CALIFORNIA ATTORNEY'S FEES

POOF!: $737,932.84 Private Attorney General Fee Award Goes Away When Appellate Court Reverses As A Matter Of Law Favorable Determinations In Contentious Public Treatment Wastewater Permits Dispute

Goes To Show You How Fortunes Can Change.

            Los Angeles Waterkeeper v. State Water Resources Control Board, Case No. B309151 (2d Dist., Div. 1 Feb. 27, 2023) (published) is a situation where plaintiff was awarded CCP § 1021.5 fees of $737,932.84 in a contentious public treatment wastewater permit dispute where plaintiff won on a general theory that the State Water Board had a general duty to prevent the unreasonable use of water.   The appellate court disagreed as a matter of law, reversing on the merits so that the fee award went POOF! also. 

Judgment Enforcement: Judgment Creditor Properly Awarded Attorney’s Fees For Pursuing A Wage Garnishment Order Against Ex-Husband For A Community Debt Judgment Against A Wife

No Conspiracy Between A Judgment Debtor And Relevant Third Party Is Required.

            Code of Civil Procedure section 685.040 authorizes a trial court to award reasonable and necessary costs of enforcing a judgment to the judgment creditor, if (1) the fees were incurred to “enforce” a judgment, and (2) the underlying judgment included an award of fees pursuant to specific provisions of the CCP (such as provisions which are allowed by contract, statute, or law, most frequently Civil Code section 1717). 

            In Direct Capital Corp. v. Brooks, Case No. C095817 (3d Dist. Feb. 27, 2023) (unpublished), DCC leased computer equipment to wife Mary Brooks, who was married to Grant Brooks at the time.  DCC obtained a judgment against Mary while the marriage was intact, then attempted to garnish Grant’s wages on the theory the debt was a community obligation.  Both the trial and appellate courts agreed in several proceedings and two prior appeals.  DCC then sought over $67,000 in attorney’s fees against Grant, fees for the wage garnishment efforts and in defending the two appeals.  The trial judge awarded some fees to the DCC for the garnishment efforts, but no fees for defending the appeals.  Grant appealed.

            His principal argument was that, under Cardinale v. Miller, 222 Cal.App.4^th 1020 (2014), no section 685.040 fees were recoverable because there was no conspiracy between the judgment debtor and relevant third party.  The Third District recognized that there was a conspiracy in Cardinale, but rejected the argument that a conspiracy is a prerequisite to imposition of section 685.040 fees against a third party such as Grant.  DCC satisfied the two parts of the 685.040 test, such that this alone sufficed—with Grant erroneously conflating Cardinale’s application of the 685.040 two-part test with the test itself. 

Cases Under Review: Discovery Sanctions And Arbitration Unconscionability Cases Are Pending For Resolution By The California Supreme Court

These Are The Two Civil Cases With Fee Issues Currently Pending Before The State Supreme  Court; Plus We Update Our Year End 2022 Review Of K.M. v. Grossmont Union High School Dist. Decision.

• • On October 27, 2022, Shanna did a nice post on a lengthy discovery sanctions case.  That matter was accepted for review and presents the following issues for resolution--City of Los Angeles v. PricewaterhouseCoopers, LLC, S277211. (B310118; 84 Cal.App.5th 466; Los Angeles County Superior Court; BC574690.) Petition for review after the Court of Appeal reversed an order in a civil action. This case presents the following issue: Is a court’s authority to impose monetary sanctions for misuse of the discovery process limited to circumstances expressly delineated in a method-specific provision of the Civil Discovery Act, or do courts have independent authority to impose monetary sanctions for such discovery misconduct, including under Code of Civil Procedure sections 2023.010 and 2023.030?
  • On January 16, 2023, we indicated that review had been granted in an arbitration unconscionability opinion which presented the follow issue:  Ramirez v. Charter Communications, Inc., S273802. (B309408; 75 Cal.App.5th 365; Los Angeles County Superior Court; 20STCV25987.) Petition for review after the Court of Appeal affirmed an order denying a petition to compel arbitration in a civil action. This case includes the following issues: Did the Court of Appeal err in holding that a provision of an arbitration agreement allowing for recovery of interim attorney’s fees after a successful motion to compel arbitration, was so substantively unconscionable that it rendered the arbitration agreement unenforceable?
  • In our year end 2022 review, we noted that K.M. v. Grossmont Union High School Dist., 85 Cal.App.5^th 717 (2022) had a petition for review pending for determination with the California Supreme Court.  We can now report that a settlement was reached, and an order was entered on February 15, 2023 granting petitioner’s unopposed request to withdraw the petition for review.  Does this impact publication of the decision?  We see no clear answer, but likely it does not because CRC 8.526 provides that the supreme court’s dismissal of a petition for review does not impact its publication unless the high court orders otherwise.  The docket does not reflect that the opinion was depublished, with the opinion strongly indicating that a CCP § 998 offeror should attach a copy of a desired settlement agreement so the offeree is clear on the terms of the 998 offer.

Family Law: $13,000 Monthly Permanent Spousal Support Order And $175,000 Fees Order Under Needs-Based/Section 271 Grounds Reversed Where Lower Court Failed To Consider Totality Of Ex-Husband’s Ability To Pay Factors

Reversal of Spousal Support Order Parlayed Into Reversal Of Fees Order.

            In Kuo v. Liu, Case No. A164928 (1^st Dist., Div. 2 Feb. 21, 2023) (unpublished), ex-husband was hit with a $13,000 monthly permanent spousal support payments and a $175,000 fees award to ex-wife under the needs-based Family Code provisions and Family Code section 271.

            Those awards got reversed on appeal.  The problems with the spousal support awards, which also infected the fee award, were two-fold in nature:  (1) the support award was based on stale numbers 8 years earlier; and (2) the gifts and loans by ex-husband’s parents were not shown to be recurrent or continuing in nature.  The fee award by the lower court was not nuanced enough on ex-husband’s ability to pay—a key factor under Family Code section 2030, 2032, and 271—given he was living paycheck by paycheck at the time of the award, his parents’ funding had dried up, and ex-wife obtained significant loans from her parents to fund her dissolution efforts. 

Appealability, Discovery: Discovery Sanctions Against Client’s Attorney For Client’s Failure To Appear At A Deposition Reversed

Nothing In The Statute Shows That Sanctions Are Allowable Against Client’s Attorney.

            Castillo v. McCreary, Case No. B317493 (2d Dist., Div. 3 Feb. 21, 2023) (unpublished) is an interesting unpublished decision on an appealability issue and on whether discovery sanctions can be visited on a client’s attorney for his client’s failure to appear for a deposition, with a lower court imposing sanctions against client’s attorney. 

            On the appealability issue, the technical issue was whether a clerk’s certificate of mailing, which was file-endorsed but attaching a minute order which was not, constituted a minute order which was appealable under the more restrictive 60-day appeal limitation.  The appellate court, although sympathetic that an order like this might qualify, applied Alan v. American Honda Motor Co., Inc., 40 Cal.4^th 894, 905 (2007) conservatively so that the appeal could go forward.

            With that said, attorney won on the merits, because de novo review was required vis-a-vis the germane Discovery Act statute.  Nothing in Code of Civil Procedure section 2025.450(g)(1) authorized monetary sanctions against client’s attorney for his client’s failure to appear at the deposition.  So, the sanctions award against the attorney was reversed.

Deadlines: Where Motion To Compel Arbitration, Based On Accompanying Declarations, Had A Fee Request, It Authorized The Lower Court To Grant Fees Where Other Side Did Not Object To Them In Their Opposition Or At The Hearing

Inadequate Record Sealed The Result, But The Lesson Is To Make An Objection To A Fee Request Even If Inartfully Raised.

            The result in Barcenas v. 99 Cents Only Stores, LLC, Case No. B316898 (2d Dist., Div. 3 Feb. 17, 2023) (unpublished) is based on waiver, but it is a lesson to object to an attorney’s fees request even if made through declarations in support of a motion.

            The defense brought a motion to compel arbitration and, through declarations, sought attorney’s fees against the plaintiffs, although not mentioning it in their notice of motion per se but reiterating the request in a reply brief.  Plaintiffs did not oppose or apparently object at the motion to compel arbitration hearing.  The lower court awarded $6,759.65 in fees against plaintiffs as “a sanction.”  The appellate court affirmed because plaintiffs never objected to the fee request, with the panel believing that it was teed up enough through the notice of motion which incorporated the defense brief and declarations.  Moral of this opinion:  object or make a record that the fee request was inartfully or inadequately raised!

Family Law: $97,500 Fee Award To Ex-Female Significant Other Under Family Code Section 6344 Is Affirmed On Appeal

Ex-Male Significant Other Had Ability To Pay, But Lower Court Did Not Award Full Fee Request Of $181,042.

            Johns v. Cummings, Case No. B313964 (2d Dist., Div. 4 Feb. 17, 2023) (unpublished) involved the aftermath of a romantic relationship between Thomas Cummings, a recording artist, and Whitney Johns, a fitness model/personal trainer, who both have significant online followings.  After the relationship apparently soured, Ms. Johns prevailed on a request for a domestic violence restraining order and was awarded attorney’s fees of $97,500 against Mr. Cummings under Family Code section 6344, although much less than the $181,042 requested (with her Westside L.A. attorney awarded $650 per hour because he did a strong job of presenting petitioner’s case). 

            Mr. Cummings appealed the award, but it was affirmed.  The prevailing party in a Domestic Violence Prevention Act matter can be awarded attorney’s fees in the discretion of the lower court, although the ability to pay of the losing party must be considered.  The matter was contested vigorously, with there being financial evidence that Mr. Cummings did have assets and significant yearly royalty earnings.  That was sufficient to sustain the award.

Appealability, Deadlines: Plaintiff’s Appeal Of An Attorney’s Fee Grant Motion Was Untimely, Resulting In A $64,350.30 Fees Order Standing As Viable Without Any Review

Appeal Was Electronically Received By The Court One Minute Late, Which Made It Untimely—So, Allow For Some Electronic Delay Transmission Issues When Filing An Appeal.

            Although unpublished, the lesson from McKenna v. Sony Pictures Entertainment, Case Nos. B304256/B310814 (2d Dist., Div. 5 Feb. 15, 2023) (unpublished) is to not push the 11:59 p.m. electronic filing deadline for superior court documents, especially with respect to a notice of appeal.  If the document is not received until 12:00 a.m. the next day, it could well be found to be untimely by a day.

            Plaintiff lost an attorney’s fees motion to the tune of $64,350.50 (inclusive of $9,427.50 for “fees on fees”) because the lower court determined defendant prevailed on a SLAPP motion as well as under Civil Code section 3344.1 (fee-shifting provision in a deceased personality name/likeness case involving deceased actor Christopher Jones).  Defendants served a notice of entry, which triggered a 60-day deadline from which to appeal the fee order.  Plaintiff encountered some electronic filing delays such that the appeal was file stamped at 12:00 a.m., one minute after the deadline such that the appeal was late by one day.  (Plaintiff visited Nationwide Legal at 11:42 p.m., but the electronic transmission issue did not get the document to the court—received by it--until 12:00 a.m., although the deadline for timely filing was 11:59 p.m. the day before, all in line with CRC 8.77.)

            The appellate court dismissed the appeal as untimely.  It did not believe that a slow connection was a failure in the electronic transmission for purposes of allowing for leniency under CRC 8.77(d).  The CRC deadline language talks about receiving the document by 11:59 p.m., not submitting by that time.  Beyond that, the notice of appeal was insufficient in failing to specify the order or judgment from which plaintiff was appealing. 

            Good electronic transmission lessons are taught in this opinion:  upshot, do not crowd electronic filing of a notice of appeal and check the right boxes in the Judicial Council form or specify the orders/judgments being appealed in a specially-crafted notice of appeal.

Costs: Failure To File A Costs Memorandum Or File A Motion To Tax Costs As To A Competing Costs Memorandum Both Constituted A Waiver If Not Timely Filed, Absent A Court Extension

Waiver Principles, Pure And Simple.

            Brady v. Clark, Case No. E078212 (4^th Dist., Div. 2 Feb. 8, 2023) (unpublished) is a simple reminder for litigants—if you are claiming routine costs as a prevailing party, file a timely costs memorandum; and, if you are going to oppose a dueling costs memorandum against you, you need to file a timely motion to tax costs.  (Hydratec, Inc. v. Sun Valley 260 Orchard & Vineyard Co., 223 Cal.App.3d 924, 929 (1990) [need to file a timely costs memorandum]; Douglas v. Willis, 27 Cal.App.4^th 287, 289 (1994) [need to file a timely motion to tax costs to timely object to a costs memorandum].)

Reasonableness Of Fees: When Trial Judge Gives You A Supplemental Chance To Explain Fees And Allocate Them, Take The Judge Up On It Or Face Reductions Which You Will Not Like

Defendants Requested $191,007.50 In Fees, But Were Only Awarded $74,424.71 Based On Their Failure To Provide The Trial Judge With Adequate Supplemental Information.

            Mooney v. Argus Realty Investors, Case No. G060440 (4^th Dist., Div. 3 Feb. 2, 2023) (unpublished) is a stark reminder that a fee claimant needs to pay special attention to a trial judge’s request for supplemental information, especially the need to allocate between non-compensable or unsuccessful claims.  The fee claimant in this one ignored a trial judge’s request for supplemental information on billings and suggested allocations between compensable contract/non-compensable tort claims.  That was not good for the fee claimant:  the lower court reduced the total $184,435 billed fee request down to $135,704.42 for inefficiencies/excessive time; it then reduced that smaller total in half; and then added back in $6,572.50 in unbilled time, for a total award of $74,424.71.  Because the prevailing parties failed to raise any argument against apportionment and failed to respond to major supplemental requests by the lower court, the reduced award was no abuse of discretion.  Presiding Justice O’Leary authored the 3-0 opinion. 

Class Actions: Federal Circuit Reverses $185 Million Class Counsel Award Because Claims Court’s Analysis Was Inconsistent With Class Opt-In Notice Terms And Did Not Justify A High 18-19 Positive Multiplier On The Lodestar

Fee Award Arose Out Of A $3.7 Billion Common-Fund Recovery In A Patient Protection And Affordable Care Act And Health Care And Education Reconciliation Act (ACA) Class Action.

            With some strong language indicating that lower federal courts must acts as fiduciaries when it comes to scrutinizing fee applications in common-fund class action situations, the Federal Circuit in Health Republic Ins. Co. v. Kaiser Foundation Health Plan, Inc., et al., No. 2022-1018 (Fed. Cir. Jan. 31, 2023) (precedential), reversed a Claims Court’s attorney’s fees award of $180 million to class counsel in an ACA case where a $3.7 billion common-fund recovery was obtained for two classes. 

            The fee award was for almost 10,000 hours of work on the two cases at a blended hourly rate of about $1,033 for partners and associates, plus 400 hours of work by support staff at an average $325 hourly rate.  The $180 million award by the Claims Court was based on 5% under a percentage of recovery methodology, with no lodestar “cross check” (although the award was actually the product of class counsel’s lodestar work augmented by a 18-19 positive multiplier). 

            The Federal Circuit found that the class opt-in notices expressly indicated a lodestar cross-check would be used, and it was not such that the “deal” for opting into the class action required reversal so this cross-check methodology could be used.  Beyond that, the federal appeals court expressed skepticism that a 18-19 multiplier was justified given the ranges in many decisions was more in the 1 to 4 positive range. 

Equity: Specific Performance Judgment Could Not Condition Transfer Of LLC Interests Upon Payment Of Attorney’s Fees Order

Fees Were Not A True Incident Of the Specific Performance Judgment.

            Youshei v. Yoshaei, Case No. B313770 (2d Dist., Div. 1 Jan. 30, 2023) (unpublished) was a case where the appellate court reversed the portion of a specific performance judgment conditioning a transfer of LLC interests upon the payment of attorney’s fees, because fees were not a true incident of the specific performance judgment so as to operate as a condition for transfer.  Costs and prejudgment interest were, however.

Prevailing Party: $78,500 Attorney’s Fees/Costs Award Affirmed Against Non-Prevailing Party Admitting In A Summary Judgment Non-Opposition That Conceded Their Cross-Claims Had No Merit

Admissions In The Summary Judgment Proceeding Were Preclusive.

            The next case, Blue Fountain Pools and Spas, Inc. v. Zauss, Case No. E077923 (4^th Dist., Div. 2 Jan. 30, 2023) (unpublished), cautions litigants that admissions in law and motion non-oppositions can have preclusive results in later fee motions.  In this one, cross-complainants admitted in a summary judgment non-opposition that their cross-claims lacked merit.  Later, the trial judge granted the prevailing cross-defendants $78,500 in contractual fees and costs.  That result “stuck” on appeal because the admissions showed there was a final victory on the cross-claims, not just an “interim win.”