Second District, Seven 7 So Holds Under Civil Code Section 1354(c), But Splinters Badly in the Process.
We all know that fundamental access to the courts is more than just rhetoric; it is a bulwark of our whole legal system. This principle took “front and center” importance in the next case, where entitlement to fees was not in doubt under a special mandatory fee-shifting statute. What was in doubt was whether the financial condition of the losing indigent litigant should be taken into account—the “pocketbook” factor frequently factored into the mix of things, especially a fee award. The lower court denied fees on the indigency basis alone, a determination that was reversed and remanded—but not necessarily for why you might think. (So, read on!)
Plaintiff, a housing cooperative tenant who was represented for a time by counsel but then proceeded in pro per, lost an unopposed summary judgment motion against owner, which moved for mandatory attorney’s fees of $48,328 under Civil Code section 1354(c) (a fee-shifting clause under the Davis-Stirling Act that we have frequently discussed under our category “Homeowner Associations”). The trial court denied fees based on plaintiff’s financial condition alone.
In Garcia v. Santana, Case No. B206513 (2d Dist., Div. 7 May 28, 2009) (certified for publication), the Second District, Division 7—in a published opinion generating majority, concurring, and dissenting opinions—reversed and remanded.
People living in miserable poverty. August 1936. Elm Grove, Oklahoma. Dorothea Lange, photographer. Library of Congress.
The majority decision (authored by Justice Zelon and joined in by Acting Presiding Justice Woods) found that entitlement to fees was clear under section 1354(c) but that the determination of the amount of fees (zero) was the decisive issue on appeal.
After an eloquent survey of indigency protections under California law, Justice Zelon decided that the indigency of an unsuccessful litigant was a proper factor to consider—even under a mandatory fee-shifting provision—but had to be balanced through a consideration of all the factors that must be evaluated in a lodestar analysis. Support was found in the analogous areas of out-of-state plaintiff bond undertakings, FEHA frivolous award determinations, and 998 offer evaluations. Although finding that indigency may not preclude a fee award in all circumstances, the majority concluded “[b]ut, in the proper case, the trial court does have the discretion to determine that the award that is reasonable is zero.” (Maj. Opn., Slip Opn., at p. 14.)
Acting Presiding Justice Woods, in a concurring opinion, agreed that “financial condition is one such other factor to be considered by the trial court in considering an award of attorneys’ fees” (Conc. Opn., at p. 1), but went on to indicate that the lower court had erred by awarding zero fees to the defense given the mandatory nature of section 1354(c).
In dissent, Justice Jackson believed that the lower court on remand should not consider plaintiff’s indigency in making an award. He found that there was a difference between access to the courts (such as waiving a filing fee for an indigent litigant) and awarding attorney’s fees against an indigent going all the way in a case with a mandatory fee-shifting statute (a result which might prejudice the defense having to defend against a potentially meritless suit). Justice Jackson noted that section 1354(c) did not have the “needs” caveats of other statutes, such as that involved in Family Code section 2030 fee awards (a topic oftentimes explored in our category “Family Law Awards”). He would have excluded indigency from the fee recovery decision making calculus under section 1354(c).