CALIFORNIA ATTORNEY'S FEES

Private Attorney General: Trial Court’s Calculation Of Benefits To Intervenors’ Retirees Was Overblown Such That The Whitley Financial Benefit/Cost Analysis Required A Remand To Award Section 1021.5 Fees To Intervenors

$588,000 Fee Request Gets A Second Study, Based On Whitley And Other Factors.

           In City of Oakland v. Oakland Police and Fire Retirement System, Case No. A144653 (1^st Dist., Div. 4 Nov. 29, 2018) (published), intervenors sought to recover $588,000 in attorney’s fees under the private attorney general statute (CCP § 1021.5) and the federal civil rights statute (42 U.S.C. § 1988) based on some successes in defending the legitimacy of certain retirement benefits with respect to some public retirees and firefighters. The trial judge denied the fee request altogether, prompting an appeal by intervenors.

            The appellate court reversed and remanded, finding section 1021.5 fee recovery was proper under the circumstances.

            The first flaw was that the trial judge way overexaggerated the financial benefits being defended by intervenors. The lower court estimated they were $13 million (after making deductions from a “top ceiling” $39 million potential benefit estimated number).   However, the appellate court found that they actually were more like $3.5 million in benefits versus the $500,000 in litigation costs which would be incurred. Under Conservatorship of Whitley (2010) 50 Cal.4^th 1206, 1215-1216, 1220-1221 [our Leading Case No. 14], a trial judge can award section 1021.5 even if the expected benefits exceed costs by a substantial margin. Here, the expected value figure looked to be overblown, such that the expenses to be borne as compared to the expected benefits justified fee recovery.

            The second problem was that the lower court refused to consider the financial status of the litigants in determining an award. After analyzing a number of cases, the 1/4 DCA decided that this is a relevant consideration under section 1021.5.

            Although the degree of success can influence both the entitlement to and amount of the award, intervenors were able to halt the Board from demanding repayments of $4.5 million in past benefits by retirees—a strong degree of success and enforcement of pension rights which are of importance. With respect to the significant benefit factor, intervenors protected 590 live pensioners, so that was large enough to warrant section 1021.5 fees. Reversed and remanded.

Arbitration, Prevailing Party: Party Defeating Petition To Compel Arbitration, The Only Contractual Claim, Was Entitled To Fee Recovery Despite No Completed Arbitration On The Noncontract Claims

Finality Was Present With Respect To The One Contractual Issue, Justifying Civil Code Section 1717 Recovery.

            In an earlier published decision, general contractor was found to have waived the right to compel arbitration in construction defect and mechanic’s lien cases which ultimately were consolidated. The winning party on the arbitrability dispute, the only contractual claim, moved for contractual fees and was awarded $14,805. The appellate court in Von Becelaere Ventures, LLC v. Zenovic, Jr., Case No. D073108 (4^th Dist., Div. 1 Nov. 29, 2018) (unpublished) found that the situation was not premature for a fee recovery because the winner did win on the only contractual issue even though remaining noncontractual claims had not yet been arbitrated.

Fee Clause Interpretation: Broad Settlement Agreement Fees Clause Allowed For Recovery Of Fees In Fraudulent Stripping Of Assets Case

$188,000, After About $86,000 Reduction, Was The Sustained Fee Award.

            In Langer’s Delicatessen, Inc. v. Sino Enterprises, Inc., Case No. B287333 (2d Dist., Div. 4 Nov. 28, 2018) (unpublished), plaintiff won an action for fraudulent stripping of assets by a defendant based on a prior judgment and a settlement agreement. The settlement agreement had a broadly worded fees clause such that the trial judge awarded $188,000, about $86,000 less than the requested amount. The fees clause was broadly worded such that it allowed for fee recovery, with the court not having to address the fact fee authorization is not discussed under California’s voidable transfer statute.

Homeowner Associations, Mediation, Reasonableness Of Fees: $225,000 Fee Recovery In Favor Of HOA And Against Losing Condo Owner Affirmed On Appeal

Mediation Requirement Did Not Apply To HOA-Owner Dispute, Owner Failed To Specifically Identify Objections Fees, And Lower Court Did Award Substantially Reduced Fees From The HOA’s Requests.

            We have done many posts showing how HOAs or owners can be subject to substantial fee exposure for losing HOA-owner disputes. Seahaus La Jolla Owners Assn. v. Witt, Case No. D071229 (4^th Dist., Div. 1 Nov. 27, 2018) (unpublished) illustrates how this can happen, with the non-prevailing condo owner hit with $225,000 in fees in a losing effort.

            HOA sued condo owner to recapture costs incurred in repairing condo owner’s unit after a water leak, with owner cross-complaining against HOA and certain of its directors. The condo owner lost on both the complaint and the cross-complaint after bench proceedings. The trial judge later awarded HOA $ 150,000 in fees (out of a requested $240,000) on its complaint and $75,000 in fees (out of a requested $160,000) for defending against the cross-complaint.

            These determinations were affirmed on appeal. No prelitigation mediation was required because that only applied to developer-condo owner disputes, not HOA-condo owner controversies. Plaintiff failed to identify what portions of the fee requests were duplicative, excessive, or unreasonable, with the trial judge’s reduction showing good discretion was exercised.

Substantiation Of Reasonableness Of Fees: Counsel Declarations Sufficed To Justify $425,000 Fee Award In HOA’s Favor

Losing Condo Owner’s Failure To Specify Excessive, Generic Time Entries Also Fatal.

            The fee substantiation requirement in California state courts is much less than in federal courts. Federal courts favor submission of detailed timesheets, while attorney declarations and the trial judge’s perception of the work can indeed support fee recovery in California state courts. Plaintiff, a condo owner, lost a water intrusion dispute against a Mammoth HOA, with the lower court awarding the HOA $425,000 in attorney’s fees as the prevailing party. The Third District affirmed in Bakas v. Mountainback Condominium Owners Assn., Case No. C081052 (3d Dist. Nov. 27, 2018) (unpublished, modifying prior unpublished decision and denying a rehearing). The appellate court determined that (1) losing party’s failure to specify what entries were duplicative, excessive, or generic forfeited the challenge on appeal, and (2) counsel declarations and the trial judge’s gauging of the fee claimant’s attorney work could support a fee award in California state courts even in the absence of detailed timesheets.

Private Attorney General: Trial Judge’s Decision To Deny Fees To Plaintiff Creating Unemployment Insurance Dispute Legal Precedent Was Proper

Adoption of Joshua S. Justified Denial Of The Fee Request.

            Plaintiff in Paratransit, Inc. v. Unemployment Ins. Appeals Bd., Case No. C080183 (3d Dist. Nov. 27, 2018) (unpublished) won an unemployment insurance dispute, albeit on narrow grounds, before the California Supreme Court. However, the trial judge denied plaintiff’s request for private attorney general fee recovery based on In re Adoption of Joshua S., 42 Cal.4^th 945, 949 (2008), which held that a litigant satisfying all the CCP § 1021.5 requirements may still be denied fees where only legal precedent was created not advancing a large public interest and only private rights were essentially vindicated. The Third District concluded the trial judge got it right, discussing many 1021.5 cases arising post-Joshua S. in the process.

Prevailing Party, Special Fee Shifting Statute: State False Claims Act Fee-Shifting Statute Applies To Defendant Prevailing On Just The False Claim Act Claims Rather Than The Action As A Whole

This Result Fosters Deterring Actions Without Foundation Brought By Government Against Private Entities/Persons.

           The First District, Division 5, in John Russo Industrial Sheetmetal, Inc. v. City of Los Angeles Dept. of Airports, Case No. A151729 (1^st Dist., Div. 5 Nov. 26, 2018) (published), dealt with a situation where a plaintiff contracted with the L.A. Department of Airports (LAWA) to provide LAWA with specialized airport firefighting trucks. Each sued the other for breach of contract, but LAWA also sued plaintiff on a California False Claims Act (CFCA) cross-claim. LAWA was awarded $1 on the contract claim, but voluntarily dismissed one aspect of its CFCA cross-claim and lost the other aspect after a jury trial. Plaintiff lost all of its claims against LAWA. The trial judge awarded LAWA costs on its contractual claim, but awarded fees to plaintiff and against LAWA (albeit in a reduced amount from the request) under CFCA’s fee-shifting provision, Government Code section 12652(g)(9)(B), after finding that the action was frivolous and harassing.

            The appellate court affirmed. The principal issue was whether plaintiff could be the prevailing party—given the fee-shifting language requiring that defendant “prevails in the action”—for prevailing on only the CFCA claim versus the action as a whole. The 1/5 DCA found that prevailing on the CFCA cross-claim alone sufficed given the lower court’s finding that the claim was frivolous. In doing so, it found that the legislative intent of deterring baseless CFCA suits would be thwarted and that “action”/”claim” were found synonymous in analogous federal False Claim Act jurisprudence.

Indemnity: Fee Clause Language Included In Escrow Agreement Indemnity Provision Did Allow For Fee Recovery

2/5 DCA Found Carr Decision’s Discussion Instructive.

            Under our category “Indemnity,” we have posted on many cases which address the issue of whether an indemnity clause is a true indemnity provision or it also can allow for fee recovery. If you face this issue, we suggest you consult Carr Business Enterprises, Inc. v. City of Chowchilla, 166 Cal.Ap0.4^th 14, 20-23 (2008), as did the 2/5 DCA when resolving Wei v. Culture Escrow, Case No. B285327 (2d Dist., Div. 5 Nov. 26, 2018) (unpublished).

            Wei involved a plaintiff trustee who lost a fraud/breach of fiduciary duty action against defendants escrow company and escrow officer related to a real estate transaction between plaintiff’s mother and stepfather. The trial judge awarded fees to the winning defendants, under the escrow agreement’s indemnity clause to which all the parties were signatories.

            Plaintiff, obviously not happy with the result, appealed. The 2/5 DCA affirmed. It found that Carr was enlightening as far as the distinction between an indemnity qua indemnity clause and a mixed indemnity/fees provision. Usually, an indemnity clause uses language such as “indemnify” and “hold harmless,” contrasted with a fees clause using language such as fees Incurred “in an action between the parties to enforce their agreement” or “on account of any breach of the agreement.” Here, the fees clause read as follows: “If the parties do not pay any fees, costs or expenses due [e]scrow [h]older under the escrow instructions or do not pay for costs and attorney[] fees incurred in any litigation, administration action and/or arbitration, on demand, they each agree to pay a reasonable fee for any attorney services which may be required to collect such fees or expenses, whether attorney[] fees are incurred before trial, at trial, on appeal or in arbitration.” This language in the escrow indemnity clause meant it was a mixed indemnity/fees clause, so that fees were recoverable under the cases discussed in Carr.

Prevailing Party: Where Alter Ego Allegations Only Directed At Tort Claims With Narrow Fees Clause, Individual Cross-Defendant Beating Alter Ego Claims On Tort Claims Not Entitled To Fee Recovery

Narrow Fees Clause and Tort Claims Were The Determining Factors Here.

            In Echeverria v. Cohen, Case No. B285085 (2d Dist., Div. 8 Nov. 26, 2018) (unpublished), plaintiff dental corporation sued defendant landlord over a commercial lease termination, and defendant cross-claimed against the tenant and tenant’s principal under an alter ego theory. Landlord prevailed on the complaint and cross-complaint against tenant, garnering around $202,000 in compensatory damages. However, defendant did not win the cross-complaint against the individual cross-defendant, who requested $244,625 in attorney’s fees under the lease fees clause and Civil Code section 1717. The lower court denied the request, one which was affirmed on appeal.

            The key reasons for the denial of fees to the individual defendants were the following: (1) the fees clause was narrow, applying only to parties (landlord and tenant, rather than other persons or entities); and (2) section 1717 does not apply to tort claims. Considering these principles in tandem, section 1717 does not apply to tort claims so as to encompass prevailing “alter ego” defendants, with the fees clause being narrow such that it could not sweep individual defendant into its scope for winning tort claims. So, this one shows how the claims won on and scope of fees clause determine the result on appeal.

Private Attorney General: Ninth Circuit Case Navigates Between Federal/State Court Claims And Determines That Plaintiffs Need A Shot At CCP § 1021.5 Private Attorney General Fee Recovery On Remand

Federal Versus State Interests Were Involved.

            We commend you to read Independent Living Center of Southern California, Inc. v. Kent, No. 15-56142 (9^th Cir. Nov. 21, 2018) (published), which reversed a district court’s denial of plaintiffs’ request for attorney’s fees following settlement of litigation concerning California’s Assembly Bill X3 5, which reduced the Medi-Cal rate of reimbursement of healthcare providers by 10%. In a 3-0 opinion (with a concurrence), the Ninth Circuit determined that despite all kinds of federal supremacy arguments, the dispute and settlement agreement involved state claims such that plaintiffs should be allowed to seek prevailing party fees under California’s private attorney general statute, CCP § 1021.5. This is one for all of us who like federal versus state conflicts on fee issues to read, although it is very narrow in its application given the unique set of facts which were involved.

Discovery, Reasonableness Of Fees: 6 DCA Remands Determination For Prevailing Party Under Subpoena To Look Again At Amount Of Fees To Be Awarded

CCP § 1987.2 Prevailing Party Fees In Subpoena Context Might Depend On Who Met Litigation Objectives, Although The Test Is Not Crystal Clear.

            John/Jane Roe v. Halbig, Case No. H043248 (6^th Dist. Nov. 20, 2018) (published) is an interesting, but somewhat perplexing, opinion on the fees to be awarded to a party which ultimately prevailed because the other side withdrew a subpoena, which did allow for a prevailing party award under Code of Civil Procedure section 1987.2(c). Although adopting a “did you achieve your litigation objectives test,” it was only done under an abuse of discretion standard such that the test is not crystal clear at all as far as providing a benchmark guidance for future litigants. We are not complaining about the result, but benchmarks are good.

            What happened was that plaintiff sued certain doe defendants in Florida about alleged comments made by them on websites/social medical websites. Plaintiff served a subpoena on Google, who coughed up the account holders—including the doe defendants.   One account holder filed a motion to quash the subpoena under CCP § 1987.2(c), which includes a fee-shifting provision in the prevailing party’s favor. Plaintiff withdrew the subpoena, with the doe defendant found to be the prevailing party although the trial judge only awarding $22,000 out of a requested $42,581 in fees.

            The appellate court remanded for a “re-do” of the fee determination.

            It did determine that a challenging subpoenaed party could be the prevailing party under circumstances where a subpoena was withdrawn, although did not articulate a clear-cut test. Rather, it found no abuse of discretion with the trial judge adopting a “prevailing party” test where the party achieved its litigation objectives, although discussing under tests under the anti-SLAPP statute (although a catalyst test was rejected) but only deciding that the “litigation objective” standard was a reasonable one to use.  

            The challenging party did prevail, but the reviewing court was flummoxed about the amount of the fee award. There were some hourly fees which likely should have been honored, but the trial judge cut them down drastically. So, the fee award was sent back down for a “relook.”

Reasonableness of Fees, Special Fee Shifting Statute: Trial Judge Correctly Denied $94,934 Fee Request To Prevailing Party Under Civil Harassment Fee-Shifting Statute

Excessiveness Of Request Justified Entire Denial Of Fees Motion Demand.

            If you request an excessive fee award, you can be slammed entirely under a lot of California fee-shifting statutes. One of the big cases is Chavez v. City of Los Angeles, 47 Cal.4th 970 (2010) [our Leading Case No. 13], where a FEHA request was denied to a civil rights plaintiff because it was deemed excessive in nature.

            Well, that motif echoed through with respect to the result reached in Pachecho v. Tuttle, Case No. B272171 (2d Dist., Div. 3 Nov. 20, 2018) (unpublished).

            There, a defendant successfully opposed civil restraining orders, which did give rise to fee shifting under a prevailing party statute in the form of CCP § 527.6. However, defendant requested fees of $94,934. The lower court denied the fee request, and the appellate court found it was no abuse of discretion to find the request excessive in nature. Although arguing there was inconsistency between clerk transcript documents and the reporter’s transcript, the lower court’s pronouncements made it clear that the entire request was denied because it was excessive based on what was said at the fee hearing.

Deeds Of Trust, Prevailing Party, Section 1717: Where Lender Did Get Ruling Saying Plaintiff Had To Repay Loan, That Was A Prevailing Party Determination

Section 1717 Governed In This One, Given Broad Fees Clause In Deed Of Trust.

            In PNG Investments, Inc. v. RG Real Estate Investments, Case No. B280229 (2d Dist., Div. 3 Nov. 20, 2018) (unpublished), plaintiff/cross-defendant won a real estate loan dispute against defendant/cross-complainant. Later, the trial judge awarded plaintiff/cross-defendant contractual attorney’s fees under a broad deed of trust fees clause. That determination was affirmed on appeal. Plaintiff did get broader relief in the form of a judgment ordering defendant to repay the loan, so plaintiff was the prevailing party.

            BLOG OBSERVATION—The deed of trust fees clause was broad, not restricting an award to just adding it to the loan which precluded true fees clause recovery under some recent cases we have posted on in our category “Deeds of Trust.”

Costs: Losing Party Properly Saddled With Opposing Expert Review Costs And With Trial Technician/Exhibit Preparation Expenses For Visually Displaying Evidence At Trial

About $23,750 In Non-Taxed Costs Were At Issue.

            In Tsang v. Engelberg, Case No. A146379 (1^st Dist., Div. 3 Nov. 19, 2018) (unpublished), a losing plaintiff was not happy when the lower court denied her motion to tax costs to the winning party for about $23,750, which included review time by a medical/psychiatric expert and for trial technician/exhibit preparation expenses by outside persons visually displaying evidence at trial and operating the equipment during trial.

            The appellate court affirmed the lower’s court refusal to tax these costs.

            With respect to the expert review of documents to support his opinion, there was no abuse of discretion in awarding expenses for this time given it was necessary to develop the witness’s expert opinions. On the “trial technician” costs to visually display certain evidence and exhibits, American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton, 96 Cal.App.4^th 1017, 1057 (2002) was found persuasive in allowing for recovery of these expenses. It contrasted this to more mundane documents control and database charges which were found not recoverable in Science Applications Internat. Corp. vo Superior Court, 39 Cal.App.4^th 1095, 1104-1105 (1995).

Reasonableness Of Fees: $17,500 Fee Award Was Reasonable In Wrongful Foreclosure Action Dismissed After Plaintiff Failed To Amend Complaint

Plaintiff Complained Fees Were For Pre-Trial Efforts, But They Were For Lawsuit Defense Efforts And Were Properly Awarded.

            In Fung v. Oregon Trail Corp., Case No. B279366 (2d Dist., Div. 7 Nov. 19, 2018) (unpublished), defendant lender won an attorney’s award of $17,500 after the trial court dismissed a wrongful foreclosure action once plaintiff failed to timely amend following the lower court’s sustaining of a demurrer with leave. (Plaintiff tried to voluntarily dismiss, but the law in California is that this right is lost after the time to end to amend has expired, even if no judgment has yet been entered.) Although not disputing defendant was entitled to fees, plaintiff argued that lender already had recovered fees from the foreclosure proceeds. However, the factual premise was incorrect, because plaintiff did not file the action until much later and the claimed fees were for defense of the action in which lender prevailed. Fee were correctly awarded.

Civil Rights, Section 998: 2/8 DCA Holds, For Pre-2019 Cases, That Plaintiffs In Nonfrivolous FEHA Suits Are Not Entitled To Costs Shifting Under CCP § 998

Panel Agrees With Reasoning In Arave Opinion So Holding.

            Effective January 1, 2019, the Legislature has determined that plaintiffs in FEHA cases found to be nonfrivolous in nature do not face fee, costs, or expert witness fee exposure under the FEHA shifting statute or even under CCP § 998 after rejection of a 998 offer which is not beaten at trial. With respect to pre-2019 cases, there is a split of opinion on the topic among the intermediary appellate courts, with Holman v. Altara Pharma US, Inc., 186 Cal.App.4^th 462 (2010) holding section 998 does allow for costs-shifting in nonfrivolous FEHA cases and with Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 19 Cal.App.5^th 525 (2018) holding it does not allow for costs-shifting in this situation.

            The 2/8 DCA, in Huerta v. Kava Holdings, Inc., Case Nos. B277164/B281303 (2d Dist., Div. 8 Nov. 14, 2018) (partially published; costs discussion published), has now weighed in. It has found Arave persuasive, reversing a $50,000 defense award of costs/expert witnesses against plaintiff in a nonfrivolous FEHA case. It also found that the result was consonant with the Legislature’s upcoming amendment which takes effect in 2019.

           Judge Kim Dunning, an Orange County Superior Court judge sitting by assignment, authored the 3-0 opinion.

Family Law: Family Law Judge’s Family Code Section 271 Sanctions Reversed And Remanded Based On “Double Dips,” Due Process Grounds, And Client Not Being Liable For Them

Opinion Demonstrates That Fees Must Be Specifically Targeted To Independent Conduct Not Previously Sanctioned And To Conduct For Which Due Process Concerns Are Honored.

            In Marriage of Bentley, Case No. H043593 (6^th Dist. Nov. 13, 2018) (unpublished), the family law judge imposed various Family Code section 271 sanctions against ex-wife. Some of them were reversed and remanded for determination. First up, a$10,000 sanctions award was too much because it included the amount of a prior discovery violation sanctions order (put another way, a “double dip”). Second, ex-wife could not be sanctioned for not showing up at an ex parte hearing because she had no notice she could be subject to sanctions. Third, she could not be sanctioned for failing to show up at scheduling conferences because she was not ordered to be present and she appeared through an attorney.

In The News . . . . California PUC Says That San Onofre Settlement Was Not Fair And Challenges The $5.4 Million In Fees Paid To Firm Which Brokered The Deal

Ninth Circuit Has Not Taken Action Yet.

            As reported by Jeff McDonald in a November 15, 2018 post in a local San Diego newspaper, the California Public Utilities Commission is asking the Ninth Circuit Court of Appeals to not dismiss an appeal contesting a settlement reached between certain parties contesting the amount that consumers should bear in the San Onofre closure costs. In that settlement, the suing parties’ firm of Aguirre & Severson received attorney’s fees of $5.4 million, allegedly less than 1% of the savings that consumers would realize under the settlement. PUC and another watchdog group claims that the settlement was improper and that the fee recovery was unfair also. The Ninth Circuit has not yet ruled on the motion.

Section 1717: Lower Court Improperly Awarded Attorney’s Fees To Plaintiffs Under A Post-Dismissal Settlement Agreement Because Easement Dispute Was Contractual, Not Based On Tort Theories

Santisas Controlled The Result In This One.

            In Cho v. Hamilton Court, LLC, Case No. B282399 (2d Dist., Div. 4 Nov. 13, 2018) (unpublished), parties reached a settlement agreement with a fees clause relating to any action or arbitration “to enforce the terms or conditions [of the easement agreement],” after dismissing a breach of easement agreement and negligence case.   Plaintiffs moved for fees of $145,802.97 (based on a 1.5 multiplier), with the defense arguing that plaintiffs could only recover for easement contractual breach claims. The lower court disagreed, awarding plaintiffs $95,215.30 in fees based on the easement agreement fees clause which it deemed applied to tort claims.

            The appellate court reversed the fee award as a matter of law.

            Civil Code section 1717 does not apply to tort and other noncontractual claims, but contractual language on what claims can gain fee recovery is left to the language chosen by the parties.   The narrow nature of the “terms or conditions of the easement agreement” language did not include tort claims such that it was erroneous to award fees to plaintiffs.

Damages: Copenbarger Opinion Now Published—Deals With Attorney’s Fees As Damages And How To Properly Authenticate Them At Trial

October 19, 2018 Unpublished Decision Now Published.

            On October 20, 2018, we posted on the then unpublished decision in Copenbarger v. Morris Cerullo World Evangelism, Inc., which was authored by Justice Fybel of the 4/3 DCA. It dealt with whether breach of a settlement agreement fees were recoverable as damages versus costs (they were recoverable as damages) and with how to competently prove the fees from an evidentiary standpoint during trial (with the judgment reversed because no proper foundation was laid).   We can now report that the unpublished decision was certified for publication on November 13, 2018.

Common Fund, Homeowner Associations, Section 1717: Developers Properly Denied $1.950 Million In Attorney’s Fees Against HOA Under Either Civil Code Section 1717 Or The Common Fund/Substantial Benefit Doctrine

HOA Would Not Have Been Entitled To Fees If It Had Won, So Developers Did Not Prevail, With Equitable Doctrines Not Supplying An Anchor For An Award.

            Market Lofts Community Assn. v. 9^th Street Market Lofts, LLC, Case Nos. B280446/B282412 (2d Dist., Div. 2 Nov. 13, 2018) (unpublished) involved a case where an HOA lost a suit against Developers based on a Parking License Agreement (PLA) to which HOA was not a party, with the PLA containing a fees clause. HOA was a party to a sublicense agreement with a fees clause. The lower court denied fees to certain Developers totaling about $1.950 million, as against HOA, finding that it was not a party to the PLA (which prevented Civil Code section 1717) and that the common fund/substantial benefit theory could not provide an anchor for recovery.

            Those determinations were affirmed on appeal.

            Developers were not entitled to fees under the sublicense agreement because the gravamen of the lawsuit was whether the PLA prohibited defendants from charging condo eventual owners for parking—with HOA not a party to the PLA and with the narrow fees clause not extending exposure to HOA, following Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal.App.4^th 858, 898-900 (2008) in this regard. With respect to the common fund/substantial benefit theory, this was an equitable theory which could only benefit the HOA in limited circumstances, such that it could form the “reciprocity” basis for recovery; “[a]llowing the Developers to utilize this equitable doctrine to recoup millions of dollars in attorney fees would turn equity on its head.” (Slip Op., at p. 21.)

Consumer Statutes, Section 998: Lemon Law Fee Award Which Was A 78% Reduction From Request Reversed And Remanded Because Post-998 Offer Fees Should Have Been Considered And Appellate Court Unclear Whether Proper Lodestar Analysis Conducted By Lower Court

Size Of The Reduction Obviously Bothered Appellate Court, Although Its Statements On Level Of Detail Of State Court Fee Award Seems To Point Toward Adoption Of More Detailed Federal Court Analysis.

            McCullough v. FCA US, LLC, Case No. D073330 (4^th Dist., Div. 1 Nov. 9, 2018) (unpublished) is an interesting “lemon law” case where the trial judge eventually reduced a Song-Beverly Act fee request by 78% but did award prejudgment interest which resulted in the necessity for a “re-do” based on a prior 998 offer. But the appellate court also suggested that the reduction was too steep and that a better explanation of the fee recovery was necessitated even though a statement of decision is not required in California – this has the seeds for a more stringent explanation of a fees award in state court proceedings, as is the standard in federal courts.

            What happened here is that plaintiff car owner rejected a $24,000 CCP § 998, plus reasonable expenses/fees/costs, in a lemon law case, going to trial by which plaintiff won $17,163.83. Plaintiff then moved to recover $125,055 in pro-car owner, Song-Beverly Act fees ($83,370 lodestar plus a 1.5 multiplier). The lower court was appalled at this request and only awarded $18,685 fees—a 78% reduction after finding the case was over-lawyered and inefficiently run. Later, the trial judge did determine plaintiff was entitled to $10,791.20 in prejudgment interest although denying post-offer fees to plaintiff after determining that he did not “beat” the 998 offer.

            The appellate reversed the fee award and remanded upon plaintiff’s challenges. The first one was the easiest—when one adds the compensatory award with the prejudgment interest, the 998 offer was exceeded such that plaintiff was entitled to recapture post-offer fees.

            However, just as salient, the appellate court did opine on the lower court’s reasoning in reaching the 78% reduction. It was worried about the size of the reduction given that the Song-Beverly Act is crafted to be compensatory in nature as far as fee awards. Simply because the compensatory award was low in relation to the fee request made no difference, because proportionality is not at issue under the fee-shifting statute. The reviewing court also criticized the trial judge for not providing any examples of inefficiency and duplicative effort such that the fee award was not precise enough. This last determination is interesting because California law does not require a statement of decision in a fee proceeding such that there is a strong insinuation by the panel in wanting to see more a detailed explanation in line with the one required in the federal court system. Although admitting that lower courts do not have to be meticulous accountants when adjudging fees motions, it did conclude that “[t]he reviewing court should be able to determine how the court ultimately arrived at the amount of fees it awarded, particularly where it orders a substantial reduction in the actual time expended.” (Slip Op., p. 22.)

Private Attorney General: Plaintiff Citizens Group Vindicating Pomona’s Proposition L Ban On Outdoor Advertising Billboards Properly Awarded CCP § 1021.5 Fees

However, Only $75,200.40 Lodestar Out Of Requested $569,700 Lodestar/Three Times Multiplier Actually Awarded.

            In Citizens For Amending Proposition L v. City of Pomona, Case No. B283740 (2d Dist., Div 4 Nov. 7, 2018) (published), the appellate court considered an award to a plaintiff public citizen’s group of $75,200.40 under CCP § 1021.5. The City appealed, but there was no change in result.

            What happened here is that Regency Outdoor Advertising, Inc. erected various billboards along several Pomona freeways, but Pomona citizens passed Proposition L—a proposition prohibiting construction of additional billboards within City limits. Pomona and Regency extended contracts, prompting the plaintiff Citizens’ group to sue on the theory that the new billboards under the “new” contract were in derogation of Proposition L. The trial court agreed and granted mandamus writ relief, which was affirmed on the merits.

            But, that takes us to what we blog on—fees. Plaintiff sought recovery of private attorney general fees based on a lodestar of $189,900 plus a 3 times positive multiplier, for a total fee request of $569,700. The lower court determined that hours had to be reduced and that the requested hourly rate had to be reduced, so that only a lodestar of $75,200.40 was awarded, no multiplier at all given.

            The lower court result was affirmed, both as to the merits and as to the fees award on appeal by the City of Pomona. The public interest was vindicated by a win on Pomona Proposition L, and it was not just a procedural victory. With respect to the financial burden factor, plaintiff Citizens’ group was hardly a competitor of Regency (the “somewhat” real party in interest never really made a party) such that plaintiff had no financial risk/benefit incentive vis-à-vis Regency.

Costs: $4,200 In Deposition Costs For Percipient “Higher Up” Witnesses No Abuse Of Discretion For Plaintiff Winning $587,000 In Damages After Bench Trial

Whether Costs Are Reasonable And Necessary Happen To Be Discretionary Calls Entrusted To The Trial Judge.

            Deposition related costs are allowable, CCP § 1033.5(a)(3)(A), but—as with all costs—must be reasonably necessary to the underlying litigation in the case, Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 989-990 (2013). In Xeo International, Ltd. v. Fantasia Distribution, Inc., Case No. G055170 (4^th Dist., Div. 3 Nov 6, 2018) (unpublished), the two sides once had a business relationship, which soured, in the electronic cigarette and electronic hookah industry. Plaintiff won $587,000 in compensatory damages and fended off cross-claims by defendant. During the litigation, plaintiff took the depositions of three defense “higher ups” who were involved in percipient business discussions relating to the dispute. The lower court awarded deposition related costs of about $4,200. The defense challenge to the costs on appeal was not persuasive given that the necessity and reasonableness are questions entrusted to the discretion of the lower court. In this instance, it did not matter that one of the deponents was not called as a witness to trial, because litigants never know who may need to be called and the proof might be established through other witnesses. (Chaaban v. Wet Seal, Inc., 203 Cal.App.4^th 49, 57 (2012) [recovery of deposition costs does not depend on whether the deponent ultimately testifies at trial]; Lindy v. McChesney, 141 Cal. 351, 353 (1903) [it is frequently proper and necessary to take depositions, even though it may not be necessary to use the deponents’ testimony].) Justice Ikola authored the 3-0 affirming opinion.

Undertaking: Trial Judge Has Discretion To Order Discretionary Undertaking For Fees/Costs-Only Segment Of Judgment Under CCP § 917.9

Trial Judge Does Have Jurisdiction Under Section 917.9, Such That $1.5 Million Undertaking Ruling Was Not Beyond His Power.

            Quiles v. Parent, Jr., Case No. G054907 (4^th Dist., Div. 3 Nov. 2, 2018) (unpublished), also authored by Justice Fybel, is somewhat of a companion to our November 4, 2018 post on the related published decision. What happened here is that the trial judge ordered that the defendant post a $1.5 million discretionary undertaking under CCP § 917.9 to support the appeal of a $383,500 compensatory award and a little over $1.1 million fees/costs award. The appellate court affirmed that the lower court had jurisdiction do so under section 917.9, determining that a costs-only judgment (which may include substantial fee recovery) is within the ambit of the discretionary undertaking provision while a case is being pursued on appeal.

Employment: FLSA Recovery Of Costs And Fees In State Court Is Governed By Federal Principles

End Result Was That $50,591.69 Costs And $689,310.04 Fee Award Was Sustained Even Though Compensatory Recovery Was Only $280,500.

            Quiles v. Parent, Case No. G054353 (4^th Dist., Div. 3 Nov. 2, 2018) (published) is an important decision establishing that costs and fees recovery for a prevailing employee in a Fair Labor Standards Act (FLSA) action tried in state court is governed by federal, not state law, principles in this respect. What happened was that a joint employer was hit with $50,591.69 in costs and $689,310.04 in attorney’s fees under FLSA, even though they were less than the requested amounts, in state court involving FLSA claims.   In a case of first impression, the 4/3 DCA—in an opinion authored by Justice Fybel—determined that federal FLSA law ruled supreme in this area. As such, that allowed certain routine costs not allowed under state law and the fees for joint employer/alter ego determinations were related enough under federal law so as to allow for their recovery.

Celebrities, Prevailing Party: Plaintiff Model/Actor Winning $1.123 Million In Unauthorized Likeness Case Was Improperly Denied Prevailing Party Fees Under Civil Code Section 3344

Despite Plaintiff Not Winning Multi-Millions More Being Claimed, Appellate Court Believed He Should Get Prevailing Party Fees.

            Co-contributor Mike was a little surprised by this one, given how prevailing party determinations in mixed cases are usually governed by a deferential abuse of discretion standard. However, that often depends on the facts of the case, with the appellate court in Olive v. General Nutrition Centers, Inc., Case No. B279490 (2d Dist., Div. 4 Nov. 2, 2018) (published) giving plaintiff a nice win on appeal such that he was declared the prevailing party and entitled on remand to seek what we would think are significant attorney’s fees in this status.

            In an unauthorized likeness case by a plaintiff model/actor, where liability was conceded, damages was the contested item in this matter. Plaintiff won $1.123 million under Civil Code section 3344, which does have a prevailing party fee-shifting provision under subdivision (a). The trial judge determined no one prevailed because (1) plaintiff sought much, much larger profits and emotional distress damages (actually, $12 million to $36 million) but only received $1.123 million; (2) GNC recommended only damages of $4,800 in total; and (3) the jury did not accept either party’s recommendation. So, between $4,800 and $23.5 million, no one prevailed.

            The appellate court disagreed, remanding such that plaintiff can be awarded prevailing party fees in the discretion of the lower court. It reasoned that failure to obtain the “most lucrative portion of sought-after damages” was not a disqualifying factor, such that plaintiff did garner the “greater relief” compared to the paltry amount which defendant thought was offered. Big win for a plaintiff who now gets to seek, we would think, significant fees.

            BLOG OBSERVATION—We do not usually comment on the end result of a decision, but this one does not “smell” like an abuse of discretion. It appears that the appellate court compared the defense recommendation to what the plaintiff ultimately achieved, but this does not take into account the huge damages plaintiff really wanted as far as determining the true prevailing party calculus at the conclusion of the day. Just sayin’ ….., given we can comment once and a while on decisions.

SLAPP: SLAPP Fee Award To Defendants—One Half Of Their Request—Was Proper

Various Challenges Did Not Prevail.

            Defendants prevailed on their anti-SLAPP motion, which requires mandatory fees in the trial judge’s discretion. They asked for $44,656.73, but were awarded $22,000, but plaintiff still appealed in Lavi v. Cohen, Case Nos. B281352/B284653 (2d Dist., Div. 3 Oct. 31, 2018) (unpublished). They were not successful on appeal.

            Plaintiff challenged mainly that the fees were excessive based on block billing, which is not per se objectionable. However, the lower court could discern the nature of the work and reduced based on excessive hourly rates and spending too much on the motion. So, in a word, no prejudice was shown because good discretion was exercised in making reductions for other reasons. Plaintiff then contested that the work should have been apportioned between the parties, but this did not require any restudy because the fee claimants did that already by discounting fees 10% -- so, so sorry, but no change in result for the losing plaintiff.

            BLOG OBSERVATION—Depending on the facts where apportionment may be an issue, offer a discount as defendants did in this case. It worked!

Private Attorney General: Defendants’ Vindication Of B&P § 16600 Principles, In Non-Recruiting Dispute, Was Worthy Of $169,000 Fee Award

Basis Under California’s Private Attorney General Statute—CCP § 1021.5.

            In AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., Case No. D071924 (4^th Dist., Div. 1 Nov. 1, 2018) (published), individual defendants—former AMN “travel nurses” providing services to medical services throughout the U.S.—had to contest non-recruiting clauses in their AMN contracts when they switched over to competitor Aya. Defendants prevailed via summary judgment motions granted in their favor, principally based under Business and Professions Code section 16600 non-compete principles. Defendants invalidated contractual provisions against non-recruiting violations when they went to work for a different company.   The trial judge later granted successful defendants $169,000 in attorney’s fees under the private attorney general statute.

            This determination was affirmed on appeal. Clearly, the enforcement of section 16600 rights involved an important public right, and defendants were successful based on winning summary judgment motions interpreting employment contractual provisions which were invalid in nature. With respect to whether their own financial interests were subordinate to the greater public interest, the record showed they pursued an injunctive relief which was granted on the validity of the contractual restrictions—over and above their own interests--such that the Whitley cost/benefit analysis was satisfied.

Consumer Statutes, Deeds Of Trust: Trial Court’s Award Of Almost $13,000 To Borrower Obtaining Preliminary Injunction Under California Homeowner Bill Of Rights (HBOR) Affirmed On Appeal

Fee Award Based On Interim Success Sustained.

            We have posted earlier on the sequence of events in Sese v. Wells Fargo Bank, N.A., Case No. C083724 (3d Dist. Oct. 31, 2018) (unpublished). Earlier, the borrower had obtained an appellate decision determining that HBOR authorized an award of legal fees to borrowers who obtained a preliminary injunction preventing a trustee’s sale of their residences, based on Monterossa. (Monterossa v. Superior Court, 237 Cal.App.4^th 747 (2015) [reviewed in our June 14, 2015 post].) The trial court then denied an award of fees, which was deemed to not be an appealable order. (Sese v. Wells Fargo Bank, N.A., 2 Cal.App.5^th 710 (2016) [reviewed in our July 30, 2016 and August 18, 2016 posts].) However, borrower renewed its fee request, with the trial court granting $13,000 in fees based on the interim HBOR win. Wells Fargo appealed.

            This fee award was affirmed. The Third District decided that a fee recovery could be considered for interim relief under HBOR despite a final merits decision and despite a plaintiff who is ultimately not successful—the interim relief justified some fee recovery. With respect to a supremacy argument under 12 U.S.C. §91, that provision did not apply to an interlocutory order awarding fees against a bank because it did not come within the ambit of the statute—no bank property was seized (even on a pretrial attachment basis), just an order for fees entered. Trial court fee award affirmed in this one.

Family Law: $10,000 Sanctions Award Reversed Because Not Tethered Into Any Specific Fees Or Costs

Gotta Have Causation, Family Law Practitioners!

            Okay, we have posted before on sanctions awarded against litigants in a family law dissolution or related matter under Family Code section 271, which is aimed at dissuading conduct which is frivolous or not targeted at resolving the matter. The facts in Marriage of Karuppiah and Thurairajah, Case No. D071601 (4^th Dist., Div. 1 Oct. 31, 2018) (unpublished) are not important because a $10,000 section 271 sanctions award was vacated. The problem was that the winning litigant must “tether” the request to attorney’s fees and costs actually incurred—a causation principle. Because that was not done in this case, the $10,000 award was invalid.

Section 998: Plaintiff’s Rejection Of $30,000 Section 998 Offer Meant That Defendant Obtained Net $9,179.83 Award Despite Plaintiff Winning $10,000 From A Jury

Case Illustrates The Potent Impact Of A Successful CCP § 998 Offer.

            Malabed-Verona v. Hollaway, Case No. B278154 (2d Dist., Div. 4 Oct. 30, 2018) (unpublished) is a situation where a car accident plaintiff won $10,000 after a jury trial, but also after rejecting a close-to-trial defense offer of $30,000. The trial judge awarded the defense $20,620.53 in costs under 998’s costs-shifting provision, resulting in a net judgment to the defendant of $9,179.83 (after crediting the $10,000 won by plaintiff).

            Plaintiff, not happy, appealed. No change in result.

            The 998 offer was certain in nature. It could contain, as it did, a condition to release unknown claims relating to the accident claims pled in the lawsuit. (Ignacio v. Caracciolo, 2 Cal.App.5^th 81, 89 (2016).) With respect to whether it was a good faith offer, it was given that (1) the $30,000 offer exceeded the $10,000 jury verdict such it was prima facie evidence of reasonableness; (2) the offer was made close to trial such that plaintiff had plenty of time to evaluate it; and (3) plaintiff did not produce meaningful evidence of loss of income such that her assertions of inflated damages did not alter the analysis about the offer being made in good faith.

In The News . . . . President Donald Trump Seeks Around $342,000 In Fees Against Stormy Daniels After She Lost Her Defamation Case

Texas Anti-SLAPP Motion Is The Basis For The Fee Recovery.

            We can tell you that U.S. District Judge S. James Otero of the Central District of California decided to grant an anti-SLAPP motion in favor of now President Donald Trump in the defamation case brought against him by Stormy Daniels. He primarily found that the alleged tweets by Mr. Trump were rhetorical hyperbole protected under the First Amendment. Here is a link to his decision. The problem was that he granted a motion to dismiss under Texas’ anti-SLAPP statute, which similar to California’s statute, has a fee recovery provision for successful defendants.   We can now report that Mr. Trump has filed a fees motion seeking about $342,000 from Ms. Daniels based on his win.

Probate: Attorney Guardian Ad Litem (GAL) Fees Can Be Paid From Mother’s Trust

Probate Code Section 1003 So Allows.

            In Berwick v. Walsh, Case No. G054632 (4^th Dist., Div. 3 Oct. 30, 2018) (unpublished), the issue on appeal was whether a probate court could award GAL fees for a mother’s husband to be paid out of mother’s share of the trust. Temporary successor trustee contested that the court could order disbursement from mother’s trust, with the fees being just over $12,000. The 4/3 DCA, in a 3-0 opinion authored by Justice Goethals, affirmed. Probate Code section 1003 expressly provides that the GAL’s expenses, including compensation and attorney’s fees, “shall be … paid as the court orders, either out of the property of the estate involved or by the petitioner or from such other source as the court orders.” Given that the statute allows payment from “such other source as the court orders,” the probate court did not abuse its discretion in ordering GAL fees paid from mother’s trust.

Arbitration: Arbitrator’s Decision On Awarding Fees To One Party On One Dispute And Denying To Same Party Another Dispute No Abuse Of Discretion

Moncharch Discretion To Arbitration Decisions Ultimately Prevailed.

            No huge recitation of the facts or conclusion is required in Axten v. Axten, Case No. D073089 (4^th Dist., Div. 1 Oct. 30, 2018) (unpublished). What basically happened was that one party obtained an arbitration award of $94,972 in attorney’s fees under a settlement agreement fees clause on one disputed matter (although the other disputed matter went the other way). The losing party claimed she should be awarded $99,322.50 in fees for prevailing in the matter not won by the prevailing party. The problem was that the arbitrator denied the latter fee request. In the end, even though some procedural challenges might have won the day anyway, the arbitrator’s merits determinations were unassailable such that the arbitrator did not act in excess of jurisdiction in ruling as the arbitrator did.

Consumer Statutes, Landlord-Tenant, Section 1717: Tenant Prevailing On Common Law Residential Inhabitability Claim Limited To Contractually-Capped Fees Of $1,600

Although More Fees Potentially Allowable Under Statutory Inhabitability Claim, Jury Did Not Base Its Verdict On The Statute Such That Contractually Capped Amount Was The Proper Award.

            This next case involves an intersection between the parties’ contractually capped fee recovery under lease agreements and potentially more expansive damages under a statute allowing recovery for a tenant if that tenant recovers under the statute (Civil Code section 1942.4(b)(2), which specifies recovery for a prevailing tenant if the elements of the statute are met).

            What happened in Brookshire v. HPG Management Inc., Case No. B269544 (2d Dist., Div. 1 Oct. 25, 2018) (unpublished) was that tenant prevailed on a common law implied warranty of habitability claim against landlord under four leases. Each lease did allow fee recovery to a prevailing party, but capped recovery at $400 per lease. Tenant moved to recoup $146,670 in attorney’s fees under both the lease fees clause and Civil Code section 1942.4(b)(2). The lower court determined that plaintiff was entitled to contractual fees, but only $1,600 ($400 under the four leases) and was not entitled to fees under the statutory implied warranty of habitability claim because the jury did not render findings under the statute (instead awarding recovery under the different, but somewhat related, common law implied warranty claim).

            The fee award was affirmed on appeal.

            On the lease fee clauses, there was nothing wrong with the cap because the limits applied to all parties equally.   The appellate court relied greatly on the reasoning in 511 S. Park View, Inc. v. Tsantis, 240 Cal.App.4^th Supp. 44, 48 (2015) [reported in our October 10, 2015 post], which did sustain a similar contractual cap on fees. There was nothing “one sided” about such a cap given that it applied to all parties.

            With respect to the claim for greater fees under the statutory claim, the problem here was that the jury only awarded recovery under a common law implied warranty claim with much different elements than the statutory claim. Given this reality, no greater fees were justified under Civil Code section 1942.4.

Costs, Private Attorney General: 4/3 DCA Affirms $409,000 Fee Recovery And Additional Costs Recovery Even Though CEQA Petitioners Only Prevailed On One Out Of Close To Thirty Issues

Clarification Of Success Facto Under CCP § 1021.5 Is Sorely Needed In This Area.

            Our local 4/3 DCA in Protect Our Homes And Hills v. County of Orange (Yorba Linda Estates), Case No. G054631 (4^th Dist., Div. 3 Oct. 25, 2018) (unpublished) was an appeal from a situation where CEQA petitioners “partially” prevailed in an action—winning one greenhouse emission issue out of close to 30 issues raised—and with the lower court awarding them $409,000 in fees under the private attorney general statute and additional costs. Developer was not happy and appealed, but the appellate court affirmed in a panel decision authored by Justice Thompson.

            In the court below, the trial judge found that an award of pre-administrative hearing petition work—which he did allow—was faced with a split in authority between Beach Colony II v. California Coastal Comm’n, 166 Cal.App.3d 106 (1985) (no) and Edna Valley Watch v. County of San Luis Obispo, 197 Cal.App.4^th 1312, 1317 (2011) (yes). The appellate court sidestepped the conflict by finding that the rulings in these cases were dicta or distinguishable. Instead, it found that the Public Records Act was not administrative proceeding work but directly related to the CEQA litigation.

            The reviewing court then had to face whether administrative record preparation work had to be claimed through a costs memorandum, or could be raised instead through a fee motion. The appellate court concluded that it could be done by either method under CCP § 1094.5, and that the developer faced no prejudice by it being raised through a fee motion.

            Developer also challenged that the A/R costs were unjustified because developer/City had to do them because CEQA petitioners were recalcitrant. Although not really disagreeing, the reviewing court found that trial judges on a “case-by-case review” could determine if costs should be awarded even if the 60-day deadline for certification record had been or was close to blown by CEQA petitioners.

            Finally, that brought the court to the lack of success issue. Even though CEQA petitioners only prevailed on one issue, the appellate court found that the possible qualitative value of the greenhouse issue allowed the lower court discretion to award substantial fees even though losing other issues which were not found to be frivolous in nature.

            BLOG OBSERVATION—Co-contributor Mike was the lead appellate attorney on the case and has no “sour grapes” with the opinion, although he does disagree with some of the determinations. The most glaring one is that there needs to be clarification on what constitutes success in CEQA litigation when petitioners lose a huge amount of their issues. No “frivolousness” benchmark determines success, such that allowing trial judges to use this test means CEQA petitioners have no incentive to not adopt a “kitchen sink” approach to raising issues.   There is a good “issue by issue” test enunciated in the SOURCE state court case, which builds on federal Sierra Club cases on this contention. This success argument needs to be clarified given that some intermediary appellate decisions have admitted that the distinction between “claims,” “issues,” and “theories” in this area is confusing at best and has no elucidating analytics.

Allocation: Contract/Tort Cross-Over Claims Did Justify $825,000 Fees/Costs Award Against Non-Prevailing Parties

Hybrid Cases Can Be Expensive.

            Keenan v. Souza, Case Nos. B276437 et al. (2d Dist., Div. 4 Oct. 24, 2018) (unpublished) was an LLC dispute with broad contractual fee recovery clauses. Needless to say, certain defendants/cross-complainants prevailed. The trial judge awarded over $825,000 in fees and costs to the prevailing parties, determining the contractual and tort claims were inextricably intertwined such that no allocation was necessary. The appellate court affirmed, especially given in the right case (this one) that apportionment was only discretionary where claims were interrelated.

Section 998: CCP § 473(b) Discretionary Vacate Motion Based On CCP § 998 Omission Of Material Term Denied On Appeal Based On Failure To Provide Reporter’s Transcript On Lower Court Determination

Adequate Record Is A Necessity.

            In Monoarfa v. Djie, Case No. B279593 (2d Dist., Div. 4 Oct. 24, 2018) (unpublished), the trial judge denied a CCP § 473(b) discretionary motion to vacate a ruling based on the CCP § 998 offer not containing a material term The result was affirmed because no reporter’s transcript was provided—reminding everyone an adequate record is required, including hiring a private (but superior court reporter on the certified list) to report hearings, and most especially on discretionary rulings.   Sorry it has come to this, litigators, but financial constraints require you are diligent in hiring YOUR OWN court reporters for important hearings. Only a sign of the times (no disrespect intended anywhere).

Mediation: Buyer’s Refusal To Engage In Mediation Under CAR Residential Real Estate Contract Did Not Support Adverse Attorney’s Fees Award Against Buyer—Buyer Did Not Refuse To Mediate!

Appellate Court Did Note Differences In CAR Mediation Provisions Leading To A Different Result In Earlier Iterations Of CAR Contract.

            In Dilonell v. Chandler, Case No. B282634 (2d Dist., Div. 2 Oct. 24, 2018) (unpublished), plaintiff/prospective buyer was dinged with an attorney’s fees award of $26,400—a reduced amount—after a lower court denied buyer’s petition to arbitrate. A key to this determination was the trial judge’s finding that no agreement to arbitrate existed between seller and buyer because there was no electronic transmission acceptance “agreement” to a deal, based upon the doctrine of amanuensis. (That doctrine provides that where the signing of a grantor’s name is done with grantor’s express authority, the person signing the grantor’s name is not deemed an agent but is instead regarded as the mere instrument or the grantor—it is the signature of the grantor, although here is a heightened scrutiny to determine whether the signature is truly valid.) Because there was coercion, there was no deal between the parties.

            But the reversal was on the fees award—so how did that happen? Very easy. Buyer did offer to mediate, but seller said there was nothing to mediate based on the absence of an enforceable contract. The lower court determined that a defendant, in seller’s position, did not need to mediate in order to be entitled to attorney’s fees under the CAR mediation clause.

            The appellate court determined this was incorrect reasoning. The applicable CAR clause indicated that mediation disqualification applied to “any party,” which applied to a defendant seller refusing to mediate. In reaching this result, the reviewing court distinguished Van Slyke v. Gibson, 146 Cal.App.4^th 1296, 1299 (2007) and also showed how the CAR form mediation clauses had evolved to reach parties other than just a plaintiff commencing litigation with respect to the mediation condition precedent. In this regard, defendant rejected mediation and was precluded from obtaining fee recovery from the plaintiff buyer—reasoning in Frei v. Davey, 124 Cal.App.4^th 1506, 1520 (2004) reigned supreme in this one.