Second District Finds “No Prevailing Party” Where Both Client and Attorneys Do Not Achieve What Either Wanted.
“If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees.” Scott Co. v. Blount, Inc., 20 Cal.4th 1103, 1109 (1999). The decision below well illustrates how that principle applies to attorneys which, although garnering a substantial net monetary recovery, still fell well short of what they really wanted to recover from a contingency client.
In Neubauer v. Musick, Peeler & Garrett, Case No. B194523 (2d Dist., Div. 7 May 29, 2008) (unpublished), Law Firm and Co-counsel sought to recover claimed reasonable attorney’s fees of $1.6 million, while Client presented evidence that the Attorneys were entitled to fees of only $234,400 based on a contingency case in which Attorneys represented Client at some points in time. Eventually, a trial judge awarded Attorneys $555,855 in fees, which was the $234,520 conceded by Client (rounded up a small amount), plus $136,050 for the work of Co-counsel, plus a 50% multiplier to reflect the risk of working on a contingency case. After that “base” decision was made, both sides filed motions for attorney’s fees based on a fee clause in the retainer agreement.
The trial judge found there was no clear prevailing party. The Second District agreed, in a nonpublished decision. Simply put, the appellate court was not inclined to disturb the trial judge’s discretion given that the record did not show the existence of a clear winner. Both sides received some “good news” and some “bad news”—the common sense test used in determining that there was no prevailing party. In line with affirmance of the ruling below, the appellate court ordered that each side was to bear their own costs on appeal (so that no fee shifting occurred at the appellate level).