However, Some Portion of The Fee Recovery On An Unsuccessful, Non-Compensable Fraud Cross-Claim Had To Be Revisited Because Billings Showed Those Expenses Could Be Assessed.
Elations Systems v. Fenn Bridge, LLC, Case No. A165762 (1st Dist., Div. 3 Sept. 15, 2023) (unpublished) is an allocation/apportionment opinion which we commend litigators and others to read.
Summarized quickly, plaintiff sued on trade secret and contractual claims (breach of a settlement agreement and an NDA agreement), obtaining a jury verdict which was reversed by the trial judge through post-trial motions. The lower court initially awarded defendants $700,000 in contractual attorney’s fees. However, in a prior appeal, the appellate court reversed and directed a remand to determine whether fees needed to be apportioned between compensable/non-compensable claims, mainly, trade secret/settlement agreement breach claims, NDA breach claims, and a fraud cross-claim. On remand, the lower court determined that $700,000 was entitled to the defense as well as an additional $150,000 in appellate/post-judgment fees.
Most of the fee recovery was affirmed on appeal. Most of the $700,000 fee award was justified because the claims were interrelated, but with one exception. On the fraud cross-claim which was unsuccessful, an apportionment was warranted because billings showed that the work on that cross-claim could be segregated. The additional $150,000 fee work was upheld.
So, the moral of this one is to ask for apportionment and not give up on appeal on this allocation issue—you may get some relief! Fee challenges should focus on a request for apportionment, where appropriate.
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