On Remand, Prevailing Party Determination Needs To Be Revisited As Well As Apportionment Issues.
Sequoia Lake, 1920s. Online Archive of California.
Central Valley Young Men’s Christian Association, Inc. v. The Sequoia Lake Conference of Young Men’s Christian Associations, Case No. F072379 (5th Dist. Oct. 3, 2017) (unpublished) was an interesting YMCA inter-organizational battle about ownership and fees owed as it related to a Sequoia Lake real property. What happened was that plaintiff/cross-defendant Central Valley brought various contractual and tort claims against defendant/cross-complainant Sequoia Lake Conference (SLC), alleging that it had an equitable possessory interest in the Sequoia Lake property and that it had offsets to camp usage fees SLC claims were owed. SLC cross-complained against Central Valley for operational expenses claimed to be unpaid. After some of Central Valley’s tort claims fell by the way side, Central Valley got mixed results on its claims, while SLC was awarded a total of $102,780 plus prejudgment interest on its cross-claims. But now the postjudgment fun begins! Both sides moved for attorney’s fees as the prevailing party, with the trial judge determining Central Valley prevailed and awarding its total request of $293,487.50 in fees. No fees were awarded to SLC.
SLC did well to appeal the fee determinations, because it obtained a reversal and remand for a redetermination of the prevailing party and possible apportionment of fees as part of that determination.
As the appellate court saw things, SLC did prevail on contractual cross-claims for payment of conference fees and a propane bill, especially given that the jury found SLC was not unjustly enriched such that no contractual offsets were owed in Central Valley’s favor. However, the trial judge believed that Central Valley never contested these claims such that SLC could not be the prevailing party, relying upon National Computer Rental, Ltd. v. Bergen Brunswig Corp., 59 Cal.App.3d 58 (1976) in reaching this result. The problem here, for the 5 DCA panel, was that the record belied this—Central Valley did contest these claims and never acknowledged owing the amounts claimed by SLC, factors critically distinguishing National. With respect to Central Valley, it defeated SLC’s claim for camper deposits, but was unsuccessful on all of its offset claims. Given that Central Valley was largely unsuccessful on its contractual offset claims, the trial judge needed to revisit the entire “prevailing party” issue in light of the erroneous conclusion that Central Valley did not contest the contractual cross-claims leading to recovery by SLC.
On the apportionment issue, the appellate court did believe that apportionment was likely possible between contract and non-contract claims, such that the remand proceeding should focus on the prevailing party status issue and on whether apportionment on only the contract claims could be achieved after it indicated some noncontractual issues which should not be considered. So, $293,487.50 in fees, for now, went POOF! pending further proceedings.