Source: https://www.calattorneysfees.com/2019/02/index.html
Timestamp: 2019-04-25 16:08:46+00:00

Document:
Legislative Enactment Resolved Split Among DCAs, As Recognized In Huerta, Effective January 1, 2019.
Although alluding to it in some posts on a year-end 2018 case, we post to indicate that California Senate Bill 1300 amended the FEHA scheme to provide that CCP § 998 offers may not be used to shift recovery of attorney’s fees and costs to a prevailing defendant unless the court finds that the action was essentially frivolous in nature. It resolved an intermediary appellate split in opinion as recognized in Arave v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 19 Cal. App. 5th 525, 554 (4th Dist., Div. 2 Jan 2, 2018) (where fees/costs not shifted, but acknowledging division in authority on this point) [discussed in our January 2, 2018 post]. Even after the passage of SB 1300, the Second District in Huerta v. Kava Holdings, Inc., 29 Cal. App. 5th 74, 78, fn. 11 (2nd Dist., Div. 8 Nov. 14, 2018) [discussed in our November 17, 2018 post] applied Arave and noted the statutory change to take effect January 1, 2019 which has resolved the appellate split.
Appeal Treated As Mandate Petition, With Plaintiff Not Showing He, As In Pro Per Attorney, Incurred Any Independent Attorney’s Fees.
In Electronic Universe, Inc. v. Superior Court (Reece), Case No. B285898 (2d Dist., Div. 3 Feb. 20, 2019) (unpublished), corporate defendant (which was suspended for failure to pay franchise fees) and its attorney were sanctioned, jointly and severally, $5,000 in sanctions fees under CCP § 128.7. However, the moving party was an in pro per attorney seeking § 128.7 attorney’s fees. Defendants appealed, and that was a good move by them.
First up was an appealability issue. The trial judge’s order was for just $5,000, with the appeal statute only allowing for an appeal unless it exceeded $5,000. The appellate court, as it can, decided to treat the appeal as a mandate petition in an effort to resolve the dispute. The 2/3 DCA panel further justified that this was the right move because the attorney defendant would have to report sanctions over $1,000 to the State Bar even if they were unwarranted such that it would be prejudicial to the attorney in the meantime (stay tuned, but you probably know what happened here—as if our titles did not give it away).
Next up was the merits ruling after the appeal was treated as a writ for appellate review. The problem here was that the moving in pro per attorney never showed that he incurred any independent attorney’s fees or expenses as a result of the defendants’ conduct. (Key here was that the suspended defendant company revived its existence so as to proceed with the appeal.) That invoked the Trope v. Katz prohibition (see our Leading Case No 12), which does not allow in pro per moving attorneys to recover for their own fees in such situations. (Musaelian v. Adams, 45 Cal.4th 512, 520 (2009).) Sanctions overturned on appeal.
Hourly Rates Were Too High For Sacramento Venue, Laffey Matrix Could Be Used, And Hours Property Reduced For Inflated Request.
In Limon v. Dept. of Finance, Case No. C082501 (3d Dist. Feb. 11, 2019) (unpublished), as it often times does, the likely final fight involved the award of appellate fees to prevailing plaintiffs in an RV park residential dispute arising out of the “Great Dissolution” (the disbanding of California’s redevelopment agencies). They earlier had won a nice judgment and $800,000 in fees under California’s private attorney general statute, none of which was in dispute. Plaintiffs then moved to compel payment out of a redevelopment trust fund, a request was eventually affirmed on appeal. Plaintiffs then moved for more CCP § 1021.5 fees of $630,000 (inclusive of a 1.4 multiplier). The trial judge awarded about $140,000, making reductions for too high hourly rates, work deemed duplicative/inefficient, and a 40% reduction for the personal interest to both plaintiffs and their attorneys in connection with the earlier fees award (although the final math calculation was enhanced by a positive 1.2 multiplier).
The Third District mainly affirmed, but it reversed the 40% reduction. Because Sacramento hourly rates are lower than L.A. rates, combined with the fact that Plaintiffs did not show that competent Sacramento attorneys were unavailable to them, the hourly rate reduction was in order. The trial judge also relied on the Laffey Matrix, adjusted for Sacramento cost of living differences, which was within his discretion. Reduction of work for inefficiencies/duplication was no abuse of discretion. The 1.2 multiplier was also fine. The only problem requiring a remand was the 40% reduction for attorney’s financial interest in the case, which conflated the requirement that only plaintiffs’ financial interests be considered.
Rejected CCP § 998 Offer Did Not Change The Result, Because Claimant Did Not Ask Arbitrator To Cost Shift And Failed To Show Contractual Expenses Were Post-Offer In Nature.
In Lipton & Margolin, APC v. Ko, Case No. B288038 (2d Dist., Div. 2 February 7, 2019) (unpublished), former law firm sued client for $39,455.45 on an unpaid receivable, prompting client to cross-claim for legal malpractice. The whole matter was referred to contractual arbitration. Nothing was awarded by the arbitrator except for $435 in filing costs for the firm to answer the malpractice complaint, with each side ordered to bear other fees and costs. Earlier, plaintiff/claimant had made a CCP § 998 offer to drop the cross-complaint and pay $1,800 in satisfaction of the receivable, an offer expiring without acceptance by the law firm. In the superior court post-confirmation award proceeding, plaintiff/claimant requested $15,161.66 in costs (mostly contractual arbitration expenses). The lower court confirmed the arbitration award, but it denied plaintiff’s costs request except for the $60 motion to confirm arbitration award fee. Plaintiff appealed that denial.
Defendant Does Not Have To Choose Best Option For Appealing Plaintiff, With Lost Opportunity Costs To Defendant Being A Factor To Consider.
In Rostack Investments, Inc. v. Sabella, Case No. B286069 (2d Dist., Div. 8 Feb. 5, 2019) (published), plaintiff obtained a substantial summary judgment which was reversed on appeal, with the appellate court awarding defendant appellate costs as the prevailing party. She sought to recover $1.4 million in costs for obtaining a surety bond, secured by a letter of credit (LOC), pending appeal. (The total amount secured was around $77 million.) Plaintiff moved to tax the claimed costs as neither reasonable or necessary based on the premise that defendant could have obtained a cash-collateralized bond without the need for the LOC. Defendant presented counter-evidence that the surety bond was the best financial alternative for her, and she did not have that much cash. The trial court denied the motion to tax costs, and plaintiff appealed.
Lack Of Fee Hearing Reporters’ Transcripts Sealed The Correctness Of The Orders.
The Third District, in Marriage of Samorano, Case Nos. C084143/C086540 (3d Dist. February 5, 2019) (unpublished), affirmed $7,500 in fees and sanctions awards in favor of ex-husband and against ex-wife under Family Code sections 2032 (needs-based provision) and 271 (sanctions provision). The main reason was that she did not provide any reporter transcripts of the fee hearings, so the orders were presumed correct. An inadequate appellate record sealed the deal.
There Was No Ruling To Be Appealed From.
In Kottler v. City of Los Angeles, Case No. B278276 (2d Dist., Div. 1 February 4, 2019) (unpublished), next door neighbors successfully obtained mandamus over a zoning adjustment made in favor of another neighbor. Petitioners submitted a proposed judgment indicating that they were entitled to fees under the private attorney general statute, but the lower court had that language stricken from the judgment because the issue had not been teed up yet. However, nothing prevented petitioners from bringing a fee motion, with the parties stipulating that petitioners could seek fees later. Petitioners obviously thought the “strike out” was a denial of the fee entitlement request, but the appellate court said “no”—the trial judge had not ruled yet and did not preclude a future fee motion, such that there was nothing to be appealed from at this stage.
Section 7605 Deals With Proceedings Involving Child Custody/Visitation.
In Darab N. v. Olivera, Case No. B282972 (2d Dist., Div. 1 February 4, 2019) (published), child’s mother appealed denial of her request for $100,000 in attorney’s fees under Family Code section 7605 relating to her efforts to defend against motions to quash brought by father (which were granted). Section 7605 is a fee shifting provision in child custody/visitation proceedings. The appellate court decided that much of the analysis of Family Code section 2032, the needs-based statute, applies to section 7605, with the lower court properly looking at the requesting party’s litigation tactics and whether claimed fees truly related to the appropriate proceedings. Section 6344 did allow fee shifting to a successful party in a DVRO proceeding, but mother lost in that phase. With respect to other fees, the lower court properly concluded that they were not reasonably incurred due to mother’s unreasonable litigation tactics and her failure to apportion them to potentially compensable work.
Business and Professions Code Section 809.9 Was The Fee Shifting Statute.
In Economy v. Sutter East Bay Hospitals, Case Nos. A150211 et al. (1st Dist., Div. 4 February 4, 2019) (published), defendants hospital were found to have improperly suspended/terminated a physician without a proper hearing under Business and Professions Code section 809 et seq, with the trial court awarding doctor $3.867 million in damages but denying the physician an award of attorney’s fees under section 809.9, which requires a mandatory award of fees to the “substantially prevailing party” if the hospital’s conduct in defending or litigating the case was “frivolous, unreasonable, without foundation, or in bad faith” (with frivolousness judged objectively and bad faith judged subjectively). The appellate court affirmed the denial of fees, finding that the lower court correctly concluded that hospital’s defense was not completely lacking in merit and there was tenability in the argument that hospital’s actions did not have to be reported (although ultimately failing on the merits).
2/6 DCA Remembers That Attorneys Are Both Zealous Advocates And Officers Of The Court.
Presiding Justice Gilbert, in Marriage of Anka & Yeager, Case No. B281760 (2d Dist., Div. 6 February 4, 2019) (published), reminds licensed attorneys that we are both zealous advocates and officers of the court. The appellate court affirmed a trial judge’s imposition of $50,000 in sanctions against an attorney for disclosing information in a confidential child custody evaluation report. Family Code section 3111(b) does allow the family law court authority to impose such sanctions for a violation of section 3025.5. However, because nothing showed that the client directed the disclosure, the joint and several award against client was reversed.
$3,500 Sanctions Award Was At Issue.
Justice Bendix, the author of Osborn v. Saucedo, Case No. B283605 (2d Dist., Div. 1 Feb. 1, 2019) (unpublished), reminds trial judges that litigation is not frivolous where there are disputed issues of fact even if they might be somewhat slim in nature. A $3,500 sanctions award under CCP § 128.7 was reversed because the dispute involved an oral agreement relating to tenant removal of fixtures separate from the written lease provisions. The disputed facts in such a scenario showed that the litigation was not frivolous in nature even though plaintiff lost.
Hourly Rates Were Too High, Case Was Overprepared, And Limited Success Before The Jury Supported Lower Court’s Reduced Award.
FEHA plaintiff in Check v. Raley’s, Case No. A153906 (1st Dist., Div. 1 Jan. 31, 2019) (unpublished) won $119,211 on some claims, later requesting the trial court to award her $1,109,107 in fees. The lower court found reasons to not honor the request, awarding instead $449,602 and denying a positive multiplier request in the process.
The appellate court affirmed the reduced fee award. The hourly rates claimed were too high for Sonoma County, a venue with lower rates than other Bay Area locales. The lower court’s 20% overall reduction was in order given its finding that the matter was overprepared by plaintiff’s counsel and involved duplicative attorney work. Finally, a multiplier was properly rejected because the matter was not complex, it was overprepared, and plaintiff had limited success (factors which combined to outweigh the contingency risk factor often leading to the application of a positive enhancement).
Equitable Estoppel Theory Was Not Supported By The Evidence.
On December 19, 2012, we posted on Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler, 212 Cal.App.4th 172 (2012) [discussed in our December 19, 2012 post], which held that a party may be equitably estopped from enforcing the rule which prohibits attorney fee splitting where one party prevented the other from obtaining the necessary written consent from a client. The matter was remanded for a trial on this narrow issue. We can now report the trial judge, on remand, found no proof supported the equitable estoppel exception. The 4/3 DCA, in Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler, Case No. G053966 (4th Dist., Div. 3 Jan. 31, 2019) (unpublished), affirmed the trial court’s determination, because the evidence did not support that the class representative was swapped out for improper purposes (the basis for equitable estoppel) and the proof actually showed that the party claiming estoppel was the one preventing the required disclosure. Justice Ikola authored the 3-0 opinion.
However, Judgment Creditor’s Acceptance Of Payoff Check Cut Off Further Postjudgment Fees, Even Though Other Judgment Creditors Were Not Paid Off.
Roe v. Ma, Case No. A150320 (1st Dist., Div. 3 Jan. 31, 2019) (unpublished) is a situation where a judgment debtor having four judgment creditors under a prior integrated judgment decided to satisfy one judgment creditor with the hopes to get rid of a judgment lien on the debtor’s real estate. She did a full cashier’s check payoff to the one creditor, requesting a full acknowledgment of satisfaction. The creditor refused, only recording a partial satisfaction, and the trial judge refused to compel a broader satisfaction acknowledgment. Creditor then moved to recoup judgment enforcement fees, with the trial judge awarding him a little over half and no costs. Debtor appealed both orders, and creditor cross-appealed from the fee reduction.
The 1/3 DCA affirmed the denial of the motion to compel satisfaction, but it reversed the fee award and dismissed the cross-appeal.
The denial of the motion to compel acknowledgment of satisfaction was correct because only a partial satisfaction was required; otherwise, a full satisfaction would have impacted the rights of the unpaid, other judgment creditors because the broader satisfaction recording would have extinguished the entire judgment lien which also benefited the other creditors. However, the fee award went away because creditor’s acceptance of the payoff prevented any further postjudgment fee collection efforts, in line with the reasoning of Gray1 CPB, LLC v. SCC Acquisition, Inc., 233 Cal.App.4th 882 (2015) [discussed in our January 28, 2015 post]. The appellate court also rejected the contention that the unpaid status of the other judgment creditors meant that judgment debtor was still subject to the one judgment creditor’s post-satisfaction fee request. The reversal of the fee award further mooted the cross-appeal, which was dismissed.
SLAPP Denial Reversed And No Appellate Sanctions Were Warranted.
This next case involves a lawsuit brought by Glenn Symmonds, a drummer who was terminated by Edward Joseph Mahoney, aka Eddie Money, a singer and songwriter who performs in concerts across the country. Symmonds sued Eddie and his entertainment company, prompting a SLAPP motion which was denied. The 2/1 DCA, in Symmonds v. Mahoney, Case No. B283529 (2d Dist., Div. 1 Feb. 1, 2019) (published), reversed because the protected conduct prong was met and the lower court then had to proceed to an examination of the merits prong. Symmonds asked the appellate court to find that the SLAPP motion itself was frivolous, but that request was rejected because no authority was presented (given that this is the trial judge’s job). Symmonds also asked for appellate sanctions, but the reversal mooted it anyway, and such a request was procedurally improper given that it must be accomplished through a separate motion (not just a request in a respondent’s brief).
Tort Of Another Claim Had Been Stricken Earlier By A Different Judge And There Was No Indication Seller Actually Incurred Any Fees To Her Attorneys.
Boykin v. He, Case No. A149020 (1st Dist., Div. 2, January 31, 2019) (unpublished), was a very convoluted case considered on appeal by the First District, Division 2, in which a jury had determined that a buyer would be awarded specific performance in a residential sale transaction and that seller, who brought a cross-complaint against a dual agent and affiliated broker, should be awarded $350,021 if seller had to transfer the house to buyer or $17,500 if seller kept the house. The judge presiding over the trial then allowed seller to keep the house, as well as awarding her $350,021 and imposing tort of another fees against the agent and broker to the tune of $794,379 (inclusive of a multiplier), even though an earlier, different judge had stricken the tort of another claim from a case. Agent and broker were shocked, appealing.
Good thing they did. The 1/2 DCA determined that only $17,500 was the proper damage award to seller because she kept the house, in line with what the jury said (not what the trial judge did). Because tort of another fees are damages (not classic fees claimed generally through a postjudgment motion), they were improperly awarded because the earlier judge had stricken them from the case—and a second judge cannot overrule what a first judge did. Tort of another fees have to be pled and proven, and they had been excised from the case. Beyond that, there was no proof that seller actually incurred any fees with respect to her attorneys. The appellate court firmly believed the trial judge acted inconsistently from the jury’s verdict and essentially overturned what a prior judge had done.
Also, Hearing The 271 Sanctions Request At The Same Time Saved Court Resources.
The Second District, Division 2, in Perow v. Uzelac, Case No. B283457 (2d Dist., Div. 2 Jan. 31, 2019) (published), decided that a wife’s request for Family Code section 271 sanctions in her responsive declarations in a dissolution modification proceeding was not “affirmative relief” under Family Code section 213 requiring that the request be brought through a separate motion. As colorfully put by the panel, “A party seeking attorney fees under section 271 is not seeking affirmative relief within the meaning of section 213 because the request for such fees is an attack on the messenger, not his message.” Also, hearing the sanctions request with the modification request avoided duplicative proceedings and conserved judicial resources.
Earlier, In Pro Per Litigant Hit With Trial SLAPP Fees Totaling $24,122.50.
City of Monrovia v. White, Case No. B282713 (2d Dist., Div. 2 Jan. 30, 2019) (unpublished) is quite a remarkable saga, showing how SLAPP fees against a losing litigant, especially against a losing litigant who also loses a subsequent appeal, can be quite steep in nature.
In this one, City sued defendant to enjoin unpermitted grading/construction on defendant’s property, prompting in pro per defendant to file a cross-complaint with 21 cross-claims. (In pro per litigant happens to be a licensed California attorney.) City successfully SLAPPed the cross-complaint and defendant lost her SLAPP motion, resulting in the imposition of $24,122.50 in attorney’s fees. Defendant/cross-complainant then appealed the SLAPP merits rulings, which were affirmed in large part in a prior appellate decision. City moved for its appellate fees as prevailing party, with the trial court awarding it another $102,699 for this work. The fee hearing was unusually long, with the in pro per litigant taxing the patience of the trial judge—where he recused himself voluntarily after making the fee ruling.
In pro per appealed the appellate fee award, losing yet again.
She argued that the trial judge’s recusal voided the appellate fee ruling, but the 2/2 DCA rejected that because the recusal occurred after the merits ruling. City initially had failed to file a supporting fee declaration with the “under penalty of perjury” language, but it corrected the error way before the fee hearing (which, like most hearings these days, are scheduled through a reservations system months down the line)—with the appellate court determining that the errata was not prejudicial because appellant had plenty of time to respond to the fee motion. City did prevail in the prior appeal (because 76% of the cross-claims were properly SLAPPed), and the prior appellate panel’s award of costs to City did not preclude it from also seeking attorney’s fees (put another way, awarding costs is not mutually exclusive of fee entitlement).
BLOG OBSERVATION—Co-contributor Mike recently appeared before Los Angeles County Superior Court Judge Terry Green (a USC graduate, with a cozy judicial attitude). Judge Green lamented the reservations system, indicating it was another indication that the courts are adopting the method of many other businesses of having you not talk to a real live human being. He likes people-to-people interactions, requiring counsel in discovery disputes to meet in person and work things out. Kinda refreshing, right?

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