Fee Clause Interpretation/SLAPP/Sanctions: 25% Contractual Fee Recovery-Capped Clause For Prosecuting Activities Held Not To Apply To Defense Activities

Also, Sanctions Against Attorney Upheld Under CCP § 128.7, But Not SLAPP Statute.

     ASAP Copy and Print v. Ringgold, Case Nos. B224295/B225702 (2d Dist., Div. 7 June 4, 2012) (unpublished) was an incredible donnybrook over a fairly minor dispute involving a photocopier lease/maintenance agreement. The amount of time, trouble, and fees that is generated must have been enormous, with the losing party at least incurring liability for over $278,000 in defense fees.

     What caught our eye on this one was two things.

     First, sanctions imposed against counsel were affirmed under CCP § 128.7 (California’s equivalent of FRCP 11), but not the SLAPP statute based on precedent indicating that losing plaintiff’s counsel cannot be hit with SLAPP fee exposure. (Moore v. Kaufman, 189 Cal.App.4th 604, 614 (2010).)

     “’There are more ways than one to skin a cat,’ so are there more ways than one of digging for money.”  Seba Smith, The Money Diggers (1844).  “There are more ways of killing a cat than choking it with cream.”  Charles Kingsley, Westward Ho! (1855). 

     Second, the pertinent contractual fees clause had a 25% capped recovery with respect to a prosecuting prevailing party. Losing prosecutor sought to apply this against defense work based on Civil Code section 1717’s reciprocity principle. Not gonna work, said the appellate court. The cap may be reasonable for prosecution work, because that it within the attorney’s control–unlike defense actions often times dictated by the whim of the opposing side as far as responses and counter-measures. Besides that, it would be inequitable to apply the cap given that the defense activities are outside the control of what the prosecuting party does to drive up costs. Fee clause interpreted by its terms and in a way to prevent an inequitable application.