CALIFORNIA ATTORNEY'S FEES

Miscellaneous, Default Judgments: 4/3 DCA Vacates Default Judgment And Remands To Determine If CCP § 425.11 Notice Of Damages Was Filed

If Not, Default Judgment Is Void; If So, Then Inefficiency/Lodestar Factors Must Be Considered On Remand.

            Although unpublished, Alshamlan v. Arabian Restaurants, Inc., Case No. G057543 (4^th Dist., Div. 3 May 12, 2020) (unpublished) is must reading for disabled rights plaintiffs’ attorneys seeking a default judgment against a target defendant.

            There, a balance-challenged plaintiff, after being refused lunch service at a restaurant which would not allow him to have his service dog Geo with him, filed a single-incident complaint under the Unruh Civil Rights Act, Disabled Persons Act, American with Disabilities Act, and Business and Professions Code section 17200.  The complaint did not specify any amount of damages, with plaintiff making a prayer for an injunction and “general, compensatory, and statutory damages” under the California disability statutes, trebled according to statute.  Plaintiff also prayed for an award of statutory attorney’s fees.  Plaintiff then filed for entry of a default judgment, requesting issuance of a permanent injunction and $40,311.33 in monetary damages--$25,000 in damages, $14,680 in fees, and $631.33 in costs.  The injunction request was based on the ADA and the damages/fees/costs based on the California disability statutes and ADA (fees and costs under the ADA, because only an injunction could be issued under that statute).  At the prove-up hearing, the trial court refused to award the requested $25,000 damages because no specific amount was alleged in the complaint.  However, it did award $5,000 in statutory minimum damages.  The trial judge further declined to issue the proposed injunction on the basis it was overbroad.  It rejected plaintiff’s request for over $14,000 in fees, finding $1,800 to be the reasonable fee award—expressing worry that the requested amount was way over the local rule default judgment guidelines.

            The 4/3 DCA, in a 3-0 decision authored by Justice Goethals, reversed and remanded.  The principal basis for the reversal/remand was the fact that plaintiff may not have served a notice/statement of damages under CCP § 425.11 to impart actual notice of the amounts of special and general damages being sought.  If one had not been filed, the default judgment was directed to be vacated on the basis it was void.  If the statement had been filed, the appellate court provided some additional guidance to the trial judge on the fees issue, given plaintiff had appealed on the ground that the fee award was too low.  The lower court should consider plaintiff’s limited success and other lodestar/reduction factors in fashioning a fee award if the statement of damages had been filed.

            BLOG COMMENT—Justice Goethals also discussed how the damages calculations under the state disability statute are confusing in the default judgment context, providing a good roadmap on how they are to be calculated.  A good primer for plaintiff disability attorneys seeking default judgments. 

Reasonableness Of Fees, Retainer Agreements: Lower Court Properly Denied Attorney’s Fees And Costs For Winning $7,580 Against Ex-Client In Fee Collection Case

Reason Was That Matter Should Have Been Brought As Limited Civil Case Rather Than An Unlimited One.

            Code of Civil Procedure section 1033 grants a trial court discretion to deny, in whole or in part, a plaintiff’s recovery of litigation costs, including attorney’s fees, where the plaintiff brought the action as an unlimited civil case but obtains a judgment for money damages in an amount that could have been recovered in a limited civil case. 

            In U.S. Construction Law v. Kinder, Case No. D074911 (4^th Dist., Div. 1 May 12, 2020) (unpublished), plaintiff law firm sued to recover over $68,000 in fees from ex-client for representing her in a cabin repair case alleging $75,000 in damages, a case where the causes of action which could have given ex-client fee recovery, if successful, were ejected through a summary judgment motion—which prompted law firm to withdraw.  Ex-client cross-complained for breach of fiduciary duty and negligence in the handling of the action from which law firm sought to collect the $68,000-plus in fees.  The jury only awarded law firm $7,580 in damages out of the requested $68,000-plus.  Law firm then sought attorney’s fees as the prevailing party under a contractual fees clause in the retainer agreement.  The trial judge denied the request in entirety based on the view that the cabin repair suit should not have been brought in the first place (but certainly not as an unlimited case) and the fees sought for the work were unreasonable.

            The 4/1 DCA affirmed, finding the fee/costs denial to be no abuse of discretion.  The cabin repair suit was not well-founded, and the law firm did not show good judgment in filing it as an unlimited case.  Although the trial court even expressed that a denial is an unusual ruling, that ruling was justified under the circumstances. 

Intellectual Property: Ninth Circuit Determines, In Case Of First Impression, That A Declaratory Relief Victory On Copyright Abandonment Qualifies For A Potential Fees Recovery Under 17 U.S.C. §505

Fee Denial Vacated And Remanded To Consider Whether It Qualifies Under Discretionary Copyright Fee-Shifting Statute Guidelines.

            The Ninth Circuit, in Doc’s Dream, LLC v. Dolores Press, Inc., No. 18-56073 (9^th Cir. May 13, 2020) (published), reversed a district judge’s determination in denying a copyright fees request under 17 U.S.C. §505 as a matter of law.  In a case of first impression, it determined that section 505 fees potentially were recoverable where copyright litigants won a declaratory relief victory on copyright abandonment.  The Ninth Circuit vacated the fee denial and remanded so that the district judge could then weigh the discretionary factors to determine if a fee award was justified under section 505. 

            BLOG CONGRATS—We noticed our friend Ben Shatz of Manatt Phelps was winning lead counsel for the appealing parties.  Congrats, Ben!

Special Fee Shifting Statute: Arace Decision Now Published

Welfare And Institutions Code § 15657.5(a) Mandates An Award Of Reasonable Attorney Fees/Costs Against Defendant Found Liable For Financial Abuse Under The Elder Abuse Act Even If Damages Are Not Awarded.

            We discussed the then unpublished case of Arace v. Medico Investments, LLC, Case No. E071194 (4^th Dist., Div. 2) in our March 25, 2020 post.  The case involves defendants’ unsuccessful appeal of attorney’s fees and costs awarded against them after a jury found them liable for financial abuse and neglect claims under the Elder Abuse Act.  Defendants claimed the award was made in error because the jury had awarded plaintiff damages only on the neglect claims – with no damages awarded on the financial abuse claim.  However, as the 4/2 DCA pointed out, the jury’s finding that defendants were liable for financial abuse mandated an award against them for plaintiff’s reasonable attorney’s fees and costs – pursuant to Welfare and Institutions Code section 15657.5(a) – even if no other form of relief was granted by the jury.  Arace was certified for publication on May 11, 2020.

Probate: $117,436.24 Section 17211(b) Fees Award Affirmed On Appeal Against Trustee Who Was Found To Have Acted In Bad Faith

Although Appealing The Section 17211(b) Fees Award, Trustee Argued Against The Prior Bad Faith Finding And Not Against The Amount Of Fees Awarded Or Beneficiary’s Statutory Entitlement To Them.

            In Cronin v. Hurst, Case No. G057303 (4^th Dist., Div. 3 May 8, 2020) (unpublished), a trustee, who was found to have engaged in self-dealing and acting in bad faith in the administration of his mother’s revocable living trust, appealed a Probate Code section 17211(b) attorney fees award against him of $117,436.24.  

            On appeal, the trustee did not argue against the amount of fees awarded or the beneficiary’s statutory entitlement to the fees.  Rather, he argued that his due process rights were violated because the fees had been awarded without a noticed motion, and that the trial court had failed to consider evidence that he had acted in good faith in administering the trust.

            The 4/3 DCA found his arguments without merit and affirmed.

            As to the noticed motion, the appellate panel found that a noticed motion is not required for a trial court to make a determination that a beneficiary is entitled to fees.  Probate Code § 17211(b) gives discretion to a trial court to award attorney fees to a trust beneficiary contesting the trustee’s account and conduct as was the case here.  Following a full trial on these issues, the trial court issued a statement of decision finding the trustee had acted in bad faith and without reasonable cause.  Additionally, based upon its finding of bad faith, the trial court properly exercised its discretion to surcharge the trustee attorney fees and costs – an order that can be made in the statement of decision.  (612 South LLC v. Laconic Limited Partnership 184 Cal.App.4^th 1270, 1284 (2010).)  Once the trial court made the determination that the beneficiary was entitled to the section 17211(b) statutory fees, the only necessary noticed motion related to the fees was for the “prove-up” of the amount of fees to be awarded – a noticed motion that was brought by the beneficiary in this matter.

            As to the trustee’s evidence of good faith administration argument, the trustee did not appeal the order granting beneficiary’s petition wherein trustee was found to have acted in bad faith.  Beyond that, the record did not reflect – nor did the trustee contend – that he was denied the opportunity to present evidence at trial that he did not act in bad faith or engage in self-dealing. 

Family Law: Family Code §§ 1101(g) And 271 Sanctions Order Against Father Affirmed On Appeal

Purpose Of These Sanctions Is To Spur Candidness Between Parties To Dissolution Action.

            In Marriage of Gutierrez, Case No. B291507 (2d Dist., Div. 8 May 6, 2020) (published), among other things, father was sanctioned under Family Code §§ 1101(g) [fee sanctions against spouse violating fiduciary duty of disclosing assets] and 271 [sanctions for prolonging litigation/not promoting settlement] when he failed to make proper disclosures about a different house.  Father appealed to no avail, misunderstanding the nature of these statutory provisions.  They are not designed to punish past wrongs, but instead were enacted to spur good conduct in terms of both sides being candid with each and the court.  Here was the takeaway by the deciding panel: “Couples dissolving their bonds thus must grasp the importance of candor. They, and their attorneys, must understand concealment will be costly and counterproductive.”  (Original emphasis.)

Homeowner Associations, SLAPP: $2,510 SLAPP Fee Award Affirmed Because No Opposition Filed At Trial Level

Fifth District Did Not Have To Decide If Indigency Of Plaintiff, An Argument Not Raised Before The Trial Judge, Could Justify A Fee Reduction Under SLAPP Fee Statute.

            The plaintiff/appellant in Cruz v. Abdelaziz, Case No. F077506 (5^th Dist. May 6, 2020) (unpublished) got SLAPPed and then failed to file an opposition to a defense fee request, resulting in an adverse fee award of $2,510.  Plaintiff appealed, principally arguing that his indigency was a factor which was not considered.  Although the Fifth District acknowledged that this is a factor for a losing homeowner in a Davis-Stirling Act fee-shifting dispute (Garcia v. Santana, 174 Cal.App.4^th 464, 476-477 (2009)), this indigency argument was not raised below and thus was waived, especially given the lack of an opposition by plaintiff.  Fee order affirmed.

            BLOG COMMENT—Although the case did not involve an HOA dispute, we cross-reference to our topical category “Homeowner Associations” for readers who may need to use the reasoning in Garcia.

Appeal Sanctions, SLAPP: $21,870.09 In Appellate SLAPP Fees Affirmed Where Prevailing Defendant Obtained Dismissal Of A SLAPP Merits Appeal For Being Untimely

Appellate Court Also Sanctioned Appellant’s Attorney For Relying On Unpublished DCA Opinions.

            Westreich v. Higa, Case No. B293726 (2d Dist., Div. 5 May 5, 2020) (unpublished) has two big warnings for attorneys arguing before California appellate courts:  make sure you have a reporter’s transcript in the appellate record when you are challenging the amount of an attorney’s fees award and do not cite unpublished DCA opinions unless you fall within narrow examples such as law of the case.

            This was a neighbor property boundary line dispute, with defendants defensing a prior lawsuit and with plaintiffs then filing a second lawsuit complaining that defendants took photos to defend the suit so as to infringe upon plaintiffs’ privacy rights.  That second suit got SLAPPed, with defendants awarded mandatory SLAPP fees at the trial level.  Plaintiffs appealed both rulings (which were consolidated at the appellate level), with the defense successfully arguing that the appeal from the SLAPP merits ruling was untimely after full appellate briefing and oral argument. That took the defense back to the trial court to request $21,870.09 in appellate fees for winning the SLAPP merits appeal on untimeliness grounds.  Plaintiffs’ main argument was that the requested fees were unreasonable because the untimeliness issue could have been resolved through an appellate dismissal motion before the merits were briefed and argued, citing an unpublished First District opinion in support of their argument.  The defense countered that the appeal consolidation decision made it more difficult such that all the arguments had to be addressed at the merits briefing stage.  The trial court held a hearing on the SLAPP appellate fee request, with no reporter’s transcript made of the hearing, and awarded the full requested fees to the defense.

            Plaintiffs appealed, and I bet a lot of you can guess what may have happened on appeal.

            The 2/5 DCA affirmed, but also imposed some mild appellate sanctions on plaintiffs’ appellate counsel.

            The fee order was sustained because (1) there was no reporter’s transcript to show what the trial judge did in response to plaintiffs’ arguments, all the more so given the existence of a succinct fee order (Rhule v. WaveFront Technology, Inc., 8 Cal.App.5^th 1223, 1229 n. 5 (2017)), and (2) no apportionment was necessary because defendants prevailed every step of the way.  With respect to the argument that a pre-merits appeal dismissal motion might have done the trick, the appellate court agreed that the consolidation of the two appeals made things a little tricky, cemented by nothing to suggest defendants had made a tactical election to pad their legal bills for the prior appellate work.  The appellate court then rejected plaintiffs’ argument that CRC 8.1115 (which prohibits citation to a DCA opinion not certified for publication) was unconstitutional, citing cases which had rejected this very argument.  The 2/5 DCA panel also sanctioned appellants’ attorney $1,100 for violating the CRC nonpublication citation rule given the defense warnings in their briefing and the published decisions rejecting the unconstitutionality argument.  Beyond that, defendants will get a chance to claim appellate costs and attorney’s fees for winning this second appeal!

Continuing Legal Education: Co-Contributor Mike Will Present “California Attorney Fees 2020” Webinar For Bridgeport Continuing Education On May 12

Time Slot Is 10:00 – 11:30 A.M., Including Ability To Field Questions From Participants.

            On May 12, between 10:00 – 11:30 a.m., co-contributor Mike will present “California Attorney Fees 2020,” a webinar through Bridgeport Continuing Education which features a detailed power point presentation as well as the ability to field questions from participants.

            This program will focus on tips for claiming and obtaining California attorney’s fees in both California state and federal courts.  It will cover, among other things, these topics:  (1) bases for requesting attorney’s fees; (2) how to structure fee petitions/motions; (3) how to attack fee petitions/motions; (4) how to develop the record in fee proceedings and what type of orders to request/fashion for future appeal; (5) tips for arguing fee issues before California state appellate courts/the Ninth Circuit Court of Appeals; and (5) selected issues of importance in the arbitration, SLAPP, civil rights, family law, private attorney general, and class action areas.

            More information is available from www.bridgeportce.com.

Civil Rights: Fee Recovery For Prevailing FEHA Plaintiff Reversed Because He Should Have Been Allowed The Hourly Rate Of His Los Angeles Attorneys When Inland Local Counsel Could Not Have Been Obtained

On Remand, Lower Court Also Needs To Reexamine Its Multiplier Analysis In Tandem With Rewarding Higher Hourly Rates.

            Caldera v. Dept. of Corrections and Rehabilitation, Case Nos. G057343/G057478 (4^th Dist., Div. 3 Apr. 30, 2020) (published) is a case where our local Santa Ana appellate court reviewed a FEHA attorney’s fees award to plaintiff’s Los Angeles attorneys where the case was venued in the Inland Empire (San Bernardino County).  It discusses lodestar and multiplier principles which are somewhat distinct under the FEHA fee-shifting statute.

            Plaintiff was a prison correctional officer who sometimes stuttered, filing a FEHA lawsuit against the California Department of Corrections and Rehabilitation and his supervisor, a lawsuit which had a protracted history—including two prior appellate decisions along the way after plaintiff won a $500,000 jury verdict in noneconomic damages despite a defense “highest” pre-trial offer of $70,000.  He had to turn to Los Angeles attorneys because no local San Bernardino attorney would take it under a contingency arrangement.  Plaintiff then filed a FEHA fees request for work spanning nearly a decade, namely, the jury work and two appeals.  Plaintiff requested $2,468,365 in fees (inclusive of a positive 2.0 multiplier), with the lower court—after various adjustments—awarding $810,067.50 in fees (no multiplier, but weighing some of those factors on the lodestar calculation).

            Unhappy with the fee result, plaintiff appealed.  Good thing.

            One main thing led to reversal:  reduction of hourly rates for plaintiff’s Los Angeles attorneys when the lower court held them to much lower Inland Empire hourly rates.  The principal problem was that plaintiff showed his use of L.A. attorneys with higher hourly rates was justified because local counsel could not be secured to vindicate his FEHA rights, such that L.A., not San Bernardino, rates applied.  (Center for Biological Diversity v. County of San Bernardino, 188 Cal.App.4^th 603, 619; Horsford v. Bd. of Trustees of Cal. State Univ., 132 Cal.App.4^th 359, 397, 399 (2005).)  But that was not all; because, after all, this was a contingency case.  The appellate court recognized that lodestar and multiplier factors cannot overlap, but did want the trial judge to revisit for purposes of seeing if the contingency multiplier factors might need to be reweighed on remand.

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

SLAPP: $3,250 Fee Award To Winning SLAPP Defendant Was No Abuse Of Discretion

Trial Judge Showed Discretion By Reducing Down The Fee Request Of $5,265 Based On The Hours Requested.

            In Olson v. Sardi, Case No. E071991 (4^th Dist., Div. 2 Apr. 30, 2020) (unpublished), defendant successfully won a SLAPP motion based on a negative review of plaintiff for counseling services to his son, with the review posted on Yelp.  The 4/2 DCA affirmed the SLAPP grant.  Plaintiff also appealed a mandatory fee award of $3,250 to defendant.  That, too, was affirmed because no abuse of discretion was shown:  the trial judge reduced the requested 16.2 hours (total fee request of $5,265) down to 10 hours and found the defense hourly rate of $325 to be reasonable—this showed discretion was exercised.

Employment: $280,794 Fee Award In Rest/Meal Break Case Reversed As A Matter Of Law On Appeal

Case Demonstrates How Fee Claimant Must Have Solid Fee Entitlement Basis (Not Shifting Grounds At The Last Moment) And Discusses When Settlement Demands Are Admissible In Fee Proceedings.

            This next opinion discusses several aspects of fee motions, oppositions, replies, and supplemental papers all pointing to a universal truth:  that fee motions primarily involve credibility of claimant’s counsel.  When there is no solid fee entitlement bases and the claimant’s attorney tries to inaptly shift grounds at the last juncture of the fee proceedings, that frequently results in an adverse credibility determination, as happened here.  The opinion, Betancourt v. OS Restaurant Services, LLC, Case No. B293625 (2d Dist., Div. 8 Apr. 30, 2020) (unpublished), which we now discuss, also shows how settlement demands can be used in a fee proceeding where they have a different purpose than to demonstrate the invalidity of a substantive claim.

            Plaintiff was a server/employee for defendant for about 7 years at a Fleming’s Steakhouse located on Olympic Boulevard in Los Angeles.  She filed a complaint alleging claims for rest and meal break violations and associated penalties (failure to include the rest break premiums on wage statements and waiting time penalties), as well as retaliation and wrongful termination claims.  Although mentioning the Labor Code § 218.5 pure wage/hour statute, she pled no such claim.  In a pretrial settlement demand, plaintiff demanded $750,000, estimating that only about a $13,000 value was attributable to her rest/meal break claims and their derivative penalties.

            Eventually, plaintiff agreed to settle for $15,375 on the rest/meal break claims and associated penalties after the defense waived some discovery sanctions.  Plaintiff cryptically referred to wage/hour claims which could have been asserted (but were not) and dismissed the retaliation/wrongful termination claims.  The fee issue was kicked down the road, to be made “consistent with applicable law” as part of the settlement. 

            Subsequently, plaintiff moved for attorney’s fees of $580,794 (inclusive of a multiplier) primarily under Labor Code §§ 218.5 (pure wage/hour) and 226 (rest/meal break) statutes.  No time records were ever submitted by plaintiff’s counsel.  Defendants claimed that the thrust of plaintiff’s case had been on the dismissed retaliation/wrongful termination claims, with plaintiff never presenting a pure wage/hour claim.  In reply, plaintiff dramatically shifted focus to say that the case was 10% about retaliation/wrongful termination claims and 90% on wage/hour claims, going so far as to attach for the first time some documents on the wage/hour claims never presented during the course of the case or before the settlement.  Plaintiff, however, did drop her fee request down to $348,476.40 (a slight lodestar reduction and abandoning the multiplier request) plus a $48,914 “fees on fees” request.  In supplemental papers, plaintiff stuck to her new ground, and the defense again presented evidence showing why no pure wage/hour claim was involved based on what was presented during the litigation as well as through a deposition admission by plaintiff.

            The trial judge granted the fee request, awarding plaintiff $280,794, prompting an appeal by defendants.

            The 2/8 DCA, in an opinion authored by Justice Grimes, reversed the fee award as a matter of law—put another way, it went POOF!

            The panel found that the thrust of the case concerned rest/meal break violations for which there is no fee entitlement under Labor Code § 218.5.  (See Kirby v. Immoos Fire Protection, Inc., 53 Cal.4^th 1244, 1255-1257, 1259 (2013).).  Likewise, there was no fee entitlement for derivative penalties relating to these claims.  (Naranjo v. Spectrum Security Services, Inc., 40 Cal.App.4^th 444, 474 (2019); Ling v. P.F. Chang’s China Bistro, Inc., 245 Cal.App.4^th 1242, 1261 (2016).)  In determining what the gist of the case was about, the Court of Appeal credited many of the defense submissions which showed (1) plaintiff had shifted grounds on reply and had not correctly acknowledged that the retaliation/wrongful termination claims were the main claims for which time had been expended, as shown by the pretrial settlement demand; (2) no evidence on pure wage/hour claims was presented before the settlement given that no claim was even pled in the complaint; and (3) plaintiff made an admission in her deposition that the case was about rest breaks on the wage/hour front. 

            With respect to the presentation of the settlement demand, plaintiff took the defense to task on appeal.  However, in a footnote, Justice Grimes diffused the criticism by observing that the demand was not being used to show the invalidity of any claim, but instead was used to show that plaintiff did not make a claim to which any fee entitlement could be hinged.  In past posts, we have suggested that settlement demands, if used wisely, should be used in fee motion paperwork submissions—a practice tip validated by the result in this opinion.

Co-Contributor Marc's Interview of Dean Erwin Chemerinsky About Government Powers And Covid-19 Is Now On YouTube

Because We Have Covid-19 On Our Minds . . . 

        Co-contributor Marc's interview with Dean Erwin Chemerinsky of the University of California Berkeley School of Law about the constitutional and statutory powers of the government to address covid-19 streamed on YouTube on April 30, 2020. It is now available as a recording after the event.  https://bit.ly/Lit0430  Marc thanks Dean Chemerinsky, and the Litigation Section of the California Lawyers Association for making this possible.

Family Law: Needs-Based Award Of $24,000 To Ex-Wife Affirmed On Appeal

Record Below Did Not Show The Trial Judge Imposed It In Retribution Against Ex-Husband.

            In Marriage of Ward, Case No. A156599 (1^st Dist., Div. 5 Apr. 29, 2020) (unpublished), ex-husband appealed a $24,000 needs-based fee award under Family Code sections 2020/2032.  His only challenge on appeal was that the lower court imposed this award in “retribution” for him raising certain spousal support issues (issues which, by the way, had to be considered when making the needs-based award).  The appellate court affirmed, and for a simple reason:  the statement of decision did not bear out at all that the award was done for retribution. 

Probate, Request For Admissions, Sanctions: More Than $1.8 Million In CCP § 128.5 Sanctions Went POOF! On Appeal, But RFA “Cost Of Proof” Sanctions Of Over $1 Million Stuck On Appeal

128.5 Sanctions Went Away Because It Did Not Apply To The Action Datewise, While RFA “Sanctions” Were No Abuse Of Discretion Even Though Substantial In Nature.

            First of all, we hope all of our readers are safe—this pandemic has presented unprecedented, bizarre consequences, but hope you are well.  We are happy to report that the California appellate courts are doing a good job staying in business, which also means we get to post on the decisions which emanate from our busy California appellate courts.  So, let’s go to it on the one unpublished decision on April 28, 2020 dealing with fee issues.  Co-contributor Mike also wants to thank his paralegal, Shanna Strader, for her great work in making sure posts are timely made—not to mention that she writes some of them!

            In Estate of Khatri, Case No. A150546 (1^st Dist., Div. 3 Apr. 28, 2020) (unpublished), two brothers were involved in a long-running dispute over the divisions of family assets, primarily six commercial properties after their mother died.  Mother left all of the assets to one son, which triggered a brother-against-brother fight which featured undue influence allegations by the brother left out.  Ultimately, ousted brother lost after a 16-day bench trial.  Winning brother then sought fees under two regimes—CCP § 128.5 (sanctions) and CCP § 2033.420 (costs-of-proof sanctions for denying discovery requests for admissions without substantial justification).  The probate court was persuaded by winning brother’s submissions, giving him full relief as follows: (1) 128.5 motion -- $1,497,680.75 in attorney’s fees and $346,874.19 in costs; and (2) 2033.420 motion -- $865,559.25 in fees and $138,621.55 in costs.  As you can predict, losing brother appealed.

            The result on appeal?  A split verdict, but probably not the one desired by the losing brother/appellant.

            Initially, the good news for appealing brother.  He was able to get the 128.5 sanctions reversed as a matter of law.  The reason was that these sanctions only applied to actions filed (not pending) after January 1, 2015, the effective date of § 128.5 after some legislative “sunsets,” such that it simply did not apply to the case—all as clarified through 2017 amendments which were only declaratory of the result reached by the appellate court here.

            But now the bad news.  The appellate court found that the lower court did not abuse its discretion in awarding the costs-of-proof sanctions totaling over $1 million.  Losing brother did not meet his burden in showing that any good faith/substantial justification exceptions applied to his denials on critical undue influence requests for admissions—all the more so given his lack of medical proof to show there was undue influence.  So, substantial fees/costs affirmed on appeal.

Probate: 4/3 DCA Remands For Recalculation/Reduction Of Surcharge Against Personal Representative Removed For Breach Of Fiduciary Duty, But Affirms Attorney Fees Award Despite Trial Court’s Erroneously Stated Statutory Basis

Personal Representative Repeatedly Failed To Timely File Accurate Inventory & Appraisal and Accountings With The Court, Spent Estate Funds Without Authorization, Showed Hostility Toward Beneficiary, Failed To File Tax Returns, And Failed To Understand The Effect Of The Pour-Over Will Executed By Decedent.

            In Karamooz v. Karamooz, Case No. G056897 (4^th Dist., Div. 3 April 27, 2020) (unpublished), decedent mother created a revocable trust and pour-over will – naming one of her sons as the sole beneficiary of the trust, and another son as the personal representative of her estate.

            When beneficiary son filed a Heggstad petition to avoid having to probate the will (Prob. Code, section 850(a)(3); Estate of Heggstad 16 Cal.App.4^th 943 (1993)), personal representative son objected and claimed the will was not a pour-over will.  Personal representative then filed a petition to probate the will, but repeatedly failed to meet deadlines for filing an Inventory and Appraisal, filed inaccurate accountings, failed to file required tax returns, spent estate funds without authorization or court approval, and showed hostility toward beneficiary – in addition to his failure to understand/acknowledge the effect of the pour-over will and act accordingly.  After several years of this, beneficiary successfully moved to have personal representative removed and surcharged for his breaches of fiduciary duty, and moved for an award of attorney fees.  Personal representative appealed.

            In an opinion authored by Justice Thompson, the 4/3 DCA affirmed the removal, but reversed and remanded the $500,000 surcharge against personal representative for a new judgment reducing and recalculating the surcharge to $80,000 for estate funds spent without authorization/approval, plus all liability for penalties and interest caused by personal representative’s failure to timely file tax returns. 

            As to the attorney fees, the 4/3 DCA agreed with personal representative’s argument that the award against him was not statutorily supported pursuant to the trial court’s reliance on Prob. Code section 11003(b) – which awards attorney fees for bad faith opposition in an accounting contest.  However, the attorney fees award was affirmed – with the 4/3 DCA finding the trial court justified in exercising its discretion to award fees under section 8804 for the repeated failures to timely make accurate inventory and appraisal filings, “regardless of [the trial court’s] stated basis.”

Consumer Statutes, Multipliers, Reasonableness Of Fees: Mikhaeilpoor Opinion Now Published

Prevailing Plaintiff’s Request For Fees In A Straightforward Lemon Law Case Was Properly And Significantly Reduced For Overstaffing, Lack Of Efficiency, Excessive Hourly Rates, And Denial Of Lodestar Multiplier.

            We discussed the then unpublished case of Mikhaeilpoor v. BMW of North America, LLC, Case No. B293987 (2d Dist., Div. 1 April 1, 2020) in our April 2, 2020 post, and can now report that it was published on April 24, 2020.

            Plaintiff won a $35,805.80 jury verdict in an “uncomplicated” lemon law vehicle case, then moved for $344,639 in fees – including a .5 lodestar multiplier – which the trial court reduced to $94,864 after denial of the requested multiplier and reductions for overstaffing, excessive hourly rates, and other inefficiencies.  Plaintiff appealed, but the 2/1 DCA affirmed -- finding no abuse of discretion under the circumstances of the case.

Construction, Special Fee Shifting Statutes: Contract Between The Parties Not Required For Awarded Code Civ. Proc. § 1032 Fees Of $2,114,434 And Costs Of $104,498 Against Real Estate Agent Defendant For Violations Of Bus. & Prof. Code § 7160

Defendant Had Fraudulently Induced Plaintiff To Enter Into Contract With Defendant’s Associates For Home Renovation Work.

            Bus. & Prof. Code § 7160 allows for an award of reasonable attorney’s fees, in addition to penalties and damages, to “[a]ny person who is induced to contract for a work of improvement, including but not limited to a home improvement, in reliance on false or fraudulent representations or false statements knowingly made . . . by the contractor or solicitor,” and provided the basis for a Code Civ. Proc. § 1032 fee award of $2,114,434 and costs of $104,498 in plaintiff’s favor in Moore v. Teed, Case No. A153523 (1^st Dist., Div. 1 April 24, 2020) (published).

            Here, the real estate agent defendant sold homebuyer plaintiff a $4.8 million fixer-upper in the historic Pacific Heights neighborhood of San Francisco by fraudulently convincing plaintiff that needed renovations could be completed for only $900,000.00.  Defendant did so by promoting himself as having “over 25 years of experience as a building contractor,” “an extensive background in historic restorations,” “a deep understanding of quality construction,” and by taking plaintiff to tour several homes defendant had renovated – thereby leading plaintiff to believe that defendant was a general contractor and could accomplish the quality, cost-effective renovations he recommended. 

            As a result, plaintiff entered into contract with defendant’s associates, and renovations began with defendant’s recommended foundation work.  However, after plaintiff learned that the completed foundation work had to be demolished and rebuilt due to faulty construction, and that the remaining renovations could not be completed for the amount promised by defendant, plaintiff sued.

            After a jury awarded plaintiff both out-of-pocket and benefit of the bargain damages based on findings of fraudulent representation, but ruled in favor of defendant on plaintiff’s breach of contract claim, plaintiff successfully moved for an award of fees and costs under Code Civ. Proc. § 1032 – pursuant to the jury’s special verdict finding that defendant had violated Bus. & Prof. Code § 7160 of the Contractors’ State License Law. 

            On appeal, defendant challenged the fees award by arguing that fees were not awardable under § 7160 as no contract existed between himself and plaintiff for renovation work, that the jury instruction explaining § 7160 omitted the word “solicitor” such that the jury could only apply the fee provision to one “contracted” with plaintiff, and that the trial court’s instruction defining “contractor” under Bus. & Prof. Code § 7026 was confusing and incomprehensible – leading to an inconsistent verdict that could not be sustained as evidenced by the jury’s finding in defendant’s favor on the breach of contract claim, but in plaintiff’s favor as to violations of § 7160 where no contract existed.

            However, the 1/1 DCA disagreed with all of defendant’s contentions – finding no contract between the parties necessary to award attorney fees against defendant as defendant had fraudulently induced plaintiff to enter into contract for renovations with defendant’s associates, and that “[s]ection 7160 does not exempt noncontracting parties from liability for attorney fees for fraudulent inducement of a home improvement contract.”  As to omission of the word “solicitor” from the § 7160 instruction, the 1/1 DCA declined to apply such a narrow interpretation.  In addressing defendant’s claim regarding the definition of “contractor,” the 1/1 DCA observed that the trial court’s instruction was tailored to conform to the circumstances of the case and required no clarification.  In contrast, they found defendant’s rejected proposed special instruction misstated § 7026’s definition of “contractor” by omitting that one can be deemed a contractor if he or she “offers to undertake” or “purports to have the capacity to undertake” renovations “by or through others.”  The jury’s finding, supported by clear and ample evidence, that defendant was a “contractor” as defined by § 7026 supported its finding that he was in violation of § 7160 and, thereby, liable for attorney fees.

            Finally, the 1/1 DCA found plaintiff also entitled to fees incurred on appeal – based on the award under § 7160 – and remanded back to the trial court for determination of the award.  “A statute providing for an attorney fee award to the prevailing party in litigation ordinarily also authorizes an award of fees incurred on appeal even if it does not expressly so state.” (Garcia v. Bellflower Unified School Dist. Governing Bd. 220 Cal.App.4^th 1058, 1067 (2013).)

Costs, Prevailing Party: Where There Were Several Judgments, With Plaintiff Not Prevailing On A Misappropriation Claim In The Second Phase, Defendant Was Entitled To Routine Costs

Case Involved Applying DeSaulles Under Unusual Circumstances.

            Ajaxo, Inc. v. E*Trade Financial Corp., Case No. H043530 (6^th Dist. Apr. 23, 2020) (published) is must reading for practitioners in trade secret cases when it comes to royalty awards under California’s Uniform Trade Secret Act.  It also has an interesting published discussion on who is the prevailing party under unusual circumstances where there were two several final judgments, the first of which was satisfied by the defendant claiming it was the prevailing party entitled to costs for defensing the misappropriation claims in a second judgment.

            Because the opinion is 86 pages long, we summarize the highlights for purposes of this blog.

            Defendant was found liable to plaintiff on a breach of contract trade misappropriation count but not a classic trade misappropriation count.  Defendant satisfied the judgment under the contractual claim, including fees and interest.  However, subsequent appeals revived the classic trade misappropriation count, remanding it to see if the trial judge was inclined to award a reasonable royalty—which he ultimately did not in the second phase of proceedings.  He then awarded defendant around $214,000 in routine costs for prevailing under the second phase “several judgment.”

            Unfair, claimed plaintiff, relying on the view that there can be only one prevailing in the entire action, based on reasoning in DeSaulles v. Community Hospital of Monterey Peninsula, 62 Cal.4^th 1140, 1157 (2016) [reviewed in our March 19, 2016 post].

            The appellate court affirmed the costs award to defendant.

            Although acknowledging the general rule that one looks to the “action as a whole,” the odds defied that in this case because there was more than one final judgment given the unusual procedural posture of the case.  Defendant had satisfied the first judgment in full such that it would be anomalous to decide plaintiff was the prevailing party under a second judgment by which it recovered nothing.  So, despite discussing DeSaulles in depth, the particularized circumstance of this case resulted in affirming the substantial costs award in defendant’s favor.

Discovery, Sanctions: $7,862.50 Sanctions Award Against Cross-Complainant In Insurance Case Affirmed On Appeal For Presenting An Unsuccessful Motion To Augment An Expert Witness Designation

Cross-Complainant’s Dilatory Conduct Justified The Sanctions Award.

            Code of Civil Procedure section 2034.630 states that a trial court “shall impose a monetary sanction . . . against any party, person, or attorney who unsuccessfully makes or opposes a motion to augment or amend expert witness information, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”   This section was front and center in Black v. Fireman’s Fund Ins. Co., Case No. A155428 (1^st Dist., Div. 1 Apr. 23, 2020) (unpublished).

            In this case, a cross-complainant/insured brought an insurance bad faith suit against cross-defendant/insurer Fireman’s Fund.  He designated two expert witnesses.  Fireman’s Fund tried for over 1 ½ years to depose one of these experts, although the expert had informed cross-complainant that he would not provide expert testimony unless paid.  A trial judge ordered the deposition of the expert under penalty of exclusion of his testimony at trial or otherwise.  Cross-complainant did not produce the expert before the expert discovery cut-off and then brought a motion to augment the expert designation based on the claim that he needed time to find/designate a new expert.  The trial judge denied the motion and imposed $7,862.50 in sanctions under section 2034.630. 

            Cross-complainants’ appeal of the sanctions order was unsuccessful.  The record showed, quite clearly, that the initially designated expert was not going to provide testimony until he was paid, and cross-complainant showed no “substantial justification” for his delay in resolving the matter or designating a new expert for 1 ½ years.  Beyond that, the appellate court found this event was part and parcel of dilatory conduct by cross-complainant, who had obtained 6 continuances of the trial date during the course of the litigation.  Sanctions order affirmed.

Consumer Statutes: Contingency Agreements Are Not To Be Considered In Establishing the Lodestar For An Award Of Attorney’s Fees Under The Song-Beverly Act

1/3 DCA Eschews The Idea Plaintiff’s Attorney Would Try A “Double Dip” On Fees, Believing They Would Do The Ethical Thing.

            In Reynolds v. Ford Motor Co., Case No. A154811 (1^st Dist., Div. 3 Apr. 21, 2020) (published), plaintiff purchased a diesel engine truck from Ford, having the truck repaired 15 times without success.  Ford denied plaintiff’s request for a buyback/replacement under the Song-Beverly Act, which triggered plaintiff to “lawyer up.”  Plaintiff filed suit and, after extensive litigation, the parties settled the case in entirety, with Ford paying $277,500 to plaintiff and agreeing that plaintiff’s attorney’s fees and costs would be resolved by agreement/motion before the trial judge. 

            Plaintiff moved for $308,696.25 in aggregate fees, comprised of a $205,797.50 lodestar plus a $102,898.75 positive multiplier of 1.5.  Plaintiff submitted his attorneys’ declarations, verified billing statements, fee surveys, and 51 court orders/rulings in lemon law cases approving counsel’s requested hourly rates and fee requests.  Plaintiff affirmed that the case was taken on a contingency basis.  Ford opposed primarily on the ground that plaintiff’s counsel was not entitled to “double dip”—recover both a contingency fee and statutory fee.  Plaintiff replied that the existence of a contingency fee agreement was not a relevant factor for purposes of awarding lemon law fees.

            The lower court conducted a lodestar analysis, awarding plaintiff an aggregate $201,891 in fees, based upon compensation for 457.85 hours at hourly rates ranging from $225-500/hour plus a 1.2 positive multiplier.  It also rebuffed Ford’s argument that a contingency fee agreement was relevant in establishing the lemon law fee lodestar.

            The 1/3 DCA affirmed, agreeing with plaintiff’s analysis of the issue.

            The lodestar methodology was the one mandated by the fee-shifting statute (Civil Code § 1794(d)), rendering the fee terms of the contingency agreement irrelevant to a calculation of fees when using the lodestar method.  In response to Ford’s argument that lemon law plaintiff’s counsel might be tempted to take a “double dip” (both a contingency fee and statutory fee award), the appellate panel concluded it was not called for under the fee-shifting statute, there is no assurance that the contingency fee would be higher than the lodestar, a lodestar was a clear “bright line” test, and it assumed that the attorneys, as officers of the court, would abide by ethical obligations to not exact an unconscionable fee from their clients.

Retainer Agreements: Third District Rebuffs B&P 6147(b) Challenge To “Related Matters” Retention Language In Contingency Agreement

The Language In The Contingency Agreement, Sustained On Appeal, Offers Some Drafting Tips To Attorneys In Fashioning Their Retainer Agreements.

            Some drafting tips for retainer agreements are presented through the result affirmed in Meagher v. Robinson Bradford LP, Case No. C087478 (3d Dist. Apr. 21, 2020) (unpublished), where attorneys fought back several challenges to both their retention agreement and handling of matters for an ex-client.

            Appellant claimed that the attorneys’ contingency agreement was voidable under Business & Professions Code section 6147 because it failed to adequately define the scope of legal services for which fees could be charged with respect to “related matters” arising out of the attorney-client relationship not covered by the contingency agreement.  The Third District disagreed:

“We find that the fee agreement contains the required related matters statement.  In paragraph 2, [the law firm] expressly agreed to represent [ex-client] and her company in the unlawful detainer and civil action. The agreement further provides in paragraph 10 that [the law firm’s] representation does not include ‘any other legal matters’ and paragraph 2 states that representation in any other matter ‘will require a separate written agreement.’ We find this language meets the requirements of section 6147, subdivision (a)(3), and therefore conclude that the agreement was not voidable under section 6147, subdivision (b).”

Appealability: Appellant’s Earlier Abandonment Of An Appeal Of A Fee Order Was Fatal To A “Rechallenge” When The Trial Judge Made A Damages Reduction In The Merits Order

The Damages Reduction Did Not Restart The Appellate Engine, With the Abandonment Resulting In A Dismissal Of The Earlier Appeal—Which Was Dispositive.

            In Corrales v. Corrales, Case No. D075507 (4^th Dist., Div. 1 Apr. 21, 2020) (unpublished), an appellant previously filed an abandonment of an appeal of an attorney’s fees order.  After an amended damages “merits” order was entered later, appellant sought to appeal again the fee order.  The 4/3 DCA said, in effect, this was not gonna happen.  The abandonment of the prior appeal resulted in a dismissal of the appeal (Code Civ. Proc., § 913), such that the time to appeal had elapsed long ago.  The amended order did reopen things, because it only impacted the amount of damages—not a major event and one not related to the fee order—such that the prior abandonment was fatal.

Employment, Special Fee Shifting Statutes, Undertaking: 1/4 DCA Affirms Labor Code § 98.2 Attorney Fees Award In Favor Of Employees Retaining Labor Commissioner’s Award After Employer’s Notice Of Appeal Dismissed

Appeal To Superior Court Of Labor Commissioner’s Ruling Was Dismissed For Employer’s Failure To Post The Required Undertaking Or Otherwise Obtain A Waiver Of Same.

            Labor Code section 98.2(c) provides for costs and reasonable attorney’s fees against the unsuccessful party appealing a decision of the Labor Commissioner to the superior court.  Rather than a standard prevailing party fee provision, section 98.2 is a fee-shifting statute that penalizes an unsuccessful party who appeals the Labor Commissioner’s decision.  It is meant to be a disincentive to appeal the Labor Commissioner’s decisions and discourage meritless appeals of wage claims.  Under section 98.2, an employee who is awarded any amount greater than zero from the superior court is considered successful. 

            In Cardinal Care Management, LLC v. Edgardo Afable et al., Case Nos. A154062 and A155229 (1^st Dist., Div. 4 April 20, 2020) (published), seven employees successfully brought administrative proceedings against their former employer and its sole member for unpaid wages and penalties.  The Labor Commissioner awarded them more than $2.5 million – collectively – with employer liable for full amount and sole member liable for over $2.2 million.

            When employer and sole member appealed to the superior court, they claimed financial inability to post the required undertaking in the amount of the award.  The trial court allowed them to file petitions for relief from the required bond, and also allowed them to file their appeals conditioned upon the appeals being stricken if the petitions were denied – which is exactly what happened.

            Employer and sole member were unable to prove a financial inability to post the required bond.  Rather, employees were able to show that employer/sole member had resources to post the bond, and had transferred some real properties – with a collective value exceeding the amount of the required undertaking – in an effort to avoid judgment.

            Dismissal of the appeal triggered a section 98.2(c) award of $16,700 in fees in favor of employees.  Employer and sole member appealed – arguing abuse of discretion and due process violations in challenging the superior court’s dismissal of their appeals, and arguing they were not “unsuccessful” on appeal for purposes of the subsequent section 98.2 award of attorney’s fees as their appeals were dismissed on jurisdictional and procedural grounds as opposed to being dismissed on the merits.

            The 1/4 DCA bought none of their arguments on appeal.  Employer and sole member were required to post an undertaking or show they were entitled to waiver before proceeding with the appeal in the superior court, and had failed to do either – hence the dismissal of their appeals.

            As to the award of attorney’s fees, the 1/4 DCA, relying on the reasoning in Arneson v. Royal Pacific Funding Corp. 239 Cal.App.4^th 1275 (2015), found the employees entitled to section 98.2(c) fees as the outcome of the employer's/sole member’s notices of appeal was that the employees retained not only an amount more than zero, but the full amount of the Labor Commissioner’s award to them – meaning the appeals were clearly unsuccessful.

Family Law: No Abuse Of Discretion Where Trial Court Awarded Husband Only $15,000 In Needs-Based Attorney Fees Out Of Requested $49,000

Husband Failed To Meet His Burden In Showing Abuse Of Discretion Where Trial Court Considered All Evidence Presented, Husband Had Significant Financial Resources, And Wife’s Needs-Based Fee Payments To Husband Accounted For 45% Of His Total Fees.

            In Marriage of Burns, Case No. H046858 (6^th Dist., April 17, 2020) (unpublished), a husband with significantly less monthly income than wife requested a post-judgment award of needs-based attorney fees under Family Code sections 2030 and 2032.  Although the husband requested $49,000.00, the trial court awarded him only $15,000.00.  Husband appealed – citing abuse of discretion and failure to issue a statement of decision.

            The Sixth District was not persuaded and affirmed.  The trial court has broad discretion in determining how to apportion fees equitably between the parties.  Although the trial court did not issue a statement of decision to explain how it arrived at the $15,000.00 award as an appropriate apportionment, it was not required to do so.  (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4^th 44, 67.)  Also, the trial court did not summarily reject any of the arguments or evidence provided by the parties – telling them it was “going to need time” to consider the request, then taking more than a month to issue its ruling – showing the trial court did exercise its discretion and consider the relevant statutory factors in reaching its decision. (Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238,254.)

            Additionally, the record reflected sufficient evidence, that the trial court was entitled to consider, which showed that husband was awarded an amount that was reasonably necessary, and just and reasonable under the relative circumstances of the respective parties.  (Alan S. v. Superior Court (2009) 172 Cal.App.4^th 238,253.)  Although husband’s monthly income was significantly less than wife’s, he had significant financial resources, plus his monthly income (including spousal support) exceeded his monthly expenses by about $4,200.  Wife had substantial income and assets, but also had a negative monthly cash flow of almost $2,000 in the month  following husband’s fee request.    The trial court also could have taken consideration of the fact that wife had already paid $40,000 in needs-based attorney fees to husband – totaling approximately 45% of husband’s total fees when combined with the $15,000 – and another $10,000 toward husband’s expert costs.

In The News . . . . City of Costa Mesa Has Won Sober Living Operator Disputes, But Has Spent $7 Million On Fees So Far

Operators’ Attorney Said His Clients Will Appeal Summary Judgment Rulings To The Ninth Circuit.

            As reported by The Orange County Register in an April 15, 2020 online article entitled, “Winning streak for Costa Mesa as it battles sober living home lawsuits,” the City of Costa Mesa has obtained several favorable summary judgment rulings against sober living operators challenging restricted zoning laws, but at quite a price tag—some $7 million in legal fees (compared to its 2019 budget of $174 million).  One of operators’ lead attorneys, Isaac R. Zfaty, was quoted as saying that all of these matters will be appealed to the Ninth Circuit Court of Appeals.

            BLOG COMMENT—Co-contributor Mike had the pleasure of trying a seven-week jury trial with Mr. Zfaty (who has his own firm, Zfaty Burns) and Mr. Mark Adams (a partner with Jeffer Mangels), both of whom were superb attorneys and colleagues for the defense side of the case.

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

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

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

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

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

Allocation, Landlord/Tenant, Prevailing Party, Reasonableness Of Fees: Prevailing Tenant Was Entitled To Prevailing Party Fees Under Oakland’s Tenant Protection Ordinance Fee-Shifting Provision As Against Defendant Landlord

However, Prevailing Party Properly Awarded Apportioned Fees Of $49,875 Rather Than Requested $318,214 In Fees Against Defendant Landlord; Prevailing Defendant Property Manager Improperly Granted Routine Costs Because Motion Did Not Mention That Defendant And Nothing Showed The Costs Were Incurred.

            In Goins v. Williams, Case Nos. A152828/A153632 (1^st Dist., Div. 3 Apr. 14, 2020) (unpublished), plaintiff tenant won an inhabitability/violation of the Oakland Tenant Protection Ordinance action against defendant landlord (but did not win against defendant property manager), while defeating landlord’s cross-complaint focusing on negligent upkeep of the premises, all happening after a 5-day bench trial.  Plaintiff tenant moved to recoup $318,214 in fees under the Ordinance, which has a unilateral fee-shifting provision in favor of tenants.  Defendant landlord’s attorney moved for $11,615.65 in routine costs but failed to specify whether the motion was filed on behalf of property manager, landlord, or both.  The trial judge denied tenant’s motion to strike costs and awarded property manager $5,810.32.  Everyone appealed, with tenant claiming in a cross-appeal that the fee award was too low.

            The 1/3 DCA affirmed the fee award but vacated the costs award.

            The fee denial was proper because the lower court was within its discretion to do its own apportionment of time based on limited success by tenant on some of her claims after reducing lead attorney’s hourly rate a bit.  However, the lower court erred by awarding costs to property manager because (1) no application for costs was filed by property manager, and (2) nothing showed that any costs were actually incurred by property manager given that two defendants were represented by the same defense counsel (Charton v. Harkey, 247 Cal.App.4^th 730, 744 (2016)) [discussed in our May 24, 2016 post].

Costs, Experts, Insurance, Section 998: Denial Of All But $11,753.94 Of Prevailing Personal Injury Plaintiff’s $83,048.06 Costs Request Affirmed On Appeal

An Invalid Section 998 Offer And A Failure To Reserve The Right To Seek Prevailing Party Fees In Agreements To Split Costs Sealed Plaintiff’s Fate.

            In Anthony v. Li, Case No. A156640 (1^st Dist., Div. 3 April 13, 2020) (published), a prevailing personal injury plaintiff, to whom a jury awarded $650,235.00 in damages which exceeded a $500,000 section 998 rejected by defendant, moved post-trial for recovery of $83,048.06 in costs.  However, the trial court granted only a small portion of the requested costs – denying the requested $62,082.50 for section 998 post-offer expert fees, $2,650 for mediation fees, and another $6,561.62 for court reporter fees.

            Plaintiff appealed, but the 1/3 DCA affirmed – finding the trial court had properly taxed the costs. 

            First, as to the expert witness fees, the simple explanation for the denial is that plaintiff had made an invalid section 998 offer.  However, as the saying goes – the devil is in the details.   

            Defendant Li resided outside of the United States.  He was driving a rental car at the time of the accident – for which he had purchased a $1 million liability insurance policy.  Plaintiff originally sued both Li and the holding corporation doing business as the rental car company, which held the insurance policy, but later dismissed Holding Corp. with prejudice.  Afterward, plaintiff tendered a joint section 998 offer that was not apportioned and required acceptance by, and entry of judgment against, both Defendant Li and Holding Corp.   Plaintiff argued his joint 998 offer was proper because: (1) Li and Holding Corp. were “one and the same” as plaintiff had included Holding Corp. in 998 offer as an insurer; (2) the law allowed plaintiff to make a section 998 offer to an insurer pursuant to Meleski v. Estate of Albert Hotlen (2018) 29 Cal.App.5^th 616 [discussed in our December 6, 2018 post]; (3) Defendant Li was not a participating in the action which was being litigated by Holding Corp., as the insurer; (4) Defendant Li was a named defendant solely for the purpose of reaching insurance under Civ. Code section 1939.33; and (5) Defendant Li was a foreign national who was unaware of the lawsuit, and plaintiff was not allowed to collect against Li because he had agreed to limit his recovery to insurance. 

            The 1/3 DCA disagreed.  First, plaintiff’s 998 offer did not advise defendants that the offer was directed at Holding Corp. as the insurer responsible for any judgment entered against Li.   Rather, it was presented as a section 998 offer to more than one defendant - as opposed to a defendant and insurer - and requiring acceptance by both defendants making it invalid. As such, Meleski was of no help to plaintiff.  Additionally, the 1/3 DCA determined that if plaintiff had made the 998 offer solely to Defendant Li, and Li had rejected it, then plaintiff – after judgment exceeding the 998 offer was entered against Li – would have had recourse by bringing a second direct action against Holding Corp., as the insurer, to recover any judgment and statutory cost award entered against Li.

            Next, as to the mediation and court reporter fees, the parties had entered into agreements for a voluntary mediation and for court reporter fees that stated that the fees were being equally divided and paid by plaintiff and defendant[s].  No language reserving the right to later seek the fees as prevailing party costs was added to either of the agreements.  The language in the agreements was unambiguous, and the trial court properly enforced those agreements as written.  (Carr Business Enterprises, Inc. v. City of Chowchilla (2008) 166 Cal.App.4^th 25, 30 and Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4^th 498, 539-540.)

Lodestar, Private Attorney General: Third District Affirms Approximate 93% Reduction To Petitioner’s Requested Code Civ. Proc. § 1021.5 Fee Award

Petitioner’s Limited Success – Winning Only 1 Of Its 13 Arguments – Was Crucial Factor In Substantial Reduction From Requested $1,440,713 In Fees To $94,698.33 Even After 1.5 Multiplier Was Applied.

            The Sacramento-San Juaquin Delta Reform Act of 2009 was enacted to address the problems and challenges facing the Delta – the most valuable estuary and wetland ecosystem on the west coast of North and South America, and the hub of California’s water delivery system.  In enacting the Delta Reform Act, the Legislature created the Delta Stewardship Council and charged it with adopting and implementing the Delta Plan to provide a more reliable water supply for California, and to protect, restore and enhance the Delta ecosystem.  The Council adopted the Delta Plan in May 2013, with the regulatory policies approved as regulations by the Office of Administrative Law – codified in the California Code of Regulations at sections 5001-5016 of title 23.

            In Delta Stewardship Council Cases, Case Nos. C082944 and C086199 (3d Dist., April 10, 2020) (unpublished), seven lawsuits – coordinated into one proceeding – were filed by various groups challenging the validity of the Delta Plan, its regulations, and the program-level environment impact report (PEIR) for the Delta Plan.  The lawsuits were based on alleged violations of the Delta Reform Act, the Administrative Procedures Act (Gov. Code, sections 11340 et seq.), and CEQA.  Each lawsuit sought a writ of mandate commanding the Council to vacate and set aside the Delta Plan and its regulations, and to rescind its certification of the PEIR.

            With only a few exceptions involving under-regulation by the Council, the trial court rejected the claims of violations of the Delta Reform Act and Administrative Procedures Act.  Based on the statutory under-regulation violations, the trial court vacated and set aside the Delta Plan and ordered corrections to the identified deficiencies.  As a result, the trial court did not reach the merits of any of the CEQA claims.

            Petitioner from one of the seven cases moved post-judgment for Code Civ. Proc. section 1021.5 attorney fees and costs – seeking $1,440,713 in fees, which included a 2.0 lodestar multiplier.  Although the trial court found petitioner was entitled to section 1021.5 fees based on its successful argument related to the Delta water conveyance and storage systems, it found that petitioner was not successful on its 12 other arguments, that those unsuccessful 12 arguments were not intertwined with the one successful argument, and that the hourly rate requested by two attorneys was unreasonable.  Additionally, the trial court found a 1.5 multiplier to the lodestar more appropriate than the requested 2.0 multiplier – ultimately awarding petitioner $94,698.33.

            Petitioner and the Council appealed – with petitioner arguing it was entitled to the full amount of requested fees as it had achieved its litigation objective, and the Council arguing petitioner was not entitled to the 1.5 multiplier because the trial court erred when it failed to articulate a basis for the multiplier.

            The Third District affirmed – finding the trial court had not abused its discretion, nor committed reversible error.  The 12/13ths reduction to petitioner’s requested award was proper based on petitioner’s limited success, and nothing in the record indicated the trial court did not consider petitioner’s litigation objectives in determining its success.  As to the Council’s claim of trial court error, the Third District found not only that the Council had forfeited the argument by failing to object to the tentative decision issued by the trial court, but also that the Council failed to meet its burden in showing reversible error in the decision the trial court made within its “wide discretion.”  The tentative ruling indicated the trial court had considered the 2.0 multiplier request based on the contingency basis cited by petitioner, and had reduced it to 1.5 with an acknowledgement that some of the work may not have been done on a contingency basis.   

Celebrities, Prevailing Party, Special Fee Shifting Statute: Nevada Supreme Court Adopts “Catalyst Theory” For Purposes Of Awarding Attorney’s Fees And Costs Under The Nevada Public Records Act

Public Records Request Related To Las Vegas Murder Of American Rap Artist Tupac Shakur; California, Too, Has Adopted This Theory Under The California Public Records Act.

            In Las Vegas Metropolitan Police Dept. v. The Center for Investigative Reporting, Inc., No. 77617, 136 Nev. Advance Opinion 15 (Nev. Sup. Ct. Apr. 2, 2020), the Nevada Supreme Court reviewed the granting of attorney’s fees and costs to the Center for Investigative Reporting and against the Las Vegas Metropolitan Police Department when the Center sought disclosure of records relating to the murder of American rap artist Tupac Shakur.  Although no judgment on the merits was entered, the parties did reach an agreement by which the Center gained access to the requested records.  The lower court granted Center attorney’s fees and costs under a fee-shifting provision of the Nevada Public Records Act.  The Nevada Supreme Court affirmed.

            It endorsed the view that a pre-merits resolution disclosure could result in a fee/costs award under a “catalyst” theory adopted by many states in the context of public record act disputes.  In doing so, it adopted the formulation of the catalyst theory in Graham v. Daimler Chrysler Corp. (2004) 34 Cal.4^th 553.  For California cases discussing that the catalyst theory is applicable to Government Code section 6259(a)—the fee-shifting provision under the California Public Records Act—see Beth v. Garamendi (1991) 232 Cal.App.3d 896, 901-902; Pacific Merchant Shipping Assn. v. Board of Pilot Comm’rs (2015) 242 Cal.App.4^th 1043, 1056.  The Reporters Committee for Freedom of the Press has a nice summary of public record act fee-shifting provisions among the various U.S. states in an Internet post found at www.rcfg.org/open-government-sections/a-attorney-fees.

            BLOG HAT TIP—Carter C. White, supervising attorney for the King Hall Civil Rights Clinic, U.C. Davis School of Law, provided us with notice of this decision and sent along wishes that he hoped everyone associated with this blog is well during the pandemic.  We can report that we are, hat tipping him and hoping he is doing well, too.

Books: Co-Contributor Marc Has Reviewed Historian Eric Foner's Book The Second Founding

Co-Contributor Marc Has Reviewed Professor Eric Foner's Book, The Second Founding: How The Civil War And Reconstruction Remade The Constitution, in California Litigation.

            The Second Founding is about the legislative and political history of the 13th, 14th, and 15th Amendments, and the post-Civil War Supreme Court's judicial interpretation and evisceration of the  Amendments. The review appears in California Litigation, the journal of the California Lawyers Association, Vol. 33, No. 1, p. 52 (2020). With the permission of the California Lawyers Association and its publication California Litigation, we are republishing the article and making it available by clicking here.

Discovery: Litigant Ordered To Pay 50% Of Discovery Referee Costs Did Not Demonstrate An Abuse of Discretion

Litigant’s Claims Of Inability To Pay Was Not Adequately Documented And Raised Too Late.

            In Duran v. Atlantic Memorial Hospital Associates, Inc., Case No. B286660 (2d Dist., Div. 7 Apr. 8, 2020) (unpublished), a litigant was ordered to bear 50% of a discovery referee’s costs. CCP § 639(a)(5) does allow a trial court to apportion a referee’s costs, modified by the condition that it must also gauge whether the party has the economic ability to pay under § 639(d)(6)(A).  It is an abuse of discretion for the lower court to not consider inability to pay in this area of the law.  (McDonald v. Superior Court, 22 Cal.App.4^th 364, 370 (1994).). The appellate court determined there was no abuse of discretion in the discovery referee fee apportionment, given that the appealing litigant did not specify the limited funds available to the party and given that the litigant waited way down the line to claim financial distress, which was a credibility issue for the lower court to weigh against the litigant. 

Eminent Domain, POOF!: Ruiz Inverse Condemnation Opinion Now Published

Inverse Condemnation Award Reversed As A Matter of Law, Such That $529,540.50 Fee/Costs Award Went POOF! Also.

            On March 19, 2020, we posted on Ruiz v. County of San Diego, Case No. D074654, a Fourth District, Division 1 opinion which was unpublished at the time.  In that decision, the appellate court reversed an inverse condemnation award of $328,000 award to plaintiff as a matter of law, which also had the effect of eviscerating the subsequent fees/costs award under CCP § 1036—one for the substantial sum of $529,540.50.  We can now report the opinion was certified for publication on April 7, 2020.

Sanctions: $5,185.00 Section 128.7 Sanctions Award Against Plaintiff For Legally Frivolous Lawsuit Against Successor Attorney Defendant Who Did Not Pay Plaintiff’s Medical Lien When His Client’s Case Resolved Affirmed On Appeal

Second District Finds Gilman Precisely On Point.

            In Medfin Manager, LLC v. Carrazco, Case No. B292644 (2d Dist., Div. 3 April 6, 2020) (unpublished), a personal injury patient signed contractual liens giving the hospital that provided some of his medical care a lien against any settlement or judgment he might recover in litigation for his injuries.  Patient’s original attorney in the personal injury case signed consents for payment of the medical lien.

            The hospital assigned its lien documents to Plaintiff, and the original attorney referred the personal injury case to Defendant/successor attorney.  When successor attorney settled the case, he successfully negotiated with patient’s medical providers for a reduction of their liens, but Plaintiff would not agree to a reduction of its lien.  Patient then instructed successor attorney not to pay Plaintiff, and acknowledged that the unpaid medical bills were his responsibility.

            Plaintiff sued successor attorney, patient, and original attorney for breach of contract and fraud, and successor attorney filed a section 128.7 motion for sanctions against Plaintiff and its attorneys.  Successor attorney argued that he was not contractually bound to Plaintiff because he never signed the lien, and that the fraud cause of action alleged no facts as to his involvement.  Additionally, Plaintiff’s attorney agreed in a letter to successor attorney that there was no cause of action for fraud against him, but failed to prepare a dismissal of the fraud cause of action as promised.

            As to the breach of contract claims, Plaintiff argued that successor attorney was bound by the medical liens/consents by becoming attorney of record.  The trial court was not persuaded – finding successor attorney under no obligation to a lien he did not sign pursuant to Gilman v. Dalby (2009) 176 Cal.App.4^th 606 [discussed in our August 13, 2009 post].

            In Gilman, a patient and his original counsel signed a medical lien, but the successor attorneys did not.  The successor attorneys were merely aware of the liens, but mere awareness of the liens did not create a contractual obligation on the successor attorneys’ part. 

            Plaintiff appealed the trial court’s granting of successor attorney’s 128.7 motion and the $5,185 in sanctions awarded against it, but the 2/3 DCA affirmed – finding Gilman precisely on point, and Plaintiff’s two causes of action against successor attorney objectively unreasonable and legally frivolous. 

Fees On Fees, SLAPP: SLAPP Fee Awards To Employee And His Counsel Totaling $136,285.50 Plus Another $33,007.50 In Fees On Fees Affirmed On Appeal

Plaintiff CEO Was Unable To Prove His Claim Against Employee And His Counsel For Their Efforts To Add Him As Judgment Debtor To Underlying Lawsuit Stemmed From Malicious Prosecution As Opposed To Protected Activity.

            Khanna v. Sonasoft Corp. – from our July 13, 2016 and October 15, 2019 posts – is the underlying case for this next one.

            In that case, an employee had sued his employer and its CEO for failure to promptly and fully pay his wages.  In the first appeal, employer was unsuccessful in challenging postjudgment awards of attorneys’ fees, costs and interest.  However, its CEO, Andy Khanna (unrelated to the employee Vince Khanna), was successful in that appeal in challenging an amendment that added him as a judgment debtor under an alter ego theory.  In the second appeal, CEO sought to reverse the trial court’s denial of his request for fees incurred on the first appeal.  There, the 6^th District affirmed – finding CEO was not entitled to fees as he had failed to demonstrate that employee had brought the action against him in bad faith as required by Labor Code section 218.5(a).

            Now, in Khanna v. Khanna, Case Nos. H044973 and H045555, (6^th Dist., April 3, 2020) (unpublished), CEO appeals the trial court’s order granting employee and his counsel’s anti-SLAPP motions brought in response to CEO’s lawsuit against them for malicious prosecution stemming from the alter-ego allegations and adding CEO as judgment debtor – alleging the trial court erred in finding that employee and his counsel made the required threshold showing that CEO’s single cause of action arose from a protected activity, and in finding that CEO failed to demonstrate the required probability of prevailing on the claim.  Additionally, CEO appeals the trial court’s orders granting employee and his counsel’s motions for attorneys’ fees and costs – alleging the trial court abused its discretion in awarding fees in their “entirety” and by not reducing the fees to reasonable amounts.

            However, CEO fared no better on appeal – with the 6^th District finding no error, nor abuse of discretion, in the trial court’s orders and affirming.

            First, as to the anti-SLAPP motions, the 6^th District found that CEO failed to provide sufficient evidence that employee and his counsel pursued the alter ego theory and had him added as judgment debtor through malice, fraud, or concealment.  Employee and his counsel pursued CEO as additional judgment debtor when employer failed to perform under the parties’ settlement agreement and demonstrated no intention of performing and paying the judgment.

            Second, as to the attorneys’ fees, the trial court – finding  employee and his counsel had each met their burden of establishing entitlement to fees, and of documenting the time spent/hourly rates charged – awarded to attorney defendants their requested $86,365.50 in fees, with no multiplier, and $1,267.90 in costs for defeating CEO in malicious prosecution claim.  Likewise, the trial court also awarded employee $49,920.00 in fees – with no multiplier – and $947.18 in costs.  Additionally, the trial court also awarded the attorney defendants with an additional fees-on-fees award of $33,007.50 in fees, without a multiplier, and $325.15 in costs for litigating their first motion for attorney fees and costs. 

            The 6^th District found no abuse of discretion as to any of the fee awards.  Rather, they found that employee and his counsel were entitled to fees under Code Civ. Proc. section 425.16(c)(1) for successfully defeating the malicious prosecution claim with their anti-SLAPP motions.  CEO failed to show that the Anti-SLAPP motions were simple or routine as he asserted, the requested hourly rates were supported by evidence, and CEO failed to support his claims of block-billing and unnecessary, redundant or excessive hours.

Discovery, Sanctions: Louisiana Federal District Judge Assesses Fees And Sanctions Against Defendant And/Or Its Attorney For Deposition Interruptions, Speaking Objections, Instructions To Not Answer, Witness Coaching, And Failure To Prepare The Deponent

Various Fees And Sanctions Ordered Under FRCP 37.

            We sometimes blog on cases outside of California.  This one caught our eye because it received press in a March 30, 2020 post by Debra Cassens Weiss in the ABA Journal.

            In REC Marine Logistics, LLC v. Richard, No. 19-11149 (E.D. La. Mar. 27, 2020) (Docket Doc. 93) [linked here], U.S. Magistrate Judge Dana M. Douglas confronted plaintiff’s request for attorney’s fees for bringing an earlier motion to compel and then fees/costs/sanctions under FRCP 37 for defense counsel’s dilatory discovery actions and his tactics during a noticed deposition in a maritime injury case.  Magistrate Judge Douglas initially awarded $3,675 in fees for an earlier motion to compel, which then turned the focus upon defense counsel’s conduct during the deposition.  He made 145 interruptions during questioning, 16 instructions to the witness not to answer, 106 objections (including 52 speaking objections), and 11 instances of interrupting to ask his own questions during the cross-examination of the witness, not to mention that the witness was coached and was unprepared for the deposition.  Defense counsel appeared on 170 pages of the 255-page deposition transcript.  Based on this conduct, the magistrate judge ordered the defendant and his attorney to pay the attorney’s fees and costs associated with the deposition and pay plaintiff’s fees associated with the sanctions motion, as well as defense counsel paying individual sanctions in the amount of $1,000.  Wisely, defendant did not oppose the fees/sanctions motion brought by plaintiff.

            BLOG OBSERVATION—The seminal federal case for deposition protocol is Hall v. Clifton Precision, 150 F.R.D. 525 (E.D. Pa. 1993).   A Southern District of California district judge in the past issued a Hall-type order.  (See Vestin Realty Mortgage II Inc. v. Klaas, No. 08-CV-2011 (S.D. Cal. Oct. 25, 2010).) However, some of the Hall protocols have been found to be too inflexible such that more moderate approaches are followed.  (See Chesbrough v. Life Care Centers, Inc., 2014 WL 861200 (Mass. Super. Feb. 14, 2014) at *2, 3, 5 [especially addressing attorney conferences with deponents during legitimate breaks, not deposition special interruptions].). District courts are generally not impressed with conferences in depositions where a question is pending unless a privilege/trade secret/privacy issue is involved, frequently sanctioning for such interruptions.  (See, e.g. New Age Imports, Inc. v. VD Importers, Inc., 2019 WL 1427468, at *3 (C.D. Cal. Feb. 21, 2019) [motion to compel second deposition of witness due to in-deposition conference was “substantially justified” so as to support an award of costs]; Horowitz v. Chen, 2018 WL 4560697, at *3-5 (C.D. Cal. Sept. 20, 2018) [attorney and client “repeatedly left the room together while a question was pending;” costs and redeposition ordered].)

Trespass: Kelly v. House Decision Now Partially Published

Published Part Discusses Scope of Agricultural Trespass Fee-Shifting Statute, CCP § 1021.9.

            CCP § 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.”

            In our March 25, 2020 post, we discussed the unpublished opinion in Kelly v. House, Case Nos. A153735/A153184 (1^st Dist., Div. 1 Mar. 23, 2020).  It determined that the trial court erred in not awarding statutory damages to prevailing plaintiffs under section 1021.9 where they proved that defendants trespassed and caused tangible property damage by boarding their own animals on farmable land, painting corrals, disk-plowed fields, applying prohibited pesticides, and cutting down oak/buckeye trees cultivated by plaintiffs, resulting in plaintiffs losing their certified organic status.  We can now report that the statutory fee discussion section of the opinion was partially certified for publication on April 2, 2020. 

Consumer Statutes, Multiplier, Reasonableness Of Fees: Trial Judge In “Uncomplicated” Lemon Law Case Properly Awarded $94,864 In Song-Beverly Act Attorney’s Fees To Prevailing Plaintiff Winning A Jury Verdict Of $35,805.08

Plaintiff Had Sought $344,639 In Fees, Which Lower Court Found To Be Unreasonable Based On Overstaffing, Lack Of Efficiency, And Requesting Hourly Rates Too High For The Complexity Of The Case; Multiplier Request Properly Denied.

            We commend everyone to read the appellate court’s affirmance of a trial court’s reduction of an attorney’s fees request in Mikhaeilpoor v. BMW of North America, LLC, Case No. B293987 (2d Dist., Div. 1 Apr. 1, 2020) (unpublished), authored by Los Angeles County Superior Court Judge Elizabeth A. White who is sitting by assignment on the 2/1 DCA.  It has a superb summary of these topics:  lodestar; trial court discretion to reduce fees; multipliers; and Song-Beverly Act (lemon) law nuances relating to fee awards.

            In this matter, plaintiff won a jury verdict of $35,805.80 in a straightforward lemon law vehicle case.  The problem occurred when plaintiff’s attorneys sought $344,639 in fees (the lodestar plus a .5 multiplier plus some other minor expense requests).  The trial judge was aghast because the fee submissions showed that 10 attorneys worked the case; hourly rates ranging from $325 - $495 per hour were requested; many motions were “much ado about nothing”; and the case was straightforward/noncomplex in nature.  The defense objected to the hourly rates and argued that at least $83,206.05 should be slashed from the fee request based on block billing and inefficiencies.  After a detailed explanation of his reasoning for reducing the requested fees, the trial judge awarded $94,864 after a small offset for certain fees/costs owed to the defense, in the process denying the multiplier request. That prompted an appeal by plaintiff.

            The 2/1 DCA panel affirmed because it did not see an abuse of discretion under the circumstances.

            Again, we will not summarize all aspects of this unpublished decision, but it is a virtual lexicon for practitioners and others to use as far as lodestar, multiplier, and lemon law fee issues are concerned.

            First of all, the trial judge made detailed explanations at the fee hearing.  Plaintiff relied on federal cases requiring more detail when reducing fee awards, but these were inapt for California state court proceedings.  (In fact, no statements of decision are required in fees matters, although we bloggers observe that trial judges are becoming much more detailed in their tentative or final decisions in this area.)

            Second, the record belied that the lower court made an “across-the-board” percentage reduction without an adequate explanation—which distinguished other California cases (lemon law and in other areas) to the contrary.

            Third, the trial judge also did not make an impermissible fee award based on the jury award to plaintiff, given that proportionality per se is not the rule of law in lemon law cases.  He acknowledged that large fee awards are oft times justified in lemon law cases, but reduced for excessive hourly rates, overstaffing, and other inefficiencies. 

            Fourth, plaintiff argued that the defense had only asked for a smaller reduction such that the trial judge was restrained from making a larger reduction.  This contention was dismissed because the defense carefully asked for a reduction “of at least” a specified amount, not to mention the lower court has discretion to go beyond a defense reduction request.

            Last, but not least, the denial of a multiplier was no abuse of discretion given that the case was not complex (the novelty/difficulty factor to be assessed when positive enhancements are requested).

Allocation, Prevailing Party: Fee Award For All Incurred Fees To Prevailing Plaintiff Who Amended Complaint To Add Cause Of Action Providing Statutory Basis For Fee Recovery Just Before Trial Affirmed On Appeal

All Causes Of Action Related To The Same Common Issue And Were So Intertwined That Apportionment Was Impracticable.

            For an interesting discussion of The Independent Wholesale Sales Representatives Contractual Relations Act of 1990 (Civ. Code section 1738.11 et seq.), Newman v. Knit Creations, Inc., Case No. B292659 (2d Dist., Div. 1 March 30, 2020) (unpublished) is a good read.

            The Act sets out requirements for the contracts between manufacturers and the independent contractor salespeople who represent them.  The Act also provides the salesperson a right of action and ability to recover prevailing party attorney’s fees, along with treble damages for violations of the Act upon proof of intentional malfeasance.

            Here, Plaintiff salesperson sued Defendant manufacturer, after termination of her contract, for underpaying commissions and travel costs.  Defendant cross-complained claiming, among other things, Plaintiff had made misrepresentations to claim commissions.

            More than a year into the litigation, and just shortly before trial, Plaintiff successfully moved, unopposed, for leave to amend her complaint to add a claim against Defendant under the Act.  Along with this newly added claim, Plaintiff also prayed for statutory fees and treble damages.

            Following a bench trial, the trial court entered judgment in favor of Plaintiff on both the first amended complaint and cross-complaint – finding Plaintiff was entitled to $41,048.60 in damages for unpaid commissions, and that Defendant had violated the Act by failing to identify the commission rate for discounted sales.  However, the trial court did not award treble damages as it did not find that Defendant’s violation was intentional. 

            As prevailing party under the Act, Plaintiff moved post-trial for fees of $85,750 plus a lodestar multiplier of two – for a total of $171,500 – based on the complexity of the case and assumed risks Plaintiff’s counsel faced in representing her.  Defendant argued Plaintiff was entitled to less than $10,000 in fees as she: (1) was not entitled to fees incurred prior to amending her complaint to add a claim under the Act; (2) could not recover fees for responding to demurrers which were partially successful; (3) was only entitled to fees incurred in prosecuting her claim for violation of the Act; (4) was not able to recover fees related to defending against the cross-complaint; and (5) was inflexible and prevented the case from settling prior to trial. 

            The trial court bought none of Defendant’s arguments – finding her counsel’s efforts “so intertwined that it would be impracticable to separate the attorney’s time into compensable and noncompensable units as all of the claims related to the payment of the commission at issue under . . . section 1738.10.”  Plaintiff was awarded the entire amount of fees incurred – $85,750 – with no multiplier. 

            Defendant unsuccessfully appealed – with the 2/1 DCA finding no abuse of discretion in the trial court’s decision not to apportion the attorney fee award to segregate time based upon the common issue on which the fees were incurred and inextricably intertwined.