Source: http://www.calattorneysfees.com/2016/11/index.html
Timestamp: 2017-03-30 22:41:11
Document Index: 532137221

Matched Legal Cases: ['§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 386', '§ 425', '§ 128']

CALIFORNIA ATTORNEY'S FEES : November 2016
2008-2009-2010-2011-2012-2013-2014-2015 Marc Alexander & William M. Hensley « October 2016 |
In The News . . . . Delaware Supreme Court Decides That Key Man Employment Advancement Of Defense Costs Provision Is Not Impaired By Company’s Fraud In Inducement Claim
Any Other Result Would Retard Individuals Going Into “Corporate Service.” The Delaware Supreme Court, in Trascent Mgt. Consulting, LLC v. Bouri, Case No. 126, 2016 (Del. Supreme Ct. Nov. 28, 2016), was confronted with an LLC’s claim that it did not have to advance costs of defense to a “key man” employee in a contractual breach suit brought by the LLC based on LLC’s plenary claim that key man had fraudulently induced his employment through upfront misrepresentations. The high court rejected this argument because corporate advancement of defense costs is to be encouraged under Delaware law until a court makes a final, nonappealable determination that indemnification of the key man was not required. It found that entertainment of the plenary “fraud in the inducement” defense would subvert the advancement procedures and reduce the ability to attract capable individuals into corporate service.
Posted at 03:50 PM in Cases: Indemnity, News | Permalink
Two Cities Go Against Each Other On Costs Recovery. City of Selma v. City of Kingsburg, Case No. F072632 (5th Dist. Nov. 29, 2016) (unpublished) cast two Central Valley municipalities against each other in a situation where we would guess cities are fiscally making moves to get whatever moneys they can. Kingsburg, which dubs itself as “Little Sweden,” filed costs memoranda in two CEQA cases for the costs of preparing the record in those matters against City of Selma. Selma’s motion to tax/strike costs was denied, prompting an appeal. Selma did not gain any further traction on appeal. Kingsburg’s costs memos were timely filed, because the minute order directed preparation of a more formal judgment having the effect of extending the time to file costs memoranda. Selma did not satisfy its burden to justify taxing/striking costs at the trial level, because it failed to indicate how many pages were improperly included by Kingsburg in the CEQA prepared record for purposes of proving its challenge on this basis. Affirmed. Posted at 03:37 PM in Cases: Costs | Permalink
Lack Of Fee Entitlement Was Clear. In Davis v. The J. Hartman Co., Case No. G051648 (4th Dist., Div. 3 Nov. 28, 2016) (unpublished), a fees clause in a real estate independent contractor consulting agreement provided that a judge or arbitrator in an arbitration had to award reasonable attorney’s fees to the prevailing party. However, the matter was not arbitrated, but was heard by a court-appointed referee. After the referee adjudicated the matter, one party moved to recoup fees. Both the trial and appellate courts said “no go,” rejecting the fee request. The fees clause was clear—it only applied to an arbitration, and that did not happen. The appellate court also rejected the argument that a prayer for fees in a pleading is the equivalent of a judicial admission, because such a prayer does not establish whether there was substantive fee entitlement (which was missing in this one). Justice Thompson authored the 3-0 panel decision.
Professional Responsibility Article Covers Basics Of Proper Retainer Letter And Attorney Billing Practices. Under the heading “Ensure That Your Clients Pay Your Fees”, attorney Lorraine M. Walsh of Walnut Creek has written an ethics/professional responsibility article that appears in the November 4, 2016 on-line edition of the Los Angeles Daily Journal. Ms. Walsh covers basic rules for fee contracts in California, rules for bills, common improper billing practices to avoid, and unenforceability of a dispute waiver provision. Plus, California State Bar members can then click to an MCLE test that they can take for MCLE credit.
Posted at 10:34 AM in Cases: Ethics, CONTINUING LEGAL EDUCATION | Permalink
Oh, Brother! -- Case Illustrates Equitable Principles Are Front And Center In Partition Disputes. Partition disputes are equitable, with a broad fee-shifting statute in the form of Code of Civil Procedure section 874.040 allowing a trial court broad discretion to equitably apportion fees and costs among the parties to the partition action. In Cummings v. Cummings, Case Nos. H040710 and H041308 (6th Dist. Nov. 23, 2016) (unpublished) (separate decisions), four siblings were involved in a family trust partition action involving a Los Altos Hills property. One brother out of the four siblings opposed a partition for sale of the property and apparently was not amenable to seek viable options to avoid conflict. Eventually, brother lost in the partition actions, prompting the other siblings to seek recoupment of fees and costs after the trial court ordered a partition by sale. Case No. H040710 involved the trial judge’s award of $115,000 in fees and costs to the prevailing siblings, almost the entire request with some minor cost disallowances. The Sixth District affirmed, determining that brother was unsuccessful in opposing the partition by sale and refused to arrive at a solution short of an acrimonious conflict. (Lin v. Jeng, 203 Cal.App.4th 1008, 1023-1025 (2012) [discussed in our Feb. 24, 2012 post; court’s discretion to apportion in partition actions is equitable, not constrained or tied to the number of parties necessarily involved in such a dispute].) Brother did not fare any better in Case No. H041308, where his sisters obtained a further fee award of $51,323.56 for other work after the partition by sale order occurred.
Posted at 06:13 PM in Cases: Equity, Cases: Special Fee Shifting Statutes | Permalink
Also, Costs Improperly Excluded From Fee Calculus As Permitted Under § 1983. The Third District in Clapp v. Terry, Case No. C076562 (3d Dist. Nov. 23, 2016) (unpublished) is an important primer on the proper methodology to be used when awarding lodestar fees, fees on fees, and costs in civil right cases to prevailing plaintiffs under 42 U.S.C. § 1983. There, plaintiff won $12,533.43 compensatory and $500 punitive damages in total against two defendants in an excessive force case, although losing related claims and obtaining no verdict against the County, its sheriff, or a deputy. Plaintiff then made two applications for fees and costs pursuant to 42 U.S.C. § 1983. On the first one where $440,473 in fees was sought, the trial judge made some lodestar reductions for efficiency and deduction of hours spent against defendants for which no recovery was had, and then made a .4 further reduction for limited success in the case, bringing the fee award down to $167,116.32. The lower court also failed to award some costs which were included in the fee request. Plaintiff appealed those determinations. The second application, for “fees on fees,” sought $72,506.50 in fees and $2,126.70 in costs. The lower court awarded them all, determining that the limited success consideration only went to the merits and should not be factored into the “fees on fees” calculation. This prompted an appeal by the two losing defendants. The Third District sorted through the lower court’s methodology, reversing and remanding the various determinations. The main infirmity with the fee award on the first application was the lower court’s utilization of an impermissible “double deduction” by initially reducing for unsuccessful hours and then again doing a further .4 reduction for the same limited success factor. The trial judge also failed to award costs/expenses included in the fee requests, which are compensable as fees under § 1983 (with California’s normal routine costs analysis being irrelevant). The flaw in the “fees on fees” calculation was the lower court’s failure to consider degree of success in awarding the fees sought under the second application. Remanded for a “re-do.”
Family Law: $210,000 Section 271 Sanctions Award Upheld On Appeal
Inadequate Appellate Record Required Affirmance – “A Little Learning Is A Dangerous Thing”.1 Marriage of Hettinga & Loumena, Case No. H041589 (6th Dist. Nov. 22, 2016) (unpublished) shows the dangers of undertaking an appeal without knowing the nuances of appellate practice. In this one, wife—who previously had been sanctioned $100,000 and declared a vexatious litigant—got sanctioned against for $210,000 under Family Code section 271. Although she appealed, the award was affirmed because an inadequate record was presented before the reviewing court: incomplete sanction motion paperwork was presented and no record citations to hearing transcripts were included. Ouch! ______________________________ 1 “A little learning is a dangerous thing; Drink deep, or taste not the Pierian spring.” -- Alexander Pope, Part II of An Essay on Criticism. Often misquoted as, “a little knowledge is a dangerous thing.”
Restrictions On Its Application Necessitated Reversal In This Case. As far as challenges to fee awards, we would have to say that challenges to awards under the “tort of another” doctrine have higher chances of reversal, based on the restrictions applicable to use of this doctrine. Los Angeles Community College Dist. v. Roosevelt Lofts, LLC, Case No. B266057 (2d Dist., Div. 4 Nov. 22, 2016) (unpublished) is a nice illustration of this general observation. There, appellant Roosevelt Lofts was found to have engaged in fraud in acquiring an easement from the District. Subsequently, the trial judge awarded $294,271 in attorney’s fees to District and against Roosevelt Lofts under the “tort of another” doctrine for work associated with a bankruptcy proceeding, the underlying action (especially an appeal), and a quiet title against another party basically affiliated with Roosevelt Lofts. The 2/4 DCA reversed the fee award as a matter of law. The “tort of another” doctrine is subject to these important restrictions: (1) no recovery is permitted for fees incurred in litigation directed against the tortfeasor, even though other parties are incidentally involved; (2) no recovery is permitted for fees incurred in litigation involving a third party sharing the same interests as the tortfeasor; and (3) fees incurred in third party litigation may be recovered from a defendant only when that litigation is “the natural and probable consequence” of the defendant’s tortious conduct such as the third party’s independent conduct (a proximate causation requirement). Application of these restrictions required reversal of the entire fee award, because (1) the pre-decision portion of the bankruptcy proceeding did not constitute an action against the affiliated third party but only insolvency battling with Roosevelt Lofts; (2) the first appeal work did not qualify because the affiliated third party was representing Roosevelt Loft’s interest in that appeal; and (3) post-appeal work pertained to the affiliated third party’s independent conduct for which Roosevelt Lofts could not bear “tort of another” fee exposure.
Equity Prevailed! Greyhound Bus sign, S. Carolina. Oct. 29, 2007. Carol M. Highsmith, photographer. Library of Congress. In Gee v. Greyhound Lines, Inc., Case No. C077077 (3d Dist. Nov. 21, 2016) (published), plaintiff had her case dismissed after she failed to pay venue transfer fees based on her attorney’s error. The trial court granted relief to plaintiff under section 473. The Third District affirmed. “Section 473, subdivision (b), can provide relief when an action is dismissed due to a plaintiff’s counsel’s mistake or inexcusable neglect related to the failure to pay change of venue fees.” BLOG HAT TIP—The winning attorney was Stuart R. Chandler, aka “Mr. Fresno”. Co-contributor Mike knows Mr. Chandler well, he graduated from the same high school class (Bullard High, Fresno) and he/Mike studied for the bar together in Fresno during the summer of 1979. Congratulations, Stuart!
Posted at 11:38 AM in Cases: Equity | Permalink
Stricter Review Is Made Of FEHA Awards In Favor Of Prevailing Defendants. “Keysville, Virginia. Randolph Henry High School. Playing baseball during gym period. Girl replaced man teacher who was drafted in the army.” Philip Bonn, photographer. June 1943. Library of Congress. Young v. Burlingame School Dist., Case No. A147012 (1st Dist., Div. 2 Nov. 15, 2016) (unpublished) illustrates that FEHA fee/costs awards to prevailing defendants are not the norm and will be subject to intensified appellate review based on Williams v. Chino Valley Independent Fire Dist., 61 Cal.4th 97, 115 (2015). In Young, teacher was cleared of sexual misconduct charges, but found to have engaged in “unprofessional conduct,” in an administrative proceeding resulting in her reinstatement. She then sued school district under FEHA, but lost on summary judgment. School district then took the offensive and moved to recover fees, with the lower court granting $16,175.50 in fees and costs. The fees/costs award was reversed on appeal. A higher standard did govern the fee/costs determination under FEHA against a non-prevailing plaintiff, with the record showing she did have sufficient proof of animus (with respect to pretextual conduct, often proven through circumstantial evidence) to prosecute her suit. Reversed.
$72,660 Fee Award Against Husband Reversed On Appeal. In Saldana v. Noh, Case No. A143491 (1st Dist., Div. 2 Nov. 14, 2016) (unpublished), wife moved to recover fees against husband under Family Code section 6344, which allows a prevailing party in a Domestic Violence Prevention Act (DVPA) proceeding to recoup fees. However, the lower court awarded $72,660 to wife instead under Family Code sections 2030/2032 “needs based” statutes. The fee award against husband was reversed on appeal. Under the circumstances, the fee award was an abuse of discretion. Although financial resources have to be considered under both statutes, the DVPA statute requires a prevailing party determination and an award of fees in a DVPA proceeding—different elements than those considered in 2030/2032 needs-based awards. These differences required a reversal and remand to gauge the situation under DVPA. Posted at 05:06 PM in Cases: Family Law | Permalink
Scope of Interpleader Proceeding Resolved In This Case. Southern California Gas Co. v. Flannery, Case No. B268298 (2d Dist., Div. 5 Nov. 14, 2016) (published) involved an interpleader action filed in the wake of a settlement agreement for injuries sustained in the 2008 Sesnon wildfire, with personal injury claimants, palimony litigants, and attorneys all vying over who got what from the settlement funds. Gas Co. interpled the settlement funds, with the lower court granting it a discharge and awarding it attorney’s fees of $169,983.13 under CCP § 386.6(a). Also, it determined that the interpleader action was a proper vehicle to resolve an attorney’s lien vis-à-vis a personal injury client in the tort case producing the settlement. The appellate court sustained both of these determinations on appeal. It first determined that section 386.6(a) included Gas Co.’s post-discharge efforts to sustain the discharge order, which included post-trial work and appellate work along the way. Then, it found that the interpleader action did qualify as a separate, independent proceeding—apart from the prior personal injury lawsuit—allowing the lower court to adjudge an attorney’s lien as against a contesting personal injury claimant/client.
Article Covers A Gamut Of Class Action Fee Issues. In the October/November 2016 issue of Practical Law, there is a nice article summarizing a gamut of issues relating to class action fee awards. Here are the major points made in this article: • Appealability – Decisions on fee awards may be appealable, separate and apart from the underlying disposition or settlement of the class action. • Standing to Appeal – A class member generally has standing to appeal, but must independently satisfy Article III standing requirements. In a common fund settlement, class members generally have standing to appeal. Class members might have standing to appeal a fee award if class counsel obtained an excessive fee in exchange for accepting an inadequate class settlement (with the fee award and class recovery considered to be a “constructive” common fund in these situations). However, if fees are paid by the defendant independently, class members usually lack standing unless there is evidence of collusion. A class member not participating in the settlement process (not filing a claim) might not have standing to appeal, although an objector can appeal a denial of his own fee claim. Usually, defendants do not have standing to appeal unless they have to pay fees individually or unless awarded under a statute allowing fees absent an agreement between the parties. Class counsel generally has standing to appeal the amount (or lack) of a fee award. • Standard of Review—The usual standard of review is for abuse of discretion, including the methodology of the fee award (district judge’s use of the lodestar or a percentage of fund recovery method).
In The News . . . . VW Class Counsel In Emissions Case Seek $175 Million In Fees
Requested Amount Is 1.7% Of $10 Billion Settlement Fund. Recently, lead counsel for the class in the Volkswagen emissions case, an MDL case assigned to U.S. District Judge Charles Breyer in the N.D. Cal., announced that class counsel will be requesting $175 million in attorney’s fees from the district court, which is about 1.7% of the $10 billion class settlement fund, according to a Law360 report.
Fees Award By Arbitrator Affirmed On Appeal. In Callahan, Thompson, Sherman & Caudill, LLP v. PathwayData, Inc., Case No. G051511 (4th Dist., Div. 3 Nov. 10, 2016) (unpublished), arbitrator awarded fees under a broad fees clause, after attorneys prevailed, under a Legal Services Agreement stating that recovery of fees and costs could be had for “[t]he prevailing party in any action or proceeding to enforce any provision of this agreement.” The trial judge confirmed this award, only to be faced with a challenge on appeal. The fee award was sustained. The guiding principle was that where a contract both compels arbitration and awards fees to the prevailing in litigation arising out of a contract, the contractual fees provision applies to an arbitration. (Harris v. Sandro, 96 Cal.App.4th 1310, 1314 (2002).) The arbitrator correctly awarded fees, Justice Moore decided in a 3-0 decision.
Posted at 04:58 PM in Cases: Arbitration | Permalink
SLAPP Motion Was Not Frivolous, And Appeal Court Did Not Find Prior Appeal Frivolous In Nature. Defendant filed a SLAPP motion which was denied, appealing without success. Then, upon remand, the lower court awarded attorney’s fees on appeal in favor of plaintiff and against defendant (and possibly its attorneys) to the tune of $26,320 out of a requested $36,155. (This was grounded on the SLAPP fee-shifting statute, CCP § 425.16(c), allowing fees against an unsuccessful moving defendant if the motion was sanctionable under CCP § 128.5.) The defense did well to appeal in Tamman v. Nixon Peabody LLP, Case No. B267439 (2d Dist., Div. 2 Nov. 8, 2016) (unpublished). Reversal of the SLAPP fee order was required because the defense motion was neither frivolous nor completely devoid of merit. Also, the lower court failed to issue a written factual recital of the sanctionable conduct, with the reference to the prior appellate decision not having any value given that the reviewing panel did not find the prior motion or appeal frivolous. Fee award reversed as a matter of law.
Dealer Did A Smart Thing Here In Apportioning Fees Between Claims. Tun v. Wells Fargo Dealer Services, Case No. D070447 (4th Dist., Div. 1 Nov. 7, 2016) (published) is a nice illustration of a smart move that a prevailing party undertook under a fee-shifting statute in its fee petition papers. That move was to allocate fees between claims so that both the trial and appellate courts could make an easy allocation of fees to the winning party. Dealer prevailed against a car purchaser bringing a multi-count complaint alleging that car dealer did not reveal the extent of prior collision damage to a BMW. Library of Congress. February, 1942.1 Jury found for dealer, who then sought to recoup $245,600 in fees. However, recognizing that different claims were involved, dealer smartly allocated fees between contractual/Automobile Sales Financing Act (ASFA) claims and other claims. Dealer allocated 30% to the ASFA claims. In granting fees, the lower court found that dealer did not prevail for fee-shifting purposes on the other claims but did prevail under ASFA, awarding the fully-apportioned 30%, namely, $80,359. The appellate court affirmed. Plaintiff challenged that no allocation was made, but the reviewing court observed that dealer had done it in the trial court and was awarded the apportioned 30%--an amount found fully justified by the appellate court too in affirming the lower court’s fee order in favor of dealer. ________________ 1”Conservation. Scrap iron and steel. As part of their campaign to collect goods for the Victory Campaign, Boy Scouts of Troop 121 of the United Church of Van Nest, Bronx, New York are shown pushing in one of their collection items, an old Ford jalopy, into the Westchester Auto Wrecking Company yard at 1400 Blondell Avenue in the Bronx. Shown in the photo pushing the car are Scouts of Troop #121 while Edward G. Bellmaire, Scoutmaster, David Lanoff of the wrecking company, and Frank O. March, Vice Chairman of the Bronx Salvage Campaign Committee look on.” Edward Gruber, photographer. Office of War Information.
Case Was On Remand From California Supreme Court. On June 9, 2016, we posted on Nickerson v. Stonebridge Life Ins. Co., 63 Cal.4th 363, 368, 371, 377 (2016), which decided that Brandt fees should be added to compensatory damages for purposes of determining the compensatory damages ratio for purposes of adjudging the reasonableness of a punitive damages award. The Second District, on remand in Nickerson v. Stonebridge Life Ins. Co., Case No. B234271 (2d Dist., Div. 3 Nov. 3, 2016) (published), considered the impact of the California Supreme Court’s decision on the punitive damages award. What happened below is that plaintiff was awarded $35,000 in compensatory damages, $12,500 in Brandt fees, and $19 million in punitive damages. The trial court found the punitive damages excessive, fashioning a remittitur based on a 10:1 punitive/compensatory damages ratio such that the punitive damages award should be $350,000 instead. However, the Brandt fees were not included in the calculus, even though the state supreme court subsequently decided they should have been. On remand, the 2/3 DCA panel decided the 10:1 ratio comported with due process such that the judgment was modified to allow for $475,000 in punitive damages ($35,000 compensatory award plus $12,500 Brandt fees equals $47,500, multiplied by 10 to reach $475,000).
$26,630 Fee Award Reversed On Appeal. A fertile ground for an appeal in the fee area is that the pertinent attorney’s fees clause simply does not allow for a fee recovery based on its wording where parol evidence is not introduced (and it rarely is in fee disputes). Kiwata v. Kiwata, Case Nos. A147002/A147459 (1st Dist., Div. 1 Nov. 1, 2016) (unpublished) illustrates this point in the trust/probate area. There, the lower court ordered a successor trustee/brother to reimburse trustee/other brother to pay $22,630 in attorney’s fees for prevailing in a probate dispute based on the wording of a no contest clause in an amended trust instrument. The appellate court reversed the fee award. The no contest clause only allowed the trustee to charge all fees and other legal expenses in defending such an action “against the gift to [successor trustee/brother];” thus, the trustee could only discretionarily diminish any gift to the other side but the clause was not the equivalent of a contractual attorney’s fees provision, requiring reversal of the fee award.
Requests For Admission: RFA Cost-Of-Proof Awards Are More Often Denied Than Affirmed On Appeal
Check Out Our Sidebar Category “Requests For Admission.” Under our sidebar category “Requests for Admission” we have posted some five dozen times about published, as well as unpublished, appellate decisions affirming or denying a trial court’s grant or denial of cost-of-proof sanctions for failure to admit requests for admission. After doing this for eight years, we can now make a general observation: appellate courts more often affirm denials and reverse grants than they affirm grants and reverse denials of cost-of-proof sanctions. True, parties denying RFAs do sometimes get hit with costs-of-proof, and the award can be significant indeed. However, in our posts, nearly twice as many appellate cases affirm denials or reverse grants as compared to cases that affirm grants or reverse denials of cost-of-proof sanctions. There are plenty of reasons for denying costs-of-proof, and several are baked right into the statute: “(1) An objection to the request was sustained or a response to it was waived under Section 2033.290. [Motion for compelling further responses]. (2) The admission was of no substantial importance. (3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. (4) There was other good reason for the failure to admit.” Cal. Code of Civ. Proc., section 2033.420(b). Based on a review of our posts on the subject, we can also include some specific reasons that (largely) build on the statutory exemptions: A demurrer was granted so no costs-of-proof were involved. A matter was stipulated to so no costs-of-proof were involved. A matter was denied, but later admitted – for example in a deposition – so no costs-of-proof were involved. The request for admission was propounded before there was a reasonable opportunity to do discovery, so that there was a reasonable basis for denying the request. The denials were not unequivocal, and the propounding party failed to follow up with a motion. The request for fees targeted an attorney, but only a party is liable for costs-of-proof. Form interrogatory responses [17.1] did a reasonably good job of explaining the basis for a denial. The party failed to establish true costs-of-proof by failing to allocate attorney time to the actual matter that was proved at trial. Costs-of-proof were denied by the trial court, and the record on appeal was too deficient to mount a challenge to the denial. A preemptive federal statute limited remedies that a party could recover. Posted at 02:56 PM in Cases: Requests for Admission | Permalink
271 Sanctions Award Also Reversed, But Child Support Enforcement/DVRO Fees Against Husband Were Sustained On Appeal. Just to show you how appellate courts “balance the equities,” husband won some and lost some in a challenge to a denial of a Family Code section 2030 needs-based fees award, a grant of section 271 sanctions against him, and a grant of child support [section enforcement [section 3692]/domestic violence restraining order (DVRO) [section 6344(b)] fees in favor of wife. In Marriage of Locatelli, Case No. B267653 (2d Dist., Div. 1 Oct. 31, 2016) (unpublished), the trial judge (i) denied needs-based fees awards sought by both husband and wife, (ii) granted section 271 sanctions against husband, and (iii) granted fees to wife for successful efforts in child support enforcement and DVRO efforts against husband. Husband did well to appeal, but the (iii) grant of fees to wife held up on appeal, with the determinations upon review of (i) and (ii) leading to the affirmance of (iii). The problem with denying needs-based fees to husband was that the record showed a clear disparity in financial resources: wife had $10,000 in gross monthly income compared to unemployed husband receiving $450/week in unemployment benefits; wife owned a property with $500,000 in equity versus husband having a property worth $100,000 (which he bought with joint IRA account proceeds) eventually transferred to his mother. However, the trial judge myopically focused in the appellate court’s opinion upon the fact husband had a domestic violence black-mark, but singularly weighted this factor without consideration of other factors showing economic disparity. The 271 sanctions grant against husband was also error even though he depleted the IRA account to buy the $100,000 property given the other extenuating adverse financial factors at play. However, the balance was restored on the child support enforcement and DVRO fee awards. Those totaled about $30,000, with husband able to pay them given his depletion of the IRA accounts which were not weighted in the reversal of the other awards.