CALIFORNIA ATTORNEY'S FEES

Insurance: Insured’s Brandt Fee Recovery Affirmed On Appeal Where Insured-Counsel Agreement Modified Before Trial But Disclosed To Insurer

No Manipulation Of Fees Shown, With Insurer Not Having Standing To Challenge The Fee Agreement As Unconscionable.

               Wietsma v. Foremost Ins. Co. of Grand Rapids, MI, Case No. C097885 (3d Dist. May 30, 2024) (unpublished) involved challenges to a Brandt fee recovery by the insured, although in a much reduced fashion from the original fee request.  Insurer brought lots of challenges to the fee award, but they were rejected on appeal.

               Insured filed an $84,000 rental property claim against insurer, hiring counsel who entered into a 2017 fee agreement based on contingency, attorney lien, and costs-of-proof sanctions components.  This agreement was produced to insurer during discovery.  After some more extensive litigation by insurer, insured entered into a new 2021 fee agreement with counsel providing for the same terms as in the 2017 fee agreement but adding a provision requiring compensation via an hourly rate if a jury panel was sworn.  Insured’s counsel produced this new agreement to insurer within 2 days of execution.  Insured won a jury trial against the insurer, winning $131,201.92 in damages although $55,223.64 consisted of policy benefits compensation that the insurer unreasonably failed to pay.  Insured moved to recover $606,278 in Brandt allocated fees.  Most of insurer’s arguments were rejected as far as denying fees, but the lower court awarded insured $384,825 in fees.  (The parties stipulated that Brandt fees could be considered by the lower court, post-trial, rather than putting damages evidence in front of the jury—not an uncommon stipulation.)

               Insurer’s appellate arguments for a reversal did not carry the day.  The appellate court rejected the idea that proof of occurring a debt to the insured’s counsel suffices to show fees were incurred, not actual payment.  (Contra Costa County Title Co. v. Waloff,184 Cal.App.2d 59, 68 (1960).)  “Furthermore, requiring an insured to specifically prove he or she has paid or will be held to pay the accrued fees makes little sense in the Brandt scenario,” especially in a contingency fee arrangement.  The appellate panel also rejected the idea that insured must show it secured the lowest contingency fees to mitigate damages, because it simply ignores the actual costs needed to vindicate the insured’s interests under the policy.  Because insurer did not have standing to challenge the fee agreements between insured and counsel, the challenge to the new 2021 new fee agreement did not prevail.  Finally, the Court of Appeal was sensitive to the “fee agreement manipulation argument,” but did not find it was persuasive under the facts on appeal.  Insured did not change the fee agreement after trial, as in a case cited by insurer (Pulte Homes, 14 Cal.App.5^th at 1129-1132), but simply changed the fee deal to reflect insurer’s tenacious litigation efforts to get to the ultimate result.  “We need not decide when the line between proper and improper modification is crossed as we conclude it was not crossed here.”

Section 998: This Provision Does Not Provide An Independent Basis For Fee Entitlement, You Either Have It Or Not Under Fee Entitlement Predicates

Nothing In Accepted 998 Offer Or Subsequent Settlement Agreement Had A Fee Entitlement In Them.

               We have always blogged that a threshold issue is whether a claimant has a fee entitlement basis.  If you do not, you lose.  That was the case in Arriagarazo v. BMW of North America, LLC, Case No. C097296 (3d Dist. May 29, 2024) (unpublished).  After convoluted procedural litigation activities, a CCP § 998 offer was accepted, with both sides bearing their own costs and attorney’s fees, but not definitively resolving how the case was to be resolved.  BMW was hit for $968 in costs after the case was ultimately resolved through stipulated pleadings, but no attorney’s fees were awarded by requesting parties under the prior events.  This result was affirmed on appeal.  The causes of action were tort claims for strict products liability, negligence, and wrongful death, none of which had fee entitlement bases.  Without that being established, no attorney’s fees were awardable especially given no other agreement to fees under the 998 offer or subsequent pleadings resulting in a resolution of the case.

Prevailing Party, Special Fee Shifting Statutes: Court Of Appeal Reverses, As A Matter Of Law, Fee Denial To Mobile Home Park Because Voluntary Dismissal By Plaintiff Of MRL Claims Made Mobile Home Park A Prevailing Party

On Remand, Reasonableness Of Fees And Allocation On MRL Claims Were The Charge Of The Lower Court.

               In Stooksberry v. El Rova Mobile Home Park, LLC, Case No B329202 (2d Dist., Div. 1 May 29, 2024) (unpublished), plaintiff resident dismissed a complaint alleging late payment of rent, fee increases, and other claims arising under the Mobilehome Residency Law (Civ. Code, § 798 et seq.) (MRL), which has a prevailing party clause which is bilateral in nature.  The lower court denied fees to the mobile home park, but that was reversed as a matter of law.  The problem for the mobilehome homeowner was that two of his claims did arise under the MRL, despite trying to argue otherwise.  Even worse, the MRL scheme does allow attorney’s fees to a party where the litigation is dismissed in the defense favor (Civ. Code, § 798.85.), with caselaw extending the dismissal to a voluntary dismissal.  That resulted in a remand to determine what fees were owed to the mobile home park, keeping in mind the lower court had to face reasonableness and allocation principles given only two claims were adversely against mobile home park owner under the MRL.

Sanctions: $35,000 Sanctions Order Against Plaintiff’s Counsel Affirmed After Lower Court Dismissed Frivolous Minimum Wage Hour Claims

Defense Counsel Did A Wise Thing:  Reduced $150,000 Prior Request Down To $35,000 In Its Reply Brief—Getting The Lower Ask In Toto.

               Baptiste v. Ralph Grocery Co., Case No. D082554 (4^th Dist., Div. 1 May 28, 2024) (unpublished) is a good example of prudent judgment exercised by defense counsel.  The case involved a CCP § 128.7 sanctions request against plaintiff’s counsel for frivolous minimum wage hour claims which were dismissed without leave at the demurrer stage.  Although originally asking for at least $150,000 in sanctions, defense counsel lowered the request to $35,000 for the direct demurrer work.  The lower court liked it, awarding the $35,000 lowered “ask.”  The appellate court liked it too, affirming the merits ruling and the amount of the sanctions. 

Arbitration: CCP § 1281.97 Orders Are Appealable And FAA Preempts CCP Deadline Provision

Unpublished Solis Decision, From The 2/5 DCA, Follows Reasoning In Recently Published Hernandez Opinion Over A Dissent.

               On May 24, 2024, we posted on Hernandez v. Sohnen Enterprises, Inc., a May 22, 2024 2/5 DCA opinion which was published, deciding CCP § 1281.97 orders are appealable and § 1281.97 was preempted by the FAA where a contract said the FAA governed—over a dissenting justice’s contrary reasoning.  The same division came to the same result in the unpublished opinion of Solis v. Sohnen Enterprises, Inc., Case No. B323296 (2d Dist., Div. 5 May 23, 2024) (unpublished), also a 2-1 decision. 

Probate, Section 998: No Matter Whether Probate Code Provisions Or CCP § 998 Applied. Lower Court Properly Granted Expert Witness Fees To Attorney Who Winded Down Deceased Attorney Friend’s Practice In Fee Division Battle With Friend’s Administrator

In Dicta, Appellate Court Suggested 998 Offers May Not Be Barred In Probate Litigation.

               Estate of Howell, Case No. D081920 (4^th Dist., Div. 1 May 23, 2024) (unpublished) is interesting reading for probate practitioners.

               This case involved a battle over attorney fee compensation to be divided between the administrator wife of a deceased attorney and another attorney (who was a friend of the deceased attorney and appointed to wind down the law practice).  That latter attorney brought significant fees into the practice being wound down.  The attorney sent a CCP § 998 offer to administrator wife to the tune of $300,000, which was not accepted.  The matter proceeded to trial, with the attorney getting $872,914 and with wife obtaining $237,428.  Attorney used a forensic accountant expert who the lower court found very helpful in establishing the court’s division of fee compensation, later awarding $53,240.80 in expert witness fees to the attorney.  Wife appealed the postjudgment expert witness fee order.

               The 4/1 DCA affirmed.  It found the lower court had discretion to award the expert fees under Probate Code sections 1000 and 1002.  However, the panel then stated that it did not believe that CCP § 998 offers were barred in probate litigation, so that was another ground on which to affirm—even though it did not have to determine if section 1002 superseded “the constellation” of CCP §§ 1032, 1033.5, and 998 or whether the CCP governs in the absence of more Probate Code specificity.  The expert fee award was no abuse of discretion no matter which analytical path was chosen.

               BLOG UNDERVIEW—For those interested in this area, see our December 4, 2023 post on Peccia v. Guerrero, an unpublished opinion suggesting that section 1002 does supersede CCP §§ 1032, 1033.5 (although section 998 was not at issue).

Appealability: Failure To Appeal Subsequent Costs Award After Final Merits Judgment Entered Nunc Pro Tunc Earlier Resulted In A Dismissal Of Any Challenge To The Costs Award

Opinion Reminds Practitioners To Separately Appeal Costs And Fee Orders.

               In California Spine and Neurosurgery Institute v. Boston Scientific Corp., Case No. H049966 (6^th Dist. May 23, 2024) (unpublished), plaintiff lost its case, resulting in a final merits judgment which was entered nunc pro tunc earlier and a later adverse costs award of $8,974.12, with many of the costs involving discretionary rather than “matter of right” determinations.  Plaintiff appealed from the final judgment, but nothing in its notice of appeal mentioned the costs award.

               Although both parties argued the merits of the costs award, the appellate court determined it lacked jurisdiction because the costs award was not appealed.  It went with the prudent rule that costs awards are separately appealable and that the costs award under consideration was not “incidental to the judgment” because no costs were mentioned in the judgment and most of the costs were discretionary rather than “as a matter of right” to fall within the Grant exception.

Arbitration: 2/5 DCA Majority Decides That FAA Preempts 30 Day Payment Deadline For Employers Under CCP § 1281.97

Dissent Disagrees That FAA Is Offended By Section 1281.97.

               In Hernandez v. Sohnen Enterprises, Inc., Case No. B323303 (2d Dist., Div. 5 May 22, 2024) (published), a 2-1 panel decided that the FAA preempts the CCP § 1281.97 deadline requiring that an arbitration is forfeited unless the employer pays expenses within 30 days unless California arbitration rules are expressly incorporated into the parties’ contract, which coincides somewhat with Justice Wiley’s dissenting rationale in Hohenshelt v. Superior Court, 99 Cal.App.5^th 1319, 1328 (2024), pet’n for review filed, Case No. S284498 (Cal. Sup. Ct. Apr. 8, 2024) [discussed in our March 1, 2024 post].  The dissent did not believe section 1281.97 offended the FAA, siding with the logic of the Gallo decision.  The majority also decided that an order granting a motion to withdraw from arbitration under section 1281.97 was appealable; the dissent questioned whether that was the case, inviting legislative scrutiny, but assumed so for purposes of addressing the FAA preemption issue.  We would adventure a guess that this decision might be destined for California Supreme Court review.

Discovery: 1/4 DCA Considers Some First Impression Issues Relating To Deposition Third-Party Subpoena Awards In Marital Dissolution Case

60-Day Deadline To Compel Runs From Proper Service Of The Subpoena, No Separate Statement Absolutely Required If Motion Provides A Road Map, And Post-Motion Meet And Confer Discovery Efforts Are Not Compensable As A Cost In Bringing A Motion To Compel.

               Marriage of Moore, Case No. A165038 (1^st Dist., Div. 4 May 21, 2024) (published) was a case dealing with a lower court’s award of $25,000 each in discovery sanctions against two third parties which had made largely unsuccessful objections to documents-only deposition subpoenas, with the sanctions awarded to ex-wife in a marital dissolution case (the third parties were affiliated with ex-husband).  For the most part, the sanctions awards were affirmed, but a remand was ordered on one expense allowed by the lower court.  Here are takeaways from this opinion, some of which involved first impression issues:

• • The 60-day deadline to file a motion to compel deposition document subpoena compliance runs from when a valid service is made on a third party, not from when objections are made where service is not validly accomplished.
  • Although a lower court can deny a motion to compel for lack of a separate statement, the rule does not prevent a lower court excusing this requirement where the moving papers provide a proper outline of what needs to be done as far as responding to discovery requests, citing CRC 3.1345(b)(2).
  • Discovery meet and confer efforts are generally compensable if they are conducted before the filing of a discovery motion. However, once the discovery motion is filed and briefing is done, further meet and confer efforts during a mediation are not compensable because they are not causally enough linked to the bringing of the discovery motion for compensation purposes.  This resulted in a limited remand for the lower court to exclude those expenses from any ultimate discovery sanctions award.

Class Actions, Multipliers, Private Attorney General, Reasonableness Of Fees: $1.174 Million Award To Class Counsel In Fair Debt Collection Practices Case Affirmed On Appeal

Significant Benefit Incurred, If Injunctive Relief Was Considered, And Other Objections Were Not Specific To Justify Any Reduction.

               In Doskocz v. ALLS Lien Services, Case No. A166299 (1^st Dist., Div. 1 May 20, 2024) (partially published; fee discussion unpublished), class counsel prevailed on behalf of plaintiffs in case involving some novel and complex issues under the Fair Debt Collection Practices Act and unrelated case.  Class counsel moved for $1.174 million in attorney’s fees, inclusive of a 1.25 multiplier, being granted the full request.  The defense appealed, but to no avail.  A significant benefit was incurred, when both limited monetary and injunctive relief were considered in tandem.  Many other requested defense reductions were not supported with sufficient detail.  A multiplier was justified based on the factors found relevant by the lower court with respect to novel and complex issues.  The defense could not surmount the abuse of discretion standard applied to the fee issues at play.

Substantiation Of Reasonableness Of Fees: Failure To Follow Local District Court Rule On Pre-Motion Meet And Confer Requirements Can Cost A Prevailing Plaintiff Or The Litigant’s Counsel The Right To Fees

Ninth Circuit Affirmed District Judge’s Denial Of Fees For Failure To Meet And Confer For Purposes Of Seeing If Fee Dispute Could Be Resolved.

               District court local rules have the “force of law.”  Prevailing plaintiff’s counsel learned that all too well, with his failure to follow one resulting in a complete denial of a fee request.

               In Atwood v. Thornell, No. 23-2247 (9^th Cir. Apr. 25, 2024) (unpublished memorandum opn.), a plaintiff prisoner successfully litigated under the Religious Land Use and Institutionalized Persons Act to secure accommodation of his religious practices in connection with his execution.  His counsel then moved for a recovery of attorney’s fees.  The district court denied fees altogether because the attorney failed to attest to the parties’ good faith efforts to meet and confer for purposes of resolving disputed issues under the fee motion or to the moving party’s good faith efforts to arrange such a conference, a requirement under a D. Ariz. Local Rule.   The Ninth Circuit affirmed, determining the local rule had the force of law and that the failure to comply with this threshold requirement blunted fee entitlement even though civil rights statutes are liberally construed in favor of fee grants.

Lodestar: $958,297 Fee Award, Inclusive Of A 1.5 Multiplier, Affirmed On Appeal

However, The Opinion Does Introduce Fuzziness On The Geographical Community For Lodestar Analysis Purposes.

               In Hoglund v. Sierra Nevada Memorial-Miners Hospital, Case No. C097065 (3d Dist. May 17, 2024) (partially published; fee discussion published), plaintiff won a case with FEHA claims against defendant, obtaining a $958,297, inclusive of a 1.5 multiplier, out of a request of $1,274,828.  Defendant appealed, arguing that the award improperly used Sacramento hourly rates when the case was litigated in Nevada County.  The Third District affirmed, holding that the lower court is not bound to the four corners of the county venue where the case was litigated.

               BLOG OBSERVATION—This opinion may create fuzziness to the general rule that the venue determines hourly rates, unless the requesting counsel can show there was unavailable, competent counsel in the venue such that out-of-venue counsel was necessary.  Although Hoglund cited PLCM Group, 22 Cal.3d at 1096, that case involves San Francisco counsel trying a case in Los Angeles, with the hourly rates very similar so that there was no real prejudice in using Bay Area rates.

Deadlines, Special Fee Shifting Statutes: City Obtaining Preliminary Injunction As To Public Nuisance On Marijuana Dispensaries Was Entitled To Attorney’s Fees, But Not Costs

No Costs Memorandum Was Required To Seek Fees, But City Failure’s To File Did Bar It From Obtaining Costs—Kaufman Decision Found Applicable To Statutory Fee Request.

               In Green Lotus Entertainment, Inc. v. City of Montclair, Case No. E079531 (4^th Dist., Div. 2 May 16, 2024) (unpublished), City obtained a preliminary injunction against certain cross-defendants, arguing that they were a marijuana dispensatory constituting a public nuisance.  The trial court granted the preliminary injunction, with the City then bringing a motion to obtain attorney’s fees and other costs under Civil Code section 3496.  [No one contested that section 3496 did allow for a fees or costs order where a governmental entity enjoyed uses involving controlled substances.]  Despite no costs memorandum being filed by City, the lower court granted it attorney’s fees of $113,387.50 and routine costs of $5,208.60.

               The 4/2 DCA affirmed the fees award, but it reversed the costs award.  Cross-defendants argued that City’s failure to file a costs memorandum precluded both a fees award and costs award.  Half correct, according to the Court of Appeal.  There was no need for a costs memorandum to be filed with respect to a fee request, finding that the reasoning in Kaufman v. Diskeeper Corp.,229 cal.App.4^th 1 (a contractual fees case) was apt in a statutory fee request case, finding no substantive difference so as to require anything other than a noticed motion for fees in both situations.  However, a different matter for costs:  a costs memorandum needed to be filed, such that the $5,208.60 routine costs went POOF! on appeal as a matter of law.

Deadlines, Special Fee Shifting Statutes: City Obtaining Preliminary Injunction As To Public Nuisance On Marijuana Dispensaries Was Entitled To Attorney’s Fees, But Not Costs

No Costs Memorandum Was Required To Seek Fees, But City Failure’s To File Did Bar It From Obtaining Costs—Kaufman Decision Found Applicable To Statutory Fee Request.

               In Green Lotus Entertainment, Inc. v. City of Montclair, Case No. E079531 (4^th Dist., Div. 2 May 16, 2024) (unpublished), City obtained a preliminary injunction against certain cross-defendants, arguing that they were a marijuana dispensatory constituting a public nuisance.  The trial court granted the preliminary injunction, with the City then bringing a motion to obtain attorney’s fees and other costs under Civil Code section 3496.  [No one contested that section 3496 did allow for a fees or costs order where a governmental entity enjoyed uses involving controlled substances.]  Despite no costs memorandum being filed by City, the lower court granted it attorney’s fees of $113,387.50 and routine costs of $5,208.60.

               The 4/2 DCA affirmed the fees award, but it reversed the costs award.  Cross-defendants argued that City’s failure to file a costs memorandum precluded both a fees award and costs award.  Half correct, according to the Court of Appeal.  There was no need for a costs memorandum to be filed with respect to a fee request, finding that the reasoning in Kaufman v. Diskeeper Corp.,229 cal.App.4^th 1 (a contractual fees case) was apt in a statutory fee request case, finding no substantive difference so as to require anything other than a noticed motion for fees in both situations.  However, a different matter for costs:  a costs memorandum needed to be filed, such that the $5,208.60 routine costs went POOF! on appeal as a matter of law.

Family Law, Reasonableness Of Fees: Marital Settlement Agreement Did Not Preclude Needs-Based Fees To Ex-Husband, But Remand Required Because Appellate Court Could Not Determine The Basis Of The $10,000 Needs-Based Award To Wife

She Asked For $72,355, With Appellate Court Unsure As To How This Amount Was Reached.

            Both ex-husband and ex-wife were unhappy with needs-based awards to each in Konkov v. Doubson, Case No. H050705 (6^th Dist. May 14, 2024) (unpublished).  Both appealed, with mixed results but not certain that anything would change on remand.

            Ex-husband was awarded needs-based fees of $14,000, with ex-wife contending that they were not allowed under the terms of a marital settlement agreement.  This argument was rejected, since nothing in the agreement addressed, much less waived, needs-based fees.

            Ex-wife was awarded needs-based fees of $10,000 out of a requested $72,355.  This order was reversed and remanded, given that the appellate court could not determine how it was reached.  A rare abuse of discretion reversal.

Appealability, Estoppel, Fee Clause Interpretation: Prevailing Party In Appellate Writ Proceeding Was Entitled To Small Routine Costs, But Not Attorney’s Fees

Appeal Costs Order Was Appealable, But There Was No Fee Entitlement Basis—Estoppel Argument Was Rejected.

            In Kaur v. Pabla, Case No. F086273 (5^th Dist. May 14, 2024) (unpublished), plaintiffs obtained an appellate writ mandate order and moved for appellate costs, both routine expenses and attorney’s fees.  In the end, the routine cost of $775 for the appellate filing fee was granted, but the request for attorney’s fees of $31,680 was denied by both the trial and appellate courts.

            The main problem for plaintiffs was that they could not show any fee entitlement basis.  They argued that prayer for fees by the other side created an estoppel, but the majority approach on this issue was against them, citing Blickman Turkus, 162 Cal.App.4^th at 898.   Because the defendants were not parties to the documents with fee clauses (some of which were forged or non-existent), there was no fee entitlement for purposes of allowing plaintiffs to recover fees.

            The interesting aspect of this case was on appealability.  The issue is whether an appellate costs order is appealable or only interlocutory in nature.  In a scholarly discussion noting a split in authority, the Fifth District sided with the majority view that the order was appealable. 

Prevailing Party: Defendant Was The Prevailing Party When Plaintiffs Were Not Awarded Damages Out Of A Requested $667,000 On Contractual Indemnification/Duty To Defend Claims

Plaintiff’s Obtaining A Declaration Of A Limited Duty Of Indemnify And Defense To Two Of Three Underlying Actions Was Eclipsed By Defeat Of Damages Claims And Defendant’s Obtaining Summary Adjudication That The Duty To Indemnity And To Defendant Was Cut Off By A Prior Date For Most Of The Alleged Duties.

            We know that an “unqualified win” makes a litigant a prevailing party under Hsu v. Abbara, 9 Cal.4^th 863 (1995) [Our Leading Case N. 2].)  However, when this situation does not exist, a lower court had considerable discretion to determine what party prevailed, if any, based on a pragmatic assessment of what party has realized its litigation objectives.  (Santisas v. Goodin, 17 Cal.4^th 599, 622 (1998).)   This type of discretionary call was at issue on appeal in Garcia v. Bank of Stockton, Case No. F085536 (5^th Dist. May 10, 2024) (unpublished).

            There, plaintiffs sought to enforce certain indemnity and duty to defend obligations under agreements with defendant bank.  The lower court granted defendant’s summary adjudication motion after determining that some of these obligations expired on a date certain under the agreements.  After a bench trial on the remaining issues, the lower court determined that plaintiff had failed to prove damages even though seeking $667,000 from defendant, with the merit determinations affirmed in an earlier appellate opinion.  (Along the way, plaintiffs did win a declaration that partial indemnity/duty obligations were at issue, even though the recorded suggest defendant did not really contest it vigorously.). Defendant then moved for contractual prevailing party attorney’s fees, with the lower court awarding some amount although the sum is not mentioned in the second appellate opinion.

            The Fifth District affirmed the fee award in plaintiffs’ second appeal.  It could no discern no abuse of discretion based on these circumstances: (1) defendant’s victory in neutralizing a significant damages award and in obtaining a pretrial summary adjudication award limiting indemnity/duty to defend obligations were predominant; whereas (2) plaintiffs’ partial indemnity/defend win was a limited one and dwarfed by the “no damages” determination against them.

Costs, Discovery: Court Of Appeal Found Nothing Wrong In Allowing Recovery Of Routine Costs For Filing Discovery Motions, Even If They Were Unsuccessful And Costs/Fees Were Denied Against Defendants In The Discovery Proceedings

No Authority Shown To Conclude Otherwise, With Routine Costs And Actual Discovery Sanctions Serving Distinct Purposes.

               In BBBB Bonding Corp. v. Pilling-Miller, Case Nos. H050703 et al. (6^th Dist. May 10, 2024) (unpublished), plaintiff lost trade secret misappropriation and related claims, with costs of $34,989 out of a requested $44,989 awarded to the prevailing defendants.  Among other items, defendants requested filing fees for discovery motion which were unsuccessful, even though the lower court denied imposition of attorney’s fees against defendants in the earlier discovery motion proceedings.  Plaintiff claimed error, arguing that the denial of motion fees as a discovery sanction precluded the award of routine motion filing fees to defendants.  The trial court disagreed, as did the appellate court.  Plaintiff cited no authority showing that such minor routine costs were precluded, with the appellate court adding that the policies behind discovery sanctions on the merits and an award of routine filing fees serving distinct purposes.

Reasonableness Of Fees: $69,930 Was The Fee Award In An Unlawful Detainer Action Where A Summary Judgment Was Granted During COVID Times

Incivility Defense Not Accepted By The Lower Court.

               A plaintiff landlord during the COVID pandemic suffered an adverse summary judgment in an unlawful detainer case, fighting all the way—which litigants are entitled to do.  In Lighthouse Brooks, LLC v. Affinity House, Inc., Case No. B323615 (2d Dist., Div. 4 May 9, 2024) (unpublished), the appellate court affirmed an attorney’s fees award of $69,930 to tenant over landlord's objections.  Landlord argued fees should be reduced because tenant’s counsel was guilty under the “incivility card” defense (which we have blogged on in some very recent posts, such as in Snoeck v. ExakTime Innovations, Inc., 96 Cal.App.5^th 908, 911 (2023)).  At best, however, one alleged act of incivility was at issue, with the trial court rejecting the need to reduce fees given other cases have much more pervasive conduct involved.

Equity: Appellate Court Summarily Reverses Fee Grant Order After Referee’s Merits Decision Reversed

Court Of Appeal Decided It Had Independent Authority To Summarily Reverse Despite Clear Statutory Authority To Do So.

               In Hot Rods, LLC v. Northrop Grumman Systems Corp., Case No. G062524 (4^th Dist., Div. 3 May 8, 2024) (unpublished by-the-court opinion), a referee’s prior merits decision was reversed and remanded, with the aggrieved party also appealing from a subsequent postjudgment fees award.  Although it was unclear whether the stipulated reversal procedure in CCP § 128(a)(8) applied to appeals or whether the presumption against stipulated reversals applies to a postjudgment fees order, the appellate court found it had inherent authority to issue a summary reversal where, as here, the reversal of the fee order was clear and public trust issues were not implicated.

Private Attorney General: Plaintiff’s Section 1021.5 Fee Request Properly Denied Where Trial Court Concluded That Its Government Claim/Suit Did Not Inspire Government Action On Health Permits During The Covid Pandemic

Substantial Evidence Was The Review Standard, So The Factual Finding Submarined A Catalyst Theory Challenge On Appeal.

               In Costeaux French Bakery, Inc. v. County of Sonoma, Case No. A166727 (1^st Dist., Div. 5 May 8, 2024) (unpublished), plaintiff sought private attorney general’s fees under a catalyst theory.  What basically happened was that the County undertook many efforts to help businesses during the COVID pandemic, including relief on health permits and infusions of moneys.  At the end of the effort, plaintiff filed a government claim and lawsuit, later settling and claiming it was the catalyst for the County granting relief on health permit issues.  Both the trial and appellate courts disagreed.  This was a factual determination which could go either way, but the lower court found plaintiff’s litigation was not a substantial factor in County’s actions which had been underway for months.  Fee denial affirmed given that substantial evidence supported the non-catalyst determinations.

Insurance: Party Claiming Brandt Fees As Damages Impliedly Waives Attorney-Client Privileges As To Some Fee Information

However, Appellate Court Indicated Some Redactions Were In Order And No Bifurcation Was Required As To Liability Versus Reasonableness Of Fees.

               Byers v. Superior Court, Case No. A169321 (1^st Dist., Div. 5 May 7, 2024) (published) posed this issue and answered it:  Does a party seeking attorney’s fees as damages under Brandt v. Superior Court, 37 Cal.3d 813, 819 impliedly waive the attorney-client privilege with respect to producing fee agreements, invoices, billings, and payment information where the fees are claimed as damages?  Answer:  generally, yes.

               However, the opinion needs to be read carefully on this issue, given it is also circumspect in some nuances of the subject matter under consideration.  It decided that there is no automatic right of bifurcation of a right of liability versus reasonableness of fees on Brandt issues.  Just as important, the appellate court did not disagree that redactions could be made when producing privileged information to the extent non-Brandt fees were at issue. 

Appealability, SLAPP: Reversal Of Defendant’s SLAPP Motion Vacated Fee Award, But Plaintiff’s Motion For Sanctions Was Not Appealable

Everyone Gets To Keeping Litigating!

               In Sayarad v. Butler-Lopez, Case No. A166884 (1^st Dist., Div. 1 May 6, 2024) (unpublished), plaintiff suffered a partial grant of a SLAPP motion, resulting in an adverse attorney’s fees award as to one defendant of $42,031.50, and with the lower court denying plaintiff’s motion for sanctions based on the ground that defendant filed a frivolous SLAPP motion.  Plaintiff appealed.

               Good thing she did.  The appellate court reversed the defense SLAPP grant, which meant that the $42,031.50 fee award went POOF!  With respect to the motion for sanctions by plaintiff, that was not appealable and did not fall within the collateral order doctrine—it did not direct the payment or money or performance of an act.  Everyone got something, but the litigation goes on!

Reasonableness Of Fees, Special Fee Shifting Statutes: $47,513.67 Fee Award To Hospital and Medical Staff Affirmed On Appeal In Peer Review Proceeding

$71,270.50 Request, Reduced, Was Proper, With Appellant’s Technical Arguments Rejected.

               In Nowzari v. Torrance Memorial Medical Center, Case No. B321862 et al. (2d Dist., Div. 2 May 2, 2024) (unpublished), a plaintiff physician’s hospital privileges were restricted by a peer review body, triggering physician’s filing of a petition for a writ of the mandate to overturn the board’s decision although the petition was denied.  Hospital and medical staff defendants were awarded statutory fees of $47,513.67, two thirds of the request, under Business and Professions Code section 809.9.

               The 2/2 DCA affirmed.  Section 809.9 empowers a trial court, when litigating a writ petition challenging a peer review decision, to award costs inclusive of reasonable attorney’s fees to the party who “substantially prevails” on any claim that is “frivolous, unreasonable, without foundation or in bad faith”—a sanctions provision.  A claim is “without foundation” where it is factually or legally baseless, groundless, or without support, and a claim is “unreasonable” where no reasonable attorney would find it tenable.  (Smith v. Selma Community Hospital, 188 Cal.App.4^th 1, 30-32 (2010).)  Because these components are determined objectively, they are subject to de novo review.  Independently reviewing the record, the appellate court found no error.  It also dismissed technical arguments we have seen raised in many fee or sanctions proceedings in the past:  (1) attorney’s fees need not be pled except in cases of default (Carlsbad Police Officers Assn. v. City of Carlsbad, 49 Cal.App.5^th 135, 142 n. 3 (2020)); and (2) the trial court was not divested of jurisdiction to determine a fee/sanctions award once physician filed his notice of appeal (Code Civ. Proc., § 916; Robertson v. Rodriguez, 36 Cal.App.4^th 347, 360 (1995)).

Discovery, Sanctions: $10,000 Discovery Sanctions Against Clients’ Ex-Attorney Affirmed On Appeal

Substitution Out Prior To Discovery Hearing Did Not Preclude The Sanctions Award, With Appealing Attorney Chided For Incivility.

               Sometimes attorneys just need to “take their lumps” for discovery abuse, whether inspired by the client, counsel, or both to some degree.  Masimo Corp. v. The Vanderpool Law Firm, Inc., Case No. G061829 (4^th Dist., Div. 3 May 2, 2024) (published) demonstrates the prudence of taking those lumps in the right circumstances and also acting professionally with opposing counsel during discovery disputes (or other junctures of a case).

               There, three defendants and their ex-counsel were sanctioned for $10,000 in discovery abuse, with the record showing some interesting emails from the sanctioned attorney to the opposing attorney before the award came down. 

               On appeal, sanctioned attorney primarily argued that his firm was no longer counsel of record at the time of the sanctions award.   That argument was rejected because the discovery sanctions statute does not limit an award to counsel of record given that such a rule would insulate a predecessor counsel from being responsible for discovery misuse.  But, as a kicker, the appellate panel—in an opinion authored by Acting Presiding Justice Bedsworth—discussed incivility concepts and chided ex-counsel for his behavior.  “Incivility is the adult equivalent of schoolyard bullying and we will not keep looking the other way when attorneys practice like this.  They will be called out and immortalized in the California Appellate Reports.”  (Slip Op., at 10.)

Trade Secrets: Plaintiff’s Dismissal Of One Defendant In Trade Secrets Case Did Not Justify Award Of Prevailing Party Fees Under The California Uniform Trade Secrets Act Fee-Shifting Provision As To Dismissed Defendant

Even Though The Dismissal Was Strategic, Defendant Did Not Demonstrate Plaintiff’s Claim Was Objectively Specious.

               The California Uniform Trade Secrets Act does have a fee-shifting provision if a court finds a plaintiff’s trade secret misappropriation claim was made in bad faith (Civ. Code, § 3426.1), which requires a finding of both objective speciousness and a subjective component showing the claim was commenced or prosecuted for an improper purpose (SASCO v. Rosendin Electric, Inc., 207 Cal.App.4^th 837, 845-847 (2012)).  Dismissed defendant, in Broker Solutions, Inc. v. Pina, Case No. G062212 (4^th Dist., Div. 3 Apr. 30, 2024) (unpublished), did not have the “goods” on objective speciousness such that a substantial fee request was correctly denied in a 3-0 opinion authored by Justice Sanchez.

               What happened here is that plaintiff dismissed one defendant from a trade secrets misappropriation case because defendant’s attorney was driving up costs and impeding resolution of the case according to plaintiff’s counsel, even though plaintiff believed the dismissed defendant had liability.  In fact, the state of evidence adduced during discovery tended to show that dismissed defendant admitted he took plaintiff’s customer lists which were not generally available and that the lists had economic value.  After the dismissal, defendant sought section 3426.1 attorney’s fees/costs in the amount of $594,185.70, a request denied by the trial judge and triggering an appeal by dismissed defendant.

               The 4/3 DCA panel affirmed the fee denial.  Based on the discovery evidence showing that dismissed defendant took the customer lists and those lists had value so that defendant was unjustly enriched, the case was not objectively specious.  Fee denial affirmed.

Family Law: Ex-Husband’s Oral Request For Needs-Based Fees In DVRO Proceeding Was Properly Denied

No Evidence On Financial Need Was Presented, Although Appellate Court Noted A Split On Intermediate Appeal Thinking On Whether Needs-Based Fees Are Warranted In This Area.

               In Marriage of Etheridge, Case No. A167520 (1^st Dist., Div. 2 Apr. 30, 2024) (unpublished), ex-husband made an oral request for Family Code section 2030 needs-based fees in a domestic violence restraining order (DRVO) proceeding.  The fatal problem was that he failed to provide any financial evidence to support this request.  The trial court denied it, and the appellate court affirmed the ruling.

               Initially, the appellate court recognized that there is no consensus on whether the losing, restrained party in a domestic violence action is entitled to needs-based fees to the extent custody and visitation issues are involved (compare C.T. v. K.W., 71 Cal.App.5^th 679, 681, 686-687 (2021) [yes] with Durab Cody N. v. Olivera, 31 Cal.App.5^th 1134, 1144 (2019) [no]), but did not need to weigh in on this split based on the facts of record.  Although written requests for these types of fees are preferred, an oral request is acceptable.  However, ex-husband had the burden of proof to produce evidence of financial need.  (In re Marriage of Falcone & Fyke, 164 Cal.App.4^th 814, 823-824 (2008).)  Ex-husband presented no such evidence, so the request was properly denied. 

Special Fee Shifting Statutes: Utility Properly Awarded $82,000 In Costs And Attorney’s Fees In A Case Alleging Defendant Knowingly Diverted Electrical Power To Support A Cannabis Grow Operation

Civil Code Section 1882.2 Was The Fee Entitlement Predicate For The Award.

               Civil Code sections 1882.1 and 1882.2 allow a utility to obtain compensatory damages, trebles damages, and costs/reasonable attorney’s fees against a party who commits or aids and abets a diversion of utility services by any means whatsoever.  (§ 1882.2 is the specific costs and fee shifting statute.)

               Defendant, in Sacramento Municipal Utility Dist. v. Kwan, Case No. C097382 (3d Dist. Apr. 30, 2024) (published), was found to be liable to a utility for knowingly diverting electrical power without paying for it in connection with a cannabis grow operation, with the merits judgment affirmed on appeal.  The compensatory damages award, after trebling, was $82,661.13.  The costs of suit and attorney’s fees award was $82,000, which stood up after the merits determination was determined against defendant.  The moral here, in line with our Mission Statement, is that attorney’s fees are “the tail that wags the dog in litigation."  Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993).

Special Fee Shifting Statutes: In A 2-1 Opinion, 4/1 DCA Affirms Attorney’s Fees Award To Prevailing Plaintiff Under A Stipulated Judgment As A Catalyst In A California Public Records Act Case

Dissenting Justice Believed Prevailing Party’s Last Year Of Litigation Was Unnecessary Such That Fees For Those Efforts Were Unreasonable.

               In Castanares v. City of San Diego, Case No. D082562 (4^th Dist., Div. 1 Apr. 30, 2024) (unpublished), a lower court entered judgment based on the parties’ stipulation that City had violated the California Public Records Act (CPRA) and plaintiff was the prevailing party.  The lower court awarded plaintiff CPRA fees, reducing the hourly rate of one senior attorney, reducing lodestar hours from 20 to 12 hours, and rejecting a positive multiplier request.  City appealed.

               The fee award was affirmed in a 2-1 unpublished opinion.  The majority found that plaintiff was a catalyst for City to produce documents, that City took contradictory positions in informal settlement discussions or reactions to plaintiff’s CCP § 998 offers (before finally relenting in the stipulated judgment), and that the fees were not unreasonably inflated given the reduction in one attorney’s hourly rate and the reduction in lodestar hours.

               The dissent saw things much differently.  The dissenting justice believed that the City had consistently decided to stipulate to a judgment in settlement discussions and took positions in answers to avoid a default, rendering a year of litigation unreasonable.  These perceptions were cemented by plaintiff’s counsel’s concession at oral argument that much of the litigation centered on getting an admission from City that the CPRA violation was intentional, which did not have substantive significance.  The dissent felt that only about 2.4 hours were compensable, not the additional year of litigation work that he determined to be unnecessary.   

Deadlines, SLAPP: Lower Court Erred In Not Adjudicating Merits Of SLAPP Motion In Dismissed Case And Then Determining If Attorney’s Fees Were Warranted

Renewed Fee Motion Was Timely, Where Original Fee Motion Was Filed Within Deadlines.

               In Shih v. Max, Case No. B324437 (2d Dist., Div. 1 Apr. 29, 2024) (unpublished), lower court denied two defendants’ SLAPP fee motions as moot after plaintiffs voluntarily dismissed their complaint before the SLAPP motion could be heard, although there were various procedural and stay nuances in effect during the entire case—with the original fee motion stayed pending an appellate determination on defendants’ successful summary judgment motion.  After the appellate court affirmed a summary judgment in defendants’ favor, defendants re-noticed their SLAPP fee motion, which was denied without explanation by the lower court.

               The 2/1 DCA reversed and remanded.  It initially determined the renewed fee motion was not time barred because it was a renewal of a timely filed fee motion.  (In re Marriage of Perow & Uzelac, 31 Cal.App.5^th 984, 992 (2019).)   With the procedural issue out of the way, the appellate panel concluded that the trial judge had to adjudicate whether the SLAPP motion had merit and, if it did, decide the reasonable fees to be awarded to the defense.  (Pfeiffer Venice Properties v. Bernard, 101 Cal.App.4^th 211, 218-219 (2002); Liu v. Moore, 69 Cal.App.4^th 745, 751-752 (1999).)

Requests For Admission: Lower Court Properly Denied Prevailing Defendant’s Request For Costs-Of-Proof Sanctions Of $67,177.38 In Fees And Costs

RFAs Were Not Worded Correctly And Not Of Substantial Importance.

               If you are going for RFA costs-of-proof sanctions under CCP § 2033.420, you should make sure that the RFAs are properly worded to get at facts which must be proven at trial.  They also must be requested at a juncture of the case where a plaintiff knows the proof that is going to be presented.  Barnes v. Martinez, Case No. G061981 (4^th Dist., Div. 3 Apr. 29, 2024) (unpublished) demonstrates the wrong way to craft RFAs, resulting in a denial of costs-of-proof sanctions.

               There, prevailing defendant sent out some RFAs, most of which asked plaintiff at the beginning of her case involving stolen jewelry/personal property to admit that he had no facts, documents, or witnesses to support his claims against the prevailing defendant who obtained a defense verdict in a jury trial (her husband was hit with a civil verdict, but wife—the prevailing defendant—was exonerated).  The lower court denied prevailing defendant’s requests for costs-of-proof sanctions to the tune of $67,177.38.

               The 4/3 DCA, in a 3-0 opinion by Justice Delaney, affirmed.  Initially, prevailing defendant failed to provide an adequate record by not providing any trial evidence to support her arguments as to why the costs-of-proof denial was an abuse of discretion.  Next, the RFA requests were not crafted well because plaintiff did not have zero proof but simply had the jury find the circumstantial evidence proffered unpersuasive in nature—in so concluding, the appellate court said it would have been better to have asked plaintiff to prove facts such as she didn’t possess any stolen property or that she didn’t pawn any of the items taken by her husband.  Finally, the RFAs about having no witnesses or documents were not of substantial importance because they merely concerned how plaintiff would prove his claims, made at an early juncture of the case such that these requests would not have expedited the trial.