CALIFORNIA ATTORNEY'S FEES

Family Law: 2/6 DCA Affirms Trial Court’s Conclusion That Monthly Payments To Father From Indian Tribe’s General Welfare Program Is Income That Can Be Considered In Calculating Child Support And Needs-Based Attorney Fees Obligations

Indian Tribe’s General Welfare Program Payments To Father, Who Has An Annual Salary Exceeding $100,000 Per Year, Were Not Need Based.

            In Pateras v. Armenta, Case No. B336065 (2d Dist., Div. 6 February 27, 2025) (published), the 2/6 DCA affirmed the lower court’s conclusion that the monthly payments father receives from Indian Tribe’s general welfare program are not excludable from the calculation of father’s income for determining child support and needs-based attorney fees payable to mother. 

Although Family Code section 4058(c) provides an exclusion for income received from public assistance programs, this exclusion applies only to those public assistance programs which are based on need, and for which qualifying for benefits is restricted to only those who meet the poverty requirements for eligibility. 

Based on father’s annual income of $114,000, the trial court made a reasonable inference that being a descendant of the Tribe, rather than financial need, was the qualifying factor for father’s monthly payments from the general welfare program.

Fee Clause Interpretation, Reasonableness Of Fees: Fee Clause Stating Recovery For Third-Party Costs For Collection Encompassed Attorney’s Fees

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.

Appeal Sanctions, Arbitration, Sanctions: $37,000 In CCP § 128.7 Sanctions Affirmed On Appeal For Attorney’s Refusal To Withdraw A Frivolous Opposition To An Arbitration Motion To Confirm An Award

Also, Appeal Sanctions Were Warranted For A Frivolous Appeal, But Matter Remanded To Trial Judge To Determine Appropriate Amount Given Conclusory Support For The Fee Request.

               In Plantation at Hayward I, LLC v. Plantation at Hayward I, LLC (Catanzarite), Case No. G062909 (4^th Dist., Div. 3 Feb. 10, 2025) (published), plaintiff’s attorney losing in an arbitration filed a frivolous opposition to a motion to confirm the arbitration award, garnering a $37,000 CCP § 128.5 sanctions award against him which was affirmed on appeal.

               Plaintiff’s attorney’s appeal on behalf of his client was found to be frivolous also, with respondent requesting $43,855 in appellate fees as a sanction.  The appellate court found the fee support was too conclusory, so it remanded with a choice: (1) losing attorney could stipulate to the fee request; or (2) losing attorney could request an evidentiary hearing so the trial judge could determine the appropriate sanctions award.  Justice Goethals authored the 3-0 opinion.

Special Fee Shifting Statutes: A Prevailing Defendant Is Entitled To Attorney’s Fees For Defeating A Penal Code Section 502 Claim

With An Important “If”: If Plaintiff’s Case Was Objectively Without Foundation When Brought Or Plaintiff Continued To Litigate After It Became So.

               Hay v. Marinkovich, Case No. D082561 (4^th Dist., Div. 1 Feb. 6, 2025) (published) held that a prevailing defendant in a Penal Code section 502 case (section 502 prohibits an unauthorized use of any computer system for an improper purpose) is entitled to attorney’s fees under section 502(c) but only where plaintiff’s claim was objectively without foundation when brought or plaintiff continued to litigate the case after it became so.  Because plaintiff’s case was not frivolous, the lower court exercised its discretion correctly by denying the defendant’s fee request. 

Deadlines: Prevailing Litigant In An Appeal Has 40 Days From Issuance Of Remittitur To File A Fee Motion Under CRC 8.278(c)(1)

Deadline Runs From Issuance, Not Extended For The Service Of The Remittitur.

               In Wash v. Banda-Wash, Case No. F085028 (5^th Dist. Feb. 3, 2025) (partially published), the Fifth District decided that a litigant prevailing on appeal has 40 days after issuance of the remittitur to file a fee motion under CRC 8.278(c)(1), a firm deadline not extended for the manner of service of the remittitur.  However, in the unpublished portions of the opinion, the appellate court remanded to have the lower court consider whether it exercised its discretion to allow the litigant a 2-day extension given that it did award appellate fees and costs to the litigant.

Judgment Enforcement, Section 998: Elmi Opinion Now Published

Opinion Held That Postjudgment Enforcement Statute Trumped CCP § 998 With Respect To Fee Entitlement.

               On January 10, 2025, we posted on Elmi v. Related Management Company, L.P., Case No. G062788 (4^th Dist., Div. 3 Jan. 8, 2025), when it was unpublished.  We can now update everyone by indicating that it was certified for publication on February 6, 2025, with the opinion holding that a litigant’s efforts to enforce a SLAPP judgment is governed by the CCP § 685.040 postjudgment enforcement fee statute, not CCP § 998.

Intellectual Property: Reversal Of Claim In A Cross-Appeal Meant That Copyright Attorney’s Fees Denial Had To Be Revisited

Same Result As Is Usually The Case In State Court Cases.

               Much like what generally happens in state court cases, Aquarian Foundation, Inc. v. Lowndes, Case No. 22-35704 et al. (9^th Cir. Feb. 3, 2025) (published) illustrates that federal circuit courts will remand an attorney’s fees denial order for a revisit after reversing a claim in an appeal (in this case, a cross-appeal).

BLOG OBSERVATION:  We liked the beginning sentence of this opinion: “Copyright, estate law, and religious writing make for strange bedfellows, but this appeal has them all.”

Allocation: Where Trial Judge Asks For Allocation Based On Partial Success Of Different Claims, You Need To Do A Rigorous Apportionment

Requests Totaling $427,102.50 For Partially Prevailing Defendants/Cross-Complainants Reduced To Awards Totaling $141,904.94 Based On Failure to Specifically Apportion.

               Apportionment of attorney’s fees among claims generally is a discretionary call for the trial judge, even though allocation should be undertaken unless the attorney work was inextricably intertwined on the claims (which is an after-the-fact determination by the judge hearing the fee motion).  However, if a trial judge asks you to allocate, you better apportion or suffer the consequences, as demonstrated by the result in West Sacramento Hospitality LLC v. S.A.V. Texas, LLC, Case No. C099575 (3d Dist. Jan. 31, 2025) (unpublished).

               There, plaintiff voluntarily dismissed its complaint before trial (which triggered the Santisas rule where fee recovery could not be had on the contractual claim but was allowable on two tort claims based on the breadth of a contractual fee clause), and defendants prevailed on two of three claims of their cross-complaint.  Based on these partial successes, the trial judge wanted detailed allocation by defendants/cross-complainants on the compensable work (the tort claims in the complaint and the two claims in the cross-complaint on which they prevailed).  Fee claimants conceded it was difficult to apportion, but they used a mechanical 75/25 allocation to the complaint/cross-complaint for entries hard to apportion, asking for a total of $427,102.50 in fees.  The trial judge applied a more rigorous apportionment:  100% of entries for which work could be attributable for segregated work on the two pleadings (50/50 between the complaint and cross-complaint) and then reduced the total amount by a third based the percentage of success on the two sets of pleadings, all told awarding a total of $141,904.94 in fees.

               Fee claimants appealed, but the Third District affirmed the fee awards.  Where a lower court asks for more information and detailed apportionment, these requests need to be honored and the abuse of discretion standard applies, especially given the deference to the lower court’s view that more could have been done to properly allocate.  With respect to the argument that the work was intertwined, fee claimants did not show it was impossible to allocate.  The one-third reduction was proper based on Santisas when it came to the complaint and was also correct based on partial success being a factor which can be used in adjudging fee motions when it came to the cross-complaint. 

               BLOG OBSERVATION—This case teaches that care needs to be taken in billings where dueling pleadings are at issue and/or multiple represented parties are involved.  No one knows how a case can come out; careful billing substantiation makes life easier, and avoids the results here, if the trial judge asks for apportionment.

SLAPP: Where Appellate Court Only Did A Modest Reversal Of SLAPP Grant, Lower Court’s Award Of Attorney’s Fees To Defendant Was Proper

Given The Enormous Successful By The Defense On The SLAPP Motion, No Need To Reverse The Fees Award On Appeal.

               Many practitioners are familiar with the general principle that the reversal of a merits judgment many times will result in reversal of a fees award, because the degree of success needs to be figured into the new calculus on who prevailed or succeeded.  But not always so, as the circumstances in Wang v. Plaza Bonita, LLC, Case No. B321484 (2d Dist., Div. 2 Jan. 30, 2025) (unpublished) demonstrated.

               There, defendant was granted a complete SLAPP grant, winning substantially all the issues and narrowing the issues to a large degree.  The lower court awarded the defense mandatory SLAPP fees of $57,681.23.  On the merits appeal, the appellate court granted some modest reversals.  Based on the reversal, plaintiff argued that the fee award had to be reversed and remanded.  The 2/1 DCA disagreed.  Based on the substantial win by the defense, the fee award was warranted and compensated defendant for its SLAPP efforts in obtaining overwhelming success.