Second District Awards Fees and Costs of $37,146 Against Attorney Admitting Neglect in Responding to Complaint.
Can trial courts award substantial attorney’s fees against attorneys admitting neglect when they seek relief from default judgments on behalf of clients? You bet, said the Second District in a recent unpublished decision.
In Jang v. Era New Star Realty, Inc., Case No. B197512 (2d Dist., Div. 8 June 3, 2008) (unpublished), plaintiff sued three defendants in a putative class action on behalf of 1,000 real estate agents. Plaintiff obtained default judgments against the three defendants and individually requested entry of a sum certain. Plaintiff then moved for class certification and an award of attorney’s fees. Defendants moved to set aside the default judgments based on their attorney “falling on the sword”—conceding his neglect caused the problem so as to entitle his clients to mandatory relief under Code of Civil Procedure section 473. The trial court granted relief. Plaintiff’s counsel sought $49,218 in attorney’s fees as a result of the default judgments. Defendants opposed on the basis that plaintiff’s fees would have been incurred regardless of the defaults. The lower court found the defense argument “partially correct,” reducing the fees and costs that plaintiff’s counsel had to pay as a condition subsequent of default relief to $37,146. Plaintiff’s counsel appealed.
The Second District affirmed the fee award against plaintiff’s counsel.
Appellant did not dispute that attorney’s fees are a proper sanction when relief is granted under section 473. (Hearst v. Ferrante, 189 Cal.App.3d 201, 204 (1987).) Instead, plaintiff’s counsel challenged the amount of fees awarded, which is reviewed under the deferential abuse of discretion standard. Not a good standard to come against on appeal under these circumstances. Appellant lost because the record did show that the trial court considered his mitigation argument and did reduce fees by over $12,000—discretion certainly was exercised.
Appellant specifically challenged three parking fees sought by plaintiff’s counsel, totaling $53. Because section 473(c)(1)(C) allows the trial court to “grant other relief as is appropriate” in lifting a default, the Court of Appeal found nothing inappropriate in allowing recovery of the parking fees.
CROSS-OVER ISSUE—The Second District ended by noting that appellant had the burden on appeal to show specific error in order to set aside an attorney fee award, citing Brewster v. So. Pac. Transp. Co., 235 Cal.App.3d 701, 716 (1991). This dovetails nicely with the ultimate holding in Premier Medical Mgt. Sys., Inc. v. Cal. Ins. Guar. Assn., Case No. B195889 (2d Dist., Div. 4 May 30, 2008) [fee discussion not published] (reviewed in our June 2, 2008 post), which rebuffed generalized arguments of duplicative and excessive fees where the arguments were not supported by competent evidence. If you are going to oppose, make sure your challenges are made with particularity.