CALIFORNIA ATTORNEY'S FEES

Civil Rights: Petitioner’s Neighborhood Association/Resident’s Trial Court Victory Under The California Voting Rights Act And California Constitution Was Reversed As A Matter Of Law

That Means That Petitioner’s Motion To Recover Fees Of $22 Million Under A One-Way Fee Shifting Statute Went Bye-Bye.

            Petitioner’s neighborhood association and a resident, in Pico Neighborhood Assn. v. City of Santa Monica, Case No. B295935 (2d Dist., Div. 8 July 9, 2020) (published), had successfully sued Santa Monica when a lower court ruled that the city’s at-large voting system to elect city council members discriminated against Latinos both under the California Voting Rights Act (CVA) and California Constitution.  In fact, the lower court ordered city to switch to a district-based voting system.  CVA, in Elections Code section 14030, has a one-way fee-shifting statute in favor only of prevailing plaintiffs, while routine costs are awardable to prevailing plaintiffs and to prevailing defendants, but to defendants only where the matter is deemed frivolous or the like.  After their win, Petitioner had a pending request for attorney’s fees and cost of about $22 million against City.

            Well, fee/cost exposure—for now—is no more worry for the City.  The 2/8 DCA reversed the lower court judgment as a matter of law and awarded costs to City.  Total reversal of fortune.

Costs: Where Both Plaintiff And Cross-Complainant Did Not Prevail, CCP § 1032 Required An Award Of Winning Costs To the Successful Defendant

However, Appellate Court Strongly Suggested That Attorney’s Fees Were Not Automatic, Given The Lower Court Can Find No One Prevailed—Fee Standard Is Different.

            In The Real Estate Store v. Michel, Case No. B301771 (2d Dist., Div. 3 July 8, 2020) (unpublished), defendant obtained a reversal of a “each side bears its own costs and fees” ruling, where routine costs had to be awarded to the defense.  However, the appellate panel strongly suggested that a fee award was not automatic because the lower court employs a discretionary standard when there are mixed results as far as determining who is the prevailing side.

            Here, a jury returned a verdict in favor of defendant on a complaint and in favor of the cross-defendant on defendant’s cross-complaint.  The lower court ruled that each side was to bear its own costs and fees, prompting an appeal by the defense.

            The 2/4 DCA reversed, determining routine costs were mandatory.  Numerous cases confirmed that CCP § 1032(a)(4) required an award of such costs to a defendant in a situation where neither the plaintiff nor the cross-complainant obtained any relief.  (McLarand, Vasquez & Partners, Inc. v. Downey Savings & Loan Assn., 231 Cal.App.3d 1450, 1453-1455 (1991); Zintel Holdings, LLC v. McLean, 209 Cal.App.4^th 431, 438-440 (2012); Cussler v. Crusader Entertainment, LLC, 212 Cal.App.4^th 356, 370-372 (2012); Schrader v. Neville, 34 Cal.2d 112, 113-115 (1949).)  However, on remand, a fee award was not automatic because the routine costs standard for a “prevailing party” is not determinative, because Civil Code section 1717 allows the trial judge to determine no side prevailed especially in a “mixed results” scenario. 

Intervenors, Prevailing Party, Private Attorney General, Special Fee Shifting Statutes: Intervenor Residential Group Were Not Successful For CCP § 1021.5 Fee Recovery Purposes Because They Lost Their Pragmatic Goal Of Stopping A Development Project

The Trial Judge’s Call On Which Side Achieved Its Litigation Objection Was Correct.

            On June 24, 2020, we posted on Redondo Beach Waterfront, LLC v. City of Redondo Beach, Case Nos. B291111/BS168564 (2d Dist., Div. 3 June 19, 2020), unpublished at the time.  We can now report that it was partially published on July 9, 2020, though the fee discussion portion remains unpublished.  You can read the partially published opinion here.

            In the published portion of the opinion, the 2/3 DCA agreed with a trial court ruling that a developer obtained vested rights, based on a vesting tentative tract map, for a Redondo Beach waterfront development before passage of a restrictive city development measure.  During the course of the matter, a residential interest group were allowed to intervene based on its belief the City could not adequately represent the city development measure’s proponents.  Intervenor moved for costs and private attorney general fees, but the lower court found that it was not a successful party—the first element necessary for CCP § 1021.5 fee recovery.

            The appellate court affirmed in an unpublished portion of its opinion.  The problem was that the developer did achieve its litigation goals, while the Intervenor seeking to halt the project did not.  The successful party analysis is pragmatically based, and Intervenor lost its attempt to stifle the project.  Intervenor’s partial success on some ancillary claims did not alter the conclusion.

Deadlines: Failure To Object To Magistrate’s Fee-Fixing Decision, Appealing To Circuit Court Rather Than Objecting In Front Of District Judge, Means The Deadline Was Blown And The Objections Waived.

Although Unsettled, District Found That The Ruling Involved a Dispositive Issue, Which Still Did Not Excuse The Failure To Object.

            In LCS Group, LLC v. Shire LLC, Case No. 18-cv-2688 (S.D.N.Y. June 22, 2020), U.S. District Judge Analisa Torres determined that plaintiff and its attorneys, who were sanctioned earlier in attorney’s fees in the amount of $133,803.75 in favor defendants, failed to timely object to a magistrate’s decision fixing the fees.  What the plaintiff side did was to move for reconsideration and then appeal the ruling to the Second Circuit Court of Appeals.  The federal appellate court much later decided that it lacked jurisdiction to hear the appeal because the ruling was either a report and recommendation by a magistrate on a dispositive issue or a ruling on a non-dispositive issue, neither of which could be appealed. Instead, District Judge Torres found that the proper course was for plaintiff/its attorneys to object to the magistrate’s ruling within 14 days under F.R.Civ.P. 72.  That deadline had long passed, so the fee award had to stand.  The district judge determined that the motion for fees did pose “dispositive questions” (even though the Second Circuit found the issue was unsettled), but that still did not excuse the failure to make timely objections under Rule 72. 

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Arbitration: “Award” For Arbitration Correction Purposes Depends On Whether Every Aspect Of A Dispute Is Resolved, With Post-Arbitration Judicial Proceeding Fees Allowable

Breadth Of Fees Clause Sustained The Post-Arbitration Judicial Fees.

            In Lonky v. Patel, Case No. B295314 (2d Dist., Div. 2 July 2, 2020) (published), the Second District had to consider two issues:  what is an arbitration final “award” for purposes of jurisdictional correction purposes and are post-arbitration judicial proceeding fees to the prevailing party awardable?  The answers will follow.

            In short, plaintiffs in Phase I won a $558,266 compensatory award, leaving punitive damages and fee/costs issues for a later phase.  Then, this interim award was later modified to decrease the compensatory award to $310,838.62.  In Phase II, the arbitrator reflected the compensatory damages correction and awarded $1 million in punitive damages, also containing blanks for fees and costs to be determined.  Then, the Phase II award was modified upward to $434,158,25.  Finally, in Phase III, there was a final award of $434,158.25 in compensatory damages, $1 million in punitive damages, and $791,826.26 in attorney’s fees/costs.  The trial court confirmed most of it, but the judge did slash the $434,158.25 compensatory award down to $310,138.62 based on the perception it could not be jurisdictionally corrected.  However, it did award $65,197 in post-arbitration judicial proceeding fees based on plaintiffs having prevailed.

            On appeal, the 2/2 DCA returned the compensatory award to $434,158.25 and affirmed everything else.  It found that “award,” for arbitration correction purposes, needed to be a pragmatic test of whether it resolved every part of the parties’ controversy.  When that test was used, the Phase III award was justified in toto.  With respect to the post-arbitration judicial proceeding fees, they were allowable.  So, that meant plaintiffs could now seek more fees and costs for winning on appeal.

Fee Clause Interpretation: Prevailing Plaintiff Freight Forwarder Improperly Denied Contractual Attorney’s Fees Because Lower Court Erroneously Interpreted The Breadth Of Clauses In One Of Two Contracts

Confusion Arose Because There Were Two Contracts, But The Earlier One Had Terms And Conditions Applying To the Subsequent Contract; Because Fee Reasonableness Not Questioned, 4/3 DCA Remanded With Directions To Enter The Requested Fee Amount.

            Plaintiff freight forwarder had 2013 and 2015 contracts with defendant rice importer requiring reimbursement of certain third-party expenses, with the 2013 contract having a contractual fees clause and with the 2015 contract having no fees clause.  Plaintiff sued for about $36,000 in unpaid third-party expenses, and the trial court awarded $18,213.93 plus interest after a bench trial.  In a prior merits appeal, the appellate court determined that the 2015 contract incorporated the terms and conditions of the 2013 contract—a crucial determination for the end result with respect to fee entitlement.  Plaintiff moved for contractual fees of $31,713.50, but the lower court denied them based on plaintiff’s failure to break the fees down between the 2013 and 2015 contracts. 

            There was a reversal and remand of the fee denial in Western Overseas Corp. v. KRBL, LLC, Case No. G057515 (4^th Dist., Div. 3 June 30, 2020) (unpublished).

            The reason for the reversal/remand was that the lower court failed to adhere to the prior appellate ruling that the 2013 contract terms, including the fee clauses, were part and parcel of the 2015 contract, such that no apportionment was needed.  There were two clear contractual fee clauses in the 2013 agreement which allowed for fee entitlement to plaintiff.  The 4/3 panel, authored by Acting Presiding Justice Aronson, remanded with directions that the lower court award plaintiff the requested fees, rather than determine reasonableness—after all, defendant never challenged the reasonableness of the requested fees.

Judgment Enforcement, SLAPP: Lower Court Did Not Err In Granting Only Minimal Postjudgment Fees/Costs Of $735 To Winning SLAPP Defendant Where Plaintiff Interpled $22,000 As An Undertaking To Secure Underlying Trial-Level SLAPP Fee Award

Requested Fees/Costs Of Almost $6,700 Were Not Reasonable Or Necessary Under CCP § 685.040.

            In Padilla III v. Jakubaitis, Case No. G057424 (4^th Dist., Div. 3 June 30, 2020) (unpublished), a SLAPP defendant successfully had stricken one cause of action, with the trial court awarding it about $14,300 in mandatory fees/costs.  While things were on appeal, plaintiff interpled $22,000 as the equivalent of an appellate undertaking.  However, defendant undertook some postjudgment enforcement efforts, then moving to recover almost $6,700 in fees and costs under CCP § 685.040, a postjudgment fee-shifting statute allowing recovery of reasonable and necessary as collectible costs after the SLAPP grant was affirmed. The trial judge found most of the fees/costs were not reasonable or not necessary, awarding only $735.  Defendant appealed, but the appellate court affirmed because the record showed plaintiff did try to “secure” the trial level fee/costs award, and the defense did not demonstrate its activities met the “reasonable/necessity” standard.  Justice Fybel penned the 3-0 decision for the court.

Appeal Sanctions, Appealability: 4/3 DCA Imposes $25,452 In Sanctions Against Counsel For Nonparty Group Of Church Congregation Members Who Appealed Trial Court’s Ruling On Their Motion For Protective Order

Nonparty Group’s Motion For Protective Order Was Actually A Nonappealable Motion For Reconsideration Of A Discovery Ruling, But 4/3 DCA Treated Appeal As A Writ Petition To Stop The Harm Caused By Delaying Litigation In This Case.

            In Roe 1 v. Doe 2, Case No. G057684 (4^th Dist., Div. 3 June 29, 2020) (unpublished), plaintiffs brought an action alleging they were molested as children during Bible study sessions in an Orange County congregation of the Jehovah’s Witness Church.  Through discovery, plaintiffs sought production of files related to child molestations by church members that had been compiled the highest level of Jehovah’s Witness’s governing body (Watchtower).  To resolve a dispute over the production of the molestation files, the trial court ordered they be produced with specific redactions and under a protective order regarding the use of the files.  In violation of the trial court’s order, Watchtower instead produced documents using a pseudonym procedure that redacted all victims and third party identifying information (including names of congregations, victims, elders, witnesses, and alleged perpetrators) and replaced it with pseudonyms composed of letters and numbers.  Plaintiffs’ counsel notified Watchtower of the noncompliant production, and moved for sanctions.  The day after plaintiffs’ counsel notified Watchtower of non-compliance, a nonparty group of congregation members, who feared information in the documents would harm their families, filed a federal complaint unsuccessfully seeking to enjoin the superior court from enforcing its discovery order.

            Meanwhile, the nonparty group also filed a motion for a protective order requesting that the trial court modify its discovery order “to exempt and recall from production documents mentioning [them] or their family members” or “to exempt all documents with clergy-penitent communications from production and permit complete redaction of all information that could lead to the identification” of the nonparty group.  The trial court denied the motion as untimely, and concluded the motion was actually a motion for reconsideration of the discovery ruling – one that failed to set forth new or different facts, circumstances, or law as required under Code Civ. Proc. section 1008(a).  The trial court then continued plaintiffs’ motion for sanctions – ordered plaintiffs’ counsel to file an updated supplemental declaration setting forth the fees and costs incurred in bringing the motion, and stating it was inclined to grant if Watchtower failed to comply with the discovery order by nine days before the continued hearing.  As this deadline approached, the nonparty group appealed and requested a stay enforcement of the discovery order – with the trial court imposing a partial stay and vacating the hearing on plaintiffs’ motion for sanctions.

            The 4/3 DCA agreed with the trial court’s assessment that nonparty group’s motion was one for reconsideration of a discovery order, and that it was nonappealable.  However, based on the circumstances of the case, the panel treated the appeal as a writ petition on a motion for protective order because it “perceive[d] the need to put an end to this matter so the case can get back on track in the lower court.”  To that end, the 4/3 DCA found no abuse of discretion – concluding the trial court had properly found the motion untimely.  However, the panel was not quit finished and – finding the appeal, taken from a nonappealable order, to be frivolous and supported with meritless arguments – imposed appeal sanctions of $25,452 against nonparty group’s counsel.  In a 3-0 decision authored by Justice O’Leary, the 4/3 DCA opined on the possible motivation behind this appeal.  “It is difficult to imagine how an attorney could be unaware of the large body of legal authority, including Supreme Court decisions, holding discovery orders are not appealable.  It appears counsel may have been aware the appeal could be dismissed, but by filing the appeal, he achieved a one year stay of the May 2018 discovery order, and postponed a sanctions hearing.”  

Requests For Admission, Sanctions: Costs Of Proof Sanctions Affirmed Against Contestants To Will Who Denied Critical RFA Without Reasonable Ground To Believe They Could Prevail On The Matter At Trial

The Only One Of Four Will Contestants Who Showed For Trial Provided No Evidence To Support The Request For Admission Denial.

            Estate of Moshier, Case No. G057076 (4^th Dist., Div. 3 June 29, 2020) (unpublished) involved a will contest brought by decedent’s adoptive brother and three adult nieces against decedent’s wife.  Decedent’s will named wife as the executor of his estate and left the entire estate to her – which included the house decedent had inherited from his late father where decedent and wife lived.  Decedent had no children. When wife petitioned to probate the will, brother and nieces contested – seeking an intestate share of the estate as, they argued, the will did not comply with Probate Code sections 6110 and 6111 because it was witnessed only by wife instead of two individuals, and was not signed by decedent because the signature omitted decedent’s middle initial.

            When wife propounded discovery, contestants denied a Request for Admission asking for admission that decedent’s intent was to leave his entire estate to wife.  Instead, contestants claimed the house decedent inherited was meant to stay in the family and decedent would not have left the house to anyone but decedent’s adoptive brothers.  At trial, decedent’s best friend and his biological half-sister testified that decedent’s intent was to leave his entire estate to his wife.  On the other side, only one person showed for trial – a niece who had not seen the decedent in over 25 years, had never spoken with decedent about his property, will or intentions as to his estate, and who had no documents or other witnesses to support the contention that the house was to stay in the family.  The trial court found evidence supporting decedent’s intent to leave everything to his wife to be clear and convincing, and denied the will contest.  Afterward, wife successfully moved for Code of Civil Procedure § 2033.420 costs of proof sanctions to recover the fees she incurred in proving the truth of the matter regarding decedent’s intent, and was awarded $23,675 in fees and $3,707 in costs.

            The 4/3 DCA affirmed.  Contestants’ argument that the trial judge, rather than a temporary judge, was required to hear the sanctions motion fell flat.  First, contestants had stipulated to having the temporary judge hear the motion and had failed to withdraw that stipulation.  Second, the motion for costs of proof sanctions involved sanctionable conduct during pretrial discovery, not sanctionable conduct during trial, and ruling on the motion did not require the trial judge’s knowledge of the parties’ trial conduct.  Beyond this, the 4/3 DCA concluded there was no abuse of discretion in awarding the costs of proof sanctions – wife proved the truth of decedent’s intent at trial, and contestants had no reasonable ground to believe they would prevail on the issue of decedent’s intent.

Private Attorney General: Doe v. Regents Of The University Of Cal. Decision Now Published

Narrowly Focusing On Plaintiff’s Personal Interest In Bringing Suit, Rather Than Significance Of Constitutional Due Process Rights Effectuated By Plaintiff’s Action, Was Error For Purposes Of Fee Determination Under Section 1021.5.

            In our June 10, 2020 post, we discussed the case of Doe v. Regents of the University of Cal., Case No. B293153 (2d Dist., Div. 6), which was unpublished at the time.   The case holds that determination of entitlement to Code Civ. Proc. § 1021.5 attorney fees requires looking at a broader scope of the effect of plaintiff’s actions – that fees cannot be denied merely because the primary effect of the litigation was to benefit the individual rather than the public.  Although Doe brought a suit based on his own personal interest, his action resulted in significant benefit to all students at UC Santa Barbara, thereby entitling him to attorney fees under section 1021.5.   Doe v. Regents of the University of Cal.was certified for publication on June 29, 2020.

Judgment Enforcement, Section 1717: In A Case Of First Impression, The 4/3 DCA Affirms Section 1717 Attorney Fees To Prevailing Alter Ego Defendant In An Enforcement Action For An Underlying Breach Of Contract Judgment

Prevailing Alter Ego Defendant Would Have Been Entitled To Section 1717 Fees For Defeating Plaintiffs’ Claims If Made In The Underlying Action Even Though He Was Not A Signatory On The Contract.

            In MSY Trading Inc. v. Saleen Automotive, Inc., Case No. G057093 (4^th Dist., Div. 3 June 26, 2020) (published), judgment creditor plaintiffs brought an enforcement action against three defendants seeking to hold them liable on the underlying breach of contract judgment as alter egos of the judgment debtors.  The trial court granted the motion as to only one of the defendants and denied as to the other two defendants.

            Afterward, one of the defendants moved for attorney fees – with the trial court holding that equitable considerations entitled prevailing defendant to fees pursuant to Civil Code § 1717.  Although the immediate action was for enforcement rather than breach of contract, the trial court reasoned that defendant would have become liable for the underlying judgment as well as the attorney fees if plaintiffs had succeeded in having him added as a judgment debtor.

            On appeal, plaintiffs argued that because the action was an enforcement action and not “on a contract,” there was no statutory basis for an award of fees to prevailing defendant.  The 4/3 DCA disagreed with this “facial[ly] appealing” argument and affirmed.

            In an opinion authored by Justice Ikola, the 4/3 DCA found the principles in Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979) persuasive.  Reynolds holds that the intent of section 1717 is to ensure mutuality in the availability of attorney fees, and that “[i]ts purposes require [Civil Code] section 1717 be interpreted to further provide a reciprocal remedy for a nonsignatory defendant, sued on a contract as if he were a party to it, when a plaintiff would clearly be entitled to attorney’s fees should he prevail in enforcing the contractual obligation against the defendant.” (Id. at p. 128.)  Observing that if plaintiffs had brought the same alter ego allegations against defendant in the underlying breach of contract action, and defendant had prevailed, he would have been entitled to attorney fees, the appellate panel found defendant’s argument on point – that the timing of the alter ego claim should not be the basis for determination of the right to fees. 

            After all, if the timing of the alter ego claim was the deciding factor in the right to fees, all alter ego claims would be made post-judgment.

SLAPP: No Abuse Of Discretion Where Trial Court Awarded Each Of Three Successful SLAPPing Defendants Separate Attorneys’ Fees.

Plaintiffs’ Claims of Duplicative Efforts, Excessive Hourly Rates, And Inefficiencies Were Not Supported By The Record.

            In Truong v. Philhower, Case Nos. GO55054 et al. (4^th Dist., Div. 3 June 26, 2020) (unpublished), two plaintiffs asserted separately up to ten claims against each of three defendants for malicious prosecution.  These nearly sixty claims stemmed from causes of action alleged in an underlying action against numerous defendants.  In the underlying action, the two plaintiffs in this case had prevailed against the causes of action through dismissals, demurrers or the jury’s verdict.  The three defendants in this case were the underlying action’s plaintiff/his company, plaintiff’s lead counsel, and co-counsel.

            After successfully SLAPPing plaintiffs’ malicious prosecution action, defendants were separately awarded a combined total of about $266,575 in mandatory attorney fees pursuant to Code Civ. Proc. § 425.16(c)(1).  Plaintiffs appealed the dismissal of their complaints and attorney fees awards.

            In an opinion authored by Justice Goethals, the 4/3 DCA affirmed.  Under the two-step analysis for the governing standard for granting an anti-SLAPP motion, as recently set out by the 4/3 DCA in Mobile Medical Services, etc. v. Rajaram, 241 Cal.App.4th 164, 170 (2015), the appellate panel concluded defendants’ pursuit of the underlying action was a protected activity and that plaintiffs failed to meet their burden of establishing a probability of prevailing on the claim. 

            As to the attorney fees awards, plaintiffs challenged the amount awarded to each defendant – claiming duplicative efforts between the defendants, excessive hourly rates, and that legal work performed by defendants could have been done more efficiently.  However, there was no support for these claims in the record.   Rather, the record established that defendants did not charge to draft papers where the template was created by another defendant’s counsel, billing rates were well within the range for comparable work in the area, and the trial court scrutinized the attorneys’ billing records, added a $25/hour multiplier for contingency work where appropriate, and made reductions where appropriate.

Sanctions: Section 128.5 Sanctions Reversed In Second Appeal On Sanctions Issue Because Subjective Bad Faith Determination On Remand Was Made By Judge Other Than Trial Judge

1/2 DCA Also Concludes That An Appellate Court Is Not Bound To The Rule Of Law Of The Case Where Adherence Would Result In An Unjust Decision.

            Armstrong v. Daly, Case No. A155656 (1^st Dist., Div. 2 June 26, 2020) (unpublished) represents the second appeal related to a Code Civ. Proc. § 128.5 motion for sanctions in this case which was filed by defendant against plaintiff’s attorney – alleging the petition for dissolution of marriage, where there was no valid marriage, was pursued for the sole purpose of causing unnecessary delay in defendant’s unlawful detainer action against plaintiff. 

            The first appeal was filed by defendant when the trial court denied his section 128.5 motion for failure to comply with the safe harbor provision found in Code Civ. Proc. § 128.7.  When the 1/2 DCA reversed and remanded, based on San Diegans for Open Government v. City of San Diego, 247 Cal.App. 4^th 1306 (2016), the motion was assigned to a new judge who imposed sanctions of $23,352.68 against plaintiff’s attorney without further briefing or argument.  This second appeal was filed by plaintiff who argued for reversal based on intervening case authority and legislative history establishing that section 128.5 contained a safe harbor provision, and on the grounds that the motion was not heard by the trial judge on remand.    

            The appellate panel reversed – concluding that ruling on the section 128.5 sanctions motion required a finding of subjective bad faith, and that the trial judge – who observed the trial as well as plaintiff’s counsel’s justification for bringing a dissolution proceeding where there was no valid marriage – was in the best position to make that determination.  (Orange County Dept. of Child Support Services v. Superior Court, 129 Cal.App.4^th 798, 805-806 (2005).)  To that end, the 1/2 DCA ordered that, on remand, the trial judge hear the motion if defendant continues to pursue sanctions.

            The panel also rejected defendant’s contention that it was precluded from revisiting its prior holding in this case under the doctrine of law of the case.  The 1/2 DCA recognized the doctrine of the law of the case, which generally precludes multiple appellate review of the same issue in a single case, as a rule of procedure that will be disregarded when adherence would result in an unjust decision.  Here, the 1/2 DCA found, the principal ground for exception to the doctrine of law of the case existed – an intervening or contemporaneous change in the law.  Since the panel’s first ruling in this case on the sanctions issue, the Legislature urgently reacted to San Diegans by amending section 128.5 to clarify its previous intent by importing section 128.7 conditions and procedures, including the 21-day safe harbor provision.  Also, since the panel’s first ruling in this case, appellate courts had uniformly held that section 128.5 (before amendment) required compliance with the safe harbor provision of section 128.7.  (See Nutrition Distribution, LLC v. Southern SARMS, Inc., 20 Cal.App.5^th 117, 130 (2018).) 

SLAPP: Combined Total Of $45,899.67 In Trial And Appellate Attorney Fees And Costs Against Successfully SLAPPed Plaintiff Affirmed On Appeal

Plaintiff Now Facing A Third Round Of Fees From Second Unsuccessful Appeal.

            After settling a case brought against his company by a former employee, plaintiff in Uziel v. Employment Lawyers Group, Case No. B299226 (2d Dist., Div. 4 June 26, 2020) (unpublished), filed a lawsuit claiming misconduct against defendant law firm that had represented former employee. Defendant successfully SLAPPed back, and plaintiff filed his first appeal in the case.  When the 2/4 DCA affirmed the lower court’s order – concluding plaintiff could not prevail on any of his claims against defendant’s protected activity in prosecution of the former employee’s action  – plaintiff unsuccessfully petitioned the appellate court for a rehearing, then filed an unsuccessful petition to the California Supreme Court for review.

            Meanwhile, defendant was awarded $14,120 in trial related attorney fees and costs.  A little over a year later, defendant also received an award of $31,779.67 in appellate attorney fees.  About a month later, the trial court entered judgment and incorporated its prior SLAPP and attorney fees/costs orders. 

            Once again, plaintiff unsuccessfully appealed – attempting to include in his appeal the trial court’s order on the anti-SLAPP motion and arguing it was warranted based on his former counsel’s declaration filed with the trial court and Amicus Curiae letter filed with the Supreme Court for review.  This argument went nowhere as both the trial court and appellate court were precluded from reopening plaintiff’s case.  The trial court’s order dismissing plaintiff’s case was final upon the 2/4 DCA’s issuance of the remittitur affirming the trial court’s order – which issuance followed plaintiff’s unsuccessful petition to the California Supreme Court. 

            As to the attorney fees, plaintiff had missed the deadline for appealing defendant’s trial related fees/costs award.  Incorporation of the trial related fees/costs award in the later entered judgment did not reinstate or extend plaintiff’s deadline.  As to the awarded appellate attorney fees, plaintiff failed to offer any argument or legal authority – thereby forfeiting the issue.

            Unfortunately for plaintiff, it looks like he is likely headed back to the trial court for another round on yet more attorney fees.  The 2/4 DCA ordered defendant is to recover its costs and attorney fees on this second appeal.

In The News: Top Law Firms Not Doing So Bad During The Pandemic

However, Next Few Months May Define What Actually Happens.

            We were somewhat surprised by the results of a Wells Fargo Private Bank’s legal specialty’s group survey of April-May 2020 data for 52 of the top grossing law firms and 20 midsized/regional law firms, which chartered some trends during the coronavirus pandemic.

            Overall, cash collections increased more than 3% in May 2020, with expenses basically flat as the surveyed firms decreased discretionary spending.  54% of reporting firms said client requests for discounts increased in May as compared to April 2020.  52% also said that there were more client requests for payment extensions in May of this year.  Number of associates dropped by just .9%, while nonlegal staff positions dropped by 4.1%.  Nonlegal staff layoffs occurred most often in jobs that did not lend themselves to remote work. 

            What practice areas have suffered?  Answer:  transactional, corporate and real estate.  What practice areas have remained robust?  Answers:  bankruptcy; banking; labor/employment (with a host of labor issues raised by the COVID-19 pandemic). 

            Liquidity was better than expected, with 90% of the surveyed firms having the ability to cover three months of monthly expenses, excluding partner draws.  More than 50% of the reporting firms cut of delayed partner contributions so there was more cash on hand.

            The real test may be future collections in the next 3-4 months.  That future may be testy, which may greatly influence how firms end up at the end of 2020. 

Family Law: Ex-Husband’s Adverse $31,500 Sanctions Award Under Family Code Section 271 Sustained On Appeal

Sanctions Do Not Need A Precise Correlation To Sanctioned Conduct And The Specific Fees.

            In Lebid-Jurtschyk v. Lebid-Jurtschyk, Case No. B300370 (2d Dist., Div. 4 June 25, 2020) (unpublished), ex-husband was hit with Family Code section 271 sanctions for insisting on too high of a listing price for a house, not signing documents to get the deal done, and not contributing to repairs on the house.  Ex-husband’s appeal was not successful, given the facts showed he was not cooperative in trying to settle the divorce issues.  With respect to the argument that some related time was not compensable, the appellate court indicated that section 271 does not require a precise correlation between the sanctioned conduct and the fee award, a determination affirmed on appeal.  (In re Marriage of Corona, 172 Cal.App.4^th 1205, 1226 (2009).)

Probate: Around $300,000 In Attorney’s Fees/Costs Incurred By Petitioner In Conservatorship Proceeding Affirmed On Appeal

Conservatorship Petition Was Successful And In Mother’s Best Interests.

            For those of you who have read our posts under the category “Probate,” you hopefully discerned that probate court is a court of equity, and that many of the fee decisions are guided by equitable principles.  The result in Conservatorship of Dubro, Case No. A157185 (1^st Dist., Div. 5 June 25, 2020) (unpublished) is consistent with those principles.

            There, a fifth sibling successfully obtained results for his mother against four other siblings in a conservatorship proceeding involving mother, resulting in revoking a power of attorney for one sibling and obtaining appointment of a professional fiduciary requested by the fifth sibling as conservator.  Fifth sibling Dennis moved for more than $300,000 in attorney’s fees and costs based on the conservatorship results, with the lower court—in line with a special master report—granting almost all except for a minor reduction.

            The fee order was affirmed on appeal.  The deciding factor in conservatorship reimbursement disputes is whether the expenses were incurred in good faith and in the best interests of the proposed conservatee, a determination usually being a discretionary call for the probate judge.  In this instance, Dennis’ activities did benefit his mother.  The fee order was justified by the fact that the other siblings roughly incurred the same amount of fees as Dennis, an indicia that his fees happened to be reasonable.  (Donahue v. Donahue, 182 Cal.App.4^th 259, 272 (2010).).

Costs: Lemon Law Plaintiff Losing Case Properly Assessed With Certain Subpoena Fees, Expert Witness Fees, And Deposition Costs

On Appeal, Taxed Deposition Costs Were Additionally Awarded On Defense Cross-Appeal.

            In Nguyen v. House of Imports, Inc., Case Nos. G056789/G057216 (4^th Dist., Div. 3 June 25, 2020) (unpublished), plaintiff lost a consumer remedies/lemon law case after rejecting two CCP § 998 offers.  In the end, he was saddled with some routine costs.  Plaintiff appealed those cost losses, but he did not win anything.  The defense cross-appealed a refusal to award $7,742 in deposition costs, which actually resulted in a modification to allow these costs.

            Plaintiff challenged some defense witness service of process fees, but that challenge was rejected.  After all, “a trial is a fluid process, particularly for defendants, who present their case last.  Therefore, there may be occasions where it is necessary to subpoena witnesses who ultimately do not testify.”  Next, plaintiff contested $31,068.55 in expert witness fees as far as amount, but the expert’s trial witness preparation costs were not excessive given the expert was a key witness whose testimony was necessary to obtain a defense verdict.  Finally, the defense’s claim for $7,742 deposition costs was righteous, given that 11 of 13 depositions were taken by plaintiff and plaintiff failed to shift the burden from the verified costs memorandum as far as showing the costs were not reasonable or necessary in nature.  Costs award affirmed, plus another $7,742 to the defense.

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

Equity: Failure To Grant A Trial Court Reporter Fee Waiver To An Eventually Losing Plaintiff Required A New Trial, With Harmless Error Analysis Having To Go With The Plaintiff Needing A Transcript To Show Error

However, Jury Trial Fee Waiver Argument Lacked Merit Given A Jury Waiver A Long Time Back.

            There are some famous quotes about justice under the American system.  Two come to mind with respect to our next post.  The first is: “It’s every man’s business to see justice done,” attributed to Sir Arthur Conan Doyle.  The second is a partial quote from Seimon v. So. Pac. Transp. Co., 67 Cal.App.3d 600, 606 (1977): “Justice is to be accorded to rich and poor alike.”

            In Padron v. City of Parlier, Case No. F077052 (5^th Dist. June 25, 2020) (unpublished), plaintiff suffered a nonsuit at trial, after asking for a court reporter fee waiver on the first day of trial and after having been granted an initial fee waiver when the complaint was filed.  The trial proceeded without a court reporter such that plaintiff really had no way to prove error without a transcript.  Based on two recent decisions, Jameson v. Desta, 5 Cal.5^th 594, 599, 607-608 (2018) and Dogan v. Comanche Hills Apartments, Inc., 31 Cal.App.5^th 566, 568, 570 (2019), the appellate court found the failure to provide a court reporter fee waiver was not harmless error, although a “firm conclusion” was difficult to draw.  However, the absence of the actual testimony did establish prejudice so that a new trial was the result.  The Fifth District panel did indicate there were merits problems with plaintiff’s case, so some cautionary remarks were provided to plaintiff in deciding to seek a new trial on remand.  With respect to the claim of error in waiving a jury trial, the defense won this one given that jury fees were not posted at the case management conference long before—even though they were required under CCP § 631(b), (c), (f)(5), augmented by the fact that no jury waiver relief motion was brought. 

SLAPP: Defense SLAPP Fees Available For Work Of Associate Who Represented Partners Sued Individually By Plaintiff

Gilbert v. Master Washer Opinion Is Still Good Law On This Issue.

            In Opperwall v. Stone, Case No. A156200 (1^st Dist., Div. 5 June 24, 2020) (unpublished), a plaintiff sued an insurer’s counsel for various contractual and tort counts, specifically suing two partners individually of a small law firm.  They filed a SLAPP motion which was worked up by an associate representing them individually.  They won, and the trial judge awarded mandatory fees to the defendants to the tune of $13,100 (the entire request, 52.4 hours of work performed at $250/hour by the associate).

            Plaintiff’s appeal of the SLAPP grant and fee order did not produce any change in result.

            In affirming, the appellate court addressed plaintiff’s principal argument that no fee recovery could be had based on the Trope prohibition, such as where an associate employed at a firm represents the firm on a SLAPP motion.  However, there was a critical difference here:  the associate was representing the partners who had sued in individual capacities.  A case on point, Gilbert v. Master Washer & Stamping Co., 87 Cal.App.4^th 212, 222 (2001), held that SLAPP fees were recoverable and there was no violation of the self-representation prohibition of Trope v. Katz, 11 Cal.4^th 274, 292 (1995) [our Leading Case No. 12].  Plaintiff contended that Gilbert was “no longer good law,” but the panel found a number of cases had followed it.  (Lockton v. O’Rourke, 184 Cal.App.4^th 1051, 1074 (2010); Gorman v. Tassajara Development Corp., 178 Cal.App.4^th 444, 96 (2009); Century Surety Co. v. Prince, 782 Fed. Appx 553, 558 (9^th Cir. 2019).). Plaintiff’s main authority in support of why fee recovery could not be had, Carpenter & Zuckerman, LLP v. Cohen, 195 Cal.App.4^th 373, 386-387 (2011), was distinguishable because associate was representing the interests of her sued law firm instead.

Requests For Admission: 1/2 DCA Opinion Reversing “Costs Of Proof” Sanctions For RFA Denials Suggests That Successful Moves Are To Make RFAs Deeper Into The Case And To Support These Type Of Sanctions With Detailed Trial Testimony

$35,595 Fee Award Under CCP § 2033.420(a) Reversed Based On Early Nature Of RFAs And Lack Of Supporting Evidence Of Trial Proof To Correlate Against RFA Denials.

            Universal Home Improvement, Inc. v. Robertson, Case Nos. A157067/A157562 (1^st Dist., Div. 2 June 24, 2020) (published) has some nice tips to litigators seeking to obtain “costs of proof” sanctions against a litigant who may have denied requests for admissions without a reasonable basis, which can trigger fee recovery under CCP § 2033.420(a).

            What happened here is that a different judge other than the trial judge awarded “costs of proof” sanctions against plaintiffs to the tune of $35,595 in attorney’s fees when the defense prevailed in a fraudulent transfer action. 

            That award was reversed as a matter of law, with the appellate court finding it was an abuse of discretion.  It, first of all, found that RFAs seeking a response that a “plaintiff has no case” early on in a suit should not ordinarily give rise to “cost of proof” sanctions, because that would be a strict liability exposure for any prosecuting litigant even though things were at an early stage of a matter.  However, more into the weeds, the defense failed to provide any trial testimony to show why the denied requests were sanctionable, given that most of the facts were vigorously contested at trial.  Simply drawing a straight line from the admissions to the ultimate result did not support sanctions under section 2033.420(a), especially in a contested matter with lots of conflicting testimony.  We believe that this demonstrates that there needs to be some supporting trial testimony, in moving papers, to show why the denials would lead to “costs of proof” sanctions in most situations. 

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

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

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

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

Intervenors, Private Attorney General: Intervenor In Reverse-CPRA Litigation Properly Denied Attorney’s Fees For Failure To Satisfy Private Enforcement Element Because Its Intervention Did Not Result In A Change In School District’s Release Of Docume

Along The Way, 4/1 DCA Did Not Endorse Marken’s Observations/Dictum On No Fee Recovery In A Reverse-CPRA Case.

            In Voice of San Diego v. Teacher 1 etc., Case Nos. D075148 et al. (4^th Dist., Div. 1 June 23, 2020) (unpublished), an intervenor in a reverse-California Public Records Act (reverse CPRA) case was denied CCP § 1021.5 attorney’s fees after some school districts released records after petitioner active/retired teachers tried to enjoin release of records unless certain information was redacted.  Intervenor’s appeal of the fee denial was affirmed under the deferential abuse of discretion standard.

            The problem here was that intervenor did not satisfy the “private enforcement” element of section 1021.5.  When all the facts were sorted, the school districts had basically agreed to produce the documents, once reverse CPRA concerns were addressed, with nothing significantly tethered to intervenor’s actions.  That was a factual call, with the trial judge not getting it wrong.

            However, in a footnote and other observations, this panel did indicate it did not agree with dictum in Marken v. Santa Monica-Malibu Unified School Dist., 202 Cal.App.4^th 1250, 1268    (2012) suggesting that parties or intervenors could not obtain fee entitlement under the California Public Records Act.

Section 998: 4/3 DCA Affirms Trial Court’s Conclusion That Plaintiff’s Section 998 Offer Was Validly Accepted Despite Being Signed By Defendant’s Counsel Instead Of Defendant

There Was No Reasonable Dispute That Defendant Had Accepted And Agreed To Be Bound By The Terms Of The Offer.

            In Newman v. Larios, Case No. G057542 (4^th Dist., Div. 3 June 22, 2020) (unpublished), plaintiff sued two defendants for personal injuries he sustained when his motorcycle was struck by cars driven by defendants.  After settling with one defendant, plaintiff presented the remaining defendant with a section 998 offer for $15,000 – the policy limit under defendant’s automobile insurance.  Defendant’s counsel responded by letter stating that defendant’s insurance company accepted the offer for $15,000, and a request to proceed by way of Release and Dismissal with prejudice.  Plaintiff, however, took the position that that litigation was not settled as defendant’s insurer was not a party to the action and, therefore, the 998 offer had not been accepted by defendant.  Defendant then successfully filed a motion to enforce the settlement.  Afterward, defendant filed the offer and acceptance, and judgment was entered against him in the amount of $15,000.  Plaintiff appealed.

            In an opinion authored by Justice Fybel, the 4/3 DCA affirmed – concluding that there was no reasonable dispute that defendant’s counsel was accepting the offer on defendant’s behalf and that defendant would be bound by the terms of the offer.  Plaintiff was aware that defendant’s defense was provided under his automobile insurance policy, and that $15,000 represented defendant’s policy limits.  Insurer had the right to settle for policy limits without defendant’s consent and had a duty to accept a reasonable settlement offer on its insured’s behalf. 

            To be sure there was no ambiguity as to where the appellate panel stood regarding this appeal, the 4/3 DCA had this to say, “There is no question [plaintiff] was ready and willing to settle the lawsuit and avoid a trial for payment of $15,000 – after all, [plaintiff] made the section 998 offer.  The offer was accepted, meaning the lawsuit was resolved, trial was avoided, and court resources could be reserved instead for those cases that do not resolve through compromise and settlement.  Technically speaking, State Farm, was not the party to the lawsuit, but to try to exploit that technicality, when the acceptance was signed by counsel for [defendant], is pure gamesmanship which we reject.”

Intervenors, Prevailing Party, Private Attorney General, Special Fee Shifting Statutes: Trial Court’s Prevailing/Successful Party Determination For Purposes Of Costs And Attorney Fees Award Affirmed On Appeal

Determination Based On Achieving Litigation Goal, Not On Prevailing On A Higher Percentage Of Issues.

            Redondo Beach Waterfront v. City of Redondo Beach, Case No. B291111 (2d Dist., Div. 3 June 19, 2020) (unpublished), involved renovation of an existing 150,000 square foot building and a new 400,000 square foot waterfront development in the City of Redondo Beach.  The project was authorized through Measure G – approved by City residents in 2010 – which amended the City’s local coastal program to permit waterfront development.  Developer began working with the City on the project in 2010 and City deemed Developer’s Vesting Tentative Tract Map complete in June 2016.  In early 2017, City residents approved Measure C to stop waterfront development.

            Developer filed a petition for writ of mandate and complaint for declaratory and injunctive relief against City – asserting Measure C was invalid and/or unconstitutional on various grounds, and could not be applied retroactively to the project.  Fearing City would not represent proponents of Measure C, City residents successfully filed to intervene. 

            The trial court ruled against Developer’s claims that Measure C was invalid and/or unconstitutional, but – pursuant to Government Code § 66498.1 and the text of Measure C  – ruled in Developer’s favor as to the ability of City to retroactively apply Measure C to the project.  Developer’s rights had vested against the City as a matter of law because City had approved Developer’s vesting tentative map prior to Measure C’s passing.  Developer dismissed his remaining causes of action, and  City residents then moved for costs and filed an ex parte application regarding their intent to seek attorney’s fees under Code Civ. Proc. § 1021.5.  Based on existing appeals on the case at the time, the trial court requested briefing on and ruled as to successful and prevailing party status – to determine which party would be entitled to seek costs and fees.  The trial court determined Developer was the successful party as it had achieved its litigation objective to proceed with the project without being forced to comply with Measure C, while City residents failed to achieve their objective to stop the project from moving forward. 

            City residents appealed – arguing they were the successful party because they had prevailed on two out of three issues.  The 2/3 DCA found no abuse of discretion.  The panel agreed with the trial court’s finding that City residents had failed to achieve their litigation goals and therefore could not show they were the “successful party” as required for an award of attorney fees under Code Civ. Proc. § 1021.5.   

Family Law: 1/2 DCA Affirms Denial Of Needs-Based Attorney Fees Requested By Wife Under Family Code § 2030

Based On Trial Court’s Analysis Under Family Code § 4320, Husband Lacked The Financial Ability To Afford His Own Attorney Much Less Contribute To Wife’s Attorney Fees.

            Family Code § 2030 provides California family law courts authority to level the playing field in dissolution actions, where sufficient disparity exists between the parties in their access to legal representation, by requiring one party to pay attorney fees to the other party.

            In Korkka v. Petrenko, Case No. A156601 (1^st Dist., Div. 2 June 19, 2020) (unpublished), wife, represented by legal counsel, unsuccessfully moved for section 2030 needs-based fees from her self-represented husband.  The trial court addressed the fees request, as well as other questions at issue between the parties, in a detailed 33-page statement of decision – basing denial of the section 2030 fees on its analysis of section 4320 factors in determining spousal support.  This analysis supported husband’s contention that no substantial disparity existed where he was unable to afford his own legal counsel for the dissolution action and lacked the financial ability to contribute to wife’s attorney fees.  Wife appealed.

            The 1/2 DCA found no abuse of discretion and affirmed.  Both parties were self-represented on appeal and provided briefing not in compliance with appellate rules or authorities.  The appellate panel described wife’s arguments for reversal of the trial court’s order on fees – simply that husband had more access to funds to pay fees, the husband had a higher earning capacity, and that his spousal support payments to her were set to end in short order – as “manifestly insufficient.”  As the 1/2 DCA explained, a self-represented person must follow the correct rules of procedure and expect to receive the same treatment as if represented by an attorney.  (Taylor v. Bell, 21 Cal.App.3d 1002, 1009 (1971); Nwosu v. Uba, 122 Cal.App.4^th 1229, 1247 (2004).) 

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

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

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

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

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

Reasonableness Of Fees, Special Fee Shifting Statute: $9,200 Attorney’s Fees Award In Venue Transfer Situation Sustained On Appeal

Reason Was That Both A Surrogacy Agreement Venue Provision And Factual Circumstances Showed The Matter Needed To Be Resolved In Transferee Venue.

            In Omega Family Global, Inc. v. Doe, Case No. D075358 (4^th Dist., Div. 1 June 17, 2020) (unpublished), defendants were granted a venue transfer motion from San Diego to Riverside where a surrogacy agreement had a Riverside venue provision and where the children were born in Riverside.  As a price for the venue transfer, the successful litigants were awarded $9,200 in attorney’s fees under CCP § 396b(b), based on 20 hours of work by a Glendora attorney billing $460 per hour in the San Diego Superior Court.  The opponent’s appellate challenges did not resonate.  To the appellate court, it was clear the dispute belonged in Riverside and, in spite of some complimentary comments by the trial judge on the quality of arguments by both sides, there was no abuse of discretion in giving clear intent to the surrogacy agreement’s venue clause and the Riverside-based venue circumstances.  Although the moving party did not provide any direct testimony on San Diego hourly rates, the trial judge in California state courts can use his familiarity with hourly rates and attorney performance when it comes to awarding the amount of reasonable fees—and nothing in the record showed manifest error in this particular situation.

Private Attorney General, SLAPP: Sandlin Decision Now Certified For Publication

Real Party Has Another Crack At A $86,000 Fee Request Under Private Attorney General And SLAPP Statutes.

            On May 21, 2020, we posted on Sandlin v. McLaughlin, Case Nos. G057264 et seq. (4^th Dist., Dist. 3 May 19, 2020 unpublished; certified for publication on June 17, 2020).  There, the 4/3 DCA reversed and remanded a real party’s fee request of $86,000 in an election candidate statement dispute where real party ultimately prevailed such that the fee request was not moot.  Real party sought fees under both the private attorney general and SLAPP statutes, with both needing to be considered on remand. 

Family Law, Special Fee Shifting Statute: Intermediate Appellate Courts Issue Several Family Law Or Neighborhood Disputes Opinions Where Fee Requests Were Granted Or Denied In Unpublished Decisions—Abuse Of Discretion Standard Guided All Of Them.

1.         Marriage of Harcke, Case No. B288727 (2d Dist., Div. 7 June 16, 2020) (unpublished).

            In this case, father was sanctioned for $15,400 in attorney’s fees for failure to be cooperative in settlement negotiations under Family Code section 271.   That was no abuse of discretion given that he “out of hand” and unequivocally rejected mother’s settlement offer to impute significant income to her for support, visitation, and other issues—not in the spirit of section 271.

2.         Taheri v. Chavooshi, Case No. B296876 (2d Dist., Div. 2 June 17, 2020) (unpublished).

            Here, after being presented with dueling domestic violence restraining order (DVRO) petitions, the lower court dismissed the male’s petition and refused to award discretionary attorney’s fees under Family Code section 6344(a).  Again, this was no abuse of discretion under all of the circumstances, given the trial judge found that each side had gone their own way and a fee award would have only rekindled ill will.

3.         Corso v. Bruhl, Case No. D075804 (4^th Dist., Div. 1 June 17, 2020) (unpublished) and  Corso v. Holtman, Case No. D075859 (4^th Dist., Div. 1 June 17, 2020) (unpublished).

            Finally, we have a two-fer.  Neighbor Corso sued two neighbors seeking civil restraining orders.  He lost both efforts, with the trial judge finding discrepancies between his petition declarations and hearing testimony.  In Bruhl, he suffered an adverse $10,000 fee award under the discretionary civil restraining order fee-shifting provision, CCP 527.6(s).  This was no abuse of discretion given the lack of a complete record of papers below and in light of the other side not asking for all incurred fees.  A somewhat similar result occurred in Holtman, where the lower court awarded $25,000 in fees, given that the other side actually incurred about $51,000 fees and smartly only asked for half of them (which happened to be the award). 

Arbitration: $87,136.42 Final Arbitration Award—Most Of It Attorney’s Fees—Affirmed On Appeal

Trope Waiver OK Between Sophisticated Parties (But Fees Were Not Awarded For Self-Representation Anyway), With Arbitrator Not Being Bound By Prevailing Party Statutory Test And Not Having To Allocate Between Contract/Tort Claims.

            In Flint v. Koslyn, Case No. B289997 (2d Dist., Div. 7 June 16, 2020) (unpublished), former attorney/tenant of a client/landlord entered into a hybrid fee engagement, agreeing to represent client in exchange for a lower monthly rental amount.  The retention agreement had a fees clause covering both fee agreement and malpractice claims, and it also allowed attorney to represent herself without disqualification from fee recovery (a Trope waiver).  Based on an arbitration clause, a dispute over rent and attorney services between the two sides went to arbitration, where a minor compensatory award was made to former client/landlord but with the arbitrator awarding almost $87,132.42 to attorney/tenant (almost all attorney’s fees and costs, determining she was the prevailing party after prevailing on 75% of the contract claims, minus a small $2,000 offset due to the former client/landlord).  The arbitration award was confirmed by the superior court.

            Former client/landlord’s challenges to the arbitration award were unsuccessful. 

            Although seeming to endorse that a Trope waiver may well be enforceable between sophisticated parties, the appellate court did not have to confront the issue because the winning party in the arbitration did not seek self-representation fees.  The retention agreement did authorize fees to the prevailing party, such that the arbitrator had broad leeway to determine who prevailed—not needing to use the routine costs definition of a prevailing party and not required to allocate fees between contract/tort claims.  Arbitration award affirmed.

Reasonableness Of Fees, Section 1717: Summary Judgment And Attorney Fees Awarded Against Borrowers Who Defaulted On Commercial Property Loan Affirmed On Appeal

Borrowers Repeatedly Failed To Cite To The Record – Thus Forfeiting Their Arguments – But Awarded Fees Were Nonetheless Reasonable.

            In Polycomp Trust Co. v. Agbede, Case Nos. E070613 and E071376 (4^th Dist., Div. 2 June 15, 2020) (unpublished), borrowers defaulted on their commercial property loan and their four lenders successfully filed an action for judicial foreclosure.  Lenders were also awarded attorney fees, pursuant to Civ. Code § 1717, as the prevailing parties. 

            On appeal, borrowers argued that the trial court erred by granting summary judgment because there were triable issues of material fact relating to the amount owed, whether there was a novation, and whether the borrowers are entitled to antideficiency protection.  They also argued the awarded attorney fees were excessive.

            The 4/2 DCA affirmed – finding borrowers’ arguments to lack merit, with some issues raised for the first time on appeal.  Turning to borrowers’ appeal of the section 1717 attorney fees, the 4/2 DCA found the award reasonable.  Without showing that the travel hours were unreasonable, borrowers argued that fees should not have been awarded for “sitting in traffic” travel time to and from depositions, but offered no explanation as to how an attorney could take or defend a deposition without being there, nor how the attorneys could have avoided traffic on their way.  They also argued against fees awarded for lenders’ attorneys’ time spent settling with borrowers’ codefendants (City of Barstow and County of San Bernardino), but this argument failed as City and County claimed liens on the property and were necessarily named as defendants for the purpose of resolving their claims as part of the judicial foreclosure action.  Finally, borrowers argued against the hourly rates awarded – claiming the trial court relied on the billing rates of “transactional” attorneys.  The 4/2 DCA rejected this argument, concluding the trial court had simply misspoke in its reference to going rates awarded for “transactional” attorneys when it was clearly referring to litigators, and finding borrowers suffered no prejudice as a result.

            Importantly, however, there was a common fatal flaw among all of borrowers’ arguments against the attorneys’ fees award.  While the 4/2 DCA found none of borrowers’ arguments against the fees to have merit, it would not have otherwise mattered because each argument would still have failed due to borrowers’ failure to cite to the record – which thereby forfeited each of the arguments.

Costs: 2/4 DCA Affirmed Routine Costs For Preparing Exhibits/Closing Demonstratives Not Used At Trial, For Second Defense Counsel’s Deposition Travel Expenses To Japan, And For Certain Deposition/Trial Interpreter Expenses

“Pragmatic Take” On Routine Costs Was Explained On Appeal, With Non-Used Exhibits Costs Allowable Despite Siding On A Split In Intermediate Appellate Thinking—If They Were Helpful.

            Segal v. ASICS America Corp., Case No. B299184 (2d Dist., Div. 4 June 15, 2020) (published) confronted allowing routine costs—although, given modern litigation expenses, maybe far from routine as maybe contemplated under the routine costs statutes—with respect to allowing costs for (1) exhibits and closing argument demonstratives not ultimately used at trial; (2) travel expenses for a second attorney to attend depositions in Japan; and (3) interpreter fees for Japanese depositions and trial testimony.  In the end, all of these costs were allowed, with the 2/4 DCA publishing to explain that a “pragmatic approach” should guide routine costs recovery in modern litigation, even though the exhibit category had resulted in a prior split in appellate thinking.

            Without getting too much into the weeds, the exhibit/demonstratives costs items was proper—despite a split in thinking (Seever/Ladas—not recoverable; Applegate/Benach—recoverable)—because litigation attorneys cannot be clairvoyant on what and what is not is admissible, so discretion is allowed to the lower court, with no definitive prohibition in light of what modern litigators have to prepare for and maybe present before jurors.  When it came to the travel costs to Japan by a second counsel to help with a deposition, this was not be unexpected given modern litigation where it is routine to send more than one attorney to defend or take a deposition in a complex case.  Then, when it came to interpreter fees, it would be tough to argue that a deponent not that proficient in English would have the expenses in translating as being a foreseen routine cost, whether in deposition or at trial (and it could be awardable as foreseen and reasonable).   So, in the end, pragmatism rules in this area—costs award affirmed in toto!

Sanctions: Sixth District Affirms Code Civ. Proc. § 128.5 Monetary Sanctions Of $8,025 Against Self-Represented Defendant Bringing Second Motion To Set Aside And Vacate 2010 Judgment

Defendant Dismissed Appeal Of First Order On Set Aside/Vacate Motion Before Filing Second Set Aside/Vacate Motion

            In TAT Capital Partners v. Feldman, Case No. H044004 (6^th Dist., June 12, 2020) (unpublished), a self-represented defendant appealed from a second trial court order denying his motion to set aside and vacate a 2010 judgment against him, and from the $8,025 section 128.5 sanctions against him.

            Defendant’s first motion to set aside and vacate the 2010 judgment was heard on January 24, 2014 and denied.  Defendant (along with other defendants) appealed the trial court’s order, but requested that the appeal be dismissed.  Then, more than two years later, defendant (without other defendants) filed a second motion to set aside and vacate the 2010 judgment, which was, again, denied – with the trial court concluding defendant’s motion constituted a motion to reconsider its prior rulings and that defendant had not satisfied the requirements for bringing a motion for reconsideration.  Additionally, the trial court found defendant – as a matter of law – barred from raising challenges to rulings that had been subject to judicial review.  Finally, in finding defendant’s motion frivolous, meritless, unreasonable, and brought in bad faith for purposes of harassing, the trial court issued section 128.5 sanctions against defendant in the amount of $8,075.  Defendant again appealed, but the Sixth District found neither error nor abuse of discretion and affirmed.

            Defendant argued that the trial court erred in imposing the sanctions because plaintiff had become a forfeited entity in 2014 for failure to file tax returns.  Therefore, defendant claimed – based on Revenue and Taxation Code section 19719(a) – plaintiff lacked capacity in 2016 to oppose his motion and move for sanctions.  Based on the same premise, Defendant also raised Revenue and Taxation Code sections 2301 and 2301.5 for the first time in his reply brief.  However, the Sixth District found that defendant had not adequately presented this to the trial court and as such could not argue it on appeal.  Nonetheless, the appellate panel found none of defendant’s arguments related to plaintiff’s capacity under the cited Revenue and Taxation Code sections helpful to plaintiff.  Section 19719(a) relates to the criminal penalty for a prohibited exercise of corporate powers and rights after suspension or forfeiture, section 23301 applies to a foreign taxpayer only if the taxpayer is qualified to do business in California, and – pursuant to United Medical Management Ltd. v. Gatto, 49 Cal.App.4^th 1732, 1741 (1996) – failure to pay its taxes does not prevent a foreign corporation from bringing or defending actions, nor forfeit its corporate powers.

Appealability, Discovery, Family Law, Requests For Admission, Sanctions: Appeal Dismissed For Petitioner Who Was Dissatisfied With Trial Court’s Order On His Motion To Have Requests For Admission Deemed Admitted And For Sanctions

The Appellate Court Has No Jurisdiction To Review A Discovery Order.

            Petitioner father and respondent mother in Minasian v. Katz, Case No. A158517 (1^st Dist., Div. 2 June 11, 2020) (unpublished) were involved an incredibly protracted action – dating back to 2004 – regarding their child who was born the year before. 

            In 2018, petitioner served respondent with Requests for Admission, but considered petitioner’s original and second sets of responses inadequate, and filed a Request for Order to have the RFAs deemed admitted and for sanctions against respondent.  When the trial court ultimately ordered sanctions of $195 against respondent and that she file proper responses within 21 days, petitioner appealed – arguing the trial court exceeded its authority and discretion in ruling the respondent would have 21 additional days to file her RFA responses.  Unfortunately for petitioner, his appeal turned out to be an exercise in futility.  The 1/2 DCA dismissed.  The panel concluded petitioner’s appeal was of a discovery order, not a judgment, and that it was without jurisdiction to rule on the discovery order given there is no statutory provision allowing for an appeal of an order on a discovery motion.  (Lund v. Superior Court of Orange County, 61 Cal.2d 698, 709 (1964); Code Civ. Proc. § 904.1.)  

Deadlines, Equity: Plaintiff’s CCP § 473(b) Mandatory Relief Motion Did Not Excuse Attorney’s Failure To File A Timely Fees Motion Based On Lower Court Order

Result Was A Causation Issue—Failure To File Fee Motion Did Not Cause The Dismissal, But Only Resulted In A Lost Fee Request Opportunity.

            Co-contributor Mike was a collegiate debater, with causation being a very important argument.  That was just at issue and dispositive in the case in Hernandez v. FCA US LLC, Case No. B296516 (2d Dist., Div. 8 June 11, 2020) (published).

            There, parties advised a trial judge that they had settled on the first day of a scheduled trial, with plaintiff under a lemon law case agreeing to file a “with prejudice” dismissal upon the payment of the settlement and upon payment of any attorney’s fees and costs by agreement or noticed motion.  The trial judge was fine with the settlement, but he wanted to set a deadline for filing of the fees motion on an Order to Show Cause re Dismissal deadline of 90 days out, with any fees motion needing to be set for hearing by that OSC date.  Well, you can guess what happened.  Plaintiff’s counsel did not file the fees motion by the OSC deadline, but the trial judge continued things for about a month.  Plaintiff’s counsel did not do anything for a month, except to file an ex parte request to file the motion later—a request made at the last moment on the continued OSC date.  The trial judge was unsympathetic, denying the fee continuance request and finding no basis for a mandatory CCP §473(b) motion relief.   The action was dismissed.

            Well, flummoxed, plaintiff appealed for not being given the chance to present an attorney’s fees motion, arguing section 473 came to the rescue.   

            Didn’t work on appeal. 

            Much of this appeal, in our view, hinges on the fact that § 473 mandatory relief only was sought.  Although many elements for mandatory relief were satisfied, plaintiff failed to satisfy the causation element—the dismissal was not caused by the attorney’s mistake, inadvertence, surprise, or neglect.  The problem here was that the actual dismissal resulted because the parties reached a settlement and plaintiff had been paid in full, not anything hinged to the fee denial.  The lost opportunity to bring the fee motion was not causally linked to the dismissal, such that the mandatory relief provision did not act to save plaintiff’s attorney’s error.  Much of this was based on the trial judge’s case management order, so litigants and attorneys need to make sure they abide by these deadlines.  If not, even safety valves for missing deadlines may not be available.

Allocation, Construction, Insurance: Lower Court’s Denial Of Any Fee Recovery To General Contractor’s Insurer For Defending The GC, Based On Equitable Subrogation, Was Error

GC’s Insurer Was Entitled To Equitable Reimbursement Of Defense Costs Relating To Subcontractor Work As Well As A Reasonable Allegation Relating To Reasonable “Mixed” Defense Efforts.

            In Pulte Home Corp. v. CBR Electric, Inc. (St. Paul Mercury Ins. Co.), Case No. E068353 (4^th Dist., Div. 2 June 10, 2010) (published), a trial judge denied in entirety a general contractor’s insurer’s request for reimbursement of attorney’s fees expended in defending the GC  under an equitable subrogation claim even though GC-subcontractors’ contracts required some subs to defend the GC for their work which was alleged to have been defective in a construction defect suit.  The insurer had requested not only reimbursement of direct fees expended for defending on the work done by the subs, but also mixed, other defense work which it claimed was related to the overall defense of the case benefitting the subs—right around $189,000 out of $209,000 expended by the insurer in GC’s defense.  On appeal, the 4/2 DCA reversed and remanded.  It determined that insurer’s equitable subrogation action allowed an insurer to recoup from subs that portion of defense costs each sub owed as a result of its duty to defend the GC, but not entire defense fees attributable to other work (the overall defense of the case).  Based on Interstate Fire & Cas. Ins. Co. v. Cleveland Wrecking Co., 182 Cal.App.4^th 23 (2010) and Valley Crest Landscape Development Inc. v. Mission Pools of Escondido, Inc., 238 Cal.App.4^th 468 (2015), insurer was entitled to reimbursement of reasonably allocated fees from the subs.  If only the direct fees for sub defense had been involved, the appellate court would not have remanded; however, the claim for “mixed” defense fees of a related nature required an allocation—a division left for the trial judge to make in a remand proceeding.

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

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

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

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

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

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

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

Bankruptcy: Reasonable Costs Of Disciplinary Proceedings Imposed On California Lawyer Were Nondischargeable; However, Discovery Sanctions Payable To A Party Were Dischargeable

End Result Was $18,714 Was Nondischargeable, But $5,738 Was Dischargeable.

            In In re Albert-Sheridan (Albert-Sheridan v. California State Bar), No. 19-60023 (9^th Cir. June 10, 2020) (published), a disciplined California lawyer was ordered by the State Bar to pay $18,714 in costs for the disciplinary proceeding and to pay a client’s opponent $5,738 in discovery sanctions as conditions to lifting her suspension.  Lawyer filed a Chapter 13 bankruptcy, later converted to a Chapter 7, trying to discharge all of the costs and discovery sanctions.  The bankruptcy court said “no,” but the Ninth Circuit said “no” and “yes.”  With respect to the State Bar disciplinary costs, those were nondischargeable.  But, a different result as to the discovery sanctions:  in a first impression issue, the federal appellate court determined they were dischargeable in light of the fact they were not payable to a governmental entity.