Rationale Parallels Result by Different Division of Second District in Superior Property of Carson v. Regency Outdoor Advertising.
In our April 17, 2009 post, we examined Superior Property of Carson LLC v. Regency Outdoor Advertising, Inc., a Second District, Division 3 unpublished decision that affirmed a substantial fee award under Civil Code section 1717, but only after the trial court reduced fees to the prevailing defendants based on their tardiness in relying on the proper lease (after taking a position that a different lease applied throughout earlier junctures of the litigation). Now, we have a Division 2 opinion affirming a similar fee award that was reduced because the winning litigant belatedly raised a preclusive issue late in overall proceedings.
Pearl v. Deitch, Case No. B203762 (2d Dist., Div. 2 Apr. 20, 2009) (unpublished) involved a protracted battle, through several lawsuits, between plaintiff tenant and defendant landlord over a purchase option on a Santa Monica condominium unit. The parties eventually reached a settlement agreement with a fees clause under which plaintiff was paid some money, agreed to vacate by a certain date, and agreed to be responsible for damages to the unit after a specified date. Charges of waste and then malicious prosecution (in the wake of dismissal of the waste action) went back and forth in the court system. Defendant and her attorneys even won $13,435 on an anti-SLAPP motion by which the malicious prosecution claim was dismissed. Plaintiff then sued for breach of contract or (alternatively) rescission of the settlement agreement, but that was finally disposed of by a judgment on the pleadings—with the trial court determining that the claims should have been raised in one of the prior actions after unsuccessfully raising the preclusion issue before the appellate court in the prior appeal of the anti-SLAPP motion grant.
Defendant then moved for an award of $124,903 in Civil Code section 1717 fees based on the fees clause in the settlement agreement. The trial court found the request excessive, primarily for two reasons: (1) defendant’s dilatoriness in raising the compulsory cross-claim waiver issue found ultimately dispositive, and (2) defendant’s request of an award based upon a $395 per hour lodestar rate when plaintiff’s $265 per hour opposition rate was found to better reflect the difficulty factor of the litigation.
Plaintiff appealed, claiming only $5,000 in fees should be awarded.
And … drum roll, please, the appellate decision: fee award affirmed on appeal.
The fees clause in the settlement agreement was a proper predicate for the fee award, and the trial court was allowed leeway to follow its own estimates of reasonable hours billed and was not bound by defendant’s submission of detailed billing substantiation.
However, the appellate panel seemed to agree with the lower court that the one-half reduction was in order because of the defense’s tardiness in raising the compulsory cross-claim waiver issue. Given the one-half reduction by the lower court for various reasons, the Court of Appeal rejected plaintiff’s suggestion that only $5,000 in fees were in order. BLOG OBSERVATION–Pearl is consistent with Division 3’s rationale in Superior Property of Carson LLC v. Regency Outdoor Advertising, Inc., where prevailing defendant’s fees were reduced for failing to alert the trial court to the governing instrument until very late in the game.