CALIFORNIA ATTORNEY'S FEES

Family Law: Lower Court’s Ignoring All Of Ex-Husband’s Evidence, But Using Some Of It, Resulted In Reversal Of Child Modification And $10,000 Needs-Based Fee Award

Appellate Court Was Bothered By Inconsistent Reasoning And Use Of Selective Evidence While Finding Appellant’s Proof Was Not Credible In Entirety.

            In Swan v. Hatchett, Case Nos. A163825 et al. (1^st Dist., Div. 4 June 29, 2023) (published), the lower court refused to consider ex-husband’s evidence as uncredible in child support modification and Family Code section 2030 attorney’s fees need proceedings, resulting in a $10,000 needs-based award in ex-wife’s favor.  The appellate court reversed and remanded because it could not square inconsistent reasoning and use of some of ex-husband’s evidence despite saying all should be ignored.  On the needs-based fee front, it found incredulous that the lower court could rely on husband’s financial declaration for purposes of fashioning a fee award but rejecting it in the modification proceeding.  If the lower court disregarded husband’s evidence in both proceedings, then there was no evidence to show husband had greater resources for purposes of paying for ex-wife’s legal representation.  Even though remanding, the Court of Appeal expressed no opinion as to what outcome should be reached.

Reasonableness Of Fees: $1.11 Million Fee Award To Two Prevailing Defendants, As Against Lloyd’s, Was Found To Be No Abuse Of Discretion

Lower Court Reduced Defendants’ Fee Requests By Over $457,720.

            Challenging the amount of an attorney’s fees award as an abuse of discretion is a daunting task, given it must be shown the award was irrational or that it shocks a jurist’s conscience.  Appellant could not satisfy this tough standard in Certain Underwriters at Lloyd’s, etc. v. Zillow Group, Case Nos. A164516 et al. (1^st Dist., Div. 4 June 28, 2023) (unpublished).

            There, Underwriters lost a summary judgment motion against two defendants in an indemnity suit featuring enterprise service agreements with fee clauses.  The lower court awarded one defendant $460,000 in fees (a $228,860.28 reduction from the ask) and another defendant $650,000 in fees (applying even a steeper reduction than the haircut given to the first defendant’s ask).

            The appellate court disagreed with Lloyd’s’ argument that the awards were an abuse of trial court discretion.  The second defendant did additional work than the first defendant, which justified the disparate amounts of the two awards.  Also not to be forgotten was the significant haircut – over $457,720 – made by the lower court in making its awards.

Section 1717: Denial Of Fees To Prevailing Creditor Was Correct Because Substantive Claims Were Not Based On A Note With A Fee Clause

Fee Entitlement Found Missing.

            In Port Blue LLC v. Perlstein, Case No. B313030 (2d Dist., Div. 1 June 27, 2023) (unpublished), the trial judge denied contractual fees under a note to a prevailing creditor.  That result was affirmed on appeal because the rescission, money had/received, and declaratory relief claims were not based on the note with a fees clause versus other documents with no fee recovery.

Arbitration: $167,315.94 In Attorney’s Fees Under An Arbitration Award Affirmed Where The Arbitration Fees Clause Did Not Prohibit Such A Fees Award And Where The Parties Submitted Fee Issues For Arbitral Resolution

Acquiescence Was A Key Predicate For Appeal Affirmance.

            In Fidelity National Title Co. v. Mehta, Case No. B309988 (2d Dist., Div. 1 June 27, 2023) (unpublished), an arbitrator awarded about $440,000 in compensatory damages which were affirmed on appeal (even after reversal of a trial court deletion of consequential damages) and also awarded $167,315.94 in attorney’s fees to the prevailing party where an arbitration fees clause allowed fee recovery for a motion to compel arbitration result but did not preclude recovery of fees for other work.  The losing party was unsuccessful in challenging the fee award on appeal for two reasons:  1) the contractual fees clause did not prohibit recovery of fees for work other than a motion to compel arbitration; and (2) the parties requested fees from the arbitrator such that they acquiesced to submission of the issue at the arbitral stage (J.C. Gury Co. v. Nippon Carbide Industries (USA) Inc., 152 Cal.App.4^th 1300, 1303-1305 (2007)). 

Experts, SLAPP: Lower Court Properly Excluded Generalized Expert Opposition Testimony Where Expert Had No Experience With SLAPP Appellate Work

Result Was An Award Of $19,651 In Attorney’s Fees To Prevailing Defendant For Defending SLAPP Grant On Appeal.

            Spielbauer Law Office v. Midland Funding, LLC, Case No. H049662 (6^th Dist. June 26, 2023) (unpublished) is a situation where a prevailing defendant in an anti-SLAPP proceeding successfully defended the result on appeal, leading to the entry of a $19,651 fees award for appellate work.  The losing side opposed with a declaration by an expert who was an insurance adjuster and had general fee review experience.  The lower court sustained an objection to that expert’s declaration, and the appellate court affirmed.  The reason is that the expert must have specialized knowledge, with nothing showing that he had experience in reviewing time for SLAPP appeal work.  So, litigants and counsel, be careful when you retain an expert to make sure that expert has specialized knowledge in the substantive area of the issues involved in the case.

Section 1717: $19,468.85 Fees Award Reversed As A Matter Of Law Because There Was No Contract With A Fee Clause

Fee Entitlement Was Missing In This Case.

            In Fischer v. Ponce, Case No. B314254 (2d Dist., Div. 1 June 23, 2023) (unpublished), a party obtained judgment after a demurrer was sustained without leave, a determination affirmed on appeal.  The lower court then granted the prevailing party $19,468.85 in attorney’s fees.  That award was reversed as a matter of law on appeal.  The reason?  The agreements sued on had no fees clause; while there was an unsigned, proposed lease with a fees clause, that was insufficient as a predicate for a fees award.

SLAPP: $23,728 In Attorney’s Fees Award To Prevailing Defendant Was No Abuse Of Discretion

Defendant Originally Requested $37,400, But Plaintiff Appealed The Reduced Fee Award Anyway.

            Plaintiff in Capital Wholesale LLC v. Buehring, Case No. C095879 (3d Dist. June 21, 2023) (unpublished) lost a SLAPP motion which resulted in his complaint being stricken and with the lower court awarding the prevailing defendant $23,728 in attorney’s fees out of a requested $37,400, determining the issues were straightforward and that 50 hours rather than the claimed 81.6 hours were the reasonable amount of time to be compensated.  Interesting enough, plaintiff appealed, arguing the proper lodestar methodology was not followed by the lower court.  The appellate court disagreed, especially given the reduced fee award showing that the trial judge did follow the Ketchum lodestar standards (see our Leading Case No. 8). 

Laffey Matrix, Probate, Reasonableness Of Fees: Probate Court Properly Lowered Requested Attorney’s Fees For Trust Work Based On Its Knowledge And Experience

Lower Court Did Not Have to Credit The Laffey Matrix.

            Melbostad v. Kasales, Case No. A165361 (1^st Dist., Div. 3 June 16, 2023) (unpublished) demonstrates how, in California state court cases, a trial court is able to draw upon its own knowledge and experience in determining a reasonable lodestar hourly rate and in determining the reasonableness of overall fees to be awarded.

            What happened in this matter was that an attorney providing both trustee and attorney fee work waived any compensation for trustee work under Probate Code section 15687(b), claiming entitlement for $163,061.82 in attorney’s fees work for a trust.  The lower court, based on its knowledge and experience in the area, reduced the claimed $525 hourly rate to $465 and found a substantial portion of the requested hours related to waived trustee compensation, such that $48,681 should be the fee award. 

            The appellate court affirmed.  Appellant’s argument that trustee’s compensation factors should be applied to a trust attorney’s fee compensation determination was unsupported by authority.  With respect to the hourly rate, the lower court did not have to follow the Laffey Matrix rates but, instead, could rely on its knowledge and experience of what a reasonable hourly rate should be in the probate area.

Judgment Enforcement, SLAPP: Briggs Opinion Now Published

Plaintiff/Judgment Debtor’s Failure To Move To Tax Costs Had Consequences.

            On May 30, 2023, we posted on Briggs v. Elliott, Case No. D080283 when it was unpublished (4^th Dist., Div. 1 May 26, 2023 unpublished, certified for publication on June 16, 2023).  We can now report that the opinion has been published, dealing with a plaintiff/judgment debtor being unable to raise challenges to a SLAPP fee award made in connection with a costs memorandum which was never contested through a motion to tax costs. 

Discovery, Judgment Enforcement, Sanctions: Lower Court’s Failure To Include Discovery Sanctions In Post-Trial Judgment Was Not Erroneous

Discovery Sanctions Was An Independent Monetary Judgment Subject to Post-Judgment Enforcement.

            In Marriage of Bush, Case No. G061202 (4^th Dist., Div. 3 June 15, 2023) (unpublished), a family law judge issued $3,635 in discovery sanctions against wife, but the judge stayed any payment until a trial determined who owed what.  However, the monetary sanction was not included in the post-trial judgment, which wife claimed was error.  Not so, said the 4/3 DCA in an opinion authored by Justice Delaney.  The monetary sanction was an independent monetary judgment subject to execution, although it was stayed for a while.  (Newland v. Superior Court, 40 Cal.App.4^th 608, 615 (1995).)  Although there might be some logistical benefit to including such an award in the pre-trial judgment (Constellation-F, LLC v. World Trading 23, Inc., 45 Cal.App.5^th 22, 31 (2020)), it was not error to omit the sanctions award from the post-trial judgment because the monetary sanctions judgment was independently enforceable. 

Private Attorney General: One Intervenor Garners $143,555 In CCP § 1021.5 Fees, While Another Intervenor Not Having A Direct Interest Properly Denied 1021.5 Fee Recovery

First Intervenor’s Fee Award, However, Was One With A 75% Lodestar Reduction.

            In City of Huntington Beach v. State of California, Case No. G061184 (4^th Dist., Div. 3 June 14, 2023) (unpublished), Huntington Beach lost a constitutional challenge in a mandamus proceeding with the State of California over a series of laws affecting a charter city’s, like Huntington Beach’s, ability to control its housing.  The lower court allowed the intervention by the Kennedy Commission (Kennedy) and the California Coalition for Rural Housing and Housing California (Housing), allowing Kennedy’s intervention without conditions but granting Housing’s intervention with reservations/some conditions as far as what it and Kennedy could file in the proceeding.  City lost its challenges, with the lower court finding that Kennedy advanced some significant legal theories, had a direct interest in the case, and advanced the ball as far as the final result which was achieved—awarding Kennedy $143,555 in CCP § 1021.5 fees (a 75% reduction from the requested $462,587 lodestar after showing displeasure about the number of hours, overstaffing, duplication, and unwarranted inefficiencies).  However, the trial judge found Housing was not entitled to recover 1021.5 fees because it did not have a direct interest in the case.  City appealed Kennedy’s fee award, and Housing cross-appealed from the fee denial order.

            The fee orders were affirmed on appeal, in an opinion authored by Acting Presiding Justice Bedsworth.

            Kennedy met the 1021.5 requirements because it was a non-conditioned intervenor which helped the trial judge come to a resolution of the case, with the lower court’s position on the contribution of Kennedy reviewed under a deferential abuse of discretion standard which was not going to yield to a different result on appeal.  The 75% reduction in the Kennedy request showed that the lower court was attuned to what it needed to do under a lodestar analysis. 

            With respect to Housing, the denial of its fees was warranted because that intervenor admitted that it had a state-wide, rather than local, interest such that its interest was attenuated.  (Connerly v. State Personnel Bd., 37 Cal.4^th 1169, 1181. 1183 (2006).)

Requests For Admission: Costs Of Proof Sanctions Were Warranted Where City Won Summary Judgment On Taking Claim And The Denied Ripeness RFA Was Material

$32,500 In Attorney’s Fees Was The Sanction Award Sustained On Appeal.

            In Forat v. City of Los Angeles, Case No. B313816 (2d Dist., Div. 2 June 14, 2023) (unpublished), City asked plaintiff to admit that a taking claim was not ripe, an RFA which was denied and with plaintiff’s position leading to the overruling of a prior demurrer.  City prevailed on the taking claim through a summary judgment motion, and the trial judge granted it $32,500 in attorney’s fees as RFA “cost of proof” sanctions.  The appellate court affirmed, because the RFA was material and the sanctions were appropriate for a defendant prevailing at a summary judgment stage.  (Barnett v. Pensk Truck Leasing, 90 Cal.App.4^th 494, 499 (2001).)

Off Topics: Do Lawyers Like Legalese And Why Does It Persist?

Conclusions in Recent Report Summarized By The Economist Suggest Lawyers Prefer Simplified Language and The Report Then Tries To Answer Why It Persists.

            The June 3, 2023 issue of The Economist reports on a study published in Proceedings of the National Academy of Sciences (Martinez and MIT/University of Edinburgh colleagues) about why lawyers use legalese and why it persists.  The conclusions might surprise you.

            The general conclusion was that lawyers preferred simplified language over legalese.  So, the authors of the study examined hypotheses as to why it persists.

            The “curse of knowledge” hypothesis is the idea that learned people do not know how to write for the less informed.  But the researchers found that lawyers, like laypeople, struggled with legalese because it is harder to understand.

            The more cynical “it’s just business” hypothesis is the theory that lawyers are intentionally opaque to get clients paying more for their supposed expertise.  But that hypothesis did not fit the data because lawyers believed their clients would be more likely to sign simplified contracts.

            The “in-group signaling” hypothesis is that legalese is a signal belonging to the legal fraternity such that it is aimed to impress fellow lawyers.  But lawyers in the test group debunked this idea because they indicated that they would be more likely to hire the writers of simplified contracts.

            The most common defense for legalese, the need for precision, did not hold up because the surveyed lawyers reading simplified contracts rated them just as enforceable as complex ones.

            That left researchers with a simple conclusion:  the “copy-and-paste hypothesis,” that is that lawyers imitate what previous lawyers have done because the legalese can be incorporated routinely into contracts drafted for clients.

Class Action, Intellectual Property: $1.7 Million Fee Award To Class Counsel In A Case Netting $52,841.05 In Benefits, With No Meaningful Injunctive/Monetary Relief, Reversed And Remanded

True Benefit To The Class And Proportionality Of Fees Had To Be Scrutinized On Remand.

            The beginning paragraph in Lowery v. Rhapsody International, Inc., Case No. 22-15162 (9^th Cir. June 7, 2023) (published) is a doozy:

            “This case will likely make the average person shake her head in disbelief: the plaintiffs’ lawyers filed a class action lawsuit on behalf of copyright holders of musical compositions and ended up recovering a little over $50,000 for the class members. The lawyers then asked the court to award them $6 million in legal fees. And the court authorized $1.7 million in legal fees—more than thirty times the amount that the class received.”

            Followed by the start of the second paragraph: “We reverse and remand.”

            The facts showed that the putative copyright class action was dead in its tracks based on a settlement in another case which made very little compensation possible in the case.  The putative class and defendant agreed to a “claims made” settlement having a hypothetical value of $20 million but with defendant only paying $52,841.05 to satisfy class members’ claims.  No significant injunctive or nonmonetary relief was a component of the settlement.  Class counsel requested over $6 million in fees, a magistrate judge recommended about $860,000 in fees, and the district judge awarded $1.7 million in fees to class counsel.

            The Ninth Circuit reversed, following a trend in recent years to scrutinize class action fee awards more closely.  The problem here was two-fold:  there was a need to assess the fee award based on the real benefit to the class (not a hypothetical benefit, given there would not be many claims made based on a prior settlement in another matter) and the need to have a class action fee award—even in a Copyright Act case—to be proportional to the class benefits.  Reversed and remanded to reconsider the award based the proportionality/actual benefit standards articulated in the appellate opinion.

Liens For Attorney’s Fees: Where One Attorney Fixed His Fee Recovery Under Attorney’s Liens, That Part Of A Judgment Was Sustained Even Though Other Parts Relating To Remaining Funds To Be Released And Successor Attorney’s Claims Would Remain To Be

Opinion Shows You How A Good, Successful Race By One Attorney May Get A Resolution First!

            Aresh v. Marin-Morales, Case Nos. G060579/G060827 (4^th Dist., Div. 3 June 5, 2023) (published) is an interesting decision on attorney priority for fee recovery in settlements.  It may tell competing attorneys that the race goes to the swift, but that the second attorney then must litigate fee entitlement with his clients after the first attorney won the race.  Actually, if the clients or all attorneys participate in the case, closure might be achieved.

            The lessons from the first paragraph emanate from an interesting judgment, where a first attorney recovered fees under protest by the second attorney refusing to fully participate in the proceedings between first attorney and client.  If we understand this opinion based on its very precise construction of the judgment, first attorney did vindicate his attorney’s lien rights but the trial judge exceeded things by resolving how the remaining proceeds should be allocated to the client inclusive of the second attorney’s fee recovery rights.  So, in the end, first attorney did a good thing by pressing his rights, such that client and second attorney had more litigation or negotiations ahead of them as far as what to do.  The judgment was not void as far as first attorney’s rights. 

            Justice Goethals authored the 3-0 opinion.

In The News, SLAPP: Maxine Waters’ SLAPP Grant And Fees Recovery Reversed On Appeal

This Updates Our Prior May 28, 2021 Post On The Case At The Trial Level.

            On May 28, 2021, we did a post on a trial court fee award in a defamation action brought by Joe E. Collins III against Maxine Waters, congressional seat opponents in the past, where a Los Angeles County Superior Court judge granted Ms. Waters’ SLAPP motion and awarded her $53,590 prevailing party attorney’s fees.  We now have an update for you.  On June 5, 2023, the 2/8 DCA reversed the SLAPP grant in the defamation case brought by Mr. Collins, which also means the fee award was vacated on appeal.  The case is Collins v. Waters, Case No. B312937 (2d Dist., Div. 8 June 5, 2023) (published). 

Private Attorney General: CCP § 1021.5 Award To Minor’s Parents For Obtaining Removal From Civil Abuse Central Index Reversed As A Matter Of Law

The Matter Only Really Impacted The Parents Themselves, Not A Larger Class Of Persons.

            In Ford v. Stanislaus County, Case No. F083828/F084205 (5^th Dist. June 2, 2023) (unpublished), minor’s parents obtained writ relief by which their names were removed from the Civil Abuse Central Index after they were found not to be the perpetrator of injuries in a juvenile dependency proceeding.  The court issuing the writ also awarded parents $101,397 in fees under the private attorney general statute, CCP § 1021, triggering an appeal by Stanislaus County.

            The Fifth District reversed as a matter of law, because the result did not confer a significant benefit on a large class of persons (one of the elements of 1021.5).  The real impact was on the parents themselves, with no evidence that the county was engaging in systematic abuse.  The fee award went POOF! on appeal.

SLAPP: What Happens When Some SLAPP Denials Are Reversed And Become SLAPP Grants As Far As Awarding Fees To A Defendant Who Only Partially Prevails On SLAPPing Some Claims?

Answer:  Partially Prevailing Defendant Gets Trial and Appellate Fees For the SLAPP Grants, But No Fees For Work on SLAPP Denials.

            As our post captions above indicate, Peterson v. Harris, Case No. B315356 (2d Dist., Div. 4 June 2, 2023) (unpublished) indicates the attorney’s fees entitlement remedy available to a partially prevailing SLAPP defendant obtaining reversal of some SLAPP denials (so that they were grants) but also having some SLAPP denials affirmed.  That entitlement is to attorney’s fees for trial and appellate work related to the SLAPP grants, but not for work relating to the SLAPP denials.  (ComputerXpress, Inc. v. Jackson, 93 Cal.App.4th 993, 1020 (2001).)

Appeal Sanctions: $10,000 In Frivolous Appeal Sanctions Awarded To Respondent And $5,000 In Separate Frivolous Appeal Sanctions Awarded To Appellate Clerk, All Against Appellant

Opinion Has A Stark Reminder For Appellants To Not Appeal Discretionary Rulings Where They Did Not Develop A Meritorious Record For Reversal.

            Champlin/GEI Wind Holdings, LLC v. Avery, Case No. B319563 (2d Dist., Div. 6 June 2, 2023) (published) is a stark reminder for appellate attorneys (or trial attorneys appealing for clients) to be very careful in appealing discretionary rulings.  Here is the introductory warning to the bar:

            “We publish this opinion for several reasons, not the least of which is a guidepost to the bar not to file a frivolous appeal. We ourselves had occasion to warn attorneys concerning the abuse of discretion standard on appeal twenty-five years ago. (Estate of Gilkison (1998) 65 Cal.App.4th 1443 (Gilkison).) ‘Everything has been said already; but as no one listens, we must always begin again.’  (Overton v. Vita-Food Corp. (1949) 94 Cal.App.2d 367, 370.) We borrow the phrase from our previous opinion: This appeal ‘was “dead on arrival” at the appellate courthouse.’ (Gilkison, supra, at p. 1449.) This does not mean that we do not consider the contentions of counsel. We do. But sometimes, the contentions are frivolous in light of the record on appeal. That is the case here.”

            In this one, appellant lost a summary judgment and motion to amend its pleading because it made an untimely/incomplete summary judgment opposition and unreasonably delayed in filing a motion to amend (not to mention technical difficulties with the motion) such that the lower court discretionarily and substantively granted relief against appellant. 

            The appellate court affirmed these determinations.  Then, it had to decide whether the appeal was frivolous, which the Court of Appeal determined it was.  There was a total lack of merit, not to mention there was evidence of an intent to delay because appellant maintained a Hawaii mechanics lien despite a California lower court ruling that the case lacked merit.  Respondent requested frivolous appeal sanctions of over $62,000, but the appellate court awarded respondent $10,000 in fees as well as $5,000 in sanctions to the appellate clerk for the reviewing court’s expense in working up the appeal.  Aside from that, respondent was awarded costs on appeal and the opinion was forwarded to the State Bar as is required in this circumstance.

Minors: $534,890 Fee Award Reversed Because Informed Minors Were Denied Their Right To Chosen Counsel In Challenging The Fee Awards

Due Process Rights Led To The Result.

            Chui v. Chui, Case No. B310325 (2d Dist., Div. 1 May 32, 2023) (unpublished), involving contentious probate and trust litigation where a guardian ad litem was appointed for two minors, a lower court approved a $534,890 fee award to GAL’s court appointed attorney to defend against the minor’s “attacks” (the appellate court’s words, not ours).  However, minor had their own counsel who was disqualified and then had another counsel appointed by the court.  The fee award was reversed because minors, given they were close to majority and were informed minors, had the right to their own chosen counsel to oppose the fee request.  That did not happen, such that the fee award had to be overturned and remanded.

Insurance: Sixth District Determines That Brandt Fees Are Recoverable On Appeal

Although Damages At The Trial Level, Appellate Fees Decided By Lower Court Upon An Appropriate Motion.

            In Borjon Auto Center King City, Inc. v. Sentry Select Ins. Co., Case No. H048021 et seq. (6^th Dist. May 31, 2023) (unpublished), the Sixth District entertained the issue of whether Brandt (see our Leading Case No. 11) fees are recoverable on appeal.  Here is what the appellate court said:

            “Finally, Borjon Auto Center seeks an award of Brandt attorney fees on appeal. This court has determined that Brandt attorney’s fees are recoverable on appeal. ‘We agree with the Ninth Circuit in McGregor [v. Paul Revere Life Ins. Co. (9th Cir. 2004) 369 F.3d 1099] that attorney fees the insured has incurred to defend a judgment against the insurer’s appeal are a logical extension of the fees incurred in pursuing the recovery in the trial court. The collection of the benefits due is not complete when the insurer resists the judgment by challenging the judgment on appeal. Thus, to the extent that appellate attorney fees reflect the continuation of services performed to obtain the rejected payment of policy benefits, they should be recoverable under the rationale of Brandt.’ (Baron v. Fire Ins. Exchange (2007) 154 Cal.App.4th 1184, 1198 (Baron); but see Burnaby v. Standard Fire Ins. Co. (1995) 40 Cal.App.4th 787, 797 [Brandt attorney’s fees are not recoverable on appeal].)

            “Since Brandt attorney’s fees ‘are recoverable as damages, the determination of the recoverable fees must be made by the trier of fact unless the parties stipulate otherwise. [Citations.]’ (Nickerson, supra, 63 Cal.4th at p. 373.) We will therefore remand the matter for a determination by the trial court, on appropriate motion, of the amount of attorney’s fees on appeal to which Borjon Auto Center is entitled to under Brandt, supra, 37 Cal.3d at pages 817-819. (See Baron, supra, 154 Cal.App.4th at pp. 1198-1199.) “