Source: https://www.calattorneysfees.com/2018/02/index.html
Timestamp: 2019-04-24 22:05:15+00:00

Document:
Three Questions Are Certified To The D.C. Court Of Appeals.
Now, the Ninth Circuit has certified similar questions to the D.C. Court of Appeals, but wanting guidance on what happens under D.C. law. That just happened in Diamond v. Hogan Lovells US LLP, Case Nos. 15-16326 et al. (9th Cir. Feb. 27, 2018) (published).
Defense Did Prevail Because Arbitration Was Dismissed For Failure To Prosecute After Plaintiffs Failed To Pay Arbitration Fees.
Plaintiffs’ challenges to the fee awards were unsuccessful.
Plaintiffs claimed that the trial court lacked jurisdiction to award fees, but the appellate court said that was not true because adjudging fees is a collateral matter which is properly considered to prevent abuse of the judicial process, citing Barry v. State Bar of California, 2 Cal.5th 318, 326=327 (2017) and Citizens for a Better Environment v. Steel Co., 230 F.3d 923, 926 (7th Cir. 2000).
Plaintiffs primarily argued that the other side did not prevail because the contractual dispute was ongoing and the defense had only achieved a mere procedural victory. The Court of Appeal disagreed. The state supreme court in DisputeSuite.com, LLC v. Scoreinc.com, 2 Cal.5th 968 (2017) [our Leading Case No. 21] did not rule out that some procedural victories could give rise to prevailing party status, and that was the case here: the arbitration had been dismissed for lack of prosecution such that the interim “wins” were indeed victories.
Procedural Requirements Did Guide This Result.
In Fichter v. Byrd, Case No. B270418 (2d Dist., Div. 4 Feb. 27, 2018) (unpublished), the appellate court, as a matter of law, decided to strike a $729.11 costs award to prevailing plaintiffs through a clerk’s entry on plaintiffs’ judgment. The reason? Costs were awarded before the time to file a motion to tax costs expired such that the clerk’s entry of them in the judgment was a nullity.
Plaintiff, Although Successful, Had Too Much Financial Incentive In Obtaining The Expensive Contract Job Or In Obtaining A Re-Bid Of The Project.
In West Coast Air Conditioning Co., Inc. v. Cal. Dept. of Corrections and Rehabilitation, Case No. D071611 (4th Dist., Div. 1 Feb. 22, 2018) (unpublished), plaintiff wanted to obtain the bid of a contract to update the Ironwood State Prison’s HVC system from CDCR, bidding about $98 million (versus contractor HP’s $88 million bid). Plaintiff challenged the contract award to HP by filing mandate seeking injunctive relief and also seeking promissory estoppel relief. The trial judge set aside the HP contract award based on math errors and gave serious thought to awarding the project to plaintiff, but found that she could not fashion this type of relief. However, the lower court did award plaintiff $250,000 in bid preparation costs under the promissory estoppel claim. Plaintiff then sought about $140,000 in § 1021.5 fees, a request denied by the trial judge.
Under Conservatorship of Whitley, 50 Cal.4th 1206, 1215 (2010) [our Leading Case No. 14], it was necessary for plaintiff to show that claimant’s legal victory transcended its personal interest from a financial stakes perspective. Plaintiff could not satisfy this element, given that is obviously had a big financial interest in a close to $100 million project for which it wanted an award of the contract for the work.
City Won Less Than 4% Of Pled Damages Against Guarantor And Only 22% Of Past Due Amounts Claimed At Trial, Garnering $100,152 In Fees Under Guaranty Fees Clause.
City of Dinuba v. Thusu, Case No. F073781 (5th Dist. Feb. 20, 2018) (unpublished) demonstrates how deferential the “prevailing party” status determination can be under Civil Code section 1717 even if a litigant only obtained much smaller percentages than what were claimed in a complaint or even at trial.
In this one, City of Dinuba won a $47,900 judgment against a guarantor of a lease agreement. City, in its Complaint, had sought $1,250,883.28 for both past rent/prospective rent, but then scaled back at trial and only sought $212,261 in past rent damages. The scaling back was a smart move in hindsight. The trial judge awarded $100,152 in contractual attorney’s fees after City won, triggering an appeal by guarantor.
The Fifth District affirmed this fee award.
The problem was the deferential standard of review for “prevailing party” status under section 1717, one which guarantor could not overcome on appeal. Despite the fact that the ultimate compensatory award was 4% of pled damages and only 22% of damages claimed at trial, the appellate court was loath to penalize a litigant overstating damages given the attorney’s dilemma to not “go for the moon” for his/her client, citing de la Cuesta v. Benham, 193 Cal.App.4th 1287, 1295, 1296 n. 5 (2011).
BLOG OBSERVATION—This unpublished opinion was authored by Justice Meehan on behalf of a 3-0 panel. Co-contributor Mike, who attended Bullard High School in Fresno, CA, believes that Ms. Meehan was a “star” debater on the Bullard High School Debate Team before he attended this Fresno high school. If he recalls, Fresno—at the time—had very excellent debate and speech teams throughout the city at various high schools.
Trial Judge, Rather Than Appellate Court, In Best Position To Determine Upon Full Record.
In Save LaFayette v. City of LaFayette, Case No. A149342 (1st Dist., Div. 4 Feb. 21, 2018) (published), the appellate court reversed a denial of appellants’ mandate petition requesting the City to submit their referendum to a public vote. In their mandate petition, appellants prayed for recovery of private attorney general statutory fees under CCP § 1021.5. Although acknowledging that an appellate court could do this under the right circumstances, the 1/4 DCA decided that it was best to have the trial court consider this on remand after developing a full record in which all the section 1021.5 were subject to examination.
Homeowner Was Assessed With About $76,000 In Fees Awardable In HOA’s Favor.
Plaintiff, who sued as a trustee of her deceased father’s trust and individually as successor-in-interest to a condominium property, lost an exclusive garage use dispute against the HOA through a summary judgment motion, which was affirmed on appeal. HOA then was awarded about $76,000 in attorney’s fees as the prevailing party under a CC&R fees clause, with the award entered against plaintiff in both capacities.
Plaintiff’s appeal of this dual capacity determination was affirmed in Michaelson v. V.P. Condominium Corp., Case No. D071215 (4th Dist., Div. 1 Feb. 21, 2018) (unpublished). The reason was that plaintiff did sue in two capacities, such that the fee award was not just limited to trust assets.
Dissent Argues That Section 1717 Does Have Precedence In This Situation, So That Fees To Prevailing Party Should Be Determined Upon A Remand.
In City of Dinuba v. Universal Biopharma Research Institute, Inc., Case No. F072497 (5th Dist. Feb. 20, 2018) (unpublished), City of Dinuba filed an unlawful detainer action against two defendants, although the Biopharma defendant was not named as the tenant under the commercial lease. A jury found that Biopharma was a not a party to the lease and not liable to City. Biopharma moved for attorney’s fees as prevailing party (no one disputed this) to the tune of about $197,000 under a fees clause, but one which was “permissive” in nature, to wit: “In the event of any proceedings brought by either party against the other under this lease, the prevailing party may be entitled to recover the fees of their attorneys in such action or proceedings for such amounts as may be adjudged reasonable attorney’s fees.” The trial court, interpreting this clause as discretionary, denied fee recovery, prompting an appeal by Biopharma.
The Fifth District affirmed, but in a 2-1 decision drawing a lengthy dissent by Justice Meehan.
The majority concluded that CCP § 1021 allows the parties to craft their own conditions for an award of attorney’s fees such that Civil Code section 1717 does not apply to discretionary attorney’s fees so as to lead to a different result. Put another way, the majority believed section 1717 applied only to mandatory fee clauses.
(Dissenting Slip Op. at 4.) She would have remanded the matter to allow the trial judge to fix a reasonable fee award in Biopharma’s favor.
Cross-Complaint Defense Work Involving Pre-Fees Clause Conduct Primarily Cut By 1/3 DCA.
In a long-standing commercial tenancy dispute producing an earlier appellate opinion reversing a SLAPP motion, a former landlord (plaintiff and cross-defendant) finally prevailed against tenant when the trial judge after a bench trial awarded landlord $85,000 in back rent plus prejudgment interest after tenant dismissed her cross-complaint. Then, the trial judge awarded total attorney’s fees of $113,096.33 out of a requested $118,096.33 pursuant to a contractual fees clause.
After affirming the merits of the judgment in a published portion of the opinion, the 1/3 DCA in Hong Sang Market, Inc. v. Peng, Case Nos. A140653/A141640 (1st Dist., Div. 3 Feb. 13, 2018) (fee discussion unpublished) trimmed the fee award to landlord downward to $49,812.83.
The reason for the “trim” primarily was that the work on the defense of tenant’s cross-complaint involved conduct which predated the operative fees clause.
BLOG OBSERVATION—In the published portion of the opinion, there is a good discussion about res judicata effect of a prior unlawful detainer judgment with respect to a subsequent long-cause action to collect back rent.
Multiplier Is Not Automatic, So Reversed To Consider Proper Factors On Appeal.
In Campos v. Kennedy, Case Nos. B266663/B268812 (2d Dist., Div. 2 Feb. 13, 2018) (unpublished), plaintiff won a $225,000 compensatory verdict under civil rights fee shifting provisions for sexual battery. Later, the trial court awarded plaintiff $ 2,924,830 in statutory fees, but augmented by a 2.0 multiplier to a reduced lodestar request.
The fee award got reversed and remanded on appeal.
The defense first tried to argue no fee award was in order because the compensatory award got offset by a good faith settlement offer by another defendant. The problem with this argument was one of timing, with the defense never making moves to challenge a substantively amended judgment which would take the amount to zero. The failure to challenge the amended judgment dispatched this argument.
With respect to the fee award, the appellate court had serious reservations about the 2.0 multiplier awarded by the trial judge. The main flaw was that the trial judge thought a multiplier was automatic and normally should be awarded, but this is not the law given the lower court must exercise certain factors under Ketchum v. Moses, 24 Cal.4th 1122, 1138 (2001) [our Leading Case No. 8] to reach such a favorable multiplier result. However, the appellate court did go on to address multiplier factors, suggesting maybe the trial judge seriously should reconsider his decision on granting a multiplier on remand.
$17,945 Fee Award Overturned Because No Bad Faith/Lack Of Reasonable Cause Even Though Case Was Found To Lack Ultimate Merit.
In Delgado v. County of Los Angeles, Case No. B271913 (2d Dist., Div. 5 Feb. 13, 2018) (unpublished), County defensed an ex-employee’s FEHA harassment/retaliation claims through a summary judgment motion, with the trial judge later awarding County fees under Code of Civil Procedure section 1038, which allows trial courts to award public entities the attorney’s fees they incur for “unmeritorious and frivolous” lawsuits if the action was not brought in good faith and with reasonable cause. The trial judge in this case awarded $17,945 in fees to County, 25% of its request, based on the premise that the retaliation claim was brought in bad faith.
The appellate court affirmed the summary judgment grant, but reversed the fee award. Although agreeing that the retaliation claim lacked ultimate merit, the record showed not all of it was untimely in nature and there was proof of record which could support the perspective that plaintiff had some evidentiary basis to bring her claim.
Family Law Judge Basically Found Both Parties Could Bear Expenses And Ex-Wife Overlitigated The Case.
Marriage of Vu and Fearn, Case No. G054234 (4th Dist., Div. 3 Feb. 8, 2018) (unpublished) was a situation where the family law judge awarded $15,000 in Family Code section 271 sanctions against both former spouses but also denied ex-wife’s request for $50,000 in “needs-based” fees under Family Code sections 2030/2032. Ex-wife was confounded, choosing to appeal—but to no avail on the “needs-based” issue. The record below showed no abuse of discretion given the financial situation of each party (including gifts, use of credit card by a friend, and fee rent by parents) and given ex-wife’s “over litigation” of the case through multiple attorneys.
Justice Fybel authored the 3-0 panel decision.
Class Attorneys Seeking $37.95 In Fees, 33% Of The $115 Million Settlement Fund.
U.S. District Judge Lucy H. Koh of the Northern District of California recently issued an order in In re Anthem, Inc. Data Breach Litig., Case No. 15-MD-02617-LHK (N.D. Cal. Feb 2, 2018, Doc. 972) by which she appointed a special master to review the class attorney fee submissions in the case. In this data breach privacy class action against Anthem, the parties reached a settlement with a $115 million settlement fund. With respect to fee requests, 331 billers from 53 law firms requested a total of $37.95 million in fees, 33% of the settlement fund. District Judge Koh, in issuing the special master order, expressed some concerns that there were unnecessarily duplicative or inefficient work based on so many billers and that close scrutiny was required given only 1.68% of the class submitted claims, although she did not argue that a bad result was obtained (in light of the act that this is the largest settlement reached in a U.S. data breach class action so far).
Here is a copy of her order for readers who want more detail.
Trial Judge Did Not Err In Assessing Settlement Offers With Respect To Overall Request.
In Villa Riviera Condominium Assn. v. Berg, Case No. B269191 (2d Dist., Di. 3 Feb. 8, 2018) (unpublished), HOA did win a CC&R assessment battle against homeowner on a summary judgment motion, then seeking a lodestar amount of $91,936 in attorney’s fees, plus “fees on fees.” Homeowner argued that more than half the fees were incurred to unsuccessfully pursue claims against homeowner’s former wife. Also, opposing party indicated that HOA offered to settle the matter for $40,000 earlier in the case in stark contrast to the $91,936 in fees now requested, drawing objections that these settlement communications were privileged information. The trial judge overruled the objections and entered a fee order of $31,375 in favor of HOA.
HOA was not happy and appealed, asking for more. HOA did not get any more.
The appellate court found that the settlement offer was probative, given it was offered to show that the fees incurred by HOA were disproportionate to the perceived value of HOA’s claim. Beyond that, the reviewing court relied on Meister v. Regents of University of California, 67 Cal.App.4th 437, 449-450 (1998) to recognize that a settlement offer may be used to assess the reasonableness of a later fee request. As far as to the amount of fees awarded, the lower court did not abuse its discretion in reducing fees and did not have to articulate its findings in a detailed ruling.
Trial Judge Found Fees, Although Labeled “Obscene,” Were Normal For Los Angeles Cases Of This Sort.
As reported by Law360, a California state judge recently ruled that Latham & Watkins tentatively was entitled to an award of attorney’s fees to the tune of about $1.6 million as damages in a malicious prosecution case against litigants Messrs. Parrish and Fitzgibbons, in a case which produced quite a bit of appellate activity (including a published California Supreme Court decision). We assume the parties stipulated to the trial judge deciding the issue. Although the losing side characterized the request as “obscene,” the trial judge found it was not that uncommon for a hard-fought Los Angeles case with high-powered counsel.
Client’s Informed Consent On Arbitration Clause Was Determinative.
In Smith v. Lindemann, No. 16-3357 (3d Cir. 2017) (non-precedential), an individual sued her former divorce attorney for malpractice even though the services agreements contained a standard arbitration clause saying that the parties “agree to submit such disagreements in binding arbitration.” The lower court enforced the clause, but the client appealed to the Third Circuit claiming that the agreement should be invalidated under New Jersey law and the New Jersey Rules of Professional Conduct.
The Third Circuit did not disturb the result. It concluded that the Federal Arbitration Act (FAA) “federalizes” arbitration law and generally controls unless there is a strong state law argument such as fraud, duress, or unconscionability. The problem is that ex-client could not identify any New Jersey law invalidating arbitration for malpractice claims and had informed consent on the arbitration provision so as to negate any issue that state rules of professional conduct were contravened.
BLOG OBSERVATION—One important warning point on this issue is that an attorney must check with their malpractice insurer to see if arbitration clauses are proper. Some insurers do not allow such clauses to retainer agreements—so check ahead of time! We thank ABA’s Litigation News, in a February 5, 2018 post by Benjamin E. Long, for providing a discussion of this case and its implications.
Trial Judge Failed To Honor Voluntary Dismissal By Plaintiffs In Awarding Fees To Defense, While Lower Court Failed To Utilize Lodestar Methodology In Awarding Reduced Fees To Plaintiffs Under Settlement Agreement.
Duncan v. Nathan, Case No. A147468 (1st Dist., Div. 5 Feb. 5, 2018) (unpublished) involved a landlord-tenant dispute involving claims for negligence, quiet enjoyment breach, San Francisco rent ordinance violations, constructive eviction, and intentional infliction of emotion distress by tenants against landlord/affiliates. On the eve of trial, plaintiffs settled with the real landlord for $12,500 each, with a reservation of the fees issue for the trial judge to decide later. Against defendant landlord manager, the jury awarded $2,153.03 against manager on the negligent claim, but found for her on the remaining claims which survived a nonsuit motion (with the jury finding for the defense on the statutory ordinance eviction claim asserted by plaintiffs). Subsequently, the lower court awarded the defense the entirety of her requested fees based on a fee-shifting provision in the San Francisco ordinance, and awarded plaintiffs $3,750 in fees each (much reduced from the almost $142,000 lodestar request plus a 1.35 positive multiplier) based on the settlement stipulation fee reservation clause.
Plaintiffs appealed both fee awards, prevailing on both challenges on appeal.
With respect to the fee award in favor of the defense, the appellate court determined that the trial judge erred in not granting plaintiffs’ request for a voluntary dismissal of the San Francisco ordinance eviction claim, although it did remand for a look at whether there was another ground for fee entitlement.
On plaintiffs’ appeal of the reduced fee awards (about 30% of the $12,000 settlement), the appellate court found that the lower court had failed to follow the lodestar methodology in determining the amounts of fees to be awarded, instead focusing on the financial condition of the nominal landlord (meager) and plaintiffs (who appeared to be well heeled). Given the failure to follow the correct methodology, the matter was reversed to use the correct test, factoring in the results obtained against landlord, any unnecessary or excessive litigation, and time spent litigating claims against the landlord manager.
BLOG OBSERVATION—The appellate court did not discuss whether financial condition was a relevant consideration under Civil Code section 1717. There is a split of thinking on this issue, as we discussed in our April 13, 2016 post of a Sixth District unpublished decision, McNeil v. Symmetricom, Inc.
Gotta Look At The Big Picture, Appellate Court Reminds Us On Prevailing Party Status.
Marina Pacifica Homeowners Assn. v. Southern California Financial Corp., Case No. B276719 (2d Dist., Div. 8 Feb. 5, 2018) (published) was hard fought litigation over the validity and timing of an assignment/transfer fee. In the end, the trial court—after bifurcating the trial into several phases—decided the transfer fee could not be collected after December 31, 2008, the fees imposed before that date should have been calculated on 4% of fair market value rather than 10%, and the escalation in the fee for a certain period of time did not fail for lack of consideration.
So, what next happened? I assume you guessed it—both sides filed dueling motions for attorney’s fees and costs as the prevailing party. The lower court determined no one prevailed, denying all of the requests. This prompted appeals by both sides.
Nothing changed, in a published opinion issued by the 2/8 DCA.
The real conclusion in this case was one of pragmatism. Mixed results occurred for both sides in the litigation below, with respect to both fees and costs. Plaintiff sought to rid the homeowners of the burden of an assignment fee in its entirety, but this did not occur. However, defendant did not gain the 10% FMV position either. (Plaintiff sought to pay nothing, but defendant established a right to recovery $39 million rather than the $97 million it sought to charge.) Not necessarily a tie, but no clear winner.
From a substantive perspective, the 2/8 DCA panel rejected the notion that settlement communications constituted “pleadings, trial briefs, opening statements, and similar sources” which could be used to compare the relief awarded on the contract with the parties’ demands/litigation objectives. Obviously, the settlement “privilege” in Evidence Code section 1152 figured heavily in this determination.
Second Circuit Court Of Appeals Decides Issue In Civil Rights Context.
Apportionment And Excessive Fee Challenges Did Not Prevail On Appeal.
In Thompson v. T.D. Service Co., Case No. A148281 (1st Dist., Div. 5 Jan. 31, 2018) (unpublished), a trustee under a deed of trust made a mistaken full credit bid at an initial nonjudicial foreclosure sale even though the mistake was corrected in a second trustee’s sale. Guarantors for borrower and lender reached a settlement, and lender assigned its claims against trustee relating to the mistaken sale to guarantors. Guarantors lost in litigation having both a complaint and cross-complaint, such that the trial judge awarded trustee attorney’s fees of $400,002.50 based on a fee clause in one of the assigned operative documents.
Guarantors appealed, but could not hurdle discretionary apportionment and reasonableness adjudications with respect to requested fees (with just about all of the claimed fees awarded to two different sets of firms after four years of litigation).
The problem on guarantors’ allocation argument was that all activities related to the “mistaken” first trustee sale in the operative proceedings such that the trial judge had to threshold determine whether issues were so intertwined that allocation would be impossible. The lower court decided the issues were interrelated, such that no abuse of discretion was shown.
The main challenge on reasonableness was that a larger firm associated into the case one month before a scheduled trial date and billed as many hours in one year as the prior firm did in five years. That contention did not resonate given the belief that new trial counsel associated in a later stage of the game would be expected to bill a lot of hours to get up to speed. Beyond that, guarantors failed to identify specific billing entries that they claimed to be unreasonable in nature—a particularity standard often enforced by reviewing courts, as here.
Second District Departs Company With Contrary Result In San Diegans for Open Government.
San Diegans for Open Government v. San Diego, 247 Cal.App.4th 1306, 1317 (2016) [reviewed in our June 9, 2016 post] held that a party filing a CCP § 128.5 sanctions motion does not need to comply with the safe harbor waiting period described in section 128.7(c)(1).
We can now report that the Second District, Division 7, has expressly departed company with this view in Nutrition Distribution, LLC v. Southern SARMs, Case No. B280983 (2d Dist., Div. 7 Jan. 31, 2018) (published). That led the appellate court to affirm a trial judge’s denial of sanctions based on moving party’s failure to satisfy section 128.7’s “safe harbor” protection where the motion for sanctions was based on a purportedly frivolous complaint, written motion or court filing that could be withdrawn or on some other alleged action or tactic that could be appropriately corrected.
Trial Judge Allocated Compensable Fees Lower From The $128,187.50 Attorney’s Fee Request.
In Rufini v. CitiMortgage, Inc., Case Nos. A148049/A149410 (1st Dist., Div. 3 Jan. 30, 2018) (unpublished), borrower lost a loan dispute against lender. Lender then sought $128,187.0 in attorney’s fees under a deed of trust fees clause, with the trial judge eventually awarding $60,000 after finding some causes of action involved the trust deed. This conclusion was sustained on appeal. The breach of implied covenant claims regarding acceleration of the trust deed did arise “on the contract” under Civil Code section 1717 so as to support fee entitlement. The trial judge did apportion, such that there was no abuse of discretion as to the amounts of fees awarded.
Guardian Ad Litem Is Not Technically A Party To An Action.
In Albrecht v. Pearson, Case No. B281720 (2d Dist., Div. 1 Jan. 30, 2018) (unpublished), a person appointed as an elder’s guardian ad litem lost a restraining order and was ordered to pay attorney’s fees and costs under Welfare and Institutions Code section 15657.03(t). However, this order was reversed as a matter of law because a guardian ad litem is not a “party” to the action such that the fee-shifting provision was not triggered.
CCP § 2033.420(b)(1) Exception Prevented Sanctions Being Assessed.
This next decision, Magco Drilling, Inc. v. Natoma Family Housing, L.P., Case No. A151586 (1st Dist., Div. 1 Jan. 29, 2018) (unpublished), is a case reining in costs-of-proof sanctions under CCP § 2033.420 in a situation where there was a partial denial and the plaintiff tailored objections/partial denials in the correct manner.
In this one, the defense sent out RFAs in a mechanic’s lien foreclosure dispute, garnering responses that plaintiff lacked sufficient information to either admit or deny the RFAs. No challenges were made to the RFA responses, although the defense later obtained summary judgment against plaintiff and then moved for costs-of-proof sanctions to the tune of $55,245 in attorney’s fees in connection with efforts to prove that plaintiff’s RFA responses were not candid.
The trial judge denied the motion for costs-of-proof sanctions, which was affirmed on appeal.
The appeal focused on a costs-of-proof sanctions exception where “[a]n objection to the request was sustained or a response to it was waived” under CCP § 2033.420(b)(1). In this situation, plaintiff never moved for a further response even though the defense objection was followed by a partial denial. So, that left the lower court with discretion to decide that a motion to compel a further response was necessary in light of the partial denials by the defense.
BLOG OBSERVATION—The reasoning in this case may provide the defense with a basis to avoid costs-of-proof sanctions, as long as the RFA responses are tailored well when it comes to denying the RFA requests.
Public Prompt Payment Statute Allows For Recovery Of Fees By Prevailing Party.
Public Contract Code section 7107 allows the prevailing party to recover attorney’s fees and costs in a suit alleging that a public entity or contractor wrongfully withheld retention payments required to be distributed in a timely manner. This fee statute is bilateral in nature.
In Waters Contracting, Inc. v. Point Arena Joint Union High School Dist., Case Nos. A138573/A139717 (1st Dist., Div. 3 Jan. 29, 2018) (unpublished), contractor sued school district for damages, among other things including a section 7107 cause of action. School District was granted summary adjudication based on the argument that the underlying construction contract was void based on the parties’ failure to comply with competitive bidding requirements. Later, the trial court awarded school district $113,216 in attorney’s fees under section 7107, prompting an appeal by contractor.
Contractor lost both its merits and fee award challenges.
First, contractor argued that school district had to apportion between the fee and non-fee causes of action, but the problem was that this general rule ignored the applicable exception that the section 7107 and breach of contract claims were interrelated. Next, contractor argued that school district was estopped from obtaining a fee award because it was an active participant in the “illegal” conduct, but estoppel is not a defense to a fees award under the statute. (East West Bank v. Rio School Dist. (2015) 235 Cal.App.4th 742, 752.) Finally, with regard to the contention that the fee award was excessive, the trial judge did reduce for some post-summary adjudication work and the school district did face penalties beyond the withheld retention amount such that it was not unfair to have a fee award which was close in range to the amount of the withheld funds.

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