Thursday, March 12, 2020
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$1.7 Million Award to Attorney General In Attorney Fees, Costs Was Proper
Opinion Says There Is No Need to Reduce Amount to Reflect Limited Success in Action to Oust Trustee, Recover Funds
By a MetNews Staff Writer
A $1.7 million judgment in favor of the attorney general for attorney fees and costs incurred in gaining the court-ordered ouster of a man as trustee of a charitable trust and reimbursement of funds to that entity was affirmed in an opinion from Div. Five of the First District Court of Appeal that was yesterday ordered partially published.
“There is no need to reduce the amount of the fees in light of the attorney general not attaining all of his litigation goals,” Presiding Justice Barbara Jones wrote. Her opinion implies—but does not expressly state—that attorney fees would be due the attorney general in an action against allegedly derelict trustees that fails.
Fees were awarded under Government Code §12598 which provides, in part:
“The Attorney General shall be entitled to recover from defendants named in a charitable trust enforcement action all reasonable attorney’s fees and actual costs incurred in conducting that action, including, but not limited to, the costs of auditors, consultants, and experts employed or retained to assist with the investigation, preparation, and presentation in court of the charitable trust enforcement action.”
It continues:
“Attorney’s fees and costs shall be recovered by the Attorney General pursuant to court order. When awarding attorneys’ fees and costs, the court shall order that the attorney’s fees and costs be paid by the charitable organization and the individuals named as defendants in or otherwise subject to the action, in a manner that the court finds to be equitable and fair.”
‘Successful Party’
Rejecting the contention of defendant William Shine that the judge erred in not taking into account the attorney general’s limited success when awarding $1,654,083.65, Jones said:
“Under California’s private attorney general statute, courts have described the extent of a party’s success as a key factor in determining the reasonableness of attorney fees….But Code of Civil Procedure section 1021.5 expressly provides that ‘a court may award attorneys’ fees to a successful party.’ Unlike this statute, the language of section 12598 does not contain a threshold requirement that the Attorney General must be a ‘successful party.’
Jones noted that the Legislature amended §12598 in 2003 to require an award of attorney fees, in addition to costs and in doing so, deleted a requirement that findings be made as to the results achieved by the attorney general. The jurist wrote:
“In our view, this deletion indicates the Legislature’s intent to provide courts with greater flexibility when awarding the Attorney General all reasonable attorney fees and costs in charitable trust enforcement actions, as there is no longer a statutory requirement that the court must make findings regarding the results. We are not persuaded that we can read into the word ‘reasonable’ a requirement—as Shine would have it—that the court must consider the results of the litigation.”
The case is People ex rel. Becerra v. Shine, A155903. It was initially filed as an unpublished opinion on Feb. 19.
Separate Decision
That same day, an opinion was filed in People ex rel. Becerra v. Shine, A154234. There, the First District’s Div. Five reduced by $290,684 the $1,421,598 award to the trust for reimbursement of moneys sapped from it.
The reduction was based on the trial court’s reliance on improperly admitted expert testimony.
In both opinions, Jones quotes Marin Superior Court Judge Kelly V. Simmons as saying:
“Shine allowed improper tax returns to be filed, allowed a Subchapter S corporation status to be lost (by failing to follow prudent legal advice) and [Shine] used Trust funds to loan money to friends. His job performance was wholly unacceptable. Due to Shine’s mismanagement, the Trust was damaged significantly.”
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