Defendant’s Fee Request Was For Around $3.215 Million.
Although this litigation was fierce, with defense parties winning SLAPP fees and contractual fees under California law, one defendant who never raised a conflict of law issue in previous crucial junctures was not allowed a substantial attorney’s fees recovery because it never argued clearly before the fee motion stage that New York law, rather than California law, should be applied.
In Sugarman v. Banc of California, Inc., Case No. B343047 (2d Dist., Div. 8 Sept. 8, 2026) (unpublished), there was contentious litigation by plaintiffs and various defendants over Mr. Sugarman’s resignations/ousters from high-ranking positions at Banc of California. Earlier, plaintiffs were hit with anti-SLAPP fees on certain claims to the tune of over $1.5 million in fees/costs and around $1.065 million in fees/costs to Banc’s board directors and executives (all based on proceeding under California law, even though certain contracts specified New York law as the governing law). Banc had remaining contractual claims against it, brought a summary judgment motion on those claims, and plaintiffs dismissed those claims without prejudice well before a court worked up any adjudication on the motion. Banc moved to recover $3.215 million in contractual attorney’s fees from plaintiffs principally under New York law, with plaintiffs opposing on the basis that Banc had waived the argument that New York law based on their prior conduct in the litigation.
Both the trial and appellate court agreed with the waiver argument. On appeal, because waiver is a factual question, the trial court’s waiver determination was reviewed under a substantial evidence standard of review—which was very outcome determinative on appeal. Banc had not really flagged New York law as being applicable in prior proceedings, especially the summary judgment motion—because Banc relied primarily on California law being applicable and not saying New York law was the beacon. That silence was persuasive at the trial court level and on appeal, given that New York law did not have a parallel statute like Civil Code section 1717(b) allowing a plaintiff to avoid fee exposure for dismissal of contract claims.