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Novel Method Approved in Determining ‘Prevailing Party’
Justice Wiley Says Trial Court Properly Disallowed Attorney Fees Claimed by Litigant Under Fee-Shifting Proviso After Taking Into Account His Loss in a Separate Action Where Notice of Related Case Should Have Been Filed
By a MetNews Staff Writer
The Court of Appeal for this district, in affirming an order that denied attorney fees to a party who claimed to have prevailed, yesterday provided two alternative bases: that the man purporting to be the victor didn’t win a large enough amount to be entitled to fees and, under a novel view, that the self-proclaimed victor was actually the loser when his defeat in a separate action, which should have been related, is taken into account.
Justice John Shepard Wiley Jr. of Div. Eight authored the opinion which upholds a determination by Los Angeles Superior Court Judge William D. Stewart.
Seeking an award of $296,744.68 in attorney fees is plaintiff/cross-defendant George Harris, who leased commercial space in North Hollywood from defendant/cross-complainant Abel Rojas. The lease contained a provision for attorney fees to the prevailing party in the event of litigation.
A jury awarded Harris $6,450 on a breach-of-contract claim, but also found that Rojas had suffered compensable harm, and, after additions and subtractions were completed, Harris was ahead by either $5,907.50 or $5,882.50. Wiley noted that neither party “seems to have noticed this discrepancy” in the judgment “or if they have noticed it, they have decided against explaining it to us.”
Both Stewart and Wiley cited the California Supreme Court’s 1995 decision in Hsu v. Abbara. Then-Justice Joyce Kennard (now retired) wrote for a unanimous court in saying that if a party obtains a “simple, unqualified victory” in a contract action where there is a provision fort attorney fees to the winner, the court is obliged to make an award, but where there is “good new and bad news” for each party in the outcome, there is discretion.
Stewart’s Order
Noting Rojas’s success in a separate unlawful detainer action, Stewart said in his Feb. 28, 2020 order:
“Under these circumstances, the Court determines that there is no prevailing party on this action, as the result was not ‘purely good news’ for either of the Plaintiffs. Additionally, in the competing contract claims between the parties, arguably Mr. Rojas is the prevailing party, since he has a judgment against Mr. Harris of more than $13,000.00 in the UD case…, more than twice what Mr. Harris recovered.
“Accordingly, the motion is denied. The court will find that there was no prevailing party herein, in light of the totality of results in this series of unhappy litigations.”
Wiley’s Opinion
Citing Hsu, Wiley said:
“When the demand is $200,000 and the verdict is $6,450 or less, the trial judge has discretion to decide the ‘victory’ is pyrrhic and nobody won.”
A relevant factor in deciding whether a party has prevailed is whether the litigation goal was met, he recited, remarking that “[r]eaping merely five or six thousand dollars after spending three years pursuing $200,000 drastically falls short of the goal,” and adding:
“A slight recovery more resembles a tie than a win.”
Wiley also saw merit in Stewart’s view that Rojas could be viewed as the victor. After expressing annoyance that neither party to the action before Stewart filed a notice of a related case as required by the California Rules of Court, he wrote:
“Rojas won some $13,000 or $17,000 in his unlawful detainer judgment against Harris, depending on the moment at which one calculates the rent and interest. We need not and do not decide that exact moment because everything is lopsided. Harris won less than $6,000 in his Burbank judgment against Rojas. This war had two battles. Harris decisively lost the war.”
The justice went on to say:
“….Harris argues there is no precedent for aggregating related judgments when parties have failed to file a notice of related cases. Perhaps there is no precedent because parties usually follow the rule. The absence of authority does not favor Harris, who offers no logic for why his failure must restrict the court’s view of the whole picture.”
In discussing the breached rule, Wiley said:
“The Los Angeles Superior Court has hundreds of bench officers and courtrooms. When for tactical reasons one side files an action related to an existing case, both sides must file this routine notice. The notice goes to the trial judge in the low-numbered case, who then can decide how to handle the parallel litigation. The notice allows the trial court to promote efficiency, to avoid duplicative effort, to combat judge-shopping, and to minimize the prospect of conflicting results. The trial court system relies on this mechanism to detect and to cure the problem of parallel litigation within its jurisdiction.
“Neither side filed the mandatory notice of related case, even though both cases concerned the same parties, the same property, and the conflict arising out of this one relationship. The two cases ended up before different judges. [Stewart] learned of the other case only later, and then chastised both sides for failing to file the required notice: ‘I never could understand why somebody didn’t ask that…be related, and we could have brought it over here.’
“Neither Harris nor Rojas has explained this omission, which was discreditable.”
The case is Harris v. Rojas, 2021 S.O.S. 4044.
Attorneys on appeal were North Hollywood attorney Christopher J. Perry for Harris and Westlake Village practitioner Keith A. Robinson for Rojas.
Copyright 2021, Metropolitan News Company