CALIFORNIA ATTORNEY'S FEES

Civil Rights: Second District Affirms $46,800 Attorneys’ Fees Award Against Unsuccessful Whistleblower Plaintiff

A Lawsuit Brought In Bad Faith With Several False Statements In His Complaint Sealed The Deal For This Plaintiff.

            In Marciano v. City of Los Angeles, Case Nos. B287477 and B288907 (2d Dist., Div. 8 November 4, 2019) (unpublished), two police officers brought a whistleblower lawsuit against the City of Los Angeles claiming retaliation for reporting that they were subjected to an unlawful ticket quota.  After deposition testimony revealed that several statements made in their complaint were untrue, one of the plaintiff officers dismissed himself from the lawsuit.  Afterward, the City filed a motion for summary judgment against the remaining officer.  During a meet and confer one month later, City informed the remaining plaintiff officer that it seek to recover attorney fees under Code Civ. Proc. section 1038 should he continue to pursue his claim.  Instead of dismissing his suit, the officer filed his opposition to City’s motion for summary judgment.  After oral argument, the trial court ruled in City’s favor on the summary judgment motion based on the officer’s failure to show two of the three required grounds, under Labor Code section 1102.5, for a whistleblower retaliation case - (1) that City’s acts subjected him to adverse employment actions; and (2) that he failed to establish causation.

            City then successfully moved for $46,800 in attorneys’ fees.  The officer appealed both the summary judgment grant and the attorneys’ fees award.

            The 2/8 DCA affirmed.  First, the officer had forfeited his challenge against the trial court’s grant of the summary judgment by failing to address the trial court’s ruling on the causation issue in his opening brief.  Because the officer forfeited his challenge to the trial court’s ruling on causation, the 2/8 DCA did not have to make a decision regarding his challenge against the trial court’s ruling on adverse employment actions.

            As to attorney fees, Code Civ. Proc. section 1038(a) allows for the award of attorney fees against an unsuccessful plaintiff if the action was brought without reasonable cause and good faith.  Here, the 2/8 DCA found substantial evidence showed that the officer did not bring his action in good faith, and therefore did not have to address the reasonable cause issue.

Probate: Beneficiary’s Continuous Bad Faith Objections To Trustee’s Activities and Accountings Cost Him A Surcharge Of $153,245.25 In Attorneys Fees and $11,339.79 In Costs

Beneficiary’s Contention That Trial Court Erred In Concluding His Objections Were Made In Bad Faith Was Not Supported With Evidence Or Authority.

            In Ettinger v. Gaskin, Case No. B287857 (2d Dist., Div. 3 November 4, 2019) (unpublished), two brothers, Roger and Arnold, were beneficiaries to their parents’ trust.  After their father passed, their mother divided the trust into 3 sub-trusts.  She named her grandnephew attorney as successor trustee to one (the “Survivor’s” trust), and Roger and Arnold as co-successor trustees to the other two.  Grandnephew assumed his duties about a year before mother passed and, at some point, also assumed ministerial duties on the other two trusts.

            When grandnephew filed his second accounting for the Survivor’s trust, Roger filed objections – just as he had unsuccessfully done with the first accounting and the accountings filed for the other two trusts.

            Substantial evidence presented at trial showed Roger as having malicious intent, his  continuous efforts to obstruct Arnold’s and grandnephew’s attempts to administer the trusts, his efforts to hire an assassin to kill Arnold and Arnold’s wife, and Roger’s efforts to sabotage other litigation matters related to the mother’s estate.  Additionally, Roger’s visitations with his mother before her death had been court restricted. 

            To perform his duties as successor trustee, grandnephew had hired two attorneys to represent him – one specializing in estate law and elder abuse, the other in estate law and accounting.  The two attorneys provided reasonable explanation and careful analysis for their billing practices and apportionment of litigation issues between them – which the trial court found to be reasonable under the circumstances.  Roger’s testimony, however, was found to be “manifestly not credible” and “patently false” by the trial court.

            In the end, all fees and costs in the second accounting were approved, and all of Roger’s objections were overruled as being made without reasonable cause and in bad faith.  Grandnephew filed a petition requesting a surcharge amount against Roger’s share of the Survivor Trust, of $153,245.25 in attorneys’ fees and $11,339.79 in costs – which was granted in full.

            Roger apparently found the trial court’s decision objectionable because he appealed.  However, he went to the appellate court without evidence, argument, or authority supporting his contention that the trial court erred in its conclusion that his objections were unreasonable and made in bad faith.  Instead, he complained that the trial court had denied his request for a trial continuance and had excluded an exhibit at trial.

            When this happens, the appellate court may decline to consider the issue and treat the appellant’s contentions as waived.  However, the 2/3 DCA addressed the appellant’s contentions – despite the shortcomings in the appellate brief.

            First, his complaint about the denial of the trial continuance – made on the day before trial – was without merit.  Roger had requested a 60-day continuance to allow his attorney, who had substituted into the case, to get up to speed with the case.  This motion was renewed on the day of trial with Roger’s attorney informing the court that a 7-day continuance would suffice.  The 7-day continuance was granted over the objections of Arnold and grandnephew.

            Next, the 2/3 DCA found no abuse of discretion in the trial court’s exclusion of one exhibit.  The exhibit was a declaration that was not included on the joint exhibit list, had not been shared with opposing counsel, and did not pertain to the main issue at trial.  Therefore, there was also no prejudice to Roger in the exclusion of this exhibit.

Family Law: Singer/Actor Tyrese Gibson Achieves $47,485 Reduction To Needs-Based Attorneys Fees Awarded To Ex-Wife Based On Trial Court’s Calculation Error

Significant Disparity Between The Parties' Income And Assets Mandated The Fee Award.

            In In re Marriage of Gibson, Case No. B294875 (2d Dist., Div. 1 November 1, 2019) (unpublished), ex-wife sought $170,890 in Family Code §§ 2030 and 2032 needs-based attorneys fees when ex-husband, singer/actor Tyrese Gibson, moved for a move-away order to allow him to move their daughter to his home in Atlanta, Georgia.  The trial court, looking to avoid a lot of back-and-forth on the fees issue throughout the duration of the litigation, requested a declaration from ex-wife’s attorney itemizing the specific anticipated legal work to be conducted through trial on the move-away petition.   

            After a 51-hour reduction for unnecessary/ unreasonable time and for time to be spent on work irrelevant to the move-away petition, the trial court ordered Mr. Gibson to pay $147,140 in ex-wife’s attorneys’ fees through a schedule of installment payments set forth in the order.  The trial court further ordered that – should Mr. Gibson’s move-away petition be successful, and he subsequently seek an order modifying child support – he pay an additional $14,725 in needs-based attorneys’ fees.

            Mr. Gibson moved for a new trial regarding the fee award, but his request was denied as an improper remedy as no “trial” had been held – with a motion for reconsideration being the appropriate vehicle.  Additionally, the trial court issued an order conditioning its further consideration of Mr. Gibson’s move-away petition on compliance with the attorney fee award.

            Mr. Gibson appealed – claiming the trial court: (1) failed to consider his monthly expenses and obligations, including his own attorney fees; (2) had improperly viewed his real property assets as a source of funds; (3) had abused its discretion in awarding fees because of wife’s ability to pay some of her own legal expenses; (4) abused its discretion by requiring him to pay additional fees if he succeeded on his move-away petition and sought a child support modification; (5) ordered fees in an amount greater than what it deemed reasonably necessary; and (6) that the installment schedule set forth in the order was not manageable.

            The 2/1 DCA rejected Mr. Gibson’s arguments and affirmed, with one exception – that the attorney fees award be reduced to $99,655 due to a calculation error made by the trial court, and that a new installment schedule be entered in line with the reduced amount.

            There was no abuse in discretion in awarding attorneys’ fees to ex-wife under sections 2030 and 2032.  Significant income disparity brought section 2030 into play – which allows an award of attorneys fees even if the party receiving the award has some ability to pay – in order to assure parity in the parties’ legal representation.

            The 2/1 DCA found that unlike the trial courts in In re Marriage of Keech (1999) 75 Cal.App.4^th 860 and Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238, the trial court here had not failed to consider Mr. Gibson’s expenses and other obligations, and ability to afford his own attorney.  It further agreed with the trial court – that even if Mr. Gibson had a monthly shortfall in meeting the scheduled payments, he has the ability to obtain funds through the approximate $1.8 million equity in his homes, his $100,000 bank account, and the ability to adjust his discretionary expenses.  Following the reasoning in Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238, 255, the 2/1 DCA found the trial court appropriately considered the equity in Mr. Gibson’s real property assets in determining his ability to pay.

            Finally, there was no error and no abuse of discretion as to the trial court’s contingent fee order tied to, and derived from, the success of Mr. Gibson’s move-away petition. If Mr. Gibson’s move-away petition were unsuccessful and he, therefore, did not seek a modification in child support as a result thereof, the contingent fee order would not come into play.  Fee awards under section 2030 necessitate that courts make educated estimates on work yet to be performed, and provides them the discretion to do so.   The trial court had reduced from ex-wife’s attorneys’ fees request the amount anticipated to conduct financial discovery.  Financial discovery would, however, become necessary if Mr. Gibson moved for a modification of child support as a result of the move-away outcome.  Having the fee information for the financial discovery already before it, the trial court simply shifted the burden, with respect to fees, to Mr. Gibson.  It would be up to him to request a revision to that fee award before filing a modification request.

SLAPP: Despite Voluntary Dismissal Without Prejudice And Filing Of Parallel Federal Case, SLAPP Moving Defendants Entitled To Recovery Of Some Mandatory Fees

However, As Against One Defendant, SLAPP Fees Not Allowable On Plaintiff’s Intentional Infliction Of Emotion Distress Claim.

            In Astre v. McQuaid, Case No. A154945 (1^st Dist., Div. 2 Oct. 31, 2019) (unpublished), defendants filed a SLAPP motion against plaintiff’s state court complaint, with plaintiff choosing to voluntarily dismiss it without prejudice and seeking relief under a parallel federal court action.  Defendants moved for SLAPP fees, perfectly proper after even a voluntary dismissal, with the trial judge having to adjudge the merits of the SLAPP motion (to determine if the defense would have won) and then ultimately awarding $5,319.82 in SLAPP fees to defendants.

            Most of the fees award was affirmed on appeal, except on one claim as to one defendant.

            Plaintiff mainly argued that the fees motion was premature, but that was doomed by the nature of the SLAPP process which allows a court to assess the merits and award fees if the SLAPP motion was meritorious.  In this regard, the 1/2 DCA followed the reasoning in Tourgeman v. Nelson & Kennard, 222 Cal.App.4^th 1447, 1452, 1457 (2014), which held that a SLAPP merits determination was a prerequisite before awarding fees under a dismissal situation, expressly disagreeing with a more non-merits discretionary perspective expressed in Coltrain v. Shewalter, 66 Cal.App.4^th 94, 107 (1998).  The trial judge did not err in following Tourgeman over Coltrain.  With respect to the precise prematurity argument, the appellate court rejected it because “[under plaintiff’s] position, a motion for attorney fees could be postponed indefinitely if the plaintiff claims its objectives might still be achieved by different, unidentified means in the future, but this result would not serve the purposes of the anti-SLAPP statute, which include ending SLAPPs early and without great cost to the SLAPP defendant.”  (Slip Op., p. 10.) 

            Nevertheless, because the intentional emotion distress claim was not necessarily lacking in merit on the second step of the SLAPP analysis, the award against one defendant has to be revisited on remand.

Sanctions: Fourth District Affirms Monetary Sanctions Imposed Against Plaintiffs And Their Attorney For Abuse Of The Discovery Process

Appealing The Order Without A Reporter’s Transcript And With Only Partial Excerpts From The Clerk’s Transcript Proved To Be A Fatal Flaw.

            In Williams v. Hernandez, Case No. E071599, (4^th Dist. Div. 2 October 28, 2019) (unpublished), plaintiffs and their attorney challenged a monetary sanctions order issued against them for repeated failures to respond to discovery requests and attend scheduled depositions.

            To support their position, they provided the Fourth District with an inadequate record and no reporter’s transcript.  As a result, the 4/2 DCA deemed their argument forfeited.

            Additionally, the 4/2 DCA found no abuse of discretion upon review of the partial record that was provided.  Rather, the limited record established the abuse of the discovery process and provided ample grounds for the trial court’s order.

            BLOG COMMENT:  If you are appealing an order on an abuse of discretion standard, as here, it is essential to provide an adequate record for review – including a reporter’s transcript.

Family Law: $48,000 Needs-Based Attorney’s Fee Award Affirmed Against Husband Asserting No Monthly Income

Bank Records Showed Husband Had Monthly Non-Taxable Income of $62,896.86

            In Marriage of Gu and Gao, Case Nos. B290406 and B292480 (2d Dist., Div. 1 October 28, 2019) (unpublished), couple met in Hong Kong and began living together in 2015, coming to the United States in 2016 when husband sought political asylum.  They settled in California in April 2016, had twin daughters a month later, then married in December 2016.  Four months later, husband filed for divorce.  He was arrested the same day on suspicion of domestic violence. 

            During their time together, the couple had enjoyed an “extremely extravagant and affluent lifestyle” paid for entirely by husband.  Wife did not work and had few assets.

            When wife requested temporary spousal support, child support, and a needs-based attorney’s fees award, husband claimed he had no income.  He provided a 5-month period of bank statements showing deposits that averaged only $773.12 per month.  However, evidence provided by wife showed husband owned numerous businesses, had recently sold $4.1 million in stock, and had deposited a total of $754,762.32 into the couple’s joint checking account in the year preceding his dissolution petition.  After reviewing the evidence and hearing testimony from husband and wife, the trial court found that husband had complete and total access to money up until he petitioned for dissolution.  Husband was ordered to pay monthly temporary support of $13,356 in child support and $8,000 in spousal support, and $48,000 in needs-based attorney’s fees.  Husband appealed.

            Husband argued that the trial court should have calculated support based on the 5-month period of bank statements showing deposits of only $773.12 per month.  The 2/1 DCA disagreed – citing In re Marriage of Riddle (2005) 125 Cal.App.4^th 1075, 1083 [“It is a manifest abuse of discretion to take so small a sliver of time to figure income [for support orders] that the determination essentially becomes arbitrary”] – and found no abuse of discretion in the trial court’s orders.

Allocation, Civil Rights, Employment: No Abuse Of Discretion Where Trial Court Held Employer And VP Jointly And Severally Liable For Attorney Fees With No Apportionment Nor Statutory Fees Cap For CMIA Claim

Former Employee Achieved Her Litigation Objectives With Set Of Facts Common To All Causes Of Action.

            In Gwin v. Natvan, Case No. B292990 (2d Dist., Div. 1 October 1, 2019) (unpublished), former employee sued employer and its vice-president (husband of employer’s owner) asserting 13 separate causes of action – several of which allowed her to recover reasonable attorneys’ fees if she prevailed. 

            After phase 1 of a bifurcated bench trial, the trial issued tentative rulings finding in former employee’s favor on 9 of 10 causes of action against employer, and 2 of 11 claims against VP.  The parties then settled before the remaining issues were tried.  The settlement agreement included $170,000 payable by employer and VP, employer’s and VP’s guarantee of the settlement payment, and it preserved attorney fees claim for later resolution through motion practice.

            Former employee then moved for an attorneys’ fee award of $1,214,340, which included $821,940 in lodestar fees and multiplier fees of $392,400.  The trial court awarded the lodestar with no multiplier, “as reasonable and warranted” without further explanation, against employer and VP jointly and severally. Employer and VP appealed. 

            VP argued it was error to hold him jointly liable for the full fee award because the tentative ruling exonerated him on most claims – with the only claim for which he was found liable, that provided for an attorneys’ fees award, being the Confidentiality of Medical Information Act (CMIA) claim which puts a $1,000 cap on recovery of attorney fees (Civ. Code § 56.35).   The 2/1 DCA disagreed and, in paraphrasing Yogi Berra, put it this way, “[A] trial ain’t over till it’s over.”  VP was focused on the tentative ruling, but that was not the end of the case, the tentative was never finalized, another phase had yet to be tried, and the parties entered into a settlement agreement wherein employer and VP agreed to payment of settlement proceeds – without allocation or severance of their liabilities – on multiple causes of action in addition to the CMIA claim. Because VP had agreed to be jointly responsible for payment on claims other than the CMIA claim, there was no abuse in discretion holding VP jointly and severally liable for the fees award.

            Both employer and VP argued that the trial court erred by failing to apportion fees between claims for which fees were statutorily authorized and those for which fees were not, and by failing to enforce the statutory fees cap on the CMIA claim.  The 2/1 DCA, again, disagreed – finding former employee’s causes of action to be so intertwined, with her causes of action based on a common set of facts, that apportionment was not required.  As to the $1,000 cap for the CMIA claim, the 2/1 DCA found that section 56.35 did not require apportionment, that employer and VP failed to show that the ultimate fee award would have differed if the CMIA claim were apportioned and capped, and that “[a]pplying the CMIA to limit fees on work inextricably intertwined with other claims on which [former employee] prevailed and would otherwise be entitled to recover attorney’s fees would burden, not encourage, the enforcement of statutory rights.” 

Experts, Probate: First District Affirms $24,755.60 Expert Costs Award And $180,285.25 Fees Award, Which Included $8,245 In Fees On Fees, To Defendants Successfully Contesting Decedent’s New Will

Plaintiff Seeking To Probate New Will Was Decedent’s Long-Time Attorney Friend Who Drafted And Benefited From New Will.

            A person challenging the validity of a will on the grounds of undue influence or lack of testamentary capacity bears the burden of proof under Probate Code § 8252(a).  This burden shifts, under Probate Code § 21380, when a presumption of undue influence arises from the challenger’s showing that the person accused of undue influence (1) had a confidential relationship with the testator; (2) actively participated in procuring the instrument’s preparation or execution; and (3) would benefit unduly by the testamentary instrument. (Rice v. Clark (2002) 28 Cal.4^th 89, 97.)  When this happens, the proponent of the will has the burden of proving the absence of undue influence.  If he/she cannot, Probate Code § 21380(d) mandates the beneficiary to bear all costs of the proceeding, including reasonable attorney’s fees.

            This is what happened in Laguatan v. Pablo, Case Nos. A152115, A152250 (1^st Dist., Div. 3 Sept. 30, 2019) (unpublished).  Here, decedent executed a holographic will that left most of his estate to his two cousins.  Seven months later, he was admitted to a hospital suffering sepsis, pneumonia, heart failure, senility, and other ailments.  During this time, his long-time friend, a California-licensed immigration attorney, had him execute a new will that the attorney had actively procured.  The new will revoked the holographic will, reduced the gifts to the cousins, named attorney friend as the sole executor, and provided attorney friend the residue of the estate – after payment of debts and distribution of specific gifts – to “manage and dispose of . . . according to guidelines relating to Christian humanitarian charitable principles which we both agree on and accede to.”  The new will provided no oversight for management and disposal of the residual estate assets.

            When attorney friend sought to probate the new will, the cousins successfully challenged on the grounds of undue influence and lack of testamentary capacity, and successfully moved to have the holographic will admitted to probate.  Cousins’ successful challenge triggered fees and costs under § 21380(d), and the trial court awarded them with $27,427 in costs, which included $24,755.60 in expert costs, and $180,285.25 in fees after a $7,950 reduction for some duplication.  The fees award included fees on fees in the amount of $8,245.

            Attorney friend appealed the trial court’s judgment denying his petition to probate the new will and the post-judgment award of fees and costs, but the 1/3 DCA affirmed – finding the trial court had properly applied the presumption under section 21380 and had not abused its discretion in the post-judgment fees/costs awards. 

            Attorney friend’s arguments that the fees were excessive with too many hours billed, too many timekeepers, inflated rates for the attorneys and paralegals, vague time entries, non-compensable clerical work, and block billing went nowhere as he failed to meet his burden to point to the specific items he challenged, with sufficient argument and citations to the record.  The 1/3 DCA agreed with the trial court’s findings that fees were driven up by Friend’s own actions – meritless summary judgment motion and evidentiary objections, two trial continuances, and refusal to enter stipulations of undisputed facts.  Cousins had submitted detailed billing records and declarations in support of their initial request for fees and subsequent request for fees on fees.  As to attorney friend’s argument that the costs award was excessive and that the expert billed for two trial days, even though testifying on only one day, the 1/3 DCA found no abuse of discretion.  The expert fees were driven up by attorney friend’s actions – requesting a continuance on the day the expert had arrived prepared to testify. The continuance caused the expert to prepare for and attend a second trial day and testify when trial resumed over four months later.

Judgment Enforcement, Prevailing Party: Trial Court Properly Denied Plaintiff’s Motion For Attorney Fees In An Action Brought Under The Uniform Foreign-Country Money Judgments Recognition Act

The Foreign Judgment Was Never Recognized In The California Court Given The Parties Entered Into A Settlement Agreement Prior To A Determination On The Request For Recognition.

            The Uniform Foreign-Country Money Judgments Recognition Act (Code Civ. Proc., § 1713 et seq.) (UFCMJRA) allows California courts to recognize and enforce judgments entered by courts in foreign countries.  However, recognition of a foreign judgment is not a foregone conclusion.  Rather, the party seeking recognition and enforcement of a foreign judgment must first file an action in trial court, and has the burden of establishing that the foreign judgment is entitled to recognition.  Once this burden is met, the opposing party then has the burden of establishing that a ground for nonrecognition exists.

            In Vischer AG v. Appollo Enterprise Solutions, Case No. B289410 (2d Dist., Div. 1 October 25, 2019) (unpublished), plaintiff brought a motion under UFCMJRA based on a judgment entered in its favor by the Commercial Court of the Canton of Zurich, Switzerland.  Defendant opposed the request for recognition and enforcement, but settled the dispute with plaintiff, approximately eleven months after the action was initiated, for slightly more than half of the amount plaintiff sought.

            Plaintiff then moved for an award of attorney fees for the UFCMJRA action claiming entitlement as the prevailing party for having achieved more than half of what it was seeking in the California action.  The trial court denied – determining that “[i]n a settlement there’s no prevailing party,” that there was no statutory basis for awarding attorney fees in this case, and that the Swiss judgment had never been recognized under the UFCMJRA as the action was dismissed following the parties’ settlement agreement.  

            On appeal, plaintiff argued that it was entitled to attorney fees for its judgment enforcement efforts under Swiss law and was therefore entitled to the same under the UFCMJRA.  The Second District disagreed.  The Swiss judgment had no force in California courts because it was never recognized under the UFCMJRA, and therefore could not provide a basis for an award of attorney fees. 

            BLOG COMMENT – The 2/1 DCA referenced its earlier decision Wertheim LLC v. Currency Corp. (2019) 35 Cal.App.5^th 1124, 1131 in applying the standard of review for statutory entitlement to attorney fees.  Co-contributor Mike was one of the appellate counsel on the Wertheim case which was discussed in our June 10, 2019 post.

SLAPP: Fourth District Affirms $26,828.41 Fees/Costs Award To Successful SLAPPing Defendant Finding No Abuse Of Discretion

Plaintiff Real Estate Developer Failed To Provide The 4^th District With Any Evidence That The Award Was Excessive Or Biased.

            In SCPB Holdings v. Taggett, Case No. D074991 (4^th Dist., Div. 1 October 25, 2019) (unpublished), plaintiff real estate developer sued defendant and others for contractual interference and defamation, among other claims, after a home buyer canceled his contract with it to purchase a residential property in San Diego. 

            Defendant followed in the steps of two of her co-defendants and successfully SLAPPed back – upheld in unpublished May 24, 2019 opinion.  She then moved for attorney fees/costs of $32,360.82 for which the trial court awarded $26,828.41 after deduction for 10 hours work spent researching and drafting the anti-SLAPP motion, noting that “counsel was able to benefit from the [codefendants’] motion.”

            On appeal, plaintiff argued that the fees/costs award was excessive because defendant’s motion was copied from the co-defendants’ motion, yet provided no evidence that the motions were duplicative.  The Fourth District found this argument unpersuasive as anti-SLAPP motions filed in the same action would be necessarily similar, and the trial court had deducted 10 hours from the requested award for this reason.  Plaintiff also argued that the fees/costs award was motivated by bias, but provided no evidence to support this claim.

            As the Fourth District put it, “[Plaintiff] simply disagrees with the trial court’s decision, which is manifestly not a basis to overturn an award of attorney fees and costs.”

Prevailing Party, Section 1717: Base Dispute Over $515 Ballooned Into Dispute Over $50,858.50 Fee Award In Favor Of Prevailing Parties, One A Nonsignatory To An Invoice

Can’t Make It Up, With A Nonsignatory Being Entitled to Fees Had The Other Side Won Against The Nonsignatory.

            You really cannot make up some of the decisions we post on.  Ehiemenonye v. Escobar, Case No. B285915 (2d Dist., Div. 8 Oct. 23, 2019) (unpublished) clearly falls in this category.

            As unbelievable as it sounds, this case stemmed from plaintiff’s failure to pay a $515 balance on her account which resulted in her not being able to claim some vehicles being shipped from Nigeria.  Then, litigation ensued, with plaintiff not prevailing against various defendants, some of whom were parties to an invoice with an attorney’s fees clause and one of which was a nonsignatory (although plaintiff sued as if the nonsignatory was a contractual party).  Plaintiff lost, was denied attorney’s fees, and was hit with a fee award of $50,858.50 as against some prevailing defendants.

            The judgment and fee award were affirmed on appeal.

            Plaintiff’s argument that she was entitled to private attorney general fees for vindicating a public interest for forcing certain defendants to revive their corporate status did not resonate at all.  After all, this was a private dispute—that argument did not even get to first base. 

            The problem with the attack on the defense fee award was simple:  there was an invoice with an attorney’s fees clause.  With respect to one nonsignatory defendant, plaintiff sued it under the theory that it was a contractual party.  Plaintiff lost that argument such that Civil Code section 1717 reciprocity principles supported the fee award.  (Hyduke’s Valley Motors v. Lobel Financial Corp., 189 Cal.App.4^th 430, 435 (2010).) 

Deed Of Trust: Broad Deed Of Trust Fees Clause Did Allow Fee Recovery To Winning Lender, Successors, And Loan Servicer Chase

However, Looks Like Borrower Waived The Winning Argument That The Deed Of Trust Clause Only Allowed Fees To Be Added To the Loan Amount.

           Fox v. JPMorgan Chase Bank, N.A., Case Nos. B285069/B288282 (2d Dist., Div. 3 Oct. 22, 2019) (unpublished) is a decision which affirmed an attorney’s fees award under a broad deed of trust provision, but sadly shows that borrower may have missed a winning argument which might have led to a different result with respect to the fee award.

            In this opinion, lender, successors, and loan servicer Chase obtained summary judgment against various claims by borrower seeking to cancel or void the loan note and deed of trust.  The summary judgment was upheld on appeal.  The lower court also awarded successful defendants attorney’s fees under a broad deed of trust clause and Civil Code section 1717.

            The fee award, too, was sustained by the appellate court.  The reason was that the deed of trust fees clause was broad enough to cover the claims by borrower such that fees were warranted for the defendants to protect their interests under the note and deed of trust.  It did not matter that Chase was not a signatory to the DOT, because it was sued as if it was a party thereto and was entitled to fees under Civil Code section 1717.  (Chacker v. JPMorgan Chase Bank, N.A., 27 Cal.App.5^th 351, 356 (2018) [reviewed in our September 20, 2018 post].)

            However, borrower may have missed the winning argument.  Borrower failed to raise the argument that fees would only be added to the loan amount, an important distinction requiring reversal of a fee award in Chacker.  In a footnote, the Fox court found this argument had been abandoned or waived. 

Family Law: Famiy Law Judges Are Allowed To Reduce Or Limit A Family Law Attorney’s Real Property Lien Even After The Lien Is Recorded

FLARPLs Are Conditional, With Family Code Section 2034(c) Giving The Lower Court Discretion To Resolve Disputes Over The Propriety Of FLARPs, Including Revisiting The Propriety Of Such Liens At A Later Time.

            Acting Presiding Justice Yegan opened the published opinion in Marriage of Bittenson, Case No. B288233 (2d Dist., Div. 6 Oct. 22, 2019) (published) with this observation:  “Family law practitioners should read this opinion with the following in mind:  ‘[F]amily law court is a court of equity ….”  (E.g., In re Marriage of Boswell (2014) 225 Cal.App.4^th 1172, 1174.)  Appellate attack upon a discretionary trial court ruling is an ‘uphill battle.’  (Estate of Gilkison (1998) 65 Cal.App.4^th 1143, 1448.)”

            With that, the 2/6 DCA panel proceeded to affirm a lower court’s revisiting of a Family Law Attorney’s Real Property Lien (FLARPL), which allows either party in a dissolution action to encumber his or her interest in community real property to pay reasonable attorney’s fees for purposes of retaining/maintaining legal counsel in a dissolution proceeding.  In the particular case before it, husband’s trial attorney recorded three FLARPLs totaling $250,000 as security for the payment of his on-going attorney’s fees.  Wife belatedly filed objections to the FLARPLs, but the objections were moot because they were not made before recordation of the liens.  However, subsequently, the trial court reduced the liens under Family Code section 2034 to protect wife’s community interest in escrow proceeds from the sale of the family residence, ordering husband’s trial attorney to deposit $100,000 of the funds into a blocked account and releasing the remaining $150,000 to the attorney in satisfaction of the FLARPLs.

            The lower court’s discretionary order was affirmed.  Section 2034(c) makes clear that the lien is conditional such that a family law judge can revisit the propriety of a FLARPL at any time and can even expunge or limit the lien.  Obviously, the lower court wanted to protect wife’s interest in escrow proceeds, such that equity was served, and no discretion was abused given the wide berth allowable under section 2034(c). 

            BLOG COMMENT—Interestingly enough, Justice Yegan’s citation to Gilkison (which he authored) is nice, because that opinion colorfully painted the “uphill battle” this way:

"An attorney who prosecutes an appeal from an order addressed to the trial court’s sound discretion is confronted with more than a daunting task.  This is an uphill battle which, absent unusual circumstances, may be equated with confederate General John Bell Hood’s attempt to capture ‘Little Round Top’ at the battle of Gettysburg in the Civil War.   General Hood did not succeed."

Prevailing Party: $159,356.73 Fee Award/$1,729.87 Costs Award Affirmed In Photocopy “Implied-In-Fact”/Services Agreement Litigation In Favor Of Prevailing Defendant/Cross-Complainant

Appellant’s “Implied-In-Fact” Contract Analysis Was Too Crimped In Nature.

            We assume that the losing party in a dispute over provision of photocopying services was not happy when the trial judge awarded the prevailing defendant/cross-complainant $159,356.73 in attorney’s fees and $1,729.87 in costs.  That prompted an appeal, but the result did not change in Wholesome Choice Market, Inc. v. Digitech Business Solutions, Inc., Case No. G056667 (4^th Dist., Div. 3 Oct. 18, 2019) (unpublished).

            Losing party principally argued that there was no contractual basis for a fee award.  However, the record showed that there was a written services agreement with a fees clause and the parties’ conduct did show a continuing “implied-in-fact” agreement justifying a fee award.  The appellate court, in a 3-0 opinion authored by Justice Goethals, found that the distinction between express and implied contracts is not that great, both dependent either on a bargain memorialized in words or on a bargain based on conduct.  The evidence supported the notion that the parties entered into an implied contract that included the terms in the service agreements—including the fee clauses—to which the parties mutually consented.  That fully supported the fees/costs awards.

Trade Secrets: $1.1 Million Fee Award Against Two Defendants And Another $100,000 Against A Third Defendant Affirmed Under Trade Secrets Fee Shifting Statute, Civil Code § 3426.4

Even Though Third Defendant Only Found Liable For $2,287, $100,000 Fee Award Proper Because He Was A Chief Actor In Trade Secret Bad Faith Misappropriation.

            In Applied General Agency, Inc. v. Greenleaf Financial and Ins. Services, Inc., Case No. G055737 (4^th Dist., Div. 3 Oct. 17, 2019) (unpublished), plaintiff won a trade secrets misappropriation case against three defendants, obtaining unjust enrichment awards of $1,026,419 against two defendants and $2,287 against a third defendant (although this third defendant was a chief actor with respect to the trade secrets misappropriation).  The jury determined that the misappropriation was willful and malicious in nature with respect to all defendants.  Later, the trial judge awarded Civil Code section 3426.4 trade secrets statutory fees of $1.1 million against the two defendants and $100,000 against the third defendant—much less than the $3.6 million requested (inclusive of a 1.5 positive multiplier), with reductions made for plaintiff filing the fee motion late and excessiveness of the fee request.

            The 4/3 DCA, in a 3-0 opinion authored by Acting Presiding Justice Bedsworth, affirmed the fee awards.

            Because the first two defendants were found to have willfully and maliciously misappropriated, the $1.1 million fee award was justified as to them.

            That brought the appellate panel to the third defendant’s challenge, which boiled down to the contention that $100,000 was too much because he only was found liable for $2,287.  The problem with this argument is that section 3426.4 is not a prevailing party statute, but one which focuses on bad faith conduct.  Here, the third defendant was found to have willfully and maliciously misappropriated trade secrets given he was a chief actor in the overall conduct resulting in the adverse jury verdict.  The trial judge only awarded 10% of the total fees found reasonable, such that third defendant’s financial condition was considered in fashioning the award. 

Costs: Prevailing Defendant Did Not Have To Raise Winning Arguments Earlier In The Litigation, Through A Demurrer, In Order To Recoup Routine Costs

CCP § 1033.5 Has No Optimal Efficiency Requirement, Only That The Costs Were “Reasonably Necessary” To The Litigation.

            The losing plaintiff on a summary judgment motion contested an award of routine costs in Harris v. VII Pier Pointe Owner, LLC, Case No. B280729 (2d Dist., Div. 4 Oct. 14, 2019) (unpublished).  Plaintiff’s argument was that defendant did not have to wait until summary judgment to raise the winning argument, which could have been made instead through an earlier demurrer.  Plaintiff contended, on this basis, that routine costs were not “reasonably necessary” to the litigation based on the premise the winning argument could have been raised earlier.  The appellate court was not impressed, putting it this way: “[Plaintiff] cites no authority, however, for the proposition that to recover costs, a party must raise its ultimately winning argument at the earliest opportunity. Code of Civil Procedure section 1033.5 does not require absolute necessity or optimal efficiency -- the prevailing party’s costs need only be ‘reasonably necessary.’”  Not to mention, a defendant may have good reasons to not tip its hat on a meritorious argument too early in the litigation or raise it on demurrer only to have a favorable ruling reversed on appeal given the stricter review standards applicable to demurrer dismissals.

Indemnity: Escrow Holder Improperly Awarded Over $61,000 In Attorney’s Fees Under Escrow Instruction Indemnity Clause

Clause Encompassed Third-Party Claims, Not Akin To A True Attorney’s Fees Clause.

            We have a category “Indemnity” which has many cases on the subject matter resulting in a reversal of an attorney’s fees award to a prevailing escrow holder as against the sellers in a real transaction, as in the next case we review.

            What happened in Choi v. Prima Escrow, Inc., Case No. B288871 (2d Dist., Div. 7 Oct. 15, 2019) (unpublished) is that escrow holder was awarded nearly $65,000 in compensatory damages against sellers after a real estate transaction was cancelled, with the trial judge concluding that escrow fees were still owed even after cancellation of the transaction.  The lower court then awarded escrow company $61,692.50 in attorney’s fees under an escrow clause which provided “[w]e agree to save you harmless as Escrow Holder hereunder from all losses and expenses, including reasonable attorney’s fees and court costs sustained by reason of any claim, demand, or action filed, legal or otherwise, which may in any manner arise out of, or from the property which is the subject of this escrow, or out of or from this escrow, before or after closing, notwithstanding anything in these instructions to the contrary, and in addition hereto, we jointly and severally agree to pay reasonable escrow fees therefor.”

            The appellate court reversed the fee award.  Based on de novo contractual review, it determined that the provision was a third-party indemnity clause, not a true attorney’s fees clause applicable between principals (the sellers) and the escrow company.  (Cf. Campbell v. Scripps Bank, 78 Cal.App.4^th 1328, 1332, 1336 (2000).)

Liens For Attorney Fees, Prevailing Party: Assignee, Principal Of Client, Had Standing To Bring Declaratory Relief Action As To Contractual Attorney’s Lien Claimed By Prior Counsel

Given Reversal Of Judgment On The Pleadings On This Issue, There Was No Prevailing Party Yet Such That Law Firm Properly Denied Attorney’s Fees.

            In Roth v. Epps & Coulson, LLP, Case Nos. B285265 et al. (2d Dist., Div. 4 Oct. 15, 2019) (unpublished), prior counsel of record ran into a rift with their corporate client, which transferred the rights to the lawsuit to the client’s principal.  A settlement was reached through a different attorney, with the principal being a party to the settlement and with the settlement subject to prior counsel’s attorney’s lien which had been filed earlier.  A trial judge found that principal had no standing to file a declaratory relief claim relating to the attorney’s lien after malpractice claims were dismissed.  Prior counsel moved for attorney’s fees in defeating the principal’s action, a request which was denied.

            On appeal, the 2/4 DCA decided that principal, as assignee, did have standing to bring a declaratory relief action on the claimed attorney’s lien, a claim which was separate from the malpractice claims.  That resulted in a reversal of the judgment on the pleadings ruling.  Given that reversal, there was no prevailing party as between assignee principal and prior counsel such that the attorney’s fees request was properly denied. 

Special Fee Shifting Statute: Civil Code Section 3334, A Statute Allowing For Costs Recovery For Wrongful Occupation Of Real Property Does Not Encompass Attorney’s Fees

Companion Post To Our Post Describing A Reversal Of Fees Based On Civil Code Section 1717.

            We recently posted on McAlister Investments, Inc. v. Thomas, Case No. G056330 (4^th Dist., Div. 3 Sept. 30, 2019) (unpublished), where our Santa Ana local court reversed an attorney’s fees award after concluding a declaratory relief action did not trigger a fees clause encompassing contractual breach situations.  The appellate court also rebuffed that Civil Code section 3334 provided a fee entitlement basis.  That provision states that, except for eminent domain or unlawful detainer matters, “[t]he detriment caused by the wrongful occupation of real property . . . is deemed to include the value of the use of the property for the time of that wrongful occupation, not exceeding five years next preceding the commencement of the action or proceeding to enforce the right to damages, the reasonable cost of repair or restoration of the property to its original condition, and the costs, if any, of recovering the possession.” (Italics added.)  In rejecting the notion that attorney’s fees were recoverable under section 3334, the appellate panel concluded:

            “Under California law, ‘costs’ include attorney fees only if they are specifically allowed by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd. (a)(10)(A)-(C); Department of Forestry & Fire Protection v. Lebrock (2002) 96 Cal.App.4th 1137, 1140 [“a prevailing party is entitled to attorneys fees only when specifically authorized by statute, contract or law” (italics added)].) Although defendants have not cited any cases holding that attorney fees are not recoverable as costs under section 3334 (and we have likewise found none), defendants have cited many cases holding as a matter of statutory construction that ‘costs’ awardable under other cost recovery statutes do not permit the award of attorney fees. (E.g., Department of Forestry & Fire Protection, at pp. 1139-1142 [interpreting Health & Saf. Code, § 13009]; People v. United States Fire Ins. Co. (2012) 210 Cal.App.4th 1423, 1426-1428 [interpreting Pen. Code, § 1305.3].) ‘Costs’ have been construed to mean those fees and charges that are required by law to be paid to the courts or some of their officers or an amount that is expressly fixed by law as recoverable as costs. [Citation.] In contrast, the term ‘attorney fees’ has been construed to mean the consideration that a litigant actually pays or becomes liable to pay in exchange for legal representation. [Citation.] Attorney fees and the expenses of litigation, whether termed costs, disbursements, outlays, or something else, are mutually exclusive. In other words, attorney fees do not include costs and costs do not include attorney fees.” (United States Fire Ins. Co., at pp. 1427-1428.)  Here, section 3334 only references ‘costs’ and does not specifically authorize attorney fees. Plaintiff accordingly could not recover attorney fees under section 3334.”

Assignment, POOF!, Section 1717: Plaintiff’s $169,534.60 Fees Award Goes POOF! On Appeal

Although The Dispute Concerned Contractual Rights, The Contractual Attorney Fees Provision Relied Upon In Issuing Award Did Not Apply Because There Was No Breach Of Contract.

            In McAlister Investments, Inc. v. Thomas, Case No. G056330 (4^th Dist., Div. 3 Sept. 30, 2019) (unpublished), neighboring land owners got into a dispute pertaining to a 99-year lease entered into in 1951 between prior owners of the two properties.  This lease allowed defendants, who operate a citrus orchard, to access a parcel of plaintiff’s property to drill for and develop water for irrigation purposes. 

            When plaintiff tried to sell its property in 2014, the buyer wanted an amendment to the 99-year lease precluding defendants from building structures on the leased parcel.  Defendants refused and plaintiff’s sale fell through.

            Plaintiff then filed suit to invalidate the lease. The trial court entered judgment in favor of plaintiff – finding the lease had not been assigned to defendants and that defendants were not successors to the lease merely because they had bought the land.  Based on Civ. Code section 1717’s statutory reciprocity of attorney fee agreements, its finding that plaintiff’s declaratory relief action was based on the lease, and because plaintiff would have been liable for defendants’ attorney fees had they prevailed, the trial court awarded plaintiff $169,534.60 in fees after some reduction.

            In an opinion authored by Justice Ikola, the 4/3 DCA reversed – finding the dispute between the parties involved contractual rights – not a breach of any covenant or agreement in the lease.  Therefore, the attorney fees provision contained in the lease – which entitled the prevailing party to fees “[i]n the event of the breach of any covenant and or agreement herein contained . . . presented to any Court . . .” – was never triggered.   And with that, plaintiff’s fee award went POOF!

Appeal Sanctions, Employment, Judgment Enforcement, Undertaking: Employer Fails In Multiple Attempts To Reduce Fee Award, CEO Is Properly Denied Fees Following Successful Alter Ego Challenge, And Attorney Sanctioned $7,765 For Meritless Challenge

The Fees Award Against Employer Had Been Affirmed By The Sixth District Three Years Prior, The CEO Could Not Prove Employee’s Alter Ego Claims Were Frivolous, But Employer’s Motion To Release Surety Bond So Frivolous It Warranted 6^th District’s Issuance Of Sanctions On Its Own Motion.

            We originally posted on Khanna v. Sonasoft Corp. on July 13, 2016.  Now, more than three years later, we post again on the same case.

            Our previous post pertained to the attorneys’ fees issue resolved on appeal – whether silence in the settlement agreement as to fees precluded postjudgment entitlement.  It did not where, as here, postjudgment fee recovery was allowable under a fee-shifting statute.  We now revisit that 2016 appeal as it impacts the current appeal in Khanna v. Sonafoft Corp., Case No. H044374 (6^th Dist., Sept. 27, 2019) (unpublished)

            An employee had sued his employer and its CEO for failure to promptly and fully pay his wages.  His complaint included alter ego allegations with respect to the employer and CEO.  Judgment was entered against employer pursuant to the parties’ judicially supervised confidential agreement providing a money judgment of $173,000 (adjusted from $227,000 after credit of some payments)., and later amended to include trial court awarded costs of $12,554.65, attorney fees of $153,840, and postjudgment interest of $26,794.54.  A second amended judgment was also entered to add CEO as additional judgment debtor based on the alter ego theory.

            In the 2016 appeal, employer challenged the postjudgment awards of attorney fees, costs and interest to no avail.  However, CEO successfully challenged the amendment adding him as judgment debtor. 

            Upon return to the trial court, CEO unsuccessfully moved for an award of attorney fees incurred on appeal, employer failed in its motion to have the judgment amended to reduce the fees/costs/interest awards by one-half because “equal efforts were directed to each defendant,” and employee’s motion to add surety bond issuer as judgment debtor was granted with the trial court’s finding that the requirements had been satisfied for adding the surety bond under Code Civ. Proc. section 996.440. 

            The 6^th District affirmed.

            CEO was not entitled to his fees as he failed to demonstrate that employee had brought the action against him in bad faith as required by Labor Code section 218.5(a). 

            Employer’s motion to reduce the fees/costs/interest effectively sought to relitigate issues that could no longer be raised.  It ignored the effect of the 6^th District’s affirmance of the awards in the 2016 appeal, and provided no authority empowering the trial court to amend the judgment after the 6^th District affirmed it without qualification.  

            Finally, employer’s motion to release the surety bond was filed with no supporting evidence as required by Rules of Court for motions based on matters outside the record on appeal.  Employer also failed to inform the 6^th District that it had unsuccessfully brought a similar motion in the trial court – to which it had also filed an unsuccessful motion for reconsideration.  Additionally – while acknowledging it still owed employee the awarded postjudgment interest – employer argued that it was “entitled to an automatic stay of proceedings without an undertaking” because Code Civ. Proc. section 917.1(d) provides that an undertaking is not required solely for awarded costs.  The 6^th District concluded the motion to be frivolous and completely without merit – imposing sanctions against employer’s appellate attorney on its own motion.

Miscellaneous: An Addition To Our Mission Statement Is Proposed

From Tail To Dog.

    Attorney Damian R. Castaneda has sent us a modest proposal: 

I wanted to make a contribution to your mission statement about "All too often attorney fees become the tail that wags the dog in litigation."  Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993). How about including Dorsey’s more extreme statement: “The attorneys' fees in this case have not simply become a case of the tail wagging the dog; the attorneys ' fees have become the dog.” Dorsey v. Superior Court, 241 Cal.App.4th 583, 589 (2015).

    HAT TIP TO DAMIAN CASTANEDA !

Civil Rights: Florida’s Federal District Courts Split On Whether Prevailing Flood Plaintiffs Can Recover Attorney’s Fees Against Write Your Own Insurance Carriers

Theory Is That Carriers Are An Extension Of FEMA In Remitting Payments So As To Trigger Fee Recovery Under EAJA.

            Back in 2009, the Fifth Circuit in Dwyer v. Fidelity National Prop. & Cas. Ins. Co., 565 F.3d 284, 289 (5^th Cir. 2019) foreclosed recovery of attorney’s fees in coverage litigation by flood plaintiffs against insurance companies arising out of floods arising under the National Flood Insurance Program (NFIP)—a private-public partnership with FEMA by which the carriers remit payments to flood insurance victims.

            However, relying on an Eleventh Circuit decision, three decisions from the Middle District of Florida recently have found attorney’s fees allowable under the Equal Access to Justice Act (EAJA) to prevailing flood victims in insurance coverage suits, founded on the theory that insurance payments were “functionally remitted” through FEMA (the U.S. agency requisite necessary under EAJA).  See, e.g. Lovers Lane LLC v. Wright National Flood Ins. Co., 2019 WL 130362 (M.D. Fla. Jan. 9, 2019); Collier v. Wright National Flood Ins. Co., 2019 WL 1531895 (M.D. Fla. Apr. 9, 2019); Arevalo v. American Bankers Ins. Co. v. Florida, 2019 WL 2476644, at *3 (M.D. Fla. June 13, 2019).  However, the Southern District of Florida has expressly disagreed with and has refused to follow Arevalo in a footnote in Hampson v. Wright National Flood Ins. Co., Case No. 4:19-cv-10093-KMM (S.D. Fla. Aug. 12, 2019).

            Looks like this split likely will have to be decided in future appeals brought before the Fifth and Eleventh Circuit Court of Appeals.

Arbitration: Based On Law Of The Case And Preclusion Doctrines, Prevailing Arbitration Law Firm Properly Denied Fees In Post-Arbitration Judicial Proceeding Relating To Arbitration Award

Prior Appellate Decision Basically Sealed The Result, With The Trope Prohibition Also Requiring Denial Of Fees Relating To Another Law Firm Attorney Whose Personal Interests Were Not Implicated.

            On May 25, 2019, we earlier posted on a prior decision which was implicated more recently in eGumball, Inc. v. Call & Jensen, Case No. G056650 (4^th Dist., Div. 3 Oct. 10, 2019) (unpublished).  In that earlier decision, our local Santa Ana appellate court ruled that an arbitrator’s denial of $1 million in fees to prevailing law firm was not legally reviewable given the arbitrator’s conclusions that the retainer fees clause did not encompass malpractice claims at issue in the arbitration and that the Trope prohibition against fee recovery for self-representation was triggered.

            However, while the first appeal was festering, law firm sought fees for post-arbitration judicial proceeding activities, which the trial judge denied.  That prompted another appeal by law firm.

            The fee denial was affirmed, in a 3-0 decision authored by Justice Fybel.

            The appellate panel had trouble discerning why law of the case or preclusion principles did not apply to judicial, postarbitration activities just as much as they applied to prior decisions by the arbitrator on related fee requests.  (After all, preclusion principles do apply to arbitration awards.  Thibodeau v. Crum, 4 Cal.App.4^th 749, 755 (1992).)  In fact, the panel found no meaningful distinction to upset application of prior rulings to the postarbitration fee request before it.  With respect to the argument that fees were allowed for the law firm’s representation of one attorney at the firm, that was dispatched because the Trope self-representation bar was intact given that nothing showed the one attorney’s personal interests were at issue in the dispute.  (Carpenter & Zuckerman, LLP v. Cohen, 195 Cal.App.4^th 373, 375-376, 387-388 (2011).) 

Consumer Statutes, Reasonableness Of Fees: Morris Lemon Law Fee Decision Now Certified For Publication

2 DCA Affirmed Trial Court’s Reduction Of Attorney’s Fees Request In Lemon Law Case For Unnecessary Duplication By Plaintiff’s Attorneys.

             On September 17, 2019, we posted on Morris v. Hyundai Motor America, Case No. B290693 (2d Dist., Div. 7 September 16, 2019), which was unpublished at the time.  In that case, a lemon law plaintiff recovering $85,000 in compensation only gained $73,864 out of a requested $191,688.75 in attorney’s fees based on the trial court’s reduction for duplication of efforts by plaintiff’s attorneys.  The Second District affirmed.  On October 11, 2019, it certified for publication this prior unpublished opinion.  The decision also has an interesting discussion of cases for which a more nuanced explanation for a “hair cut” must be made, limiting this more detailed explanation to the civil rights area. 

Allocation, Fee Clause Interpretation, Lodestar, Prevailing Party, Reasonableness Of Fees, Section 1717, Settlement: Reasonable Discretion Exercised In Awarding Defendant Only 20% Of Requested $177,712 In Fees

The Legal Principles Of Civil Code Section 1717 and Santisas Governed.

            Both parties appealed the fee results in Rusnak/South Bay v. Glukel Group, Case No. B286513 (2^nd Dist., Div. 3 Sept. 27, 2019) involving a dispute between landlord and tenant – with tenant plaintiff advancing contract and tort claims against landlord. 

            Tenant dismissed its lawsuit during the discovery phase, before depositions took place, and Landlord moved for an award of $177,712 in attorney fees under the lease’s attorney fee provision which entitled the prevailing party to fees.  Although the trial court granted the fee motion, it awarded Landlord with only 20% of the requested fees – apportioning between the contract and tort claims pursuant to Civ. Code section 1717(b)(2), and reducing for excessive and unreasonable fees.  

            On appeal, Landlord argued that it was entitled to all of the fees pursuant to the lease contract, and Tenant argued that Landlord was not the “prevailing party” on the tort causes of action.

            The 2/3 DCA affirmed.  The apportionment and 80% reduction were proper pursuant to the legal principles of Santisas v. Goodin (1998) 17 Cal.4^th 599 [our Leading Case No. 6] and Civ. Code section 1717(b)(2).  First, as to the contract claims, section 1717(b)(2) bars recovery of the fees incurred to defend plaintiff’s contract claims where an action has been voluntarily dismissed as it was here – with Santisas defining the extent of such preclusion to include cases involving a contract that on its own terms authorizes recovery of those fees. 

            As to Tenant’s argument that Landlord was not the prevailing party on the tort causes of action, the 2/3 DCA found the argument meritless – citing the holding in Santisas that the “prevailing party” of tort claims resolved by  voluntary dismissal is governed by the clear and unambiguous language of the contract for purposes of awarding attorney fees.  Here, the relevant fee provision defined “prevailing party” to include “without limitation” a party “who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party . . . of its claims.”  Tenant abandoned its noncontract claims, making Landlord the prevailing party under the unambiguous terms of the parties’ contract. 

POOF!, SLAPP: Fee Award Of $56,225 Goes POOF! On Appeal When Sixth District Reverses SLAPP Grant

Sixth District Determined Cause Of Action Was Not Properly SLAPPed Because It Was Triggered By A Dispute That Arose In The Aftermath Of Previous Litigation, Not The Conduct In The Prior Litigation.

            GBR Magic Sands MHP, LLC v. Pecoraro, Case No. H044936 (6^th Dist., Sept. 26, 2019) (unpublished) involves a dispute among family members over a 20-acre parcel of land – originally owned by two brothers (Cyril and Louis) who shared a 50% undivided interest, and their parents who owned a 50% undivided interest.

            In 1963, parents granted a 98-year lease of their interest to the two brothers.  Cyril used his and his brother’s interest + the 98-year lease of parents’ interest to develop a mobile home park.  When the parents died, their children (the 2 sons, and daughters Rita and Josephine) succeeded to fractional shares of the parents’ interest. Later, in 2007, the brothers’ interest was leased to GBR – an entity controlled by Cyril.  In 2008, the 1963 lease was assigned to GBR.  A 2010 partition action led to the entire 20-acre parcel’s fee interest becoming vested in Louis, Josephine, and Catherine (Rita’s daughter).

            During the partition action litigation, Louis, Catherine and a trustee learned that Cyril had obtained the 1963 lease through undue influence – and Catherine and the trustee successfully filed an action to cancel the 1963 lease and quiet title to their interest in the parcel.  The judgment in that case also provided that GBR had “no right, title or interest in the undivided fifty percent interest . . . previously subject to the 1963 Lease . . .”

            Later, in 2017, GBR filed a cross-complaint in an existing action against it brought by Louis’ company.  In its 4^th cause of action, GBR sought declaratory relief with respect to possession and rent in light of the 1963 lease cancellation.  GBR alleged that Catherine and the trustee were claiming a right to possess the 20-acre parcel and a right to a share of the rent paid to GBR by its mobile home tenants.  However, GBR claimed it had a right to continue in possession of the 20-acre parcel pursuant to the 2007 lease.  Catherine and the trustee successfully SLAPPed (Code Civ. Proc. section 425.16) GBR’s 4^th cause of action.  The parties then stipulated to $56,225 in attorney’s fees – which the trial court awarded to Catherine and the trustee.

            GBR appealed the SLAPP determination and the subsequent attorneys’ fees award – claiming its 4^th cause of action for declaratory relief did not stem from protected activity.  Rather, it arose from a dispute that arose in the aftermath of the protected activity.

            The Sixth District agreed – citing City of Cotati v. Cashman (2002) 29 Cal.4th 69.  They determined GBR’s 4^th cause of action stemmed from a dispute that arose from the outcome of the previous litigation and not the protected activity itself – concluding that Catherine and the trustee had failed to meet their burden of demonstrating that GBR’s 4^th cause of action arose from the prior litigation activity rather than the underlying real property dispute.

            With the Sixth District’s reversal of the SLAPP grant came reversal of the $56,225 attorneys’ fees award.  POOF!

Costs, Experts, Section 998: Sixth District Affirms Denial Of $26,950.50 In Expert Witness Fees To Prevailing Defendant Because Section 998 Offer Was Not Apportioned Among Plaintiffs

Defendant’s Treatment Of Mother And Son Plaintiffs As Spouses For Section 998 Purposes Did Not Fly.

            In Roe v. Hollister School Dist., Case No. H043658 (6^th Dist., Sept. 26, 2019) (unpublished), mother and son plaintiffs (Jane and Jonnie Roe) sued school district and others for an incident involving the five-year-old son and another six-year-old student.

            During the course of this litigation, the school district and co-defendants served plaintiffs with a joint section 998 offer to pay Plaintiffs and their attorney a single check for $200,000 as settlement for all claims, costs and attorney’s fees.  The offer did not allocate the $200,000 offer between mother and son.  Plaintiffs did not accept the offer, and the case proceeded to jury trial.

            After prevailing at trial, the school district sought to recover $26,950.50 in expert witness fees under Code Civ. Proc. section 998 because plaintiffs had rejected the 998 offer and had not achieved better results at trial.  Plaintiffs moved to tax the costs as to the expert witness fees on the ground that the failure to allocate the offer between mother and son rendered it “legally invalid.”  For its part, the school district argued that “[f]or all practical purposes John Roe is the second plaintiff in this case” because Jonnie was a minor and John was his father and guardian ad litem.  The trial court rejected this contention and denied school district’s request for expert witness fees.

            On appeal, school district relied on cases that recognize an exception to the rule that section 998 offers must be apportioned between individual offerees.  This exception is for joint offers made to spouses “because a cause of action is community property as is any recovery.”  Relying on this exception, school district claimed that that separate offers were not necessary “under community property rules because any financial recovery by Jonnie lessens the burden upon his parents to support him, AND lessens the burden upon his parents’ community property.” 

            The Sixth District disagreed and affirmed the trial court’s ruling – finding that mother and son do not share property rights, and that father’s role as guardian ad litem did not grant him a personal property interest in any recovery the child might obtain.  The Sixth District summed up its decision this way: “Try as it might, the [school] District cannot force Jane and Johnnie into the exception that applies where two plaintiffs are husband and wife.”   

Class Actions, Employment, POOF!: Class Action Win Of Labor Code Section 226 Penalties And Attorney Fees Against Employer Goes POOF! On Appeal

Employer’s Failure To Include Premium Pay On Wage Statements For “On Duty” Meal And Rest Periods Did Not Trigger Penalties Because Premium Pay Is A Statutory Remedy For An Employer’s Conduct – Not An Amount “Earned” By The Employee.

            A certified class of former and current non-exempt employees brought a lawsuit against their employer for meal break violations in Naranjo v. Spectrum Security Services, Inc., Case No. B256232 (2^nd Dist., Div. 4 September 26, 2019) (published).  They sought premium wages, Labor Code §§ 203 (waiting time penalties) and 226 (itemized wage statement penalties) derivative remedies, and attorney fees.  We focus on the attorney fees issues involved in this case.

            The employees were/are officers for a security company responsible for taking temporary custody of federal prisoners and ICE detainees for offsite travel for medical treatment, court appearances and other appointments.  Two such officers jointly provide continuous supervision until the prisoner/detainee is returned to his/her custodial location.  The officers are not permitted to leave the room or building where the prisoner/detainee is located, and are required to remain “on duty” during meal breaks. 

            With respect to one sub-class of the employee class members, employer had failed to: (1) provide an off-duty meal period; (2) obtain a mutually agreed-upon waiver if one hour or less would end the work shift; or (3) obtain written agreement to an on-duty meal period for shifts lasting longer than five hours.  This entitled these sub-class members to premium pay under Labor Code section 226.7 (an additional one hour of pay for each day an off-duty meal period is not provided without waiver or written agreement described above) – something the employer had failed to pay. 

            The parties stipulated that the sub-class was owed $1,393,314 in premium pay during a second trial phase in this action.  The third phase of trial, a bench trial, dealt with the employees’ requests for Labor Code §§ 203 and 226 penalties and attorney fees.  The section 203 requests were denied.  However, the trial court determined the sub-class was entitled to the section 226 penalties as the premium pay had not been reflected in the employees’ wage statements.  The parties stipulated to $399,950 for the section 226 penalties.  Based on the employees’ section 226 win, the trial court awarded attorney fees pursuant to section 226(e).  Employer appealed. 

            The 2/4 DCA reversed the trial court’s finding on the section 226 penalties because the penalties are triggered by an omission from the wage statement of “wages earned.”  Here, the premium pay served as a statutory remedy for an employer’s conduct.  The premium pay is not an amount the employee has “earned.”  Because the section 226 penalties were reversed, so too were the attorney fees awarded under section 226(e).  The award of attorney fees was contingent upon the award of section 226 penalties.

Family Law: Family Court’s Failure To Make Mandatory Findings Required Under Family Code Sections 2030 and 2032 Was Abuse Of Discretion

Family Court Did Not Award Fees Due To Wife’s Pro Per Status At The Time It Rendered Its Decision.

            In Marriage of Soares, Case No. F076532 (5^th Dist., Sept. 26, 2019) (unpublished), Wife challenged family court’s denial of her needs-based fees request, its spousal support determination, and the judge’s failure to recuse himself for conflict of interest.

            Although Wife gained no traction on the spousal support and disqualification issues, she achieved a remand on the attorneys’ fees issue.

            Throughout the course of this action, Wife was represented by three different attorneys before proceeding in pro per.  Her request for attorneys’ fees was filed during representation from her first attorney, but Wife was representing herself at the time the court rejected her request based on her self-representation.

            Citing In re Marriage of Cheriton (2001) 92 Cal.App.4^th 269 and In re Marriage of Tharp (2010) 188 Cal.App.4^th 1295, the 5^th District found the family court’s failure to make a mandatory determination pursuant to Fam. Code §§ 2030 and 2032 to be an abuse of discretion.  Wife’s eventual self-representation was of no consequence.  She had received legal services and had made a request for fees which may be awarded under Fam. Code § 2030 (b) “for legal services rendered or costs incurred before or after the commencement of the proceeding.”

Private Attorney General, Civil Rights: Hawkins Opinion Now Partially Published As To The Discussions On Sufficiency Of Evidence of Retaliation And Award Of Attorney’s Fees Under CCP § 1021.5

September 9, 2019 Unpublished Decision Now Partially Published.

            On September 9, 2019, we posted on then unpublished decision in Hawkins v. City of Los Angeles, which dealt with the Bane Act/Whistleblower Retaliation victories, and $1,054,286.88 attorney’s fees award, obtained by two fired Department of Transportation hearing examiners who had sued the City of Los Angeles.  We can now report that the unpublished decision was certified for partial publication – as to the discussions on sufficiency of evidence of retaliation, and the award of attorney’s fees under CCP section 1021.5 – on September 25, 2019.

Costs: Awarded Costs Of $199,464.98, Consisting Mostly Of Deposition Costs Incurred In Related Federal Proceeding, Upheld On Appeal Because Coordination Order Was At Play And Apportionment Among Actions Not Necessary

The Coordination Order Called For Extensive Discovery Coordination Among The Federal And State Court Actions Such That Costs Incurred For Depositions Noticed In The Federal Proceeding Were Incurred In The California Proceeding.

1921 Model T Ford

            In In re Automobile Antitrust Cases I and II, Case No. A152893 (1^st Dist., Div. 4 Sept. 25, 2019) (unpublished), a number of automobile manufacturers and dealer associations were sued under the Cartwright Act (Bus. & Prof. Code, §§ 16720-16728) and the unfair competition law (Bus. & Prof. Code, §§ 17200-17210).  Multiple lawsuits were filed in California and a similar lawsuit against many of the same defendants in federal court.  Parallel cases were also pending in a number of other state courts.

            The allegations were that defendants had conspired to keep new vehicle prices higher than they would have been in a properly competitive market by preventing new, virtually identical, lower priced cars from being exported to the U.S. from Canada.

            The California lawsuits were coordinated into one proceeding, and discovery was coordinated among the California, federal, and other state actions under a June 2004 discovery coordination order which provided detailed provisions governing the taking and use of discovery in the separate proceedings – with the federal proceeding being “the lead case for discovery and discovery-related pretrial scheduling.”

            After prevailing on summary judgment in federal court in July 2009, Ford Motor Company (Ford U.S.) and Ford Motor Company of Canada, Ltd. (Ford Canada), along with other defendants, were denied their requests for costs awards.  The denial was based on federal case law, under Fed. R. Civ. P.,  Rule 54, that allows a district to deny costs awards to a prevailing party if the case “ ‘presented a close question that required considered balancing[.]’ ”

            However, Ford U.S. and Ford Canada (the two remaining defendants) got another bite at the apple after each separately prevailed on summary judgment in the California proceeding in November 2011 – resulting in a 2012 costs award of $199,464.98 with only a $1,625 reduction for disallowed costs included in the joint request. 

            Plaintiffs appealed the judgments and separately appealed the costs award.  In July 2016, judgment was reversed and remanded as to Ford Canada.  Judgment in favor of Ford U.S. was affirmed on appeal.  Plaintiffs then moved to dismiss the cost order appeal as moot, and the 1/4 DCA granted the motion.

            On remand, Ford U.S. moved, once again, for a costs award as a prevailing party.  In addition to the previous jointly awarded $199,464.98, Ford U.S. sought to recover interest on that amount from the date of the 2012 costs order.  The trial court granted the costs award request (the 2017 cost order), but denied the request for interest.

            Plaintiffs appealed – contending the deposition costs were not recoverable because they were incurred in the federal proceeding, and that any costs award should be apportioned between Ford U.S. and Ford Canada.  They further argued that if any deposition costs were allowed, they should be apportioned among the seven separate cases that made use of the discovery taken.  Finally, Plaintiffs argued that some depositions taken were not reasonably necessary to Ford U.S.’s defense in the California proceeding.

            The 1/4 DCA disagreed and affirmed Ford U.S.’s costs award. 

            It found that in light of the coordination order in the related actions, the costs of conducting discovery could not be characterized as having been incurred in just one action and not in the others, and were therefore absolutely recoverable. Ford U.S. was entitled to recover these costs “as a matter of right” under Code Civ. Proc. section 1032. 

            As to apportionment, the 1/4 DCA found no abuse of discretion.  It found reasonable the trial court’s resolutions that there were not “seven separate cases of equal dignity and equal work,” and that there was only a “singular conspiracy” at the core of each of the actions – meaning what any plaintiff knew about that conspiracy was relevant and had impact in the other actions.  Likewise, the 1/4 DCA found no abuse in discretion as to lack of apportionment between Ford U.S. and Ford Canada – that the evidentiary showing was that Ford U.S. had reasonably incurred the costs awarded, and that the depositions taken were reasonably necessary to Ford U.S.’s defense.

Allocation, Homeowner Associations, Interest, Special Fee Shifting Statutes, Standard of Review: Plaintiff Owner/Developer’s Award Of $1,673,691 In Damages and Entire Fee Request Upheld On Appeal

Defendant HOA’s Breach Of Owner/Developer’s Valid Contractual Access Rights Was The Common Core Involved In The Causes Of Action, So Apportionment Of Fees Not Required.

            In Millennium-Diamond Road Partners v. Diamond Bar etc., Case No. B285539 (2^nd Dist., Div. 3 Sept. 24, 2019) (unpublished), Owner/Developer Millennium sued HOA when it revoked Millennium’s access to undeveloped parcels of land Millennium had purchased for the purpose of developing residential properties. 

            The undeveloped parcels of land were landlocked and adjacent to a guard-gated residential community known as Diamond Bar Country Estates.  From 1997 until October 2013, Millennium had easement access via Country Estates – access that was abruptly revoked when a new group of board members began to oppose Millennium’s development.

            Substantial evidence doomed HOA at trial – with the trial court finding that HOA breached Millennium’s valid contractual access rights pursuant to CC&Rs, a second contractual agreement providing Millennium an option for access rights for which Millennium had tendered the required fee, and a recorded annexation agreement under which the Millennium parcels became a part of the Country Estates development. 

            HOA argued that the CC&Rs were not at play as Millennium had not paid monthly assessments.  HOA also claimed Millennium had failed to pay fees owed under the annexation agreement.  The trial court rejected both claims.  The language of the CC&Rs contradicted HOA’s argument– providing the HOA “no power to cause a forfeiture or abridgement of an Owner’s right to full use and enjoyment of his Lot” absent a judicial/arbitral order or foreclosure.  The annexation agreement did include a schedule of payments to be made to the HOA.  However, the first payment under the schedule was triggered by an event that had not yet occurred, so no annexation fees were yet due.

            At trial, Millennium’s expert testified and explained his computations of Millennium’s damages of $1,673,691 in detail.  HOA did not challenge his methodology or calculation, nor did it call its own expert witness regarding damages, and the trial court awarded the entire amount Millennium claimed as damages.  Additionally, the trial court awarded Millennium prejudgment interest at 10% with a start date of January 2014.

            Millennium’s win triggered an award of attorneys’ fees pursuant to Civil Code section 5975(c) which mandates the award of attorneys’ fees in a successful action to enforce the governing documents of a common interest development.  The trial court awarded the full amount requested with no apportionment.

            HOA appealed, but fared almost no better – achieving only a small victory related to the start date for calculation of the prejudgment interest.  The 2/3 DCA found substantial evidence supported the trial court’s decision, but remanded for prejudgment interest calculations to begin on March 23, 2017 instead of January 2014.  It further determined that the HOA had fashioned its appeal largely “as an attack on the factual findings of the trial court.”  Citing Waller v. Brooks (1968) 267, Cal.App.2d 389, 393, the 2/3 DCA stated that the HOA “misconceiv[ed] the function of an appellate court which is to review errors of law, and not to pass on questions of fact.”

            As to apportionment of the attorney fees, the 2/3 DCA found no abuse of discretion as Millennium’s causes of action were so intertwined, and involved a common core of facts which were directly related to enforcement of the governing documents, such that apportionment was impracticable.

Appealability, Probate: Trustee’s Attorney’s Appeal Of Order Denying Fees Without Prejudice Was Not A Final Appealable Order

Appeal Was Dismissed, But Attorney Could Renew Request In Civil Court.

            In Katzen v. Callan, Case No. G055985 (4^th Dist., Div. 3 Sept. 23, 2019) (unpublished), the 4/3 DCA—in an opinion authored by Presiding Justice O’Leary—dismissed an appeal by a trustee’s former attorney denying a fee request because the denial was without prejudice.  So, there was no final appealable order worthy of appellate jurisdiction, not to mention that the request could be renewed in civil court at the right time. 

Family Law: Family Law Judge’s Failure To Allow Argument Over, Much Less Address, Needs-Based Fee Request, After Agreeing To Bifurcate Same For Determination, Reversed On Due Process Grounds

Surprise, Last-Minute Reversal In Tentative Decision Required A Reversal.

            Due process required a reversal of a family law judge’s decision denying a needs-based fee request by ex-wife in Marriage of Bramhall and Melvoin, Case No. B288129 (2d Dist., Div. 7 Sept. 23, 2019) (unpublished).  The parties stipulated to bifurcation of a needs-based fees request, with the trial judge remarking that this would be considered later, only to not address the issue in a tentative decision that became the final statement of decision.  The 2/7 DCA reversed because the trial judge had agreed to bifurcate and consider the issues, with a Reporter’s Transcript confirming the trial judge’s intentions which were not followed in a “surprise” last-minute order.  Here is our favorite due process case citation in the opinion: Monarch Healthcare v. Superior Court, 78 Cal.App.4th 1282, 1286 (2000) [“fundamental principles of due process . . . call for those with an interest in the matter to have notice and the opportunity to be heard, so that the ensuing order does not issue like a ‘bolt from the blue out of the trial judge’s chambers’”].

Interest, Judgment Enforcement: Reversal Of Judgment And Remand, Which Really Was An Upward Modification, Required That Interest On The Attorney’s Fees Award Should Run From The Date Of Original Judgment

Substance Of The Order Was Determinative.

            In Pacifica Companies LLC v. Patel, Case No. D074358 (4th Dist., Div. 1 Sept. 23, 2019) (unpublished), the 4/1 DCA in an earlier decision reversed a trial judge order denying a request for contractual attorney’s fees based upon a letter of intent agreement, remanding so that the trial judge could enter an award of reasonable prejudgment attorney’s fees.  On remand, the trial judge did just that, awarding defendants over $1.42 million in fees (out of a requested more than $2.4 million) and denying the request for 1.5 lodestar enhancement.  The trial judge then ordered that interest on the fee award should run from the date of the original judgment rather than the date of the fee award on remand.

            Plaintiffs appealed on the interest trigger date, but they lost their challenge.  After surveying several California decisions, the Pacifica II appellate panel decided that the substance of the remand was an upward modification of the judgment (even though framed like a reversal), such that interest ran from the date of the original judgment. 

Class Actions: Summer 2019 Litigation News Article Tells What Class Action Issues Are Spiking In 2018-2019 With Respect To Frequency

Has Implications For Fees, Given Statute And Equitable Principles Allowing For Fee Recovery.

            An article by Daniel S. Wittenberg, “Class Action Spending Reaches 10-Year High” in the Summer 2019 edition of the ABA’s Litigation News, provides some interesting insights into the class action cases which are prevalent and frequently expose defendants to attorney’s fees/costs exposure in 2018-2019:

• • Labor/employment class action This topped the list.  For the first time in 15 years, plaintiffs posted a record high certification rate in wage/hour cases.  The #MeToo movement gained traction in this area, with an eight percent increase in the number of sexual harassment filings in 2018.
  • Securities litigation class actions. Securities class action filings reached their highest level since the dot-com. crash of 2000. 
  • Life science securities class actions. In 2018, roughly one out of every five securities fraud class actions suits were brought against a life sciences company. 
  • Food and beverage class actions. These class action cases, in 2018, reached their highest levels since 2015.  The big venue—California, of course, with almost half of the cases filed.  False labeling was the number one claim subject matter in this area as far as filings.
  • Data breach privacy and security class actions. This might be the next surge of class actions, notwithstanding a lot of standing and injury obstacles.  In California, the enactment of the Consumer Privacy Act, going into effect in 2020, might augment this possible future surge in class actions in the “Golden State.”

Special Fee Shifting Statutes: Napa County Properly Awarded Attorney’s Fees And Costs In Public Nuisance Abatement Action

Napa County Code Section Allowed For Prevailing Party Fees And Government Code Section 25845(b) Allowed For County’s Recoupment Of Expert Fees.

            In County of Napa v. Silver, Case No. A146586 (1^st Dist., Div. 4 Sept. 20, 2019) (unpublished), Napa County won a public nuisance abatement action against appellants involving the European grapevine moth and dead/dying vine on appellants’ vineyard.  The trial judge also awarded County prevailing party fees under Napa Code section 1.20.025 and expert fees of $1,575 under Government Code section 25845(b).

            The appellate court affirmed these awards, as well as the merit judgment.

            Although the Napa Code section had no definition of “prevailing party,” courts analyze which party prevailed on a practical level.  (Salehi v. Surfside III Condominium Owners Assn., 200 Cal.App.4^th 1146, 1153 (2011); Intelligent Investments Corp. v. Gonzalez, 1 Cal.App.5^th Supp. 1, 6-7 (2016).)  Under this test, County prevailed—after an evidentiary hearing, the lower court decreed parts of appellants’ vineyard to be a nuisance, ordered abatement, and declared County to be the prevailing party after the hearing; County obtained the majority of the relief it sought.

            With respect to expert fees, Government Code section 25845(b) provides that, in nuisance abatement proceedings, the owner of the property shall be liable “for all costs of abatement incurred by the county, including, but not limited to, administrative costs, and any and all costs incurred in the physical abatement of the nuisance.  Recovery of costs pursuant to this section shall be in addition to and shall not limit any prevailing party’s rights to recover costs pursuant to Sections 1032 and 1033.5 of the Code of Civil Procedure or any other provision of law.”  Even if expert fees were not awardable under the routine costs statutes, they were under the Government Code section such that the costs award was affirmed too.

Partition: 4/3 DCA, In Unpublished Decision, Allows Trial Court To Apportion Fees/Costs Following A Partition Sale Based On Equitable Circumstances

Panel Follows Lin Rather Than Finney On This Issue.

            Although the particular facts are not that scintillating for posting purposes, Rahgoshay v. Luo, Case No. G056735 (4^th Dist., Div. 3 Sept. 19, 2019) (unpublished), authored by Justice Fybel, does show how it lined up on the standard to be followed for purposes of apportioning attorney’s fees, referee fees, and other costs based on a partition sale.  In effect, the 4/3 DCA panel followed the reasoning in Lin v. Jeng, 203 Cal.App.4^th 1008 (2012), a 2/4 DCA decision, over Finney v. Gomez, 111 Cal.App.4^th 527 (2003), a 2/7 DCA decision, on the issue.   It also looks like Orien v. Lutz, 16 Cal.App.5^th 957 (2017), a 2/8 DCA decision, also lines up with Lin.  Here is what Justice Fybel had to say in Rahgoshay:

“In Finney v. Gomez (2003) 111 Cal.App.4th 527, 548 to 550 (Finney), the

appellate court held that a trial court may only award costs and fees incurred for the common benefit of the parties in a partition action. The appellate court reversed the judgment because the record showed an ‘absence of any rationale by the trial court and any evidence in the record suggesting the fees were for the common benefit,’ resulting in an abuse of discretion in the award of fees. (Id. at p. 549.) The court in Lin v. Jeng refused to follow the holding of Finney because Finney was based on the Law Revision Commission comment to the statute, and not on the statutory language itself, which was unambiguous. (Lin v. Jeng, supra, 203 Cal.App.4th at p. 1025.) We agree with the analysis of Lin v. Jeng that Code of Civil Procedure section 874.040 permits the trial court to apportion fees and costs following a partition sale based on equitable considerations as well as the parties’ interests in the property. (Lin v. Jeng, supra,

203 Cal.App.4th at p. 1025; see Orien v. Lutz, supra, 16 Cal.App.5th at p. 968 & fn. 12 [recognizing disagreement and following Lin v. Jeng].)”

Arbitration, Employment: 4/3 DCA Affirms Lower Court’s Denial Of Motion To Compel Arbitration Because, Among Other Things, Arbitration Clause Gave Arbitrator Mandatory Authority To Award Fees To Employer Even Where Fee-Shifting Statutes Favored Employe

Mandatory Language Of Fee Clause Demonstrated Substantive Unconscionability, Which Was Not Supplanted By More General Reference To JAMS Employment Rules Which Were More Discretionary In Nature.

            We commend employment attorneys to read Randall v. Veros Credit, LLC, Case No. G056463 (4^th Dist., Div. 3 Sept. 17, 2019) (unpublished), where a trial judge denied an employer’s motion to compel arbitration against an employee based on a determination that the arbitration clause was procedurally and substantively unconscionable.  Numerous grounds are discussed, but we focus on the one area which is relevant for our blog.

            The problematic clause basically stated that the losing party in an arbitration would (“shall”) pay to the prevailing all costs plus a reasonable sum for attorney’s fees.  The defect was that this mandatory clause also encompassed one-way fee-shifting provisions in the Labor Code which would not allow exposure to a losing employee even though no such exposure could be faced in a civil forum.  Neither the lower nor appellate courts found this substantively tolerable because awarding mandatory fees to a prevailing employer in an action concerning overtime wages does not conform to the employee’s statutory rights.  Employer argued that the arbitrator obviously knew how to apply Labor Code fee shifting, but the appellate court was not impressed given the mandatory nature of the clause.  (Cf. Serpa v. California Surety Investigations, Inc., 215 Cal.App.4^th 695, 709-710 (2013).)  Employer then fell back on the argument that JAMS Employment Arbitration Rule 24(g) permits arbitrators to award fees if “allowed by applicable law,” but this generally worded rule does not supplant the specifically-worded arbitration fees clause to the contrary.  (Rebolledo v. Tilly’s, Inc., 228 Cal.App.4^th 900, 920 (2014).)  Given that there were other infirmities in the arbitration clause, the offending sections could not be severed.

            This case certainly gives drafting tips to employment attorneys wanting to enforce arbitration clauses; at the least, there needs to be language qualifying the arbitration provision to say the losing party need only pay costs and attorney’s fees employees would have been liable for in a civil forum.  (See Slip Op., p. 14.)  Presiding Justice O’Leary authored the 3-0 opinion.