Source: https://www.calattorneysfees.com/2018/08/index.html
Timestamp: 2019-04-25 16:05:58+00:00

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Fee Claimant Did Something Good—Apportioned Fees Upfront From A Common Defense So That The Fee Request Was Not Inflated And Was Reasonable In Nature.
We congratulate attorneys Eric Bjorgum and Vincent Pollmeier, who apparently follow our blog, for a nice attorney’s fees/costs proceeding win in a trade secrets misappropriation case which was presided over by Los Angeles County Superior Court Judge David Sotelo.
In SoCal Diesel Inc. v. Extrasensory Software, Inc., LASC Case No. BC597857 (Fee Motion Order dated Aug. 9, 2018, Download Link here ), an individual defendant obtained a nonsuit in a trade secret misappropriations case, while a corporate and other individual defendants, after a jury trial finding them liable for misappropriation, obtained a grant of a new trial motion by Judge Sotelo. The individual defendant obtaining the nonsuit then moved to recover $168,924.96 in attorney’s fees and $29,560.28 in costs (after voluntarily reducing costs by about $10,000 in response to an opposition by plaintiff), doing so based on the CUTSA fee-shifting provision (Civ. Code, § 3426.4) for misappropriation claims brought in bad faith. (For the standards governing bad faith in this context, see our home page category “Trade Secrets”.) The moving defendant did a lot of good things in its fee motion, with the lower court granting the entire request.
The moving party persuasively assembled the evidence to show that he was not involved in any misappropriation and was only included as a defendant to put leverage on the other defendants to settle.
The next good thing which moving party did was actually allocate fees to work efforts relating to just him versus trying to overreach by requesting fees for all of the common defense work on behalf of all three defendants. The lower court bought the allocation, which was not arbitrary, and provides a good tip to practitioners on how to think about issues which would trouble a judge in awarding fees so as to pro-actively apportion in the first instance.
The hourly rates of $250 to $350 were reasonable, if not low, for Los Angeles County attorneys.
Congratulations to Messrs. Bjorgum and Pollmeier on their win, as well as sharing the opinion with us. Mr. Bjorgum told us that our website was helpful in the fee proceeding – and this is one reason that we do the blog!
Family Law Judge Did Not Consider Husband’s Ability to Pay, And Wife Was Not Required To Make A Separate Request For Fees On Appeal When She Had Already Requested Them.
What happened, boiled down, was this: wife prevailed on appeal from an order terminating spousal support, then seeking fees under a marital settlement agreement, Family Code section 271 (sanctions), and Family Code sections 2030/2032 (needs-based fees statute). The lower court denied fees on any of these bases, prompting an appeal. Wife did get relief in the form of a remand to determine fees under the needs-based fees statutes.
Appealability was the first issue. The interim order being appealed from was not a final order such that it was not appealable. It also did not qualify as a collateral final order given that wife was not directed to pay any money to husband.
The lower court did get it right as to no fee entitlement under the marital settlement agreement and section 271. With respect to the MSA, the language was not a prevailing party clause but simply reserved the right to apply for future fees under sections 271 or 2030/2032—this reservation language was not akin to a fees entitlement clause on a stand-alone basis. The section 271 sanctions request was correctly denied because ex-husband’s modification request was not frivolous and simply did not confer fee entitlement because it was reversed on appeal.
That took the appellate court to the critical needs-based fees request, which took ex-wife to the promised land as far as a reversal was concerned. The main problem is that the lower court denied fees without recognizing that the appellate court’s earlier reversal was one for the entire post-judgment order inclusive of the decision on attorney’s fees. Ex-wife was entitled to fees on remand for successful appellate work. Ex-wife also did not have to request fees somehow again until an appeal was concluded to be entitled to them—after all, a litigant like wife does not have to be clairvoyant in predicting whether an appeal would be won. Finally, on the merits, the trial court failed to consider husband’s ability to pay versus just basing a fees denial based on wife’s ability to pay. So, both parties’ relative circumstances had to considered on remand as it related to all of the germane fee motions denied below.
Acting Justice Fybel authored the 3-0 panel decision in favor of ex-wife.
Deals With Compensability of Mediation, Personal Attorney, and Accounting Objection Fees.
In an August 9, 2018 post, we discussed the unpublished opinion in Powell v. Tagami, a Fourth District, Division 1 decision relating to probate compensation for mediation work, personal litigant work, and accounting objector work where unwarranted ad hominem attacks were levied against opposing siblings and/or their attorneys. We can now report that this case was certified for publication on August 15, 2018.
Improper To Enter Default Judgment Where Fees Were Not Authorized By Statute or Contract.
In Luginbill v. Salva, Case No. E068549 (4th Dist., Div. 2 Aug. 15, 2018) (unpublished), plaintiff only demanded $11,500 base damages, plus interest, plus $2,500 in attorney’s fees, in plaintiff’s complaint. No Statement of Damages was sent indicating any punitive damages were being sought. The trial court, in a default prove-up, entered a judgment for the base damages, interest, costs, $50,000 in punitive damages, and $19,900 in attorney’s fees. The appellate court reversed the punitive damages award because no Statement of Damages was provided. It also reversed the $19,900 fee award because no basis for fee entitlement was provided by plaintiff. Plaintiff, on appeal, smartly did agree to a modification of the judgment for improper amounts, such that these two items—inclusive of the fee award—were excluded from the judgment, as modified.
None Of Ex-Wife’s Papers Before A Critical Hearing Specifically Referenced Section 271, Requiring A Reversal Without Prejudice.
This next case, Marriage of Bauer, Case No. H041338 (6th Dist. Aug. 10, 2018) (unpublished), teaches an important due process lesson in family law cases: if you are going after fees as Family Code section 271 sections (not being cooperative or trying to resolve the case), make sure your papers or briefs cite the section specifically.
What basically happened was that ex-wife failed to cite section 271 in her latter requests for order or trial briefs, despite doing it in prior hearings at which the requests were denied for the time being. Ex-husband raised the argument he did have notice or opportunity to be heard, with the appellate court agreeing and reversing the trial judge’s $50,000 sanctions award without prejudice. The reason was ex-wife’s failure to comply with Parker v. Harbert, 212 Cal.App.4th 1172, 1178 (2012), which holds that due process requires that a notice for section 271 sanctions must specify the authority relied upon and must advise of the specific grounds/conduct on which sanctions are to be based.
Large-Scale Dissolution Battle Was Involved, With Appellate Court Giving Great Explanation Of Abuse Of Discretion Standard Of Review—Likely a “Smell Test” At Best.
In Marriage of Vinhas and Krognes, Case No. A144387 (1st Dist., Div. 2 Aug. 9, 2018) (unpublished), a family law judge largely decided marital standard of living issues in favor of ex-husband where his earnings plunged to a quite modest level after a few years of large earnings before separation. This case involved a non-consummated Swiss divorce agreement and ex-wife moving to Paris to live with her boyfriend, and the couple finally signing a divorce agreement in San Francisco, among other interesting and diverse facts. Ex-wife wanted $71,700 per month in support, but the family law judge awarded closer to $12,000 per month after factoring in other transfers or retentions of substantial assets. The family law judge denied most of ex-wife’s request for late-in-the game attorney’s fees requests, including denial of fees relating to child and spousal support requests.
Ex-wife appealed, with ex-husband mainly winning but with a remand to revisit an award of fees for ex-wife’s successful child modification request. However, as we note in our BLOG OBSERVATION below, the opinion maybe has the most lucid, pragmatic definition of the appellate abuse of discretion standard—although some of our readers might think it too trite (even though we actually think it has some commonsense appeal).
In denying fees, the family law judge did observe that ex-wife incurred $472,107 in attorney’s and forensic accounting fees (yikes!); husband took the laboring oar with respect to a realistic financial analysis; and wife drove up the fees based on how she litigated and in not being candid in her financial disclosures. So, the appellate court found that her requests for additional prejudgment fees and appellate fees were properly denied given that she had substantial access to funds (she had received $3.1 million in separate property) and that she had received over $8,500 in monthly child/spousal support for a period of time—not to mention her request for relief was astronomical in nature. However, it was error to not award her some fees for modifying child support under the Family Code section 3652 fee-shifting provision. But, to the contrary, the family law judge did not err in denying fees for modification of spousal support request given that ex-wife purchased an $1.8 million house such that her plea of “liquid asset poverty” did not resonate with the reviewing court.
Blech v. Blech, Case No. B268326 (2d Dist., Div. 3 Aug. 6, 2018) (Partially Published; Fee Discussion Unpublished).
In this one involving a trust dispute between one objecting sibling against his other three siblings, the appellate court rejected objector’s merits challenges on appeal, which also affirmed the fee awards of $237.000 in aggregate amount as to several fee awards in favor of the three siblings. Just goes to show you that probate litigation can be expensive and even more expensive for the loser.
Powell v. Tagami, Case Nos. D072566/D073083 (4th Dist., Div. 1 Aug. 6, 2018) (Unpublished).
Probate Code section 17211 authorizes an award of fees against a beneficiary who improperly challenges a trustee’s accounting without reasonable cause and in bad faith. One beneficiary was hit with a $14,115.39 fee award under this provision, a determination sustained on appeal. Among other things, the appellate court found that the work and costs at mediations were justifiable, the work by a personal attorney for trustee can be compensated in the probate court’s discretion, and the bad faith of the objector was corroborated by his personal attacks on his siblings and their attorneys. That goes to show you how ad hominem attacks are never good, bolstering any findings of willfulness or bad faith in many situations.
Defense Fee Recovery Reversed, But No Fees To Plaintiff Because She Did Not Seek Fees Below.
This one is somewhat of an object lesson because the 2/4 DCA not only reversed fee recovery against a disabled person dismissing an action for injunctive relief under the Disabled Person Act (DPA), but would have found that plaintiff was the prevailing party entitled to attorney’s fees herself had she sought them below (although she didn’t).
After plaintiff dismissed her DPA and Unruh Act action after a grocery store made modifications to a parking lot such that there was an accessible path for disabled persons, defendant moved for attorney’s fees against her and was awarded $28,008 (the full defense request) in Baskin v. Hughes Realty, Inc., Case No. B279645 (2d Dist., Div. 4 Aug. 6, 2018) (unpublished). The 2/4 DCA reversed the fee award against plaintiff/appellant.
Fee Clause Was Also Broad In Scope, But Nonsignatory Individuals Were Not Party To The Underlying Agreement.
Federal Appeals Court Ordered An End To The Litigation, With Class Counsel To Pay Objector’s Fees Adding Value To Class Settlement.
We like the near conclusion to the next federal circuit court case we post on: “Despite our remand [ordering a class objector’s fees paid from class counsel fee recovery], our message is clear: we expect this case to end ‘so that the tail can stop wagging the dog.’” (Quoting Estate of Enoch v. Tienor, 570 F.3d 821, 823 (7th Cir. 2009).) This sounds a lot like the quote from our blog Mission Statement: "All too often attorney fees become the tail that wags the dog in litigation." Deane Gardenhome Assn. v. Dentkas, 13 Cal.App.4th 1394, 1399 (1993). Who says federal and state jurists do not agree on issues? Not us, although it may depend on the issue.
What happened in In re Southwest Airlines Voucher Litig., No. 17-3541 (7th Cir. Aug. 2, 2018) was that an objector had some challenges to supplemental class counsel fees which were found meritorious and led to a rejiggling of the settlement in favor of the class in an airline drink voucher case. The objector wanted a modest $80,000 in fees, less than 5% of class counsel’s total award. Nothing in the settlement agreement addressed objectors’ fees.
The Seventh Circuit agreed the litigation should end, with objector’s fees paid by class counsel—reversing a district judge’s denial of fees to objector. Unless something in the settlement agreement said otherwise, settlement agreement should not be read to bar attorney’s fees for objectors adding genuine value to a class action settlement, all the more so based on equitable and common fund principles which would support the award of fees in this situation.
BLOG OBSERVATION—This does raise a gnarly question as to whether settlement agreements will address objector’s fee claims. It is our experience that this is not addressed and only addressed depending upon the result of approval hearings/subsequent appeals on a pragmatic, negotiated basis. Although we are aware of “blow” provisions for excessive opt-outs, maybe there can be a threshold “blow” provision which nullifies the settlement if claimed objector fees reach a certain level. We doubt this will happen, but this opinion does seem to indicate that counsel in class actions can negotiate what happens with respect to the “objector fee” possibilities if they wish to do so in class settlement agreements.

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