CALIFORNIA ATTORNEY'S FEES

Reasonableness Of Fees, SLAPP, Substantiation Of Reasonableness Of Fees: Successful SLAPPing Defendant Entitled To An Award Of $48,790 In Fees And $1,574.60 In Costs

Winning Defendant Did Something Smart:  After SLAPP Motion Granted, Offered To Stipulate To A Much Lower Fees And Costs Award, Rejected By Plaintiff.

               When it comes to the reasonableness of a fee award, we have posted on situations where the prevailing party offered to stipulate to a lower fees/costs award and then obtained a higher fees/costs award after that offer was rejected.  Proof of this was made in Aminpour v. Verdi, Case No. B327213 (2d Dist., Div. 5 Aug. 21, 2024) (unpublished), with the lower and appellate courts persuaded that the defense higher fee request was justified in part by an attempt to resolve the controversy by the winning side.

               In this one, the defense prevailed on a SLAPP motion, including having to reply to a 150-page opposition by plaintiff.   Before any fees/costs motion was filed by the prevailing defendant, his counsel sent an email willing to stipulate to a definite fees/costs award in order to avoid further expenses to file an actual attorney’s fees motion, an offer which was not responded to apparently.  Later, the trial judge ordered a higher fees award of $48,790 and higher costs award of $1,574.60 to defendant.  Plaintiff appealed, but the appellate court determined the awards were no abuse of discretion because (1) plaintiff had argued that he should be awarded $56,225 in fees in an earlier pleading, such that the work by plaintiff demonstrated the defense request was not outrageous, citing In re Tobacco Cases I. 216 Cal.App.4^th 570, 584 (2013); (2) the “fees on fees” to bring the fee motion were allowable; and (3) sufficient declaration testimony was presented to support the award given no billing records/invoices were required (although as bloggers, we would say they are highly advisable).

Substantiation Of Reasonableness Of Fees: Failure To Follow Local District Court Rule On Pre-Motion Meet And Confer Requirements Can Cost A Prevailing Plaintiff Or The Litigant’s Counsel The Right To Fees

Ninth Circuit Affirmed District Judge’s Denial Of Fees For Failure To Meet And Confer For Purposes Of Seeing If Fee Dispute Could Be Resolved.

               District court local rules have the “force of law.”  Prevailing plaintiff’s counsel learned that all too well, with his failure to follow one resulting in a complete denial of a fee request.

               In Atwood v. Thornell, No. 23-2247 (9^th Cir. Apr. 25, 2024) (unpublished memorandum opn.), a plaintiff prisoner successfully litigated under the Religious Land Use and Institutionalized Persons Act to secure accommodation of his religious practices in connection with his execution.  His counsel then moved for a recovery of attorney’s fees.  The district court denied fees altogether because the attorney failed to attest to the parties’ good faith efforts to meet and confer for purposes of resolving disputed issues under the fee motion or to the moving party’s good faith efforts to arrange such a conference, a requirement under a D. Ariz. Local Rule.   The Ninth Circuit affirmed, determining the local rule had the force of law and that the failure to comply with this threshold requirement blunted fee entitlement even though civil rights statutes are liberally construed in favor of fee grants.

Eminent Domain, Reasonableness of Fees, Substantiation Of Reasonableness Of Fees: Unreasonable Demands And Lack Of Substantiation Caused A Substantial Fee Request Haircut

Plaintiff Wanted $1.942 Million; However, Trial Court Properly Awarded Only $360,438.45 In Fees.

[U.S. Army induction center, ca. 1942]. Getting haircuts. CA 1942. Library of Congress

               This next case illustrates how fee requests need to be reasonable and supported by proper substantiation.  If not, the litigant will get a sizable “haircut,” which is exactly what happened in Medical Acquisition Co., Inc. v. Tri-City Healthcare Dist., Case Nos. D079471 et al. (4^th Dist., Div. 1 Apr. 17, 2024) (unpublished). 

               Plaintiff entity sought reasonable litigation expenses, which include attorney’s fees, under CCP § 1268.610 in an eminent domain action, even though other distinct claims were involved.  Plaintiff requested recovery of about $1.942 million in fees, broken down as $1.225 million for the main firm based on a contingency agreement and with the remainder being requests by in-house counsel and three other law practices for their contribution to the case.  However, the lower court only awarded $360,438.45 in fees because it found the lodestar calculation to be fair for primary counsel and finding that there was improper substantiation for the remaining attorneys because hourly rates and hours worked were not shown, not to mention there was duplication in the services they provided.  On appeal, the 4/1 DCA discerned no abuse of discretion, reminding us all that fee requests need to be reasonable in nature even at the moving paper stages of a fee proceeding under penalty of getting nothing or substantial fee reductions.

Trade Secrets, Substantiation Of Reasonableness Of Fees: One Defendant Obtains Fee Award Of $254,147.40 Under Trade Secrets Fee Shifting Statute, While Another Defendant Denied Fees

Other Defendant Denied Fees For Not Providing Sufficient Substantiation Of Claimed Fees.

            In Environmental Logistics, Inc. v. Hayward, Case No. D080515, and Environmental Logistics, Inc. v. Tabush, Case No. D080516 (4^th Dist., Div. 1 Aug. 25, 2023) (unpublished), two companion cases, Plaintiffs sued multiple defendants, including three former employees, for interference and trade secret misappropriation, seeking $37.55 million in damages.  After weeks of trial, including an Evidence Code section 402 hearing, the lower court granted a nonsuit on all Plaintiffs’ claims after excluding the opinions of two experts, one because he did not make himself available for deposition until one week before trial and another because his opinions lacked causal foundational links.  Defendants Hayward and Tabush moved for attorney’s fees under Civil Code section 3426.4, which allows for fee awards in the lower court’s discretion in a trade secrets misappropriate case where both objective speciousness and bad faith in commencing/prosecuting a trade secrets case exists.  The lower court granted Hayward’s fee motion, awarding $254,147.40 against Plaintiffs, but it denied Tabush’s fee motion for lack of sufficient fee substantiation.  Defendant Tabush requested expert witness fees of $13,535.60 for a consulting forensic accountant’s expert witness fees given that Tabush successfully made a CCP § 998 offer to waive costs in exchange for a dismissal with prejudice (a 998 offer which he upheld through the non-suit order).  The lower court granted Tabush’s expert fees as costs, striking only $440 of the request because it represented work for a deposition which never went forward.  Plaintiffs appealed the Hayward fee and expert fee award in Case No. D080515, while Tabush appealed the fee denial in Case No. D080516.

            With respect to the appeal involving the Hayward attorney’s and expert’s fees awards, the 4/1 DCA affirmed.  Plaintiffs’ main challenge was that subjective bad faith was not shown, but this was dispatched based on opposing counsel showing deficiencies in Plaintiffs’ theories at an injunction hearing which persisted through the trial.  Although Tabush’s expert never testified at trial, it was reasonable for this defendant to consult with a forensics accountant given the substantial damages claim by Plaintiffs.

            On the fee denial appeal by Tabush, there was no abuse of discretion by the lower court in reaching its conclusion given that Tabush submitted a conclusory attorney declaration with ultimate conclusions and no supporting documents for a $188,168 fee request.  The appellate court endorsed the view that, in a complicated litigation matter, more detail is better and that a lead attorney declaration on reasonableness does not allow a lower court to make its own determination of the same without detailed substantiation.  Plaintiffs argued that the billing contained attorney-client information, but the defense at a motion hearing diffused this well by indicating that the information could be redacted, filed under seal, or remedied by more detail in the lead attorney declaration.

Block Billing, Substantiation Of Reasonableness Of Fees: Where Attorney’s Fee Request Was Modest, An Attorney In A Firm Can Substantiate His Firm’s Fees And Block Billing Was Not An Issue Where Fee Request Was Not Substantial

However, Block Billing Is A Problem In A Complex Case With Multiple Billing Attorneys Involved.

            In Minser v. Collect Access, LLC, Case Nos. B318325/B321996 (2d Dist., Div. 1 May 24, 2023) (unpublished), plaintiff prevailed on a Rosenthal Act debt collector claim, which has a fee shifting provision under Civil Code section 1788.30(c).  The lower court awarded plaintiff $12,100.50 in fees and $1,097.23 in costs.  On appeal, defendant argued that plaintiff’s fee substantiation was inadequate.  Not at all, said the Court of Appeal.  An attorney working on a case in a firm, if involved, can verify the firm’s work effort from a synergistic perspective.  Although there was some block billing, the fee request was so modest such that the transgression did not require a reduction, although the appellate court did note that the result would be different in a complex case with many attorneys billing hundreds of hours on a case.  Fee award affirmed. 

Family Law, Substantiation Of Reasonableness Of Fees: Attorney Fee Award To Husband Prevailing In Restraining Order Matter Reversed Due To Lack Of Information Necessary For Trial Court To Perform A Lodestar Calculation

An Unsworn Statement Made By Husband’s Counsel, As To His Hourly Rate And Time Spent Working On The Case, Did Not Support The Trial Court’s Lodestar Calculation.

            In Marriage of Halamandaris, Case No. E076933 (4^th Dist., Div. 2 October 10, 2022) (unpublished), husband defeated wife’s attempt to obtain a restraining order under the Domestic Violence Prevention Act (Fam. Code, § 6200 et seq.), then successfully moved for $38,395 in prevailing party attorney fees under Fam. Code, § 6344 – which allows for an award of fees and costs to the prevailing party in any domestic violence restraining order matter.

            Wife’s argument against husband’s fee request fared much better on appeal than it did in the trial court – namely that husband had failed to carry his burden of proof regarding the $38,395 in fees by failing to provide a basis for the fees requested.  Agreeing with wife’s contention that the fee award was not supported by substantial evidence, the 4/2 DCA reversed and remanded for a redetermination of the fee award. 

            The only evidence provided by husband’s counsel in support of the fee request was a list of tasks performed by him and his staff, and a statement that husband had incurred a total of $38,395 in fees.  Husband’s counsel submitted nothing to evidence the number of hours spent on the case, by whom the hours were spent, and at what rate – thereby failing to provide the information necessary for the trial court to complete the lodestar calculation, which involves the trial court first determining the actual hours spent by counsel on the case, then subtracting any hours it finds inefficient or unreasonable, and finally, it multiplies that amount by the applicable billing rate (if it finds the rate reasonable).  An unsworn statement made during the fees hearing by husband’s counsel, as to his hourly rate and time spent working on the case, were insufficient to support a lodestar calculation.  “[A] fee request ordinarily should be documented in great detail.” (Weber v. Langholz, 39 Cal.App.4th 1578, 1587 (1995).)

SLAPP, Substantiation Of Reasonableness Of Fees: $23,100 SLAPP Fee Award Affirmed On Appeal, Minus A Small Amount For A Nonrelated Demand Letter

Lack Of Evidentiary Challenges To Hourly Rates Justified No Reduction, And Block Billing Does Not Have To Be Reduced Depending On The Circumstances.

            In Nejad v. Abernathy, Case Nos. B304481/ B307759 (2d Dist., Div. 4 Nov. 1, 2021) (unpublished), the lower court granted $23,362.50 to a SLAPP winner, which was affirmed on appeal except for a demand letter not required under the SLAPP statute so as to reduce the award a little less to $23,100.  The appellate court rejected challenges to the hourly rates because no evidence was introduced to challenge the rates.  With respect to a block billing challenge, the trial judge has discretion not to reduce block billing—but it depends on very particular circumstances and the nature of the billing entries.  Based on a detailed record by the lower court in granting fees, the deferential abuse of discretion standard showed that the award should be sustained.

Deadlines, Substantiation Of Reasonableness Of Fees: Party Winning Usurious Note Dispute Was Properly Awarded $318,400.50 In Contractual Attorney’s Fees

Filing An Appeal Did Not Stay Fee Motion Determination Absent A Stipulation, With Petitioning Attorneys Doing A Commendable Job Of Supporting The Fee Request.

            This next case, Korchemny v. Piterman, Case Nos. A155483 et al. (1^st Dist., Div. 2 Aug. 27, 2021 [unpublished]; certified for publication on September 17, 2021), demonstrates how a winning party did an exemplary job of supporting their fee petition before the lower tribunal.

            Winning party won a usurious note dispute where there was a contractual “prevailing party” fess clause.  That party moved for attorney’s fees of $318,730.50, with the judge awarding $318,400.50 after minor deductions.  The losing party appealed, to no avail. 

            First, loser argued that the appeal stayed a determination of any fee motion.  Wrong, wrong, as we have posted on before – this is embracing a collateral issue which is not forestalled by a merits appeal.  (Bankes v. Lucas, 9 Cal.App.4^th 365, 368-369 (1992).)

            Then, on the merits of the fee award, this decision shows how a good fee petition should be structured, with the lower and appellate courts digging it: (1) submitting detailed billing records; (2) submitting a detailed declaration by the lead attorney; (3) allocating work between certain issues; and (4) detailing why work with another party was compensable under a joint strategy rubric.  Not to mention that the loser’s tenacious litigation was a factor to justify awarding the close-to-total-request ask by the winner.

Appealability, Lodestar, Partition, Substantiation Of Reasonableness Of Fees: Lower Court’s Award Of Fees To Winning Beneficiaries And Property Owner In Partition Action Was Affirmed On Appeal

Apportionment Under Partition Statutes Is Vested Within Lower Court’s Equitable Discretion.

            In Hofmann v. Hofmann, Case No. F079977 (5^th Dist. July 15, 2021) (unpublished), trustee son Michael was obviously not happy when he lost a partition action to trust beneficiaries (his siblings) and the current property owner.  Beneficiaries and property owner, respectively, filed attorney’s fees motions under the partition statutes, primarily Code of Civil Procedure sections 874.010 and 874.040, which allow the lower court wide discretion to determine if fees were incurred for a common benefit or should be apportioned against a loser who drove up the costs of litigation.  That is what happened to trustee Michael, with the lower court granting the beneficiaries $122,395.81 and the property buyer $191,031.50, about a 50% apportionment based on certain interests.  Michael was unhappy, so he appealed.

            The Fifth District affirmed the fee awards.

            With respect to the beneficiaries, they could not entertain the challenges because Michael failed to appeal the post-judgment fee order—something we have constantly reminded our readers to do.

            Although the appeal was timely as to property buyer, the buyer was entitled to fees under sections 874.010 and 874.040 because Michael engaged in some spurious activities and the “common benefit” apportionment was not out of bounds.  Michael also challenged the amount of fees, but the lower court properly utilized the lodestar method and Michael waived any challenge that the requested fees were “padded” because he failed to include the detailed billing records in the appellate record for review. 

Employment, Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: Third Circuit Court Of Appeals Affirms Denial Of Fees Where Wage/Hour Plaintiffs Had Limited Success And Fee Petition Was Not Properly Documented

Plaintiffs Only Recovered $6,601 Out Of Requested $180,000 In Damages And Attorneys Sought $118,569 In Fees.

            In Wang v. Chapei, LLC, Case No. 20-2975 (3d Cir. June 10, 2021) (nonprecendential), two wage/hour plaintiffs had their federal claim dismissed, were unsuccessful on class certification tries, and won about $6,601 out of a requested $180,000 in damages under a state statute with an employee-friendly fee shifting provision.  The district judge denied their $118,569 fee request in entirety based on (1) plaintiffs’ limited success, (2) the attorneys failing to justify their claimed hourly rates, and (3) sloppy fee petition drafting where the rate request was erroneously requested for over ten times the correct amount.  The Third Circuit affirmed, finding no abuse of discretion as well as indicating employment litigators should not expect large fee awards where the results were meager.

Indemnity, Substantiation Of Reasonableness Of Fees: Trial Court’s Complete Denial Of Attorney Fees And Costs To Contractor Prevailing On Contractual Indemnity Claims Affirmed On Appeal

Contractor Failed To Support Its Roughly $570,000 Fees/Costs Request With Underlying Documentation And Testimony, And Made No Attempt To Allocate Fees Between Compensable And Noncompensable Claims.

            In Paul Ryan Associates v. Catlin Specialty Ins., Case No. A156755 (1^st Dist., Div. 5 May 21, 2021) (unpublished), contractor prevailing on summary judgment, against contractual indemnity claims, appealed the trial court’s order denying its motion for roughly $570,000 in contractual prevailing party attorney fees and costs.

            The 1/5 affirmed – finding the trial court acted well within its discretion.  Contractor – if it were entitled to fees (something the panel did not determine) – “utterly failed to satisfy its burden of demonstrating a reasonable fee award.” Contractor made no attempt to estimate or apportion the fees/costs incurred in defending against the contractual indemnity claims from fees it incurred defending against other claims made by other parties involved in the litigation. Rather, contractor divided the litigation into 3-month quarterly periods of time, separately calculated the amount of fees and costs incurred during each quarterly period in which the parties asserting the indemnity claims were involved in the litigation, and divided the total by the number of parties involved in the litigation at the time. Additionally, contractor did not submit billing records, provide attorney testimony as to the number of hours worked on the contractual indemnity claims, nor provide any other underlying data that would assist the trial court in making a determination as to the reasonableness of the fees requested. 

   

SLAPP, Substantiation Of Reasonableness Of Fees: Trial Court Properly Granted Landlord Defendant’s Anti-SLAPP Motion Against All Of Tenant’s Causes Of Action And Did Not Abuse Discretion In Awarding Landlord $4,890 In Fees And Costs.

All Of Tenant’s Claims Stemmed From Protected Activity Pursuant To Litigation Privilege.

            Tenant sued landlord – claiming the content and service of a 3-Day Notice to Cure constituted breaches of covenants of good faith and fair dealing, quiet enjoyment, were defamatory, and interfered with the contractual and economic relationship between tenant and tenant’s domestic assistant (for whom plaintiff had attempted to sublet space in Landlord’s home).  Landlord successfully SLAPPed back, claiming plaintiff’s causes of action stemmed from protected petitioning activity, and was awarded $4,890 in attorney fees and costs – consisting of $4,800 in attorney fees, a $60 filing fee, and $30 for court reporter fees.  Plaintiff appealed.

            The 4/3 DCA affirmed in Escamilla v. Encarnacion, Case No. G059276 (4^th Dist., Div. 3 May 21, 2021) (unpublished).  In a 3-0 opinion authored by Justice Moore, the panel found that both the service and content of the Notice were activities protected, under Civil Code § 47, pursuant to the litigation privilege – which applies to “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.”  (Silberg v. Anderson, 50 Cal.3d 205, 212 (1990).)  Because the only acts challenged in plaintiff’s complaint were the service of the notice and content of the notice, all of plaintiff’s causes of action arose from protected activity.  As such, plaintiff was unable to demonstrate a probability of prevailing on the merits of his claims.

            As to the fees, plaintiff argued that defendant’s attorney charged an unreasonable hourly rate and failed to fully document the fees.  The panel disagreed – finding the award was supported by declaration detailing the fees, billing rates and hours.  Additionally, plaintiff provided no proof that the hourly rate was unreasonable.

Substantiation Of Reasonableness Of Fees: $387,464.50 Postjudgment Fee Award Reversed Based On Block Billed Entries And Severely Redacted Entries With No Justification

Entries Made It Hard To Discern What Work Was Performed.

            We like the result reached in R Consulting & Sales, Inc., Case No. D076749 (4^th Dist., Div. 1 May 13, 2021) (unpublished), where an appellate court reversed a $387,464.50 postjudgment CCP §§ 685.040 and 685.070 enforcement fees award because the petitioning fee claimant had block billed entries and severely redacted entries not justified as being privileged or protected by the attorney work product doctrine.  Because these in tandem factors made it impossible to determine what was compensable, the fee award was reversed—basically on due process grounds.  The opposing party did a good job of objecting in the fee proceeding.

Allocation, Multipliers, Section 1717, Substantiation Of Reasonableness Of Fees: Reversal And Remand Were In Order Where Trial Court Believed It Did Not Have Authority To Apply A Negative Multiplier In An Award Of Attorney Fees

Invoices Submitted In Support Of Plaintiff’s § 1717 Fees Motion Were Extensively Redacted And Contained Vague Block-Billing, Which Offered The Trial Court No Way To Meaningfully Apportion Time Between Causes Of Action.

            After defeating defendant’s cross-claim breach of contract cause of action, plaintiff moved for Civ. Code § 1717 attorney fees of $939,600.50, which represented all of plaintiff’s incurred fees from the time defendant amended their cross-complaint to add the breach of contract cause of action.  In opposition, defendant argued that a negative multiplier should be applied based on the extensive redactions and block-billing of the invoices submitted by plaintiff in support of its fee motion, which offered the trial court no way to meaningfully apportion time between causes of action.  Defendant argued that no more than $47,980.20 should be awarded to plaintiff.  The trial court rejected defendant’s negative multiplier argument and awarded plaintiff $369,811.50 after reductions to one attorney’s hours, hourly rate reductions, and further reductions for apportionment and excessiveness.

            Defendant appealed, and the 2/1 DCA reversed in Southern Cal. School of Theology v. Claremont Graduate University, Case No. B302452 (2d Dist., Div. 1 May 3, 2021) (unpublished). 

            The trial court appeared to have rejected defendant’s proposed negative multiplier based on its belief it had no authority to apply defendant’s requested negative multiplier.  However, a trial court has considerable discretion in determining fee awards, including its authority to ““assig[n] a reasonable percentage to [time] entries, or simply cast them aside.” (Bell v. Vista Unified Sch. Dist., 82 Cal.App.4th 672, 689 (2000).)  The court may reduce compensation on account of any failure to maintain appropriate time records as the party moving for fees bears the burden of establishing entitlement and documenting the appropriate hourly rate and hours expended. (ComputerXpress, Inc. v. Jackson, 93 Cal.App.4th 993, 1020 (2001).)

            On remand, the panel instructed the trial court to reconsider its order based on its full authority to fashion a fees award under § 1717 – reminding the trial court it has the authority to apply a negative multiplier as a basis to apportion fees.

Substantiation Of Reasonableness Of Fees: No Abuse Of Discretion In Award Of $28,086 In Fees And $2,069.36 In Costs To Sellers Of Mobile Home Park Who Prevailed In Confirming Arbitration Award

Buyer Failed To Meet Its Burden Of Rebutting Seller’s Showing Of Entitlement And Reasonableness Of Fees With Supporting Rebuttal Evidence.

            In Kim v. PCP-Sundance, Case Nos. D076510/D076799 (4^th Dist., Div. 1 January 11, 2021) (unpublished), buyer of a mobile home park sued sellers for $1,754,428.50 for breach of the parties’ Special Indemnity Agreement (SIA) under which the sellers agreed to provide certain concessions to buyer in order to complete the sale.  Pursuant to the SIA, the parties agreed to arbitrate their dispute, and sellers conceded to owing buyer $3,396.25 for eviction-related expenses for three tenants who were in arrears at the close of escrow.  The arbitrator awarded buyer the $3,396.25, but found the remainder of buyer’s claims to be outside the scope of the SIA.  The Arbitrator also determined sellers were the prevailing parties as they had prevailed on all of the disputed issues – awarding sellers $78,236.43 in fees/costs, pursuant to the fees provision in the SIA, with an offset of the $3,396.25 sellers owed buyer for a net recovery to sellers of $74,840.18.

            After sellers successfully petitioned the trial court to confirm the arbitration award, and defeated buyer’s separate petition to vacate or correct the award, sellers moved for $32,918.50 in attorney fees and $2,120.51 in costs – with the trial court awarding seller $28,086 in fees and $2,069.36 in costs after a $4,832.50 reduction for some excessive work and for the attendance of two attorneys instead of one at the hearing on the petitions. 

            Buyer appealed, but its arguments – that trial court’s award of fees/costs was “grossly excessive,” and that most of the fees sellers sought were directly related to the arbitration case rather than the judicial proceedings to confirm, correct or vacate the arbitration award – were of no avail.  The 4/1 DCA found no abuse of discretion.  First, sellers met their burden by establishing their entitlement to the fees/costs, and supported their motions with attorney declarations establishing the work performed and billing rates, memoranda of costs, and copies of the relevant billing records.  Buyer, however, failed to meet its burden to rebut sellers’ showing with evidence – failing to support its arguments by addressing/objecting to any specific billing entries.

Probate, Substantiation Of Reasonableness Of Fees: Attorney Fees By Three Firms Granted To Trustee In Long-Standing Dispute Were Affirmed On Appeal

Fees To Three Firms Representing Trustee In Multiple Venues Was Just Fine In This Context.

            A beneficiary under a trust, which engaged in a long-standing dispute against trustee in multiple venues (California superior court, California appellate court, U.S. bankruptcy court, and the Ninth Circuit Court of Appeals), was not happy when well-documented fees incurred by trustee through three law firms were ordered to be paid by the trust.  The appellate court in Kvassay v. Kvassay, Case No. B297461 (2d Dist., Div. 2 Jan. 1, 2021) (unpublished) affirmed the propriety of the fee award based on (1) painstaking substantiation showed the amounts were justified, and (2) the fact that the work of three law firms was warranted given the battle raging against trustee in various venues.

Landlord/Tenant, Substantiation Of Reasonableness Of Fees: Landlord Seeking To Overturn $988,539 Attorney Fees Award To Prevailing Commercial Tenants In UD Action Gets Fee Award Reduced By Only $14,125 On Appeal

No Abuse Of Discretion In The Trial Court’s Implied Finding That The Total Time Tenant’s Attorneys Spent Working On The UD Case And Subsequent Appeal Was Reasonable Given The High Stakes Involved In The Litigation.

            In NHP/PMB Burbank Medical, etc. v. Premiere Medical, etc., Case No. B299841 (2d Dist., Div. 7 December 14, 2020) (unpublished), prevailing commercial lease tenants (a medical center and doctor) in an unlawful detainer action were awarded $988,539 in attorney fees on remand.  The 2/7 DCA, concluding landlord’s notices to quit were defective, had previously reversed the trial court’s initial judgment which found in favor of and awarded landlord $1,141,074.60 – comprised of $373,592.68 in rental fees, operating expenses and late charges, $624,207.97 in holdover damages, $53,121.16 in prejudgment interest, and $90,152.79 in attorney fees and costs. 

            On appeal, landlord argued that an award of nearly $1 million in attorney fees – for what it described as a routine unlawful detainer action – was absurd, that tenants failed to show the fees were incurred in the UD action and not the parties’ other related actions, that the award included sums for nonexistent or duplicative work, and that the fees were purposely inflated to approximate the amount of damages landlord anticipated tenants would be found liable for in the other related actions.

            The 2/7 DCA agreed only with landlord’s contention regarding nonexistent or duplicative work – striking $14,125 from the award for such billing entries.  The fees awarded to tenants covered the UD action as well as pre-litigation, post-judgment and appellate work related to the UD action.  The panel found no abuse in discretion in the trial court’s implied finding that the total time expended by tenants’ attorneys was reasonable.  The litigation involved much higher stakes for the tenants than it did the landlord – with medical center’s doctor declaring the unlawful detainer action “posed an existential threat to [his] business and seriously threatened his livelihood” and that if the monetary portion of the initial judgment had been enforced, “it would have been financially devastating to [him] and his family.”  The trial court had correctly observed detailed time or billing records are not required under California law – accepting the declarations and summaries submitted by tenants’ counsel – which listed by broad category the time expended by each attorney.  In fact, the panel observed, this method “has been upheld and even recommended, as ‘an especially helpful compromise between reporting hours in the aggregate (which is easy to review, but lacks informative detail) and generating a complete line-by-line billing report (which offers great detail, but tends to obscure the forest for the trees).’” (Syers Properties III, Inc. v. Rankin, 226 Cal.App.4th 691, 700 (2014) [discussed in our May 06, 2014 post].)

Substantiation Of Reasonableness Of Fees: Detailed Time Entries Supported $103,950 Fee Recovery Under Fraudulent Transfer Statute

Fee Entitlement Was Not Contested Below, So That Premise Carried On Appeal, Especially Given No Request That The Appellate Court Consider It As A Discretionary Matter.

            Shin v. Chung, Case No. B301055 (2d Dist., Div. 4 Nov. 18, 2020) (unpublished), is a bleak reminder to contest fee entitlement at the trial court level; if you do not, the reviewing court may find there is a waiver on an entitlement issue which is far from settled in California.  Also, even if you are behind on the waiver issue, ask the Court of Appeal to consider it as a discretionary matter, something not done on appeal in this matter.

            Here, the trial judge awarded $103,950 to a creditor in a fraudulent transfer action under a “catchall” provision of the fraudulent conveyance statutes, despite the creditor asking for $158,508.90 in fees inclusive of a 1.5 multiplier.  Losing parties prevailed, but the fee award was affirmed.

            Appellants did not contest fee entitlement at the trial court level, although we bloggers can tell you there is no published California decision deciding if fees are allowable under the fraudulent transfer statutes and with many out-of-state court decisions saying no.  Because this issue was not raised at the lower court level, it was waived.  Appellants did not ask the reviewing court to consider it in discretionary fashion, an omission which sealed the result.  With respect to the amount of the fee award, the supporting fee substantiation involved detailed time entries, by and large, such that the resulting sum was no abuse of discretion.

Reasonableness of Fees, Substantiation of Reasonableness of Fees: $2.1 Million Attorney Fees Award Upheld On Appeal Despite Billings Submitted With Excessively Heavy Redactions Defense Claimed Made Effective Challenge Impossible

The 2/8 DCA Determined Defense Counsel Could Have Used Its Own Knowledge Of The Case To Hire An Expert For A Determination Of Whether The Hours Requested Were Reasonable.

            In Los Angeles Unified etc. v. Torres Construction, Case No. B291940 (2d Dist., Div. 8 October 26, 2020) (unpublished), Defendant was hired by Los Angeles Unified School District to renovate middle and high school cafeterias in a three-phase project involving the purchase and installation of kitchen equipment and electrical upgrades.  Defendant’s performance on the project was bonded by Western Surety Company.  A few years into the project, LAUSD discovered some irregularities in Defendant’s billings and filed this action against Defendant and its Surety Company for breach of contract and breach of bond.

            After six years of litigation, LAUSD ultimately prevailed, and Surety Company was found liable on its bonds.  After the parties settled Defendant’s offset claims for withheld payments on other jobs, in the amount of $556,296.89 plus $151,958.47 in interest, LAUSD had a net recovery of $4,555,178.49 – consisting of $3,941,829 in damages, $1,232,887.88 in prejudgment interest, and $88,716.97 in costs.  Additionally, LAUSD was awarded $2,100,000.00 in attorney fees, out of a requested $2,123,277.20, against Surety Company.

            This appeal ensued – with Defendant and Surety Company challenging numerous trial court orders – but we will focus on Surety Company’s challenge to the attorney fees award.

            On appeal, Surety Company argued that the trial court violated its right to due process, and abused its discretion by “rubber stamping” LAUSD’s fee request – which was supported by its lead attorney’s declaration and extremely heavily redacted billings.  Surety Company argued that the billing submissions were meaningless due to the heavy redactions, and that the declaration did not have enough detail to allow an evaluation of or opposition to the fee request.  However, the 2/8 DCA found no abuse of discretion.  Although the trial court expressed concern about the heavily redacted billings and possible duplications – with Surety Company expressing the same, as well as an inability to determine whether LAUSD’s work was reasonably necessary and efficient – the appellate panel found, based on comments by the trial court, that the trial court was familiar with the amount of work and cost of a case like this and had found the fees reasonable.  Additionally, the appellate panel determined that Surety Company only disputed about $174,000 of the billings, and that the trial court’s reduction of $23,277.20 from LAUSD’s requested fees equated to 13% of that amount and likely reflected the trial court’s concern about duplicative entries.

            The 2/8 DCA found no merit to Surety Company’s contention that its right to due process was violated because it was unable to effectively challenge the fees request because of the heavily redacted billing – determining that Surety Company could have evaluated the overall hours billed by LAUSD based on its own counsel’s familiarity with the work involved in the case and appropriate hours for particular tasks.  The panel suggested that Surety Company could have hired an expert to estimate the appropriate hours for the work based on that information as there was not great variation in the attorney’s hourly rates, and an expert “could have simply categorized the work into one of two hourly rates.”

BLOG COMMENT:  Co-Contributor Mike Hensley served as co-counsel on the appeal.  Based on the record, he knew this would be an uphill battle on appeal, with the review based on discretion.  Despite the appellate panel’s findings in this matter, we do not know how defense counsel, with or without an expert, would have been able to appropriately challenge LAUSD’s fee request given the extremely heavily redacted billing submission.

Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: $2,135,688.75 Fee Award Affirmed On Appeal Based On Detailed Supporting Substantiation For Litigation Spanning Five Years And Lots Of Activity By The Other Side

Substantiation And Reasonableness Challenges Rebuffed On Appeal.

            In San Vicente Investment, LP v. Trammell Crow Santa Monica Development, LLC, Case No. B296147 (2d Dist., Div. 1 Oct. 1, 2020) (unpublished), sophisticated litigants battled it out over five years in litigation involving lots of law and motion, discovery, and then two rounds of largely successful summary adjudication motions by the defense—not to mention plaintiff’s numerous attempts to get a reconsideration of the summary adjudication rulings and after a nonsuit of the remaining case at trial, merits determinations affirmed earlier on appeal.

            What then ensued is what we blog on.  Defendant sought $2,349,378.93 in contractual attorney’s fees, providing a detailed declaration from the lead associate with specific timekeeper, billing rate, charts of total work for seven identified phases of litigation, and totals of hours spent/total fees billed by defense counsel.  The trial judge wanted work spent on a third-party indemnity parsed out, such that the defense wisely filled supplemental information requesting $2,135,688.75 in fees after excising the indemnity work--detailed information reviewed in depth by the deciding lower court.  The trial judge granted the entire “lesser” request.   Plaintiff was miffed, challenging both the fee substantiation and amount of fees awarded.

            The 2/1 DCA affirmed.  With respect to substantiation, the main supporting declaration provided enough detail, including the work performed by others.  Beyond that, the trial court based the award on broader experience as far fee recovery in litigation of the sort, showing comportment by decreasing the fee for indemnity activities.  The large amount of the fees award was reasonable given the other side’s litigation activities, with the appellate panel indicating that caution needed to be given to using what another side spent on fees unless the activities were comparable.  Duplicative/overstaffing is a legitimate concern; however, where the litigation ebb and flows over time, there can be valid temporary changes in a legal staffing roster which may be reasonable, all circumstances considered. 

Lodestar, Substantiation Of Reasonableness Of Fees: Trial Judge’s Award Of $1,000 In Fees/Costs Reversed Where Requested Amount Was $164,768

Appellate Court Needed More Of A Justification For Such A Large “Haircut.”

            For readers who have followed us for some time, you would know that district judges in the Ninth Circuit have to explain “haircuts” from attorney’s fees requests which exceed 10% with some specificity.  (See, e.g., Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9^th Cir. 2008) [enunciating 10% rule]; Vargas v. Howell, 949 F.3d 1188, 1195-1197 (9^th Cir. 2020) (reviewed in our February 7, 2020 post) [reversing 90% reduction due to lack of adequate explanation].). We now report on an unpublished appellate opinion from our own local 4/3 DCA which shows how a substantial reduction led to a reversal and remand, suggesting that state courts are more and more, under the right circumstances, endorsing the federal test for large fee “haircuts.”

            In Ramirez v. CL Education, Inc., Case No. G057779 (4^th Dist., Div. 3 Sept. 30, 2020) (unpublished), plaintiffs settled a Labor Code-heavy case for $25,001 (with a final payment of $5,001 waived based on defense payments) under a written stipulation allowing recovery of attorney’s fees and costs from defendants upon plaintiffs’ motion for same.  In an opposed motion, plaintiffs requested $164,768 in fees/costs (inclusive of a 1.5 contingency multiplier request, but the trial judge only awarded a total of $1,000, with the record unclear whether the lower court had the documentation to fashion such an award.

            The Court of Appeal, in a 3-0 opinion authored by Justice Thompson, reversed and remanded.  Although recognizing the discretion given to trial judges on fee motions, the appellate court could not divine how the $1,000 award was arrived at and indicated such a reduction required at “least some explanation or justification” for purposes of supporting a substantial “haircut” of this nature.  In so doing, it cited Warren v. Kia Motors America, Inc., 30 Cal.App.5^th 24, 36 (2018) where heightened scrutiny was recognized in consumer (specifically, a Song-Beverly Act matter) and civil right cases, although observing in a footnote that the federal “haircut” rationale had not previously been applied in cases under state law fee-shifting statutes.  Interestingly enough, Warren itself cited Mountjoy v. Bank of America, N.A., 245 Cal.App.4^th 266, 280-281 (2016), which in turn applied the federal-type test in a contractual fee wrongful foreclosure matter.  So, the jurisprudence seems to be heading in the direction that substantial “haircuts” in state cases must be explained with some degree of specificity.  This is a fertile area in which to make new caselaw at the state level for litigators.

Costs, SLAPP, Substantiation Of Reasonableness Of Fees: SLAPP Fees Of $63,970 And Costs Of $1,680.13 Affirmed On Appeal

Vague Objections Not Entertained, But Failure To Award Positive Multiplier Was Sustained.

            In Koerber v. Project Veritas, Case No. B291770 (2d Dist., Div. 3 Sept. 29, 2020) (unpublished), the Court of Appeal affirmed a mandatory SLAPP award of $63,970 in fees and $1,680.13 in costs.  The defense requested $109,545 in fees, inclusive of a 1.5 multiplier, but the trial court did not award a multiplier and reduced the lodestar request for time spent on a demurrer.  Appellant did not provide any specific arguments as to why the fee substantiation was deficient (spreadsheets and supplemental briefing were provided) or why the fee request was inflated.  Filing/motion fees, reporter fees, and attorney service/courier expenses were all fair game for routine costs, with a component-by-component analysis provided in the affirming opinion.

Landlord/Tenant, Substantiation Of Reasonableness Of Fees: $1,586 Fees Award To Landlord Affirmed Based On Inadequate Lack Of Substantiating Evidence

$84,995.25 Was Requested; Only $1,586 In Fees Awarded.

            Although there was no explicit appellate discussion on this issue, Triplett v. Decron Properties Corp., Case No. B295126 (2d Dist., Div. 1 Sept. 24, 2020) (unpublished) is a reminder for parties seeking fee recovery to provide sufficient evidence in support of a substantial request.  The particulars are not reported, but the prevailing party sought $84,995.25 in attorney’s fees and was awarded only $1,586 based on lack of sufficient evidence.  The moral to this one is to make sure there is a competent proof support to your fee motion. 

Substantiation Of Reasonableness Of Fees, Trespass: Fee Recovery To Plaintiffs In Federal-State Court Agricultural Trespass Case Affirmed On Appeal

Fees In Federal Case Were A Continuation Of The Entire Litigation, And Reconstructed Time Can Be Credited Under The Right Circumstances.

            The parties in Shuler v. Capital Agricultural Property Services, Inc., Case No. B294555 (2d Dist., Div. 6 June 24, 2020) (unpublished) came to the end of an agricultural trespass case which went before both federal and state courts, resulting in two published decisions before the 2/6 DCA (based in Ventura).  At the end of the day, under a trespass fee-shifting statute (CCP § 1021.9), the trial judge awarded plaintiffs about $1.271 million in fees (which included a positive 1.4 multiplier).

            That result was affirmed on appeal.  The argument that plaintiffs did not “prevail” for purposes of the trespass fee-shifting statute did not resonate because it was simply a continuation of the overall battle in which plaintiffs prevailed.  No apportionment was required because all of the legal theories related to common facts, with no California case requiring a statement of decision on a fee motion (although some selective cases may need a more detailed explanation).  The defense then argued that certain clients could only be liable for their proportion of fault in the case with respect to fee apportionment, but that would fly in the face of the mandatory fee-shifting provision so as frustrate overall responsibility for fees—so they should be joint and several.   (Friends of the Trails v. Blasius, 78 Cal.App.4^th 810, 837-838 (2000) [CCP § 1021.5 case].)  Although reconstructed time is subject to credibility challenges, it can support a fee motion if there is adequate information to reach reasonable estimates of the work described.  (Cates v. Chiang, 213 Cal.App.4^th 791, 821 (2013).)  The 1.4 multiplier award was no abuse of discretion given the risk involved in the lengthy litigation. 

Civil Rights, Costs, Substantiation Of Reasonableness Of Fees, Reasonableness Of Fees: Except For Correction Of Routine Costs Math, FEHA Fee Award Of About $1.1M And Almost $107K In Costs Affirmed On Appeal Where Plaintiff Won $650K In Damages

Limited Success/Allocation Fee Challenges Rejected On Appeal; Expert Witness Fees Can Be Sought Through A Costs Memorandum. 

            In Abarca v. Citizens of Humanity, LLC, Case No. B290090 (2d Dist., Div. 3 June 18, 2020) (unpublished), a FEHA plaintiff won a jury verdict on disability discrimination/retaliation claims, although losing two other claims, to the tune of compensatory and punitive damages totaling $650,000 ($550,00 of which were punitive damages).  Plaintiff’s attorneys, under a liberal FEHA fee-shifting statute, moved to recover a fee lodestar of $1,652,255 plus a 2.0 positive multiplier (total fee request of $3,304,510) as well as costs of $142,299.92 (a lot of which were for depositions, expert witness fees, models/blowups, etc.).  In the end, the trial judge awarded $1,084,160 in fees after reducing hourly rates and denying the multiplier request and also awarded costs of around $116,000.

            The appellate court affirmed everything, except to modify routine costs down to about $107,000 based on some transparent math errors.

            The defense attacked reliance on reconstructed time, but this was a credibility determination for the lower court below.  As far as limited success or apportioning fees on unsuccessful claims, the appellate court found that (1) the $650,000 verdict was not limited success given that the defense only offered to initially settle the case for $149,999.99; and (2) the intertwined unsuccessful claims were not a reason to reduce the fee under the particular circumstances of the case.  With respect to routine costs, a lot of the defense opposition centered on whether expert fees needed to be claimed by noticed motion versus a cost memorandum, with plaintiff claiming through a cost memorandum.  As we see it, the appellate court seemed to endorse the view, based on an analogous CCP § 998 situation, that these fees could be claimed through a cost memorandum (Jonkey v. Carignan Construction Co., 139 Cal.App.4^th 20, 27 (2006), especially given no procedural specification under the FEHA cost-shifting statute to the contrary.  However, there was no need to really confront the issue, because no prejudice was shown—the defense did oppose the costs through a motion to tax with full briefing by everyone.  As far as models, blowups, and exhibit photocopies, courtroom technology has become more commonplace and less expensive such that earlier cases where the costs were exorbitant were not persuasive.  (Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 991 (2013).)  Everything affirmed, except for the appellate court to correct some minor arithmetic errors. 

Substantiation Of Reasonableness Of Fees: 2/8 DCA Publishes Decision To Stress The More Credible Weight Of Contemporaneous Records To Support An Attorney’s Fee Demand, With Lesser Proof Allowing For Substantial Reductions In Fees

Attorney Demanded $308,000 In Fees, He Only Got $17,325.

            “We publish to underline that contemporaneous time records are the best evidence of lawyers’ hourly work.  They are not indispensable, but they eclipse other proofs.  Lawyers know this better than anyone.  They might heed what they know.”

            This early-on observation in Taylor v. County of Los Angeles (Traylor), Case No. B296537 (2d Dist., Div. 8 June 10, 2020) (published) is a crucial one to be paid attention to.  The particular facts and result are not pretty, but we leave you readers to draw your own inferences.

            For a brief period of time, appealing attorney represented plaintiff in a wrongful death civil rights police shooting.  Plaintiff then replaced attorney with other attorneys, who filed suit and obtained a $7 million settlement, with former attorney never turning over his case files.  That, we surmise from reading the opinion, is where the fun (or tragedy, depending on your perspective) began.  Former attorney sent all kind of contradictory invoices and documentation for hours expended on the case, but he filed an attorney’s lien and sought $308,000 in fees.  Plaintiff claimed at most $4,554 was owed, after noting the various inconsistencies in the hours claimed by former attorney and rounded-up entries of a hard-to-digest reaction (and even suggesting that attorney did not work, but actually went on a fishing trip).  At an unreported hearing, the trial judge awarded $17,325 in fees in the lien proceeding.

            Former attorney’s appeal was unsuccessful, resulting in a published opinion with some very colorful quotes by Justice Wiley on behalf of a 3-0 panel, suggesting that appealing attorney should be grateful that he got that much.  There are numerous takeaways from this decision.

            First, the failure to have a reporter’s transcript, when it comes to amount of fees requested, is fatal with respect to appellate challenges.  Second, appealing attorney never credibly explained the recordkeeping discrepancies (not to mention this was not helped by the failure to turn over case files).  Third, reconstructed time records are entitled to diminished “credibility weight” as compared to contemporaneous records of timekeeping—after all, “[a]ccuracy is a professional virtue and a systemic concern” especially given the high costs of legal services these days.  Fourth, reading in between the lines, appealing attorney only really requested his demand after learning of the $7 million settlement—again, a “weight” factor for determining the reasonableness of fee request substantiation.

Allocation, Lodestar, Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: Prevailing Plaintiff Correctly Awarded $182,000 Under Contractual Fees Clause After Winning $455,000 In Damages After A Lengthy Court Trial

Fees Award Should Not Get Offset Against Damages, And Trial Judge Awarded Contingency Arrangement Percentage As Fees—Dispensing With The Need For Review Of Detailed Bills.

            Prevailing plaintiff in Pham v. Nguyen, Case No. H044958 (6^th Dist. Apr. 15, 2020) (unpublished), on the heels of winning $455,000 in damages, moved for contractual attorney’s fees.  The trial judge awarded $182,000, which was 40%--the amount of the contingent arrangement between plaintiff and his attorney.  Defendant’s numerous challenges on appeal did not result in any disturbance of the award.

            Plaintiff initially claimed that the fees awarded had to be offset against the damages award.  No way, said the appellate court—that would nugatory the impact of a fees clause and would actually punish an attorney for taking the case on a contingency basis.  No apportionment was required because the compensable and non-compensable units of work were intertwined such that it would have been impractical or impossible to separate out.  With respect to the claim that plaintiff failed to provide evidentiary support for the fee request, the lower court did not err by awarding the contingency fee amount so that billings did not have to be reviewed.

            BLOG COMMENT:  The appellate court also chastised appellant’s attorney for filing noncompliant appellate briefs and recycling arguments from lower court papers.  (See In re Marriage of Shaban (2001) 88 Cal.App.4^th 398, 408 [“Appellate work is most assuredly not the recycling of trial level points and authorities.”].)

Class Action, Substantiation Of Reasonableness Of Fees: District Judge Adequately Explained 25% Reduction In Lowered Lodestar Hours, Says The Ninth Circuit

Reasonableness Of Fee Award Confirmed By Percentage Of Recovery Cross-Check, Where Ultimate Award Was Beyond 25% Benchmark.

            Class counsel in a consumer protection class action, which was settled, sought an unopposed $350,000 fee recovery.   The district judge, after setting the reasonable hourly rate, then applied a 25% reduction to the lower lodestar determination based on some block billing, excessive time spent on law conferences that did not advance the case or the interests of the class, unreasonable travel time billed without any showing that substantive work was performed, duplicative work, unsupported identical conclusory statements of class counsel as the only explanation for why the hours requested were reasonable, and puffery in describing work performed.  The district judge ultimately awarded fees of $184,665 based on the lodestar approach, but also performed a cross-check using the percentage of recovery methodology.  This cross-check showed that much more than the 25% benchmark was being awarded through the $184,665 fee order, but that class counsel rather than the defendants should receive any class action settlement monetary excess.

            Plaintiff challenged that the district court did not adequately explain its award, but the Ninth Circuit disagreed in Johnson v. MGM Holdings, Inc., No. 18-35967 (9^th Cir. Dec. 2, 2019) (published).  No magic words are needed to explain a reduction, with the record in entirety showing an adequate explanation for the reduction.  The Ninth Circuit also was pleased that the district judge cross-checked through the percentage of recovery method, again encouraging district judges to do so when they can. 

Allocation, Prevailing Party, Substantiation Of Reasonableness Of Fees: Prevailing Plaintiff Under Civil Code § 3344 Properly Awarded $137,595.20 In Attorneys’ Fees And $9,523.55 In Costs While Prevailing Defendant Under § 3344 Properly Denied Fees

Plaintiff – Although Seeking Six-Figures In Damages – Had Achieved His Litigation Purposes Through Damages Verdict of $10,000, But Dismissed Defendant Failed To Meet His Burden As To The Reasonableness Of His Fees Request.

            In Dice v. X17, Inc., Case No. B2282448 (2d Dist., Div. 3 September 27, 2019) (unpublished), a celebrity news website published images of sobriety coach Peter Dice showing a bag containing healing crystals to celebrity Lindsay Lohan, and depicted the interaction as a drug deal.  Mr. Dice sued the media company and its president/sole shareholder seeking damages and injunctive relief. 

            Before trial, plaintiff presented defendant media company with a rejected Code Civ. Proc. § 998 offer for $250,000.  During a later mandatory settlement conference, defendant media company offered $45,000 to settle the case.  Plaintiff rejected the offer, and the case proceeded to jury trial.  At the close of evidence, plaintiff dismissed president/sole shareholder from the action.

            The jury returned its special verdict finding the media company liable to plaintiff for defamation, and common law and Civ. Code section 3344 misappropriation of likeness for its knowing, unauthorized use of plaintiff’s likeness on its website – awarding plaintiff $10,000 in damages. 

            The lower court entered judgment – finding the prevailing parties under section 3344 to be plaintiff against media company, and dismissed president/sole shareholder defendant against plaintiff.  This triggered cross-motions for attorneys’ fees and costs pursuant to section 3344(a) which provides the prevailing party entitlement to fees and costs. 

            As to plaintiff, the lower court found no requirement to apportion fees between the section 3344 and common law claims, concluding that proving plaintiff’s successful section 3344 and common law causes of action “required virtually identical testimony and evidence” (although it did reduce for fees not incurred to prevail on section 3344) and awarded fees of $137,595.20 and $9,523.55 in costs.

            President/shareholder, however, was awarded only costs of $4,934.91 against plaintiff – with denial of his $226,456.50 fees request altogether for failure to meet his burden of proof that the requested fees were reasonable.  He made his request jointly with media company – although media company was not a prevailing party – and provided no apportionment between the two defendants, and did not categorize the fees nor apportion for the section 3344 work, even after the trial court had issued its tentative ruling.  Additionally, the lower court was unable to find that president/shareholder had incurred any fees – with only the media company being invoiced. 

            Media company and president/shareholder jointly appealed – arguing the trial court erred in determining plaintiff a prevailing party because in doing so it had improperly considered his success on other causes of action, and also because plaintiff failed to achieve his monetary litigation goal, with the nonmonetary goals being irrelevant under section 3344.  Additionally, they argued the lower court erred by basing the denial of their fees on president/shareholder sharing of counsel with media company and in the fact he did not personally incur fees.

            The 2/3 DCA found no error or abuse of discretion and affirmed.  Plaintiff had realized his litigation objectives, which included the award of monetary damages and “to right a wrong and clear his reputation.”  Section 3344 does not limit recovery to economic damages, but includes “any damages sustained” – thus including damage to reputation and providing remedy for the associated mental harm.  The jury’s verdict, regardless of the amount awarded, had provided plaintiff public vindication. 

            While the 2/3 DCA agreed that president/shareholder could not be denied fees based on sharing counsel and not personally incurring fees, it found that the trial court had properly denied fees.  Due to defendants’ failure to apportion fees, the lower court was unable to determine what fees were incurred to defend president/shareholder against the section 3344 cause of action, and president/shareholder did not demonstrate that the facts in his defense were inextricably intertwined with those of media company.  As a result, president/shareholder had failed to meet his burden as to reasonableness.

            BLOG COMMENT:  Congratulations go out to James R. Balesh of the Los Angeles-based Balesh Law Group for your successful representation at the trial and appellate court levels!  Great results on plaintiff’s fee request and his opposition to defendants’ joint fee request.

Civil Rights, Lodestar, Substantiation Of Reasonableness Of Fees: 9th Circuit Remands Post-Settlement Fee Award In Civil Rights Case For Determination of Reasonable Hourly Rate and Settlement Agreement Date To Determine Fees For Work on Unfiled Motions

There Was Humor Here—Ninth Circuit Agreed Attorney Petitioning For Fees Was Ill-Advised To Put In A Declaration By A Hawaiian Plumber About What The Plumber Charged!

            As you will see, there is some underlying humor simmering in Roberts v. City and County of Honolulu, No. 16-16179 (9^th Cir. Sept. 12, 2019) (published).

            What happened here is that plaintiff settled a civil rights action against Honolulu after trying to settle the matter even before filing a complaint, a factor we bloggers believe was important in the appellate court’s ultimate result.  After a complaint was filed, the parties reached a settlement agreement even though plaintiff’s counsel had begun drafting motions for preliminary injunction/judgment on the pleadings.  Plaintiff moved for attorney’s fees and costs of $40,191.43, which was opposed by Honolulu.  The magistrate recommended an award of $13,912.04 in fees and $400 in costs, after reducing the hourly rates being claimed and reducing for the two unfiled motions.  The district judge awarded $21,302.95, an increase of $7,390.91 from the magistrate judge’s recommendation. 

            The Ninth Circuit vacated and remanded because the correct legal standard was not followed.

            It agreed that the attorney has the responsibility to submit supporting evidence for requested hourly rates.  Plaintiff’s counsel submitted his own declaration, a co-counsel declaration, declarations from other Hawaiian attorneys familiar with counsel’s work, “and an (ill-advised) declaration from a plumber.”  (Tee hee!)  Plaintiff’s lead counsel’s declaration also referred to hourly rates in San Diego, the Laffey Matrix describing D.C. area rates, and the plumber’s affidavit (the inclusion of which was even described as “inexplicable” by the Ninth Circuit panel).  In its award, the district judge ignored this inapt proof but relied on the hourly rates awarded to the two attorneys in other civil right cases in the District of Hawaii.  This reliance was error—examination of prior fee awards was not an acceptable substitute for considering the declarations actually submitted and explaining why those declarations did not establish the prevailing hourly rate in the district.  So, the matter had to be remanded so that the correct legal standard could be applied to the case. 

            With respect to the time spent on the two unfiled motions, the Ninth Circuit panel remanded because it was a “close question” on whether this time should have been compensated given the status of pending settlement discussions. 

            The moral of this one may well be this:  Don’t submit plumber declarations in support of a fee motion!

Employment, Multipliers, Substantiation Of Reasonableness Of Fees: FEHA Plaintiff Properly Awarded Fees At Reduced Hourly Rates, But Augmented By Hourly Rates For Enhancement Factors, And Then Correctly Denied Any Multiplier Beyond That

Almost $1.5 Million In Fees/Costs Sought, But Ultimate Affirmed Award Was About $649,000.

            The next case is an interesting example of how a trial judge’s decision to not credit prior fee awards to an employment contingency attorney was affirmed because there was not sufficient foundation to show the prior awards were similar to the case under scrutiny, but provided a positive enhancement to hourly rates to make up for the contingency risk factor.

            In Navarro v. 4Earth Farms, Inc., Case No. B288105 (2d Dist., Div. 5 Sept. 4, 2019) (unpublished), a FEHA plaintiff won a jury verdict of $309,310 against certain defendants.  Filling emboldened, plaintiff’s counsel then moved for attorney’s fees of $1,473,315, inclusive of a 2.0 positive multiplier, against the non-prevailing defendants, with hourly rates requested which ranged from $450-850 per hour.  Plaintiff’s counsel supported these rates with a list of 10 recent fee awards the firm had received from other courts.  The trial judge found the rates to be too high in a tentative decision, but he wanted to give further thought to the multiplier request.  Later, the lower court awarded lower hourly rates to plaintiff’s lawyers, but it enhanced them somewhat for “multiplier” factors after observing the case was not complex and was a single plaintiff case (mainly, for contingency risk).  Ultimately, it awarded $649,020.62 in fees and costs to plaintiff.

            The 2/5 DCA affirmed.

            Although acknowledging that prior fee awards could be relevant (Margolin v. Regional Planning Com., 134 Cal.App.3d 999, 1005-1006 (1982)), the appellate court affirmed the trial court’s conclusion that plaintiff’s counsel did not give an “apples to apples” comparison—the listed cases were class actions unlike the involved single plaintiff case with not as much complexity, such that the similarity nexus was missing.  Also, even though most trial judges simply award a multiplier after reductions, the trial judge here did not discount any hourly work effort tasks at all but simply applied a higher hourly rate as an enhancement—something perfectly proper under California law.  (Horsford v. Board of Trustees of California State University, 132 Cal.App.4^th 359, 394-395 (2005).)  So, the fact that he did not apply a multiplier, but enhanced the hourly rates beyond what he considered reasonable, was no abuse of discretion.  

Probate, Substantiation Of Reasonableness Of Fees: Trustee Benefiting Herself, Not The Trust, Not Entitled To Reimbursement Of $500,000 In Attorney’s Fees And Costs In Various Probate Proceedings

Besides That, Fee Substantiation Of A Re-created, Severely Redacted Nature Did Not Support Fee Recovery. 

            Decedent in In re Andersen Family Trust, Case Nos. B286565/B286867 (2d Dist., Div. 4 June 5, 2019) (unpublished) left about $1.3 million in assets to three beneficiaries, one of which was designated as the trustee.  After a to-do on distribution of assets which was largely won by beneficiaries, trustee sought $500,000 in attorney’s fees and costs for doing battle in various proceedings with the beneficiaries.  The lower court denied the request on several grounds.

            The 2/4 DCA affirmed.  The main problem was that trustee failed to do an allocation, with most of the work relating to protection of trustee’s own interests rather than for the benefit of the trust—with the trust’s benefit being of pivotal concern when it comes to reimbursement of fees and costs in the probate arena.  (Whittlesey v. Aiello, 104 Cal.App.4^th 1220, 1231 (2002).)  Beyond that, the fee substantiation was flimsy, consisting of re-created time and severely redacted billing entries such that the lower court was correct in concluding it was impossible to apportion fees for trustee’s versus the trust’s true interest. 

Homeowner Associations, Prevailing Party, SLAPP, Substantiation Of Reasonableness Of Fees: No Abuse of Discretion In Awarding Prevailing Plaintiff $114,990.75 In Lawsuit Against Homeowners Association

Condominium Owner Plaintiff Wisely Sought Fees Only For The Claims On Which She Prevailed Against Association

            The Broadway Hollywood is a 10-story historical building on the corner of Hollywood and Vine. It was constructed in 1927 and originally used as a store. However, the building was abandoned in 1987 and remained vacant for 18 years – until it was revitalized and converted from an obsolete building to modern use. Today the Broadway Hollywood is a common interest development managed by a homeowners association – with the Davis-Stirling Act (Civ. Code section 4000) governing such developments.

            In Yu v. Broadway Hollywood Homeowners Assn., Case No. B280977 (2d Dist., Div. 1 March 7, 2019) (unpublished) Plaintiff, who owns a condominium in The Broadway Hollywood, sued the homeowners association, alleging it violated its governing documents by failing to offer valet parking (development was deficient in meeting current parking code requirements, and was granted a variance to allow for off-site parking) in her first cause of action; for interfering with homeowners’ 2013 and 2014 board elections, in which she sought election, respectively in her second and third causes of action; and for breach of fiduciary duty in her unsuccessful fourth cause of action.

            Association SLAPPed back against Plaintiff’s claims regarding interference with the election – stating it was simply exercising its protected activity of right of petition. The trial court, while finding the “thrust” of the claim arose from unprotected activities, found that Plaintiff was not likely to prevail on this issue. On appeal, the matter was remanded for further proceedings – with the trial court ultimately denying Association’s anti-SLAPP motion. While the SLAPP appeal was pending, a bench trial was held on the parking violation issue, with the trial court finding in favor of Plaintiff. Post-trial, the trial court also awarded Plaintiff attorney fees, pursuant to Civ. Code section 5975, subd. (c), of $114,990.75 (which included Plaintiff’s requested $112,549.75 after her detailed reduction for time spent on claims in which she did not prevail, plus $2,440 for time and costs incurred by Plaintiff’s attorney in connection with the fee motion). Association appealed the judgment, the order denying its anti-SLAPP motion, and the attorney fees award to Plaintiff – claiming the trial court had abused its discretion in awarding these fees.

            The 2/1 DCA disagreed with Association at every turn, and affirmed on appeal. As to the fees, they found that Plaintiff was the prevailing party as she had achieved her main litigation objectives. To that end, citing PLCM Group, Inc. v. Drexler (2000) 22 Cal.4^th 1084 [our Leading Case No. 1] and Serrano v. Priest (1977) 20 Cal.3d 25 [our Leading Case No. 3], the 2/1 DCA found that the trial court’s order took into consideration the claims on which Plaintiff did not prevail, and that nothing in the record suggested the award was arbitrary or exorbitant.

Prevailing Party, Substantiation Of Reasonableness Of Fees: Sibling Prevailing In Probate Dispute to Enforce Settlement Agreement Was Entitled To Fee Recovery Against Other Sibling

However, Prevailing Sibling’s Use Of Overly Redacted Billings Justified Reduction From Fee Request.

            In Levine v. Levine, Case No. B284749 (2d Dist., Div. 1 February 6, 2019) (unpublished), siblings in a probate dispute entered into a global settlement agreement. One sibling moved to enforce the settlement agreement, but the motion was denied. The settlement agreement had a fees clause, inspiring the winning sibling to move as the prevailing party for costs of $2,659.17 and attorney’s fees of $74,349.17. The sibling moving for fees and costs submitted heavily redacted fee billings. The lower court granted the motion, but it denied the requested costs and awarded reduced fees of $25,112.

            Both sides appealed, but nothing changed. Winning sibling did prevail because he took actions under the settlement agreement which were beneficial to the estate and belied the efforts to enforce the settlement agreement (especially given that the other sibling got sizeable distributions of an unusual nature before estate taxes were settled). However, the trial court’s award of reduced fees to prevailing sibling was justified; after all, he chose to not apportion costs between settlement agreement/trust administration activities and chose to submit redacted billings which made it equally hard to decipher what was compensable.

Allocation, Substantiation Of Reasonableness Of Fees: City Prevailing On Cross-Complaint Could Not Obtain Recovery Of Unilateral Inverse Condemnation Fees, Which Could Only Be Awarded To Losing Cross-Complainants

Apportionment Was Required In This Context, Plus A Relook At “Block Billing” Despite A 20% Reduction By The Trial Judge On The First Go-Around.

            In City of Patterson v. Patterson Hotel Associates, Case No. F074038 (5^th Dist. Jan. 11, 2019) (unpublished), City of Patterson prevailed on its complaint and defensed a cross-complaint involving a commercial project. However, the rub was that the cross-complainants included an inverse condemnation claim which has a unilateral fee-shifting clause in their favor, not cross-defendant’s favor. (See Code Civ. Proc., § 1036.) City, feeling emboldened, moved to recoup fees of a little over $1 million for all of the work, arguing everything was intertwined, so that the spoils go the victor. Loser argued that fees for the inverse condemnation work had to be excluded and that block billing made it impossible to review the fee request. The trial judge did not buy the legal argument, but awarded $673,600 in fees to City, reducing the fee request by 20% based on the uncertainties created by block billing.

            The Fifth District reversed and remanded the fee award for another bite.

            The problem here was that the unilateral, pro-plaintiff inverse condemnation time had to be apportioned based upon reasoning in Carver v. Chevron U.S.A., Inc., 119 Cal.App.4^th 498, 504 (2004). Because the inverse condemnation work was not compensable, it needed a restudy by the trial judge—especially given the City had the burden to produce information sufficient to determine how much time was spent on particular claims. However, some apportionment or percentage discount was necessary.

            That then led the Fifth District to look again at the block billing issue. Reading in between the lines, the reviewing court understood the discretion to trial judges on block billing but wanted a better read on whether block billing prevented a “reasoned apportionment of fees.” So, another look is in order on this one.

            Justice Snauffer, a recent Fifth District appointee, authored this opinion.

Bankruptcy Efforts, Substantiation Of Reasonableness Of Fees: Debtor Is Entitled To Attorney’s Fees And Costs For Challenging A Willful Automatic Stay Order On Appeal

Debtor Also Properly Allocated Fees To Work On Appeal, Such That A Procedural Basis For Denying Fees And Costs Was Infirm.

            In In re Schwartz-Tallard, 803 F.3d 1095, 1101 (9th Cir. 2015) (en banc) [discussed in our April 17, 2014 post], the Ninth Circuit earlier held that 11 U.S.C. § 362(a) authorizes the court to award reasonable attorney’s fees and costs incurred on appeal to a debtor defending a willful automatic stay violation judgment pursuant to § 362(k). This same circuit court of appeals, in Easley v. Collection Service of Nevada, No. 17-16506 (9^th Cir. Dec. 20, 2018) (published) has now extended that logic and fees/costs entitlement to encompass the situation where a debtor successfully challenges an initial award pursuant to § 362(k) on appeal. Furthermore, it rejected a district judge’s sustaining of a procedural objection that the debtor did not properly segregate work just on appeal, with the record showing it was an abuse of discretion to so conclude based on the substantiating time entries and accompanying memorandum of points and authorities.

Substantiation Of Reasonableness Of Fees: Counsel Declarations Sufficed To Justify $425,000 Fee Award In HOA’s Favor

Losing Condo Owner’s Failure To Specify Excessive, Generic Time Entries Also Fatal.

            The fee substantiation requirement in California state courts is much less than in federal courts. Federal courts favor submission of detailed timesheets, while attorney declarations and the trial judge’s perception of the work can indeed support fee recovery in California state courts. Plaintiff, a condo owner, lost a water intrusion dispute against a Mammoth HOA, with the lower court awarding the HOA $425,000 in attorney’s fees as the prevailing party. The Third District affirmed in Bakas v. Mountainback Condominium Owners Assn., Case No. C081052 (3d Dist. Nov. 27, 2018) (unpublished, modifying prior unpublished decision and denying a rehearing). The appellate court determined that (1) losing party’s failure to specify what entries were duplicative, excessive, or generic forfeited the challenge on appeal, and (2) counsel declarations and the trial judge’s gauging of the fee claimant’s attorney work could support a fee award in California state courts even in the absence of detailed timesheets.

Fees as Damages: Copenbarger Opinion Now Published—Deals With Attorney’s Fees As Damages And How To Properly Authenticate Them At Trial

October 19, 2018 Unpublished Decision Now Published.

            On October 20, 2018, we posted on the then unpublished decision in Copenbarger v. Morris Cerullo World Evangelism, Inc., which was authored by Justice Fybel of the 4/3 DCA. It dealt with whether breach of a settlement agreement fees were recoverable as damages versus costs (they were recoverable as damages) and with how to competently prove the fees from an evidentiary standpoint during trial (with the judgment reversed because no proper foundation was laid).   We can now report that the unpublished decision was certified for publication on November 13, 2018.

Fees as Damages, Substantiation Of Reasonableness Of Fees: Using Client To Authenticate Attorney’s Fees Invoices Found To Be An Incompetent Showing, Requiring Reversal As A Matter Of Law

Case Is A Stark Reminder On How To Competently Introduce Attorney’s Invoices In A Trial Where Fees Are Claimed As Damages.

            Justice Fybel, a sitting justice on our local Santa Ana court (this year’s winner of the David G. Sills Award for Appellate Excellence Presentation by the Orange County Bar Association Appellate Law Section), has penned an unpublished opinion in Copenbarger v. Morris Cerullo World Evangelism, Inc., Case No. G054731 (Oct. 19, 2018) (unpublished), in which he shows how to properly introduce attorney’s fees in a case where there are damages that need to be presented before the trier of fact. The takeaway is that a client, most likely, cannot be the witness attempting to introduce them based on not knowing the extent of an attorney’s work (with only the attorney generally able to describe what was done and justify the reasonableness of the proffered fees).

            What happened in Copenbarger is that one party to a settlement agreement sued the other side for failing to dismiss an unlawful detainer action and sought, as damages, related attorney’s fees in line with the settlement agreement’s fees clause. The lower court awarded the suing party $118,000 in fees as damages.

            The losing party appealed, arguing that fees are costs of suit (not damages) and the suing party failed to present competent evidence sufficient to prove the amount of damages. Losing party lost the first argument, but it prevailed big time on the second.

            The appellate panel concluded that, by analogy to fees sought in the insurance context for wrongful denial of insurance benefits under Brandt v. Superior Court, 37 Cal.3d 813, 819 (1985), fees for breach of a settlement agreement are fees sought qua damages rather than fees sought qua costs of suit. It questioned whether contrary results in Olson v. Arnett, 113 Cal.App.3d 59, 63, 67 (1980) and Navellier v. Sletten, 106 Cal.App.4^th 763, 767-768 (2003) were correct, but did have to decide the issue based on the ruling on the second argument raised by appellant.

            The winning argument was an evidentiary one. Only the client attempted to introduce his attorneys’ invoices over the objection of the other side that the testimony was hearsay and violated the secondary evidence rule. The trial court overruled the objections, but the Fourth District, Division 3 agreed that client testimony was insufficient for purposes of admitting the invoices. The problems were that the client did not really know about the services received from his attorneys, had no independent recollection of what work was performed/specific dollar amounts, and did not remember clearly what he had paid—meaning the hearsay and secondary evidence rule (a rule which holds oral testimony to prove the content of the writing is inadmissible unless the original or copy was lost/destroyed/not reasonably procurable by court process or other means) objections should have been sustained. Beyond that, a fee proponent must prove the reasonableness of the fees sought, something a client likely cannot do alone in the vast majority of situations. The client should have called the attorneys as witnesses. Given that there was insufficient evidence to support the judgment, reversal as a matter of law and judgment in favor of the appealing party were the proper end results.

            BLOG CONGRATS—We congratulate Justice Fybel on a well-deserved award.

Civil Rights, Reasonableness Of Fees, Substantiation Of Fees: Third Circuit Court Of Appeals Denies Unreasonable Civil Rights Fee Petition And Affirms Sanctions Of $25,000 Against Attorney

Entire Fee Motion Denied For Misconduct And Inflated Fees, A Companion To Our Post On The Clemens Decision.

            While co-contributor Mike was out on a short vacation, his legal assistant Shanna Strader was kind enough to post on Clemens v. New York Cent. Mut. Fire Ins. Co., No. 17-3150 (3d Cir. Sept. 12, 2018) [see our September 15, 2018 post], where the Third Circuit affirmed a district court’s entire denial of a fee petition where it was outrageously excessive in nature and was chock full of numerous substantiation flaws. That decision occurred under a discretionary Pennsylvania consumer statute, but its basic reasoning has now been extended to the federal civil rights arena.

            In Young v. Smith, Nos. 17-3190 & 17-3201 (3d Cir. Sept. 25, 2018) (precedential) [opinion linked here], attorney represented a group of students in civil rights claims against a school district and a teacher, obtaining an initial jury verdict but with the resultant judgment vacated based on her misconduct. The second trial, only against the school district, resulted in a complete defense verdict. The third trial schedule against teacher was settled when plaintiffs accepted a Rule 68 $25,000 offer of judgment, with the settlement allowing fees and costs against teacher only up until the date of the offer. However, attorney submitted a fee petition for all work against both defendants, requesting $733,002.23 in fees!

            No one was impressed. The district judge ordered an OSC as to why attorney should not be sanctioned for requesting such an excessive fee, with some of the requested fees connected to her vexatious conduct. The district judge denied the entire fee request and sanctioned attorney $25,000 for presenting such a fee petition (including doing so through pleadings with an inconsiderably small font size), finding that even a line-by-line review of entries was unproductive and not tied to nonvexatious work as limited by the settlement with the teacher. The district court also found that hundreds of entries in the fee petition were fraudulent.

            The Third Circuit affirmed. The fee petition was not honest and was not accurate in nature, allowing for a denial of a request in entirety under the federal civil rights fee-shifting statute where the fee petition sought outrageously excessive fees in egregious fashion. Just the fact that $733,002.23 was sought in a $25,000 settled case confounded the Court of Appeals as much as the district court. So, the reasoning in Clemens was extended to civil rights fee petitions, and the $25,000 sanctions was sustained too.