Second District Corrects Clerical Error and Affirms Substantial “Cost of Proof” Award Against Losing Attorney Malpractice Plaintiff.
In our June 6, 2008 post, we reviewed the fee-shifting provision of Code of Civil Procedure section 2033.430(a). Briefly summarizing, that provision allows a trial court to award “costs of proof,” including reasonable attorney’s fees, to a party that proves facts that should have been admitted through the requests for admission (RFA) discovery process. This case is the second illustration of how practitioners need to be very careful in responding to requests for admission or else expose their clients to substantial “cost of proof” awards. West Side Health Care Dist. v. Hooper, Lundy & Bookman, Case No. B190562 (2d Dist., Div. 4 June 11, 2008) (unpublished), involved a plaintiff suing its Former Attorneys for transactional legal malpractice. The trial judge granted summary judgment based on the statute of limitations contained in Code of Civil Procedure section 340.6 and on lack of causation, rulings which were affirmed on appeal.
Winning Former Attorneys also moved for an award of $122,626.42 in attorney’s fees and costs (mainly fees) under the RFA fee-shifting statute, plus $3,240 of costs in bringing the fee motion. At the fee motion hearing, the trial judge was concerned that Former Attorneys had not apportioned out fees so that they correlated to the work spent in proving the denied RFAs, a concern acknowledged by Former Attorneys as having some validity. The trial judge continued the hearing for supplemental papers on this issue. Former Attorneys did supplement with a declaration by which the fee request was reduced to $81,530, plus $3,240 incurred in the initial fee motion, plus $2,940 incurred in preparing the supplemental declaration, for a grand total of $87,710. After eliminating five items totaling $3,808, the court “reduced” the award to $118,818.42 in fees and costs, after refusing to award the $2,940 in work for the supplemental declaration. (Wait, you say, something does not add up—you are right, so hang on.)
On appeal, the Second District panel (3-0, with Presiding Justice Epstein as author) affirmed but modified the award down based on an obvious arithmetic error. The Court of Appeal found that there was no abuse in awarding expenses for proving the truth of facts that showed a lack of causation on the legal malpractice claim. It did, however, correct the mathematical error, finding that the trial judge erroneously took the $3,808 off of the initial fee request of $118,818.42 rather than the concededly reduced request of $81,530. When the proper arithmetic was done and the fees for the initial motion were also added in, the appellate court—under its inherent authority—modified the award to $80,962, still a hefty “cost of proof” award to be faced by the losing malpractice plaintiff.