CALIFORNIA ATTORNEY'S FEES

Fees, Civil Rights, Employment: USDC Central District Judge Awards Full Freight Fee Award In Waiting-Time Penalties Case

Judge Finds That Fee Award Of $342,782.50 Is Reasonable In Waiting-Time Penalties Case.

        On June 17, 2022, the Hon. R. Gary Klausner issued a fee award to the prevailing plaintiff in a waiting-time penalties case. Caley Rae Pavillard v. Ignite International, Ltd. et al., USDC Central District No. 2:21-cv-01306-RGK-Ex.

        Though the fee award is not part of a published opinion, it is interesting in several respects. 

        First, this case arose out of what should have been a payment of $3,000 to plaintiff for her modeling work during a photo shoot. The court describes the factual background: "The shoot took place on October 5, 2018. However, despite Plaintiff's request for payment, Defendant did not pay her wages until May 22, 2020 -- nearly two years later. On that date, Defendant wired $3,000 to Plaintiff's agent, LA Models, who took a 20% cut and sent the remaining amount to Plaintiff." 

         Second, while it would seem unusual for a $3,000 case to generate $342,782.50 in fees, keep in mind that thirty days of waiting time penalties could amount to $3,000 X 30 = $90,000 -- and here, payment was not made immediately after 30 days, but rather made only after more than 1 1/2 years. And the Labor Code provided a basis for awarding attorney's fees.

        Third, Judge Klausner considered the bases for the award: the legal basis for fee entitlement and the reasonableness of the request: reasonableness of hourly rates, reasonableness of hours expended, and reasonableness of a lodestar multiplier of 1.5. A request for a lodestar multiplier was rejected by the judge.

        Fourth, the judge considered that the case lasted 2 years, proceeded to a jury trial, and plaintiff "achieved complete success."

        COMMENT: Defendant could have had a better outcome by timely paying $3,000. Indeed, Defendant would have had a better outcome if the waiting-time penalties had been paid, without proceeding to a jury trial. If the fee award is upheld on appeal, Defendant will be on the hook for the fee award, and will have likely incurred significant attorney's fees defending itself. While an attorney's fees award can be appealed by a defendant, it may well be an uphill battle when an experienced judge who has participated in a jury trial considers and analyzes the factors that support a fee award, and incidentally, denies plaintiff's request for a lodestar multiplier. And appeals to the 9th Circuit are not inexpensive.

        

Record: In Forma Pauperis Litigant Entitled To Court Reporter For Hearings And Trial Notwithstanding Local Superior Court Rule To The Contrary

California Supreme Court Does Reiterate That Lack of Reporter’s Transcript Might Doom Fees Ruling Appeal.

                Although a little far afield of what we normally devote our posts to, Jameson v. Desta, Case No. S230899 (Cal. Supreme Court July 5, 2018) (published) is on point in stressing that a reporter’s transcript should normally be processed to preserve errors committed at a state court’s fee hearing—especially where some discretion, versus legal conclusions, is involved.

                Jameson held that a local superior court not allowing an in forma pauperis litigant to obtain a court reporter for hearings and trial could not pass muster on a statutory or fairness basis. Even with the budgetary constraints, the financially-strapped litigant should have been given the opportunity to have a trial reporter present such that a nonsuit had to be reversed based on the lack of a transcribed trial record to which the litigant was entitled.

                In doing so, the California Supreme Court did cite to many cases indicating a lack of a reporter’s transcript might be dispositive, including one relating to fees—Vo v. Las Virgenes Municipal Water District, 79 Cal.App.4^th 440, 447 (2000).

                Chief Justice Cantil-Sakauye authored the unanimous opinion.

                BLOG OBSERVATION—The appellate courts are far from uniform in their rulings as to when a RT will preclude the review of the merits of a fee ruling. If we were to distill some trends, a detailed written ruling may be sufficient (especially where legal de novo rulings are involved), but may not suffice where factual or discretionary rulings were involved (substantial evidence/abuse of discretion rulings where a RT might make a difference). This may need to be clarified by the state supreme court, which did indicate that budgetary restraints have required even well-heeled litigants to provide their own court reporter for important hearings or trials.

Allocation, Homeowner Associations: Neighbor Winning $784,208 In Damages Against Another Neighbor Based On CC&R/Nuisance/Prospective Economic Advantage Damages Properly Awarded CC&R Fees Of $363,571.56

Lack Of Fee Hearing Transcript Meant No Adequate Record On Appeal; However, Claims Looked To Be Interrelated Such That No Apportionment Was Required.  

             We have noticed an increasing trend among appellate courts to affirm fee awards or fee denials where the appealing litigant failed to provide a reporter’s transcript, especially where abuse of discretion or non-legal issues are involved. The Second District, Division 5 has been especially vigilant on this issue, and we have seen an uptick in denying fee appeals by our local Santa Ana Court of Appeal based on the lack of an adequate record. Kinsman v. Rodarte, Case No. G048812 (4^th Dist., Div. 3 June 7, 2018) (unpublished) illustrates this well.

            There, a jury found in favor of a plaintiff neighbor governed by CC&Rs as against a nearby defendant neighbor. It awarded $784,208 in damages based on nuisance, prospective economic advantage interference, civil harassment, and CC&R claims, also rejecting defendant’s cross-claims. No one disputed that plaintiff was other than a prevailing party based on a CC&R fees clause which was broadly worded. Plaintiff sought fees of $438,571.56 in contractual fees, with the court awarding $363,571.56.

            Plaintiff’s appeal of the fee award did not result in any change. Plaintiff argued that the fee awarded should have only been awarded for work on the CC&R claims. However, no fee hearing transcript was submitted such that the appellate court did not know the reason(s) why the trial court lowered the requested award, perhaps even restricting the award to work only on the CC&R claim. Beyond that, on the merits, there was no perceived abuse of discretion because the CC&Rs declared that any violation of the Declaration was a nuisance, such that the work on the tort causes of action were inextricably intertwined with the contractual CC&R violations—meaning apportionment would have been unnecessary in any event.

           Acting Presiding Justice Moore authored the 3-0 panel opinion.

Family Law/Record: Ex-Wife’s 271 Sanctions Request Properly Denied

Failure to Include Reporter’s Transcript Of Fee Proceedings Was Fatal On Appeal.

            In a growing trend among California intermediate appellate courts, the 4/3 DCA in Marriage of Watts, Case No. G053304 (4^th Dist., Div. 3 Apr. 11, 2018) (unpublished), affirmed the denial of Family Code section 217 sanctions to the tune of $37,000 as requested by ex-wife based on a failure to provide a reporter’s transcript of a hearing on appeal.   Given that the lower court’s ruling was governed by an abuse of discretion standard, the appellate court found that the appellant’s failure to provide a reporter’s transcript of the fee proceeding cemented the presumption that adequate evidence and argument was presented to support the lower court’s decision to deny 271 sanctions.  Acting Presiding Justice Bedsworth authored this 3-0 panel decision.

Probate/Record: Lack Of Transcript On Probate Objection To Award Of Ordinary Fees Dooms Appeal By Objecting Party.

Probate Fee Order Presumed Correct.

            A probate court in Estate of Marshall, Case No. A150296 (1^st Dist., Div. 2 Feb. 27, 2018) (unpublished) awarded an attorney $7,500 in ordinary attorney’s fees to a former attorney for an estate.  An objection was filed stating that the fee should be shared with a court-appointed administrator, which objection was not sustained.  An appeal followed, but the appellate court affirmed for a transgression we see a lot:  the lack of a reporter’s transcript on the hearing with respect to the objection, which made review impossible. 

SLAPP: SLAPP Fee Order Appealable Under Collateral Order Exception

However, Fee Order Affirmed Due To Inadequate Record.

     In Van v. Cameron, Case No. D068630 (4th Dist., Div. 1 July 14, 2013) (unpublished), plaintiff lost a SLAPP motion and was hit with a mandatory fee award of $24,815.75.   Plaintiff’s appeal was unsuccessful on the merits.  Although the defense raised the argument that the SLAPP fee order was not appealable per se, the appellate court agreed it was reviewable under the collateral order exception.  (City of Colton v. Singletary, 206 Cal.App.4th 751, 781 (2012).)  However, after surmounting the appellate jurisdictional hurdle, plaintiff lost on the merits—no attorney’s fees motion was presented in the record, so there was an inadequate record to review the issue.  Affirmed.

Reasonableness Of Fees 3-Fer: Fee Recovery Sustained In Landlord-Tenant, Family Law, And Appeal/Class Action Cases Based On Waiver, Failure To Provide Adequate Record, And Failure To Beat Abuse Of Discretion Standard On Amounts Awarded

 

Landlord/Tenant:  Sevier v. Ghannoura, Case No. B259542 (2d Dist., Div. 4 Mar. 22, 2016) (Unpublished).

    Tenant won compensatory damages of $21,865 against landlords for illegal entry into common areas of a rental apartment without proper notice.  There was a fees clause, requiring mediation as a condition precedent, but tenant satisfied that by requesting it four times and having landlord never agreeing to participate in mediation.  Tenant then requested $69,875 in fees based on a lease fees clause, with the trial judge awarding $56,875.  Landlords only argued the amount was “unfair,” far short of what was needed to surmount the abuse of discretion review standard applicable to the amount of a fee award.

Family Law:  Evilsizor v. Sweeney, Case No. A143054 (1st Dist., Div. 2 Mar. 22, 2016) (Unpublished).

     Ex-wife and her parents were hit with an adverse “needs-based” fees award to ex-husband of $125,000, $25,000 payable by parents and $100,000 by ex-wife.  The record showed that ex-wife, an attorney, was paid substantial legal fees for work performed on behalf of her parents and that there largesse had helped fund her dissolution fight in some ways.  The fee awards were found to be no abuse of discretion, especially given that parents’ funds counted on the “needs-based” analysis.  (Marriage of Smith, 242 Cal.App.4th 529, 535 (2015).)

Appeal/Class Action:  Ocegueda v. American Brother Corp., Inc., Case No. H041380 (6th Dist. Mar. 22, 2016) (Unpublished).

    Plaintiffs challenged the amount of appellate fees claimed by three sets of defense attorneys on an unsuccessful appeal of a sanctions order, with the appellate court earlier granting a motion to dismiss the appeal and ordering payment of sanctions.  The defense sought $31,435.50 in fees, challenged as excessive by plaintiffs and with the trial judge initially agreeing unless time records were submitted for in camera review.  After submission of more detail, the trial judge granted the request after observing that the defense excluded an additional 48 hours of work.  The problem here for plaintiffs was the failure to object and provide an adequate record.  No objections to the in camera review or tentative rulings were made at the trial level, magnified by the lack of a reporter’s transcript to show what happened at oral hearings on the fee requests.  This made it easy to deem the due process argument—plaintiffs did not have an opportunity to review the in camera time records—as being waived and not reviewable based on an inadequate record.   

Employment, Lodestar, Multiplier, Record: Plaintiff Employee Obtaining $43,654.50 On Unpaid Commission Claim Awarded $58,341.50 Under Labor Code Fee-Shifting Statute

 

Plaintiff Requested $212,287.50 (Inclusive Of A 1.5 Multiplier), But Lower Court’s Award Of A Reasonable Lodestar Was No Abuse of Discretion.

     Plaintiff employee eventually obtained recovery of $43,654.50 in an unpaid commission dispute even though he at one point was willing to accept $75,000 to settle which included a $30,000 component to reimburse his attorney for fees under a contingency agreement. Plaintiff then sought recovery of $212,287.50 in fees under Labor Code section 218.5’s fee-shifting provision (with the request including a 1.5 positive multiplier). The defense suggested $30,000 was a reasonable award, but the trial judge awarded plaintiff $58,341.50 as a reasonable fee lodestar, denying the request for any multiplier.

     Plaintiff’s appeal that the fee award was too small did not prevail in Philpott v. Midwest Roofing Co., Inc., Case No. B262185 (2d Dist., Div. 5 Jan. 15, 2015) (unpublished).

     The trial court cut the amount of lodestar hours and the hourly rate, with some explanations for his order at the fee hearing. One of the problems was the lack of a reporter’s transcript so the reviewing court could see what occurred at the fee hearing—a problem we have chronicled in other posts. However, given that the trial court found the matter was not complex and that plaintiff had been willing to accept $30,000 in fees before the first day of trial (which was not that long), the trial judge was within the range of acceptability by nearly doubling the settlement request as a check on the fees he actually awarded. The refusal to award the multiplier was no abuse of discretion either, in light of the relative non-complexity of the case (with only the contingency risk factor supporting a multiplier, while no other multiplier-justifying factors were in play).

SLAPP: Losing Cross-Complainant Presented Inadequate Record Or Merits Argument To Overturn SLAPP Fee Recovery In Favor Of Cross-Defendant

 

Record Inadequacy Was Fatal.

     Cross-complainant appealed after getting assessed with attorney’s fees in favor of a cross-defendant successfully SLAPPing the cross-complaint in Moody v. Lanak & Hanna, P.C., Case No. E059515 (4^th Dist., Div. 2 Feb. 27, 2015) (unpublished). He did not get any change in result, mainly because he did not present an adequate record—failing to include the motion for fees filed by cross-defendant or a transcript of the hearing on the fee motion. Also, the merits arguments were unclear such that the judgment was presumed correct.

Special Fee Shifting Statute, Record: Public Entity Seeking Fees Under CCP § 1038 Must Support Motion With Specific Evidentiary Support And Citations To Trial Record

 

Public Entity Properly Denied Fees/Costs Under Section 1038 By Simply Pointing To Entirety Of Record.

     Public entities seeking to recover fees and costs under Code of Civil Procedure section 1038—a fee-shifting section allowing such entities to recoup fees and costs if they can demonstrate a suit was brought in bad faith or without reasonable cause—should take extra care to review the next decision. They cannot simply point to the entirety of the record and hope the trial judge will help them satisfy their burden as the moving parties in such proceedings.

     In Wedgeworth v. City of Newport Beach, Case No. G048902 (4^th Dist., Div. 3 Feb. 11, 2015) (unpublished), wife sued for her husband’s suicide while in the custody of the police department, eventually not being able to beat a summary judgment motion which was affirmed in a companion appeal. However, City then moved for recovery of section 1038 fees and costs, essentially predicated on the “entirety of the record” rather than presenting specific supporting evidence or specific citations to the trial record. The lower court denied the request, determining that it was “not the scrivener for the defendants.”

     The appellate court affirmed, agreeing that the public entity had to lay a much more detailed evidentiary foundation for a section 1038 showing rather than having the trial judge “work up the motion” for the City. Even though the same trial judge knew many of the facts in the summary judgment proceeding, section 1038 has different elements needing specific evidentiary support—especially given some detailed opposition by wife.

     In affirming, the 3-0 panel—with the author being Justice Fybel—informed City that its appeal was close to frivolous.

Standard Of Review/Record: Failure to Provide RT Doomed Appeal Where Loser In Fee Battle Argued Objections Were Not Honored Or Fee Discovery Not Allowed

 

No Adequate Record Was Presented for Review Purposes.

     Yet again, Next Seafood Co., Inc. v. Port of San Francisco, Case No. A137487 (1^st Dist., Div. 5 Aug. 27, 2014) (unpublished), is a situation where a party losing a fee award—to the tune of $77,881.25—appealed, arguing that the fee award was not supported by admissible evidence and that the lower court improperly denied discovery in connection with the fee motion. These arguments did not go very far because loser did not submit a reporter’s transcript of the fee hearing to show whether or how the lower court addressed these issues. No adequate record doomed this appeal. (Maria P. v. Riles, 43 Cal.3d 1281, 1295-1296 (1987).)

     BLOG UNDERVIEW—Even in the appeals involving fee hearings, we are not sure that they are all that helpful as far as determining some issues. However, they certainly help reinforce whether de novo review is appropriate and may clarify discretionary rulings, so appellate courts use the absence of an RT as a “non-starter” in many situations.

Fleet of Whalers in the Port of San Francisco.  1864.  Library of Congress.

Appealability: Lack Of Reporter’s Transcript And Only Filing Moving Papers Doomed Review Of Fee Grant

 

Gotta Develop an Adequate Record, Appellate Law 101.

     Castruita v. Guerrero, Case No. B246439 (2d Dist., Div. 7 Feb. 24, 2014) (unpublished) is a situation where a party moving for a temporary restraining order and permanent injunction against his uncle lost and was ordered to pay uncle’s counsel at the time $1,000 in fees.

     The appellate court affirmed the fee award based on an Appellate Law 101 principle: you must develop an adequate record to overcome the presumption that a trial court ruling below is correct. Here, appellant failed to file a reporter’s transcript of the hearing and only included his moving papers, which retarded the ability to hurdle the presumption of correctness. (Appellant did try to dodge the lack of a reporter’s transcript by indicating that budgetary restraints had made a reporter impossible to get; however, remember you can bring your own if you follow the correct protocol.)

Family Law/Record: $3,000 Family Code Section 271 Fee Award Against Husband Sustained On Appeal

 

Failure to Provide Reporter’s Transcript or Substitute Was Damning.

     In Marriage of Kahdeman, Case No. B243812 (2d Dist., Div. 6 Aug. 28, 2013) (unpublished), ex-husband appealed a $3,000 award under Family Code section 271, contending that the lower court actually erroneously awarded it other Family Code provisions. The problem here is that appellant failed to provide a reporter’s transcript or settled statement of the hearing so that the judgment could be adequately reviewed. (Foust v. San Jose Const. Co., Inc., 198 Cal.App.4th 181, 186-187 (2011).) Fee award affirmed.

Requests For Admissions: Inadequate Record Doom Defense Request For “Costs of Proof” Sanctions

 

     The defense won but then was disappointed when the trial court denied “costs of proof” sanctions for proving matters that were denied by plaintiff in RFAs. So, defendant took the matter up on appeal, only to be disappointed yet again.

     In Alamo Group IX, LLC v. Tabaie, Case No. A133376 (1st Dist., Div. 5 Apr. 4, 2013) (unpublished), the appellate court found that defendant presented an inadequate record. He only designated one witness’ trial testimony, hardly enough for the panel to gauge whether the RFA denials related to something proved to the contrary or were made in bad faith. In fact, the “good faith” exception is reviewed for abuse of discretion, Brooks v. American Broadcasting Co., 179 Cal.App.3d 500, 508 (1986), and nothing demonstrated that plaintiff wrongfullly believed that the managing member of an LLC stood in its shoes so as to have standing--even though the lower court ultimately concluded otherwise. “Costs of proof” denial affirmed.

Family Law: Failure To Provide Reporter's Transcript Required Affirmance Of Family Law Judge Fee Sanctions Ruling Even Though He Might Have Based It On Litigation Conduct Not Mentioned In The Initial Moving Papers

 

     Here is an interesting one showing how an inadequate appellate record can be damning.

     It was apparent in Marriage of Castaneda, Case No. C067676 (3d Dist. Mar. 22, 2013) (unpublished) that the family law judge granted Family Code section 271 sanctions based not on the conduct mentioned in initial papers (failure to produce documents at trial) but other litigation conduct at husband's deposition. Husband was directed to pay $3,155 in 271 sanctions to wife.

     He appealed, but ran into a major problem. He failed to provide a reporter's transcript of a proceeding insinuating that the family law judge was considering sanctions for the deposition conduct and may have given husband an opportunity to respond on that point. However, without a hearing transcript, the appellate court had to presume a response was allowed to husband based on other papers of record. Fee sanctions affirmed, although due process did lurk as an issue in this one.

Family Law/POOF!: Third District Reverses Fee Award After Overturning Judgment On Two Claims Against Motor Home Buyer And Sustains 271 Sanctions Against Mother Based On Inadequate Record/Lack of Prejudicial Error

 

     Here is a quick two-fer from the Third District:

     Lafferty v. Wells Fargo Bank, Case No. C067812 (3d Dist. Feb. 4, 2013) (published): Judgment was entered against buyer in a defective motor home dispute with a lender to whom an installment sales contract was assigned by dealer. The trial court also awarded $45,700 in fees to lender based on a contractual fees clause. However, the fee award went POOF! when the appellate court reversed the judgment on two claims so that the prevailing party status was not completely determined as yet. (Gilman v. Dalby, 176 Cal.App.4th 606, 620 (2009).)

     Marriage of Katumbusi & Whyte, Case No. C067692 (3d Dist. Feb. 4, 2013) (unpublished) involved custody and visitation disputes between mother and father. Mother was hit with Family Code section 271 sanctions of $3,000 (payable $50 per month) after the lower court found mother was somewhat impoverished and taking care of other children. Mother appealed, but was unsuccessful because she failed to provide an adequate record and also failed to demonstrate prejudicial error.

Family Law/Record: First Judge's Decision Denying Fees Encompassed Needs-Based/271 Fees And Second Judge Also Denied Domestic Violence Proceeding Fees

 

     The appellate record, in this case transcripts of oral hearings, was critical in the disposition of the appeal in Marriage of Perry, Case No. F062331 (5^th Dist. Feb. 1, 2013) (unpublished).

     Although wife cross-appealed from a denial of some attorney's fees requests, the record showed that the first judge denied needs-based fees or Family Code section 271 sanctions, such that the second judge only had to endorse those prior rulings. As for her request for fees under Family Code section 6344 (which provides for a fee award in domestic violence proceedings), the second judge's denial of fees encompassed that request, given that a 6344 fee award is based on financial equity to permit the moving party to have access to the courts. Because this policy mimics the needs-based policy underlying Family Code section 2030, no prejudice could result from the second judge's rulings as far as denial of the specific domestic violence fee request.

Private Attorney General Statute: Inadequate Record And Failure To Prevail Dooms Vexatious Litigant’s Appeal

 

     Plaintiff, a vexatious litigant, appealed a trial court’s denial of his fee request under CCP § 1021.5, California’s attorney general statute, after he lost a bid to overturn a Nevada judgment on the grounds it was fraudulently procured.

     Plaintiff lost his appeal of the fee denial in Missud v. D.R. Horton, Inc., Case No. A135531 (1st Dist., Div. 3 Nov. 27, 2012) (unpublished) on two grounds: (1) failure to provide an adequate record (no moving fee papers were provided to the appellate court); and (2) failure to prevail in the action. Fee denial affirmed.

Appeal: Failure To Provide Adequate Record Forfeited Challenge To Fee Award

 

Party Failed to Provide Record Establishing an Assignment.

      Ybarra v. Ready Products Corp., Case No. E053406 (4th Dist., Div. 2 Sept. 7, 2012) (unpublished) is yet another reminder to make sure you present an adequate record on appeal. Here, defendants challenged they were not parties to a note for fee recovery purposes, which depended on showing a certain assignment. However, the appealing defendant did not present any proof of the assignment in the appellate court which means that this failure required the claim to be resolved against appellant. (Ketchum v. Moses, 24 Cal.4th 1122, 1140-1141 (2001).)