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Court of Appeal:
Attorney Fees May Be Shaved Based on Lawyer’s Incivility
Justice Wiley Says Personal Embroilment, Over-Litigation of Case May Also Be Taken Into Account
By a MetNews Staff Writer
The Court of Appeal for this district yesterday affirmed a $90,000 award of attorney fees to a lawyer who prevailed in an action against an unlicensed contractor and claimed entitlement to $287,640, holding that the judge who set the fees properly took into account the attorney’s incivility and his over-litigation of the case, attributable to his personal embroilment.
“Trial judges deciding motions for attorney fees properly may consider whether the attorney seeking the fee has become personally embroiled and has, therefore, over-litigated the case,” Justice John Shepard Wiley of Div. Eight wrote. “Similarly, judges permissibly may consider whether an attorney’s incivility in litigation has affected the litigation costs.”
The opinion affirms a judgment by Los Angeles Superior Court Judge Elaine W. Mandel as it pertains to the award of attorney fees, but reverses the judgment to the extent that the contractor’s surety is not held liable for payment of the fees. Mandel entered the case after the trial as to damages, held before Los Angeles Superior Court Judge Nancy L. Newman, who was reassigned.
Pro Per Attorney
Seeking a boost in fees was Beverly Hills attorney David Karton, who was involved in litigating the action against Ari Design and Construction, Inc., along with his co-counsel, Woodland Hills attorney Joe R. Abramson. The fee award excluded time Karton personally spent on the case, under the 1995 holding by the California Supreme Court in Trope v. Katz that a pro per attorney is not entitled to such recompense
Karton and his wife had paid Ari $92,651 for construction work at their home but Karton ordered that performance cease when he discovered that Ari was unlicensed. Based on a portion of sum advanced having been unearned, the lawyer demanded a return of $35,096; Ari insisted it owed only $13,000.
The result of the litigation was a judgment for $133,792.11 plus postjudgment interest in favor of the Kartons.
This included a return of the full $92,651, although Newman found that the overpayment had been in the amount of $35,096. Business and Professions Code §7031(b), which requires disgorgement of all compensation paid to an unlicensed contractor, was applied.
The attorney fees were awardable under Code of Civil Procedure §1029.8 which provides that in actions against unlicensed contractors, “[t]he court may, in its discretion, award all costs and attorney’s fees to the injured person if that person prevails in the action.”
Setting Fees
In setting attorney fees, Mandel took into consideration the simplicity of the issues in the case and the relationship of the amount being sought in fees to the damages recovered, as well as the matters of lack of civility, over-litigation, and personal embroilment.
She said the briefing by the plaintiffs’ lawyers “was replete with attacks on defense counsel such as that defense counsel filed ‘knowingly false claims of witness tampering,’ ‘her comments were frivolous,’ something was ‘typical of the improper tactics employed by defendants and their counsel’.”
The judge remarked:
“It was really offensive to me, the attacks made in this case.”
In support of the motion, more than 300 pages of documentation was provided. Mandel complained:
“I… have a lot of extraneous documentation, a lot of paper that I did not need and did not want in ruling on this motion.
“If this is reflective of the litigation that went on in this relatively simple-sounding case, I understand how you may and your counsel may have spent the number of hours that you claim to have spent.”
She said Karton and Abramson filed “so far beyond what was necessary on this matter” and declared that the $270,000 fee request was “excessive by a lot.”
Mandel told Karton he was “agitated about this case” and tied this to “the over-litigation of this case.”
The following day, she made the award of $90,000 based on 200 hours at $450 per hour.
Wiley’s Opinion
In his opinion affirming the fee award, Wiley said Mandel correctly applied the appropriate factors,
With respect to civility, he said:
“Attorney skill is a traditional touchstone for deciding whether to adjust a lodestar….Civility is an aspect of skill.”
He provided these observations:
“Excellent lawyers deserve higher fees, and excellent lawyers are civil. Sound logic and bitter experience support these points.
“Civility is an ethical component of professionalism. Civility is desirable in litigation, not only because it is ethically required for its own sake, but also because it is socially advantageous: it lowers the costs of dispute resolution. The American legal profession exists to help people resolve disputes cheaply, swiftly, fairly, and justly. Incivility between counsel is sand in the gears.
“Incivility can rankle relations and thereby increase the friction, extent, and cost of litigation. Calling opposing counsel a liar, for instance, can invite destructive reciprocity and generate needless controversies. Seasoning a disagreement with avoidable irritants can turn a minor conflict into a costly and protracted war. All those human hours, which could have been put to socially productive uses, instead are devoted to the unnecessary war and are lost forever. All sides lose, as does the justice system, which must supervise the hostilities.
“By contrast, civility in litigation tends to be efficient by allowing disputants to focus on core disagreements and to minimize tangential distractions. It is a salutary incentive for counsel in fee-shifting cases to know their own low blows may return to hit them in the pocketbook.”
Approach on Appeal
The incivility was repeated in pursuing the appeal, Wiley said, commenting that “the Kartons have come out swinging, apparently believing the best defense is a good offense,” advising:
“This approach demonstrates the trial court was within its discretion to conclude the Kartons conducted litigation that was less than civil.”
Karton pointed to the Sixth District Court of Appeal’s 2009 opinion in Gorman v. Tassajara Development Corp. which reversed an award of $416,581.37 as arbitrary where the appeals court could not decipher how that amount could have been derived from the lodestar figure, saying:
“No amount of adding or subtracting 10ths of hours would yield a charge ending in 37 cents….[¶] No amount of adding or subtracting half-hours would yield a charge ending in 37 cents….[¶] [N]o adding or subtracting of quarter-hour increments would yield a charge ending in 37 cents.”
That opinion, Wiley said, “shows one wrong way for a trial court to rule on fees” while Mandel “showed one right way.”
Liability of Surety
Wiley disagreed, however, with Mandel’s determination that the $90,000 award of attorney fees cannot be recovered from Wesco, from which Ari had purchased a $25,000 performance bond. Rather than interpleading the funds, he noted, Wesco chose to litigate, providing fees to Ari’s attorneys.
Wesco argued that its liability was limited to $12,500, which it had paid. Wiley responded:
“Wesco’s actions belie its argument. Wesco says it cannot be liable for more than the $12,500 sum of its bond. Yet it voluntarily wrote the Kartons a check for $38,768.49, which was the sum of the $12,500, plus postjudgment interest, and plus costs. When a surety decides to fight a lawsuit, it can make itself liable for the costs of that litigation in excess of the face value of its bond, as Wesco’s own actions demonstrate.”
The case is Karton v. Ari Design and Construction, Inc., B298003.
Abramson and Karton represented the Kartons. Carlos E. Sosa and Larry D. Stratton of the Woodland Hills firm of Hausman & Sosa acted for Wesco.
Ari was advised by the court that, as a corporation, it could not appear in pro per as it purported to do. Three employees of Ari who were found not to be alter egos and not liable filed a brief in pro per.
Earlier Cases
On Feb. 17, 2009, Div. One of this district’s Court of Appeal, in an opinion by Presiding Justice Frances Rothschild, reversed a default judgment against former client, William Russell Dougherty, whom Karton sued for fees, holding that then-Los Angeles Superior Court Judge (now Court of Appeal Justice) Helen Bendix had erred in denying relief to the defendant based on lack of notice. Karton had made successive applications for attorney fees based on his efforts to collect on the judgment, and those fees had mounted to well in excess of $1 million.
Karton on Nov. 14, 2014, was stripped by Div. One of this district’s Court of Appeal of a judgment for $1,161,565 in attorney fees and $6,266.56 in costs against Dougherty. Rothschild wrote the opinion in which the award by Los Angeles Superior Court Judge Ralph Dau (since deceased) was reversed because, she said, Dougherty was the prevailing party inasmuch as Dau found that Karton had collected $14,383.30 too much.
The opinion instructed that fees and costs be awarded, on remand, to Dougherty. On Sept. 25, 2015, an award was made to him against Karton in the amount of $655,258.80.
On March 12, 2018, Los Angeles Superior Court Judge Mel Red Recana corrected the judgment, nunc pro tunc, to reflect that it was against “David S. Karton, a Law Corporation,” not Karton, as an individual. Karton appealed.
In an unpublished opinion on March 4, 2020, Recana was affirmed. Rothschild said:
“One point is particularly relevant to this appeal: Through more than 20 years of litigation, the Law Corporation, not the Individual, has been the plaintiff.”
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