CALIFORNIA ATTORNEY'S FEES

Reasonableness Of Fees: Lack Of Success/Jury Reduction For Negligence Justified Trial Judge Award Of Reduced Fee Award

 

No Problem That 40% Fee Award Paralleled Jury Decision That Prevailing Party Was 60% Negligent.

    In Stone v. Mitchell, Case No. A132335 (1st Dist., Div. 4 Oct. 16, 2015) (unpublished), plaintiffs prevailed won a negligence claim but lost two other claims, with the jury finding plaintiffs were 60% responsible for injuries on the negligence claims—awarding damages of $32,560 net (based on the negligence attribution and $12,000 reduction for another defendant’s settlement).  Plaintiffs then moved to recover $212,800 in attorney’s fees based on a sales contract with a fees clause.  The lower court awarded $85,000, prompting an appeal by plaintiffs who argued the fee award was not enough.

    The fee award did not change on appeal.

    Success or failure is a lodestar consideration under California law.  (PLCM Group, Inc. v. Drexler, 22 Cal.4th 1084, 1095-1096 (2000).)  The appellate court did not think reducing the fee award to reflect the jury 40% positive negligence apportionment to the prevailing party was an abuse of discretion under the circumstances, since the fee award was 40% of the fee request.

    BLOG OBSERVATION—The reviewing court also has made an oblique “pass” on an issue which we believe will have to be decided at some point by the appellate courts, but has not drawn uniform treatments in published or unpublished decisions.  At present, trial judges do not have to issue detailed findings or statements of decision in connection with fee proceedings in California state courts.  However, despite not having to issue a statement of decision, what is the rule if a litigant asks for specific findings, creates a good record, and is denied that request?  In our view, this issue has not been fully vetted by an appellate court, especially given that Stone observed “California courts have stated a disinclination to review the amount of an award when specific findings are not requested,” citing Taylor v. Nabors Drilling USA, LP, 222 Cal.App.4th 1228, 1250 (2014).  Obviously, a fee litigant is in a conundrum—it cannot insist on a statement of decision, but is damned if it doesn’t ask for one.  We would suggest that a statement of decision or at least proposed findings be submitted to a trial judge, because at some point the California state courts will have to decide what happens when specific findings are proffered, but not ruled on, when determining the real impact on review of fee rulings. 

Reasonableness Of Fees: If You Are Gonna Try to Beat Abuse Of Discretion Standard As to Fee Recovery Amount, You Gotta Get Specific On Challenges!

 

Fee Recovery of Less than 10% of Request Affirmed on Appeal.

     Byrne v. Peninsula Heating & Appliance, Inc., Case No. A134664 (1st Dist., Div. 5 June 12, 2013) (unpublished) is one of those classic appeals involving a challenge to the amount of fees, which is governed by an abuse of discretion reviewing standard. The appealing party did not get any relief on appeal, despite claiming that a less than 10% fee request award was erroneous in nature.

      Warring brothers taking over a business from a father and then parting to form separate businesses filed dueling lawsuits, eventually entering into a settlement agreement of the various actions with -- dant! dant! da! -- a fees clause which was very broad in scope for fee recovery recapture in the event the settlement agreement came into controversy. Well, one brother apparently breached the settlement, setting off another roundelay of settlement proposals and demands, but with non-breaching brother having to file a cross-complaint to overcome the argument fees and costs were not recoverable unless there was an “action or proceeding.” Non-breaching brother sought $65,424.44 in fees, but the trial court was only willing to grant fees for a Sacramento action, inviting further fee submissions. Incredibly, brother who would get some fees, if reasonable, asked for more--$85,070.30 in fees! Opposing brother contested the amount, arguing that only $7,641 should be awarded, a position endorsed completely by the lower court.

      “Winning” brother appealed, claiming the $7,641 award was too low, an argument reviewed under the abuse of discretion standard. (Children’s Hospital & Medical Center v. Bonta, 97 Cal.App.4th 740, 777 (2002).)

     The result in this appeal calls to mind the words of Justice Fybel (4th Dist., Div. 3), who at a seminar indicated that any party to a fee appeal should provide a “roadmap” to the appellate justices. No roadmap was provided by the appellant in Byrne.

     The primary flaw in the appeal was a failure to specifically identify challenged entries or provide legal authority demonstrating that the entries were suspect. Rather, certain vague billing entries were self-evident and justified the lower court’s reductions. Although supplying a 107-page allocation chart, appealing brother did not correlate his arguments to this chart--a real problem on appeal. For example, after appealing brother admitted some errors in his memory, the appellate court basically said “what is good for the goose is good for the gander”--if you say you did a detailed analysis (but with errors), the trial court can well view with skepticism the remainder of a fee request. Given that the lower court has lots of discretion to reduce perceived inflated fee requests, there was no abuse of discretion in the scalped amount awarded here.

Reasonableness Of Fees: Trial Court’s Award Of Fees Of $575,000 (Out Of Requested $1.4 Million) And Another $187,000 To Bank No Abuse of Discretion

 

No Need For Independent Fee Expert Scrutiny, Because Trial Judge Can Do It.

     Here is an interesting reasonableness of fees challenge made on appeal to our local Santa Ana appellate court in Yeskin v. Pacific Mercantile Bank, Case No. G045361 (4th Dist., Div. 3 Oct. 5, 2012) (unpublished), authored by Presiding Justice O’Leary on behalf of a 3-0 panel.

     Bank won a contractual claim award of $1.4 million (after trial court reductions) against one plaintiff. Bank then requested an award of almost $1.4 million in fees (although claiming to have spent closer to $2 million), but the trial judge asked for supplemental briefing and elimination of fees for work done on behalf of other parties, elimination of work done on an unsuccessful fraudulent conveyance claim, and clarification of severely redacted billings submitted in support of the fees request. After this was done, the lower court awarded Bank $575,000 in fees against the one plaintiff and another $187,000 in fees against the same plaintiff due to his legal maneuverings.

     (The lower court did find that a $500 hourly rate was reasonable, but reduced the requested lodestar hours of 2,756 down to 1,150 in fashioning the awards. The trial judge found the requested fees were excessive, based on overstaffing, and driven by over analysis of the litigation by Bank’s counsel.)

     The fee awards were affirmed despite plaintiff’s challenges to them.

     Plaintiff principally argued that the lower court erred in not appointing an independent expert to review the billings in the fee proceeding. No, said the appellate court, because the trial judge having familiarity with the case is equipoised to make such a review, with no heightened scrutiny necessary because this was not a probate case (unlike the different situation presented in Donahue v. Donahue, 182 Cal.App.4th 259 (2010) [discussed in our February 27, 2010 post].)

Reasonableness Of Fees: $109,288.75 Fee Award To Defense Affirmed Even Though Cross-Claim Judgment Only Totaled $90,000

 

Abuse of Discretion Standard Not Hurdled.

     In Ruane v. 403 Main LLC, Case No. B227273 (2d Dist., Div. 5 May 30, 2012) (unpublished), plaintiff lost a lease/option dispute to the defense, which recovered a $90,000 judgment on the cross-complaint. The trial court then awarded Civil Code section 1717 fees under a contractual fees clause of $109,288.75 to the defense.

     Plaintiff appealed the fixing of the fee award, but there was substantial evidence supporting it. Detailed time records were authenticated and submitted to support the award. Although reasonable minds could differ, the award was not “out of the ballpark.”

Miss Genevieve Ebbets, youngest daughter of Charley Ebbets, throws first ball at opening of Ebbets Field.  April 5, 1913.  Library of Congress.