CALIFORNIA ATTORNEY'S FEES

POOF!: $737,932.84 Private Attorney General Fee Award Goes Away When Appellate Court Reverses As A Matter Of Law Favorable Determinations In Contentious Public Treatment Wastewater Permits Dispute

Goes To Show You How Fortunes Can Change.

            Los Angeles Waterkeeper v. State Water Resources Control Board, Case No. B309151 (2d Dist., Div. 1 Feb. 27, 2023) (published) is a situation where plaintiff was awarded CCP § 1021.5 fees of $737,932.84 in a contentious public treatment wastewater permit dispute where plaintiff won on a general theory that the State Water Board had a general duty to prevent the unreasonable use of water.   The appellate court disagreed as a matter of law, reversing on the merits so that the fee award went POOF! also. 

Appealability, POOF!: Reversal Of Merits Judgment For $390,184 In Damages Also Meant That A $365,065 Prevailing Parties’ Fees Award Went POOF!

No Separate Appeal Of The Fees Award Was Necessary To Extinguish The Fees Award—Although Prudent Appellate Practitioners Usually Appeal Separately To Be Cautious.

            In Medical Benefits Administration, Inc. v. Nivano Physicians, Case No. C093214 (3d Dist. Apr. 1, 2022) (unpublished), prevailing parties were awarded $365,065 in attorney’s fees after winning $390,184 in damages.   However, defendant in a prior appeal turned the merits judgment totally around, with the appellate court determining that agreements underlying that judgment were illegal and unenforceable.  So, given that prior result, the fees award went POOF!  also.  The Third District reminded appellate practitioners that it is not necessary to appeal the postjudgment fee award to get the fee award to go POOF! (Center for Biological Diversity v. County of San Bernardino, 188 Cal.App.4^th 603, 613 n. 4 (2010)), but many appellate practitioners separately appeal the award just to be safe.

POOF! Earlier Reversal of Judgment On Less Than All Causes of Action Required Reversal Of Subsequent Fees/Costs Award

4/1 DCA So Rules In Unpublished Opinion.

            In Cui v. Secured Capital Ltd. Partnership, Case No. D078538 (4^th Dist., Div. 1 Dec. 2, 2021) (unpublished), a trial judge entered a $97,000 fees/costs award against a commercial tenant based on tort and premises liability claims against landlord and its real estate broker about the suitability of the leased premises for tenant’s intended uses.  The lower court earlier had granted summary judgment on all claims based upon an unlawful detainer possession stipulation, with the appellate court reversing the summary judgment on all claims but the premises liability count.  That meant the fees/costs award when POOF! also.  That held true even when, as here, the judgment was reversed as to fewer than all causes of action. (See Harris v. Wachovia Mortgage, FSB, 185 Cal.App.4th 1018, 1021 [reversal of postjudgment fee and cost order required where judgment was reversed as to only one of three causes of action]; Ventas Finance I, LLC v. Franchise Tax Bd. (2008) 165 Cal.App.4th 1207, 1212 [reversing fee award following partial reversal of judgment].)

Fee Clause Interpretation, POOF! After A Merits Reversal, Language Of The Fees Clause Meant That The Reversed Party Did Not Prevail

Fee Clauses Without Prevailing Party Language Have Such A Condition Implied.

            Drink Tank Ventures, LLC v. Real Soda in Real Bottles, Ltd., Case Nos. B29881/B302215 (2d Dist., Div. 2 Nov. 10, 2021) (published) is an interesting case where a “prevailing party” had its intentional interference claim reversed as a matter of law.  At the lower court, where judgment was entered on this reversed claim, the trial judge granted the “then” prevailing party $280,700 in attorney’s fees based on a nondisclosure contract clause (out of a requested $785,981, based primarily on overbilling as well as denying a multiplier request).  The attorney’s fees award also evaporated because of the reversal of the merits judgment.  The appellate court looked at the fees clause, which did not have “prevailing clause” language, but implied it under CCP § 1021 and Civil Code $ 1717.  Once what was done, based on the reversal, the fee award went POOF!

Private Attorney General, POOF!: Reversal Of CEQA Parking Lot Issue Petition In Entirety Also Vacated Private Attorney General Fee Award

$154,000 In Fees Went POOF!

            The appellate court in Save Our Access-San Gabriel Mountains v. Watershed Conservation Authority, Case Nos. B303494 et al. (2d Dist., Div. 8 Aug. 19, 2021) (published) reversed a CEQA petitioner’s win on a parking lot issue in entirety.  Petitioner had won $154,000 in private attorney general statute fees (used often in CEQA litigation) at the lower court stage, but that went POOF! on appeal with the reversal.

POOF!: Plaintiff Prevailing On Summary Adjudication Has His Contractual Damages Award, Interest, Costs And Contractual Attorney’s Fees Award Go POOF! On Appeal

The Trial Court Erred In Granting Plaintiff’s Motion For Summary Adjudication On Breach Of Contract Claim Because Defendants Had Established A Triable Issue Of Fact, And That Error Prejudiced The Subsequent Bench Trial On Other Claims.

            In Groth v. Gilad, Case Nos. A151497 and A150493 (1^st Dist., Div. 5 November 18, 2019) (unpublished), plaintiff and other individuals signed a Partnership Engagement Letter that provided each person signing would contribute capital equally for the purpose of engaging in a cigar club.  Shortly thereafter, plaintiff agreed to fund the purchase of real property for the club – depositing $735,000 into a business account belonging to one of the defendants.  That defendant then transferred the funds into an LLC account – with the LLC having been formed to own the real property.  The cigar club (which has since failed) was operated under a California corporation incorporated about a month later.

            Approximately four months after depositing the $735,000, plaintiff requested a written promissory note for $610,001 showing the corporation as the borrower.  The promissory note was signed by the corporation’s Secretary and CFO – both of whom had signed the Partnership Engagement Letter with plaintiff – on behalf of the corporation.

            After receiving only one payment from the LLC of $10,001, plaintiff received no additional payments.  He sued the Secretary and CFO who had signed the promissory note, and one corporate entity, alleging breach of contract, negligence, and breach of fiduciary duty.  His motion for summary adjudication on the breach of contract claim was granted and, after a bench trial on other issues, the trial court issued judgment against all defendants for $400,000 in contract damages and interest, plus costs and contractual attorney’s fees.

            On appeal, defendants argued that the trial court erred in granting summary adjudication on the breach of contract claim because defendants had established triable issues of fact that brought into question whether the parties agreed that the partnership, as opposed to solely the corporation or the LLC, would be obligated under the note.  They also argued that this erroneous ruling had prejudiced the subsequent bench trial on other claims.  The 1/5 DCA agreed and reversed the judgment and post-judgment fees order – finding the promissory note to be ambiguous with competing reasonable inferences regarding liability.  Because triable issues of material fact exist as to the breach of contract, summary adjudication was precluded.  With that, plaintiff's damages, interest, costs and fees awards went POOF! (at least for now).

Class Actions, Employment, POOF!: Class Action Win Of Labor Code Section 226 Penalties And Attorney Fees Against Employer Goes POOF! On Appeal

Employer’s Failure To Include Premium Pay On Wage Statements For “On Duty” Meal And Rest Periods Did Not Trigger Penalties Because Premium Pay Is A Statutory Remedy For An Employer’s Conduct – Not An Amount “Earned” By The Employee.

            A certified class of former and current non-exempt employees brought a lawsuit against their employer for meal break violations in Naranjo v. Spectrum Security Services, Inc., Case No. B256232 (2^nd Dist., Div. 4 September 26, 2019) (published).  They sought premium wages, Labor Code §§ 203 (waiting time penalties) and 226 (itemized wage statement penalties) derivative remedies, and attorney fees.  We focus on the attorney fees issues involved in this case.

            The employees were/are officers for a security company responsible for taking temporary custody of federal prisoners and ICE detainees for offsite travel for medical treatment, court appearances and other appointments.  Two such officers jointly provide continuous supervision until the prisoner/detainee is returned to his/her custodial location.  The officers are not permitted to leave the room or building where the prisoner/detainee is located, and are required to remain “on duty” during meal breaks. 

            With respect to one sub-class of the employee class members, employer had failed to: (1) provide an off-duty meal period; (2) obtain a mutually agreed-upon waiver if one hour or less would end the work shift; or (3) obtain written agreement to an on-duty meal period for shifts lasting longer than five hours.  This entitled these sub-class members to premium pay under Labor Code section 226.7 (an additional one hour of pay for each day an off-duty meal period is not provided without waiver or written agreement described above) – something the employer had failed to pay. 

            The parties stipulated that the sub-class was owed $1,393,314 in premium pay during a second trial phase in this action.  The third phase of trial, a bench trial, dealt with the employees’ requests for Labor Code §§ 203 and 226 penalties and attorney fees.  The section 203 requests were denied.  However, the trial court determined the sub-class was entitled to the section 226 penalties as the premium pay had not been reflected in the employees’ wage statements.  The parties stipulated to $399,950 for the section 226 penalties.  Based on the employees’ section 226 win, the trial court awarded attorney fees pursuant to section 226(e).  Employer appealed. 

            The 2/4 DCA reversed the trial court’s finding on the section 226 penalties because the penalties are triggered by an omission from the wage statement of “wages earned.”  Here, the premium pay served as a statutory remedy for an employer’s conduct.  The premium pay is not an amount the employee has “earned.”  Because the section 226 penalties were reversed, so too were the attorney fees awarded under section 226(e).  The award of attorney fees was contingent upon the award of section 226 penalties.