CALIFORNIA ATTORNEY'S FEES

Construction: $132,290.00 In Contractual Fees And $5,926.45 In Costs In Homeowner-Contractor Construction Dispute Affirmed On Appeal

Real Moral Of The Case Is That The Fee/Costs Award Eclipsed $71,700 Compensatory Award Inclusive Of Prejudgment Interest By Quite A Bit

            We post on Star Restoration, Inc. v. Salame, Case Nos. B310809/B313512 (2d Dist., Div. 2 Sept. 29, 2022) (unpublished) because the affirmed result below, once again, bears out our Mission Statement that "[a]ll too often attorney fees become the tail that wags the dog in litigation."  What happened here was that homeowner, who was abroad, had a friend hire a contractor to remediate leak damage to his house, with homeowner refusing to pay the $40,000 bill.  Litigation ensued, with contractor winning and homeowner losing.  Contractor won $35,360.62 in damages, $36,375.91 in prejudgment interest, $5,926.49 in costs, and $132,290 in attorney’s fees.  Think that maybe homeowner would have been better off by paying the $40,000 bill?

Costs, Prevailing Party: $2.15 Million Fee Order Affirmed, But $205,480.27 In Not Court-Ordered Electronic Document Hosting Charges, Denied, Were Ordered For Consideration On Remand

Decision Looks Like It Recognizes That The Modern Costs Of ESI Discovery Expenses May Be Compensable In The Lower Court’s Discretion.

            In Russo v. Andrews, Case No. A155999 et al. (1^st Dist., Div. 5 Sept. 28, 2022) (unpublished), defendants beat plaintiff in a contentious LLC operating agreement dispute, with defendants awarded damages and equitable relief on their cross-complaint except for one cause of action.  The fees order and one aspect of a cost award were at issue on appeal.

            The trial judge awarded defendants $2.15 million as prevailing parties.  The appellate court agreed, because the defendants/cross-complainants achieved their primary litigation objectives on capital contributions, dilution, and management ouster issues.

            That took the Court of Appeal to the trial judge’s denial of $205,480.77 in non-court-ordered electronic document hosting charges which were requested by the defense, an issue which had to be remanded.  That cost was neither allowed nor prohibited under the CCP § 1033.5 regime such that the lower court had discretion on the issue.  However, the record showed that the trial judge believed it did not have discretion, so the matter went back.  However, the panel made it clear that electronic hosting charges, even those just voluntarily done without a court order, may be fair game for a costs award.

Reasonableness Of Fees: Failure To Provide Adequate Record Led To Affirmance Of $365,455.02 Fee Award To Defendants

Lengthy Litigation Can Lead To Large Fee Awards, Which Require An Adequate Record To Challenge.

            The moral from Westpark Village, et al. v. Khanna, Case No. A164667 (1^st Dist., Div. 2 Sept. 28, 2022) (unpublished), which involved a contractual fee award of $365,495.02 against defendants after years of litigation, is simple—make sure you have an adequate appellate record when you challenge such an award.  Here, defendants only put their fee opposition papers; failure to provide the moving paperwork was fatal. 

Class Actions, Poof!: Ninth Circuit Vacates $310 – 500 Million Class Settlement Based On Objectors’ Arguments To Settlement Fairness

That Meant $80.6 Million Class Counsel Fee Award Went POOF!, And Whether Fees For Parallel State Litigation Was Appropriate Had To Be Considered Based On Its Impact On Lodestar Multiplier.

            In Named Plaintiffs, et al. v. Apple, Inc., Case Nos. 21-15758 et al. (9^th Cir. Sept. 28, 2022) (published), the Ninth Circuit, based on some objectors’ arguments, vacated a $300 – 500 million class action settlement and $80.6 class action fee award (out of a requested $87.73 million) in a case alleging that Apple secretly throttled system performance of certain iPhones to mask battery defects.  The district judge on remand needed to use the correct legal standard to gauge the fairness of the settlement.  The panel did address a specific fee issue:  the district judge, on remand, needed to consider $4 million in fees expended in parallel coordinated state litigation as far as appropriateness because it impacted the lodestar multiplier awarded (which would have gone up, even though the district judge thought the lower multiplier was pretty high).  The appellate court did observe that district judges can pick either the lodestar or percentage method, choosing to cross-check with the other method depending on what method is chosen. 

Appealability, Sanctions: $2,000 Sanctions Order Against Attorney For Filing A Second Amended Cross-Claims With New Claims Is Affirmed On Appeal

Prior Dismissal Of A Premature Appeal Did Not Retard Consideration Of This Appeal, Plus Be Careful To Observe Memorandum Page Limits!

            Bush v. Cardinale, Case No. A158757 (1^st Dist., Div. 4 Sept. 27, 2022; posted on Sept. 28, 2022) (unpublished) involved an appeal of a $2,000 CCP § 128.7 sanctions order against an attorney for filing a second amended cross-complaint in derogation of a prior lower court order requiring a motion for leave if new claims were added, as they were.  The Court of Appeal affirmed the sanctions order.

            Initially, it had to resolve a thorny appealability issue.  A prior appeal of the order was dismissed (not indicating without prejudice) because it was premature.  Normally, that dismissal would have been considered “with prejudice” if there is no indication otherwise, but there is an exception that allows an appellate court to consider a second appeal even though a prior appeal was dismissed as premature, the case here.  The appeal could be considered on the merits.

            However, there was no basis to overturn the sanctions award on the merits.  But there is cautionary tale in this one.  The sanctions opposition motion was 17 pages long which, under CRC 3.1113, can be considered a late-filed brief subject to being disregarded.  (CRC 3.113(d), (g).)  The trial court did not consider the excessive brief, and that decision was affirmed—so, litigators, be warned!

Appealability, Discovery: Plaintiff “Internet Troll” In California Discovery Litigation, Whose Motion To Quash Was Dismissed, Was Not Entitled To Attorney Fees Under CCP § 1987.2(c)

Appellate Court Also Rebukes Parties And Attorneys Whose Main Quest Is To Recoup Fees After A Defeat.

            Here is how Doe v. McLaughlin, Case No. A161534 (1^st Dist., Div. 2 Sept. 21, 2022) (published) began:

            “Forty-four years ago our Supreme Court admonished that ‘The purpose of litigation is to resolve participants’ disputes, not compensate participating attorneys. Our courts are sufficiently burdened without combat kept alive solely for attorney fees.’ (International Industries, Inc. v. Olen (1978) 21 Cal.3d 218, 224.) We reiterated the admonition in 2006 (Abouab v. City and County of San Francisco (2006) 141 Cal.App.4th 643, 675), an admonition that is as true today—if not truer—than it was in 1978.”

            This involved plaintiff, an admitted “Internet troll,” who became embroiled in a California discovery proceeding hinged to an Illinois case, seeking to quash a subpoena after plaintiff posted a mugshot of defendant despite the fact defendant’s criminal case records in Illinois were expunged and defendant/his ex-girlfriend settled Illinois litigation between themselves.   The California judge dismissed the motion to quash, primarily because defendant and his ex-girlfriend had settled their dispute.  CCP § 1987.2(c) allows for fee recovery if the moving party prevails, actions were based on the exercise of speech rights on the Internet, and the responding party fails to make a prima face showing of a cause of action, with the statute being akin to the anti-SLAPP statute.  Plaintiff had sought over $34,000 in fees.

            The 1/2 DCA affirmed, finding that plaintiff’s appellate attorney should have known the quest for fees was unwarranted based on the state of the record. 

            Although discovery orders are generally nonappealable, this one was because the entire purpose of the California proceeding was to resolve the discovery battle.  (H.B. Fuller Co. v. Doe, 151 Cal.App.4^th 879, 883-884 (2007).)

            However, the lower court correctly denied the motion to quash.  Plaintiff did not prevail under either of the two approaches described in Roe v. Halbig, 29 Cal.App.5^th 236, 305-306 (2018), given that defendant settled the Illinois action with ex-girlfriend.  Beyond that, plaintiff’s conduct was targeted harassment which is a free speech rights exception, not to mention that defendant did present a prima facie case.  

            ETHICS FOOTNOTE—The appellate court, in a footnote, reminded appellant’s counsel that he had an obligation to point out that a case had been disapproved and point out contrary authority to judges or justices.

Family Law: Family Code Sections 271 And 2030 Fee Awards To Two Ex-Wives, Though Substantial, Were No Abuse Of Discretion

271 Fees Of $400,000 And 2030 Fees Of $60,000 Affirmed On Appeal.

            Ex-husband in Marriage of Regalbuto, Case Nos. B310897/B310917 (2d Dist., Div. 3 Sept. 16, 2022) (unpublished) got a “double whammy” in a consolidated domestic violence restraining order (DVRO) trial against two ex-wives.  He lost the trial and, during the way and afterwards, the family law trial judge granted ex-wife Lotte $400,000 in Family Code section 271 fees out of a requested $462,000 (payable $80,000 yearly, with ex-husband missing the first installment) and granted ex-wife Susan $60,000 in Family Code section 2030 fees (out of a requested $130,000), diminishing the requested amounts after finding some “contributory negligence” by the two ex-wives.

            Husband appealed, claiming principally that he did not have the ability to pay and that loans/gifts from his parents should not be counted in the ability to pay analysis.  After invoking its discretion to not dismiss the appeal under the disentitlement doctrine for failing to make the first $80,000 payment to Lotte and allegedly not making child support payments (the latter being contested), the 2/3 DCA disagreed that ex-husband not have the ability to pay despite recognizing that the two fee awards were substantial in nature.  It found that the loans/gifts could be counted, as well as monthly trust distributions to ex-husband by his parents and his living rent free in his parents’ Santa Monica condominium transferred to them completely with no real explanation.  (In re Marriage of Smith, 242 Cal.App.4^th 529, 531-535 (2015).)  Susan was a freelance makeup artist, so there was a disparity in access to funds.  As far as the bottom-line math, ex-husband received about $140,000 in employment and parent funding and had yearly expenses for fees and child support of $180,000.  However, given the help from parents, the awards—though high—were no abuse of discretion in the end.

Special Fee Shifting Statutes: Although County’s CCP § 1038 Motion Was Timely, It Was Properly Denied Because Losing Plaintiff Had A Good Faith, Reasonable Basis For Pursuing His Dangerous Condition Suit

Nothing in Section 1038 Prohibits A Lower Court From Considering A Postjudgment Fees Motion.

            Plaintiff in Burkot v. County of Los Angeles, Case No. B306244 (2d Dist., Div. 2 Sept. 14, 2022) (unpublished) lost a summary judgment in a dangerous condition intersection case after County’s objections to plaintiff’s opposing expert declarations were sustained to a large degree.  In its summary judgment motion, County moved to recover CCP § 1038 attorney’s fees, but the lower court did not rule on that request.  County then brought a postjudgment fee motion, with Plaintiff arguing it was untimely (had to be brought before entry of judgment) and wrong on the merits (because Plaintiff had a good faith reasonable belief that the case was potentially meritorious).  The lower court denied the motion on the merits.

            The 2/2 DCA affirmed the fee denial.  Section 1038 allows a court in an action under the Tort Claims Act to assess attorney’s fees for a plaintiff losing a summary judgment where that was a lack of reasonable cause a good faith belief that there was a legally and factually justifiable controversy when filing a complaint.  Reasonable cause is akin to a malicious prosecution “probable cause” standard, an objective one.  Good faith belief involves a factual inquiry into the plaintiff’s subjective state of mind.  Because the trial judge credited plaintiff’s attorney’s declaration on good faith (citizen complaints about the crosswalk) and reasonableness (there were enough nuances on the merits), the appellate court found substantial evidence for the lower court’s conclusions.  On the timeliness issue, County did raise it in the summary judgment paperwork, but the trial judge did not consider it, not to mention the appellate court could find no authority prohibiting consideration of such a motion at a postjudgment stage—so the timeliness ruling by the lower court was upheld also.

Appealability, SLAPP: Even Through Cross-Claims Were Dismissed During Pendency Of An Appeal, SLAPP Denial Appeal Was Not Moot

The Reason Is That Attorney’s Fees Were In Play If The SLAPP Denial Was Reversed, As It Was.

            Watkins v. D’Orio, Case No. B310902 (2d Dist., Div. 2 Sept. 14, 2022) (unpublished) involved a situation where cross-defendant appealed the denial of an anti-SLAPP as to certain cross-claims and, during the pendency of the appeal, cross-complainant voluntarily dismissed the cross-complaint.  Cross-complainant argued that this dismissal mooted the appeal, but the appellate court disagreed.  Guess why?  If you said that a successful appeal would not be moot because cross-defendant could move for mandatory attorney’s fees if a reversal occurred, then you answered correctly.   Well, that is what happened—the SLAPP denial was reversed with instructions to reinstate the cross-complaint, grant the SLAPP motion, and strike the cross-complaint.  Cross-defendant was awarded appellate costs and will have a chance to move for fees before the lower court in the future.

EMPLOYMENT: Betancourt Opinion Published

2/8 DCA Reinstates Fees Award Under Wage/Hour Statutes After California Supreme Court Remand.

            On August 26, 2022, we posted on Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (2d Dist., Div. 8 Aug. 25, 2022), which was unpublished at the time.  We can now report it was published on September 12, 2022.  Here is our discussion of it in the prior post:

            The 2/8 DCA had to revisit its denial of attorney’s fees to a plaintiff employee alleging missed rest and meal break violations and waiting penalties even though the lower court had awarded fees of $280,000 to plaintiff.  The reason for the revisit was the California Supreme Court’s decision in Naranjo v. Spectrum Security Services, Inc., 13 Cal.5^th 93, 102 (2022), which held that extra pay for missed breaks constitutes “wages” that must be reported on employment wage statements and give rise to Labor Code fee exposure.  Given this change in the judicial landscape, the 2/8 DCA panel reinstated the $280,000 fee award—even though plaintiff’s compensatory settlement acceptance was only $15,375.  This shows how statutory fee-shifting provisions need to be considered wisely when litigating a case where wage/hour claims can trigger fee exposure.

            BLOG OBSERVATION—This case also is must reading for employment practitioners, given that Naranjo overruled Ling and similar cases on waiting penalties. 

Deeds Of Trust: 2/5 DCA Affirms Denial Of Attorney Fees To Prevailing Plaintiff Seeking Fees Under Deed Of Trust Fees Provision

The Fees Provision Was Not A True Attorney Fees Provision As It Allowed Lender To Add Attorney Fees To The Indebtedness, But Did Not Allow For Fee Recovery As A Separate Award.

            In Cho v. Patel, Case No. B312306 (2d Dist., Div. 5 September 12, 2022) (unpublished), prevailing plaintiff in a quiet title action sought attorney fees pursuant to a deed of trust fees provision.  However, the trial court denied plaintiff’s fees motion – citing Chacker v. JP Morgan Chase Bank, N.A., 27 Cal.App.5^th 351, 357 (2018) [discussed in our September 20, 2018 post] and Hart v. Clear Recon Corp., 27 Cal.App.5^th 322, 327 (2018) [discussed in our September 19, 2018 post] – determining that the attorney fees provision in the deed of trust was not a true attorney fees provision as it did not allow fee recovery as a separate award from litigation.  The 2/5 DCA affirmed.

Family Law: Failure To Rule On Pendente Lite Family Code Section 2030 Early In A Proceeding Resulted In A Reversal Of Reserved Issues Where Self-Represented Wife Bungled Key Trial Issue

Failure To Rule Was Prejudicial, Leading To A Reversal.

            Marriage of Knox, Case No. F081092 (5^th Dist. Sept. 9, 2022) (published) is a blockbuster decision where a lower court’s failure to promptly rule on a self-represented ex-wife’s request for pendente lite Family Code section 2030 led to reversal on reserved issues when she bungled a key trial transmutation issue.  Based on the record, the failure to rule on a request for representation was prejudicial given that counsel would not have bungled the issue.  Quite a turnaround with a reversal on reserved issue and remand to rule on the section 2030 request.

            Here is the crux of the appellate court’s holding: “Section 2030 provides that family courts ‘shall ensure that each party has access to legal representation, including access early in the proceedings,’ by awarding pendente lite attorney fees when certain statutory conditions are met. (§ 2030, subd. (a)(1), italics added.) We interpret the phrase ‘shall ensure’ to mean family courts have a mandatory obligation to order a party to pay attorney fees of the other party when the circumstances specified in the statute exist. In addition, the reference to ‘access early in the proceedings’ and other statutory text means family courts must not unreasonably delay their ruling on a request for pendente lite attorney fees.”

Construction, Costs: Litigant Prevailing On Payment Bond Improperly Denied Costs And Fees Under Routine Costs Statute And Civil Code Section 9564(c)

It Did Not Matter That Someone Else Paid Or Reimbursed Costs And Fees—Entitlement Was There.

            In Cell-Crete Corp. v. Federal Ins. Co., Case No. E075264 (4^th Dist., Div. 2 Sept. 8, 2022) (published), defendant prevailed in a case involving a payment bond, which raised whether defendant was entitled to routine costs and prevailing party fees under Civil Code section 9564(c) [a fee-shifting provision in favor of a prevailing party upon a payment bond].   The lower court denied both costs and fees to defendant on the basis that they were paid by a third-party insurance carrier.

            The 4/2 DCA reversed.  As to costs, defendant prevailed such that it is irrelevant who paid them.  (Litt v. Eisenhower Medical Center, 237 Cal.App.4^th 1217, 1222 (2015).)  Same result occurred as to fees: (1) section 9564 does not have language indicating the fees had to be “incurred;” and (2) even if they had to be “incurred,” case law establishes that a litigant does incur fees even if a carrier or indemnitor pays them (Lolley v. Campbell, 28 Cal.4^th 367, 373 (2002)).

Appeal Sanctions: Monetary Sanctions For Corrected Appellant’s Appendix Affirmed On Appeal, But Appellant Dodges Frivolous Appeal Sanctions

Although The 2/6 DCA Found The Appeal To Be Meritless, Lack Of Bad Faith Was Shown By Appellant’s Vigorous Advocacy

            Appellant won one and lost one as far as appellate sanctions were concerned in IQ Holdings v. Krablin, Case No. B307034 (2d Dist., Div. 6 Sept. 8, 2022) (unpublished).  Appellant lost an appeal of $15,050 in sanctions for making a respondent force the filing of a corrected appellant’s appendix—you do not see this often.  However, the appellate court denied a request for frivolous appeal sanctions of $41,500; although finding the appeal was meritless, the panel found that vigorous advocacy was sufficient here to show a lack of subjective bad faith under Flaherty [our Leading Case No. 9].  The panel did warn that other courts might not look at a future appeal with these problems as kindly as it did, reporting appellant’s attorney to the State Bar based on affirming the $15,050 sanctions award. 

Employment: Nonprevailing Employees May Not Be Assessed With Routine Costs Under California’s Fair Pay Act

Court Of Appeal Follows Analogous Reasoning Which Relates To Labor Code Section 1194.

            In Lohman v. City of Mountain View, Case No. H046681 et seq. (6^th Dist. Sept. 7, 2022) (unpublished), the Sixth District reversed a $10,082 routine costs award—a sixth of the ask—against a nonprevailing employee plaintiff under a California Fair Pay Act, Labor Code § 1197.5, claim.  It determined that only prevailing employees, not employers, are entitled to costs under the Fair Pay Act, accepting the reasoning of cases under Labor Code section 1194 (an analogous statute in the court’s view) which came to the same conclusion. 

Landlord/Tenant, Reasonableness Of Fees: $684,000 Fee Award In Favor Of Tenants And Against Landlord Reversed And Remanded

Appellate Court Did Not Buy That Trial Court Could Just Adopt Plaintiffs’ Voluntary Reduction Without Addressing Other Objections.

            We posted today about a published decision between the parties.  Separately, Sarkany v. West, Case No. A161728 (1^st Dist., Div. 2 Aug. 30, 2022) (unpublished) was landlords’ appeal from an adverse $684,000 attorney’s fees award in favor of tenants after a favorable jury verdict, with the fee entitlement not being contested.  Without much of an explanation, plaintiffs reduced their $1.134 million fee request (inclusive of a 1.5 multiplier) by $141,245.50.  The trial court bought it, awarding a little over $684,000 to plaintiffs on the lodestar request, but denying a positive multiplier. The appellate court did not buy it.  The voluntary reduction did not address the defense objections to the fee motion, much less the trial judge’s concerns that a reduction might be justified based on plaintiffs’ sanctionable and litigious conduct.  It simply could not determine that these factors were considered, so a re-do was ordered.  One of the defendants argued no fee award was justified based on indigency, but the appellate court could only find this was a consideration for a plaintiff’s indigency, not a defendant’s indigency.  (Garcia v. Santana, 174 Cal.App.4^th 464, 476 (2009).)

Undertaking: Trial Court Has Discretionary Authority To Waive Bond On Appeal For A Monetary Judgment With Respect To An Indigent Litigant

CCP § 917.1(a) Does Allow That.

            In Sarkany v. West, Case No. A162441 (1^st Dist., Div. 2 Aug. 30, 2022) (published), the appellate court confirmed that a trial court, under CCP § 917.1(a), does have discretionary authority to stay enforcement of a monetary judgment on appeal if the principal litigant is indigent and cannot obtain adequate sureties.