The next two cases indicate that decisions to apportion fees for “fee eligible” versus “non-fee eligible” work almost always depend on the facts and circumstances of the case, especially where there are clear avenues to make an apportionment. However, if everything is truly intertwined, trial judges have broad discretion to decide not to make apportionments.
Dromy v. Assil, Case No. B259489 (2d Dist., Div. 1 Dec. 22, 2015) (Unpublished)—No Apportionment Needed Because Claims And Cross-Claims All Intertwined.
Here, plaintiff sued to recoup on $3 million in loans under two notes with fee clauses, although defendant had paid them off in full in line with apparently inflated payoff requests by plaintiff. Defendant cross-claimed on various theories, such as usury and “I paid you off/you inflated the payoff demand” claims. Despite the payoff, plaintiff filed an amended complaint on various torts. Plaintiff decisively was defensed in a jury trial, while cross-complainant/defendant got “mixed results”—losing a usury claim but winning that the excessive fees/interest was included in plaintiff’s payoff demands, winning a bench trial compensatory award of $86,890.64. Both sides requested fees, but defendant/cross-complainant was found to have prevailed, with the lower court awarding $371,814 in contractual attorney’s fees (out of a requested $434,304).
Plaintiff/cross-defendant appealed, claiming he should have been the prevailing party and arguing that the lower court had to apportion between “fee eligible” and “non-fee eligible” claims.
Plaintiff lost at the appellate level, with a further award of appellate costs and a remand to determine fees to the victor on appeal. Defendant/cross-complainant did prevail—he did not have to pay anything and obtained positive money from plaintiff/cross-defendant, even if only 10% of the requested amount. However, this was enough to be the prevailing party. As far as apportionment was concerned, the appellate court determined that all of the claims and cross-claims were intertwined, with no “clear avenue” to require apportionment of time on the usury argument—unlike clear avenues in other published appellate decisions. Finally, the amount of fees awarded were not excessive, especially given that losing plaintiff had requested within 3% of defendant/cross-complainant’s fee request (i.e., $424,687).
Berger v. Varum, Case No. A141112 (1st Dist., Div. 1 Dec. 22, 2015) (Unpublished)—Abuse of Discretion To Not Apportion Given Circumstances Showing Different Parties And Pre-Joinder Work.
In contrast, this decision found it was an abuse of discretion not to gauge whether apportionment was appropriate between compensable and non-compensable work related to contract claims under Civil Code section 1717.
Residential property owners won cross-claims against a construction designer even though there was prior complaint involving 12 parties and separate defect claims against subcontractors, plus pre-joinder work not relating strictly to the construction designer. The trial judge awarded owners $2.1 million on a breach of contract claim, a little over $1.6 million on a negligence claim, and nothing on a fraud claim. This win also netted owners a contractual fee award of $532,434 from the lower court.
Construction designer did well to appeal under the circumstances. Observing that only contractually-related claims are compensable (Brown Bark III, L.P. v. Haver, 219 Cal.App.4th 809, 829-830 (2013)), the appellate court believed that the trial judge needed to exercise discretion on whether apportionment was required, looking at whether work could be segregated out or whether it was truly intertwined. Reversed for a “re-look.”