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Court of Appeal:
Law Office Was Erroneously Denied ‘Cost of Work Product’
Statute Authorizes Payment Where Political Subdivision Is Prodded Into Switching From At-Large Elections to District-Based Elections, Panel Says; There Need Be No Present Client, No Payment of Costs by Client
By a MetNews Staff Writer
A Pasadena law firm is entitled to be reimbursed for the “cost of work product” incurred in connection with prodding the Whittier Union High School District into switching from at-large to district-based elections for members of its Board of Trustees, the Court of Appeal for this district held yesterday, broadly interpreting the statute authorizing such payments.
The Law Office of Carlos R. Perez claimed entitlement under Elections Code §10010(f)(1), a part of the California Voting Rights Act, to the maximum recovery permitted, $30,000. Los Angeles Superior Court Judge Mitchell L. Beckloff ruled that it receive nothing.
The statute provides that where a “prospective plaintiff” gives notice of an intent to sue if a district-base election system is not adopted to avoid dilution of a minority’s voting power, there must be “reimbursement for the cost of the work product generated to support the notice.” The school district acted in response to the law firm’s notice.
Beckloff’s Reasoning
However, Beckloff found that while there was a “likely plaintiff” there was no “prospective plaintiff” because no one had retained the firm’s services. He also determined that “the law firm did not pass the cost onto a prospective plaintiff who paid the expense and then was entitled to reimbursement.”
Reversal came in an opinion by San Diego Superior Court Judge Albert Harutunian III, sitting on assignment, who wrote: “Pursuant to our de novo review of the trial court’s statutory interpretation, we believe the term ‘prospective plaintiff’ connotes a person who meets the criteria for being a plaintiff, and whom the law firm anticipates is willing and able to take on the role of plaintiff if necessary. ‘Prospective’ is a term of anticipation, not certainty. The trial court’s factual finding Perez Firm represented at least one ‘likely plaintiff’ appears to contradict the court’s implication that the firm would have had to search for a client when it submitted the demand letter.”
He added:
“This is not a case where a law firm dreamed up a legal claim for a hypothetical client. Perez Firm presented evidence that if it needed to go forward with litigation, it had several people it expected would be available to serve as a plaintiff. It presented the court with some of their names—one of them was even the spouse of plaintiffs counsel. Nothing more was needed to properly characterize Perez Firm’s work as having been done on behalf of a ‘prospective plaintiff.’ ”
Out-of-Pocket Payment
The jurist also said that Beckloff erred in concluding that a prospective plaintiff had to “incur” expenses “by personally transferring the funds from” his or her “wallet or bank account.” Harutunian said:
“We presume the Legislature was aware the allocation of who pays costs, and when they are paid, is a matter of free contract between attorney and client. Lawyers, including those working on a contingency, may choose to absorb costs until the litigation is concluded. Plaintiffs’ lawyers routinely take cases on contingency, with courts awarding plaintiffs their attorney’s fees even though the plaintiff was either never obligated to pay fees to the attorney, or was entitled to defer payment of these fees until after the litigation was concluded. In these situations, nothing would be gained by requiring the lawyer to force the client to pay the costs merely to obtain reimbursement for those costs.”
The matter was remanded to the Superior Court so that it can “determine the ‘cost of work product’ recoverable” by the law firm. Harutunian noted:
“The trial court did not address whether attorney’s fees are recoverable as the cost of work product, so we do not reach that issue.”
He said it was also not necessary to determine whether the law firm is entitled to recompense under the private attorney general statute, Code of Civil Procedure §1021.5. The law firm had sought fees under that statute but Beckloff ruled that it was inapplicable because there was no prevailing party, and the order denying fees on that basis was not appealed.”
“Appellant may present any such claims to the trial court for decision in light of the court’s future decision on awarding the cost of work product, Harutunian specified.
The case is Law Office of Carlos R. Perez v. Whittier Union High School District, B315375.
Perez and Alejandra Gonzalez-Bedoy of his office argued for reversal. Eric Bathen and Richard D. Brady of the Costa Mesa Law Office of Eric Bathen represented the school district.
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