CALIFORNIA ATTORNEY'S FEES

Private Attorney General: Plaintiff Non-Profit Properly Awarded CCP § 1021.5 Fees For Invalidating A Local Ordinance Which Lowered Property Intensity In Light Of Housing Shortage Concerns

1.25 Multiplier On Merits Work Was Sustained On Appeal.

            Plaintiff non-profit in Yes In My Back Yard v. City of Culver City, Case No. B321477 (2d Dist., Div. 4 Oct. 27, 2023) (published) invalidated a Culver City ordinance reducing the intensity of land use as being violative of California’s housing shortage dictates.  Then, the trial judge awarded plaintiff $131,813.58 in private attorney general fees, consisting of a 1.25 multiplier on merits work (but less than the 3.0 multiplier request).

            The Court of Appeal affirmed the fee award.  City argued that there was no significant benefit to a large class of persons, but the 2/4 DCA rejected this argument because there does not need to be a consensus in policy on addressing important issues to confer a significant benefit, especially considering the housing shortage concerns in California.  The 1.25 multiplier award was no abuse of discretion because (1) a first impression issue was involved; (2) non-profit’s attorneys obtained an excellent result; (3) the requesting attorneys’ hourly rates were lower than for commensurate L.A. cases; (4) the fee award inured to the benefit of the non-profit; and (5) the fee award would be borne by taxpayers, with the actual multiplier not being penal in nature.

Sanctions: $6,000 Discovery Sanctions Award Affirmed

But Appellate Court Has Harsh Word For Appellant’s Counsel On It Attempting To Argue The Merits Of A Nonappealable Discovery Ruling.

            In Tedesco v. White, Case No. G061197 (4^th Dist., Div. 3 Oct. 27, 2023) (published), a tedious conservatorship battle, appellant appealed a $6,000 sanctions award against litigant and their counsel, jointly and severally, although the thrust of appellant’s brief was to challenge a nonappealable discovery ruling.  The 4/3 DCA, in an opinion authored by Justice Goethals, affirmed the discovery order because the subpoena was overbroad and intrusive.  But it also had this to say at the very start of the opinion: “A bulldozer can move piles of dirt from one place to another. But when the goal is to move minds rather than dirt, employing a bulldozer may be counterproductive. The bulldozer in this case is appellant Debra Wear’s counsel. In our prior nonpublished opinion, Tedesco v. White (June 15, 2022, G059883) (Tedesco 1), we made clear to these lawyers that ‘[w]e do not confuse aggressive argument with persuasive advocacy.’ Although the aggression has not abated, our view of it remains unchanged.”

Lodestar; Special Fee Shifting Statutes: In Two MRL Cases, Fees And Costs Affirmed In One Case, But A “Quarterling Approach” To Fee Reduction Required A Remand In The Other Case

Mobile Home Park Owner Entitled To Prevailing Party Fee Recovery For Obtaining Free And Clear Ownership After A Public Sale Of An Abandoned Lot Where Lease Fees Were Owed.

            In this post, we summarize two lengthy fees/costs decisions arising under Civil Code section 798.85, the fees/costs shifting provision of the Mobilehome Residency Law (MRL).  Both cases ultimately determined, after some prior appeal decisions, that a mobile home park owner seeking to quiet title to property acquired after a mobile home lot owner abandons the lot can obtain fees and costs because such quiet title efforts relate to the termination, abandonment, and public warehouse sales provisions of the MRL.

            The first one, Canyon View Limited v. Nationstar Mortgage, Case No. B312642 (2d Dist., Div. 1 Oct. 26, 2023) (unpublished) involved a mobile home park owner who did recover possession of an abandoned lot, where lease fees were still delinquent, through a public sale which gave the interest in the lot “free and clear” of prior interests, including a loan against the lot.  However, lender failed to remove certain documents which clouded title to the lot, prompting a quiet title action by park owner against the lender.  Because this action was successful against lender, it arose out of the MRL.  Park owner was awarded $470,338.23 in fees and $24,209.86 in costs after rejecting lender’s three § 998 offers which eventually agreed to the relief plus $70,000 in fees to park owner.  The fees and costs orders were affirmed because (1) a “dividing line” by the defense for recoverability of fees was unreasonable, and (2) the 998 offers were not more favorable because pre-offer fees at the time exceeded the $70,000 ultimate offer (they were over $112,000 in amount).

            The second one, Canyon View Limited v. Bank of America, N.A., Case No. B312259 (2d Dist., Div. 1 Oct. 26, 2023) (unpublished) concerned similar issues for differing parties, but with a lower court on remand from a prior appeal awarding fees under a “quarterling approach” (reducing certain fees by a quarter even though different actions were concerned and in one case there was no real concern with overbilling reductions).  The appellate court found this approach too arbitrary, remanding with instructions to not use this approach but follow the lodestar methodology (although not hampering the trial judge from making reductions to arrive at a reasonable fee).

Costs, Special Fee Shifting Statutes: In “Close Call” Situation, 9th Cir. Majority Affirms Denial Of EAJA And Bad Faith Atty’s Fees Where Government Lost Case Due To Unreliable Opinion Of Its Expert, But Reverses Denial Of Certain Deposition Costs

Dissenting Circuit Judge Would Have Awarded Defendants Fees Because DOL’s Case Was Not Substantially Justified When Viewed Under An Objective Standard.

            The Equal Access to Justice Act (EAJA) was enacted to curb abusive and costly lawsuits involving the federal government, authorizing a prevailing party to seek attorney’s fees and costs from a federal agency if the agency’s litigation position was not “substantially justified” or the government acted in bad faith under 28 U.S.C. § 2412(b), (d)(1)(A), (d)(2)(A). The EAJA also empowers a court to award taxable costs.  28 U.S.C. § 2412(a).

            These statutory provisions were at issue in Su (Dept. of Labor Secretary) v. Bowers, No. 22-15378 (9^th Cir. Oct. 25, 2023) (published).  DOL lost an overinflated valuation case against defendants after the district court rejected the opinion of DOL’s star expert witness.  Although defendants were awarded certain costs, the federal judge did not award fees after finding that the “substantially justified” or “bad faith” requirements were not met.  The Ninth Circuit, in a 2-1 opinion, affirmed even though acknowledging the case was “a close call.”   DOL could not predict that its expert’s opinion would be considered entirely faulty, even though one piece of it was, such that its actions were substantially justified and not taken in bad faith.  However, the entire panel did reverse the refusal to award deposition costs to defendants because there was a clear error given that the depositions were properly necessary for summary judgment purposes.

            Circuit Judge Collins dissented from the fee denial order.  He believed that too lax a standard was being used to judge the government’s actions, substituting a “could have rationally believed” standard versus an objective “substantially justified” standard.  He would have remanded to see what fees were authorized because eligibility is tied to certain “net worth” requirements of the requesting parties under section 2412(d)(2)(B).

Ethics, Lodestar, Multipliers: Snoeck Opinion Now Published

Message Is That Incivility Can Lead To A Negative Multiplier To A Fees Request, On Top Of Other Reductions.

            On October 3, 2023, we posted on Snoeck v. ExakTime Innovations, Case No. B321566 (2d Dist., Div. 3 Oct. 2, 2023 unpublished), but it was certified for publication on October 25, 2023.  The main lesson from this case is that appellate courts will have no trouble affirming a lodestar request reduction, aside from other deductions, separate for the incivility of the party requesting a fee award where the record supports such a reduction for incivility.

Private Attorney General, Special Fee Shifting Statutes: UC Davis Student, Whose Suspension Was Overturned Through Administrative Writ Proceeding, Properly Denied CCP § 1021.5 Fees, But Matter Remanded To See If Fees Warranted Under Gov. Code § 800

Appellate Court Disagrees That An Investigation Has To Be Wholly Arbitrary Or Capricious For Section 800 Purposes.

            In Doe v. Atkinson, Case No. A166145 (1^st Dist., Div. 1 Oct. 19, 2023) (published), a lower court in an administrative writ proceeding overturned the one-year suspension of a UC Davis junior for violating sexual harassment principles, but denied his request for attorney’s fees under either the private attorney general statute, CCP § 1021.5, or Government Code section 800, which allows a plaintiff to recover up to $7,500 in fees for arbitrary or capricious actions by a public entity or its officers.  Plaintiff appealed.

            The appellate court affirmed the section 1021.5 fees denial, agreeing that the result in the case did not benefit a significant segment of the public and, at best, only a smaller segment of UC students—the main benefit was Plaintiff’s in overturning the suspension.

            But a different result occurred with respect to the section 800 fee denial.  The lower court erroneously determined that the entire investigatory actions had to be wholly arbitrary and capricious, which it did not believe to be the correct standard and criticizing the “wholly” language to the same effect in Kreutzer v. County of San Diego, 153 Cal.App.3d 62, 78 (1984).  Otherwise, very few section 800 fees would be warranted.  A remand was the “call” on the section 800 issue.

SLAPP: Ross Opinion Is Now Published

Appellate Court Found That The Entire SLAPP Motion Should Be Granted And The Defense Awarded Fees, Not Having To Resolve The Split Between Coltrain and Liu.

            On October 2, 2023, we posted on Ross v. Seyfarth Shaw LLP, Case No. B312337 (2d Dist., Div. 8 Oct. 20, 2023) (published), unpublished at the time but certified for publication on October 20.  In this opinion, the defense earned a huge appellate win when the 2/8 DCA decided its entire SLAPP motion was righteous such that the requested attorney’s fees of $79,889 were warranted.  It did acknowledge a split in intermediate appellate thinking on the prevailing party standard, between Coltrain and Liu, but it found that the defense prevailed for fee purposes under either standard.  So, it is likely the defense will seek appellate fees for prevailing in this one.

Appealability, Sanctions: 4/1 DCA Holds In Unpublished Opinion That Interlocutory Order Denying CCP § 128.7 Sanctions Is Not Appealable

It Is Appealable From A Final Judgment, Although There Is A Split In DCA Thinking On The Issue.

            In Arteaga v. California Restaurants, Inc., Case No. D082258 (4^th Dist., Div. 1 Oct. 17, 2023) (unpublished), plaintiff filed a CCP § 128.7 sanctions motion which was denied in a class action case, prompting an appeal.  The 4/1 DCA dismissed the appeal, following the lead of Longobardo v. Avco Corp., 93 Cal.App.5^th 429, 434 (2023) by concluding that an interlocutory order not directing the payment of money or performance of an act is not appealable under the collateral order doctrine.  Rather, it is appealable from a subsequent final judgment.  The appellate court did observe that Muller v. Fresno Community Hospital & Medical Center, 172 Cal.App.4^th 887, 905 (2009) held otherwise under peculiar facts, but agreed with Longobardo’s analysis of state supreme court precedent in this area.  Here, the parties reached a settlement, and the lower court issued a final judgment, with plaintiff eschewing to appeal from the final judgment.

Requests For Admission, Section 998: RFA Costs-Of-Proof Sanctions Improperly Denied, But Defense CCP § 998 Costs Were Correct

Playing Cute With Business Records Admissibility Issues Might Lead To RFA Sanctions.

            In Vargas v. Gallizzi, Case No. B317540 (2d Dist., Div. 7 Oct. 13, 2023) (published), personal injury plaintiffs prevailed against defendant but only obtained jury verdicts amounting to $30,000 based on a prior appeal and subsequent jury verdict.  But that then led to the real contest:  who gets RFA denial costs-of-proof sanctions and who gets trial costs, including expert witness fees.  Well, in the end, this was a split verdict, although plaintiff did get a remand to show they were entitled to RFA costs-of-proof sanctions.

            The lower court denied RFA costs-of-proof sanctions on the principal ground that its ruling at a pretrial hearing that medical records fell within the business records exception for admissibility purposes was not made “at trial.”  The appellate court observed that there was no “at trial” requirement under the sanction statute, such that plaintiffs did meet the threshold by proving the matters set forth in the documents.  They will get another shot at these costs-of-proof sanctions, with their initial request being around $350,000.

            Because plaintiffs did not beat a defense section 998 offer, an expert testifying over two days allowed the defense to recover $12,000 as costs, and the appellate court also determined that real-transcription fees are allowable as costs in the lower court’s discretion.  Those costs awards were affirmed on appeal.

Partition: Defendant Successfully Defending Against Sole Plaintiff’s Claim To 50% Property Ownership Properly Denied Attorney’s Fees Under Partition Statute

No Common Benefit Was Secured.

            In Gentino v. Yaghoobia, Case No. B321102 (2d Dist., Div. 4 Oct. 12, 2023) (unpublished), plaintiff was defensed by a single defendant in a case alleging that plaintiff had a 50% ownership interest in a Long Beach property, with one of the claims being for partition.  Defendant moved for fees under CCP § 874.010, but that fee request was denied.  On appeal, the reviewing court agreed:  the reason was simple, defendant obtained no “common benefit” between the parties, a requirement for an award of fees under the partition statute.

Civil Rights: City Of South Gate Garners $29,000 In Attorney’s Fees For Frivolous Civil Rights Suit From L.A. District Court Judge

Partial Fee Request Granted Because Plaintiff’s Counsel Admitted Prosecution Of The Case Successfully Was Not Possible At A Definite Point In The Case.

            Under 42 U.S.C. §1988, a district judge, in his or her discretion, may award attorney’s fees to a prevailing defendant where the court finds plaintiff’s claims to be frivolous, unreasonableness, or groundless.  There are important timing nuances here:  that determination can be based upon circumstances existing at the commencement of the case or during the subsequent prosecution of the case where it becomes clear that the civil rights claims lack merit.  Ammari v. City of Norwalk, et al., Case No. 2:22-cv-01319-SSS-MARx (C.D. Cal. Sept. 28, 2023) (order granting in part defendant’s motion for attorney’s fees) is an example of a partial fee award being granted because of the second timing nuance.

            There, Plaintiff’s § 1988 complaint was not frivolous when filed, but became so by a certain point in time after Plaintiff’s counsel admitted in opposition to the fee motion that he could not obtain facts to support the claims, such that City of South Gate had to continue litigation for a few months, including attendance at unsuccessful mediations and preparation of a summary judgment motion which was granted.  Using the lodestar analysis, U.S. District Judge Sunshine S. Sykes found that the requested hourly rate for three experienced attorneys was reasonable for the work and that each attorney did separate tasks such that no reduction was necessary for duplication, leading to a partial fee award of $29,000 for the time post-dating when prosecution of the case was without basis.

            BLOG HAT TIP—Because such fee awards are infrequent, we congratulate Raul F. Salinas, Rick Navarette, and Monisha Coelho of Frost Brown Todd LLP’s Los Angeles office on the result, with Ms. Coelho being the lead attorney on the fees motion. 

SLAPP: Partial Reversal Of SLAPP Victories Means That Attorney’s Fees Award To The Defense Had To Be Revisited

Parsing Out Unsuccessful Work And Assessing Satisfaction Of Litigation Objectives Had To Be Considered On Remand.

            In Berry v. Pope Valley Union Elementary School Dist., Case No. A165592 (1^st Dist., Div 3 Oct. 10, 2023) (unpublished), defendant District SLAPPed plaintiff’s amended complaint, while another defendant SLAPPed all but one whistleblower claim.  The defendants respectively were awarded mandatory SLAPP fees of $8,507 and $5,494.50.  On appeal, the appellate court found that procedural due process and equal protection claims should not have been SLAPP-ed, which would lead to a reconsideration of the fee awards.  In doing so, a two-step lodestar analytical process needed to be utilized: (1) segregating out unsuccessful SLAPP work; and (2) with respect to the successful arguments, consideration of whether the defense achieved their litigation objectives.  (Mann v. Quality Old Time Services, Inc., 139 Cal.App.4^th 328, 344-345 (2006).)

Judgment Enforcement: Despite Contractual Cap On Attorney’s Fees, Postjudgment Enforcement Fees Were Not Similarly Capped

Case Demonstrates That Enforcement Fees May Eclipse The Underlying Small Fee Award By Exponential Amounts.

            In Nash v. Aprea, Case No. B322796 (2d Dist., Div. 7 Oct. 3, 2023) (published), a default judgment of $59,191 was entered against defendant, with $1,000 of that being contractual attorney’s fees because the contract capped recoverable fees at that amount.  Later, the lower court awarded plaintiffs $27,721 in post-judgment enforcement fees under CCP § 685.040.  Because the underlying judgment did have a fee award (although small), this predicate justified enforcement fees even though they were almost 30 times more than the nominal fee award.

Ethics, Lodestar, Multipliers: Lower Court Properly Applied A .4 Negative Multiplier To A FEHA Fee Request Based On Plaintiff’s Counsel’s Incivility Throughout The Litigation

2/3 DCA Agreed With The Reasoning In Karton.

            More and more, we are seeing appellate opinions, whether published or not, stressing the need for civility among attorneys in litigation cases.  In fact, there are proposals being considered which would require that California attorneys, annually, have to reaffirm their oath and to confirm they will act with civility.  In Karton v. Ari Design & Construction, Inc., 61 Cal.App.5^th 734, 747 (2021), the 2/8 DCA held that incivility can allow a lower court to reduce a fee request, with it being an “incentive for counsel in fee-shifting cases to know their own low blows may return to bite them in their pocketbook.”

            Karton was followed and endorsed by the 2/3 DCA in Snoeck v. ExakTime Innovations, Case No. B321566 (2d Dist., Div. 3 Oct. 2, 2023) (unpublished).

            There, a FEHA disability discrimination plaintiff won $130,080 in damages on one out of six causes of action for defendant’s failure to engage in an interactive process.  The lower court took the lodestar request and initially made a 20% reduction for overstaffing, duplicative, and vague entries but increased the fee request by a 1.2 positive multiplier, decisions not challenged on appeal.  The lower court then applied a .40 negative multiplier to the adjusted lodestar of $1,144,659.36 based on plaintiff’s counsel’s incivility through the litigation, attacking defense counsel and belittling the court.  That resulted in an ultimate fee award of $686,795.62.  The appellate court found the reduction to be no abuse of discretion, determining that an “incivility reduction” was completely proper when the record shows (as it did to the reviewing court) that counsel engaged in incivility.  To us bloggers, this stresses an important theme in fee requests—the requesting attorney’s credibility is paramount, difficult to restore when unreasonable fee requests are presented for resolution or litigation counsel went out of bounds in his or her conduct before the lower court.

Special Fee Shifting Statutes: Prevailing Plaintiff, Found Comparatively At Fault, Was Properly Awarded Attorney’s Fees As Against Defendant Who Entered A Nolo Plea To Felony Driving Under The Influence Of Alcohol Which Caused Injury To Plaintiff

CCP § 1021.4 Was The Fee Shifting Statute.

            Isom v. MacCarthy, Case No. B317433 (2d Dist., Div. 4 Oct. 2, 2023) (unpublished) involved application of CCP § 1021.4, which allows a court in its discretion to award attorney’s fees to a prevailing tort plaintiff as against a defendant who is convicted of a felony driving under the influence of alcohol offense.

            In this case, plaintiff was a passenger in a car driven by defendant, who was above the legal alcohol level and who crashed into obstacles causing injury to plaintiff.  Defendant entered a nolo contendere plea to the DUI felony.  Years later, a jury found defendant was negligent to the tune of almost $15.5 million after finding plaintiff 25% comparatively negligent.  Plaintiff then moved to recover 1021.4 fees of almost $6.2 million based on a 40% contingency fee, with the lower court ordering supplemental briefing under a lodestar approach.  Based on a lodestar analysis, the lower court awarded $535,095 augmented by a 2.0 multiplier, for a total fee award of $1,070,190. 

            Defendant’s appeal to overturn or scale back the fee award was unsuccessful. His main argument was that it was mandatory to reduce the award based on plaintiff’s comparative negligence, but the appellate court concluded nothing in the fee statute required a mandatory reduction even though the lower court could consider this as a factor for reducing the fee request.  (Sommers v. Erb, 2 Cal.App.4^th 1644, 1650 (1992).)  The fee award was no abuse of discretion because the lower court did consider plaintiff’s comparative fault, it was proper to award plaintiff’s attorneys a blended $450 hourly rate (including assessment of that rate for a first year associate), and the multiplier was justified based on the contingency fee arrangement/risks taken by plaintiff’s counsel for a number of years.

SLAPP: Where Lower Court Only Granted Defendants Partial Mandatory SLAPP Fees Based On The Theory They Only Partially Prevailed, Appellate Court Disagreed—Defense Entirely Prevailed

Result Was That The Total Fee Request Of The Defense Should Have Been Awarded, Not The Scaled Down Order For 80% Of The Request.

            In Ross v. Seyfarth Shaw LLP, Case No. B312337 (2d Dist., Div. 8 Sept. 29, 2023) (unpublished), plaintiff brought a suit based primarily on the alleged shoddiness of a CSU investigation, with the lower court tentatively indicating that three out of eleven claims should be SLAPP-ed but indicating that the other claims involved unprotected activity—awarding fees and costs of $63,911, 80% of the $79,889 request in its tentative.  Before the tentative ruling could be entered as a final order, plaintiff dismissed his complaint in entirety.  Both sides appealed.

            The 2/8 DCA decided that plaintiff’s entire complaint should have been SLAPP-ed because all of his claims involved a CSU investigation which was a protected “official proceeding,” and plaintiff’s claims were time barred.  Although noting a split in intermediate appellate thinking on prevailing party SLAPP analysis as between Coltrain [presumption that dismissal made the defense the prevailing party, subject to narrow rebuttal circumstances] or Liu [defense must prove it would be successful on the SLAPP merits], defendants prevailed under either standard given the appellate court’s analysis of the substantive underlying issues.  That meant defendants should have been awarded the full $79,889 in fees and costs, plus they were entitled to more costs on appeal.

Deeds Of Trust, Equity: Lender Electing Judicial Foreclosure Which Did Not Fix Amount Of Additional Attorney’s Fees And Costs, But Forcing A Borrower Pay Off To Lender Due To Nonjudicial Foreclosure Activities, Had To Return Fees And Costs To Borrower

Lender Elected Its Judicial Foreclosure Remedy, With Borrower Not Being Assessed With Fees And Costs.

            Lender must not be pleased with the result in Transition Financial Services, LLC v. Wintrust Bank, Case Nos. A162930 et al. (1^st Dist., Div. 5 Sept. 29, 2023) (unpublished).  Lender obtained a judicial foreclosure judgment for the amount of the secured debt, but never pursued adding additional attorney’s fees and costs of a claimed additional $500,000 to the judgment or moving for same in that action.  However, lender threatened nonjudicial foreclosure such that the borrower paid the claimed additional fees and costs to avoid the trustee’s sale and loss of property.  Eventually, a trial judge held that lender had elected its judicial foreclosure remedy and had to return the fees and costs to borrower because they were not part of the judicial foreclosure judgment.  The appellate court affirmed, finding that lender had elected its remedy—it could have gone judicial or nonjudicial foreclosure, but obtained a judgment under the former path.  As such, borrower did not owe the additional fees and costs; and, also, was properly found to be the prevailing party entitled to fees and costs ordered by the lower court after determining borrower prevailed on the election of remedies issue.