Fourth District, Division Three Overturns Denial and Analyzes anti-SLAPP Fee Issues in the Process.
In the following case, we have an entertaining decision penned by Presiding Justice Sills on behalf of a Fourth District, Division Three unanimous panel. However, it also has a very syllogistic-like analysis of issues frequently encountered in the anti-SLAPP fee arena of the substantive law.
Feuding attorneys, apparently former colleagues, vented a fee referral dispute in Sobel v. Kent, Case No. G040172 (4th Dist., Div. 3 Aug. 18, 2008) (unpublished).
Sobel referred certain cases to Kent under a fee referral arrangement, giving more fee recovery for clients coming from Larry Parker (of the famous advertisement genre) and less for clients coming from Sobel directly. Kent filed a lawsuit when he felt Sobel was stiffing him under the referral arrangement. Sobel retaliated by filing a malicious prosecution cross-complaint against Kent and client John Akers, predicated on the theory that Kent had egged Akers to bring a meritless small claims legal malpractice action against Sobel (arising out of Sobel’s representation of Akers in a slip and fall case). Kent countered with an anti-SLAPP motion directed against Sobel’s cross-complaint. Although there was some confusion in exactly what the relationships truly were in this situation, Akers did state in open court that he asked Kent to file the anti-SLAPP motion for Akers. Sobel hastily retreated by unilaterally dismissing his cross-complaint, which meant Akers was out of the litigation altogether. Kent refused to take the anti-SLAPP motion off calendar, with his $2,250 in fees for preparing the motion still at issue. Akers admitted at the hearing he paid nothing to Kent in fees for filing the anti-SLAPP motion. Eventually, Kent’s fee request was denied because he was only a “volunteer” who was acting pro bono for Akers. Both Kent and Akers appealed the trial court’s fee order denial, with Kent representing both himself and Akers on appeal.
With respect to Akers, our local Santa Ana-based appellate court reversed the fee denial and remanded for a determination of fees to be awarded for prevailing at both the trial and appellate levels. In so doing, Presiding Justice Sills gave a scholarly discussion of anti-SLAPP fee issues that have cropped up and are certain to crop up in the future.
Issue number 1: Can anti-SLAPP fees be denied to a prevailing defendant (or cross-defendant) because the defendant never incurred any fees to “recover”? Answer: No. This argument was foreclosed by Ketchum v. Moses, 24 Cal.4th 1122 (2001) (contingency defendant entitled to fees) and Roseaur v. Scherer, 88 Cal.App.4th 260, 282-283 (2001) (pro bono client entitled to fees in an anti-SLAPP proceeding). Thus, the attorney—the client’s agent—can ask for a fee recovery on behalf of the client, even though the attorney waived payment vis-à-vis client.
Issue number 2: Did Sobel’s withdrawal of his cross-complaint after filing of the anti-SLAPP motion mean that Akers still “prevailed”? Answer: Yes, based on the circumstances at play. The appellate panel acknowledged that it is usually a discretionary call about whether a litigant’s withdrawal of a pleading in the wake of an anti-SLAPP motion means the defendant has prevailed. (See, e.g., Coltrain v. Shewalter, 66 Cal.App.4th 94, 107 (1998); Moore v. Liu, 69 Cal.App.4th 745, 753 (1999).) “The rule is borne of a recognition of the varying contexts under which pleadings are withdrawn in the face of anti-SLAPP motion.” On the one end, the withdrawals may be nothing more than a surrogate for defeat; however, conversely, the withdrawals might be prompted by a settlement or a positive outcome for an adversary (e.g., where the adversary wins on the merits while an anti-SLAPP decision—even if erroneous—is pending for decision by an appellate court). However, based on the circumstances before the Court of Appeal, Akers was a “predestined winner” and had to prevail because of definitive case law holding that no malicious prosecution action can be founded on a small claims case.
Issue number 3: What was the reasonable amount of attorney’s fees to be awarded to Akers as the prevailing defendant on the anti-SLAPP motion? Answer: Probably only one half of the request, but appellate courts cannot exercise the proper discretion on such an issue.
Issue 3-A: Under Trope v. Katz, 11 Cal.4th 274, 280-281 (1995), Kent could not obtain fees on his own behalf. (Justice Sills suggested half an award to Akers sounded reasonable, but deferred to the trial court’s discretion on remand.)
Issue 3-B: Although the text of Code of Civil Procedure section 424.16 (the fee entitlement statute) does not use the word “reasonable” in the context of the responding party’s fee exposure, Robertson v. Rodriguez, 36 Cal.App.4th 347, 361 (1995) held that only reasonable anti-SLAPP fees can be awarded to a prevailing defendant.
Issue 3-C: The appellate court cannot simply reverse and direct entry of $2,250 in fees to Akers. “The trial will have to, in its discretion, ascertain reasonable fees for the anti-SLAPP motion in the first instance; we can’t do it here and now.” Also, the lower court had to evaluate awarding Akers reasonable fees expended on his behalf on appeal.
BLOG QUOTE FROM DECISION—“. . . such withdrawals [of pleadings after the filing of an anti-SLAPP motion] may indeed be nothing more than a surrogate for defeat: Sun Tzu in the Art of War noted that ‘supreme excellence consists in breaking the enemy’s resistance without fighting.’” (Slip Opn., at p. 6.)