Discretion Was Abused When There Was No Hearing And Only One Sentence Fee Award.
NICO Alloys v. American Metal Group, Case Nos. B251688/B253987 (2d Dist., Div. 2 Feb. 5, 2015) (unpublished) is an example of where a lower court and fee claimant need to do a little more to sustain a fee award on appeal, especially where apportionment was a vigorously contested issue.
In this one, two scrap metal dealers got into a real battle. NICO sued AMG for scrap metal conversion, and AMG cross-claimed for breach of a stock and inventory sales contract after the sales deal fell through and some scrap metal went missing from would-be seller’s inventory. NICO won on all counts, obtaining $322,923.31 plus prejudgment interest (affirmed on appeal, with a small modification due to an offset) and also obtaining $740,257.50 in attorney’s fees based on a fees clause in the contract. (Because the offset issue was distinct from contractual breach, NICO did prevail after winning the breach issue put at controversy under the unsuccessful cross-complaint.) The parties did vigorously argue, in the fee proceeding, about the propriety of apportionment of requested fees.
The fee award was reversed, based on the lower court’s failure to demonstrate that it actually demonstrated an exercise of discretion in apportioning fees between compensable and noncompensable claims. The reversal was driven by the fact that there was no hearing on the fee motion and the lower court simply issue a single sentence order saying “granted” as to all fees requested. Not enough to show discretion was exercised, so back to the lower court once again!