Opinion ID: 2543911
Heading Depth: 1
Heading Rank: 10

Heading: Prospectivity of our holding

Text: Although as a general rule judicial decisions are to be given retroactive effect ( Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 978, 981-982, 258 Cal.Rptr. 592, 772 P.2d 1059),' there is a recognized exception when a judicial decision changes a settled rule on which the parties below have relied. (See, e.g., Brennan v. Tremco Inc., supra, 25 Cal.4th at p. 318, 105 Cal.Rptr.2d 790, 20 P.3d 1086; Droeger v. Friedman, Sloan & Ross, supra, 54 Cal.3d at p. 45, 283 Cal.Rptr. 584, 812 P.2d 931; Woods v. Young, supra, 53 Cal.3d at pp. 329-331, 279 Cal.Rptr. 613, 807 P.2d 455.) [Considerations of fairness and public policy may require that a decision be given only prospective application. ([ Neiuman v. Emerson Radio Corp., supra, 48 Cal.3d] at pp. 983-984, 258 Cal.Rptr. 592, 772 P.2d 1059; see Estate of Propst (1990) 50 Cal.3d 448, 463, 268 Cal.Rptr. 114, 788 P.2d 628; Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 305, 250 Cal.Rptr. 116, 758 P.2d 58; Peterson v. Superior Court (1982) 31 Cal.3d 147, 152, 181 Cal. Rptr. 784, 642 P.2d 1305.) Particular considerations relevant to the retroactivity determination include the reasonableness of the parties' reliance on the former rule, the nature of the change as substantive or procedural, retroactivity's effect on the administration of justice, and the purposes to be served by the new rule. ( Newman v. Emerson Radio Corp., supra, at pp. 983-992, 258 Cal.Rptr. 592, 772 P.2d 1059; Peterson v. Superior Court, supra, at p. 152, 181 Cal.Rptr. 784, 642 P.2d 1305; Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 193, 98 Cal.Rptr. 837, 491 P.2d 421.) (Woods v. Young, supra, 53 Cal.3d at p. 330, 279 Cal.Rptr. 613, 807 P.2d 455.) The Court of Appeal's construction of section 98.2(c) (comparison of the resulting judgment with the administrative award from which the appeal was taken to determine whether the appealing party was unsuccessful for fee-shifting purposes) represents a clear break from the Triad and Cardenas courts' construction of the statute (fee-shifting provision becomes operative only when the trial court's judgment completely eliminates the commissioner's award). The latter standard appears to have been uniformly applied until the Court of Appeal's decision in this case. Smith reasonably relied on the Triad/Cardenas rule in weighing the potential costs of unsuccessfully appealing his commissioner's award to the superior court. Under that rule, Smith would become liable for RVLG's attorney fees and costs only if the superior court reduced his award to zero, an unlikely occurrence. The nature of the change effectuated by the new rule also supports our limiting our decision's retroactivity. That change involves only the formula by which the superior court determines, postjudgment, whether the appeal before it was or was not successful for limited fee- and cost-shifting purposes. Prospective application will remove no substantive defenses otherwise available to RVLG in this case. Retroactive application, on the other hand, would render Smith liable for RVLG's considerable attorney fees and costs regardless of his partially meritorious claims, a result he likely did not envision when he elected to appeal the commissioner's decision under the former rule. Retroactive application of an unforeseeable procedural change is disfavored when such application would deprive a litigant of `any remedy whatsoever.' ( Chevron Oil Co. v. Huson (1971) 404 U.S. 97, 108, 92 S.Ct. 349, 30 L.Ed.2d 296; Newman v. Emerson Radio Corp., supra, 48 Cal.3d at pp. 990-991, 258 Cal.Rptr. 592, 772 P.2d 1059.) ( Woods v. Young, supra, 53 Cal.3d at p. 330, 279 Cal.Rptr. 613, 807 P.2d 455.) Concern for the administration of justice further supports prospective application of our decision, which, if applied retroactively, would stand to affect all pending appeals from the commissioner's decisions that were filed in the superior court in reliance on the former rule. Justice would not be served by designating such appeals successful or unsuccessful under a rule the appellants did not anticipate when they elected to appeal their administrative awards to the superior court. ( Woods v. Young, supra, 53 Cal.3d at pp. 330-331, 279 Cal.Rptr. 613, 807 P.2d 455; Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287, 305, 250 Cal.Rptr. 116, 758 P.2d 58; Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 829, 119 Cal.Rptr. 858, 532 P.2d 1226.) Our construction of the fee-shifting provision announced today will better effectuate the intent and purpose of the statuteto discourage frivolous, meritless, and costly appeals from the commissioner's decisions to the courts. That important objective would not be served by retroactively applying the newrule to appeals already filed and pending in the superior courts, nor will it be compromised by prospective application of our decision. Accordingly, our holding today will be applied prospectively only to those appeals from the commissioner's decisions and awards filed in the trial court after the date this decision becomes final.