Sears v. Baccaglio Decision Found Not Viable CCP § 1032 “Prevailing Party” Law.
This one is an interesting one under section 1717/CCP § 1032 routine costs jurisprudence.
Here, client at first suffered a default judgment of $86,676.88 in favor of former attorney, but client obtained relief from the default judgment from the appellate court in an earlier decision. Client then won a county bar fee arbitration and a later superior court bench trial against attorney, where attorney got no relief (and in fact an indication that client overpaid after prior judgment enforcement although client never cross-complained).
However, here is the attorney’s fees and costs nitty-gritty. Attorney moved to recoup over $1.6 million in fees, and ex-client sought over $543,000 in fees. The lower court awarded attorney over $1.16 million in fees under a Civil Code section 1717 fees clause and $6,266.56 in routine costs under Code of Civil Procedure section 1032.
The appellate court reversed in David S. Karton, A Law Corporation, v. Dougherty, Case No. B244231 (2d Dist., Div. 1 Nov. 14, 2014) (published).
Under the pragmatic Hsu v. Abbara, 9 Cal.4th 863 (1995) test governing section 1717 fees, client—not attorney—prevailed because it got an unqualified win except for things already collected. That meant the fee award got reversed and ex-client was determined to be the fee prevailing party.
So what about costs also awarded to attorney? That too had to be reversed because client prevailed. Because neither plaintiff nor defendant obtained relief (a zero judgment), client was the prevailing party. The appellate court also disagreed with Sears v. Baccaglio, 60 Cal.App.4th 1136 (1998) to the extent it suggested that a costs “prevailing party” determination is always discretionary, reasoning Sears was based on cases disapproved by the California Supreme Court or based on postdated cases holding otherwise.
So, on remand, client was going to be able to recover fees and costs—quite a reversal of fortune.