Owner Over-litigated The Case, With Fee Awards Not Having To Be Proportionate To A Litigant’s Recovery.
Attorney’s fees awards can be substantial, especially where an opposing party over-litigates a case and drives up the prevailing party’s litigation expenses. That is what happened in Zale Design Studio v. Leevan, Case Nos. B324871 (2d Dist., Div. 1 Aug. 28, 2024) (unpublished).
Plaintiff home designer sued defendant owner, who raised an unlicensed contractor defense and brought cross-claims for fraud and under RICO (with the RICO claim knocked out on a demurrer). The case was litigated over about 7 years. A jury awarded $64,000 to designer, answered special verdict interrogatories finding she did not have to be a licensed contractor, and found against owner on his cross-claims. Under a prevailing party contractual fees provision, the trial judge awarded designer the full lodestar ask of $1,568,501 over fee objections by owner, although the lower court refused designer’s 1.5 positive multiplier request.
The 2/1 DCA affirmed the jury’s verdict and the fee award. It agreed with the lower court that owner had over-litigated the case and that he had refused two CCP § 998 offers from plaintiff (one of which required her to pay him $100,000). Finally, the Court of Appeal cited a case indicating that a fees award does not have to be proportional to the ultimate recovery—even though plaintiff did more than get a compensatory award because she also defeated owner’s cross-claims. (See Taylor v. Nabors Drilling USA, LP, 202 Cal.App.4th 1228, 1251 (2014).)
BLOG OBSERVATION—This case has a nice discussion of unlicensed contractor and mechanics lien principles as applied to home designers who do no installation or where only removable items are installed. Interestingly, plaintiff admitted that she had overcharged owner and included some false charges, but she gave credit for these errors—with the jury finding she did defraud owner, yet it caused no damages.
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