CALIFORNIA ATTORNEY'S FEES

Appealability, Landlord-Tenant, POOF!: Reversal Of Unlawful Detainer Judgment Against Landlords Required Reversal Of Related Attorney’s Fees/Costs Award

In Separate Merits Appeal, Appeal Was Cognizable Although Possession Returned To Landlords During Appeal Because Review Would Determine Landlord Liability For Fees/Costs.

            In Lee v. Kotyluk, Case No. G058631 (4^th Dist., Div. 3 Jan. 7, 2021) (published), landlords sought to evict a commercial tenant for selling marijuana without a license.  The lower court found the 3-day notice to pay or quit was defective because the notice was sent by a predecessor in interest and the notice contained no precise directions to whom possession should be delivered (the “quit” component of the 3-day notice).  A defense motion for judgment on the pleadings was granted, and plaintiffs’ request to amend the complaint was denied, triggering the first appeal by landlords.  Later, the lower court granted $25,794 in attorney’s fees and $1,445 in costs against landlords, which prompted a separate appeal in Lee v. Kotyluk, Case No. G058768 (4^th Dist., Div. 3 Jan. 7, 2021) (unpublished).

            Landlords’ merits appeal resulted in a reversal of the judgment against landlords, because the motion for judgment was properly granted but landlords should have been given leave to file an amended pleading.  That appeal was not rendered moot because tenant surrendered possession of the premises.  The reason?  Landlords’ liability for the trial level fees and costs awards presented a live controversy not mooted by the surrender.  In the unpublished opinion, the merits reversal meant that the fees and costs awards went POOF!  Acting Presiding Justice Moore authored both 3-0 opinions.

Probate, Substantiation Of Reasonableness Of Fees: Attorney Fees By Three Firms Granted To Trustee In Long-Standing Dispute Were Affirmed On Appeal

Fees To Three Firms Representing Trustee In Multiple Venues Was Just Fine In This Context.

            A beneficiary under a trust, which engaged in a long-standing dispute against trustee in multiple venues (California superior court, California appellate court, U.S. bankruptcy court, and the Ninth Circuit Court of Appeals), was not happy when well-documented fees incurred by trustee through three law firms were ordered to be paid by the trust.  The appellate court in Kvassay v. Kvassay, Case No. B297461 (2d Dist., Div. 2 Jan. 1, 2021) (unpublished) affirmed the propriety of the fee award based on (1) painstaking substantiation showed the amounts were justified, and (2) the fact that the work of three law firms was warranted given the battle raging against trustee in various venues.

Appealability, Costs: Appeal Of Post-Judgment Order Striking Request For Costs Dismissed On Appeal Against Plaintiffs Who Did Obtain A Merits Reversal Of A Demurrer To A Brown Act Mandate Petition

Reason For The Dismissal Was Plaintiffs’ Failure To Adequate Raise Or Brief The Issue. 

            In New Livable California v. Assn of Bay Area Governments, Case No. A159235 (1^st Dist., Div. 3 Dec. 18, 2020 December 18, 2020, published on Jan. 6, 2021), plaintiffs lost a Brown Act writ of mandate petition on a demurrer, a ruling reversed on appeal.  The lower court, in a post-judgment motion, struck a request by plaintiffs for costs, which plaintiffs also appealed.  The appellate court dismissed the appeal based on the abandonment doctrine, because appellants failed to adequately raise or brief the issue.  This is a reminder to practitioners that California reviewing courts usually (in our experience) will not reach out to decide an issue which has been raised summarily without proper discussion of authority or without proper citation to record support cites. 

Homeowner Associations: $492,592 Fee Award To HOA And Neighboring Homeowners, Combined, Affirmed On Appeal After Homeowners Lost View Protection Dispute

HOA View Disputes Can Be Costly.

            Under this category, we have indicated that fee awards can be costly for homeowners and homeowner associations/directors/property managers/neighboring homeowners caught in the middle of “view protection” disputes.  The next case is yet another example of that.

            In Davis v. Irvine Terrace Community Assn., Case Nos. G057682/G058266 (4^th Dist., Div. 3 Jan. 5, 2021) (unpublished), one set of homeowners lost a “view protection” case against the HOA and neighboring homeowners.  The trial judge awarded $159,363 to HOA and $333,229 to the neighboring homeowners as prevailing parties in the dispute.

            The appeal by the plaintiff homeowners did not change things.  There was fee entitlement based on the CC&R nature of the dispute, notwithstanding whether a true common interest subdivision was involved.   (Tract 19051 Homeowner Assn. v. Kemp, 60 Cal.4^th 1135, 1143 (2015).)  With respect to the amount of the fee award, a one paragraph argument with string citations in opposition, with no real contest, did not justify why the result should be disturbed.  Ouch as to losing parties!   Justice Moore penned the 3-0 panel decision.

IN THE NEWS . . . . CALIFORNIA RANKS #3 ON “JUDICIAL HELLHOLES” 2020-2021 RANKINGS

Proposition 65; Lemon Law; PAGA; Privacy Act; ADA; and Public Nuisance Issues Abounded.

            The American Tort Reform Foundation published its 2020-2021 “Judicial Hellholes” report, traditionally reporting the jurisdictions where businesses should fear having to be subject to as far as venue from a plaintiff’s perspective.

            California actually slipped to #3, below Philadelphia/Pennsylvania and New York City.  However, it only fell due to the others being more egregious, according to its report.

            Here are the substantive areas which contributed to its #3 ranking:  Proposition 65; lemon law cases; PAGA; Privacy Act [no cases, but some future expected matters]; ADA [disability construction/website cases]; public nuisance [climate change, vaping, and opioid potential matters]; and employment matters [mainly independent contractor, ABC issues]. 

            ADA took some significance, given the minimum $4,000 per violence damages remedy.

            Lemon law was really highlighted, discussing a San Diego County Superior Court decision on August 7, 2020 where a plaintiff won $1.00 in damages but was awarded $684,250 in attorney’s fees (out of a requested $1 million in fees and costs). 

Taxation: Chinese Theatres Has Been Certified For Publication.

Revenue and Taxation Code § 1611.6 Fees Award Of $180,000 To Chinese Theatres Was Reversed On Appeal As A Matter Of Law

            In a December 9, 2020 post, we discussed Chinese Theatres, LLC v. County of Los Angeles, Case No. B302708 (2d Dist., Div. 3) which was unpublished at that time.

            In Chinese Theatres, which involved the historical Grauman’s Chinese Theatre in Hollywood, the 2/3 DCA reversed a Revenue and Taxation Code § 1611.6 fees award of $180,000 to Chinese Theatres.  The reversal was dictated by the narrow circumstances under which § 1611.6 fee entitlement arises in tax refund actions: (1) a county board fails to make requested findings, or (2) the lower court concludes the Board’s findings are so deficient that it remands the matter with directions for the Board to make findings that fairly disclose its determination on the point at issue.  Neither of the circumstances existed – with the Board making a finding, but simply failing to explain how it reached its finding, and with the superior court’s remand for a recalculation based on its finding – not a remand to correct deficient findings.

          We can now report that Chinese Theatres was certified for publication on January 4, 2021.

Landlord/Tenant, Section 1717: Fees Award Of $80,411.50 To Prevailing Plaintiff In Commercial Lease Dispute Affirmed On Appeal

Defendant Failed To Support Its Sole Argument, Raised For The First Time On Appeal, With Evidence, Analysis Or Authority – Thus Waiving Its Only Argument On Appeal – And Its Sole Argument Asked The Appellate Court To Second-Guess The Trial Court’s Evaluation Of The Evidence.

            In KJ Investment Group v. American Heritage College, Case No. G058647 (4^th Dist., Div. 3 January 4, 2021) (unpublished), prevailing plaintiff in a commercial lease action – based on the attorney fees clause in the parties’ lease agreement – moved for almost $145,000 in attorney fees, inclusive of a 1.5 multiplier, plus almost $11,000 in costs pursuant to Civ. Code § 1717 and Code Civ. Proc. Civ. § 1033.5.  Defendant opposed – arguing only that attorney fees must be reasonable and that plaintiff over-litigated the case.  After reductions for time spent by anyone other than plaintiff’s two lead attorneys and rejection of the 1.5 multiplier, the trial court awarded plaintiff $80,411.50 in fees based on its calculation of reasonable time spent by the two attorneys.

            On appeal, defendant argued for the first time that no fees or costs should be awarded to plaintiff because its principal provided inaccurate testimony at trial that was attributable to it counsel – thereby violating Business and Professions Code § 6068 requiring attorneys ‘“never to seek to mislead the court or any judicial officer by an artifice or false statement of fact or law.”’ (§ 6068(d).)

            In a 3-0 opinion, authored by Justice Goethals, the 4/3 DCA affirmed.  Plaintiff’s sole contention was not supported with evidence, analysis or authority – constituting a waiver of plaintiff’s argument on appeal.  The 4/3 DCA also noted that plaintiff’s argument would fail even if it had not been waived because it asked the panel to presume the trial court was misled by false evidence, and that it could not second-guess the trial court’s evaluation of the evidence.  (People v. Hovarter, 44 Cal. 4^th 983, 996 (2008); In re Marriage of Arceneaux, 51 Cal.3d 1130, 1133 (1990).)

Costs, Private Attorney General, Reasonableness Of Fees: Petitioners, In Long-Standing San Francisco Bicycle Plan CEQA Challenges, Who Achieved Limited Success, Had Costs Properly Stricken And Recovered 50% Less Than Requested Once The Lodestar Was Reduc

Bottom Line In This Case, Limited Success Will Impact Cost and Fee Recovery, Even In Public Interest Cases.

            We have seen that costs and attorney’s fees in many public interest cases, including those under the private attorney general statute, can be quite large.  However, one should keep in mind that the cost and fee requests can be slashed or denied quite a bit if the plaintiffs/petitioners only obtain limited success.  Anderson v. City & County of San Francisco, Case Nos. A143974 et al. (1^st Dist., Div. 2 Dec. 30, 2020) (unpublished) is a case on point.

            There, petitioners—in a long-standing case generating a prior appeal with limited success—did successfully challenge San Francisco’s Bicycle Plan for CEQA review.  But the victory basically was Pyrrhic in nature.  So, the final strokes for petitioners happened to be what costs and fees they could recoup.

            The trial judge struck $1,813 in costs claimed against City and only granted petitioners $153,346 in attorney’s fees under CCP § 1021.5 out of a requested $500,000 lodestar (plus another 1.5 positive multiplier request).  All of those reductions stayed intact on appeal.

            With respect to costs, petitioners obtained no monetary relief such that the other relief was put in directly in a discretionary determination by the lower court.  The lower court denied costs based on limited success, a determination affirmed under the deferential abuse of discretion standard.  (East Bay Mun. Utility Dist. v. Dept. of Forestry & Fire Protection, 43 Cal.App.4^th 1113, 1131-1134 (1996).)

            That brought the appellate court to the fee award.  After the lodestar reductions for hourly rates, a 50% reduction for limited success by the trial judge—supported by numerous cases allowing for a deduction based on this factor—was affirmed as no abuse of discretion.

            Here are the decisions cited by the 1/2 DCA as supporting this conclusion.  (See e.g., Save Our Uniquely Rural Community Environment v. County of San Bernardino, 235 Cal.App.4th 1179, 1185 (2015) [request for $221,198; award of $19,176]; Bowman v. City of Berkeley, 131 Cal.App.4th 173, 176 (2005) [$96,592 attorney fees billed; $89,696 paid; $17,314 awarded]; San Diego Police Officers Assn. v. San Diego Police Department, 76 Cal.App.4th 19, 24 (1999); Californians for Responsible Toxics Management v. Kizer, 211 Cal.App.3d 961, 974–975 (1989) [65 percent reduction].)

            BLOG COMMENT—This likely will be our last post for 2020.  Happy New Year, readers!

SLAPP, Special Fee Shifting Statutes: Founding Partner Of Software Company Did Get Hit With Some Fee/Costs Exposure From Shareholder Derivative Case And Malicious Prosecution Case Which Was SLAPPed

Not Huge Amounts, But Some Challenges Were Untimely And Some Were Not Meritorious.

            To end the year, we post on Storix, Inc. v. Johnson, Case Nos. D075308/D077096 (4^th Dist., Div. 1 Dec. 31, 2020) (unpublished), which was a very contested dispute between software company Storix and founder Mr. Johnson, which dragged in various directors of Storix.  The disputes involved separate fiduciary duty, shareholder derivative, and malicious prosecution actions relating to the overall business dispute.  Johnson lost the shareholder derivative dispute based on a lack of standing after he had voluntarily posted the Corporations Code section 800 bond.  His malicious prosecution suit was SLAPPed.  Subsequently, the lower court decided that Johnson’s bond should not be released and was liable for up to $50,000 in fees/costs in the shareholder derivative action.  On the SLAPP win, Individual Defendants were awarded $12,237.50 in fees and $2,364.45 in costs, with some of the fees amount being “fees on fees.”

            Johnson’s challenges to the fees/costs award were not successful on appeal, some of which were forfeited because there was no separate timely appeal of the fee/costs orders (something we have posted on many times before—in doubt, separately appeal!).  Johnson’s main argument that he lacked standing in the shareholder derivative suit such that he was never a plaintiff and his bond exonerated was not bought by the appellate court.  Even a lack of standing allows the adverse party on a section 800 litigation expense bond dispute to recover fees and costs.  With respect to the SLAPP fee/costs award, the orders were affirmed because (1) in the SLAPP context, it does not matter if fees were actually incurred versus being indemnified by another (i.e., Individual Directors were indemnified by Storix); and (2) the trial judge did reduce for limited success on some SLAPP issues, but the overall award was justified based on the reduction because additional “fees on fees” were warranted. 

Ethics, Quantum Meruit: Illinois Appellate Court Affirms Award Of Zero Fees To Contingency Attorneys Obtaining $25 Million Award For Clients Based On Failure To Substantiate Fees And On Certain Fiduciary Breaches To Client

However, Clients Had To Reimburse Certain Hard Costs To Attorneys.

            Although we generally do not post on out-of-state cases, Vandenberg v. RQM, LLC, No. 10 L 003188, 2020 Ill. App. (1^st) 190544 (Ill. App. June 26, 2020) is a sobering reminder of what contingency attorneys must do to obtain substantial fees where a settlement is obtained under suspicious circumstances and the lawyers then fail to support a quantum meruit recovery with substantiating evidence.

            Boiled down to essential facts, plaintiffs sued a deep pocket defendant, with plaintiffs’ counsel doing so under a contingency agreement.  Before a jury verdict was obtained during trial, the defense offered a $25 million settlement, but there were suspicious circumstances showing the plaintiff’s main attorney obtained “insider” information from a court clerk that a defense verdict might be upcoming so as to prompt an acceptance of the offer.  After a lot of adversarial hearings and an appeal, the settlement stood.  However, a lower court eventually awarded zero dollars to plaintiffs’ counsel under a quantum meruit theory, although the appellate court did allow recovery of some hard litigation expenses. 

            The “zero dollars” award was affirmed.  The overriding issue was that plaintiff’s counsel relied solely on the contingency arrangement and provided no support for its work effort under a quantum meruit recovery.  Huge, huge mistake—this lack of evidence cemented the lower court’s decision to award nada.  Consistent with the California case of Sheppard, Mullin et al. v. J-M Manufacturing Co., Inc., 6 Cal.5^th 59 (2018), Illinois case law authority does not prevent quantum meruit recovery for attorneys engaging in ethical violations unless they are so egregious as to require forfeiture.  However, the nature of the ethical breaches here was a factor to weigh in deciding if zero dollars was the proper remedy.  But the failure to substantiate the fees was the real dagger in fee recovery in this particular case—a bitter pill for plaintiffs’ counsel to swallow, as they had to.

Year In Review - 2020

Year End Wrap-Up:  Mike, Marc, and Shanna’s Top 30 Decisions in 2020

Sculpture "The Decisions" at the Robert T. Matsui U.S. Courthouse, Sacramento, California.  Carol M. Highsmith, photographer.  October 2009.  Library of Congress.

Part 2 of 2—Specific Fee Shifting Statute, Employment, Code of Civil Procedure Section 998, Civil Code Section 1717, and Sanctions Issues Dominated.

            We now complete our Top 30 decisions for the 2020 year on fees and costs issues.  Here is looking forward, optimistically, to a better 2021 for all of our readers.  However, enjoy the rest of our Top 30 decisions.

            15.  EMPLOYMENT.  Betancourt v. OS Restaurant Services, LLC, 49 Cal.App.5^th 240 (Cal. App. 2d Dist., Div. 8 May 21, 2020 certified for publication)—authored by Justice Grimes, discussed in our May 1, 2020 post when the opinion was unpublished:  Rest/meal break and associated penalties do not give rise to attorney’s fees entitlement under the Labor Code because they are not pure wage/hour violations, resulting in reversal of a $280,794 fee award as a matter of law.

            14.  COSTS—REVIEW GRANTED BY CALIFORNIA SUPREME COURT.  Segal v. ASICS America, 50 Cal.App.5^th 659 (Cal. App. 2d Dist., Div. 4 June 15, 2020), rev. granted, No. S263569 (Cal. Supreme Court Sept. 30, 2020)—authored by Justice Currey at the DCA level, discussed in our June 16, 2020 post:  Appellate court decided that a “pragmatic approach” should be applied when deciding whether a prevailing party can recover for trial exhibits and closing slides that were never used at trial, siding with one side in a split of appellate thinking on the issue.  The California Supreme Court limited review to this issue: “May a party recover costs for multiple sets of trial exhibits and closing slides that were not used at trial?”

            13.  SPECIAL FEE SHIFTING STATUTE (ELDER ABUSE).  Arace v. Medico Investments, LLC, 48 Cal.App.5^th 977 (Cal. App. 4^th Dist., Div. 2 May 11, 2020 certified for publication)—authored by Justice McKinster, discussed in our Mar. 25, 2020 post when the decision was unpublished:  Jury’s determination that defendants were liable for financial elder abuse mandated fee recovery under Welfare & Institutions Code section 15657.5(a) even though no damages were awarded. 

            12.  SECTION 1717 (ALTER EGO).  MSY Trading, Inc. v. Saleen Automotive, Inc., 51 Cal.App.5^th 395 (Cal. App. 4^th Dist., Div. 3 June 26, 2020)—authored by Justice Ikola, discussed in our June 30, 2020 post:  Defendant prevailing in post-judgment enforcement action attempting to add defendant as an alter ego was entitled to a contractual attorney’s fees award under Civil Code section 1717 against plaintiffs.  See also 347 Group, Inc. v. Philip Hawkins Architect, Case No. C091273 (Cal. App. 3d Dist. Dec. 7, 2020)—authored by Justice Robie, discussed in our December 8, 2020 post:  Third District agreed with the alter ego fee analysis in MSY Trading.

            11.  SUBSTANTIATION OF REASONABLENESS OF FEES.  Taylor v. County of Los Angeles, 50 Cal.App.5^th 205 (Cal. App. 2d Dist., Div. 8 June 10, 2020)—authored by Justice Wiley, discussed in our June 11, 2020 post:  Reconstructed time records are entitled to diminished credibility weight as compared to contemporaneous records when it comes to examining fee substantiation.

            10.  SECTION 998.  Burchell v. Faculty Physicians & Surgeons of the Loma Linda University School of Medicine, 54 Cal.App.5^th 515 (Cal. App. 4^th Dist., Div. 2 Sept. 10, 2020)—authored by Justice Raphael, discussed in our Sept. 11, 2020 post:  In a joint and several liability case involving multiple defendants, plaintiff must provide separate acceptance lines for each defendant where a multiple Code of Civil Procedure section 998 offer is made in order to make the pretrial settlement offer valid.

            9.  DEADLINES.  Nutrition Distribution LLC v. IronMag Labs, LLC, 972 F.3d 1088 (9^th Cir. Aug. 25, 2020)—authored by Circuit Judge Bress, discussed in our Aug. 26, 2020 post:  Filing a post-judgment attorney’s fees motion, absent a district court’s extension of the appeal deadline or a decision to treat the fee motion as a Federal Rule of Civil Procedure, rule 59 motion, does not extend the 30-day deadline to file a merits judgment appeal.

            8.  SPECIAL FEE SHIFTING STATUTE (PARNERSHIP BUYOUT DISPUTE).  Jones v. Goodman, 2020 WL 6736235 (Cal. App. 4^th Dist., Div. 1 Nov. 17, 2020)—authored by Justice Guerrero, discussed in our Nov. 18, 2020 post:  Corporations Code section 16701’s partnership buyout fee shifting provision is discretionary and is invoked only when a plaintiff’s claims objectively lack merit or were subjectively pursued in bad faith (or both).

            7.  RETAINER AGREEMENTS/TRADE SECRETS.  Aerotek, Inc. v. Johnson Group Staffing Co., Inc., 54 Cal.App.5^th 670 (Cal. App. 3d Dist. Sept. 15, 2020)—authored by Acting Presiding Justice Blease, discussed in our Sept. 16, 2020 post:  An attorney’s fees award under California’s Trade Secret Act, Civil Code section 3426.4, belongs to the attorney, not the client, in the absence of an express fee agreement dictating otherwise. 

            6.  CLASS ACTIONS.  Chambers v. Whirlpool Corp., 2020 WL 6578223 (9^th Cir. Nov. 10, 2020)—authored by Circuit Judge Lee, discussed in our Nov. 11, 2020 post:  Percentage-of-value approach governs a coupon component of a Class Action Fairness Act (CFAA) settlement, and the lodestar approach governs the non-coupon settlement component, but the lodestar approach can be applied in a hybrid settlement if certain adjustments are made by the district judge.

            5.  EMPLOYMENT.  Cruz v. Fusion Buffet, Inc., 2020 WL 6559229 (Cal. App. 4^th Dist., Div. 1 Nov, 9, 2020 certified for publication), pet’n for review filed, No. S265682 (Cal. Supreme Court Dec. 10, 2020)—DCA opinion authored by Justice Aaron, discussed in our Oct. 17, 2020 post when the opinion was unpublished:  Labor Code’s cost shifting provisions trumped Code of Civil Procedure section 998’s cost shifting features with respect to successful section 998 defendants, disagreeing with the contrary result suggested by Plancich v. UPS, Inc., 198 Cal.App.4^th 308, 310-312 (2011). 

            4.  SECTION 998.  Auburn Woods I Homeowners Assn. v. State Farm Insurance, 56 Cal.App.5^th 717 (Cal. App. 3d Dist. Oct. 28, 2020)—authored by Acting Justice Mauro, discussed in our Sept. 29, 2020 post:  Attaching a proposed settlement agreement for acceptance in connection with a Code of Civil Procedure section 998 offer cured any uncertainty about there being extraneous terms of an unknown nature.

            3.  SLAPP; SANCTIONS.  Changsha Metro Group Co., Ltd. v. Xuefeng, 57 Cal.App.5^th 1, 2020 WL 6441346 (Cal. App. 4^th Dist., Div. 2 Nov. 3, 2020 after vacating prior opinion), pet’n for review filed, No. S266067 (Dec. 11, 2020)—authored by Justice Miller, discussed in our May 21, 2020 and Nov. 4, 2020 posts:  Plaintiff’s motion for attorney’s fees based on frivolous anti-SLAPP motion by the defense should be requested in the opposition to the merits anti-SLAPP motion in order to give the defense an opportunity to respond, given that the 21-day safe harbor provision under Code of Civil Procedure section 128.5 (as incorporated through section 128.7) cannot likely be satisfied from a timing perspective in most instances.

            2.  DISCOVERY; SANCTIONS.  Kwan Software Enginerring, Inc. v. Hennings, Case Nos. H042715/H043215 (Cal. App. 6^th Dist. Dec. 2, 2020)—authored by Justice Danner, discussed in our Dec. 3, 2020 post:  Imposition of prior terminating sanctions is not a basis to deny issuance of mandatory discovery sanctions of a monetary nature against offending litigants, although attorneys are not subject to monetary sanctions unless they advised their client litigants to engage in the discovery violations.  On the attorney sanctions issue, see also Cornerstone Realty Advisors, LLC v. Summit Healthcare REIT, Inc., 2020 Cal. App. LEXIS 1013 (4^th Dist., Div. 3 Oct. 28, 2020)—authored by Justice Fybel, discussed in our Oct. 28, 2020 post, which found monetary sanctions were inappropriate against attorneys who did not advise litigants to engage in the offending discovery abuses. 

            1.  SECTION 1717.  Waterwood Enterprises, LLC v. City of Long Beach, Case No. B296830 (2d Dist., Div. 1 Dec. 18, 2020)—authored by Justice Bendix, discussed in our Dec. 22, 2020 post: (a) section 1717 trumps more lenient fee clause language as to who is a prevailing party (“getting greater relief” language in fees clause did not trump clear winner standard under section 1717); (b) settlement discussions, informal or under CCP § 998, are irrelevant for fee entitlement under section 1717 independently; and (c) defendants wishing to be section 1717 prevailing parties under tender subdivision must strictly must satisfy tender and deposit rules, not partially admitting some allegations but hedging through a denial of liability.

Sanctions: Trial Judge’s Failure To Expressly Specify The Sanctionable Conduct Required A Remand And Do-Over

Appellate Court Found Basis Existed For Sanctions, But Required Greater Clarity Especially Given That Bar Discipline Could Be At Issue.

            An attorney in American Express Bank FSB v. Singh (Abdeljawad), Case No. E074042 (4^th Dist., Div. 2 Dec. 30, 2020) (unpublished) violated a court order to personally appear at a Fall 2019 hearing to address a possible forgery of a substitution of attorney.  Instead, the attorney telephonically appeared because he was in Chicago on a family visit, eschewing the option to come back one day earlier to comply with the lower court’s order.  The lower court was not impressed, setting a later hearing to impose sanction not to exceed $1,500 under “all remedies available to the court pursuant to CCP §§ 128.6, 177.5, 575.2, CRCs and Riverside Local Rules of Court, and/or other statute or existing case precedent.”  At the subsequent hearing, the lower court sanctioned attorney $1,000 for not making a personal appearance, payable to the clerk of the court, but did not specify the specific statute or the conduct giving rise to the sanctions in its written order.

            The 4/2 DCA reversed and remanded for a do-over on due process grounds.  Although it was inferable that the sanctions were imposed under CCP § 177.5 and there was cause for imposition of them, the failure to explain the conduct or circumstances justifying the order required a re-do—especially given that the explanation may be valuable in determining whether additional discipline was warranted (given that the sanction was reportable to the State Bar).  (See Caldwell v. Samuels Jewelers, 222 Cal.App.3d 970, 977 (1990).)

            The moral of the story here is to make sure you, as attorney practitioners, obey an edict to personally attend a hearing or get the matter continued so that you can comply. 

Civil Rights: $3,164,955.61 Fee Award Under The California Voting Rights Act Affirmed Where Plaintiffs Successfully Challenged City Of Santa Clara’s At-Large City Council Elections

Plaintiffs Can Also Seek Compensation For Postjudgment Fee Work Before The Superior Court After Remittitur Issuance.

            The California Voting Rights Act, Elections Code section 14030, has a pro-plaintiff, private attorney general-type of fee shifting provision, which states: “ . . . the court shall allow the prevailing plaintiff party, other than the state or political subdivision thereof, a reasonable attorney's fee consistent with the standards established in Serrano v. Priest (1977) 20 Cal.3d 25, 48-49, and litigation expenses including, but not limited to, expert witness fees and expenses as part of the costs.  Prevailing defendant parties shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.”  That provision benefited the winning plaintiffs in the next case we post on.

            Five Asian American residents successfully sued the City of Santa Clara under the Voting Rights Act, winning their contention that the at-large elections for the city council’s office violated the Act.  The trial judge also awarded them $3,164,955.61 in attorney’s fees under section 14030, after it struck some unrecoverable time and reduced in part the lodestar and accompanying multiplier request.

            City’s appeal in Yumori-Kaku v. City of Santa Clara, Case Nos. H046105/H046696 (6^th Dist. Dec. 30, 2020) (published) did not change either the merits or fee results.  City argued that the merits decision was wrong as the only basis for overturning the fees; when the merits judgment was affirmed, that meant the fee award stood also.  The appellate court further indicated that plaintiffs could seek postjudgment fees, including those for appellate work, before the superior court after issuance of the remittitur. 

Employment: Reversal Of Shoulder Injury Portion Of Jury Verdict Required A Retrial And Reversal Of $503,273.50 FEHA Fee Recovery Award Until Retrial/Settlement Is Achieved

Case Is Must Reading On Reasonable Accommodation/Interactive Process FEHA Claims.

            FEHA plaintiff in Shirvanyan v. L.A. Community College Dist., Case Nos. B296593/B297419 (2d Dist., Div. 1 Nov. 30, 2020 unpublished; Dec. 29, 2020 published) won a $2,899,670 economic/emotional distress damages award based on claims that District failed to make reasonable accommodations and engage in an interactive process relating to her wrist and shoulder injuries.   The trial judge then awarded plaintiff $503,273.50 in fees under the FEA attorney’s fee shifting provision—which highlights how large fee awards can be in this substantive area. 

            District’s appeal resulted in a reversal and remand of both the jury verdict and fees award.  The verdict was reversed and remanded for a new trial because there was insufficient evidence on the shoulder injury component of the case, such that both liability and damages needed to be retried to see what occurred when the matter was limited to the wrist injury.  When the underlying judgment fell, the fees award fell also—with the appellate court reminding the trial judge to adjudge any future fee proceeding based on plaintiff obtaining limited success based on the outcome of this very appeal. 

Default Judgments: Where A Defendant Contests A Default Judgment, Successful Post-Judgment Efforts To Defeat Motion To Vacate Give Rise To Recoverable Attorney’s Fees

However, No Pre-Judgment Fees Allowed Because Plaintiff Did Not Include A Request For Fees At The Time The Default Judgment Was Entered.

            In Vincent v. Sonkey, Case No. B293251 (2d Dist., Div. 6 Dec. 29, 2020) (published), plaintiff obtained a default judgment against defendants (one of whom was alleged to be an alter ego of the corporate defendant) under a lease with a contractual fees clause.  Plaintiff did not ask for fees at the time she obtained entry of the default judgment.  She then successfully resisted defense efforts to set the aside the default judgment, prompting her to move for recovery of at least $40,000 in fees under Civil Code section 1717.  The lower court denied the motion. 

            Plaintiff appealed.  The 2/6 DCA, in a 3-0 published opinion, reversed and remanded.  Plaintiff was not entitled to pre-default judgment fees, but it was legal error to deny the postjudgment efforts to uphold the default judgment where defendants made the proceeding adversarial in nature and she prevailed.  In doing so, it refused to extend Garcia v. Politis, 192 Cal.App.4^th 1474, 1479 (2011), which involved a fee forfeiture in the context of a default proceeding, to fee recovery in a fully contested post-judgment case. 

Prevailing Party: Plaintiff Settling For $150,000 In FEHA/Residential Inhabitability Case For Costs Of Defense To Try The Matter, Was Properly Denied Attorney’s Fees

Plaintiff’s Request For $819,171.75 In Fees Was Inflated, With $150,000 Settlement Amount Being Much Lower Than The Damages Being Sought, Forget Demands In Mediation.

            With 2020 drawing to a close, we can say there have been a surge in decisions on who is a prevailing party under Civil Code section 1717 where the results have been mixed or far from clear.  Bonacci v. Maranhas, Case No. B298194 (2d Dist., Div. 5 Dec. 29, 2020) (unpublished) is yet another example of where a party garners no attorney’s fees and costs after accepting a “cost of defense” pretrial offer and after presenting an inflated fee request.

            In this one, plaintiffs in a residential lease dispute brought 17 causes of action, including a FEHA, retaliatory eviction, and residential inhabitability warranty claim against defendant landlord.  Two months before trial and before a summary adjudication motion could be heard, defendant served a CCP § 998 offer for $150,000 which internally was based on the defense’s estimates on what it would cost to try the case going forward.  Plaintiffs accepted the 998 offer, but they then moved to recover attorney’s fees of $819,171.75 in attorney’s fees (inclusive of a 1.5 multiplier) based on fee shifting provisions under FEHA and the residential inhabitability warranty statutes—fee entitlement was not at issue.  The lower court decided that no one prevailed, given that the defense only settled for cost of defense (not settling for what plaintiffs truly wanted) and that the fee request was inflated based on the settlement result.

            The 2/5 DCA affirmed, because this type of prevailing party determination was fact bound and it was no abuse of discretion.  Neither party achieved their litigation goals:  plaintiffs got nowhere close to the potential damages, while the defense had to pay some not insubstantial change (i.e., a trial costs of defense settlement).  The fee request, also, was inflated when compared to the settlement recovery.  Plaintiffs argued that the lower court factored in a $1 million settlement demand by them in mediation proceedings, but the record below did not show that this was an influential factor at all. 

Prevailing Party: Determination That No Side Prevailed Under Contentious Parking Easement Dispute Was Affirmed On Appeal

Where One Side Wanted Exclusive Parking Easement And Other Side Wanted Termination Of Easement/Tort Damages, Trial Court’s Decision To Share Parking Was A True “Lose-Lose” Case For Everyone.

            One of our leading cases, Hsu v. Abbara, 9 Cal.4th 863 (1995), is must reading and the blueprint for the decision to affirm a trial court’s decision to award no fees to either side as a prevailing party under a contractual fees clause (Civ. Code, § 1717).

            In AHZ Co. v. Sharp Healthcare, Case Nos. D075975/D076362 (4^th Dist., Div. 1 Dec. 29, 2020) (unpublished), corporate neighbors got involved in contentious litigation over parking spaces—not uncommon, given the necessity for this in many commercial and retail businesses.  One side claimed that it had an exclusive use of parking spaces, while the other claimed that the parking easement was terminated and was entitled to millions in tort damages.  In the end, the trial judge found that the warring parties had to share the pertinent parking spaces.  The trial judge also decided that no side prevailed, because it was a “lose-lose” case.

            That determination held up on appeal.  Utilizing the Hsu “blueprint,” no one got a clear victory, such that a prevailing party decision was a discretionary one for the trial judge.  Given that both sides went nuclear but were ultimately held to share the use of spaces (not consistent with the relief either wanted), the “lose-lose case” assessment resonated with the reviewing court.  No attorney’s fees awarded here.

Family Law: Lower Court’s Failure To Specifically Make Explicit Findings Under Family Code Section 2030 As To Ex-Wife’s Needs-Based Request Necessitated A Remand

Equivocal Reasoning That Wife “Might Prevail In A 2030 Argument, But Certainly Not Prevail Under A 271 Argument” Was Too Cryptic An Explanation.

            In order to level the dissolution playing field where one spouse has a greater access to financial resources (so as to pay attorneys and forensic accountants), Family Code section 2030 allows a trial judge to order the more financially set spouse to pay attorney’s fees for the other spouse’s counsel during the course of a dissolution proceeding.  When ruling on such a request, a family law judge must make three specific findings:  (1) whether an award of fees and costs is appropriate; (2) whether there is a disparity in access to funds to retain counsel; and (3) whether one side is able to pay for legal representation of both parties.  (§ 2030, subd. (a)(2); see also In re Marriage of Morton, 27 Cal.App.5th 1025, 1050 (2018).)  The findings “must be explicit”; they may not be implicit. (Morton, 27 Cal.App.5^th at 1050.)

            In re Marriage of Nevai & Klemunes, Case No. C086584 (3d Dist. Dec. 29, 2020) (published) involved a situation where, when married, husband and wife enjoyed a high standard of living, owning several properties with high mortgages due to husband’s spending during the marriage.  Husband had a good job, while wife quit work in 2005 to raise their child and never went back to work.  After the dissolution proceeding was filed, husband made almost $16,000-18,000 per month (exclusive of bonuses) and lived with a girlfriend with a good job who contributed to household expenses, while wife claimed she had $10,000 in monthly expenses.  Prior to trial, ex-husband agreed to pay $25,000 to ex-wife with respect to her attorney fee bill.  Ex-wife forecasted spending $80,000 in divorce fees, requesting that husband pay half—another $25,000 in addition to the previous $15,000.  Ex-husband did his own counter-salvo by requesting $24,000 in need-based fees and $4,000 for a forensic accountant, as well as seeking $10,000 in Family Code section 271 sanctions against ex-wife based on her litigation stances.  The lower court ordered both sides to pay their own fees, expressly stating that wife “might prevail in a 2030 argument, but certainly not prevail under a 271 argument.”

            The Third District reversed and remanded.

            The family law judge’s cryptic remarks did show that there was an absence of the required findings or there was no proper weighing of the 2030 factors; “more was required,” the Third District decided in a 3-0 opinion authored by Justice Krause. 

Requests For Admission: Plaintiff Boyfriend Winning Loan Dispute Against Girlfriend Properly Awarded $44,242.50 In Costs Of Proof Sanctions Where Boyfriend Won A $111,325 Recovery

However, Boyfriend Not Awarded Fees On Appeal Based On Failing To Identify A Fee Entitlement Basis.

            As the famous comedian Jackie Mason once quipped, “Money is not the most important thing in the world.  Love is.  Fortunately, I love money.”  That quote well encapsulates the result in the next case we post on.

            Plaintiff boyfriend, over a period of time, loaned a total of $110,000 to his girlfriend—his life savings.  We surmise that after things soured, boyfriend sued girlfriend for repayment of the loan, eventually recovering $111,385 against her.  During the litigation, boyfriend propounded three key requests for admission going to the heart of the case, which drew boilerplate objection and denials.  After his court victory, boyfriend sought to recoup $44,242.50 in costs of proof sanctions under CCP § 2033.420, which allows recovery of reasonable attorney’s fees if certain relevant requests for admission are denied without substantial justification.

            The trial court awarded boyfriend his entire request, which triggered an appeal by girlfriend in Fuller v. Campos, Case No. B296403 (2d Dist., Div. 2 Dec. 24, 2020) (unpublished).

            The 2/2 DCA affirmed.  Plaintiff’s counsel did a good job of explaining the fees being sought, carefully only claiming expenses incurred after the requests for admission were denied.  There was no requirement for itemized billing statements, because counsel’s breakdown of the hours expended was sufficient.  Boyfriend also requested attorney’s fees on appeal (if he won, which he did), but the appellate panel concluded nothing in section 2033.420 contained authorization for an award of “fees on fees,” the costs of bringing the costs of proof sanctions motion such that the lack of fee entitlement for such trial fees could not justify an award of appellate fees either.

Fee Clause Interpretation: $1,487,990.30 Attorney’s Fees Award Based On Settlement Agreement Contractual Fees Clause Affirmed In Favor Of Prevailing Mobile Home Plaintiffs

Appellate Court Rejected Election Of Remedies Argument Where Plaintiffs Prevailed On Both Contract And Tort Claims With Overlapping, Yet Different, Facts.

            Mobile home park/related property management defendants had reached an earlier settlement with two mobile home residents, with the settlement agreement having a contractual fees clause for a breach limited to contract claims.  Subsequently, the mobile home residents became plaintiffs, suing the prior settling defendants for breach of the settlement agreement as well as tort claims when the residents’ mobile homes were removed from the park without their knowledge or consent.  The jury was not pleased with this conduct, awarding one resident $477,000 in compensatory damages, the other resident $468,000 in compensatory damages, and $4 million in punitive damages to each.  Later, the plaintiffs moved to recover $1,790,984 in attorney’s fees, with the lower court awarding them $1,487,990.30 after eliminating fee work on non-contract claims.

            Defendants, in Belanger v. Biggs, Case Nos. B296853/B297614 (2d Dist., Div. 3 Dec. 24, 2020) (unpublished), appealed both the merits and fees award.  Except for reversal of a fraudulent conveyance count based on lack of harm, the compensatory/punitive verdicts and fee award were affirmed in entirety.

            The defense argued that the fee award was precluded based on election of remedies, contending that plaintiffs had to choose between emotional distress/punitive damages recourse or contractually based relief.  The appellate court disagreed.  The problem here is that the tort claims, while involving some overlapping facts with the contract claims, did involve independent and different facts such that no election needed to be made because the claims were not inconsistent. 

Private Attorney General: Intervenor In Reverse-PRA Action, Where Only Limited Disclosure Of Publicly Available Documents Was Ordered, Did Not Satisfy Separate Significant Benefit Prong Of CCP § 1021.5

Public Interest And Significant Benefit Prongs Of Private Attorney General Statute Must Be Satisfied Independently.

            In Burgess v. Coronado Unified School Dist., Case No. D076263 (4^th Dist., Div. 1 Dec. 24, 2020) (published), a reverse action under the California Public Records Act (PRA) was filed by a news outlet employee to enjoin District from disclosing certain requested records sought by a news outlet, which intervened in the reverse-PRA case.  Intervenor in the action, who did want disclosure of records, did obtain trial court relief in the form of an order mandating disclosure of only limited publicly available information by the District.  Intervenor then moved for recovery of CCP § 1021.5 attorney’s fees of $78,720. The lower court denied the motion, determining that intervenor did not demonstrate the limited document disclosure conferred a significant benefit—one of the prongs to be satisfied under section 1021.5.

            The 4/1 DCA affirmed, in a 3-0 opinion authored by Justice Dato.  Several salient points were made in the published decision:  (1) a significant benefit is a separate element from vindicating a public interest, with the two issues not properly conflated; (2) attorney’s fees are not awardable to intervenors in reverse-PRA actions under PRA, but they might be under section 1021.5; (3) the significant benefit element does not justify attorney’s fees to an intervenor solely because disclosure of documents was ordered, because this would automatically confer fee entitlement upon intervenors in most cases; and (4) the disclosure order relating to publicly available information added no substantive benefit under section 1021.5.

Section 998: CalTrans’ Pretrial CCP § 998 Offer To Losing Motor Vehicle Plaintiff Based On Design Immunity Was Valid And Reasonable

$24.516.05 In Expert Witness Fees Awarded By Lower Court Was No Abuse Of Discretion, Although The Dissent In A 2-1 Decision Would Have Reversed The Design Immunity Summary Judgment Ruling.

            Menges v. Dept. of Transportation, Case Nos. G057643/G058148 (4^th Dist., Div. 3 Dec. 24, 2020) (published) involved a plaintiff, through a guardian ad litem, who lost a motor vehicle personal injury case against CalTrans based upon a summary judgment ruling predicated upon a design immunity defense.  The lower court found valid and reasonable Caltrans’ CCP § 998 offer of $25,000, awarding CalTrans $42,926.05 (out of a requested $66,218.74) in costs, mainly expert fees for a service in analyzing medical records and for a medical expert on plaintiff’s life care plan.  The 4/3 DCA affirmed the costs award, although a dissenting justice would have reversed the merit decision (such that he implicitly would have denied the costs award to see what happened on remand).

            Plaintiff argued that the section 998 offer was invalid because it requested a dismissal with prejudice and a release, but these terms are proper as long as the releases only relate to claims at issue in the case.  The $25,000 offer was reasonable, vindicated by the zero award and the fact it was made two years out after the action was commenced (such that plaintiff had plenty of time to assess defenses, including the design immunity defense).  The assertions of unreasonableness as to the expert witness fees was simply that—an assertion with no reasoned analysis of why the award was an abuse of discretion.

            Presiding Justice O’Leary penned the majority opinion, drawing a dissent by Justice Thompson.

Co-Contributor Marc Has Article In December 24, 2020 Daily Journal About Qui Tam Actions And Arbitration

Qui Tam Actions May Avoid Arbitration.

        Marc's article in the December 24, 2020 Daily Journal is entitled, "Qui tam actions can avoid arbitration in California." The article is prompted by an opinion authored by Justice Arthur Gilbert in State of California ex rel. Aetna Health of California, Inc. et al., B299025 (2nd Dist. Div. 6  12/21/20). The opinion held that a qui tam action involving the California Insurance Fraud Protection Act to combat insurance fraud, avoids a binding arbitration agreement. The reasoning is in line with a California Supreme Court opinion addressing arbitration and qui tam actions in the context of the California Private Attorney General Act of 2004, Iskanian v. CLS Transportation Los Angeles, LLC.

Equity: Economic Duress Doctrine Supports No Award Of Post-Judgment Collection Fees In Dissolution Action Involving, Yes, A $20,000 Marital Settlement Agreement Sum

Husband Was Forced To Pay Off Exorbitant Fee Judgment Lien Amounts, With Equity Coming To The Rescue!

            We wish all of our readers Happy Holidays as we come to the close of an interesting year.

            Although involving convoluted facts and procedural history, Marriage of White & Hunter, Case No. A157398 (1^st Dist., Div. 2 Dec. 23, 2020) (unpublished) goes to show you how the equities do play a part in attorney’s fees disputes, ironically involving substantial post-judgment fee collection requests relating to a $20,000 marital settlement debt.  In the end, the economic duress doctrine rescued ex-husband, because the record supported the lower court’s conclusion that he had to pay off an exorbitant judgment lien, mainly attorney’s fees, in order to close a property escrow where he faced liability no matter which way he turned.  Given this lack of choice, duress came to rescue the day and relieve him from paying attorney’s fees which grew in number over a substantial number of years.  (Hester v. Public Storage, 49 Cal.App.5^th 666, 679 (2020); Rich & Whillock, Inc. v. Ashton Development, Inc., 157 Cal.App.3d 1154, 1159 (1984).)

SLAPP: 1/2 DCA, Although Acknowledging Slim Nature Of Defense SLAPP Motion, Sustained Not Awarding Fees To Plaintiff For A Claimed Frivolous SLAPP Motion

Matter Was Close, But Deference To Trial Judge Made The Difference.

            In Guinnane Construction Co., Inc. v. Chess, Case No. A157781 (1^st Dist., Div. 2 Dec. 22, 2020) (unpublished), plaintiff won a SLAPP motion and moved for fees based on the contention that the defense motion was frivolous.  The trial judge denied plaintiff’s fee request.  The 1/2 DCA, showing some sympathy for the fee motion given that business-related communications usually do not arise out of protected activity, found enough of a “sniff of merits” to sustain the deference accorded to trial judge’s decision on denying frivolous fee award under a CCP § 128.5 standard—given that an offer to indemnify fell within the cracks and might have fallen within the litigation privilege.  Fee denial affirmed, but close to going the other way.

Lodestar, Multiplier, Reasonableness Of Fees: Prevailing FEHA Plaintiff Only Recovering $400,800 In Fees Out Of Requested $1,064,062.70 Did Not Recover Any More On Appeal

Compensatory Award Was $575,000.

            Plaintiff did prevail on some wrongful termination/FEHA claims to the tune of $575,000 in past noneconomic damages.  Plaintiff later moved to recoup $1,064,062.70 in fees (lodestar of $532,031.35 plus a 2.0 positive multiplier), with the trial judge awarding $400,800.  Both sides appealed, with plaintiff filing a cross-appeal seeking more fees.  Both sides lost in Lave v. Charter Communications, LLC, Case No. D076206 (4^th Dist., Div. 1 Dec. 21, 2020, posted on Dec. 22, 2020) (unpublished).

            The problem was that plaintiff waived any fees challenges by not raising them below—with forfeiture being a key appellate principle often applied if an appellant did not contest it before the trial judge.  With respect to not awarding the 2.0 multiplier, plaintiff could not demonstrate how the lower court abused its discretion, given that a multiplier is not automatic and a discretionary call unless legal criteria are not properly followed in coming to a decision.  That was the case in this particular matter.

Allocation, Section 1717: No Abuse Of Discretion In Trial Court’s Allocation Which Reduced Plaintiff’s Fee Award To $143,257.92 From Requested $800,165.00, Nor In Its Award Of $105,000 In Fees And $4,609.77 In Costs To Prevailing Defendants

Plaintiff Did Not Support Its Arguments With An Adequate Record On Appeal, Citations To The Record And Legal Authority.

            Newstart Real Estate Investment v. Huang, Case No. B289513 (2d Dist., Div. 8 December 18, 2020) (unpublished) is a breach of contract, fraud, and conspiracy action involving the sale of a Las Vegas Ramada Inn.  Plaintiff purchaser claimed its principal did not speak or read English, that defendants had conspired together to take advantage and sell the property at an inflated price and had failed to disclose the requirements to transfer of the Ramada franchise license to plaintiff – with the transfer of the franchise being the primary consideration for the purchase, but something plaintiff was unable to obtain.  Plaintiff sued seller and its members as alter egos, the escrow company and its principal, and the real estate brokerage and its principal who brokered the transaction.  The jury trial resulted in awards against broker and broker’s principal in $1.62 million in damages, over $1.2 million against seller, and another $280,000 in punitive damages against broker’s principal.  However, the trial court entered judgment omitting broker as a joint tortfeasor following post-trial hearings regarding some ambiguities as to the broker and its principal in the jury’s special verdict, and granted broker principal’s post-trial motion for a new trial on the punitive damages based on broker principal’s inability to pay .  The escrow defendants received judgment in their favor, and seller’s members were found not to be alter egos of seller in a bifurcated trial. 

            Plaintiff moved for $800,165 in attorney fees against seller based on the fees provision in the purchase agreement – with the trial court awarding $143,257.92 after reducing the fee to 1/6^th the amount requested based on the number of defendant groups and including fees for bringing the fee motion.  Individual seller defendants sought $596,598 in fees, pursuant to Civ. Code § 1717, but were awarded $105,000 as the trial court observed they had failed to demonstrate the reasonableness of their requested fees and could not recover fees incurred by seller in its defense.  Finally, broker sought prevailing party costs of $23,000, and the trial court – in partially granting plaintiff’s motion to tax – awarded broker $4,609.77 in costs.

            Plaintiff appealed, raising a number of challenges against the trial court’s final judgment.  Unfortunately for plaintiff, it failed to support its arguments with an adequate record on appeal, citations to the record and legal authority – thereby demonstrating no abuse of discretion and sealing its fate.  In a 3-0 opinion, the 2/8 DCA affirmed.

Probate: $21,053.33 In Attorney Fees Awarded To Stepdaughter Executor, Which Included § 10811 Additional Fees For Extraordinary Services, Affirmed On Appeal Along With $5,075 In § 859 Penalties Imposed Against Decedent’s Son

Failure To Provide The Appellate Court With An Adequate Record Doomed Self-Represented Son’s Appeal.  

            In Estate of Greer, Case No. C087492 (3^rd Dist., December 21, 2020) (unpublished), decedent’s will gave his entire estate to the trustee of his trust – with his son and stepdaughter each being a fifty percent beneficiary – and appointed his son and stepdaughter as co-executors.

            Son had lived with decedent in decedent’s home and continued to live there after decedent passed.  When son filed a petition for letters of administration, he claimed decedent had died intestate and had partially revoked his trust for the purpose of allowing his real property to pass to son through intestate succession.  Stepdaughter objected and filed a petition for probate of decedent’s will.  The probate court determined the will was valid, admitted it to probate, denied son’s petition, and appointed stepdaughter as executor after determining son and stepdaughter were unable to work together.  Additionally, the probate court partially granted stepdaughter’s Prob. Code § 850 petition – requiring son to vacate decedent’s home, surrender decedent’s property, pay $10,200 in unpaid rent to the estate (reduced from $20,400 because son was a 50% beneficiary) and imposed a penalty against son of $5,075 under Prob. Code § 859 for son’s bad faith possession of the estate property.  Finally, the probate court awarded administration costs, some reimbursements to son and stepdaughter, $7,605.83 to stepdaughter as executor, plus $7,605.83 in fees for her attorney and an additional $13,447.50, pursuant to Prob. Code § 10811, in attorney fees for “extraordinary services” for litigation on son’s various motions, services related to the sale of decedent’s home, and litigation on the § 850 petition – all of which the probate court found went beyond the scope of a typical probate proceeding. 

            Son appealed, but forfeited arguments and limited the appellate panel’s ability to review the case by providing an incomplete record on appeal – with no reporter’s transcript and key evidentiary items excluded from the record.  Although son represented himself, “[p]ro. per. litigants are held to the same standards as attorneys.”  Kobayashi v. Superior Court (2009) 175 Cal.App.4th 536, 543 (2009).  The probate court’s judgment was affirmed.

Landlord/Tenant, Prevailing Party, Section 1717: Reversal Of $172,375 In Attorney Fees Awarded To Defendant Based On Trial Court’s Abuse Of Discretion In Finding Defendant Was The Prevailing Party

Pursuant To Section 1717, Defendant Was Not The Prevailing Party As It Lost The Sole Cause Of Action In The Case – With The Jury Awarding $45,050 In Damages To Plaintiff For Defendant’s Breach Of The Written Lease Contract.

            Waterwood Enterprises, LLC v. City of Long Beach, Case No. B296830 (2d Dist., Div. 1 December 18, 2020) (published) includes a nice discussion on the proper legal standard for determination of a prevailing party for purposes of attorney fees where neither party achieved a simple, unqualified win on the contract claim(s) based on a contract containing a fees provision.

            In this case, plaintiff sued its former commercial tenant, City of Long Beach, alleging a single cause of action for breach of a written contract – seeking at least $150,000 for property damage.  In its answer, City denied owing anything to plaintiff and raised 18 affirmative defenses.  Each party served the other with § 998 offers which were rejected.  At trial, City admitted that it owed some amount to plaintiff for asphalt damage, but not for any other damages claimed by plaintiff.  The jury returned a verdict in plaintiff’s favor and awarded it $45,050 in damages, but did not identify the repairs for which it awarded damages.

            Both parties moved post-trial for fees and costs, with each arguing they were the prevailing party.  Plaintiff sought $307,068.50 in fees, plus $15,000 for fees on fees for bringing the fees motion, and $12,000 in costs.  City argued it had achieved its main litigation objective to pay “for some, but not all, of the claimed repairs.”  City sought $172,375 in fees, $17,673.50 in costs, and $39,483.50 in expert fees.  The trial court found plaintiff was the prevailing party under Code Civ. Proc. § 1032 for having achieved a net monetary recovery, and awarded it costs of $19,905.04.  But, looking to the parties’ pre-litigation settlement discussions and § 998 settlement offers, the trial court found City was the prevailing party for the purpose of awarding attorney fees.  In awarding City $172,375 in fees, the trial court reasoned that City’s 998 offer was closer to the jury’s damages award than plaintiff’s 998 offer.  Under the amended judgment – which added interest, fees and costs awards – plaintiff ended up owing City $105,432.90. 

            Plaintiff appealed and the 2/1 DCA reversed as to City’s attorney fees award.  On remand, the appellate panel limited the trial court’s discretion to finding either that plaintiff was the prevailing party, or there was no prevailing party for the purposes of awarding fees.

            Section § 1717 governs the determination of prevailing party in an action on a contract containing a fees provision.  The trial court abused its discretion in determining City was the prevailing party by relying on wholly unsupported facts, improper legal criteria, and applying the wrong legal standard.  Trial courts may not consider the parties’ settlement communications in determining the prevailing party under § 1717.  Additionally, although § 998 may permit fee awards in certain circumstances even when a party was not the prevailing party under § 1717, such circumstances require that the party’s § 998 offer exceeded the judgment.  City’s 998 offer did not beat the jury’s damages award. To achieve prevailing party status under § 1717, based on City’s claim its objective was to pay only for some asphalt repair, City would have had to admit and pay its debt prior to the trial – something that did not happen.

SLAPP: 2/2 DCA Affirms $33,060 In Fees Awarded Against SLAPPing Defendants For Filing A Frivolous Motion To Strike For The Sole Purpose Of Delay

Defendants Could Not Strike A Cause Of Action For Breach Under The Anti-SLAPP Statute On The Ground Of Privileged Conduct Where Defendants Clearly Breached A Contract Not To Assert Particular Claims.

            Rubin v. Kessler, Case No. B301967 (2d Dist., Div. 2 December 18, 2020) (unpublished) involves a bitter neighbor dispute – described by Los Angeles Superior Court Judge Chalfant as a “tempest in a teapot” – over a sewer easement.  Actually, the neighbors were previously involved in litigation when plaintiff neighbor, who owns an easement for a sewer on defendant neighbors’ property, applied for permits to build a new, larger house on his property.  Defendant neighbors opposed and filed a petition for writ of mandate against the City of Los Angeles when it approved plaintiff’s project.  That action was settled in 2015 – with plaintiff and defendants agreeing to a mutual release of any and all claims against each other from the beginning of time to the date of execution of the release.  Additionally, pursuant to their settlement agreement, plaintiff and defendants promised that they would not “commence, aid in any way, prosecute or cause to be commenced or prosecuted, any action or other proceeding based upon any claims, demands, causes of action, obligations, damages or liabilities” that were released in the settlement agreement. 

            A few years later, just as plaintiff was completing construction of the new house, his plumbers mistakenly cut defendants’ water line.  Defendants responded by denying plaintiff access to the easement, so plaintiff filed a lawsuit and was granted a preliminary injunction requiring defendants’ to allow easement access.

            In opposing the preliminary injunction, defendants claimed plaintiff had forfeited his easement – citing the mistaken cut to their water line as well as issues previously resolved through the parties’ settlement agreement and release.  Additionally, defendants filed a cross-complaint seeking to nullify the easement based on the same claims – prompting plaintiff to file a first amended complaint alleging defendants breached the settlement agreement by raising claims previously disposed of in the settlement agreement.  Defendants SLAPPed back – claiming plaintiff’s new cause of action and other portions of his FAC arose from defendants’ protected petitioning activity. The trial court denied the motion and awarded plaintiff $33,060 in attorney fees on the ground that the defendants’ motion was frivolous and designed solely to cause delay and expense.

            The 2/2 DCA affirmed both the trial court’s denial of defendants’ anti-SLAPP motion and award of fees to plaintiff.  Although disagreeing with the trial court’s conclusion that plaintiff’s breach cause of action did not arise from protected activities, the appellate panel found that plaintiff met his burden in the second step of the anti-SLAPP analysis.  Based upon defendants’ own pleadings, plaintiff easily showed that his claim for breach of the settlement agreement had the “minimal merit” necessary to defeat defendants’ SLAPP motion. Additionally, the trial court reasonably concluded defendants' anti-SLAPP motion was the latest example of a litigation strategy to cause delay and expense based on defendants' prior pattern of using litigation as a means to obstruct and harass plaintiff.

Year In Review - 2020

Year End Wrap-Up: Mike, Marc, and Shanna’s Top 30 Decisions in 2020

Sculpture "The Decisions" at the Robert T. Matsui U.S. Courthouse, Sacramento, California. Carol M. Highsmith, photographer. October 2009.  Library of Congress.

Part 1 of 2—Lemon Law, Class Action Settlement, Ethics, Civil Rights, and Specific Fee-Shifting Statutes Took the Stage.

            It is the Holiday season, and we continue our tradition to present our personal favorite decisions from our blog postings during 2020, keeping in mind they are simply a distillation of what we selectively picked as important.  (This year, we include our legal assistant Shanna, who did postings throughout the year—with M&M thanking her for the work on this blog.)  2020, although a challenging year due to the COVID-19 pandemic, produced an unusual amount of California state court and Ninth Circuit decisions on fee issues, such that we wrap up with a Top 30 Decisions list.  We wish our readers Happy Holidays, hoping you all stay safe.

            30.  APPEALABILITY.  K.J. v. Los Angeles Unified School Dist., 8 Cal.5^th 875 (Cal. Supreme Court Jan. 30, 2020)—authored by Justice Groban, discussed in our Feb. 19, 2020 post:  Client only appealing a sanctions award against an attorney properly preserved appellate jurisdiction over the appeal on attorney’s behalf where the circumstances showed that the attorney’s interests were at stake and no prejudice resulted to the other side.

            29.  CIVIL RIGHTS.  Vargas v. Howell, 949 F.3d 1188 (9^th Cir. Feb. 5, 2020)—majority decision authored by Circuit Judge Miller and dissent authored by District Judge Benitez, discussed in our Feb. 7, 2020 post:  90% reduction in fee request of civil rights plaintiff under 42 U.S.C. section 1983 remanded for a more adequate explanation where a mechanical arithmetic reduction was the methodology utilized by the district judge.

            28.  FAMILY LAW/SANCTIONS.  George v. Shams-Shirazi, 45 Cal.App.5^th 124 (Cal. App. 1^st Dist., Div. 1 Feb. 11, 2020)—authored by Justice Sanchez, discussed in our Feb. 19, 2020 post:  Family Code section 271 sanctions motion filing deadline is not hinged to civil deadlines for filing fees motions under the California Rules of Court; doctrine of laches determines if the motion filing is too late.

            27.  ETHICS/RETAINER AGREEMENTS.  Hance v. Super Store Industries, 44 Cal.App.5^th 676 (Cal. App. 5^th Dist. Jan. 23, 2020)—authored by Presiding Justice Hill, discussed in our Jan. 29, 2020 post:  Referring attorney to class action specialists, who failed to disclose that he had no professional liability insurance, had his fee division agreement invalidated under Rule of Professional Conduct, rule 1.4.2, although the trial judge on remand could decide if quantum meruit recovery was warranted.

            26.  PRIVATE ATTORNEY GENERAL.  Canyon Crest Conservancy v. County of Los Angeles, 46 Cal.App.5^th 398 (Cal. App. 2d Dist., Div. 4 Mar. 12, 2020 certified for publication)—authored by Justice Collins, discussed in our Feb. 20, 2020 post when unpublished:  No private attorney general fee award under Code of Civil Procedure section 1021.5 was justified because no public interest was implicated from a mere issuance of a “status quo” administrative stay which only vindicated plaintiff’s private interests rather than those of a large number of persons.

            25.  SPECIAL FEE SHIFTING STATUTE—REVIEW GRANTED BY CALIFORNIA SUPREME COURT.  Siry Investment, L.P. v. Farkondehpour, 45 Cal.App.5^th 1098 (Cal. App. 2d Dist., Div. 2 Mar. 3, 2020), rev. granted, No. S262081 (Cal. Supreme Court July 8, 2020)—DCA opinion authored by Justice Hoffstadt, discussed in our Mar. 4, 2020 post:  Attorney’s fees award based on Penal Code section 496(c) reversed because it does not apply to fraudulent diversion of business funds, but only applies to trafficking in stolen goods, parting company with the opposite conclusion reached in Switzer v. Wood, 35 Cal.App.5^th 116 (2019).  Fees/costs issue on review is: “May a trial court award treble damages and attorney fees under Penal Code section 496, subdivision (c), in a case involving the fraudulent diversion of business funds rather than trafficking in stolen goods?”

            24.  CIVIL RIGHTS.  Citizens for Free Speech, LLC v. County of Alameda, 953 F.3d 655 (9^th Cir. Mar. 24, 2020)—authored by District Judge Adelman, discussed in our Mar. 25, 2020 post:  Younger-based abstention dismissals can give rise to fee exposure for civil rights plaintiffs where a particular dismissal materially altered the parties’ legal relationships.

            23.  ETHICS/REFERRAL AGREEMENTS.  Reeve v. Meleyco, 46 Cal.App.5^th 1092 (Cal. App. 3d Dist. Mar. 24, 2020)—authored by Justice Mauro, discussed in our Mar. 25, 2020 post:  Attorneys need to obtain an express, written client consent to a fee referral arrangement under State Bar Rules of Professional Conduct, former rule 2-200 (now rule 1.5.1), with a signed acknowledgment by client of having received disclosure of the referral arrangement not satisfying the requirement; however, quantum meruit recovery may still be available in the trial court’s discretion if it is not time barred.

            22.  CIVIL RIGHTS/COSTS—REVIEW GRANTED BY CALIFORNIA SUPREME COURT.  Ducksworth v. Tri-Modal Distribution Services, 47 Cal.App.5^th 532 (Cal. App. 2d Dist., Div. 8 Apr. 7, 2020), rev. granted, No. S262699 (Cal. Supreme Court Aug. 12, 2020)—DCA opinion authored by Justice Wiley, not posted on by us because costs issue not discussed in DCA opinion which affirmed a summary judgment order on a statute of limitations administrative claims issue (but costs on appeal granted to the prevailing defendants on a FEHA claim victory):  The particular costs issue on review is this:  “Was it proper for the Court of Appeal to award costs on appeal under rule 8.278 of the California Rules of Court against an unsuccessful FEHA claimant in the absence of a finding that the underlying claims were objectively frivolous?”

            21.  CONSUMER STATUTES (LEMON LAW).  Mikhaeilpoor v. BMW of North America, 48 Cal.App.5^th 240 (Cal. App. 2d Dist., Div. 1 Apr. 1, 2020)—authored by Los Angeles County Superior Court Judge White, discussed in our Apr. 2, 2020 post:  Song-Beverly Act lemon law plaintiff winning a $35,805.80 jury verdict properly had a $344,639 fee request reduced to $94,864 in awarded fees by a trial judge based on a detailed explanation of reductions based on inefficiencies, over-lawyering, and unnecessary duplication.

            20.  CONSUMER STATUTES (CONSTRUCTION).  Moore v. Teed, 48 Cal.App.5^th 280 (Cal. App. 1^st Dist., Div. 1 Apr. 24, 2020)—authored by Justice Sanchez, discussed in our Apr. 27, 2020 post:  No contract is necessary to allow fee entitlement under Business and Professions Code section 7160 for a person induced to enter into a construction agreement on the basis of false or fraudulent statements by a contractor or a solicitor.

            19.  CONSUMER STATUTES (LEMON LAW).  Reynolds v. Ford Motor Co., 47 Cal.App.5^th 1105 (Cal. App. 1^st Dist., Div. 3 Apr. 21, 2020)—authored by Justice Petrou, discussed in our Apr. 23, 2020 post:  Plaintiff’s contingency fee agreement in a Song-Beverly Act (lemon law) case is irrelevant as far as setting the lodestar for fee calculation purposes, affirming a $201,891 fee award under the Song-Beverly Act fee shifting provision.

            18.  SECTION 998.  Anthony v. Li, 47 Cal.App.5^th 815 (Cal. App. 1^st Dist., Div. 3 Apr. 13, 2020)—authored by Justice Petrou, discussed in our Apr. 15, 2020 post:  Code of Civil Procedure section 998 joint offer to two defendants was invalid where prevailing plaintiff failed to specify that one defendant was included only as an insurer.

            17.  PRIVATE ATTORNEY GENERAL.  Carlsbad Police Officers Assn. v. City of Carlsbad, 49 Cal.App.5^th 135 (Cal. App. 4^th Dist., Div. 1 May 18, 2020)—authored by Justice Dato, discussed in our May 20, 2020 post:  Trial court cannot condition intervenors’ intervention in a reverse-Public Records Act action upon their agreement to strike an attorney’s fees prayer request under Code of Civil Procedure section 1021.5.

            16.  CLASS ACTION.  In re Optical Disk Drive Products Antitrust Litig., 959 F.3d 922 (9^th Cir. May 15, 2020)—authored by Circuit Judge Christen, discussed in our May 18, 2020 post:  No “bright-line” rule exists for percentage-of-recovery benchmarks in a mega-fund class action settlement, with variance between class counsel’s fee request and its upfront competitive bid being a factor to be considered in awarding fees. 

 

           

SLAPP: $43,000 Out Of Requested $66,750 In Fees Was Awarded Because The Defense Brought A Frivolous SLAPP Motion

Hourly Rate For One Attorney And Hearing Appearance Work Was Reduced.

            Defendants, in bringing SLAPP motions, do not get a “pass the jail/wild card.”  If a defense motion is frivolous, then the plaintiff can move to recover attorney’s fees for successfully opposing the SLAPP motion.  That is what occurred in Lora v. Parter Medical Products, Inc., Case No. B304027 (2d Dist., Div. 4 Dec. 17, 2020) (unpublished).

            After a SLAPP motion was found to be frivolous (a determination upheld on appeal), plaintiff moved for $66,750 in attorney’s fees, recovering $43,000 after reduction of one attorney’s hourly rate from $750 to $500 and after reduction for appearance at hearings from seven to four hours.  The appellate court sustained the result, determining that 86 hours at the rate of $500 per hour was a fair compensation—in line with what the lower court decided. 

Consumer Statutes, Fee Clause Interpretation, Settlement: $65,000 Attorney’s Fees Award And $7,987.40 Costs Award Under Lemon Law Settlement Stipulation Are Affirmed On Appeal

Lower Court Properly Harmonized Seemingly Conflicting Terms Of Settlement Stipulation.

            In Boykin v. Premier Universal, Inc., Case No. F078689 (5^th Dist. Dec. 17, 2020) (unpublished), the parties settled a lemon law case, but reserved the issue of recovery of attorney’s fees for a subsequent motion.  The problem was that the settlement stipulation had conflicting terms: (1) “fees and costs are to be resolved by motion to the Court;” and (2) “there will be no prevailing party status and no admission of liability.”  The defense seized on (2), in opposing a fees/costs motion, to boldly contend that plaintiff stipulated that there would be no prevailing party such that fee entitlement did not lie.  The lower court harmonized the two settlement provisions and determined fees/costs were justified to the tune of $65,000 in fees and $7,087.40 in costs.  The Fifth District affirmed, because the (1) settlement stipulation would be rendered meaningless, and the trial judge deciding the issue was the one presiding over the settlement colloquy such that any reasonable inferences on stipulation construction was guided by the substantial evidence rule.  (Winograd v. American Broadcasting Co., 68 Cal.App.4^th 624, 627, 632-633 (1998).)

Homeowner Associations, POOF!: $109,760 Fees Award Went Away Based Upon Merits Reversal

$154,744 In Fees Was Requested.

            One Ford Road Homeowners Assn. v. Johnson, Case No. G058269 (4^th Dist., Div. 3 Dec. 17, 2020) (unpublished), is just a reminder about how expensive HOA/homeowners disputes can be.  Here, HOA won a CC&R dispute which was reversed on appeal as a matter of law.  That resulted in an attorney's fees award to the HOA of $109,760 (out of a requested $154,744) going POOF!  Winning homeowners may get appellate fees later unless a settlement is reached.  But it does show how expensive these cases can be, as Justice Fybel—the author of a 3-0 opinion—so found.

Family Law: $1,225 Section 271 Sanctions Award Reversed As A Matter Of Law

No Due Process Was Satisfied And Ex-Husband Had No Ability To Pay.

            Family law practitioners should pay attention to Mar v. Ligne, Case No. A158768 (1^st Dist., Div. 2 Dec. 16, 2020) (unpublished) with respect to what needs to be done to sustain a Family Code section 271 sanctions award.

            The 271 sanctions award, only $1,225, did not hold up on appeal.  The reasons were two-fold.  First, litigants need to satisfy notice requirements, with the family court never indicating, nor the litigants, that these types of sanctions were being sought.  Second, the record showed that ex-husband had no ability to pay these sanctions—with the transcript showing he had a hard time making “ends meet” and could not pay any sanctions award.  Reversed. 

Appeal Sanctions: 2/3 DCA Sanctions Losing Appellant And Its Counsel $56,000 Total

Published Opinion Has A Nice Discussion Of CCP § 907 Frivolous Appeal Standards.

            We commend everyone to read the 2/3 DCA’s published decision in Malek Media Group LLC v. AXGC Corp., Case No. B299743 (2d Dist., Div. 3 Dec. 16, 2020) (published), which contains a nice discussion of the standards for appeals sanctions under Code of Civil Procedure section 907, but also reinforces that litigants and their attorneys need to be civil—avoiding sexist and crazy theories which waste parties’ resources and make the appellate courts waste taxpayer resources.

            What happened here is that an arbitration party challenged an adverse arbitration award and superior court’s denial of a motion to vacate the award.  Appellant’s briefing on appeal was laced with far-fetched conspiracy theories, sexism, homophobia, personal attacks against the arbitrator, and failure to abide by appellate court rules as far as briefing and judicial notice requests.  The appellate court affirmed the merits of the award, but then went on to sanction appellant and its counsel under CCP § 907—both the objective and subjective prongs in a decision which is worthy of reading by both litigators and appellate practitioners.

            The end result was that appellant and its counsel, jointly and severally, were liable for $46,000 in sanctions to respondent and an additional $10,000 to the appeals court clerk for the time spent by the appellate panel in considering the frivolous appeal.  Justice Dhanidina authored this well-penned decision.

            BLOG ADDITIONAL COMMENT—The arbitrator was Ambassador David Huebner (Ret.), who served as an ambassador to New Zealand and Samoa.  Co-contributor Mike remembers Ambassador Huebner well, because they were at Irell & Manella for some overlapping period of time.  Mike wishes him well—he was a stand-up individual.

Landlord/Tenant, Substantiation Of Reasonableness Of Fees: Landlord Seeking To Overturn $988,539 Attorney Fees Award To Prevailing Commercial Tenants In UD Action Gets Fee Award Reduced By Only $14,125 On Appeal

No Abuse Of Discretion In The Trial Court’s Implied Finding That The Total Time Tenant’s Attorneys Spent Working On The UD Case And Subsequent Appeal Was Reasonable Given The High Stakes Involved In The Litigation.

            In NHP/PMB Burbank Medical, etc. v. Premiere Medical, etc., Case No. B299841 (2d Dist., Div. 7 December 14, 2020) (unpublished), prevailing commercial lease tenants (a medical center and doctor) in an unlawful detainer action were awarded $988,539 in attorney fees on remand.  The 2/7 DCA, concluding landlord’s notices to quit were defective, had previously reversed the trial court’s initial judgment which found in favor of and awarded landlord $1,141,074.60 – comprised of $373,592.68 in rental fees, operating expenses and late charges, $624,207.97 in holdover damages, $53,121.16 in prejudgment interest, and $90,152.79 in attorney fees and costs. 

            On appeal, landlord argued that an award of nearly $1 million in attorney fees – for what it described as a routine unlawful detainer action – was absurd, that tenants failed to show the fees were incurred in the UD action and not the parties’ other related actions, that the award included sums for nonexistent or duplicative work, and that the fees were purposely inflated to approximate the amount of damages landlord anticipated tenants would be found liable for in the other related actions.

            The 2/7 DCA agreed only with landlord’s contention regarding nonexistent or duplicative work – striking $14,125 from the award for such billing entries.  The fees awarded to tenants covered the UD action as well as pre-litigation, post-judgment and appellate work related to the UD action.  The panel found no abuse in discretion in the trial court’s implied finding that the total time expended by tenants’ attorneys was reasonable.  The litigation involved much higher stakes for the tenants than it did the landlord – with medical center’s doctor declaring the unlawful detainer action “posed an existential threat to [his] business and seriously threatened his livelihood” and that if the monetary portion of the initial judgment had been enforced, “it would have been financially devastating to [him] and his family.”  The trial court had correctly observed detailed time or billing records are not required under California law – accepting the declarations and summaries submitted by tenants’ counsel – which listed by broad category the time expended by each attorney.  In fact, the panel observed, this method “has been upheld and even recommended, as ‘an especially helpful compromise between reporting hours in the aggregate (which is easy to review, but lacks informative detail) and generating a complete line-by-line billing report (which offers great detail, but tends to obscure the forest for the trees).’” (Syers Properties III, Inc. v. Rankin, 226 Cal.App.4th 691, 700 (2014) [discussed in our May 06, 2014 post].)

Arbitration: Denial Of Attorney’s Petition To Confirm Non-Binding Arbitration Award Under MFAA Affirmed

Client Timely And Properly Rejected Non-Binding Award By Commencing A Trial After Arbitration And Notifying Attorney’s Counsel Of Client’s Intent To Reject The Award.

            The Mandatory Fee Arbitration Act (MFAA) (Bus. & Prof. Code, § 6200 et seq.) recognizes “the disparity in bargaining power in attorney fee matters which favors the attorney in dealings with infrequent consumers of legal services” (Schatz v. Allen Matkins Leck Gamble & Mallory LLP, 45 Cal.4th 557, 564-565 (2009)) and was established in 1978 “to protect clients as consumers of legal services in general.” (Alternative Systems, Inc. v. Carey, 67 Cal.App.4th 1034, 1044 (1998).)   Pursuant to § 6201(a), a client may request nonbinding arbitration under the MFAA despite having a contractual agreement for binding arbitration with his/her attorney, and if a client commences non-binding arbitration under the MFAA, it is mandatory for the attorney pursuant to § 6200(c).  A non-binding arbitration award under the MFAA becomes binding if the parties agree in writing to make it binding, or upon the passage of 30 days after service of notice of the award – unless, within the 30 days, a party has sought a trial after arbitration. (§ 6204(a); §6203(b).)

            This is what happened in Torru v. Price, Case No. A158400 (1^st Dist., Div. 3 December 14, 2020) (unpublished), when a fee dispute arose between attorney and client.  After receiving notice of the arbitrator’s award to attorney of $26,046.70, after a reduction to attorney’s fees of $875, client sent a letter to attorney’s counsel with a confidential settlement offer and notice that she intended to reject the arbitrator’s decision.  Additionally, client timely filed a complaint against attorney following service of the notice of the award concerning the fees at issue. 

            When attorney initiated a separate action to confirm the arbitration award, the trial court denied the petition – finding client had timely rejected the award.

            The 1/3 DCA affirmed.  Client’s letter to attorney’s counsel was admissible as evidence she intended to reject the non-binding decision.  Additionally, client’s filing of complaint properly served as her rejection of the non-binding decision, and satisfied MFAA provisions requiring her to seek and commence a trial after arbitration. 

Homeowner Associations, Special Fee Shifting Statutes: Trial Court’s Denial Of Civil Code Section 5975(c) Fees To Prevailing HOA Was Error

The Davis-Stirling Act Fee-Shifting Provision, Section 5975(c), Mandates The Award Of Fees To The Prevailing Party With The Trial Court's Only Discretion Being To Determine The Reasonable Amount Of Fees.

            Hope Ranch Park Homes Assoc. v. Rubin, Case No. B299932 (2d Dist., Div. 6 December 14, 2020) (unpublished) involved a $30,600 penalty assessed against a homeowner for failure to complete a home remodeling project by the deadline extended by the HOA and pursuant to the HOA's CC&Rs.  The trial court determined that the penalties were properly imposed by the HOA and that homeowner owed HOA $26,600 after having paid $4,000 of the penalty by the time of trial.  Additionally, the trial court awarded HOA $1,358.92 in costs, but denied HOA’s motion for attorney fees under Civil Code § 5975(c) – the Davis-Stirling Act fee-shifting provision.

            The 2/6 DCA reversed – finding the trial court erred in denying the HOA’s motion for fees because § 5975(c) mandates the award of attorney fees to the prevailing party.  “Attorney fees under section 5975 ‘are awarded as a matter of right, and there is no discretion afforded to the trial court in granting or denying such fees, other than as to their reasonableness and amount.’” (Chapala Management Corp. v. Stanton, 186 Cal.App.4th 1532, 1546 (2010); see also Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5th 252, 260-261 (2016) [trial court has no discretion to deny attorney fees to a prevailing HOA]; Salehi v. Surfside III Condominium Owners Assn., 200 Cal.App.4th 1146, 1152 (2011).)

            On remand, the panel instructed the trial court to exercise its discretion to determine the amount of reasonable attorney’s fees to which the HOA is entitled.

Reasonableness Of Fees: Top 10 Fee Awards In Published And Unpublished California State Court Decisions In The Last Few Years For Civil, Noncontingency Cases

Our David Letterman’s Top 10.

Treasury. A $75,000 wheelbarrow of mutilated money on way to vaults. Employee in picture has wheeled barrow 50 years. From the National Photo Company Collection, photograph taken between 1909 and 1925. Library of Congress.

            We got a fun email from Damian Castaneda, a San Jose-based attorney who specializes in business law, contracts, employment, fraud, and real estate.   He asked us bloggers if we could generate a David Letterman type of “Top Ten Attorney’s Fees Awards” based on blogging since May 2008.  Here is our attempt, keeping in mind that we are not including contingency fee awards (such as those encountered in class action, employment/FEHA, lemon law, and private attorney fee cases—which are usually contingency based and can be quite large, subject to positive multipliers).  We also are limiting it to results in published and unpublished California intermediate appellate court decisions for the period May 2008 to present.  We apologize if we missed some other fee awards, but us bloggers invite readers to share them so that we can amend our list.  (Here is Mr. Castaneda’s ending comment to us: “Simply put, if I had known as a young man the stress of being a lawyer, I would have been a comedian instead.  But the closest I can do now is to hope for a Top Ten list and we can all have a laugh at what those lawyers did to deserve it.”). There you go, and here is our list:

            1.  CONTRACTUAL FEES—Kline v. Redevelopment Agency of the City of Pomona, Case No. B184453 (2d Dist., Div. 7 June 17, 2008 unpublished):  Redevelopment agency properly was awarded $4,126,638.98 in fees against plaintiffs in a retail commercial center dispute involving a contractual fees clause. 

            2.  TRADE SECRETS—Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., Case Nos. A134343/A135831 (1^st Dist., Div. 5 May 8, 2014 unpublished):  Plaintiff prevailing on a trade secret misappropriation claim was awarded statutory fees of $3,297,102.50 under Civil Code section 3426.4 where plaintiff won compensatory damages of $1,513,400. 

            3.  CONTRACTUAL FEES UNDER CONSENT DECREE—In re Tobacco Cases I, 216 Cal.App.4^th 570 (4^th Dist., Div. 1 2013):  People of the State of California prevailed upon a consent decree with a contractual fee clause against a large tobacco company, awarded $2,943,920.63 in attorney’s fees.

            4.  CONTRACTUAL FEES CLAUSE UNDER JOINT VENTURE AGREEMENT—San Vicente Investment, LP v. Trammel Crow Santa Monica Development, LLC, Case No. B296147 (2d Dist., Div. 1 Oct. 1, 2020 unpublished):  Prevailing defendants in joint venture construction dispute, based on contractual fees clause, were correctly awarded $2,135,688.75 in attorney’s fees (out of a requested $2,234,607.21).

            5.  SURETY BOND FEES CLAUSE/CIVIL CODE SECTION 1717—Los Angeles Unified School Dist. v. Torres Construction Group, Case No. B291940 (2d Dist., Div. 8 Nov. 17, 2020 certified for publication):  $2,100,000 (out of a requested $2,123,277.20) fee award to LAUSD against a surety company, based upon a surety bond fees clause, affirmed on appeal.

            6.  CONTRACTUAL FEES UNDER A LEASE—Cal-Murphy, LLC v. Hines Interests Limited Partnership, Case Nos. A137605/A139772 (1^st Dist., Div. 5 Aug. 1, 2014 unpublished):  Non-prevailing parties who assumed a lease were subject to $1,600,000 attorney’s fees award based upon a contractual fee provision.

            7.  CONTRACTUAL FEES UNDER AN ATTORNEY ENGAGEMENT LETTER—Calvo Fisher & Jacob LLP v. Lujon, 234 Cal.App.4^th 608 (1^st Dist., Div. 2 2015):  Former attorneys obtained a full requested award of $1,532,674.81 in attorney’s fees against former client based on a broad contractual fee clause in the engagement letter. 

            8.  CONTRACTUAL FEES UNDER EASEMENT AGREEMENT—IMT Capital 11525 Blucher v. NMS Properties, Case No. B255823 (2d Dist., Div. 3 Mar. 4, 2016 unpublished):  Party winning a contentious easement dispute awarded $1,185,783 in attorney’s fees, out of a requested $1,820,282.98—a 35% reduction.

            9.  CONTRACTUAL FEES IN A COMMERCIAL LOAN/GUARANTY DISPUTE—Legendary Investors Group v. Nieman, Case No. B284736 (2d Dist., Div. 4 Jan. 16, 2019 unpublished):  Prevailing defendants, in a long-running commercial loan and guaranty dispute, recovered $1,047,313.72 out of a requested $1,061,208.22. 

            10. LANDLORD/TENANT—NHP/PMB Burbank Medical Plaza I, LLC v. Premiere Medical Center of Burbank, Inc., Case No. B299841 (2d Dist., Div. 7 Dec. 14, 2020 unpublished):  Former prevailing tenants were awarded $988,539 (a full fee request) against former landlord in a commercial unlawful detainer action which generated lots of appellate work ultimately reversing an initial $1.14 million judgment against former tenants and which also generated related actions.