42 Cal.App.5th 416
Cal. Ct. App.2019Background
- In April 2008 plaintiffs obtained writ relief against the City of Banning and SCC/Black Bench LLC (SCC/BB) and were awarded attorney fees (Highland Springs $421,819.96; Banning Bench $288,920.01).
- SCC/BB later lost the property; plaintiffs filed a section 187 alter ego motion in October 2012 to add SCC Acquisitions, Inc. (SCCA) as an additional judgment debtor.
- The trial court denied the alter ego motion for lack of diligence; this court reversed in Highland Springs (244 Cal.App.4th 267) and remanded to determine alter ego liability.
- On February 8, 2017 the trial court entered judgment finding SCCA was SCC/BB’s alter ego and amended the 2008 judgments to add SCCA.
- Plaintiffs filed cost memoranda (Feb 9, 2017) and formal fee motions (Apr 10, 2017) seeking all fees incurred pursuing the alter ego motion (including appellate fees); the trial court awarded each plaintiff $80,000, excluding appellate fees as untimely under rule 3.1702(c)(1) and disallowing fees older than two years under the Enforcement of Judgments Law (EJL).
- Plaintiffs appealed the $80,000 awards; this Court reversed and remanded for redetermination, holding the fees were prejudgment fees governed by rule 3.1702(b) and that the EJL two-year limit and rule 3.1702(c)(1) did not bar recovery of the contested fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the fees incurred prosecuting the section 187 alter ego motion prejudgment (rule 3.1702(b)) or postjudgment enforcement fees under the EJL? | Fees were incurred obtaining the Feb 8, 2017 judgment and thus are prejudgment fees recoverable under rule 3.1702(b) and §1021.5. | Plaintiffs filed forms and motions under EJL; fees are enforcement (postjudgment) costs governed by §§685.040–685.080. | Fees are prejudgment fees incurred in obtaining the Feb 8, 2017 judgment and governed by rule 3.1702(b) and §1021.5, not the EJL. |
| Were appellate fees incurred in the Highland Springs appeal untimely under rule 3.1702(c)(1)? | No—because the appeal led to a new favorable trial-court judgment, appellate fees are claimed under rule 3.1702(b)(1) and were timely filed within 60 days of the Feb 8, 2017 judgment. | Rule 3.1702(c)(1) and rule 8.278 timing (40 days after remittitur) apply to appellate fee claims; plaintiffs missed that deadline. | Rule 3.1702(b)(1) applies where an appeal results in a new judgment; plaintiffs’ appellate fees were timely claimed under rule 3.1702(b)(1). |
| Does the EJL two‑year limitation (§§685.070/685.080) bar recovery of fees incurred more than two years before the fee motion? | No—EJL timing applies to postjudgment enforcement costs; it does not apply to fees incurred in obtaining a judgment (prejudgment fees). | EJL two‑year rule limits recoverable fees because plaintiffs invoked enforcement procedures on their forms. | The two‑year EJL limitation does not apply to these fees; the trial court erred by excluding pre‑two‑year fees. |
| Was the trial court’s fixed $80,000 award appropriate without beginning from each plaintiff’s lodestar? | The award was arbitrary; fee awards under §1021.5 should start from the lodestar (reasonable hours × prevailing hourly rate) and include fees-on-fees. | The court exercised discretion to set a reasonable flat award. | Court must redetermine fee amounts on remand starting from each plaintiff’s lodestar and consider all reasonable hours, rates, and applicable multipliers per §1021.5 jurisprudence. |
Key Cases Cited
- Highland Springs Conference & Training Center v. City of Banning, 244 Cal.App.4th 267 (2016) (appellate reversal of denial of alter ego motion and remand)
- Conservatorship of McQueen, 59 Cal.4th 602 (2014) (distinguishing prejudgment fees, appellate fees, and EJL postjudgment enforcement fees)
- Ketchum v. Moses, 24 Cal.4th 1122 (2001) (lodestar as starting point and fees-on-fees under §1021.5)
- Serrano v. Unruh, 32 Cal.3d 621 (1982) (§1021.5 awards ordinarily include all reasonable hours and fees-on-fees)
- Yuba Cypress Housing Partners, Ltd. v. Area Developers, 98 Cal.App.4th 1077 (2002) (rule 3.1702(b) governs appellate fees when appeal results in entry of a new judgment)