Appellate Court Strikes Attorney’s Fees Award of $9,350 in Favor of Plaintiff.
In Legal Service Bureau, Inc. v. Mostafavi, Case No. G041804 (4th Dist., Div. 3 Oct. 4, 2010) (unpublished), our local Santa Ana appellate court dealt with a lower court judgment awarding $9,350 to plaintiff under an attorney’s fees clause of an agreement between each side. The basic dispute involved compensation entitlement to a company that agreed to represent a chiropractor in connection with pursuit of certain lien claims before the Workers’ Compensation Appeals Board. After company did not obtain all the compensatory fees it desired for representing chiropractor, yet did obtain some fees primarily under an unjust enrichment theory, the trial court nevertheless did award attorney’s fees to company and against chiropractor pursuant to a contractual fees clause. Everyone appealed.
The underlying judgment in favor of plaintiff was affirmed, but the Court of Appeal did strike the fee award, in a 3-0 opinion authored by Acting Presiding Justice Bedsworth.
What was the basis for the reversal? Simple answer: the wording of the fees clause, interpreted by a contextual construction of the entire contract between the parties, did not justify an attorney’s fees award. The fees clause only applied to routine billing disputes under the contract, not unjust enrichment claims that were not covered by the fees clause. As aptly observed by the appellate panel, "In the absence of an applicable fee shifting provision, both parties must bear their own attorney fees." (Slip Opn., citing Trope v. Katz, 11 Cal.4th 274, 278 (1995).)