was a tenant in a building owned by one of the defendants, and that this affiliation created a “hostile environment” for his deposition.  Because his deposition testimony should have been precluded, plaintiff contended, the trial court erred in awarding defendant costs related to his deposition.

            In a 3-0 opinion authored by Acting Presiding Justice Goethals, the 4/3 DCA affirmed.  Prior to judgment, the trial court denied plaintiff’s motion to have his deposition testimony suppressed and for $10,000 in sanctions to be imposed based on the same failure to disclose the affiliation argument.  Because plaintiff did not appeal that prejudgment order, nor did he claim that the trial court erred with regard to that order when he appealed the judgment and underlying summary judgment ruling, he was precluded from making that argument with regard to the costs award.  To allow plaintiff to re-raise the same argument in challenging the costs award “‘“would have the effect of allowing two appeals from the same ruling.”’” (Hersey v. Vopava, 38 Cal.App.5th 792, 797-798 (2019).)

Consumer Statutes, Section 998: $143,624.59 Costs Award To Lemon Law Defendant, Based On A Successful CCP § 998 Offer, Is Affirmed On Appeal

Bad Faith And Lack Of Specificity Arguments Rejected.

            California’s Song-Beverly Consumer Warranty Act, known as the Lemon Law, has a pro-plaintiff attorney’s fees provision.  However, Code of Civil Procedure section 998 can tilt the risk against a defendant by cutting off post-offer fees and costs if the 998 offer is properly crafted.  Plus, the defendant can recover routine costs, which may be extensive based on expert and trial expenses, if the 998 offer was calibrated correctly to the jury verdict or court award to plaintiff.

            Shakouri v. Tesla Motors, Case No. B307273 (2d Dist., Div. 4 June 30, 2022) (unpublished) illustrates how the defendant obtained a costs award of $143,624.59 as a section 998 offeror and held to a minimum the fees and costs which could be recouped by plaintiff under the Lemon Law.

            In this one, Tesla put out a 998 offer with two options for plaintiff’s evaluation:  (1) accept $97,519.31 as a car repurchase plus consequential expenses; or (2) accept a lump sum of $115,000 for repurchase, consequential losses, and unspecified interest, plus attorney’s fees, conditioned on showing that the returned car had factory equipment (the intent being Tesla did not want to take back a stripped-down car).  In discovery responses, plaintiff confirmed that the car had no prior accident damages which had to be repaired.  Plaintiff’s pre-offer fees and costs were only about $14,500 because the 998 was made before plaintiff’s counsel expended much in resources.  Later, after about 3 years of litigation, the jury awarded plaintiff $96,145. 

            So, the issue naturally turned to whether plaintiff had beat the defense’s 998 offer.  Plaintiff moved for $907,548.24 in fees/costs, while Tesla filed a costs memorandum because it could not recover fees under the Lemon Law.  Plaintiff argued that the 998 offer was not made in good faith and lacked specificity based on the factory equipment part return language.  The trial court disagreed, awarding plaintiff $12,245.50 in pre-offer fees as the prevailing party and $2,356.03 in costs.  However, it disagreed that the 998 offer was invalid, awarding Tesla $143,624.59 in costs. 

            The appellate court affirmed plaintiff’s challenge to the Tesla cost award.  The offer was made in good faith because it was in the reasonable range of a result for plaintiff, as the ultimate jury verdict vindicated.  The factory equipment part return condition was specific enough, given that plaintiff could reasonably evaluate it—the car had no accident damage repairs and the offer simply wanted to make sure that the car was not stripped down from its mainly original condition.  The 2/4 DCA distinguished cases which made defendants the sole arbiters of “normal wear and tear,” with the condition in the offer before it being objectively verifiable in nature because Tesla was not requiring plaintiff to trace every part back to the factory.

            BLOG OBSERVATION—This case is a good one for showing that a smartly crafted section 998 pre-trial offer can be a big game changer.  Also, plaintiff’s counsel in the Lemon Law area should take advantage of case law encouraging a 998 offeree to ask for clarification or exchange information with the offeror for purposes of evaluating a 998 offer if the offeree feels it is unclear.

POOF!, Special Fee Shifting Statute: CCP § 1038 Fees/Costs Assessed Against Plaintiff And In Favor Of City In Dangerous Property Case Reversed As A Matter Of Law

Plaintiff’s Claim Was Colorable Such That “Reasonable Cause” Element Was Missing So As To Not Justify The Award.

            Cities gaining pre-trial victories in certain cases frequently move to recover some attorney’s fees and costs against a losing defendant under Code of Civil Procedure section 1038.  However, the governmental entity must prove that the plaintiff’s claim lacked reasonable cause (measured by an objective standard) or was not brought/prosecuted in good faith (with the good faith element not at issue in the case we next post on).  Also of salience, the reasonable cause component is reviewed de novo on appeal.  (Lee v. Dept. of Parks & Recreation, 38 Cal.App.5^th 206, 215 (2019).)

            The “reasonable cause” standard was not met by the governmental entity in Sheks Construction Co. v. City of South San Francisco, Case No. A163204 (1^st Dist., Div. 5 June 29, 2022) (unpublished).  Although plaintiff lost a dangerous condition of public property case before trial, nothing demonstrated that its claim was other than colorable (meaning it had potential merit).  Even though the lower court awarded fees and costs under section 1038, that award went POOF! on appeal upon a de novo review by the appellate court of 1038’s “reasonable cause” prong.

Private Attorney General: Lower Court Properly Denied CCP § 1021.5 Fee Request By Plaintiff Which Dismissed Its Complaint Without Showing That Nonsettling Defendants Changed Their Behavior As A Result Of The Lawsuit

Success/Causation Elements Of Section 1021.5 Were Not Demonstrated.

            In Companion Animal Protection Society v. Puppies4Less, Case No. E076858 (4^th Dist., Div. 2 June 29, 2022) (unpublished), plaintiff sued certain defendants for selling animals to pet stores which were not obtained from nonprofit animal shelters or rescue groups.  Some defendants settled, others did not, and plaintiff dismissed the complaint after winning an initial TRO but losing a renewed TRO and then losing a preliminary injunction.  Plaintiff then moved for private attorney general fees, a request which was denied.  The 4/2 DCA affirmed.  The reasons were that plaintiff failed to prove success or that plaintiff’s conduct resulted in any changed behavior by the nonsettling defendants—crucial elements which had to be shown for fee entitlement under CCP § 1021.5.

Sanctions: $11,300 In CCP § 128.7 Sanctions Affirmed Against Client’s Attorney Based On Relitigating Grounds Lost Before

However, Because No Improper Purpose Shown By Client Independent Of Following Counsel’s Advice, Sanctions Against Client Reversed.

            Showers v. Matthews, Case No. A163900 (1^st Dist., Div. 1 June 29, 2022) (unpublished) is a reminder that CCP § 128.7 sanctions cannot be sustained under subdivision (b)(1) if the underlying conduct by a client was reliance on what counsel did.  In this case, the trial court awarded 128.7 sanctions of $11,300 against both client and client’s attorney for relitigating a second probate petition which had been dispositively decided under grounds raised in a first petition.  Because the conduct was objectively without merit and no subjective bad faith needs to be shown, the award was affirmed against the attorney.  However, because the order did not show that client had an improper motive other than relying on the actions of client’s attorney, the award had to be reversed as against client.  

Reviews: Articles On Anti-SLAPP Fee Awards And On Best Practices

California Litigation Publishes Two Helpful Attorney Fees Articles In Latest Issue.

        California Litigation, the journal of the Litigation Section of the California Lawyers Association, has published two articles relating to attorney fees in the latest issue, Vol. 35, No. 1 (2022). Co-contributor to this blog Marc is one of the editors of California Litigation.

        Hon. Elizabeth R. Feffer (Ret.) & Richard M. Pearl, Best Practices for Litigating a Civil Code Section 1717 Motion for Attorney Fees. Our readers will know Richard Pearl as the author of the CEB book about attorney fees in California. Elizabeth Feffer served as a judge of the superior court in Los Angeles from 2007 to 2020, and is now a neutral at ADR Services.

        Timothy M. Kowal, Are Anti-SLAPP Fee Awards Stayed on Appeal? The Better Side of a Split of Authority Says Yes. Tim and his law partner Jeff Lewis are the creators of the California Appellate Law Podcast. Mike and Marc were recently interviewed on the podcast on -- you guessed it -- the subject of attorney fees.