CALIFORNIA ATTORNEY'S FEES

Section 998: $12,000 Pre-Litigation Offer, Iterated As A 998 Offer Four Months Later After Filing Of A Lawsuit, Was Reasonable And Supported Cost-Shifting In Low-Level Vehicular Personal Injury Case

Section 998 Test Focuses On Objective Reasonableness, Not Plaintiff’s Subjective Perception Of The Offer’s Fairness.

            In Mkhitarian v. Jackson, Case No. B306198 (2d Dist., Div. 5 Sept. 20, 2021) (unpublished), plaintiff in a low level, soft issue vehicular injury case rejected both a pre-trial informal offer and subsequent CCP § 998 offer for $12,000 (together with a waiver of costs) coming after her case was filed.  That was a bad judgment call, because the jury rendered a defense verdict on negligence causation grounds.  The lower court denied plaintiff’s request to tax costs because the 998 offer was unreasonable, resulting in defendant obtaining costs (including $25,440 in expert witness fees). 

            The 2/5 DCA affirmed.  Objective reasonableness of the offer, not plaintiff’s perception of its fairness, is the guiding test.  The defense offer met this standard because the subsequent formal offer four months later did not show that any more information was needed to evaluate the offer.  Here is the conclusion reached by the appellate panel: “Finally, we know of no rule that disqualifies a section 998 offer simply because it is the same as an offer made prior to litigation. A defendant’s willingness to make a pre-litigation offer should not foreclose automatically a reinstatement of the offer made four months later under the benefits of section 998. Instead that factor, like the others we have mentioned, becomes part of the mix to be considered by the trial court in exercising its discretion.”  (Slip Op., p. 9.)

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 (1^st Dist., Div. 2 Aug. 27, 2021 [unpublished]; certified for publication on September 17, 2021), demonstrates how a winning party did an exemplary job of supporting their fee petition before the lower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.

Private Attorney General: Petitioner Winning First Round Of San Francisco Bay Mineral Extraction Lease Dispute, Getting Paid Under A Settlement, Did Not Get Any Further CCP § 1021.5 Fees By Failing To Succeed In The Second Phase

Future Losses Can Change The Private Attorney General Analysis.

            Petitioner in San Francisco Baykeeper, Inc. v. Cal. State Lands Commission (Hanson Marine Operations, Inc.), Case No. A159693 (1^st Dist., Div. 4 Sept. 17, 2021) (unpublished) did initially prevail in a dispute with the Commission over approval of several 10-year mineral extraction leases that authorized real party in interest Hanson to dredge mine sand from under the San Francisco Bay.  The trial judge earlier denied the challenge, but the First District reversed in a published decision, with petitioner obtaining fees under a settlement agreement with other parties.  However, Commission basically won in another go-around when a different panel of the First District found no public trust was implicated.  Petitioner moved again for fees, but the lower court denied them.  This denial was affirmed on appeal, given that success at early stages does not mean private attorney general entitlement for a party not ultimately succeeding in subsequent stages of a case.  (See National Parks & Conservation Assn. v. County of Riverside, 81 Cal.App.4^th 234, 240 (2000) [“it is not true that a previously successful party is entitled to fees for postjudgment litigation regardless of the outcome of that litigation”]; see also Ebbettts Pass Forest Watch v. Dept. of Forestry & Fire Protection, 187 Cal.App.4^th 376, 387 (2010).)

Appealability, Probate, Reasonableness Of Fees: Trustee’s Failure to Appeal Prior Separately Appealable Order On Fees Was Dispositive On Most Issues

As Far As Amount Of Fees, Failure To Include A Reporter’s Transcript Was Equally Damning.

            In Padlan v. Graves, Case No. A159576 (1^st Dist., Div. 3 Sept. 17, 2021) (unpublished), a trustee was ordered to pay certain attorney’s fees to a beneficiary based on reneging on a mediation settlement agreement.  That order was made in March 2019 and served by the trial court within 60 days.  Trustee did not appeal it.  Later, in a December 2019, the lower court refused to revisit the March 2019 fee orders, although this December 2019 order was appealed by trustee.  The 1/3 DCA decided that much of the fee challenges could not be entertained because trustee did not mention the March 2019 in her appeal of the December 2019 order and, also, the March 2019 order was separately appealable under Probate Code section 1300(g) relating to fixing of fees as it relates to a fiduciary.  With respect to the amount of the fees, that too failed because trustee failed to provide a reporter’s transcript as part of the record so as to show whether there was any abuse of discretion as far as amounts awarded. 

Requests For Admission: $211,032.50 In Costs-Of-Proof Sanctions Affirmed On Appeal

Trial Judge Did Not Err In Granting Sanctions For Central RFA Denials In The Case.

            In Nilson v. White, Case No. D077046 (4^th Dist., Div. 1 Sept. 16, 2021) (unpublished), plaintiffs lost a case where they sought to hold their attorneys responsible for a loss of a farming business through a nonjudicial foreclosure.  The trial judge also granted the winners $211,032.50 in RFA costs-of-proof sanctions.  The court of appeal affirmed because these were central RFAS which were not correctly denied and were apportioned out as far as awarding costs to the winning parties.

Section 998: Only Mentioning CCP § 998 Or Allowing Judgment To Be Entered, Without More Precise Instructions For Accepting 998 Offer, Does Not Render A 998 Offer Valid

4/1 DCA Provides Further Guidance On Drafting Effective 998 Offers.

            Drafting effective CCP § 998 offers can be tricky, as the 4/1 DCA recognized in Finlan v. Chase, Case No. D078410 (4^th Dist., Div. 1 Sept. 15, 2021) (published).  A plaintiff lost some hefty costs and expert witness fees by not providing specific acceptance instructions in the 998 offer.  The published decision adds two nuances to the jurisprudence in this area: (1) simply incorporating by a reference to section 998, without further acceptance instructions, will not suffice; and (2) a reference to “allow judgment to be entered” is not the equivalent of specific acceptance instructions. 

Consumer Statutes, Settlement: Attorney’s Fees Award In Lemon Law Case Affirmed As To Settling Party’s Responsibility, With Other Party Not Agreeing To Pay Fees Not Responsible

Given Merits Judgment Was Paid, Other Party Was Not Responsible For Fees.

            The next case we post on, Carter v. Mike Thompson Recreational Vehicles, Case No. G058205 (4^th Dist., Div. 3 Sept. 14, 2021) (unpublished), shows how care needs to be given to drafting settlement agreements as far as preserving attorney’s fees exposure to different defendants.  Justice Bedsworth authored the 3-0 panel decision.

            What occurred here is that manufacturer EHGNA and dealer Thompson entered into a settlement agreement for a lemon law dispute.  Although both defendants were liable to fund the merits settlement, only ENGNA was liable for fees.  That settlement was dispositive on appeal.  EHGNA went into Canada receivership, such that plaintiff car owner shifted sites to Thompson as far as fee recovery.  That did not work.  Both the lower and appellate courts honored the settlement agreement entered into between the parties.  Only EHGNA, not Thompson, was responsible for fees, with plaintiff agreeing to this allocation such that there was no unenforceable waiver of lemon law fees given the bargain between the parties. 

Prevailing Party, Special Fee-Shifting Statutes: No Abuse Of Discretion In Trial Court’s Award Of $23,162.50 To Prevailing Civil Harassment Plaintiff

Awarded Fees, Which Were Reduced From The $70,000 Requested, Were Not Excessive Considering The Complexities Of The Case And The Increased Attorney’s Fees Plaintiff Incurred As A Result Of Defendant’s Conduct.

            In Rowan v. Kirkpatrick, Case No. A161436 (1^st Dist., Div. 3 September 13, 2021) (unpublished), defendant appealed the trial court’s award, under Code Civ. Proc., § 527.6(s), of $23,162.50 in attorney fees to prevailing civil harassment plaintiff – arguing the trial court abused its discretion by awarding excessive fees.

            The 1/3 DCA disagreed and affirmed.  Defendant failed to meet her burden to demonstrate the trial court abused its discretion.  Plaintiff, who sought and obtained a restraining order against defendant, was clearly the prevailing party.  Additionally, after considering the complexity of the case and the increased attorney’s fees plaintiff incurred due to defendant’s conduct, the trial court acted well within its discretion in awarding plaintiff $23,162.50 of the approximate $70,000.00 she sought in fees.

Costs, Deadlines, Experts, Section 998: 4/2 DCA Dismisses Defendants’ Cross-Appeal Of Trial Court’s Order Granting Plaintiff’s Motion To Tax Majority Of $139,951.97 In Costs And Fees Sought By Defendants Under § 998

Defendants’ Cross-Appeal Was Untimely, And A Separate Appeal, Not A Cross-Appeal, Was Required For Challenging Trial Court’s Order As It Related To Defendants’ Request For Expert Witness Fees.

            In Ramirez v. Barajas, Case No. E071558 (4^th Dist., Div. 2 September 13, 2021) (unpublished), personal injury plaintiff, suing defendants for $1.4 million in damages, rejected defendants’ Code Civ. Proc., § 998 settlement offer of $350,000.  After plaintiff failed to beat that offer at trial (being awarded only $58,311.77, a result plaintiff appealed), defendants moved, under § 998, for costs and fees of $139,951.97 – which included $111,74.88 in expert witness fees.  However, because the trial court found defendants’ request to be deficient in that it failed to identify the date costs were incurred – whether pre or post-offer – it granted in its entirety plaintiff’s motion to tax and awarded defendants only $9,284.39 in ordinary litigation costs. 

            Defendants cross-appealed, but the 4/2 DCA dismissed their cross-appeal due to lack of jurisdiction. 

            First, defendants’ cross-appeal was untimely.  Under California Rules of Court, Rule 8.108(g), the deadline for the filing of defendants’ cross-appeal was within 20 days of the superior court serving them with notice of plaintiff’s appeal.  Defendants filed their notice of cross-appeal 21 days too late.

            Second, plaintiff’s notice of appeal from the judgment did not create appellate jurisdiction over the trial court’s ruling on defendants’ request for expert witness fees under § 998 – which accounted for the majority of fees sought by defendants.  A cross-appeal may challenge only the same judgment challenged by the underlying appeal, and “[a]n award of expert witness fees [under] section 998 is not incidental to the judgment but is instead a separately litigated issue” requiring a separate notice of appeal. (Fish v. Guevara, 12 Cal.App.4th 142, 148 (1993).)

Requests For Admission: $189,532.50 Costs-Of-Proof Sanctions Generally Affirmed With Minor Adjustments

No Motion To Compel Is Necessary Except Under Certain Circumstances And Costs-Of-Proof Sanctions Not Limited To Trial Evidentiary Stages.

            In DeJong v. Beach, Case Nos. C085462/C086526 (3d Dist. Sept. 13, 2021) (unpublished), the Third District affirmed major parts of a trial court’s grant of RFA costs-of-proof sanctions in the amount of $189,532.50.  Here are the takeaways from this case: (1) no motion to compel is necessary to claim costs-of-proof sanctions where the motion would be idle; (2) a motion to compel for certain incomplete answers may be a predicate for costs-of-proof sanctions depending on the facts; and (3) costs-of-proof sanctions are available for post-trial matters beyond evidentiary phases, even for post-trial briefing and attorney’s fees issues.

Indemnity: Apple’s Request For Substantial Attorney’s Fees On Contractual Counterclaims In Epic Lawsuit Denied Because Indemnification Clause Not Broad Enough To Encompass Non-Third Party Claims

Drafting Issues Abound Here—Make It Explicit!

            We thank our AlvaradoSmith colleague Monisha Coelho for bringing the recent ruling in Epic Games, Inc. v. Apple Inc., Case No. 4:20-cv-05640-YGR (N.D. Cal. Sept. 10, 2021) (Doc. 812) to our attention.  It highlights how indemnification clauses must be drafted with extremely clear language to make true attorney’s fees shifting clauses between the parties.

            In this case, the district court judge concluded that Epic did not prove Apple was a monopolist in the digital mobile gaming transactions market, but Apple did engage in anticompetitive conduct under California’s unfair competition laws, warranting specified nationwide relief.  However, Apple also moved to recover substantial fees for defeating contractual counterclaims under a written contractual clause in an Epic agreement.

            The district judge denied fee entitlement to Apple.  She found that the contractual fees clause was too narrow, only encompassing third-party liability given the words “indemnify” and “hold harmless” rather than claims between Apple and Epic.  The federal judge found that there needed to be express language indicating fee recoveries regarding the issue of an action between the parties on a contract was covered, language not present in the germane contract.  (Alki Partners, LP v. DB Fund Services, 4 Cal.App.5^th 574, 600-602 (2016).) 

Appealability, Trade Secrets: Denial Of Attorney’s Fees Under Trade Secret Statute, Before Resolution Of Entire Case, Was Not Appealable For Now

Order Dismissing Appeal Was Recently Published.

            In Dr. V Productions, Inc. v. Rey, Case No. B312605 (2d Dist., Div. 5 Sept. 10, 2021) (published), the appellate court confronted whether the denial of a $273,484.56 attorney’s fees request under the trade secret fee-shifting statute (Civil Code section 3426.4) was appealable where the trade secret claim was dismissed even though other claims were outstanding.

            The appellate court dismissed the appeal because the interlocutory order was not appealable.  In this case, the collateral order doctrine did not apply because this was not a grant of fees ordering payment of money.  The expansive interpretation of the collateral order doctrine was not prudent, especially given that other claims were pending (which did involve trade secrets issues, only under the rubric of other claims).   Put another way, the review of the denial of trade secret fees had to await a further resolution of all claims. 

Interpleader: Interpleading Cross-Complainant, Likely Not A Neutral Stakeholder Given Competing Claims, Properly Denied $450,000 In Attorney’s Fees Where Cross-Complainant Had Use Of $5.5 Million In Fund For Four Years

Interpleading Party Held And Managed The Bond Portfolio Under An Unusual Loan Agreement.

            CCP § 386.6(a) allows a court discretion to award costs and reasonable attorney’s fees to an interpleading party obtaining a discharge.  Because this is an equity-driven decision-making process (Hood v. Gonzales, 43 Cal.App.5^th 57, 71 (2019)), the abuse of discretion standard guides in most situations whether a grant or denial of fees is proper.

            Attorney’s fees were denied to an interpleading cross-complainant in a unique bond portfolio management case, BNY Mellon Bank v. First Foundation Bank, Case No. G059083 (4^th Dist., Div. 3 Sept. 9, 2021) (unpublished) [a 3-0 decision authored by Acting Presiding Justice Bedsworth].  In this sui generis factual setting, the interpleading cross-complainant had use of $5.5 million in funds for four years, with the lower court unwilling to find cross-complainant was a neutral stakeholder giving competing claims against that party by others.  The lower court refused to discharge cross-complainant, preferring to dismiss the cross-complaint and deny a fee request for $450,000.  The 4/3 DCA panel affirmed both determinations.  With respect to fees, two reasons sustained the denial:  (1) there was no discharge of cross-complainant, so the statutory condition for fees was not met; and (2) there was no abuse of discretion given that cross-complainant had the use of the $5.5 million for four years even though trying to use the interpleader action as a chip to obtain a dismissal of a voidable transfer complaint against another party (with the specter of fee exposure under section 386.6(a)). 

Interest: Trial Court Properly Rejected Interest Accruing From An Earlier 2015 Merits Judgment When Fees Were Only Awarded In Early 2019 After A Prior Appellate Reversal Of A Fee Denial

End Result Was That 3 ½ Years Of Interest Did Not Accrue, About A $100,000 Savings.

            In AAWestwood, LLC v. Liberal Arts 677 Benevolent Foundation, Inc., Case No. B302363 (2d Dist., Div. 5 Sept. 8, 2021) (unpublished), the interest accrual for a subsequent fees order was the question facing the appellate court.

            The facts were that Appellant Liberal Arts had obtained a prior money judgment against Respondent AAWestwood in Fall 2015, but the lower court denied Civil Code section 1717 contractual fees.  That prompted an appeal and a reversal; and, on remand, the lower court awarded $280,000 in lower court/appellate court fees to Appellant in early 2019.  However, the lower court denied a request to have interest accrue on the fee award going back to Fall 2015, a 3 ½ years savings of around $100,000.  The 2/5 DCA panel agreed with the lower court.  Because there was a prior reversal of a fee denial and entry of a subsequent fee award, that subsequent award was a separate money judgment from which interest accrued as of the later Early 2019 date.  (Felczer v. Apple, Inc., 63 Cal.App.5^th 406, 415 (2021).)  Respondent was awarded costs on appeal, but no attorney’s fees. 

Civil Rights, Lodestar, Reasonableness Of Fees: $1,113,750 In FEHA Attorney’s Fees In Racial Discrimination/Retaliation Case Garnering $450,001 Compensatory Award To Successful Plaintiff Was No Abuse Of Discretion

Hourly Rate, Lodestar, And Multiplier Conclusions Were Not Beyond Reason.

            Plaintiff in Sterling v. County of Sacramento, Case No. C089616 (3d Dist. Sept. 7, 2021) (unpublished) won $450,001 in compensatory damages under FEHA racial discrimination/retaliation claims.  Plaintiff then moved for over $1.515 million in fees (lodestar plus a positive 2 multiplier enhancement).  The lower court basically sustained the lodestar request, but it instead awarded a 1.5 positive multiplier such that the FEHA fee award was $1,113,750.

            The Third District affirmed the merit and fee results.  The lower court did a proper lodestar analysis, not having to accept “padding” challenges or the defense suggestion that no more than $580,635 should be awarded as fees.  The trial judge awarded an hourly rate of $550 for the lead attorney, which was no abuse of discretion given expert testimony indicating that $650-695 per hour would be justified and given past awards to the attorney above $550.

Arbitration: Superior Court Judge Properly Vacated An Arbitrator’s Correction Of A Fee/Costs Award From The Amount Contained In The Original Final Award

The Miscalculation Was Not Evident From The Face Of The Prior Award.

            Crooymans v. Givner, Case No. B305916 (2d Dist., Div. 3 Sept. 7, 2021) (unpublished) demonstrates how narrow the power of an arbitrator is to correct an arbitration award under CCP § 1286.6(a).  There, children, the executors/trustees of their late father’s estate/trust, filed an arbitration claim against father’s tax planning attorneys.  The attorneys were found liable to the tune of $654,800.  Children then asked for prevailing party attorney’s fees and costs of about $3.2 million, with the arbitrator filing an original final fees/costs award of around $1.738 million.  However, upon a request by children to correct a miscalculation under section 1286.6(a), the arbitrator indicated he failed to factor in a supplemental fee declaration and upped the fees/costs award to about $2.025 million.  However, a superior court judge vacated the correction after finding that there was no miscalculation evident from the face of the final award.

            The 2/3 DCA affirmed the undoing of the arbitrator’s correction.  At the outset, it found that the requirement of a “reasoned award” in an arbitration contract or ADR neutral rules likely does not apply to a fees/costs award, but just to a merit adjudication of claims.  Then, it sustained the lower court’s conclusion because there was no evident miscalculation under case law construing section 1286.6(a).  (Severtson v. Williams Construction Co., 173 Cal.App.3d 86, 95 (1985).) 

Deadlines: Service Of Notice Of Ruling On Post-Trial Motions Did Not Trigger Shorter Post-Trial Motion Appeal Period For Purposes Of Shortening The 180-Day Longest Period To File An Attorney’s Fees Motion

Numerous CRC Provisions And Cases Established The Proper Conclusion.

            We thank the 2/2 DCA panel in Gallop v. Duval, Case No. B308531 (2d Dist., Div. 2 Sept. 2, 2021) (unpublished) for clarifying the deadlines which apply to timely filing of an attorney’s fees motion when posttrial motions have been denied.  Prevailing party filed an attorney’s fees motion which was denied as untimely because it was not made 30 days after notice of the ruling denying a posttrial motion was served.  However,  the fee motion was timely if the longer 180-day period was used assuming that the service of the notice of ruling was not a proper service of “an order denying the [posttrial] motion or a notice of entry of that order” for purposes of CRC, Rule 8.108.  The problem is that the other side only served a notice of ruling on the posttrial motions, not a service of a copy of the actual order or a notice of entry of that order, with the notice of entry stating “Notice of Entry” and attaching a file-stamped copy of the order.  The fee denial on untimeliness was reversed for a merits determination based on the failure to trigger a shorter appeal period within which to file the fees motion. 

Family Law, Fee Clause Interpretation: Wife Properly Allowed Section 217 Sanctions Against Husband For Divorce Decree Enforcement Purposes

However, Lower Court Properly Denied Her Fees On Husband’s Prior Efforts To Set Aside The Martial Settlement Agreement.

            In Marriage of Mirza, Case Nos. G057613 et seq. (4^th Dist., Div. 3 Sept. 1, 2021) (unpublished), husband and wife entered into a marital settlement agreement and divorce decree based upon the agreement.  Husband then attempted to set aside the MSA and decree, but he was ultimately unsuccessful.  The lower court denied wife’s fees relating to husband’s efforts to set aside the divorce decree, but the court did grant wife sanctions of $100,000 under Family Code section 271 to enforce the divorce decree after the set aside effort did not resonate.  The 4/3 DCA, in an opinion authored by Justice Goethals, affirmed.  A nice “line” was drawn by the family law judge, with the set aside efforts not clearly falling within the MSA and with husband’s set aside attempt to rescind being a discretionary call on how to adjust the equities.  However, wife’s subsequent efforts relating to the divorce decree were justified such that the $100,000 award was sustained on appeal.

Employment, Section 998: Section 998 Offer Is Invalid If Employer Did Not Attempt To Pay Undisputed Wage Amounts Before Sending Section 998 Offer

Timing Is Everything—Pay Undisputed Amount Before The 998 Offer Or Pay Later/Issue A New 998 Offer.

            Wasito v. Kazali, Case No. B308826 (2d Dist., Div. 6 Aug. 31, 2021) (published) is must reading for employers wishing to resolve unpaid wage claims through a CCP § 998 offer where undisputed wages are due.

            In essence, employees filed a complaint seeking unpaid wages, including bonuses.  Employers made a $300,000 section 998 offer.  After that 998 offer expired, employer sent a substantial check for unpaid bonuses, interest, and penalties, a check accepted by employees.  A jury found only small amounts still owed to employees, with employer arguing that the 998 offer beat the small amounts awarded by the jury.  The lower court disagreed and awarded employees $66,700 in attorney’s fees for prevailing in small amounts under Labor Code section 218.5, a one-way fee shifting statute. 

            The 2/6 DCA affirmed.  Relying on Reid v. Overland Machined Products, 55 Cal.2d 203, 206-207 (1961), which held that undisputed wages must be paid without condition, the reviewing justices found that the section 998 offer was invalid under the Labor Code provisions requiring payment of undisputed wages.  Although employer did pay the undisputed wages after the 998 offer was not accepted, that was too late as to retroactively validate it.  The employer had two choices, neither of which were met:  pay the undisputed wages before making the 998 offer or make a new 998 offer after paying the undisputed wages.

Common Fund, Costs, Special Fee Shifting Statutes: 4/3 DCA Affirms Large Part Of Trial Judge’s Fee And Costs Rulings In Financial Elder Abuse/Derivative Litigation

Hornet Nest Of Fees And Costs Issues Resolved By Appellate Court.

            We knew right away that Acting Presiding Justice Bedsworth penned Horowitz v. Brown, Case No. G057412 (4^th Dist., Div. 3 Aug. 30, 2021) (unpublished) based on his distinctive writing style.  The appellate court faced a virtual hornet nest of fees and costs issues, with us distilling the ones that we saw of most importance.

            What happened here is that plaintiff was found to be a victim of financial elder abuse and gained some derivative recovery for an entity, but only against some defendants.  Plaintiff was 81 years old and got involved in making investments with her ex-husband’s real estate joint venture partner, which you can likely see led to the litigation which spawned over 5 years and 51 days of a trial.  In the end, plaintiff prevailed on financial elder abuse claims against some defendants and obtained some derivative benefit for an entity, with many of them being in the millions of dollars.  The case resulted in multiple motions for fees and costs, with plaintiff being awarded about $1.411 million in fees against four defendants, nothing in fees for gaining a derivative liability award (because she was advancing her personal interest over that of an entity), and all kinds of split decisions on routine costs. 

            The 4/3 DCA affirmed in major respects, but it reversed and remanded on some issues—the major ones which we highlight now.

            The appellate court agreed that plaintiff primarily recovered against many defendants on a financial elder abuse claim, which carries a prevailing party plaintiff fee entitlement.  Despite some overlap on contractual claims under a partnership agreement, the 4/3 DCA panel found that the financial elder abuse fee-shifting provision had primacy even though there was just a liability finding given that some of the defendants paid the damages earlier—with the 4/3 DCA agreeing with the consistent analysis in Arace v. Medico Investments, LLC, 48 Cal.App.5^th 977, 983 (2020) [a 4/2 DCA opinion].

            Next, some prevailing defendants were entitled to routine prevailing party costs under CCP § 1032, with the financial elder abuse shifting provision not dictating otherwise.  After all, plaintiff only recovered money for an entity derivatively, not herself personally.  (Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4^th 985, 990-991 (1998).)

            However, the reviewing court did remand on whether plaintiff could obtain recovery of denied fees on the derivative claim based on a common fund/substantial benefit doctrine.  After all, in the end, she did bear the fees to obtain the derivative award, with it being unfair to say that she should bear the costs when she did not entirely benefit with most of the advantage going to the entity upon whose behalf she was suing.

            Finally, because various defendants were involved, the costs awards had to be remanded to make sure there was an apportionment as to separate defendants with respect to jointly incurred defense costs.  (Charton v. Harkey, 247 Cal.App.4^th 730, 743-744 (2016).)

Probate: Attorney’s Fees Made Payable By The Trust For Trustee Beating Back Misconduct/Malfeasance Claims As To Trustee’s Accountings Were Proper

Broad Equitable Powers Of The Probate Court So Allowed, Even Though Section 17211(a) Was Denied As A Fee Entitlement Basis.

            In Key v. Tyler, Case No. B298739 (2d Dist., Div. 2 Aug. 30, 2021) (unpublished), trustee successfully defended accountings from charges of misconduct, self-dealing, and malfeasance as brought by a sister beneficiary of a family trust.  The lower court awarded fees to the trustee for prevailing, payable out of the trust, finding subjective bad faith but not that the objection lacked reasonableness—expressly denying fees under Probate Code section 17211(a), a fee-shifting provision we have discussed often as relating to accountings in our “Probate” category.

            The appellate court affirmed.  Beneficiary argued that there was no fee entitlement based on the denial of fees under the statutory provision, but fee entitlement can be based on the probate court’s broad equitable powers to administer the trust.  (Pizarro v. Reynoso, 10 Cal.App.5^th 172, 183 (2017.)  Also, the record showed that the trust was benefitted by putting to bed trustee malfeasance allegations, such that the benefit did not only flow to the trustee. 

Reasonableness Of Fees: Defendant Winning Retaliatory Eviction Action Correctly Awarded Only $2,671.50 Out Of A Requested $26, 715 In Attorney’s Fees

10% Was Reasonable Based On The Defense Not Ending The Dispute Through A Demurrer And Based On Plaintiff’s Indigency.

            Wiles v. McClure, Case No. A161165 (1^st Dist., Div. 3 Aug. 27, 2021) (unpublished) shows how a trial judge can consider numerous circumstances when determining the reasonableness of a requested fee award.

            The defense won a retaliatory eviction action which contained a prevailing party fee entitlement under Civil Code section 1942.5(i).  Defendant requested $26, 715 in attorney’s fees, but only was awarded about 10%--$2,671.50.  That reduction was affirmed on appeal.  The lower court determined that the defense could have litigated much more efficiently by bringing the dispositive issue up through a demurrer rather than a summary judgment motion, not to mention that plaintiff was indigent.  Indigency is a proper factor to consider, Garcia v. Santana, 174 Cal.App.4^th 464, 476-477 (2009), such that this was not an impermissible consideration for purposes of affirming the ultimate award in line with other factors.

Sanctions: Pro-Trump Lawyers Sanctioned For Speculation And “Guesswork” Affidavit Filed In Election Fraud Suit, With Amount To Be Set In A Future Hearing

Opinion Has Some Eloquent Reasoning On Fiduciary Duties/Officer Of The Court Functions By Lawyers.

            We do not like to take political stances in this blog, and this post is no exception.  We have posted plenty of blogs, both pro and con, relating to court disputes involving former President Donald Trump. 

            However, U.S. District Judge Linda V. Parker of the U.S. District Court, Eastern District of Michigan, found that she had to sanction pro-Mr. Trump lawyers in an election suit which was based on speculation and “guesswork” affidavits.  Although the First Amendment does protect a large ambit of rights, it does not immunize lawyers from sanctions imposed by courts, which “are reserved for hearing legitimate causes of action.”  This 110-page decision is instructive reading for all litigators as far as reminding them of their “officer of the court” duties of lawyers when it comes to prosecuting and defending suits.

            BLOG FAVORITE OBSERVATION IN THE CASE—There was a reference to “kracken suits,” which refers to a sea monster in Scandinavian folklore that emerges from the sea to devour its enemies. 

Prevailing Party: General Contractor Winning Net Award Of $74,890 Was The Prevailing Party Such That The Fee Award Of $65,000 And The Costs Award Of $3,600 Was No Abuse Of Discretion

After All, The Trial Court Did Reduce The Request Substantially, And Lack OF Comparative Analysis/Specific Objections Did Not Meet The Burden In Opposing The Fee Application.

            In Avalanche Air, Inc. v. Dwelling Construction, Inc., Case No. B302340 (2d Dist., Div. 7 Aug. 24, 2021) (unpublished), subcontractor sued for nonpayment, and general contractor sued for defective work, with both winning something but the net award being positive for general contractor to the tune of $74,890.  General contractor was the prevailing party, moving for contractual fees of $100,435 and costs of $4,118.  After reducing the hourly rate and adjusting for block billing and duplication, the trial judge awarded general contractor $65,000 in attorney’s fees and about $3,600 in costs.  Subcontractor appealed, not achieving any change in result.  Subcontractor’s challenges to the amount of the fees were unsuccessful because (1) it failed to suggest a fee amount which it believed to be reasonable, (2) it did not comparatively show what it expended in the litigation, and (3) it made no specific objections to individualized fee billing entries or work categories. 

Costs, Deadlines, Fee Clause Interpretation, Lodestar: L.A. Groundwater Case Fee And Costs Awards Remanded For A Revisit By The Fifth District

Variety Of Costs, Fee Entitlement, And Lodestar Issues Explored In This Unpublished Opinion.

            Antelope Valley Groundwater Cases, Case No. F083138 (5^th Dist. Aug. 24, 2021) (unpublished) was a Los Angeles-venued case which produced a global settlement complete with a provision for certain parties to bear attorney’s fees and costs by class counsel.  Class counsel sought to recover $3,348,160 in attorney’s and paralegal fees (4,538.8 hours at $720 per hour for attorneys; 679.5 hours at $110 or $125 per hour for paralegals).  However, the trial judge awarded class counsel $2,269,400 in attorney’s fees and $80,224 in paralegal fees, reducing the attorney requested hourly rate from $720 to $500 per hour.  He also allocated fees among different parties and rejected two parties’ attempts to pay the awards out over time under Government Code sections 984 and 970.6.  He denied a 2.5 positive enhancement request.  The trial judge also taxed over $24,000 in routine costs requested by class counsel, triggering an appeal by the class.

            The Fifth District (although based in Fresno, not Los Angeles, but assigned the case on appeal for neutrality reasons) reversed and remanded with some specific instructions.  With respect to fees, the appellate panel initially determined that the settlement agreement did authorize fee/costs entitlement and then found that the trial judge’s reasoning on the lodestar was unclear, especially as to why the requested hourly rate was discounted downward from $720 and with a “Great Recession” lower rate rationale not explaining why higher rates were not justified from when it ended (2010 going forward).  Equally salient was the fact the lodestar could not be diminished solely or primarily because a governmental entity was the party with fee/costs exposure.  But the lower court did properly allocate fee/costs recovery among some parties and correctly denied the periodic payment requests because a fees/costs judgment was not a tort judgment against a public entity under section 984 and the requesting entities did not show that the L.A. County Board of Supervisors passed a hardship ordinance for purposes of satisfying section 970.6.  Finally, on the routine cost issues, class counsel did not have to use Judicial Council costs memorandum forms (they are optional only), the trial judge impliedly allowed counsel more time to file the costs memorandum, and there were arithmetic discrepancies which the appellate court could not decipher—sending all of this back for a re-do, including a relook at the enhancement request.               

Appeal Sanctions, Costs: 2/4 DCA Denies Requests From Prevailing Party In A Writ Proceeding For Attorney Fees To Be Included As Part Of Costs Award And For An Award Of Fees As A Sanction Against Defeated Party

Attorney Fees Are Not Included As Recoverable Costs Under California Rules Of Court, Rules 8.493(b) And 8.278(d), And A Passing Reference To An Award Of Fees As Sanctions, With No Showing Of Justification For Sanctions, Does Not Qualify As A Motion For Sanctions Under Rule 8.492(a).

            In Harden v. Superior Court, Case No. B311738 (2d Dist., Div. 4 August 19, 2021) (unpublished), defendant prevailing in a petition for writ of mandate, after the trial court declined to comply with the 2/4 DCA’s alternative writ, requested that attorney fees be included as part of the costs he was entitled to under California Rules of Court, rule 8.493(a).  Because attorney fees are not included in the list of recoverable costs under rules 8.493(b) and 8.278(d), and defendant provided no other basis for a fees award, the 2/4 DCA denied his request.  Additionally, the panel declined to consider defendant’s passing reference to an award of fees as sanctions being issued against plaintiff because the reference did not qualify as a motion for sanctions under rule 8.492(a), and defendant had not shown justification for an award of fees as a sanction.

Class Action, Employment: Eighth Circuit Court Of Appeals Reverses $1 Fee Award To Class Counsel Where Some Work Was Done Despite Failing to Segregate Compensatory/Fee Negotiations And Despite Billing Problems

Dissenting Circuit Judge Would Have Affirmed District Judge Fee Award.

            Vines v. Welspun Pipes Inc., No. 20-2168 (8^th Cir. Aug. 18, 2021) is an interesting case which shows how appellate circuit judges can have differing perspectives on approaching class action fee awards.

            What happened in this one is that class action counsel on federal/state wage hour claims, after not much litigation and after limited success on some defendants, had to take three swings at a class action settlement of the wage/hour claims against the main defendant, failing to heed the Eighth Circuit’s prohibition of not settling the merits claims and fees award issue in FLSA cases in tandem.  For purposes of forging a settlement, class counsel basically insinuated to the defense that they would be subject to exposure in much more in unearned fees if the defense did not capitulate, which it did.  The settlement valuation eventually came to around $308,000 (but at least $270,000), with class counsel wanting $96,000 in fees.  The district judge granted only $1 in fees due to certain billing practices and class counsel’s conduct in not segregating merits/fees negotiations.  (If $1 was not the correct amount, the district judge indicated that it would only award $25,000.) 

            The Eighth Circuit, in a 2-1 opinion, reversed.  The majority found that reversal was required because the district judge failed to determine the lodestar (although ruling on the appropriate hourly rates, but not calculating the rest of the equation) and to opine that some amount over $1 was likely due based on class counsel’s efforts.   However, the majority did not hamstring the district judge as far as discounting for unprofessional conduct on the merits/fees negotiations snafu.

            The dissenting judge found the $1 award was no abuse of discretion based on the conduct of class counsel, not condoning those attorneys squeezing extra fees based on the leverage of obtaining future unearned fees from the defense and failing to segregate merits/fees negotiations.

            However, the appeals court refused a reassignment to a different district judge request, such that it will be interesting to see if this is little more than a pyrrhic victory for the plaintiffs’ side.

Private Attorney General, POOF!: Reversal Of CEQA Parking Lot Issue Petition In Entirety Also Vacated Private Attorney General Fee Award

$154,000 In Fees Went POOF!

            The appellate court in Save Our Access-San Gabriel Mountains v. Watershed Conservation Authority, Case Nos. B303494 et al. (2d Dist., Div. 8 Aug. 19, 2021) (published) reversed a CEQA petitioner’s win on a parking lot issue in entirety.  Petitioner had won $154,000 in private attorney general statute fees (used often in CEQA litigation) at the lower court stage, but that went POOF! on appeal with the reversal.

Prevailing Party: Party Not Seeking Fees In Trial Court Cannot Be The Prevailing Party On Appeal

Overall Litigation Picture Must Be Surveyed.

            In Betuel v. Luma Pictures, Inc., Case No. B297030 (2d Dist., Div. 4 Aug. 19, 2021) (unpublished), parties under a settlement agreement reached a resolution on partial ownership in a corporation, with a contractual fees clause being present in the settlement document.  However, one of the litigants who possibly prevailed under the settlement never moved for fees as the prevailing party in the trial court.  It did move for attorney’s fees on appeal, after indicating that it won on appeal (and good guess, which was true).  The appellate court denied the request for appellate fees.  The appeal was not a discrete segment of prevailing unattached to the overall trial result below, with the failure to seek fees at the trial level being the clincher. 

Interesting Survey Results: NALFA Has Issued Its 2020 Litigation Hourly Survey And Report

It Has Detailed Breakdown Of Hourly Rates In 16 Large U.S. Cities, Suburbs Of Those Cities, And Other Cities Not In The 16 Largest City Areas.

            We thank Terry Jesse, Executive Director of the National Association of Legal Fee Analysis (NALFA), for bringing to our attention that NALFA issued its 2020 Litigation Hourly Survey and Report on July 21, 2021.  NALFA conducted an email survey and mined 29,595 data points from 4,106 participants with the help of some of its members/well-known fee experts.  The hourly rate data focused on these categories:  location/venue; years in litigation practice; practice area (including hourly rates for routine versus complex litigation); and law practice size.  The survey took place between August 7 – December 18, 2020.  The hourly rate data was generated for 16 large cities, suburbs of those 16 cities, and cities outside of the 16 large cities.  Here are the sixteen cities involved in this survey, which provides instructive data for the four categories described above:  D.C.; Dallas; San Francisco; New York City; Seattle; Tampa; Chicago; Los Angeles; Miami; Boston; Denver; New Orleans; Philadelphia; Atlanta; Houston; and San Diego.  Given that these surveys are frequently used in fee proceedings, more data like this report is always welcomed by fee experts/analysts. 

Discovery, Sanctions: $17,427 In Sanctions Imposed In Connection With Second Special Interrogatory Objections Were Reversed As A Matter Of Law

The Second Special Interrogatories Were Duplicative Of First Special Interrogatories To Which No Motion To Compel Was Made, So The Lower Court Lacked Jurisdiction To Award Sanctions The Second Time Around.

            We post on this one to share a nifty older case for litigators embroiled in discovery battles to keep in their back pockets.

            What happened in Estate of Huang, Case No. B307671 (2d Dist., Div. 4 Aug. 17, 2021) (unpublished) is that a probate litigant served 723 special interrogatories—yes, you read right—to which no motion to compel was filed after some objections and responses were made.  Not to be deterred, the litigant served 54 special interrogatories in a second set discovery wave which, although smaller in number, were clones of prior special interrogatories in the first set.  The trial court felt shackled when facing some of the objections to the second set of special interrogatories which it deemed were unwarranted, awarding $17,427 in monetary sanctions against the objecting side.  However, the appellate court reversed all the sanctions based on Prof’l Career Colleges, Magna Inst. v. Superior Court, 207 Cal.App.3d 490, 492-493 (1989).  That case established that a trial judge is without jurisdiction to grant sanctions on a second discovery wave which is a “clone” of a first wave for which the time to bring a motion to compel has passed. 

            In a telling footnote, the 2/4 DCA panel also indicated the 723 special interrogatories were excessive and violated the L.A. County Superior Court Civility Guidelines (Local Rules Appendix 3.A(g)(1)), which states that interrogatories are to be used sparingly and not as harassment instruments. 

Probate: Routine And Extraordinary Probate Attorney’s Fees Are Normally Payable Out Of The Estate

Appellate Court Rejected Ordering That Payment Of Fees And Costs Should Come From Personal Representative’s Attorney.

            In the probate area, Estate of Anderson, Case No. A161729 (1^st Dist., Div. 1 Aug. 17, 2021) (unpublished) confirms the general rule that routine and extraordinary probate attorney’s fees are normally payable out of the probate estate.  These expenses are not a personal charge against the executor, much less the executor’s attorney.  (Estate of Wong, 207 Cal.App.4^th 365, 375 (2012); Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore, 162 Cal.App.4^th 1331, 1339 (2008).)  

Allocation: Where Prevailing Litigant Failed To Apportion Compensable And Non-Compensable Fees Where Governing Documents Required A Causal Connection To The Contracts, The Lower Court Did Not Abuse Its Discretion In Denying Fees Altogether

Practice Tip—Think About Apportioning To Avoid The Result Here!

            Stifano v. Slaga, Case No. D077865 (4^th Dist., Div. 1 Aug. 17, 2021) (unpublished) is an example of a case which we do not see often:  a trial judge denying attorney’s fees altogether when a party did not apportion them between compensable and non-compensable claims.

            The start to this case was great and should guide all litigants: “This case underscores the old maxim that it is best not to mix friendship and business.”  What happened here is that two partners opened an Ocean Beach bar and music venue, with one of the partners “fronting” a loan to the other when he could raise his contribution under penalty that the loaning partner obtained the entire business.  Litigation ensued, and the loaning partner substantively prevailed, a result affirmed on appeal.  Here, however, is the rub in this matter:  loaning partner moved for attorney’s fees, but he failed to apportion compensable fees owed by the defaulting partners from non-compensable fees expended in litigating against a third party.  After loaning partner had to admit in fee proceedings that allocation was a legitimate adjustment exercise, the trial judge denied in entirety the fee request.

            That conclusion was affirmed on appeal.  Appellant argued that the contract documents were broad enough to allow for the extraneous fees, but a closer examination showed they had to have a causal connection with the contract dispute between the partners rather than outside parties.  Fee denial affirmed where the other side did no apportionment of fees.

Class Actions: $1.2 Million Class Action Fee Award Remanded For Another Look Where Ninth Circuit Majority Was Convinced Settlement Valuation Was Overinflated And Clear Sailing Provision Indicated Possible Collusion With The Defense

Ninth Circuit Seems To Be Looking At Class Action Settlement Valuations Most Closely, Although Dissenting Circuit Judge Thought District Judge’s Decision Was Adequate.

            We are starting to discern a trend by the Ninth Circuit to scrutinize class action settlements and fee requests with more rigor, as Kim v. Allison (Tinder, Inc.), Case No. 19-55807 (9^th Cir. Aug. 17, 2021) (published) demonstrates, albeit a 2-1 decision.

            In this matter, the district judge approved a cash/redemption pre-class certification settlement which he valued at $24 million, $6 million for injunctive relief and the rest for the cash/redemption component.  He also approved $1.2 million in attorney’s fees to class counsel pursuant to a “clear sailing provision” agreed to by the defense. The Ninth Circuit, in a 2-1 majority decision penned by Judge Rakoff of the S.D.N.Y. (sitting by designation), sent this back for a restudy based on objectors’ challenges.  The majority found that the injunctive relief valuation had no support, and there was reason to believe that the claims rate valued the monetary component at closer to $45,000 rather than a possible $6 million dependent on a dubious 100% claims rate (with the $12 million in Super Likes incentives also not resonating as being achievable, according to the majority).  The clear sailing provision also was disturbing; in tandem with the overvaluation of the class action settlement, the entire thing—including attorney’s fees—needed a more intensive reexamination.

            In dissent, Circuit Judge Callahan found that the $6 million valuation of the cash/redemption component supported the $1.2 million fee award, although she did indicate that the overall settlement might have been overvalued. 

Interpleader: $8,424.80 Interpleader Fee Award Affirmed In Settlement Agreement Dispute

Once Interpleader Found Necessary, Interpleader Losing Party Had To Bear Costs/Fees.

            In Eskenazi v. 301 Culver, LLC, Case No. B302398 (2d Dist., Div. 7 Aug. 16, 2021) (unpublished), a settlement agreement was in controversy, with one party filing an interpleader action relating to contested settlement funds at issue.  Eventually, the interpleading party prevailed and sought costs and reasonable attorney’s fees under Code of Civil Procedure section 386.6(a), a discretionary fee-shifting provision.  The trial judge awarded $8,424.80 in costs and fees out of the $60,523.51 deposited into court.  The appellate court affirmed, finding no abuse of discretion given that the interpleader resolved the dispute over the deposited money.  (Accord, Wertheim, LLC v. Omidvar, 3 Cal.App.5^th 921, 925 [reviewed in our October 2, 2016 post].)

Private Attorney General: $115,000 Fee Award To School District In Winning Charter School Zoning Exemption Dispute Was Affirmed On Appeal

Implied Findings On CCP § 1021.5 Elements Will Suffice Legally.

            The school district in San Jose Unified School Dist. v. Rocketship Education, Case No. H045884 (6^th Dist. Aug. 16, 2021) (unpublished) successfully challenged a charter school zoning exemption, in a lower court ruling affirmed in an earlier published appellate decision.  The District then obtained a $115,000 attorney’s fees award under CCP § 1021.5, California’s private attorney general statute.  That award was affirmed on appeal.   Even though there was no express finding of a public interest, the trial judge made an implied finding, which was sufficient.  On the significant benefit element, that also was satisfied because the charter school element is a charged issue, and the Legislature must be approached to make inroads into giving increased public school facility access to charter schools.  Finally, on the financial interest, there was one, but the benefit to the District was speculative as far as financial savings given that charter schools were allowed to operate, but only not allowed to operate in particular locations. 

Preemption: Federal Crop Insurance Act Requires Ranchers To Obtain Determination From Federal Crop Insurance Corporation To Seek Extra-Contractual Damages, Fees, Or Expenses

Case Demonstrates How Agricultural Cases Are Subject To Governmental Regulations.

            Although not directly involving an attorney’s fees or costs issue, we still post on Sunset Ranches, Inc. v. NAU Country Ins. Co., Case No. F078916 (5^th Dist. Aug. 16, 2021) (unpublished) because it shows how agricultural litigation disputes may face federal preemption principles.  In this one, the dispute concerned a cherry orchard rancher’s insurance claim under the Federal Crops Insurance Act which was properly ordered to arbitration.  The rancher’s extra-contractual claims got bounced by virtue of Federal Crop Insurance Corporation regulations which required an initial determination that it could recover damages, fees, or other expenses in court, a determination never obtained by the rancher.  The Fifth District affirmed, recognizing that preemption did apply to attempts to obtain fees and costs under this very specific statutory/regulatory scheme.  (Wanamaker Nursery, Inc. v. John Deere Risk Protection, Inc., 364 F.Supp.3d 839, 848-849 (E.D. Tenn. 2019).) 

Appeal Sanctions, Judgment Enforcement, Tort Of Another: Judgment Creditor Denied Contractual, Statutory, Or Tort Fees Where Thrust Of Dispute Involved Claim Under A Separate Contract Not Involving Judgment Debtors And Having No Contractual Fees Clause

Attorney Was Not A Party To The Judgment Collection Settlement Agreement And Defenses Asserted In An Answer Do Not Provide A Tort Of Another Damages Predicate; Appellate Sanctions Request Denied. 

            Bush v. Cardinale, Case No. A159689 (1^st Dist., Div. 4 Aug. 13, 2021) (unpublished) was a situation where a judgment creditor reaching judgments against and an agreement with certain judgment debtors, but then had to defend judgment creditor’s former attorney’s suit requesting a certain percentage of proceeds from the judgment creditor-judgment debtors’ settlement based on a separate contingency agreement among judgment creditor, attorney, and another attorney.  Attorney was not a party to the settlement agreement, and judgment creditor only alleged defenses in attorney’s action as a potential setoff.  Former attorney lost in her action, with no damages awarded to anyone.  However, judgment creditor requested attorney’s fees against former attorney based on the post-judgment enforcement statutes (CCP § 685.040), on the tort of another doctrine, and on a contractual fee provision under the settlement agreement.  The trial judge denied the fee requests.

            The 1/4 DCA affirmed.  The appellate court concluded former attorney’s action was too attenuated to be an “enforcement” action relating to the earlier judgments against judgment debtors, given that former attorney’s lawsuit did not challenge the prior judgments and did not challenge the settlement agreement, but only sought to enforce rights under a separate contingency fee agreement.  The “tort of another” doctrine did not succeed because judgment creditor did not allege any affirmative claims against former attorney (just answering) such that there were no damages which could be pled and proven under the doctrine.  Finally, the contingency fee agreement had no fees clause, with nothing in the settlement agreement indicating that former attorney was a party or third beneficiary to the settlement agreement. 

            Former attorney filed a frivolous appeal motion, but that request was denied because the case was convoluted and there was enough plausibility to some arguments given the uniqueness of the case circumstances. 

Reasonableness Of Fees: $943,250 Fee Award To Title Company Under Contractual Fees Clause Was Not Excessive

Title Company Requested $1,851,575 Lodestar Request, Substantially Reduced By The Lower Court—Ultimate Award Was No Abuse Of Discretion.

            In Meridian Financial Services, Inc. v. Phan, Case Nos. D078586/D078589 (4^th Dist., Div. 1 Aug. 10, 2021) (published), Chicago Title won a summary judgment in a dispute where there was a prevailing party fees clause in lender’s escrow instructions signed by the main plaintiff.  Title insurer moved for $1,851,575 in attorney’s fees as the lodestar request, with the lower court ultimately awarding only $943,250.  Appellants’ challenge to the fee award was unsuccessful—after all, under Serrano, the lower court did substantially reduce the fee request, a viable option even if it did not expressly conclude the fee request was inflated in nature. 

Ethics: 4/3 DCA Justice Fybel Provides Tips For Judges To Avoid Ethical Issues

OCBA ZOOM Meeting On August 5, 2021 Provides Some Nice Guidance.

            On August 5, 2021, Justice Richard Fybel provided a symposium for lawyers and judges on how California judges (and lawyers, for the matter) should ethically guide themselves, both in court and out of court, under the California Code/Canon of Ethics.  Here are the highlights:

• • • The Code of Ethics are disciplinary, not aspirational, so they are mandatory in nature for judges, with the Commission on Judicial Performance having ultimate authority on most issues with respect to judges.
    • California has not adopted the ABA Model Code on ethics, so it is not dispositive but might be persuasive in some areas.
    • Justice Fybel held up the “California Judicial Conduct Handbook,” which should be consulted by all judges as far as conduct and performance are concerned.
    • He indicated what he considered mandatory and ancillary rules on judicial decision-making—honesty and integrity in decision-making; follow the rule of law; explain an opinion with detailed reasoning (not saying “we disagree” without specifying why); and judges/justices having accountability for their decisions.
    • Here are tips for both trial and appellate attorneys:  do not engage in ex parte communications, because cases should be decided on the record; avoid social media interactions; do not accept gifts by a party or a counsel to a party with very limited exceptions; judges can endorse or oppose judicial races, but not non-judicial races; if a judge’s decision is contested, that judge can respond in a way so as to not affect the ultimate outcome (“fair administration of the case”), but a defense is now allowed—judges can prudently respond; and judges have discretion to report attorneys to the State Bar or criticize them, less than reporting to the Bar.