Monday, July 13, 2026
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Court of Appeal:
Promise to Pay Attorney Fees Includes Paralegal Expenses
Opinion Says While Parties Are Free to Exclude Such Recovery, Contrary Reading of Undefined Terms Would Incentivize Higher Billings, Work Against Term Requiring Payout to Be ‘Reasonable’
By Kimber Cooley, associate editor
Div. Four of the First District Court of Appeal held Friday that a contract provision providing that the prevailing party in any litigation under the agreement is authorized to recover attorney fees covers any expenses attributable to paralegal services, highlighting that a contrary reading would incentivize higher billings and operate in contradiction to the term’s demand that the payout be “reasonable.”
Acknowledging that cases finding that “paralegal fees are recoverable as a component of attorney fees generally address fee-shifting provisions in statutes rather than contracts,” Justice Jeremy M. Goldman, writing for the court, declared:
“If the term ‘attorneys’ fees’ in the Agreement excluded paralegal fees, it would incentivize the parties to have attorneys perform work that could otherwise be assigned to a paralegal, needlessly increasing costs for everyone.”
Saying that “nothing prevented the parties here from taking a narrower approach,” Goldman opined that, while “attorney fees” could be interpreted as only expenses attributable to work performed by lawyer, “[i]t appears to us that one of the purposes of that provision is to allow the prevailing party to recover, to the extent the amount is reasonable, what it paid or owed its counsel to prosecute or defend the litigation.”
Dairy-Operations Agreement
Seeking the fees was Daniel Del Biaggio, the prevailing party in a lawsuit filed against Pete and Mary Ann Bansen. The parties had entered into a contract providing that Del Biaggio would receive a salary in exchange for working at the defendants’ dairy in Humboldt County and would have the opportunity to lease the operation in the future.
Del Biaggio filed a complaint against the Bansens in 2019 for breach of contract, alleging that the defendants had failed to pay him what he was due under the agreement. After a jury found in his favor, awarding him $52,850 in damages, he moved to recover $115,533 in fees as the prevailing party; his request included paralegal time billed at $130 per hour.
Humboldt Superior Court Judge Timothy Canning partially granted the motion last September, reducing the recovery to $56,000 based on a finding that the number of hours billed was unreasonable and that Del Biaggio was not entitled to recover for paralegal hours under the contract.
Fees as Sanctions
After Del Biaggio appealed, the Bansens moved in Div. Four for appellate fees as sanctions, arguing that the appeal “is without a reasonable legal or factual basis” and that the opening brief includes fictional quotations from real cases.
Presiding Justice Tracie L. Brown and Marin Superior Court Judge Andrew Sweet, sitting by assignment, joined in Friday’s opinion, which declares:
“While we order [Del Biaggio’s attorney Carlton] Floyd to pay [$1,500 in] sanctions to the court, we decline to award sanctions to the Bansens. It is true that they first raised the issue by identifying some of the misstatements of authority in the opening brief. But their motion significantly overreaches by characterizing the appeal as frivolous.”
Floyd is a solo practitioner based out of Eureka.
Paralegal Expenses
Addressing the paralegal fees, Goldman remarked:
“In the abstract, the term ‘attorneys’ fees’ could be understood to refer to fees charged for work performed only by attorneys, in which case fees charged for work by paralegals would fall outside its scope. But we do not find that interpretation likely in the context of the parties’ contractual fee-shifting provision….‘[T]he usual and ordinary meaning of the words…is the consideration that a litigant actually pays or becomes liable to pay in exchange for legal representation.’ ”
Noting that “courts have approved contractual attorney fee awards that included paralegal fees without anyone suggesting that the contract’s fee-shifting provision did not reach them,” he said:
“The trial court’s order awarding attorney fees is reversed insofar as it categorically denied recovery of paralegal fees, but is otherwise affirmed. On remand, the court shall evaluate the extent to which the paralegal fees sought are reasonable.”
As to the fictitious quotations, the jurist pointed out that Floyd declared that his office “uses generative AI” in a manner “consistent with State Bar guidance” with “protocols requiring human verification.” However, he claimed that he added the fake quotations during recesses from a trial in a separate case and asked his paralegal to verify them, but she misunderstood his directions.
Saying that “even if the communication error had not occurred, Floyd’s protocol would not comply with the State Bar guidance,” Goldman pointed out that the referenced guidelines call for confirmation by an attorney. As to the excuse that he had “limited time for review” due to his engagement in trial, Goldman said:
“[H]is general unavailability to supervise the brief’s finalization made it even less appropriate for him to expect his paralegal to assume responsibility for verifying what he wrote about cases he apparently had not laid eyes on himself.”
The jurist added:
“We acknowledge that Floyd admitted the unverified use of AI, offered some explanation for how it occurred, and eventually sent a letter identifying and withdrawing the misstatements. But the protocol he described was insufficient not only to prevent the errors but also to satisfy his obligation to review personally the principal legal authority on which his argument relied. Waiting until shortly before oral argument to correct the misstatements was also far from ideal. We find it appropriate under the circumstances to order Floyd to pay a sanction of $1,500 to the court.”
Citing Business and Professions Code §6086.7(a)(3), the court ordered the clerk to forward a copy of the opinion to the State Bar and directed Floyd to provide a copy of the opinion to his client.
The case is Del Biaggio v. Bansen, 2026 S.O.S. 2012.
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