CALIFORNIA ATTORNEY'S FEES

Time 2020-10-17 12:03:52

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2008-2009-2010-2011-2012-2013-2014-2015-2016-2017-2018 Marc Alexander & William M. Hensley However, Amending Fee Order Nunc Pro Tunc To Correct Clerical Error Was No Abuse Of Discretion. Trans World Sourcing, Inc. v. Prend, Case No. E071712 (4th Dist., Div. 2 Oct. 14, 2020) (unpublished) is a situation where two dismissed defendants moved for attorney’s fees of $27,263.63, each, and for costs of $3,859.49, each, against plaintiff. Plaintiff did not oppose the motion, which was granted although the order mistakenly stated it was for fees and costs of $3,859.46 rather than including the separate, higher fees amount. The defendants quickly moved to correct the error, with the lower court requiring a CCP § 473 clerical error motion. Defendants obliged, and the lower court corrected the fees/costs award nunc pro tunc to reflect the true fees amount in granting the section 473 motion. Plaintiff appealed, but to no avail. It had forfeited challenges to the earlier fee ruling on the merits based on no opposition and on Plaintiff’s failure to appeal the ruling. Although Plaintiff could contest the section 473 order, it was no abuse of discretion for the trial judge to correct a transparent clerical error. No Appellate Costs Awarded Per Se, But Probate Court Has Broad Powers To Award Attorneys Assisting Trusts Even On An Interim Basis. A beneficiary/removed trustee was flummoxed that the probate court approved the successor trustee’s request for payment of interim attorney’s fees and costs incurred in representing the trust on appeal out of the trust. That determination was appealed in Blickenstaff v. Cumming, Case No. E073007 (4th Dist., Div. 2 Oct. 14, 2020) (unpublished), but affirmed. The reason was that the probate court has broad powers to aid the trust in defending itself on appeal, as was the case here even though interim fees/costs were awarded. (Rudnick v. Rudnick, 179 Cal.App.4th 1328, 1333 (2009).) Since Entitlement Not Decided Under Original Judgment, Appeal From It Only Did Not Preserve Challenge To Subsequent Fee Ruling. Unfortunately, Clymer v. Elder, Case No. E072525 (4th Dist., Div. 2 Oct. 13, 2020) (unpublished) is another appellate case result which counsels one to appeal post-judgment orders or amended judgments where an original judgment did not determine fee entitlement. Otherwise, the challenges cannot be jurisdictionally entertained by the reviewing court. Losing party got hit with a $392,172 attorney’s fees award after losing out based on standing and full credit bid arguments from the defense. He contested the fee award, but the 4/2 DCA panel basically said “no dice, cannot consider it.” The reason was that appellant had failed to appeal a subsequent fee order or amended judgment after an original judgment had been entered. In certain cases, an appeal from an original judgment will subsume a later fee award but only if fee entitlement was decided under the original judgment. (Silver v. Pacific American Fish Co., Inc., 190 Cal.App.4th 688, 692 (2010); Nellie Gail Ranch Owners Assn. v. McMulllin, 4 Cal.App.5th 982, 1009 (2016).) In this particular case, it was clear that no fee entitlement determination had been made, with the original judgment listing “TBD” (to be determined) such that this traditional language contained in many judgments was not equivalent to an entitlement determination. Message from this one: appeal those post-judgment orders and amended judgments, please. Losing City Was Free to Go Forward With The Sale, So The Victory Was Pyrrhic. In City of Upland v. The Inland Oversight Committee, Case No. E073768 (4th Dist., Div. 2 Oct. 13, 2020) (unpublished), City sought through a validation action to validate its agreement to sell part of Memorial Park to San Antonio Regional Hospital, which drew an opposition by a nonprofit organization. The lower court dismissed the validation action only on the technical ground that it lacked subject matter jurisdiction because the contract was not subject to such an action, although the City was free to go ahead with the transaction later. It in no way determined the validity of the agreement, and nonprofit did not cross-claim on invalidity grounds. The trial judge denied nonprofit’s request for private attorney general fees for defeating the validation action on such a narrow ground. The 4/2 DCA affirmed. There were two main problems with respect to reversing the fee denial, which was no abuse of discretion under the circumstances. First, the victory did not confer a significant benefit because the sale could indeed go through later (subject to renewal of other arguments by nonprofit). Second, nonprofit’s suggestion that defeating any validation action was per se grounds for a CCP § 1021.5 fee grant went too far; after all, nothing showed City and Hospital had done anything wrong and the sale might yet be consummated. (Cf. Canyon Crest Conservancy v. County of Los Angeles, 46 Cal.App.5th 398, 410-411 (2020) [discussed in our February 20, 2020 post before it was later certified for publication].) Mountain Air Supported Denial Of Fees To Former Attorney. In Thomas v. Lin, Case Nos. B291508/B292496 (2d Dist., Div. 2 Oct. 13, 2020) (unpublished), clients brought contract/tort actions arising from defendant attorney’s professional misconduct. Clients entered into a written settlement release agreement, with one containing a fees clause encompassing “an action brought to enforce or defend the terms, conditions, and provisions of this agreement.” Attorney obtained summary judgment based on raising the release agreement as an affirmative defense, and he then moved to recover $71,440 in attorney’s fees clients. The lower court denied the fees motion, prompting an appeal by clients. The 2/2 DCA affirmed. Under Mountain Air Enterprises, LLC v. Sundowner Towers, LLC, 3 Cal.5th 744, 753 (2017), the fees contractual language did not extend to assertion of an affirmative defense because it is not tantamount to an action. The appellate panel said that the result might well have been different had attorney brought a cross-complaint for declaratory relief to sustain the validity of the release. Principal Reasons For Reversal Were That Certain Aspects Of The Employment Agreement Violated Business And Professions Code Section 16600. Claimant/counter-claim respondent, former employee, was hammered pretty hard in an employment arbitration when the arbitrator rejected his claim for a $300,000 deferred bonus, found for employer on a counterclaim to the tune of $652,243 for an earlier bonus, dismissed a Business and Professions Code section 16600 challenge, and awarded employer $2.46 million in fees and $172,682 in costs under a discretionary fees/costs clause allowing such shifting if any party acts in bad faith. The trial judge confirmed the award and denied a motion to vacate it. The 4/3 DCA reversed in Brown v. TGS Management Co., Case No. G058323 (4th Dist., Div. 3 Oct. 13, 2020) (unpublished), a 3-0 panel authored by Justice Aronson. It found that portions of the award violated section 16600 and other aspects had to be revisited on remand. That also meant the fees/costs award, for now, went POOF! because it could be revisited by the arbitrator after the remand issues were considered and in light of the appellate reversal. Employee has renewed life! Claims Of Competing Lienholders Had To Be Considered With Respect To Division Of Property Sale Proceeds. In County of Sonoma v. U.S. Bank N.A., Case Nos. A155837/A157245 (1st Dist., Div. 1 Oct. 8, 2020) (published), the appellate court affirmed a lower court’s order conferring super-priority status to property sale proceeds on a receiver’s financial lien and enforcement costs in a case where the County obtained appointment of the receiver to remediate hazardous/substandard conditions on real property. The lower court also gave super-priority treatment to County’s enforcement costs under Health Safety Code section 17980.6, which encompassed costs and attorney’s fees. That latter determination was reversed on appeal, because the claims of competing lienholders needed to be considered along with County’s claims before divvying up property sale proceeds to these claimants. Appellate Court Had No Jurisdiction To Consider Any Fee Challenges. In Miller v. Bayview Loan Servicing, LLC, Case No. B295819 (2d Dist., Div. 2 Oct. 7, 2020) (unpublished), plaintiff appealed a judgment of dismissal after losing a demurrer without leave on all claims. Later, prevailing defendants moved for fees, a motion which was granted and then resulted in an issuance of an amended judgment. Plaintiff tried to challenge the fees award, but the failure to separately appeal the subsequent fee order or amended judgment was fatal—the appellate court had no jurisdiction to consider the fee challenges. Inadequate Record, Discretionary Apportionment Principles, And Failure To Show Abuse Of Discretion Led To Affirmance Of Awards. Defendants apparently were shocked by a trial judge awarding a combined $284,482.48 in attorney’s fees and costs against two groups of defendants and in favor of a plaintiff in a case alleging that defendants failed to disclose that a sold vehicle had been previously stolen and damaged so as to cause the right-front suspension to fail while plaintiff was driving on the freeway. The lower court did so under the Consumer Legal Remedies Act, the Song-Beverly Act, and a contractual fees clause under a settlement agreement with the defendants. Various defense challenges on appeal were not accepted as persuasive by the 2/2 DCA in Horvath v. HC Automotive, Inc., Case No. B295116 (2d Dist., Div. 2 Oct. 7, 2020) (unpublished). The argument that plaintiff violated CRC requirements for the fee motion failed because they failed to include the alleged defective notice of motion and motion for fees. The settlement agreement clearly allowed plaintiff to seek fees, with three bases for fee entitlement being presented. The trial court has broad discretion to allocate a fees award among various defendants, with the defense side having the opportunity to present their positions on the issue. The amount of fees awarded was no clear abuse of discretion, given that there is a presumption the lower court is presumed to follow the appropriate factors—with a 40-page minute order showing that to be the case. No Violation of Law Shown Under Various Disability Statutes, With Catalyst And Prelitigation Demand Contentions Not Helping Either. Because construction/website disability claims are flooding the federal and state courts, Skaff v. Rio Nido Roadhouse, Case Nos. A152462/A153606 (1st Dist., Div. 1 Oct. 5, 2020) (published) is a case showing that the judiciary is eyeballing these claims closely where attorney’s fees and costs are the main thrust of the claims—especially where there are no triggering new construction alterations and all the remediations have been made. This case has an excellent discussion of remedies and fees/costs analysis under Health and Safety Code section 19955, the American with Disabilities Act (ADA), the Unruh Act, and the Disabled Persons Act. In Skaff, disabled plaintiff asserted two claims, one under Health and Safety Code section 19955 et seq. and the second under the Unruh Civil Rights Act (Civ. Code, § 51 et seq.). The thrust of the claims was that plaintiff visited The Roadhouse, a restaurant and bar located near Guerneville in Sonoma County, on a fall 2012 day where there were two San Francisco team televised events such that he could not find a space to accommodate his van even though there were van accessible spaces – though already occupied—in short, a full parking lot. After plaintiff’s visit and an exchange with a Roadhouse representative, the accessibility concerns were remediated as essentially stipulated to during the subsequent trial. After a 12-day bench trial, the lower court ultimately concluded that plaintiff prevailed on the section 19955 claim, even though plaintiff’s counsel withdrew a request for injunctive relief, based upon catalyst/prelitigation demand “retroactive” theories. However, plaintiff lost his Unruh Act claim because he only encountered a full parking lot and never encountered other alleged ADA non-compliance issues. The trial judge did grant in part plaintiff’s Unruh Act fee request for $242,672 in fees/costs (with almost $193,000 being the fee component). All of that went POOF! on appeal as a matter of law, after an enlightening analysis of construction disability liability claims under both federal and state statutes. On the section 19955 claim, because it does not contain an ongoing obligation for existing facilities to remedy barriers to access (only those alterations which trigger state access regulations), no liability occurred because The Roadhouse was not new construction and had not undergone any alterations triggering compliance—triggers conceded by plaintiff’s counsel during trial. So, could fees be based on a catalyst theory under section 19955? No, also. The catalyst theory contemplates a situation where the case was not fully litigated to final judgment; but, even if this is not a requirement, there was no legal merit of the claim because no accessibility modifications were required under the California Building Code. That took plaintiff to arguing that fees were warranted on the basis of the Unruh Act claim (supplemented by the structural barrier definition under the ADA). The major problem here was that plaintiff did not prevail on this claim and, additionally, plaintiff only encountered a full parking lot, as well as not encountering any issues on non-parking ADA violations because he drove away. Finally, in a “hail Mary” attempt, plaintiff argued fees were allowable under Code of Civil Procedure section 1032, but this only applies to routine statutory costs, not an award of attorney’s fees. BLOG COMMENT—Although many construction disability cases are resolved before a legal adjudication, the discussion of remedies and fee availability under federal and state statutes should aid judges, mediators, the bar, and clients in general, both at pre-trial and especially trial phases of litigation. Substantiation And Reasonableness Challenges Rebuffed On Appeal. In San Vicente Investment, LP v. Trammell Crow Santa Monica Development, LLC, Case No. B296147 (2d Dist., Div. 1 Oct. 1, 2020) (unpublished), sophisticated litigants battled it out over five years in litigation involving lots of law and motion, discovery, and then two rounds of largely successful summary adjudication motions by the defense—not to mention plaintiff’s numerous attempts to get a reconsideration of the summary adjudication rulings and after a nonsuit of the remaining case at trial, merits determinations affirmed earlier on appeal. What then ensued is what we blog on. Defendant sought $2,349,378.93 in contractual attorney’s fees, providing a detailed declaration from the lead associate with specific timekeeper, billing rate, charts of total work for seven identified phases of litigation, and totals of hours spent/total fees billed by defense counsel. The trial judge wanted work spent on a third-party indemnity parsed out, such that the defense wisely filled supplemental information requesting $2,135,688.75 in fees after excising the indemnity work--detailed information reviewed in depth by the deciding lower court. The trial judge granted the entire “lesser” request. Plaintiff was miffed, challenging both the fee substantiation and amount of fees awarded. The 2/1 DCA affirmed. With respect to substantiation, the main supporting declaration provided enough detail, including the work performed by others. Beyond that, the trial court based the award on broader experience as far fee recovery in litigation of the sort, showing comportment by decreasing the fee for indemnity activities. The large amount of the fees award was reasonable given the other side’s litigation activities, with the appellate panel indicating that caution needed to be given to using what another side spent on fees unless the activities were comparable. Duplicative/overstaffing is a legitimate concern; however, where the litigation ebb and flows over time, there can be valid temporary changes in a legal staffing roster which may be reasonable, all circumstances considered. Result Followed From The Clear Wording Of CCP §685.070(a)(5). In Banda v. Wash, Case No. F077727 (5th Dist. Sept. 30, 2020) (unpublished), plaintiff obtained a civil harassment restraining order and concomitant attorney’s fees/costs of $16,814. She then filed a postjudgment debtor examination proceeding to require judgment creditor to appear for an examination, paying a mandatory $60 filing fee under Government Code section 70617(a)(6). This filing fee can be recovered under the Enforcement of Judgments Law (EJL) as a cost if it is a reasonable and necessary cost of enforcing the judgment. Plaintiff/judgment creditor filed a memorandum of costs after judgment claiming the $60 fee, which judgment debtor moved to tax and with the lower court deciding the fee was a proper cost item. The Fifth District reversed as a matter of law, observing early on that the issue “presented a question of law not resolved in a published decision.” Judgment debtor argued that the fee was not allowable because the judge conducting the exam did not approve the reasonableness or necessity of the filing fee. Judgment creditor, conversely, argued that no approval was required because the fee is mandatory and set by statute. The appellate court sided with judgment debtor based on the literal wording of CCP § 685.070(a)(5) which has the qualifier that the costs “have been approved as to amount, reasonableness, and necessity by the judge or referee conducting the proceeding.” Further support for this conclusion came from the fact that the alternate way of claiming enforcement costs is to file a noticed motion for allowing costs which allows the trial judge to assess their propriety under the circumstances of the case. After all, automatically allowing costs—even though mandatory—which are unreasonable and unnecessary would fly in the face of limiting post-judgment expenses to ones which are reasonable and necessary. For Noncoupon Relief, District Judge Bashant Grants $3.42 Million In Fees Based On Anticipated $10.5 Million Cash Fund Versus Class Counsel’s $5.7 Million Lodestar Request. U.S. District Judge Cynthia Bashant’s decision in In re Easysaver Rewards Litig., 2020 U.S. Dist. LEXIS 77483 (S.D. Cal. May 1, 2020) contains an excellent discussion of the methodology to use in awarding attorney’s fees to class counsel in a mixed coupon/non-coupon settlement case. In a mixed case, a district judge should more appropriately apply the percentage-of-recovery method to award fees for coupon relief and the lodestar method to award fees for only the non-coupon relief, citing CAFA, 28 U.S.C. § 1712 (which she labeled as having “puzzling” text). What happened in this case is that class counsel only sought fees for the non-coupon relief based on an anticipated $10.5 million cash fund such that the lodestar was the primary methodology to utilize. Class counsel requested a $5.7 million lodestar, plus an unspecified positive multiplier. However, District Judge Bashant determined that $3.42 million would be the granted fee award with a negative .06 multiplier because (1) the requested $5.7 million would amount to 54% of the $10.5 million fund based on a percentage-of-recovery check often used in lodestar analysis, too rich for the benefit returned to the class; (2) the $3.42 million award was 32.5% of the anticipated cash fund; (3) the settlement’s value had actually diminished over time; and (4) a higher percentage of the cash fund over the Ninth Circuit’s 25% benchmark test was justified because the case was risky and involved novel issues when it was filed. If the cash fund was more than $10.5 million, class counsel was allowed to return to the district court to file a request for a supplemental award of fees. Appellate Court Needed More Of A Justification For Such A Large “Haircut.” For readers who have followed us for some time, you would know that district judges in the Ninth Circuit have to explain “haircuts” from attorney’s fees requests which exceed 10% with some specificity. (See, e.g., Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008) [enunciating 10% rule]; Vargas v. Howell, 949 F.3d 1188, 1195-1197 (9th Cir. 2020) (reviewed in our February 7, 2020 post) [reversing 90% reduction due to lack of adequate explanation].). We now report on an unpublished appellate opinion from our own local 4/3 DCA which shows how a substantial reduction led to a reversal and remand, suggesting that state courts are more and more, under the right circumstances, endorsing the federal test for large fee “haircuts.” In Ramirez v. CL Education, Inc., Case No. G057779 (4th Dist., Div. 3 Sept. 30, 2020) (unpublished), plaintiffs settled a Labor Code-heavy case for $25,001 (with a final payment of $5,001 waived based on defense payments) under a written stipulation allowing recovery of attorney’s fees and costs from defendants upon plaintiffs’ motion for same. In an opposed motion, plaintiffs requested $164,768 in fees/costs (inclusive of a 1.5 contingency multiplier request, but the trial judge only awarded a total of $1,000, with the record unclear whether the lower court had the documentation to fashion such an award. The Court of Appeal, in a 3-0 opinion authored by Justice Thompson, reversed and remanded. Although recognizing the discretion given to trial judges on fee motions, the appellate court could not divine how the $1,000 award was arrived at and indicated such a reduction required at “least some explanation or justification” for purposes of supporting a substantial “haircut” of this nature. In so doing, it cited Warren v. Kia Motors America, Inc., 30 Cal.App.5th 24, 36 (2018) where heightened scrutiny was recognized in consumer (specifically, a Song-Beverly Act matter) and civil right cases, although observing in a footnote that the federal “haircut” rationale had not previously been applied in cases under state law fee-shifting statutes. Interestingly enough, Warren itself cited Mountjoy v. Bank of America, N.A., 245 Cal.App.4th 266, 280-281 (2016), which in turn applied the federal-type test in a contractual fee wrongful foreclosure matter. So, the jurisprudence seems to be heading in the direction that substantial “haircuts” in state cases must be explained with some degree of specificity. This is a fertile area in which to make new caselaw at the state level for litigators. Case Shows How Litigants Should Structure 998 Offers So As To Escape Enforcement Challenges. We commend practitioners to read Auburn Woods I Homeowners Assn. v. State Farm Ins. Co., Case No. C085749 (3d Dist. Sept. 29, 2020) (unpublished) when it comes to structuring an effective CCP § 998 pretrial settlement offer in several respects. The settlement offer, as detailed in the appellate opinion, proceeded along the following lines: “Prior to the trial, State Farm and Lewis made a written settlement offer under section 998 to HOA. The offer explained how HOA may accept State Farm and Lewis’s offer: ‘If you accept this offer, please: [¶] a) Date and sign the Agreement attached hereto as Exhibit A; [¶] b) Have your legal counsel execute a Request for Dismissal in a form identical to that attached hereto as Exhibit B; [¶] c) Send the signed Agreement and signed Request for Dismissal to counsel for defendants, who will then file the Request for Dismissal with the Court; and [¶] d) Execute, by and through your counsel, the statement of acceptance of this offer that appears below and return the same to attorneys for defendants indicating that the Offer to Compromise is accepted pursuant to the terms and conditions outlined above.” The offer included a document which read, “STATEMENT OF ACCEPTANCE OF OFFER TO COMPROMISE [¶] In accordance with Code of Civil Procedure section 998, subdivision (b), plaintiff Auburn Woods I HOA hereby accepts Defendants’ Offer to Compromise pursuant to the terms and conditions set forth in that offer.’ The statement concluded with a signature block for counsel for HOA.” This section 998 offer survived numerous challenges. First, contrary to what the challenger said, the offer did sufficiently identify the accepting party based on the signature line for accepting party to simply sign. Second, there was no overbreadth or ambiguity with respect to the claims to be released, because they were limited to claims relating to the lawsuit (with section 1542 waivers not dictating a different result). Third, the offeror did attach a proposed settlement agreement for acceptance such that there was no indefinite extraneous agreement to be guessed at when it came to deciding what to do with respect to the 998 offer—determined to be valid on appeal. Failure To Apportion/Double Counting Lodestar And Enhancement Arguments Not Supported By The Record. In many cases, a fees-seeking litigant needs to apportion between fee entitlement and non-fee entitlement claims, unless the thrust of the case involved a fee entitlement case so that it was inextricably intertwined with a non-fee case. If so, even a reversal of the non-fee case upholds the fee award on the intertwined fee entitlement basis of the case. That is what occurred in Santana v. FCA US, LLC, Case Nos. G057244/G058020 (4th Dist., Div. 3 Sept. 29, 2020) (unpublished). In a defective vehicle case for Song-Beverly Act violations and fraudulent concealment, plaintiff was awarded $1,229,531.71 (of which $1 million was punitive damages under the fraud count) and then awarded Song-Beverly Act fees/costs of $510,637.87 inclusive of a positive 2.0 multiplier, but less than 2.5 multiplier requested by plaintiff. The 4/3 DCA affirmed the fees/costs award in a 3-0 panel decision authored by Justice Ikola, although there was a large scale-back of the fraud damages, paring about $1.134 million from the overall award. The defense argued that there needed to be an apportionment, but that did not resonate based on the fraudulent concealment being intertwined and with the defense not offering a realistic apportionment proposal for the trial or appellate courts to consider. With respect to the “double dip” argument, the appellate court indicated that a plaintiff could not rely on a contingency risk argument if it was being used to justify the lodestar and an enhancement. However, that did not occur here because the trial judge did not use the contingency risk to justify the hourly lodestar rate but only used it for true enhancement, also mentioning complexity and attorney skill which would have gotten to the same result. Vague Objections Not Entertained, But Failure To Award Positive Multiplier Was Sustained. In Koerber v. Project Veritas, Case No. B291770 (2d Dist., Div. 3 Sept. 29, 2020) (unpublished), the Court of Appeal affirmed a mandatory SLAPP award of $63,970 in fees and $1,680.13 in costs. The defense requested $109,545 in fees, inclusive of a 1.5 multiplier, but the trial court did not award a multiplier and reduced the lodestar request for time spent on a demurrer. Appellant did not provide any specific arguments as to why the fee substantiation was deficient (spreadsheets and supplemental briefing were provided) or why the fee request was inflated. Filing/motion fees, reporter fees, and attorney service/courier expenses were all fair game for routine costs, with a component-by-component analysis provided in the affirming opinion. The Clerk’s Mailing Did Not Trigger Deadlines For The Costs Memorandum Or Fees Motion Because The Judgment Was Not Accompanied By A Proof Of Service And Failed To Satisfy Requirements For Service Of Notice Of Entry Of Judgment. In MES Investments, LLC v. Dadson Washer Service, Inc., Case No. B297634 (2d Dist., Div. 3 September 25, 2020) (unpublished), defendant was awarded prevailing party costs and contractual attorney fees following a bench trial. On appeal, plaintiff argued that defendant’s motions for fees and memorandum of costs were not timely filed. When the trial court entered judgment, the superior court clerk mailed a conformed copy of the judgment to the parties. Plaintiff claimed the clerk’s mailing triggered a 15-day deadline for defendant to file and serve its memorandum of costs pursuant to California Rules of Court, rule 3.1700(a)(1), and a 60-day deadline for defendant’s fees motion pursuant to rule 3.1702(b). Because defendant filed and served its costs memorandum more than 60 days after the clerk’s mailing, and its fees motion 60 additional days beyond that, plaintiff argued the fees/costs awards should be reversed. However, the 2/3 DCA affirmed – explaining service of notice of entry of judgment did not occur until defendant filed and served it on the same date it filed its memorandum of costs. The clerk’s mailing of the judgment did not include a proof of service – meaning there was nothing in the record establishing the deadlines for defendant to file its costs memorandum and fees motion as the simple act of mailing a conformed copy of the judgment does not constitute service of notice of entry of judgment. To constitute service and establish posttrial motion deadlines, “the clerk’s mailed notice must affirmatively state that it was given ‘upon order by the court’ or ‘under section 664.5’ and a certificate of mailing the notice must be executed and placed in the file.” (Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc., 15 Cal.4th 51, 64 (1997).) In The End, the Supervisor Might Get Some Litigation Reimbursement Fees Of A Somewhat Limited Nature. Municipality practitioners should be well advised to read County of San Benito v. Scagliotti, Case No H045887 (6th Dist. Sept. 24, 2020) (unpublished) about fee shifting statutes under the Political Reform Act (PRA) and Government Claims Act (GCA), not to mention indemnification for settlement payments made by public employees. Boiling things down, County and former supervisor Richard Scagliotti were sued for violations of the Political Reform Act of 1974. County agreed to indemnify and defend Mr. Scagliotti based on the ambiguous nature of some complaint allegations. The lower court assessed some $12,500 in penalties against Mr. Scagliotti for some unintentional reporting omissions under the PRA and $220,000 under Government Code section 81700 for use of governmental position for financial gains in the plaintiff suit. That determination provoked a firestorm by which the County withdrew its indemnification/defense decisions based on the premise that Mr. Scagliotti’s conduct might have been outside the course and scope of his employment, especially in connection with the $220,000 penalty. Mr. Scagliotti substituted in another attorney, incurring about $27,000 in fees for beating back the plaintiff’s $800,000 fee motion. He also eventually reached a settlement with plaintiff by which he paid $220,000 out of his own pocket, effectively having plaintiff waive the PRA penalties. This set off secondary litigation where County sued to recoup $470,000 in fees spent in defending Mr. Scagliotti in the underlying case based on GCA and Labor Code section 2865 fee-shifting provisions. Mr. Scagliotti cross-complained under Government Code section 825 and Government Claims Act section 995 for the $27,000 attorney’s fees he expended on the substituted attorney and for the $220,000 settlement payment he made to the plaintiff. In the end, the trial judge denied each side’s requests for fee awards and indemnification. Both sides moved for reimbursement of litigation fees expended in litigating the secondary action for fees/settlement payments under Code of Civil Procedure section 1038(a), motions which were denied. That gets us to the Sixth District appeal decision in the matter. The Court of Appeal had no problem finding County was not entitled to underlying fees because nothing in a contractual letter with Mr. Scagliotti overrode the more inclusive fee-shifting reimbursement provisions in Government Code section 996, with Labor Code section 2805 not displacing the general reimbursement provision which is pro-public employee. With respect to Mr. Scagliotti, he was not entitled to recovery of settlement payments because it did not fit GCA’s “injury” definition; however, he was entitled to reimbursement of his defense costs under Government Code section 996.4 for the failure to report violations, after a very detailed discussion of the interaction between GCA and PRA statutory schemes. On the section 1038 dueling motions, County was properly denied fees based on Mr. Scagliotti’s reporting result, with Mr. Scagliotti’s fee denial being correct because the County’s defenses were not totally baseless in nature. Each side had to bear their own appellate costs. So, the former supervisor gets a shot at recovering some attorney’s fees of a limited nature—otherwise, everyone went home empty-handed! $84,995.25 Was Requested; Only $1,586 In Fees Awarded. Although there was no explicit appellate discussion on this issue, Triplett v. Decron Properties Corp., Case No. B295126 (2d Dist., Div. 1 Sept. 24, 2020) (unpublished) is a reminder for parties seeking fee recovery to provide sufficient evidence in support of a substantial request. The particulars are not reported, but the prevailing party sought $84,995.25 in attorney’s fees and was awarded only $1,586 based on lack of sufficient evidence. The moral to this one is to make sure there is a competent proof support to your fee motion.

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