CALIFORNIA ATTORNEY'S FEES

Appealability/Family Law: $1,000 Sanctions Order Appeal Was Dismissed Because Correct Course Was Appeal From Final Judgment

 

Appeal Was Premature.

     In Marriage of Garcia, Case No. B231782 (2d Dist., Div. 3 June 1, 2012) (unpublished), ex-wife appealed from a $1,000 “sanctions” order under Family Code section 2107(c), which does allow for imposition of attorney’s fees for a family law litigant not complying with family law provisions. (Apparently, she failed to produce a preliminary declaration of disclosure and was “sanctioned”.)

     Wife’s appeal from the sanctions order was dismissed as premature. CCP § 904.1(b) does provide that sanctions under $5,000 can only be reviewed through an appeal of the final judgment (or, even less successfully, through an extraordinary writ, which was not done). Given the concession on appeal that no final judgment had been reached, the sanctions order appeal had to be dismissed.

Pending Cases: U.S. Supreme Court To Determine If Prevailing Defendant Can Be Awarded Costs Against Losing Plaintiff In FDCPA Case

 

FRCP 54(d) Was Basis For the Cost Award in Tenth Circuit Decision.

     On Tuesday, May 29, 2012, the United States Supreme Court granted certiorari from the Tenth Circuit’s decision in Marx v. General Revenue Corp., U.S. No. 11-1175, to determine whether a prevailing defendant can be awarded routine costs (not attorney’s fees) against a losing plaintiff in a Fair Debt Collection Practice Act (FDCPA) case where the plaintiff was found to have brought the suit in good faith. The basis for the costs award was FRCP 54(d) (costs and attorney’s fees), while the FDCPA only penalizes losing plaintiffs bringing the suit in bad faith or for harassment purposes.

Requests For Admissions: Appellate Remittitur Required Separate Consideration Of Post-Appeal Consideration Of Appellate Fees, Not Just Remand Fee Issues

 

Appellate Follow-up to Earlier Appeal Surveyed in Our September 2, 2010 Post.

     In our September 2, 2010 post, we surveyed Simon v. Coleman (Simon I), reversing and remanding for consideration attorney’s fees to be awarded for “costs of proof” sanctions under Code of Civil Procedure section 2033.420. Clearly, the defense was going to get something, and they did.

     On remand, the trial court recalculated the costs-of-proof award, quite faithfully, at $45,000 (a little lower than the $50,150) request, but also awarded additional attorney’s fees for filing the motion ($2,350) and for defending the prior appeal ($13,787).

     The latter aspect of the award got the lower court in trouble in Simon v. Coleman (Simon II), Case No. B231229 (2d Dist., Div. 3 May 31, 2012) (unpublished).

     The lower court’s $45,000 recalculation was sustained. However, the matter had to be remanded, yet again, because the prior appellate remittitur only related to the RFA calculation such that any other fees had to be considered in a separate proceeding--and they were not so considered. So, further proceedings will be spawned from this appeal, the case of the excessive remittitur fee award.

Requests For Admissions/Section 1717/Specific Fee Shifting Statutes: Property Owner Obtaining Cancellation Of Grant Deed For Fraud Not Entitled to Attorney’s Fees Recovery

 

Three Grounds for Recovery Did Not Support Request.

     Property owner in Marchi-Friel v. Rago, Case No. A130125 (1st Dist., Div. 4 May 31, 2012) (unpublished) did obtain cancellation of a fraudulent grant deed, with the trial court also cancelling related promissory notes out of an abundance of caution. She then sought recovery of attorney’s fees under three grounds, all of which were denied and sustained on appeal.

     The initial request was grounded in the good faith improver statute of Code of Civil Procedure section 871.5. The defect here was that a crucial prerequisite to fees under 871.5 was not met--the filing of a good faith improver action or cross-action, something not done by appellant.

     The second ground for fees was based on Civil Code section 1717 given the existence of attorney’s fees clauses in the note provisions. The problem here was that the cancellation of the promissory notes was only tangential to the grant deed cancellation, a theory of the case appellant herself espoused such that the fee recovery was not “on the contract” for 1717 purposes.

     The third basis was “costs of proof” sanctions for denying requests for admissions under Code of Civil Procedure section 2033.420. No abuse of discretion under the circumstances once the reasons for the denials were explored through the appellate record.

Private Attorney General: Hospital Psychiatrist Technician Beating A Medical Demotion In Administrative Decision Affirmed In Unpublished Decision Not Entitled To CCP § 1021.5 Fee Recovery

 

Her Financial Stake and Lack of Benefit to a Large Class Were Reasons Why.

     Hospital psychiatrist technician, who won an administrative reversal of a medical demotion, also won an appeal in an unpublished decision upon a review requested by the Department of Medical Health. She then sought fees and costs totaling $75,000, even though her recovery from the prior win was worth $176,191.44 in back pay and interest.

     The lower denied the private attorney general fee request, a determination affirmed in Department of Mental Health v. State Personnel Board (Meyer), Case No. A132921 (1st Dist., Div. 3 May 30, 2012) (unpublished).

     Two reasons supported the affirmance of the fee denial. First, appellant did have a significant financial stake in the controversy outcome, untied to anyone else’s interests--as the back pay/interest award showed. Second, the nonpublished appellate decision on the medical demotion only applied to her, which certainly negated the significant benefit element of section 1021.5.

 

Psychiatrist’s office from 1958 movie, “Terror in the Haunted House.”  Flickr creative commons license.

Family Law: $30,000 Lump Sum “Needs Award” In Favor Of Wife Affirmed On Appeal

 

Record Did Demonstrate Disparity in Financial Incomes of Ex-Spouses.

     Marriage of Landau and Francis, Case No. B232575 (2d Dist., Div. 8 May 30, 2012) (unpublished) involved ex-husband’s appeal of a Family Code section 2030/2032 needs-based fee award to wife of $30,000 lump sum.

     The fee award was affirmed. After all, under a prior spousal/child support stipulation, the parties stipulated that husband (KPMG tax attorney/director) had monthly income of $26,939 compared to $3,750 for wife (a psychologist). This admission could be given great weight by the lower court, as it was on appeal. Also, husband and wife had roughly the same amount in attorney’s fees incurred during prior battles. From a “net” cash flow perspective, husband had over $10,000 per month compared to negative income for wife. Finally, it was no abuse of discretion to direct the fee award as being payable on a lump sum basis, because husband waived the argument by not asking for installment payments and he did have assets with equity from which to pay the award.

Reasonableness Of Fees: $109,288.75 Fee Award To Defense Affirmed Even Though Cross-Claim Judgment Only Totaled $90,000

 

Abuse of Discretion Standard Not Hurdled.

     In Ruane v. 403 Main LLC, Case No. B227273 (2d Dist., Div. 5 May 30, 2012) (unpublished), plaintiff lost a lease/option dispute to the defense, which recovered a $90,000 judgment on the cross-complaint. The trial court then awarded Civil Code section 1717 fees under a contractual fees clause of $109,288.75 to the defense.

     Plaintiff appealed the fixing of the fee award, but there was substantial evidence supporting it. Detailed time records were authenticated and submitted to support the award. Although reasonable minds could differ, the award was not “out of the ballpark.”

Miss Genevieve Ebbets, youngest daughter of Charley Ebbets, throws first ball at opening of Ebbets Field.  April 5, 1913.  Library of Congress.

Lodestar/Multiplier/Postjudgment Enforcement Interest: Published Decision Considers When Interest Runs On California State Fee Awards

 

Also Rejects Application of Perdue v. Kenny A. To State Cases Involving Lodestar Multipliers.

     Khazan v. Braynin, Case No. A128536 (1st Dist., Div. 4 May 30, 2012) (certified for partial publication; fee interest issue published) is an interesting decision that has a scholarly discussion on when interest begins to run on a fee award. The opinion basically held that Stockton Theatres, Inc. v. Palermo, 55 Cal.2d 439 (1961) is still good law, and that interest accrual timing depends on whether there was a reversal versus just a modification of a prior fee award. If a reversal (as in Khazan, where the fee award papers had to be reconsidered on remand), then interest runs from the new award as compared to interest running from the original award if there was just a modification. Khazan also has an interesting discussion of the federal rule, where there is a split on whether interest runs from the date of a fee entitlement award or from the date of the fixing of the amount of fees, and the differences in rates of interest (10% per year in California state courts versus interest tied to T-bill rate in the federal system).

     In the unpublished portion of the case, the appellate court affirmed a substantial lodestar award, reduced by 30% on remand after apportionment of noncompensable or unsuccessful claims, and then enhanced by a 1.5 multiplier (for a total award of $1,115,204 to the lead counsel). The interesting aspect of the discussion here is that the appellate court rejected application of Kenny A. v. Perdue, 130 S.Ct. 1662 (2010) to state multiplier situations, finding that the considerations in federal fee-shifting cases were distinguishable and that California is more liberal in allowing enhancements.

SLAPP/Substantiation Of Fees: $5,705 SLAPP Fee Recovery Falls Within The Collateral Order Exception To Appealability

 

     In City of Colton v. Singletary, Case No. E052377 (4th Dist., Div. 2 May 30, 2012) (certified for publication), cross-defendant was granted a SLAPP motion on two counts of a cross-complaint brought by City, eventually awarded $5,750 in fees and $80 in costs.

     City appealed, with the appellate court discussing several SLAPP fee issues.

     First, it determined that the fee award was not directly appealable under CCP § 904.1, but was appealable under the collateral order exception.

     Second, cross-defendant was indeed the prevailing party on the two counts, but a partial reversal on one of the counts meant that the lower court could revisit the award in light of the partial reversal--although intimating that cross-defendant did indeed win.

     Third, cross-defendant’s fee declarations about the work alone sufficed as adequate substantiation for fee motion purposes.

Wigwam Motel, located minutes from Colton.  Carol M. Highsmith collection.  Library of Congress.

Requests For Admissions: $49,031 “Costs Of Proof” Sanctions Properly Denied By Trial Court

 

Defense Waived Sanctions By Not Moving to Compel Further Responses to Incomplete RFA Responses.

     We have blogged many times before on the “costs of proof” sanctions available to litigants that can show the opponent made them expend unnecessary fees and costs in proving facts at trial that were denied in earlier requests for admission responses.

     However, Smith v. GNP-Crescendo Record Co., Inc., Case No. B235551 (2d Dist., Div. 1 May 25, 2012) (unpublished) reminds us that “costs of proof” sanctions can be waived if certain other procedural requirements are not met.

     There, plaintiff lost a music royalty acounting dispute, with defendants moving to recoup $49,031 “costs of proof” sanctions arising from plaintiff’s earlier denial of certain RFAs. The lower court denied the request, a determination affirmed on appeal.

     Two reasons supported affirmance. First, defendants never challenged incomplete RFA responses through a motion to compel, effectively waiving the ability to collect “costs of proof” sanctions. (Code Civ. Proc., § 2033.420(b)(1).) Second, plaintiff had a reasonable belief to deny certain requests based upon obtaining a music industry expert declaration supporting a contention that certain royalty contractual provisions were unconscionable in nature. (§ 2033.420(b)(3).)

In The News . . . A Plethora Of Recent Class Action Fee Awards And Irwindale City Council Refuses to Pay Fees In Councilman’s Embezzlement Trial

 

N.J. District Judge Awards Firm $2.3 Million In Fees In Eating Disorder Insurance Coverage Case.

     The National Association of Legal Fee Analysis (NALFA), which has an excellent blog website, has reported on some recent class action fee recoveries.

     The first one is an eating disorder insurance coverage class action. A New Jersey district judge awarded plaintiffs’ N.J. law firm $2.3 million in fees and expenses for its work in reaching a $1.18 settlement in the case. Plaintiffs requested a 1.4 multiplier-enhanced $2,196,580 in fees plus expenses bringing the total request to $2,309,086. The Newark-based judge appears to have awarded a fair amount of the request, although the fee award has been appealed to the Third Circuit.

Plaintiff Firm Garners $1.575 Million In Fees/Expenses in Philips/Magnavox Malfunctioning T.V. Class Action.

     The second class action fee recovery involved a $4 million settlement confirmed by another N.J. district judge in the Philips/Magnavox malfunctioning television class action. Although awarding $1.575 million in fees/costs, the judge applied a .75 multiplier to the lodestar, which represented 39% of the cash portion alone under the recovery of fund method. (In re Philips/Magnavox Television Litig.)

First Circuit Seems Skeptical of Fee Award in Volkswagen Multidistrict Case.

     The third matter was the First Circuit Court of Appeals argument relating to the fee award in Volkswagen Group of America, Inc. v. Peter J. McNulty Law Firm. There, a district judge awarded $30 million in fees and $1.2 million in costs to the plaintiff law firm in a multidistrict case. The parties had agreed to a “clear sailing” clause by which plaintiff would seek no more than $37.5 million in fees and $1.8 million in costs. VW did challenge basing the fee award on the percentage of fund measure because the settlement agreement apparently said fees would not be based on benefits. If the proper lodestar analysis was used, somewhere around $7.7 million would have been the fee award. Plaintiff law firm, in rebuttal, said that the lodestar was used by the district judge to “check” the percentage of recovery method. Apparently, the First Circuit had some concerns with the award at oral argument.

Irwindale Will Not Pay for Embezzlement Trial Defense of Councilman Garcia.

     As reported by J.D. Velasco in a May 26, 2012 post in The San Gabriel Valley Tribune, the Irwindale City Council, with certain members recused, denied a request to reimburse attorney’s fees by an attorney representing Councilman Garcia in an embezzlement trial arising from charges that he and other councilpersons/a former city manager took lavish New York trips costing taxpayers $200,000 between 2001-2005.

Prevailing Party/Section 1717: Successor Trust Deed Lender Entitled To Attorney’s Fees Recovery Against Extinguished Lienholder Based On “Practical Liability” Section 1717 Doctrine

 

Saucedo Case Found to Support Fee Recovery.

     Saucedo v. Mercury Sav. & Loan Assn., 111 Cal.App.3d 309, 315 (1980) is an interesting section 1717 decision where plaintiffs (nonassuming grantees) of a property subject to a note/trust deed beat the lender under loan documents with a fees clause. Plaintiffs were allowed fee recovery because, under the note/trust deed, the lender was entitled to having fees added as part of the debt secured by the trust deed. In order to prevent foreclosure, plaintiffs would have had to pay the debt (if they lost), inclusive of fees, so that this “practical liability” triggered the section 1717 mutuality remedy even though they were not in technical privity with the lenders due to acquiring the property from privity-related borrowers.

     Well, Saucedo’s rationale was dispositive over 30 years later in Vineyard Bank, NA v. DFI Funding, Inc., Case No. B224656 (2d Dist., Div. 6 May 24, 2012) (unpublished).

     There, Vineyard made a secured loan of money to borrower through a first priority trust deed even though another lender loaned money secured by a more limited interest in certain real property through a second trust deed. Vineyard then loaned additional money, with a title search not picking up on the second trust deed, with first lienholder recording a full reconveyance of the first trust deed and arguably moving second lienholder ahead from a priority perspective. Vineyard foreclosed through a non-judicial foreclosure, second lienholder initiated its own non-judicial foreclosure, and Vineyard filed suit to enjoin the second lienholder foreclosure, with the lower court issuing an injunction in favor of Vineyard. Jurors found that the second lienholder trust deed was ambiguous and did not create a lien against a property, but a much more narrower interest that did not reach the property. Subsequently, the lower court awarded $376,466.45 in fees based on the second lienholder’s trust deed fees clause, as well as $12,122.90 in litigation costs, to Vineyard, prompting an appeal by the losing lender.

     Fee/costs awards affirmed on appeal, based on Saucedo. The “practical liability” section 1717 doctrine was determinative, because second lienholder had a fees clause that would have added its fees as prevailing party to the debt and first lienholder (now owner of the property) would have had to pay off this enriched indebtedness.

     Losing party argued that this was nothing more than a competing lienholder dispute not triggering fee exposure, but the appellate court found that this was an improper characterization--the dispute was by a property owner (former foreclosing first lienholder) against a second lienholder attempting to enforce an interest akin to that involved in Saucedo. Simply put, “[t]his distinction has a difference.”

Appealability/SLAPP: Defense SLAPP Fee Recovery Of $12,633 Sustained Because Plaintiff Forfeited Claim On Appeal

 

Plaintiff Failed to Properly Present His Estoppel Theory For Factual Exploration By the Trial Court; Appealability Issue Did Not Impact Appeal, But Waiver Did.

     Plaintiff, who suffered an adverse SLAPP fee recovery of $12,633, might have had a chance on appeal on an estoppel theory. However, the problem is that he did not properly present it for consideration by the trial court, resulting in a waiver on appeal.

     In Hartnett v. San Diego County Bd. of Education, Case No. D059646 (4th Dist., Div. 1 May 25, 2012) (unpublished), plaintiff had a letter from opponent’s counsel that conceded the defendant Commission did not pay legal fees and could not take an active role in arguing for recovery of fees if its motion were granted. Plaintiff, however, did not raise/develop the equitable estoppel issue in opposition paperwork and only mentioned it in fleeting reference during oral argument on the fee motion. (The letter was attached to an opposition declaration.) Given that estoppel is a factually intensive doctrine, this presentation was too cursory such that the argument was forfeited on appeal.

     With respect to appealability, the defense claimed that the appeal should be dismissed because plaintiff only appealed the fee fixing second order rather than a first order indicating entitlement to fees but fixing later. Nope, said the appellate panel. Plaintiff did appeal the postjudgment order awarding (fixing the amount of) fees and costs, which was a separately appealable order. (PR Burke Corp. v. Victor Valley Wastewater Reclamation Auth., 98 Cal.App.4th 1047, 1053 (2002).)

Costs/Private Attorney General: Nonprofit Organization Losing 5 Of 6 Issues Not Entitled To CCP § 1021.5 Fee Recovery For CEQA Reconsideration That Did Not Change Project

 

Public Hearings Remand Was a Limited One, At Best; Attorney/Paralegal Work Stricken From Cost Award In County’s Favor.

     A nonprofit organization out to save blue oak woodlands from the consequences of a development appealed a denial of a requested fee recovery under CCP § 1021.5 after they won a limited public hearings remand under CEQA to reconsider the financial feasibility of a greater fee to mitigate traffic impacts on Interstate Highway I-5. It also appealed a costs award of $25,565 in favor of Tehama County as prevailing party.

     Blue oaks.  Flickr creative commons license.  Miguel Vieira, photographer. 

     The appeal did not overturn the fee award, but a substantial portion of the costs award was ordered to be subtracted in California Oak Foundation v. County of Tehama, Case No. C066415 (3d Dist. May 25, 2012) (unpublished).

     The problem was that nonprofit lost the blue oak woodlands issue and five of the six remaining mitigation issues. The financial feasibility remand issue resulted in sparsely-attended public hearings and the County arrived at the same position it reached previously with respect to the project. Under these circumstances, no “significant benefit” was achieved for section 1021.5 purposes such that the lower court did not abuse its discretion in denying the fee request.

     The County’s cost award was another matter altogether. $15,771.25 of the costs award comprised a JD/prospective attorney’s work in summarizing a PowerPoint presentation for trial which, at a $185 hourly rate, could only be characterized as attorney/paralegal fees not recoverable as costs. (Science Applications Internat. Corp. v. Superior Court, 39 Cal.App.4th 1095, 1104 (1995); Code Civ. Proc., § 1033.5(a)(10).) This amount was subtracted, with the remaining judgment affirmed by the appellate court.

Arbitration/Prevailing Party: Only One Prevailing Party For Civil Code Section 1717 Purposes Under One Contract After Exhaustion Of Arbitration Proceedings

 

Parameters of “Discrete Win” Doctrine Probed, With Interim Wins On Petitions To Compel Arbitration Not Determining Eventual Winner Unless Discrete Proceeding Ended Matter.

     Frog Creek Partners, LLC v. Brown, Case No. A129651 (1st Dist., Div. 5 May 24, 2012) (certified for publication) is a scholarly opinion considering, in a two party-one contract context arising under Civil Code section 1717, which party is the prevailing one where one party won an interim petition to compel arbitration although it ultimately lost the ultimate contractual dispute in a subsequent arbitration after successfully bringing a second petition to compel arbitration. Acting Presiding Justice Simons, in a 3-0 opinion discussing the various cases (Lachkar, Otay, Green, Kors, and Acosta), decided that (1) a lower court should not award section 1717 fees to a litigant who wins a petition to compel arbitration filed in an independent lawsuit but should await what happens in the arbitration, (2) a lower court can award fees to a litigant that obtains a denial of an independent petition to compel arbitration (not one brought in a lawsuit), because the victory in the discrete petition proceeding is a definite/final victory, and (2) a lower court should not award fees to a litigant who defeats a petition to compel arbitration in a filed lawsuit but await either the outcome in an arbitration or the lawsuit. (In this particular case, petitioner filed a renewed arbitration petition and won, and then won in the later in a 50-day arbitration--garnering $663,293 in net fees/costs, but after awarding the interim winner $125,000 in fees and denying ultimate winner’s request for $128,000 in fees for the initial petition to compel skirmishes. The appellate court in this one reversed the $125,000 fee award and remanded so that ultimate winner could obtain fees for the initial petition to compel battles, otherwise known as “to the victor goes the spoils”).

     In reaching its result, the appellate court disagreed with the reasoning in Kors and Acosta, which might put this decision higher up for state supreme court review given that the jurisprudence is rich and constantly evolving in this area. Also, the policy implications of this decision were discussed in lengthy footnote 18 of the slip opinion, with the appellate court deciding that no “race to the courthouse” will ensue because nothing indicated a defendant would gain “a predictably greater entitlement of fees” under section 1717 by filing an independent petition to compel arbitration.

Photo:  Red-backed poison frog.  Flickr creative commons license.  Dominik Hofer, photographer.

Family Law: $10,000 In Family Code Section 271 Sanctions Affirmed On Appeal

 

Mother’s Failure to Provide Detailed Financial Picture Ended Her Appellate Quest.

     Mother in Dorbie v. Fales, Case No. D059338 (4th Dist., Div. 1 May 24, 2012) (unpublished) challenged a Family Code section 271 $10,000 sanctions award on the basis she simply could not afford it.

     Unfortunately for her, the appellate court rejected her challenges to the award. Mother failed to provide a complete financial picture to contest the sanctions award, which literally was the end of the matter--coupled with the fact the lower court ordered that the sanctions be paid off at a rate of $250 per month to make them more affordable. The abuse of discretion standard of review was not surmounted in this appellate case.

Costs: Prevailing Party Must Only Serve Costs Memorandum After Judgment Is Filed, But Not After Notice of Entry of Judgment

 

     In Kansaku v. City of Hermosa Beach, Case No. B230611 (2d Dist., Div. 1 May 24, 2012) (unpublished), a non-prevailing party claimed that his motion to tax costs was erroneously denied on the ground it was untimely.

      Above:  Young women surfing at Hermosa Beach.  1920-1950.  Library of Congress.

     Nope, not under the circumstances. Prevailing party filed its costs memorandum after judgment was filed, but before notice of entry of judgment was served. Non-prevailing party filed its motion to tax costs one day too late--21 days later rather than the required 20 days (15 days plus 5 days for mail service).

     No abuse of discretion in denying the motion; after all, the tax costs motion was late. “There is no requirement that notice of entry of judgment be served before the prevailing party files its memorandum of costs.” (Slip Opn., p. 16.)

Section 998: Failure To Include Acceptance Provision Invalidates 998 Offer

 

Puerta Governs, Not Dependent on Whether Party is Represented Or Not, and Does Impact Substantial Rights of Party Claiming Offer Was Invalid.

     The defendant in Perez v. Torres, Case No. F061214 (5th Dist. May 24, 2012) (certified for publication) must have been kicking himself. He made a “successful” CCP § 998 offer that would have shifted almost $45,000 in costs to the plaintiff who did not beat the offer. However, there was a rub. (Yep, when you say there was a rub, you know there was a problem.)

     The defense forgot to include an acceptance provision in the 998 offer, which invalidated it under Puerta v. Torres, 195 Cal.App.4th 1267 (2011). The trial court taxed the defense request for costs, which led to an appeal.

     Defendant’s proffered distinctions of Puerta did not cut it on appeal.

First, although Puerta involved an unrepresented party, the appellate court found that the status of the litigant made no difference in this area -- to hold the omission was harmless when a 998 offeree is represented by counsel would allow an exception to swallow the brightline rule that the absence of the acceptance provision means the offer does not cut the mustard.

     The defense then argued “harmless error”--there was no indication that plaintiff would have ever accepted the offer. (Code Civ. Proc., § 475.) Not so fast, said the appellate panel, because such an argument is speculative at best and did impact the offeree who would have incurred $45,000 in costs that she was otherwise not obligated to pay. Hardly chump change and impacting substantial rights when it came to paying money.

     Puerta ruled yet again in this one.

Family Award: $15,000 Fee Award Affirmed In Favor Of Husband After Denial Of Marriage Nullification Petition

Court Rejects Suggestion That Fee Award and Sanction Cannot Be Made Against an Unemployed Person As “An Obviously Dangerous Rule”

     After a family law judge found that a marriage nullification petition by wife was “not that close,” he ordered $5,000 in fees to be paid to husband under Family Code section 2255 (successfully defending against a claim of fraud) and an additional $10,000 of his fees as a sanction for wasteful litigation tactics under Family Code section 271.

     Wife’s appeal of these awards was unsuccessful in Marriage of Aaronson and Oslica, Case No. A128516 (1st Dist., Div. 2 May 22, 2012) (unpublished).

     Although wife claimed that she was unemployed and this alone dictated a reversal, the appellate court was unconvinced. Rather, the appellate record demonstrated that wife had much less fees to be paid to her attorney than husband as well as retirement funds she could tap into. It rebuffed the concept, based on no authority, that “as a matter of law, a fee award and sanction cannot be made against an unemployed individual,” something it characterized as “an obviously dangerous rule.” (Slip Opn., p. 7.)

     Above:  “Forgotten women”, unemployed and single, in job demand parade.  1933.  Library of Congress.

     Also, the appellate court soundly rejected the argument that the settlement privilege of Evidence Code section 1152 precluded consideration of settlement discussions for purposes of evaluating whether to impose a family law sanction under Family Code section 271.

Section 1717: $142,000 Out Of Requested $316,335 In Fees Awarded To Party Achieving Litigation Objective, Although Only One-Third Of Requested Damages

 

Discretionary Call on Prevailing Party Was Given Deference.

     Wertheim, LLC v. Currency Corp., Case No. B218547 (2d Dist., Div. 1 May 22, 2012) (unpublished) was a loan dispute donnybrook with some wild assignment issues and the prevailing party basically winning the argument that lender charged more in interest and fees than was permitted by law. Plaintiff argued damages were $102,007, but the jury accepted the opponent’s argument that damages were only $38,554.48.

     Then, we get to what we like to blog about: fee recovery. winner requested fees of $316,335, but was awarded fees of only $142,000.

     Judgment affirmed on appeal, in a 3-0 decision authored by Justice Chaney. Even though winner only recovered a fraction of what it sought, it did achieve its litigation objective of winning the unlawful interest/fee argument. No abuse in awarding fees here--although we note the fee award was over 3 times the compensatory award.