Judge May Be Challenged When Case Is Remanded for Fee Award

Tuesday, September 26, 2006

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Judge May Be Challenged When Case Is Remanded for Fee Award—C.A.

By KENNETH OFGANG, Staff Writer

A trial judge may be peremptorily challenged when the Court of Appeal sends the case back for the entry of an attorney fee award, even if the jurist’s ruling on other issues has been sustained, the Court of Appeal for this district ruled yesterday.

A divided panel in Div. Seven granted a writ of mandate sought by First Federal Bank of California, and directed that the bank’s challenge to retired Los Angeles Superior Court Judge Robert H. O’Brien, sitting on assignment, be sustained.

The writ proceeding stems from a suit in which Prestige of Beverly Hills, Inc., a real estate developer based in West Hollywood, claims that First Federal improperly debited its account $20,000 to pay gambling markers presented against the account by Caesars Palace.

The suit originally resulted in a summary judgment for First Federal, but the Court of Appeal reversed and remanded for trial. First Federal then prevailed in the trial before O’Brien, but its motion for attorney fees was denied.

‘New Trial’

The appellate panel affirmed the judgment for the bank and reversed for a determination of the fees, which the court said the bank was entitled to under an indemnity provision in the account agreement.

The bank then sought to disqualify O’Brien under Code of Civil Procedure Sec. 170.6(a)(2), which allows a successful party on appeal to remove the judge whose ruling was reversed “[i]f the trial judge in the prior proceeding is assigned to conduct a new trial in the matter.”

O’Brien ruled that the statute did not apply because the attorney fee determination was not a “new trial.”

But Justice Laurie Zelon, writing yesterday for the court, said the intent of the Legislature was to allow a successful appellant to avoid having to go before the same judge when the appellate ruling requires a reexamination of factual or legal issues previously determined.

Reexamination Required

That was the case here, Zelon said, distinguishing Paterno v. Superior Court (2004) 123 Cal.App.4th 548. The court held there that in a bifurcated case, a group of plaintiffs bound by an adverse determination as to liability but not as to damages could not use the statute to disqualify the judge who presided over the liability trial from hearing the proceedings regarding damages.

Zelon explained:

“Given the procedural posture of Paterno,...no reexamination was required as neither the plaintiffs, nor any of the factual or legal issues relating to damages, had been before the trial court. The same is not true here where, on remand, the trial court must return to the very motion it denied, and on which it was reversed.”

Also distinguishable, the justice said, are cases in which the statute was held inapplicable to a reversal to state the reasoning for a summary judgment or to consider new legal authority.

“Here, it is clear that there was a trial, even limiting the examination to the attorney’s fees motion,” she wrote. “The trial court made a determination on the merits that First Federal was not entitled to recover its attorney’s fees. Reversing that order, we remanded for a hearing on the amount to be awarded, a hearing that will require the presentation of evidence and factual and legal determinations as to the nature and amount of the fees sought. Such a reexamination of an issue previously in controversy is a retrial. The trial court erred in rejecting the motion.”

Justice Earl Johnson Jr. concurred, while Presiding Justice Dennis Perluss dissented.

The dissenting jurist argued:

“Our remand for a determination of the amount of attorney fees to which First Federal is entitled following the reversal of the trial court’s determination Prestige was not liable for any such fees under the parties’ contract is, in my view, indistinguishable from the situation in Paterno... where damages were to be considered for the first time on remand. Here, the trial court apparently interpreted the relevant contracts as a matter of law...and concluded no attorney fees could be recovered without addressing any factual issues relating to First Federal’s motion...The initial hearing on the attorney fees motion was unquestionably a ‘trial’....However, the trial court on remand is not free to reexamine the legal issue previously in controversy (that is, whether the account agreement authorizes the award of fees). In addition, because the court never reached any of the factual issues relating to the merits of First Federal’s motion, there can be no ‘reexamination’ of factual issues on remand. Accordingly, there is no ‘retrial’ within the meaning of section 170.6, subdivision (a)(2).”

Attorneys on appeal were Steven N. Richman and Lawrence A. Abelson of Epport, Richman & Robbins for the bank and Frank A. Satalino for Prestige.

The case is First Federal Bank of California v. Superior Court (Prestige of Beverly Hills, Inc.), 06 S.O.S. 5145.