Fee Entitlement Still Allowed A Determination Of Reasonableness, With Record Supporting An Excessive Fee Request.
Reasonableness of a fee request is simply an important issue all clients and attorneys must consider when a fee/sanctions petition is filed. Where an excessive, unreasonable request is made, the lower court has a range of options, from denying the request altogether or making reductions of a substantial nature.
That last option occurred in Pritikin v. LG Electronics U.S.A., Inc., Case No. G063695 (4th Dist., Div. 3 Aug. 21, 2025) (unpublished).
There, an employer failed to pay costs and expenses to continue an arbitration involving an employee. The arbitration apparently was abandoned after those expenses were not paid, with employee moving to recover material breach of arbitration agreement sanctions under CCP §§ 1281.98 and 1281.98 for fees incurred in the arbitration ($14,475) and for “fees on fees” in bringing the fees motion ($3,178.50), totaling $17,653.50. The lower court found that the fee request was excessive, awarding $2,060 after indicating the number of hours and hourly rate which it deemed reasonable. The appellate court affirmed, in a 3-0 opinion by Justice Delaney.
The first issue was what arbitration sanctions provision applied. The 4/3 DCA decided that section 1281.98 applied because employer materially breached the arbitration agreement by not paying expenses to have the arbitration continue; it had paid the arbitration initiation fees. Once a material breach occurs under 1281.98, the lower court imposes sanctions under section 1281.99. Section 1281.98(c)—expenses incurred before the material breach—is a discretionary provision, whereas section 1281.99 concerning expenses incurred after the material breach is mandatory in nature. Nevertheless, the appellate court considered sanctions under both provisions as engrafting a reasonableness standard into the ultimate imposition decision making.
Because discretionary decisions on the amount of fees awarded are reviewed under the abuse of discretion standard, the lower court’s award was proper because it determined that the request was inflated, a special circumstance where the attorney’s fee substantiation did not have to be blindly credited by the trial judge.