No Proportionality Required Under Section 1717; Defense Expenditure Of More Proved Reasonableness.
In Big Ring Holdings, LLC v. Van Ness Mgt., LLC, Case No. A126692 (1st Dist., Div. 2 Jan. 26, 2011) (unpublished), plaintiff tenant was awarded $271,682 in damages for a leaking ceiling in a dispute over a yet-to-be-opened laundromat where there was a lease with a fees clause. Later, the trial court awarded prevailing plaintiff attorney’s fees of $611,544.75 (out of a requested $635,445.25) for three years of litigation toil. The defense appealed.
The defense did not succeed on appeal.
The trial court properly calculated the lodestar and then determined its reasonableness (including any reductions) under the Ketchum v. Moses methodology. It also properly allowed recoupment of fees spent on a dismissed alter ego claim.
The appellate court also rejected the notion that Civil Code section 1717 fees had to bear some set percentage to a compensatory damages award.
Finally, the reasonableness argument of the defense was undermined when it implicitly conceded the issue by submitting some proof indicating that the defense expenditures exceeded those of the plaintiff.
Leaking roof. 1827. Library of Congress.