CALIFORNIA ATTORNEY'S FEES

Employment, Settlement: $226,000 Stipulated Amount For Attorney’s Fees To Plaintiffs Under PAGA Settlement Validated On Appeal

The Defense Could Not Retract From Its Agreed-Upon Settlement Amount.

               In Loudon v. DHSE, Inc., Case No. E081497 (4^th Dist., Div. 2 Aug. 8, 2024) (unpublished), defendants agreed to settle a PAGA action through a written settlement agreement providing plaintiffs were entitled to attorney’s fees of $226,000, or one-third of the PAGA settlement amount.  The defense tried to deviate from this amount down the line on appeal after approval of the fee sum, but the lower court approved the fee amount and so, too, did the appellate court.  The reviewing court believed the agreed-upon amount should prevail, but also observed that (1) plaintiffs’ counsel billed more than the agreed-upon amount before approval of the fees, and (2) individual plaintiffs’ fees would have been a lot more had the case gone to trial. 

Settlement: CCP § 664.6 Settlement Validated Where Lemon Law Plaintiff Agreed To Settle For $100,000 Inclusive Of Attorney’s Fees

Effective 1/1/2021, Section 664.6 Allows A Litigant’s Attorney To Orally Stipulate To A Settlement On The Record.

               Lemon law plaintiff was not happy with a lower court’s ruling that found a binding oral, on-the-record settlement which was reached with defendants by her attorneys to settle the case for $100,000 inclusive of attorney’s fees through an MSC ZOOM session which was recorded in stenographic and audio formats.   She argued before the lower court that the settlement was “exclusive” of fees; after a 4-day evidentiary hearing, the lower court agreed with the defense that the settlement was enforceable and that it was “inclusive” of fees.  Plaintiff appealed in Greisman v. FCA US, LLC, Case No. A166919 (1^st Dist., Div. 2 Aug. 5, 2024) (partially published), but the appellate court affirmed the settlement decision by the lower court.

               The legal issue resulting in publication was that, effective January 1, 2021, CCP § 664.6 allows a litigant’s attorney to sign a binding settlement stipulation or orally stipulate on the record that a settlement was reached, abrogating the former rule that litigants had to endorse the settlement under the Levy decision which was superseded.  With respect to whether substantial evidence supported the lower court’s conclusion, it did:  the lower court credited the court reporter’s stenographic and audio evidence that “inclusive” was the word used.  Not to mention that the lower credited the MSC judge’s statement on the record that the settlement for $100,000 was reached despite whatever terms plaintiff reached with her attorneys between themselves.

Prevailing Party, Section 1717: Defendants Winning A Demurrer Dismissal Without Leave Was Contractually Prevailing Party Under Section 1717

Conspiracy And Unjust Enrichment Claims Fell Within An Operating Agreement Contractual Dispute Ambit.

               Many contractual fee disputes depend on whether the claims were “on the contract” under Civil Code section 1717; and if so, who prevailed.  In Zhou v. Hotel Winters, LLC, Case No. C099278 (3d Dist. Aug. 2, 2024) (unpublished), defendants won a demurrer without leave resulting in a dismissal, a merits determination affirmed on appeal, in a case involving conspiracy and unjust enrichment claims under a broad fee dispute contractual clause.  Defendants obtained a $45,000 attorney’s fees award (out of a requested $134,396.25 fee claim), although $625 hourly rates were reduced to $450 for principal attorneys.  The Third District affirmed:  defendants won by showing that the operating agreement was inapplicable, invalid, unenforceable, or nonexistent given that the conspiracy and unjust enrichment claims were “on the contract” under section 1717.  Also, the dismissal based on the demurrer being sustained without leave was a merits determination rather than just a premature or interim victory. 

Reasonableness Of Fees: Despite Challengers Prevailing In Private Attorney General Dispute, They Appealed, Arguing The Fee Award Should Be More

No, The Actual, Roughly $105,800 Fee Award Out Of A Requested $330.363.75, Inclusive Of A 1.5 Multiplier, Was Affirmed—No More Awarded.

               In a recent post, we blogged on the affirmance of a $105,800 fee award (roughly) to challengers in a private attorney general award, and they got there barely under an abuse of discretion standard.  Interestingly, the challengers argued that their fee request of $330,382.75 (inclusive of a 1.5 positive multiplier) should have been granted by the lower court rather than the lower award. The Fifth District disagreed in Westlands Water Dist. v. North Coast Rivers Alliance, Case No. F085567 (5^th Dist. Aug. 5, 2024) (unpublished).

               The lower and appellate courts’ reasoning in this matter is a fee auditor affirmation on why reductions should be done for these activities:  the hourly rates were excessive (Northern California versus Central California rates); there was no showing that Bay Area counsel representation had to be obtained on a case of this nature because no evidence was provided to show why local counsel could not be obtained; fee applicants’ expert witness only offered generalized opinions, not geared to the specifics of the case; and excessive time on many tasks, especially processing Case Management Statements, drafting stock Answers to a Complaint, appellate work involving “cutting and pasting” with not much more originality, and more mundane tasks. The trial court reductions for specific tasks were no abuse of discretion based on its ruling and the appellate record, where reductions were considered.

Private Attorney General: $105,797.40 Fee Award To Some Validation Action Challengers Affirmed On Appeal

Fifth District Affirmed After Independent Review Of Significant Benefit Prong Because Remand Would Be Futile Under An Abuse Of Discretion Standard.

               In Westlands Water District v. All Persons Interested etc., Case No. F085374 (5^th Dist. Aug. 2, 2024) (unpublished), the Fifth District reviewed an attorney’s fees award against Water District and in favor of four challengers to a validation action filed by District, which was dismissed earlier because District’s proposed extended contract with the federal government had key missing terms.  The validation action was dismissed, with that determination affirmed in an earlier Fifth District decision which was published because it involved first impression issues.  Later, the lower court awarded the challengers $105,797.40 in attorney’s fees under CCP § 1021.5, California’s private attorney general statute.  District appealed this award, claiming the respondents were not successful, no enforcement of an important right affecting the public interest was involved, and respondents did not confer a significant benefit on the public in general.

               The Fifth District affirmed the fee award.  It had no problem finding that respondents were successful, because they obtained dismissal of the validation action—their primary litigation objective.  On the important public interest right prong of § 1021.5, it agreed that the result did vindicate the objectives of opposing validation actions and promoted transparency/accountability with respect to public contracts.  The troubling element for the appellate court was the substantial benefit element of § 1021.5.  It agreed that a Brown Act argument did not support an award under this prong, because no Brown Act violation was alleged and there were cure issues which would have been operative.  The Water Code issue was secondary to the ultimate outcome, so that did not help.  However, the publication of the prior appeal on novel issues did satisfy the substantial benefit element, such that there was no need for a remand because this rationale showed that the lower court’s ruling was no abuse of discretion, relying on its own earlier appellate opinion in Robinson v. City of Chowchilla in reaching this result.

Section 998: Lower Court Properly Entered Judgment On An Accepted 998 Offer

The Defense Did Not Timely Withdraw Its Offer Before Acceptance, And The 998 Offer Did Contemplate Entry Of A Judgment Based On The Parties’ Conduct.

               Courts encourage settlements and acceptance of CCP § 998 offers, if structured correctly.  They generally do not honor untimely attempted withdrawals of those offers after acceptance.  That is what occurred in Yehoshua v. American Roofing and Gutters, Inc., Case No. B333020 (2d Dist., Div. 1 Aug. 2, 2024) (unpublished).

               What happened in this case was that plaintiff accepted defendants’ section 998 offer.  Defendants tried to withdraw it after acceptance.  Then, after eight rounds of submitting proposed judgments by plaintiff, the lower court entered judgment by which money was accepted by plaintiff (plus reasonable attorney’s fees and costs to be determined by motion), one defendant’s cross-complaint was dismissed, defendants waived claims against plaintiff and his counsel, and plaintiff had judgment entered on his complaint.  (Defendants did not raise the argument that no entry of judgment was contemplated under the section 998 until their objection to the fifth proposed judgment.)

               Defendants’ appeal of the judgment based on the section 998 acceptance was unsuccessful.  Defendants argued that the section 998 offer was not accepted until the notice of acceptance was filed with the lower court.  That argument was rejected because section 998 only provides that the notice of acceptance is filed after the offer is accepted, an act not required for acceptance to occur prior to filing of the notice.  Although the offer was ambiguous as to whether entry of judgment was contemplated, the parties’ subsequent conduct demonstrated that this was the case given that defendants waited more than a year to raise this objection after five rounds of proposed judgments were submitted. 

Appealability, Arbitration, Employment, Preemption: $176,687.96 Fees And Sanctions Award For Employer’s Failure To Advance Fees Affirmed On Appeal

Employers Not Paying Fees Upfront Can Be Exposed To Further Arbitration Expenses Before the Axe Comes Down; Appellate Court Found No FAA Preemption, With This Preemption Issue Now Being Reviewed By The California Supreme Court.

               Although unpublished, Costa-Fleeson v. Americor Funding, Inc., Case No. G062962 (4^th Dist., Div. 3 Aug. 1, 2024) (unpublished) is a stark reminder to employers that failure to timely pay arbitration fees can result in the forfeiture of the ability to arbitrate as well as imposition of attorney’s fees and costs under Code of Civil Procedure sections 1281.98(c)(1) [covering “all attorney’s fees and costs associated with the abandoned arbitration proceeding”] and 1281.99 [with this latter statute providing for a mandatory monetary sanction to pay reasonable attorney’s fees and costs incurred by the employee as a result of the material breach of the arbitration agreement].  The appellate court affirmed five of six categories of fees and costs awarded to employee by the lower court as a result of employer’s failure to timely pay arbitration dues, with the employer likely not happy with the $176,687.96 adverse award.  In doing so, it found the lower court’s order was appealable as a monetary sanction under CCP § 904.1(a)(12).  The 4/3 DCA also found unpersuasive that the statutes were preempted by the Federal Arbitration Act.

               BLOG UPDATE—The FAA preemption issue was recently taken up for review, on June 12, 2024, by the California Supreme Court in Hohenshelt v. Superior Court (2d Dist., Div. 8 2/27/24), where the majority found no preemption and where dissenting Justice Wiley found the arbitration payment statutes were preempted.

Eminent Domain, Reasonableness Of Fees: City Losing Summary Judgment Motion In Eminent Domain Proceeding Was Properly Saddled With $246,744.50 In Fees

Summary Judgment Grant Was A Predicate For CCP § 1268.610 Fees, And Lower Court Made Reductions For Duplicative Work.

               In City of Ontario v. We Buy Homes Any Condition, LLC, Case No. D083080 (4^th Dist., Div. 1 July 19, 2024 filed) (published on July 31, 2024), City lost an eminent domain case at the summary judgment stage, a determination affirmed on appeal.  The lower court also awarded the defense $246,744.50 in CCP § 1268.610 attorney’s fees for prevailing, reducing the “ask” request of $331,161.50 downward.  City’s appeal of the fee award was unsuccessful.  The appellate court determined that a SJM grant was a dismissal which qualified the defense for fees under section 1268.610.  With respect to the amount of fees awarded, there was no abuse of discretion—the lower court reduced a second firm’s fees by 70% and also reduced lead partners’ time on the SJM by 50%, showing a reasonable exercise of discretion. 

Fee Clause Interpretation, Section 1717: Prevailing Defendant’s Dismissal Of Cross-Complaint After Winning Did Not Give Rise To Fee Exposure

Santisas Rule Applied, With Dismissed Cross-Complaint Only Raising Contractual Claims.

               In Colaco v. Marcum LLP, Case No. B326252 (2d Dist., Div. 2 July 30, 2024) (unpublished), plaintiff sued his accounting firm for misrepresentation after losing money in some investments, with the defendant obtaining summary judgment and then voluntarily dismissing a cross-complaint containing indemnity and declaratory relief cross-claims.  Although the accounting firm’s engagement letters had broad fee clauses, the lower court denied plaintiff’s request to be awarded attorney’s fees under Civil Code section 1717.  The 2/2 DCA affirmed under the Santisas v. Goodin, 17 Cal.4^th 599, 602 (1998) rule applicable to voluntarily dismissed contract claims.  Plaintiff could not distance himself from admissions that he was suing “on the contract,” and he could not articulate persuasively how the dismissed cross-claims were tort claims falling outside of Santisas. 

Civil Rights: The Price Of A Frivolous ADA Hotel Accessibility Action In Terms Of Attorney’s Fees—Plaintiff Was Hit With A $57,604.90 Adverse Fee/Costs Award

Voluntary Dismissal Before Opposition To Summary Judgment Motion Did Not Do The Trick.

               In Garcia v. Zarco Hotels Incorporated, Case No. B332298 (2d Dist., Div. 1 July 29, 2024) (unpublished), plaintiff brought an ADA suit challenging a hotel’s accessibility policies to enable disabled persons to determine whether the hotel’s common areas and room were accessible to them.  Hotel moved for summary judgment, challenging the accessibility assumptions, with plaintiff dismissing the case before any SJM opposition was due.  (In moving for SJM, hotel relied on about 50 federal district court decisions dismissing similar claims about hotel reservations websites, most filed by plaintiff’s counsel and including many where plaintiff was the plaintiff.)  The lower court found that plaintiff’s case was frivolous under the ADA’s fee-shifting provision in 42 U.S.C. § 12205 which permits a court, in its discretion, to award reasonable attorney’s fees and costs against a plaintiff and in favor of a prevailing defendant where “the plaintiff’s action was frivolous, unreasonable, or without foundation.”  (Summers v. A. Teichert & Son, Inc., 127 F.3d 1150, 1151 (9^th Cir. 1997).)  The lower court awarded $57,604.90 in fees and costs to hotel as the prevailing party.

               The 2/1 DCA affirmed, based on an abuse of discretion review standard.  Plaintiff’s own evidence did not bear out his case, and the federal decisions otherwise did not blunt that the hotel’s website was ADA compliant based on the SJM evidence never refuted by Plaintiff.

In The News . . . . California Lemon Law Cases Are On The Rise At The State Trial Court Level

Orange County Register OpEd Piece Thinks Attorney’s Fees For Plaintiffs Is The Motivating Cause.

               Although we are not endorsing OpEd views in this blog, we will report on ones which have their own take on issues which the writers believe implicate attorney’s fees issues.

               The Sunday, July 28, 2024 edition of The Orange County Register has an OpEd piece authored by Kyla Christoffersen Powell, who reported that California “lemon law” cases in 2023 surged to a total of 22,655 cases filed statewide, a 52% increase from the previous year.  She reports that the situation is acute in Los Angeles County, where lemon law cases spiked 1,400% in branch courts between 2021 and 2023—with two Los Angeles County Superior Court judges reporting that they had total dockets in excess of 760 cases.  She also reports that, in 2023, just seven law firms filed 54% of all lemon law cases in the state, with the most prolific firms increasing their filings almost 75% between 2022 and 2023.  Ms. Powell believes the dramatic increase is due to the pro-plaintiff fee shifting provisions of the Song-Beverly Act.  She makes some suggestions for reforms, such as a pre-lawsuit notice, capping of fees, and wider use of an arbitration protocol potentially available in these types of disputes.

               She ends by quoting Judge Timothy Taylor of the San Diego County Superior Court, who noted that certain attorneys are “emboldened to over-litigate cases the manufacturers regularly seek to settle, with no benefit to the injured consumer.”

Civil Rights, Sanctions: 4/3 DCA Reverses $98,852 Sanctions Award Under CCP § 128.7 After Concluding That Plaintiff Successfully Defeated Summary Judgment Motion On ADA And Related Claims

For ADA/Disability Practitioners, A Disabled’s Successor May Have Standing To Pursue ADA And Related Claims For Injunctive Relief.

               In Saurman v. Peter’s Landing Property Owner, LLC, Case No. G061561 (4^th Dist., Div. 3 July 26, 2024) (published), the Court of Appeal reversed a summary judgment grant and $98,852 CCP § 128.7 sanctions award against husband, a successor to a deceased wife claiming ADA, Unruh Act, and Disabled Persons Act violations.  For practitioners in this area, this opinion is “must” reading for purposes of establishing whether a successor may have standing to pursue injunctive relief for the deceased person, for that person “as well as the public general” in state court (but not necessarily federal court).  That reversal of the grant of summary judgment pretty much meant that the section 128.7 sanctions order also fell because of the standing determination.  Acting Presiding Justice Moore penned the 3-0 opinion.

Indemnity: Because California State Precedent Does Not Allow For Recovery Of First-Party Attorney’s Fees Under A Standard Third-Party Indemnity Clause, Ninth Circuit’s Earlier Dewitt Decision Was Incorrectly Decided

Concurring Justice Explains That A More Flexible Standard Of Intra-Circuit Stare Decisis Is Applicable To State Law Questions.

               In AGK Sierra De Monteserrat, L.P. v. Comerica Bank, No. 23-15290 (9^th Cir. July 19, 2024) (published), the Ninth Circuit reversed a district judge’s grant of attorney’s fees as damages under an indemnity provision despite California state court precedents holding that first-party attorney’s fees are not recoverable under a standard, third-party indemnity provision absent clear language allowing for such fee recovery.  The Ninth Circuit held that its earlier interpretation in Dewitt v. Western Pacific Railroad Corp., 719 F.2d 1448 (9^th Cir. 1983) was incorrect, which led to the reversal.  However, it did remand to see if fees were recoverable under an indemnity provision in a different document.  The concurring circuit judge explained why a more flexible standard of intra-circuit stare decisis applies to state law questions versus federal law questions. 

Retainer Agreements: Client Funds With Law Firm Not Immune From Judgment Creditor Third-Party Level Where Law Firm Did Not Perform Any Services To Earn Compensation Under A Flat Fee Agreement

Good Discussion Of Professional Responsibility Rule Requirements For Flat Fee Agreement Arrangements.

               In Dickson v. Mann, Case No. D081851 (4^th Dist., Div. 1 July 16, 2024) (published), an appellate court has a discussion on who owns and how to handle client funds under a flat fee agreement.  There, it agreed with a lower court’s assessment that a judgment debtor client’s deposit of fees with a law firm were not immune from third-party levy because law firm had yet to earn any compensations for services under the flat fee agreement.  The opinion has a good discussion on using law firm operating accounts versus trust account with respect to a deposit of client funds under a flat fee agreement.

Section 998: Where Respondent Made A Counteroffer to A Section 998 Offer, Lower Court Erred In Entering Judgment Under This Scenario

Judgment Was Void On Its Face.

               A judgment based on acceptance of a CCP § 998 offer was found void because the accepting party made a counteroffer in Endrawes v. Mitchell, Case No. B330916 (2d Dist., Div. 6 July 16, 2024) (unpublished).  There, a defendant accepted a 998 offer but added language indicating appellant was releasing “any and all other persons, whatsoever, from any and all claims . . . .”  This language rendered a judgment entered on the “acceptance” void because plaintiff did not accept the counteroffer, because plaintiff’s offer became void after 30 days.  (Bias v. Wright, 103 Cal.App.4^th 811, 814, 817 (2022).)

Costs: With Respect Trial Transcription Costs, Court Reporter Fee Are Awardable But Transcript Preparation Is Not Unless Transcripts Ordered By The Court

Also, Messenger And E-Filing Charges Are Allowable In The Court’s Discretion.

               McCluskey v. Hendricks, Case No. B331457 (2d Dist., Div. 2 July 16, 2024) (unpublished) reinforced these principles for recovery of routine costs: (1) court reporter fees for trial transcription are recoverable (CCP § 1033.5(a)(11); Gov. Code, § 68086(d)(2)); (2) actual trial transcript preparation costs are not recoverable unless ordered by the court (CCP § 1033.5(b)(5)); and (3) messenger and e-filing charges are allowable in the discretion of the lower court if reasonably necessary for the litigation. 

Arbitration: Arbitration Clause Requiring Employee To Pay Nonfrivolous Motion To Compel Arbitration And Subsequent Arbitration Fees/Costs Was Unconscionable

However, Severability Was To Be Considered On Remand.

               In Ramirez v. Charter Communications, Inc., Case No. S273802 (Cal. Supreme Ct. July 15, 2024) (published), an employer faced unconscionability rulings on components of its arbitration clause, with the state supreme court issuing rulings on unconscionability and then whether those infirm clauses should or could be severed—important topics for employment law practitioners.  As applicable here, the California Supreme Court determined that arbitration clauses requiring an employee to pay motion to compel arbitration and subsequent arbitration costs were unconscionable because they violated FEHA law requiring that fees and costs could only be awarded if employee’s opposition to the motion to compel and subsequent arbitration prosecution was frivolous and without substance.

Civil Rights, Prevailing Party: Plaintiff Entitled to Prevailing Party Fees Under The California Voting Rights Act Of 2001

Although Unintentional, School District Continued To Defend The Legality Of Its At-Large Elections Even Though Plaintiff Was Able To Show A Violation Of The Act, Obtain An Injunction, And Force Trustee-Area Election Based On Plaintiff’s Proposed Map.

               Although the amount of the fee award is not mentioned, the 4/1 DCA affirmed the award in favor of Plaintiff and against School District in Southwest Voter Registration Education Project v. Ramona Unified School Dist., Case No. D081500 (4^th Dist., Div. 1 July 11, 2024) (unpublished).  There, Plaintiff proved a violation of California’s Voting Rights Act of 2001, which statutory scheme has a prevailing party fee-shifting provision under Elections Code section 14030.  In line with the lower court’s determinations, the appellate court agreed Plaintiff had obtained its primary litigation objectives by obtaining an injunction against District’s at-large elections and forcing trustee-area elections based on plaintiff’s proposed map.  We would speculate that the fee award was somewhat substantial in nature.

Arbitration, Employment: Arbitrator’s Failure To Consider Unwaivable Fee Request Under Labor Code Section 226(e)(1) For Prevailing Employee Was Erroneous

Employee Won $4,000 For Employer’s Failure To Issue Accurate Itemized Wage Statements.

               In Sanzone v. DCH Korea Imports, LLC, Case No. G063483 (4^th Dist., Div. 3 July 3, 2024) (unpublished), an arbitrator awarded an employee $4,000 on a Labor Code failure to issue accurate itemized wage statements, after denying several other Labor Code claims, and ordering each side to bear their own fees (even though employer had to pay the costs of the arbitration).  Employee appealed, among other issues, the denial of attorney’s fees, claiming that he had an unwaivable statutory right to fees and costs under Labor Code section 226(e)(1), which is a plaintiff one-way favorable fee-shifting statute, such that the arbitrator exceeded his powers.

               The 4/3 DCA agreed, in an opinion authored by Justice Motoike.  Applying a de novo standard of review, it found an employee has unwaivable statutory rights under section 226(e)(1), a paramount concern ignored by the arbitrator and the lower court in confirming the award (and denying the employee’s vacatur request).  The panel understood that there were decisions under Civil Code section 1717 where arbitrators did not have to follow the 1717 mandate, but found that the reasoning in Pearson Dental Supplies, Inc. v. Superior Court, 48 Cal.4^th 665 (2010) apt because employee was denied the opportunity to be heard on the merits of the fee request.

               BLOG OBSERVATION—If we read this case correctly, the appellate court was concerned that the arbitrator did not even consider the request, not that a merits determination after considering it would be treated the same way.

Allocation, Deadlines, Family Law: $72,776.25 Appellate Fee Award To Ex-Husband For Ex-Wife’s Breach Of Fiduciary Duties Affirmed On Appeal, Although Husband Lost Section 271 Sanction Request

Lower Court Impliedly Extended The Fee Filing Deadline, With The Failure To File An Income/Expense Statement Found Nonprejudicial In Nature.

               Bryan v. Bryan, Case No. E080311 (4^th Dist., Div. 2 July 1, 2024) (unpublished) is a case where ex-husband was awarded $72,776.25 in appellate fees (out of a requested $90,000) for winning an appeal involving ex-wife’s claimed breach of fiduciary duty under Family Code section 1101(g), although ex-husband was denied Family Code section 271 sanctions.  Both parties appealed, but all determinations were affirmed.

               The appellate court found that the lower court impliedly allowed ex-husband to exceed the 40-day post-remittitur time deadline to file a fee motion.  It also found that his failure to file a FL-150 income/expense statement was nonprejudicial in nature.  However, ex-husband lost the 271 denial challenge because he failed to allocate fees for this request versus throwing them into “one pot.”

Special Fee Shifting Statutes: Denial Of DVRO Resulted In Adverse Fee/Cost Award Of $24,777.38 Against Unsuccessful Petitioning Party

Failure To Oppose The Fee Motion Was Fatal.

               A party prevailing in a domestic violence restraining order (DVRO) can obtain attorney’s fees and costs.  Ex-girlfriend lost a DVRO petition, with the lower court awarding ex-boyfriend $24,777.38 in attorney’s fees and costs.  The appellate court affirmed the awards in Gikkas v. Stern, Case No. A168298 (1^st Dist., Div. 1 July 1, 2024) (unpublished), finding especially dispositive ex-girlfriend’s failure to oppose the fee/cost request below.

Employment: Partially Dismissed/Frivolous Claims For Unpaid Commissions Under Labor Code Resulted In Substantial Adverse Fee And Cost Awards Against Plaintiff

$245,531 Was The Fee Award And $8,489.76 Was The Cost Award.

               In Doustkam v. Sage, Case No. B321390 et al. (2d Dist., Div. 2 July 1, 2024) (unpublished), plaintiff claimed $747,000 in unpaid commissions under the Labor Code, dismissing some claims and losing other claims because of a lack of evidentiary support.  The trial court found plaintiff’s claims to be frivolous such that defendants prevailed.  The lower court then awarded $245,531 in attorney’s fees and $8,439.76 in costs to defendants under Labor Code section 218.5, determinations affirmed on appeal.  This shows how unsuccessful, frivolous cases can result in substantial expense exposure to a losing plaintiff under section 218.5.

Arbitration: Where Costs-Shifting Component Only In Employer-Employee Arbitration Agreement Was Unconscionable, It Should Be Severed

Denial Of Motion To Compel Arbitration Was Reversed.

               In Helfet v. Motive Energy, Inc., Case No. B331359 (2d Dist., Div. 1 July 1, 2024) (unpublished), the appellate court reversed the denial of a motion to compel arbitration under an employer-employee contractual provision because the only unconscionable provision, an improper cost-shifting provision, could be severed so the case could proceed to arbitration.

Intellectual Property: District Judge Properly Denied Fees To Prevailing Party In Trademark Infringement Action

Trademark Did Not Arise Under The Contract Or Involve Exceptional Circumstances Under The Lanham Act.

               Plaintiff lost a trademark infringement suit against a defendant alleging use of a different mark than defendant’s trademark use.  There was a contractual fees clause under a partnership agreement involving uses of marks different than the one involved in the infringement action.  Defendant moved for contractual and Lanham Act fees for prevailing, claiming under the Lanham Act that the case was exceptional in nature.  The district judge denied the defense motion for fees.

               The Ninth Circuit affirmed in BillFloat Inc. v. Collins Cash Inc., Case No. 23-15405 et al. (9^th Cir. July 1, 2024) (published).  The partnership agreement only concerned use of a different mark; and, in any event, a trademark infringement claim was found to be totally independent of the parties’ partnership agreement because it arose four years earlier before the partnership agreement was signed.   With respect to the Lanham Act fee claim, the appellate court agreed that the claim was not meritless based on dismissal of a single contract claim and based upon the facts that the prelitigation activities by plaintiff were not egregious enough to warrant an award of fees (just normal exercises which may have not been productive).

Arbitration: 1/1 DCA Agrees That 30-Day Employer Arbitration Payment Deadline Is Not Preempted By The FAA

Split Is Now Present Between The Intermediate Appellate Courts On This Issue. 

               In Keeton v. Tesla, Inc., Case No. A166690 (1^st Dist., Div. 1 June 26, 2024) (published), the 1/1 DCA considered whether CCP § 1281.98(a)(1), the 30-day window for employers to pay arbitration expenses, is preempted by the Federal Arbitration Act (FAA).  After determining that was no unmistakable delegation of the issue to the arbitrator, the appellate court found that section 1281.98 was not preempted by the FAA, agreeing with Gallo v. Wood Ranch USA, Inc., 81 Cal.App.5^th 621 and disagreeing with Hernandez v. Sohnen Enterprises, Inc., 102 Cal.App.5^th 222 (2024).  Given that there is now a clear split on this issue among the intermediate appellate courts, we would predict that this case or Hernandez might be a candidate for state supreme court review.  (A petition for rehearing in Hernandez was denied on June 3, 2024.)

Discovery, Sanctions: $9,495 In Sanctions Against Client And Her Attorney For Failing To Reasonably Meet And Confer On Discovery Disputes Was Affirmed On Appeal

Unpublished Opinion Has A Discussion On What Not To Do In The Meet And Confer Battles.

               In Estate of Ambrose-Gordon, Case Nos. A169189 et al. (1^st Dist., Div. 5 June 24, 2024) (unpublished), a probate litigant and her attorney were sanctioned $9,495 in discovery sanctions for failing to reasonably meet and confer with the opposing side before moving to compel.  (Code Civ. Proc., §2023.020.)  The appellate court affirmed, citing factors which are instructive in showing why the lower court did not abuse its discretion:

• • Making no effort to schedule a live conversation after delivery of a formal meet and confer letter;
  • Waiting to announce that a motion to compel was being filed after opposing counsel provided notice he would be on vacation;
  • Conditioning any resolutions on payment of substantial fees of $45,000 or more before taking the motion to compel off calendar; and
  • Failing to withdraw the motion to compel after receiving amended discovery responses and asking for even more--$67,250—to withdraw the motion.

Fee Clause Interpretation, Judgment Enforcement, Section 1717: $70,635 Attorney’s Fees Award Favorable To Nonsignatory To A Contract, Reversed As A Matter Of Law

Plaintiffs’ Claims Against Nonsignatory Did Not Seek To Enforce The Contract, With No Judgment Enforcement Fees Available To The Nonsignatory.

               Crooymans v. Foumberg, Case No. B325110 (2d Dist., Div. 3 June 18, 2024) (unpublished) is a stark reminder that a nonsignatory to a contract, more often than not, does not face fee exposure under a contractual fees clause when that litigant was not a party to the underlying contract.

               In this case, plaintiffs obtained a favorable arbitration award against their late-father’s tax planning attorney, with a separate $1.7 million fee component embedded in the award under an attorney engagement letter with a fees clause.  But the relevant part of the case is that plaintiffs sued defendant Foumberg, a nonsignatory to the attorney engagement agreement, because he did some estate planning transfers for the tax planning attorney and his wife, with plaintiff claiming he was a shill for the judgment creditor attorney.  Foumberg won on a demurrer on the merits (not at issue) and then moved for attorney’s fees under Civil Code section 1717 based on the engagement letter to which he was not party.  The lower court awarded him $70,635 in attorney’s fees, prompting an appeal.

               The 2/3 DCA panel reversed as a matter of law.  The primary flaw was that Foumberg, a nonsignatory to the attorney engagement letter with a fees clause, was not sued under that agreement—the “on the contract” requirement of section 1717 was not satisfied.  In fact, the merger doctrine applicable when a judgment is entered which extinguishes contractual rights all the more so dictated the conclusion that no contractual fee recovery was available:  this meant plaintiff could not recover fees against Foumberg, so he could not do so either.  (Chelios v. Kaye, 219 Cal.App.3d 75, 79-80 (1990), abrogated by statute in Code Civ. Proc., § 685.040 in some regards; GrayI CPB, LLC v. SCC Acquisitions, Inc., 233 Cal.App.4^th 882, 890 (2015).)  Plaintiffs argued that Foumberg had alter ego exposure, but this did not resonate for two reasons:  (1) plaintiffs attempted “reverse piercing” which is not generally allowed; and (2) plaintiffs were attempting recovery on a tort—not contract—claim which was not within the scope of the attorney engagement contractual fees clause, relying on the reasoning in Brown Bark III, L.P. v. Haver, 219 Cal.App.4^th 809, 828-829 (2013).  Finally, because plaintiffs argued Foumberg was accountable for fees as an alter ego, the appellate panel found that plaintiffs had not sued the attorney under traditional alter ego analysis, had sought unconventional reverse piercing, and had obtained a judgment against attorney which was based on tort rather than on a contract. 

Homeowner Associations, Prevailing Party: Homeowner Only Achieving Marginal Success, But Not Removing Quorum Requirements Or Board Member Removals, Was Not A Pragmatic Prevailing Party

Davis-Stirling Act And CC&R Provisions Did Not Require A Fee Award To Homeowner.

               In Mays v. Oakview Homeowners Assn., Case Nos. D083707 et al. (4^th Dist., Div. 1 June 17, 2024) (unpublished), homeowner received a fairly limited mandate win to direct the HOA to conduct an election to replace board directors whose terms had expired.  However, the main litigation objectives of her proceeding—getting rid of a quorum requirement and removing certain directors—did not happen.  Homeowner moved for attorney’s fees of $57,775.81 plus a positive 1.5 multiplier under the Davis-Stirling Act and the CC&Rs.  The lower court denied the motion.

               Homeowner’s appeal on the fee denial was not successful.  The CC&Rs only related to delinquent assessments, not broader homeowner-HOA disputes.  On the Davis-Stirling Act fee request, the lower court did not abuse its discretion in deciding that homeowner did not achieve her main litigation objectives—the additional relief she requested and did not win on—results which properly led to a denial of fees to homeowner. 

Paralegal Time, Special Fee Shifting Statutes: Reduced Change Of Venue Fee Award Of $9,019.50 To Certain Defendants Affirmed In Part

Lower Court Properly Did Not Award Self-Represented Attorney Any Fees Relating To Himself (But Okay For Other Codefendants), But Matter Remanded To Apportion Fees And To Award Paralegal Compensation For A Law Clerk’s Work.

               Civil Code section 396b, subd. (b) allows a lower court, in its discretion, to award attorney’s fees to a defendant successfully moving to change venue where the other side refused to stipulate to a change and the plaintiff failed to file the suit in good faith in the transferor venue.   That statute was at issue in California Capitalism Associates, LLC v. Marston, Case Nos. E078759 et al. (4^th Dist., Div. 2 June 13, 2024) (unpublished).

               There, plaintiffs entered into a joint venture agreement with the Chemehuevi Indian Tribe about establishing a cannabis and industrial complex in San Bernardino.  After the Tribe terminated the joint venture agreement for an alleged breach, plaintiffs filed a lawsuit against their attorneys and main attorney’s law firm in San Bernardino County even though all but one attorney resided and did business in Mendocino County (where the legal work was performed).  Defendants moved to change venue from San Bernardino to Mendocino County, after plaintiffs refused to stipulate to a change, with the lower court granting the motion and then awarding a reduced fee award under section 396(b), subd. (b) from the “ask” to the tune of $9,019.50.  The lower court denied fees to attorney Marston because he was functionally representing himself on the venue change motion, but it also denied fees for Marston’s work on behalf of other codefendants.  Additionally, the lower court denied fees for the work of a law clerk. 

               The 4/2 DCA decided the record showed that the change of venue opposition was not in good faith based on the location of the attorneys and where the work was performed.  The reduced fee award was proper, because the lower court found that a very experienced attorney should have charged $350 per hour, not $550 per hour (even though this would have been appropriate for general Indian law work), mainly because the venue motion was not that complex.  The lower court also properly reduced the award for unrelated venue motion work and for excessive time spent on the reply brief/venue change oral argument preparation work.  The appellate court agreed that attorney Marston was functionally representing himself so the Trope prohibition applied as to work benefitting himself, but that he could represent the other codefendants such that denying fees for that work was erroneous—a remand was necessary to determine a reasonable fee award and proper apportionment of the fees.  Finally, it was error for the lower court to deny paralegal compensation for the law clerk’s work on the motion, another remand point for further proceedings.  (See Guinn v. Dotson, 23 Cal.App.4^th 262, 269 (1994); Roe v. Halbig, 29 Cal.App.5^th 286, 312 (2018) [paralegal compensation should be generally allowable].)

Costs, Deadlines, Probate, Reasonableness Of Fees, Special Fee Shifting Statutes: $175,252.50 Fee Award Under Financial Elder Abuse Statute Affirmed On Appeal

Fee Request Reduced Down From $203,865; Two Awarded Routine Costs Components Remanded For A Further Hearing.

               In Thompson v. Ito, Case No. G061437 (4^th Dist., Div. 3 June 12, 2024) (unpublished), a defendant losing a trust undue influence case and determined to have committed financial elder abuse was hit with an adverse attorney’s fees award of $175,252.50 out of a requested $203,865 (reductions made based on excessive hourly rates, clerical work, and some discovery work not allowed by the lower court).  The award was made under Welfare & Institutions Code section 15657.5, providing that a fee award is mandatory where financial elder abuse is found.  The lower court also awarded the full costs request of $27,961.07 to the winning plaintiff. 

               Defendant’s appeal was mainly unsuccessful except for a remand to have a further hearing on two components of the costs award.

The argument that no attorney’s fees could be awarded while a merits appeal was pending (with the financial elder abuse findings affirmed earlier) lacked merit because the issue was a collateral matter not embraced within the merits judgment.  (Bankes v. Lucas, 9 Cal.App.4^th 365, 369 (1992), superseded by statute on other grounds; Korchemny v. Piterman, 68 Cal.App.5^th 1032, 1052 (2021).)

               Fees were mandatory against a party found to have committed financial elder abuse, so no “prevailing party” analysis was necessary.

               The fee award was no abuse of discretion, given that the lower court did reduce the request, that appellant raised new arguments on appeal (with those challenges forfeited), and that appellant failed to specify which block-billed entries should be disallowed.

               With respect to the costs award, appellant did not file a motion to tax costs, but the lower court did not err in allowing entertainment of his fee opposition challenges to costs.  Two components, the award of lodging and parking costs (which are discretionary items to be allowed or disallowed) for one person—totaling $2,468.67—was reversed and remanded because it was unclear the role of the claiming person in the case.  However, because the costs claimant would be given the opportunity to meet this objection, the matter was remanded to have a hearing on these two costs components only.

               Justice Motoike authored the 3-0 unpublished opinion.

Laffey Matrix: For Complex Federal Fee-Shifting Cases In The District Of Columbia, Many Courts Are Endorsing Use Of The Fitzpatrick Matrix

Vanderbilt Professor And His Students Updated Information From The U.S. Attorney’s Office In The Original Laffey Matrix.

               Although it has not been used outside of the District of Columbia, D.C. fee claimants now have another alternative for establishing reasonable hourly rates of their attorneys, with some caveats:  the Fitzpatrick Matrix.

               Vanderbilt Professor Brian Fitzpatrick, with the help of his students, helped the U.S. Attorney’s Office in D.C. to update the matrix using many data points from actual litigated federal D.C. cases based on years of experience for attorneys and paralegals/law clerks, searching cases in 2013-2020 and then applying a CPI index increase for years 2021-2023.  It has been used by several D.C. courts since its development.  (See, e.g., J.T. v. District of Columbia, 2023 WL 355940 (D.D.C. Jan. 23, 2023).)

               There are some important caveats in its use:  it only applies to complex, fee-shifting federal litigation in the D.C. area (not outside D.C.).  So, the complexity of the case is an important factor in its use.  (Compare Bradley v. U.S., Case No. 19-4001 (Fed. Cl. Feb. 1, 2023) [matrix used in National Trails System Act case, where fees were sought under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970] with Bond v. Friendship Public Charter School Bd. of Trustees, Case No. 23-cv-367-ZMF (D.D.C. Dec. 18, 2023) [IDEA litigation is not presumptively complex; allowing fees under the matrix but discounting by 25% based on lack of complexity].)

Allocation, Indemnity, Reasonableness Of Fees: Defendant/Cross-Complainant Winning $48,511.50 On Certain Intentional Tort Claims And Defeating A Complaint In An Occupancy License Indemnity Dispute Properly Awarded $225,894 In Contractual Attorney Fees

Opposing Party Did Not Adequately Provide A Litigation History Roadmap, Never Suggested A Reduced Award Amount, And Never Attacked Specific Billing Entries; No Allocation Necessary Because Work Was Inextricably Intertwined.

               Cubework.com, Inc. v. Solo Trading, Case No. B330959 (2d Dist., Div. 1 June 6, 2024) (unpublished) has some nice tips for what opposing parties may need to do as far as attacking a fee request and shows how a fees claimant did the right thing by voluntarily eliminating duplicative entries.

               In this case, plaintiff lost on its claims under an occupancy license agreement having an indemnity clause, but defendant won $48,511.50 in compensatory damages on its cross-complaint under some intentional tort claims where the lower court found willful misconduct by plaintiff/cross-defendant.  Then, winning cross-complainant moved for fees after voluntarily reducing 90 duplicative entries.  The lower court awarded the full ask of $225,894, given the litigation spanned over two years.

               Cubework’s appeal of the fee award was unsuccessful.  The indemnity clause was direct between the two parties, with the trial court finding willful misconduct by Cubework under the intentional tort claims although that type of misconduct was not substantively necessary—but it existed and satisfied the indemnity condition for an award of fees.  There was no need to apportion fees for unsuccessful work as to another party dismissed before trial because it was intertwined with successful work on the intentional tort claims.  Because the fee claimant voluntarily eliminated duplicative entries and the time/hourly rates were reasonable to the lower court, the appellate court could not find the award was shocking, even though the lower court acknowledged it was much more that the compensatory damages award.  The appellate panel also observed that the opposing party failed to provide an adequate litigation history record, did not suggest a reduced award number at oral argument, and did not attack specific billing entries.  These observations provide some valuable tips in moving for and opposing fee requests in state court (although the same tips likely are apt in federal court).

Insurance: Insured’s Brandt Fee Recovery Affirmed On Appeal Where Insured-Counsel Agreement Modified Before Trial But Disclosed To Insurer

No Manipulation Of Fees Shown, With Insurer Not Having Standing To Challenge The Fee Agreement As Unconscionable.

               Wietsma v. Foremost Ins. Co. of Grand Rapids, MI, Case No. C097885 (3d Dist. May 30, 2024) (unpublished) involved challenges to a Brandt fee recovery by the insured, although in a much reduced fashion from the original fee request.  Insurer brought lots of challenges to the fee award, but they were rejected on appeal.

               Insured filed an $84,000 rental property claim against insurer, hiring counsel who entered into a 2017 fee agreement based on contingency, attorney lien, and costs-of-proof sanctions components.  This agreement was produced to insurer during discovery.  After some more extensive litigation by insurer, insured entered into a new 2021 fee agreement with counsel providing for the same terms as in the 2017 fee agreement but adding a provision requiring compensation via an hourly rate if a jury panel was sworn.  Insured’s counsel produced this new agreement to insurer within 2 days of execution.  Insured won a jury trial against the insurer, winning $131,201.92 in damages although $55,223.64 consisted of policy benefits compensation that the insurer unreasonably failed to pay.  Insured moved to recover $606,278 in Brandt allocated fees.  Most of insurer’s arguments were rejected as far as denying fees, but the lower court awarded insured $384,825 in fees.  (The parties stipulated that Brandt fees could be considered by the lower court, post-trial, rather than putting damages evidence in front of the jury—not an uncommon stipulation.)

               Insurer’s appellate arguments for a reversal did not carry the day.  The appellate court rejected the idea that proof of occurring a debt to the insured’s counsel suffices to show fees were incurred, not actual payment.  (Contra Costa County Title Co. v. Waloff,184 Cal.App.2d 59, 68 (1960).)  “Furthermore, requiring an insured to specifically prove he or she has paid or will be held to pay the accrued fees makes little sense in the Brandt scenario,” especially in a contingency fee arrangement.  The appellate panel also rejected the idea that insured must show it secured the lowest contingency fees to mitigate damages, because it simply ignores the actual costs needed to vindicate the insured’s interests under the policy.  Because insurer did not have standing to challenge the fee agreements between insured and counsel, the challenge to the new 2021 new fee agreement did not prevail.  Finally, the Court of Appeal was sensitive to the “fee agreement manipulation argument,” but did not find it was persuasive under the facts on appeal.  Insured did not change the fee agreement after trial, as in a case cited by insurer (Pulte Homes, 14 Cal.App.5^th at 1129-1132), but simply changed the fee deal to reflect insurer’s tenacious litigation efforts to get to the ultimate result.  “We need not decide when the line between proper and improper modification is crossed as we conclude it was not crossed here.”

Section 998: This Provision Does Not Provide An Independent Basis For Fee Entitlement, You Either Have It Or Not Under Fee Entitlement Predicates

Nothing In Accepted 998 Offer Or Subsequent Settlement Agreement Had A Fee Entitlement In Them.

               We have always blogged that a threshold issue is whether a claimant has a fee entitlement basis.  If you do not, you lose.  That was the case in Arriagarazo v. BMW of North America, LLC, Case No. C097296 (3d Dist. May 29, 2024) (unpublished).  After convoluted procedural litigation activities, a CCP § 998 offer was accepted, with both sides bearing their own costs and attorney’s fees, but not definitively resolving how the case was to be resolved.  BMW was hit for $968 in costs after the case was ultimately resolved through stipulated pleadings, but no attorney’s fees were awarded by requesting parties under the prior events.  This result was affirmed on appeal.  The causes of action were tort claims for strict products liability, negligence, and wrongful death, none of which had fee entitlement bases.  Without that being established, no attorney’s fees were awardable especially given no other agreement to fees under the 998 offer or subsequent pleadings resulting in a resolution of the case.

Prevailing Party, Special Fee Shifting Statutes: Court Of Appeal Reverses, As A Matter Of Law, Fee Denial To Mobile Home Park Because Voluntary Dismissal By Plaintiff Of MRL Claims Made Mobile Home Park A Prevailing Party

On Remand, Reasonableness Of Fees And Allocation On MRL Claims Were The Charge Of The Lower Court.

               In Stooksberry v. El Rova Mobile Home Park, LLC, Case No B329202 (2d Dist., Div. 1 May 29, 2024) (unpublished), plaintiff resident dismissed a complaint alleging late payment of rent, fee increases, and other claims arising under the Mobilehome Residency Law (Civ. Code, § 798 et seq.) (MRL), which has a prevailing party clause which is bilateral in nature.  The lower court denied fees to the mobile home park, but that was reversed as a matter of law.  The problem for the mobilehome homeowner was that two of his claims did arise under the MRL, despite trying to argue otherwise.  Even worse, the MRL scheme does allow attorney’s fees to a party where the litigation is dismissed in the defense favor (Civ. Code, § 798.85.), with caselaw extending the dismissal to a voluntary dismissal.  That resulted in a remand to determine what fees were owed to the mobile home park, keeping in mind the lower court had to face reasonableness and allocation principles given only two claims were adversely against mobile home park owner under the MRL.

Sanctions: $35,000 Sanctions Order Against Plaintiff’s Counsel Affirmed After Lower Court Dismissed Frivolous Minimum Wage Hour Claims

Defense Counsel Did A Wise Thing:  Reduced $150,000 Prior Request Down To $35,000 In Its Reply Brief—Getting The Lower Ask In Toto.

               Baptiste v. Ralph Grocery Co., Case No. D082554 (4^th Dist., Div. 1 May 28, 2024) (unpublished) is a good example of prudent judgment exercised by defense counsel.  The case involved a CCP § 128.7 sanctions request against plaintiff’s counsel for frivolous minimum wage hour claims which were dismissed without leave at the demurrer stage.  Although originally asking for at least $150,000 in sanctions, defense counsel lowered the request to $35,000 for the direct demurrer work.  The lower court liked it, awarding the $35,000 lowered “ask.”  The appellate court liked it too, affirming the merits ruling and the amount of the sanctions. 

Arbitration: CCP § 1281.97 Orders Are Appealable And FAA Preempts CCP Deadline Provision

Unpublished Solis Decision, From The 2/5 DCA, Follows Reasoning In Recently Published Hernandez Opinion Over A Dissent.

               On May 24, 2024, we posted on Hernandez v. Sohnen Enterprises, Inc., a May 22, 2024 2/5 DCA opinion which was published, deciding CCP § 1281.97 orders are appealable and § 1281.97 was preempted by the FAA where a contract said the FAA governed—over a dissenting justice’s contrary reasoning.  The same division came to the same result in the unpublished opinion of Solis v. Sohnen Enterprises, Inc., Case No. B323296 (2d Dist., Div. 5 May 23, 2024) (unpublished), also a 2-1 decision. 

Probate, Section 998: No Matter Whether Probate Code Provisions Or CCP § 998 Applied. Lower Court Properly Granted Expert Witness Fees To Attorney Who Winded Down Deceased Attorney Friend’s Practice In Fee Division Battle With Friend’s Administrator

In Dicta, Appellate Court Suggested 998 Offers May Not Be Barred In Probate Litigation.

               Estate of Howell, Case No. D081920 (4^th Dist., Div. 1 May 23, 2024) (unpublished) is interesting reading for probate practitioners.

               This case involved a battle over attorney fee compensation to be divided between the administrator wife of a deceased attorney and another attorney (who was a friend of the deceased attorney and appointed to wind down the law practice).  That latter attorney brought significant fees into the practice being wound down.  The attorney sent a CCP § 998 offer to administrator wife to the tune of $300,000, which was not accepted.  The matter proceeded to trial, with the attorney getting $872,914 and with wife obtaining $237,428.  Attorney used a forensic accountant expert who the lower court found very helpful in establishing the court’s division of fee compensation, later awarding $53,240.80 in expert witness fees to the attorney.  Wife appealed the postjudgment expert witness fee order.

               The 4/1 DCA affirmed.  It found the lower court had discretion to award the expert fees under Probate Code sections 1000 and 1002.  However, the panel then stated that it did not believe that CCP § 998 offers were barred in probate litigation, so that was another ground on which to affirm—even though it did not have to determine if section 1002 superseded “the constellation” of CCP §§ 1032, 1033.5, and 998 or whether the CCP governs in the absence of more Probate Code specificity.  The expert fee award was no abuse of discretion no matter which analytical path was chosen.

               BLOG UNDERVIEW—For those interested in this area, see our December 4, 2023 post on Peccia v. Guerrero, an unpublished opinion suggesting that section 1002 does supersede CCP §§ 1032, 1033.5 (although section 998 was not at issue).

Appealability: Failure To Appeal Subsequent Costs Award After Final Merits Judgment Entered Nunc Pro Tunc Earlier Resulted In A Dismissal Of Any Challenge To The Costs Award

Opinion Reminds Practitioners To Separately Appeal Costs And Fee Orders.

               In California Spine and Neurosurgery Institute v. Boston Scientific Corp., Case No. H049966 (6^th Dist. May 23, 2024) (unpublished), plaintiff lost its case, resulting in a final merits judgment which was entered nunc pro tunc earlier and a later adverse costs award of $8,974.12, with many of the costs involving discretionary rather than “matter of right” determinations.  Plaintiff appealed from the final judgment, but nothing in its notice of appeal mentioned the costs award.

               Although both parties argued the merits of the costs award, the appellate court determined it lacked jurisdiction because the costs award was not appealed.  It went with the prudent rule that costs awards are separately appealable and that the costs award under consideration was not “incidental to the judgment” because no costs were mentioned in the judgment and most of the costs were discretionary rather than “as a matter of right” to fall within the Grant exception.

Arbitration: 2/5 DCA Majority Decides That FAA Preempts 30 Day Payment Deadline For Employers Under CCP § 1281.97

Dissent Disagrees That FAA Is Offended By Section 1281.97.

               In Hernandez v. Sohnen Enterprises, Inc., Case No. B323303 (2d Dist., Div. 5 May 22, 2024) (published), a 2-1 panel decided that the FAA preempts the CCP § 1281.97 deadline requiring that an arbitration is forfeited unless the employer pays expenses within 30 days unless California arbitration rules are expressly incorporated into the parties’ contract, which coincides somewhat with Justice Wiley’s dissenting rationale in Hohenshelt v. Superior Court, 99 Cal.App.5^th 1319, 1328 (2024), pet’n for review filed, Case No. S284498 (Cal. Sup. Ct. Apr. 8, 2024) [discussed in our March 1, 2024 post].  The dissent did not believe section 1281.97 offended the FAA, siding with the logic of the Gallo decision.  The majority also decided that an order granting a motion to withdraw from arbitration under section 1281.97 was appealable; the dissent questioned whether that was the case, inviting legislative scrutiny, but assumed so for purposes of addressing the FAA preemption issue.  We would adventure a guess that this decision might be destined for California Supreme Court review.