Source: http://www.thenalfa.org/blog/category/fees-as-damages/
Timestamp: 2019-04-21 16:40:15+00:00

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A recent Metropolitan News story, “Attorney Fees Might Have Been Awardable as Damages” reports that the Fourth District Court of Appeal declared that a trust that had to continue defending against an action in an unlawful detainer when the plaintiff refused to file a request for dismissal after a settlement had been reached was probably entitled to recover its post-settlement attorney fees as damages, in a new action, rather than securing them through a post-judgment motion for costs in the UD case.
While indicating a preference for that view—and suggesting that two cases to the contrary were incorrectly decided—Justice Richard D. Fybel of Div. Three said in an unpublished opinion that the issue need not be determined because the amount of the fees awarded—$118,000—was not supported by the evidence, consisting solely of inadmissible hearsay. The opinion directs the trial court to enter judgment in favor of the defendant, Morris Cerullo World Evangelism, Inc. (“MCWE”), and against plaintiff Lloyd Copenbarger, as trustee of the Hazel I. Maag Trust.
This was not a case where a written agreement called for the award of attorney fees to the prevailing party. MCWE pointed to Code of Civil Procedure §1021 which codifies the American Rule that party normally bears its own costs of attorney fees, “[e]xcept as attorney’s fees are specifically provided for by statute.” Citing the 1985 California Supreme Court decision in Brandt v. Superior Court, Fybel said: “There is a difference, however, between attorney fees sought qua damages and attorney fees sought qua costs of suit. ”In Brandt, recovery of attorney fees was permitted as tort damages in a case where an insurer wrongfully denied coverage.
The holding in Brandt was criticized in a majority opinion by then-Justice Miriam Vogel (now returned to law practice) in the 1995 case of Burnaby v. Standard Fire Ins. Co., with Presiding Justice Vaino Spencer (now deceased) dissenting from that portion of the discussion. Vogel wrote: “Whatever merit there may be to the criticisms regularly heaped upon the American rule…, the decision to change that rule is the Legislature’s, not the courts’. For that reason, we agree with Chief Justice Lucas’s dissent in Brandt…that courts ought to move cautiously in extending the nonstatutory bases on which awards of attorneys’ fees may be predicated. For the same reasons, we suggest it is time for the Supreme Court to reconsider and reject the exception it adopted in Brandt.” The high court has not acceded to that suggestion.
A recent Metropolitan News story by Kenneth Ofgang, “Panel Upholds Award of ‘Fees-on-Fees’ Under Statute” reports that a statute that permits federal judges to sanction attorneys for vexatious litigation permits an award of fees to opposing counsel for litigating the right to fees, the Ninth U.S. Circuit Court of Appeals ruled.
In a published order, the panel—Judges Alex Kozinski, Richard A. Paez, and Marsha S. Berzon—denied reconsideration of the appellate commissioner’s ruling calculating sanctions against Boston attorney Michael J. Flynn and his client, Timothy Blixseth. The two were ordered to pay nearly $192,000 in fees and costs incurred by several creditors of Blixseth, a co-founder of the bankrupt Yellowstone Mountain Club. Blixseth was found jointly liable for all but around $34,000 of the award, for which Flynn was found separately liable by statute.
Blixseth and one of his ex-wives developed the Yellow Mountain Club as an exclusive resort for “ultra-wealthy” golfers and skiers. He has blamed the 2008 mortgage crisis for the collapse of his finances. His wealth was estimated by Forbes magazine at $1.3 billion when it named him one of the 400 wealthiest Americans in 2006. Creditors have claimed Blixseth has hidden assets.
In the order, the panel agreed with the appellate commissioner that fees incurred in litigating the right to fees, or “fees on fees,” cannot be awarded under Rule 38, but may be awarded under §1927. The panel also denied, without comment, Flynn’s motion that the judges recuse themselves.
The case is Blixseth v. Yellowstone Mountain Club, LLC, 12-35986.
A recent the IndianaLawyer.com story, “Bill Would Allow Recovery of Attorney Fees in All Wrongful Death Actions” reports that a northern Indiana senator has introduced legislation to amend Indiana’s wrongful death statute to allow for surviving families to collect attorney fees.
Sen. Lonnie Randolph, D-East Chicago, has proposed in Senate Bill 124 that language be added to Indiana Code 34-23-1 that would enable a widow or widower, dependent children or dependent next of kin to receive reasonable attorney fees in wrongful death actions.
The measure comes after the Indiana Supreme Court ruled in August that under current law attorney fees do not qualify as damages when the deceased is survived by family. In SCI Propace LLC; South Central Indiana Rural Electric Membership Corp.; Rush Shelby Energy Rural Electric Cooperative, Inc. v. Courtney Fredrick, as Personal Representative of the Estate of Stephan Fredrick, Deceased, 55S04-1508-PL-501, the unanimous court found the state’s General Wrongful Death Statute allows for attorney fees only when the decedent has no survivors.
Randolph’s bill specifies that in an adult wrongful death lawsuit, damages include “reasonable attorney’s fees” incurred by the estate or any person for bringing and maintaining the action.
The fiscal impact of the new language would depend on whether a state agency is found liable for an individual’s death, according to the Indiana Legislative Services Agency. The maximum payment for a wrongful death from the state government is $700,000 but the average cost of attorney fees in such actions is unknown.
A recent Texas Lawyer story, “Government to Pay $1.5M in Attorney Fees in FLSA Suit,” reports that the U.S. Department of Labor has agreed to pay $1.5 million in attorney fees to Corpus Christi company and its owner after the U.S. Court of Appeals for the Fifth Circuit sanctioned the federal government for bad faith ruled that it owed fees to the company.
The wage and hour division of the U.S. Department of Labor will pay the money to Gate Guard Services and owner Bert Steindorf, according to the settlement agreement. The money is for attorney fees and expenses.
The Department of Labor alleged in a 2010 complaint that Gate Guard violated overtime laws. But according to a ruling in July issued by a three-judge Fifth Circuit panel, when the DOL investigated Gate Guard for alleged Fair Labor Standards Act (FLSA) violations, the federal agency violated its own internal procedures and ethical litigation practices.
The Fifth Circuit sanctioned the federal government for bad faith and found that it owed attorney fees and travel expenses to Gate Guard. But instead of having U.S. District Senior Judge John Rainey of the Southern District of Texas determined that exact amount of fees and expenses, the DOL negotiated a settlement with Pipitone.
Earlier, in April 2014, Rainey had ruled that the DOL owed $565,227 in attorney and paralegal fees and travel expenses to Gate Guard. In 2013, Rainey granted Gate Guard’s motion for summary judgment and dismissed all claims that the DOL brought against it in the FLSA enforcement action.
"Great program...hope this becomes an annual thing"
Fee-Shifting Litigation Overwhelms the "American Rule"

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