CALIFORNIA ATTORNEY'S FEES

Private Attorney General: Petitioner Was Correctly Denied 1021.5 Fee For Obtaining Removal Of His Name From Gang Law Enforcement List

Petitioner Vindicated Mainly His Personal Interests And No Broad Pernicious Policy Proven Against L.A.’s Sheriff Department.

               Petitioner sought private attorney general fees in Richardson v. L.A. County Sheriff’s Dept., Case No. B333555 (2d Dist., Div. 4 Nov. 22, 2024) (unpublished) against the LASD after obtaining a court order removing his name as a suspected gang member in a database shared by other law enforcement agencies.  The lower court denied the request, a determination sustained on appeal.  Petitioner’s proceeding primarily vindicated his personal interests, and he failed to prove that LASD had a pernicious policy with respect to inclusion of names by simply using a simple checklist of factors in doing so. 

Fee Clause Interpretation: Tenant Winning Damages Under Municipal Code And Statutory Provisions Properly Awarded Fees Even Though Rental Agreement Precluded Fee Recovery On Contractual Claims

Statutory Entitlement To Fees Was Independent From Recovery Under A Contractual Fees Clause.

               In Dostie v. Marowitz, Case Nos. A168780 et al. (1^st Dist., Div. 2 Nov. 22, 22, 2024) (unpublished), plaintiff tenant won $60,000 in damages against defendant former landlord for failure to maintain the premises, gender discrimination, and emotional distress.  Defendant landlord defenses some contractual claims.  The rental agreement had this fees clause: “If, in the event of any dispute, a legal action becomes necessary regarding this rental agreement or the parties to this agreement, each party shall bear the cost of their own legal representation in any and all matters related to such legal action.”   The lower court awarded tenant $22,750 in fees under an Oakland tenant protection ordinance, the Unruh Act, and FEHA.  Landlord argued that the contractual fees clause prevented a fee award, but the appellate court found that the award was justified because municipal and state statutory entitlements were the bases for the fee award, not contractual bases (finding the clause did not reach non-contractual claims, but did explain why landlord did not seek fees for winning on contractual claims). 

Family Law, Special Fee Shifting Statutes: $43,000 Fee Award To Prevailing Petitioner In An Extensive DVRO Proceeding Is Affirmed On Appeal

Current Version Of Family Code Section 6344 Is Retroactive To Cases Pending On Its Effective Date, With Fee Award Not Being Seen As Excessive In Nature.

               Prevailing petitioner (ex-wife) was awarded $43,000 in attorney’s fees imposed upon her ex-husband under Family Code section 6344 in a DVRO proceeding.  That award was affirmed on appeal in Marriage of Stephanie & Kyle N., Case No. D084263 (4^th Dist., Div. 1 Nov. 21, 2024) (unpublished).

               The current version of section 6344, effective January 1, 2023, changed the law such that a prevailing petitioner could obtain fees and costs without regard to the petitioner’s ability to pay so long as the respondent had the ability to pay.  The appellate court found that provision was retroactive to petitioner’s matter pending before 2023, adopting the reasoning articulated to that effect in Dragones v. Calkins, 98 Cal.App.5^th 1075, 1081-1082 (2024).)  The amount of the fee award was not excessive because (1) the DVRO proceeding lasted 18 days over a 15-month time span, and (2) husband had the ability to pay, paying his own attorney about twice more than the fee award in ex-wife’s favor.

Judgment Enforcement: Judgment Creditor Entitled To Contempt Attorney’s Fees And Costs Against Person In Post-Judgment Enforcement Proceeding, Even Though That Person Was Not A Litigant In The Underlying Lawsuit

CCP § 1218 Was The Governing Statute Allowing For This Result. 

               In Ofek Rachel, Ltd. v. Zion, Case No. B333959 (2d Dist., Div. 2 Nov. 21, 2024) (published), a person who was not a litigant in an underlying lawsuit was found guilty of contempt in post-judgment enforcement proceedings, ordered to pay the judgment creditor $185,695.20 in attorney’s fees and $8,964.71 in costs under CCP § 1218(a).  The 2/2 DCA affirmed, concluding that the post-judgment enforcement proceeding was a separate action which allowed the award against a person who was not a litigant in the underlying suit. 

Sanctions: CCP § 128.5 Sanctions Of $7,500 Reversed On Multiple Grounds

Case Is A Primer On Procedural And Substantive Requirements To Meet Under 128.5.

               In Ramirez v. Ramirez, Case No. B336369 (2d Dist., Div. 6 Nov. 18. 2024) (unpublished), appellant in a probate case obtained a reversal of a $7,500 CCP § 128.5 sanctions award in favor of respondent with respect to appellant’s request to disqualify an opponent’s counsel.  Here are the takeaways which led to the reversal:

• • • No separate sanction motion. The winning party at the trial court level did not file a separate motion for sanctions, with the filing of a request in a response to a formal notice of motion on the merits not sufficing to meet the sanctions motion separate request requirement.
    • Failure to satisfy 21-day safe harbor notice requirement. Winning party below failed to give the safe harbor notice such that the opponent did have the opportunity to react.  (Zarate v. McDaniel, 97 Cal.App.5^th 484, 489 (2023).)
    • Due process rights on the merits ruling. The losing party would have not anticipated an adverse sanctions order without having proper notice on numerous grounds unrelated to the merits ruling.
    • The disqualification issue was not frivolous. Based on a split decision on appellate courts on the standing issue, the merits ruling against the losing party was not one where it could be deemed that the contested issue was frivolous in nature.
    • Lack of specific findings as to sanctionable conduct. A summary order on sanctions does not satisfy the 128.5 requirements for specificity on findings to support sanctionable conduct. 

Appeal Sanctions: $8,500 To Appellate Clerk Was Appeal Sanctions

Lower Court Will Determine Amount To Prevailing SLAPP Litigant On Appeal.

               Just to show you how appeal sanctions are increasing, the appellate court in NBoordhof v. Armstrong, Case No. B331078 (2d Dist., Div. 4 Nov. 14, 2024) (unpublished) determined that a frivolous appeal should result in the punished litigant paying $8,500 to the appellate clerk for the frivolous appeal.  With respect to appellate fees to the SLAPP prevailing litigant, that was something the lower court would determine on remand.

Insurance: Brandt Fees Properly Denied Where No Policy Benefits Claimed, Just Insurer Claim For Reimbursement Based On No Bad Faith Investigation

Theory Of Recovery Is Key In This Area.

               Many times, the theory of recovery is a key for attorney’s fees recoupment.  That is more so when an insured requests Brandt fees, with the theory needing to be calibrated to policy benefit recovery by the insured.  That did not happen in William Lyon Homes, Inc. v. Steadfast Ins. Co., Case No. G061834 (4^th Dist., Div. 3 Nov. 13, 2024) (unpublished), authored by Justice Gooding.

               The problem here for insured was that it was dealing with a retaliatory cross-complaint for recoupment of fees, with the insured admitting it was not based on bad faith lack of investigation facts.  These admissions were critical, such that insured could not attack insurer’s allegations for reimbursement.  Brandt fees were not at issue, given the cross-complaint filing was privileged and did not deal with affirmative recovery of insured benefits.

Default Judgment, Reasonableness Of Fees, Requests For Admission: Lower Court Properly Rejected Default Judgment Request Of About $308,000 In Fees Where Compensatory Damages Were Around $48,000

Fee Award Of $4,498.46 Was Proper, Given Inflated Fee Request; Costs Of Proof Sanctions Of $11,852.50 Out Of A Requested $123,016.40 Was Not Improper.

               As only Justice Wiley can do in his individual writing style, he reminds us in LCPFV, LLC v. Somatdary Inc., Case No. B325599 (2d Dist., Div. 8 Nov. 13, 2024) (published), that lower courts are gatekeepers in terms of entering reasonable default judgments, including those with inflated fee requests which will get rejected or scaled back as far as the fee recovery, more than a 90% reduction.

               Over a dispute of about $48,000 over a rusty pipe repair, a default judgment was submitted for $1.1 million (inclusive of a $308,000 fee request and $500,000 punitive damages request).  The lower court would have no part of this, because the defaulted party did not really resist, awarding $120,319.22 in a default judgment, which included attorney’s fees of $4,498.46.  It also rebuffed an RFA costs of proof sanctions request of $123,016.40, awarding just $11,852.50.

               All the awards were affirmed on appeal.

               C’mon said the appellate court, the lower court is a gatekeeper on reasonableness and did a good job on entering much reduced awards.  As far as the fees, here were the takeaways for reducing a $380,000 request down to under $5,000:

• • • The award was against a “no show” defendant, so the matter was not vigorously contested;
    • The award included duplicative work efforts which were not justified;
    • The issues in the case were simple, not justifying a fee request for a complex matter;
    • The fee request would be reduced based on the requesting party’s lack of candor in its overall default judgment submission; and
    • The fee request was shocking in amount, justifying a drastic reduction (as made) or alright denial.

Insurance: Lower Court’s Rejection Of D&O Insurance Reimbursement Of Legal Expenses Was Erroneous

Non-Indemnifiable Legal Expenses Are Usually Recouped Under D&O Policies, With Restitutionary Damages and Insurance Code Section 533 Exclusions Not Dictating Otherwise.

               In Jasper v. Chubb National Ins. Co., Case No. H050804 (6^th Dist. Nov. 12, 2024) (unpublished), a D&O insurer denied a CFO reimbursement for legal expenses in a federal securities case and related cases where the CFO was found liable.  He claimed that legal expenses were reimbursable under non-indemnified claims of the D&O policies.  The lower court disagreed, invoking restitutionary damages and Insurance Code section 533 exclusions to justify the reimbursement denial.  The Sixth District reversed, engaging in analysis of these exclusions and the general nature of D&O insurance which are helpful to litigants and practitioners representing directors or officers under D&O policies.

Deadlines, Reasonableness Of Fees: Make Sure You File/Serve Fee Oppositions Correctly And On Time

Also, Admissions In Appellate Brief Extension Requests Can Undermine A Claim That Fees Were Unreasonable Based On Non-complexity.

               Currency Corp. v. Wertheim, LLC, Case No. B326827 (2d Dist., Div. 1 Nov. 5, 2024) (unpublished), where a substantial appellate fee award of $338,535 was sustained on appeal in favor of prevailing respondents, has some lessons for litigants and practitioners when opposing fee awards.  First, make sure that the fee opposition paperwork is properly served and correctly filed—here, the opposition had an incorrect case number, it was served by express mail on the due date (one day too late), and served upon an incorrect suite for one of the moving parties’ attorneys (four days too late).  Also, on the merits, be careful of statements you make in requesting appellate briefing extensions—here, the appellants’ representations that the case was complex and had a voluminous record undermined its appellate argument that the case was not complex so as to justify the work efforts of respondents on appeal.

Block Billing, Multipliers, Reasonableness Of Fees: Plaintiff’s Counsel’s Inflated Fee Request In A Non-complex FEHA Case Where Block Billing And Failure To Explain Proliferation In Fees For A Six Month Period Through Trial Justified A Drastic Reduct

Fee Request Was About $1.75 Million In A Case Where $36,757.25 In Damages Was Awarded, With A Lower Court Awarding Only $135,102.

               Inflated fee requests are often reduced substantially and sometimes denied altogether.  In the next case, block billing, failure to explain a huge jump in the fee request for a six-month period, use of an excessive hourly rate, and unreasonable work efforts all coalesced to lead to a substantially reduced fee award, one affirmed in Howell v. Dept. of State Hospitals, Case No. A168526 (1^st Dist., Div. 2 Nov. 7, 2024) (unpublished).

               There, plaintiff brought a FEHA suit and won just $36,757.25 in lost earnings and health benefits after three years of litigation and a two-week jury trial.  Plaintiff sought about $1.75 million in fees, inclusive of a 1.75 positive multiplier.  On various grounds, the lower court determined that the fee request was inflated so as to justify a reduction to just $135,102.  The appellate court affirmed that determination, presenting some nice takeaways for litigants/attorneys in attorney’s fees law and motion proceedings:

• • • Block billing – Plaintiff’s counsel block billed which prevented the trial judge from doing a reasonable audit of what fees were appropriate.
    • Unreasonable time – Plaintiff sought recovery for unreasonable work effort for overlitigating the case, examples being time spent on 19 unsuccessful motions in limine and hours combating a physical exam request even though plaintiff was claiming pain and suffering.
    • Lack of complexity – Plaintiff was requesting a large number in a case where the issues were not that complex.
    • Excessive hourly rates—Plaintiff’s counsel requested larger hourly rates based on a Napa County venue for the case, which were higher than counsel’s San Joaquin County home rate and which was reviewed by the lower court as a “surreptitious” multiplier request.
    • Discrepancy in explaining the final large number—In a January 2023 settlement conference statement, plaintiff claimed to have expended $123,101.95 in fees/costs, and counsel could not explain the $1 million proliferation in the request for the six months between January-July 2023.
    • Denial of a multiplier against an entity funded by taxpayers—It is proper for a lower court to deny based on a taxpayer status consideration.
    • Inflated fee requests are a special concern allowing for reduction or denial—See Chavez v. City of Los Angeles, 47 Cal.4^th 970, 990 (2010).

Civil Rights, Prevailing Party, Settlement, Special Fee Shifting Statutes: Stipulated Judgment To Enforce Settlement Had Post-Judgment Enforcement Language Carve-Out Allowing For Further Post-Enforcement Attorney’s Fees

Also, On Remand, Trial Judge Had To Determine If Plaintiffs Prevailed In Voting Rights Act Case; And, If So, Amount Of Further Fees To Be Awarded.

               In Robles v. City of Ontario, Case No. G064119 (4^th Dist., Div. 3 Nov. 6, 2024) (published; originally issued unpublished on October 24, 2024), plaintiffs alleged that defendants erred in not holding at-large elections for city council, instigating a suit for violations of the California Voting Rights Act (VRA) and 42 U.S.C. § 1983.  The parties reached a settlement agreement and stipulated judgment, under which defendants agreed to pay plaintiffs $300,000 for prior attorney’s fees incurred under Elections Code section 14030, the VRA’s fee-shifting position.  Plaintiffs moved to enforce the stipulated judgment based on alleged noncompliance, with the lower court determining a provision in the judgment was invalid and denying further post-judgment enforcement fees based on the prior fees language.  Defendants conceded there was no invalidity, but the lower court still denied renewed post-judgment enforcement fees.

               The 4/3 DCA, in an opinion authored by Acting Presiding Justice Moore, reversed and remanded.  The stipulated judgment contained carve-out language allowing plaintiffs to enforce the settlement under CCP § 664.6, which the appellate court deemed sufficient to allow for the further attorney’s fees being requested.  However, the lower court also had to determine if plaintiffs were prevailing parties because they achieved their litigation objectives in obtaining map relief under the stipulated judgment; and, if so, the amount of further fees to be awarded to plaintiffs.

Homeowner Associations, Prevailing Party: 4/1 DCA Affirms Prevailing Party Status And $48,229.08 Attorney Fees Award To HOA That Filed Successful Demurrer And Was Dismissed From Action With Prejudice

HOA Pragmatically Achieved Prevailing Party Status By Achieving Its Litigation Objectives Through Its Successful Demurrer And Dismissal From The Case

                Homeowners alleging their upstairs neighbors had created a nuisance with improperly installed floors filed a lawsuit against their HOA and others in Haidet v. Del Mar Woods Homeowners Assn., Case No. D082923 (4^th Dist., Div. 1 October 21, 2024) (certified for publication on November 5, 2024).  The HOA successfully demurred to the three causes of action against it in the homeowners’ initial complaint, with the trial court dismissing a breach of fiduciary duty cause of action without leave to amend and two other causes of action with leave to amend.  However, homeowners elected to omit HOA as a defendant altogether when they filed their First Amended Complaint.  Afterward, the trial court granted HOA’s motion for attorney fees under Civil Code § 5975(c) and request for dismissal with prejudice.  Homeowners appealed – arguing that the trial court abused its discretion by declaring the HOA was a prevailing party and in awarding fees beyond those attributable to the breach of fiduciary duty claim.   

                The 4/1 DCA affirmed.  A court is allowed to base its fees decision on a pragmatic definition of the extent to which each party achieved its litigation objectives where, as here, a statute does not define “prevailing party.” (Santisas v. Goodin (1998) 17 Cal.4^th 599, 621-622.)   The HOA achieved its litigation objectives through a successful demurrer – which prompted the homeowners to omit it from their FAC – and through the judgment of dismissal with prejudice of all causes of action against it.  As such, the 4/1 DCA found no abuse of discretion in the trial court’s determination that the HOA was the prevailing party, nor in its award of fees attributable to the HOA’s defense of the entire action.

Special Fee Shifting Statutes: Prevailing Plaintiff Awarded Only Partial Fees Under EAJA Wins Reversal And Remand For Award Of Fully Requested Fees In Case Challenging Social Security Administration’s Denial Of Disability Benefits

Prevailing Plaintiff’s EAJA Fees Could Not Be Reduced Because She Raised Alternative Theories To Support A Single Claim, Even Though The Court Did Not Reach The Alternative Theories In Rendering Judgment In Plaintiff’s Favor.

            The Equal Access to Justice Act (“EAJA”) requires the award of “reasonable attorney fees” to “a prevailing party other than the United States” ” in “any civil action (other than cases sounding in tort)” that are “brought by or against the United States,” “including proceedings for judicial review of agency action, . . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1)(A), (2)(A).

            In Nerio Mejia v. O’Malley, Case No. 23-3162 (9^th Cir. November 4, 2024) (published), plaintiff prevailed in a lawsuit challenging the Social Security Administration’s denial of her disability benefits, then moved for $13,426.42 in attorneys’ fees under the EAJA.  The district court determined that the SSA’s position was not substantially justified and that plaintiff was entitled to fees under the EAJA.  However, relying on Hardisty v. Astrue, 592 F.3d 1072 (9th Cir. 2010), the district court awarded only a reduced amount – excluding fees incurred to develop two alternative arguments the district court determined it did not need to reach to render judgment for plaintiff.  

            Citing the Supreme Court’s decision in Hensley v. Eckerhart, 461 U.S. 424 (1983), along with its en banc decision in Ibrahim v. United States Dep’t of Homeland Sec., 912 F.3d 1147 (9^th Cir. 2019) – both of which hold that sufficient grounds for reducing a fee award do not exist where a court rejects or fails to reach alternative legal grounds for a desired outcome  – the Ninth Circuit reversed and remanded with instructions to award the full amount of requested fees.  In so doing, the panel determined that the district court’s application of Hardisty in this case was legal error.  Although, like here, there were undecided arguments in Hardisty, the determining factor in Hardisty for denial of fee eligibility under the EAJA was whether the United States’ position was substantially justified - not whether fees were incurred to develop undecided arguments.