Practice Tip—Think About Apportioning To Avoid The Result Here!
Stifano v. Slaga, Case No. D077865 (4th Dist., Div. 1 Aug. 17, 2021) (unpublished) is an example of a case which we do not see often: a trial judge denying attorney’s fees altogether when a party did not apportion them between compensable and non-compensable claims.
The start to this case was great and should guide all litigants: “This case underscores the old maxim that it is best not to mix friendship and business.” What happened here is that two partners opened an Ocean Beach bar and music venue, with one of the partners “fronting” a loan to the other when he could raise his contribution under penalty that the loaning partner obtained the entire business. Litigation ensued, and the loaning partner substantively prevailed, a result affirmed on appeal. Here, however, is the rub in this matter: loaning partner moved for attorney’s fees, but he failed to apportion compensable fees owed by the defaulting partners from non-compensable fees expended in litigating against a third party. After loaning partner had to admit in fee proceedings that allocation was a legitimate adjustment exercise, the trial judge denied in entirety the fee request.
That conclusion was affirmed on appeal. Appellant argued that the contract documents were broad enough to allow for the extraneous fees, but a closer examination showed they had to have a causal connection with the contract dispute between the partners rather than outside parties. Fee denial affirmed where the other side did no apportionment of fees.