Trial Court Properly Reduced $124,160 Fee Request To $64,750 To Prevailing Party Based On Partial Success, Under A Percentage Of Recovery And A Lodestar Analysis.
Pulse Technology Consulting Group, Inc. v. Skowron & Bunning, LLP, Case No. C098036 (3d Dist. Feb. 11, 2025 partially published; fee discussion published) involved dueling actions about an information technology services agreement. After a five-day bench trial, plaintiff won its contractual breach claim but was awarded lower-than-requested damages of $54,680 while defeating the defense’s counterclaims. Plaintiff then moved for attorney’s fees under this contractual clause: “Client will be responsible for all third party costs incurred by PULSE to collect overdue invoices.” Plaintiff/cross-defendant ultimately requested fees of $124,160, but the lower court only awarded $64,750, triggering an appeal by the defense.
The Third District affirmed, publishing its discussion on the fee issue. The defense argued that the contractual language did not encompass fees, but the appellate court disagreed even though giving de novo review to the fee entitlement issue. It observed that third-party expenses, in a collection context, would encompass attorney’s fees, relying on the reasoning in the federal court decisions in Mastronardi International Limited v. SunSelect Produce (California), Inc. (E.D. Cal. Aug. 23, 2019, No. 1:18-cv-00737-AWI-JLT) 2019 U.S. Dist. LEXIS 143934; Oklahoma Fixture Co. v. ASK Computer Systems, Inc. (10th Cir. 1995) 45 F.3d 380 to support its conclusion.
That shifted the analysis into whether the fee award was reasonable. It was. After reducing some claimed hours for partial success under the lodestar approach to arrive at a $64,750 figure, the interesting part of the decision is that the appellate court also affirmed the lower court’s determination of reasonableness through a “cross-check” under a percentage-of-recovery analysis: plaintiff obtained 32% success on its contractual case based on damages ultimately awarded and 100% success on the counterclaims, such that a blended 66% success rate justified the ultimate award from plaintiff’s “ask”—an $82,000 figure even though the trial court used it as a check against the $64,750 lodestar figure, adopting the lower lodestar figure as the award.
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