Monday, July 8, 2002
Court of Appeal Rules:
Recovery of Non-Economic Damages Need Not Reduce Fee Restitution
By ROBERT GREENE, Staff Writer
A criminal court awarding restitution may include the full amount of the victim’s attorney fees from a related lawsuit even if the recovery from the suit includes non-economic damages like pain and suffering, the Fourth District Court of Appeal ruled Friday.
Although non-economic damages are not reimburseable under the Penal Code’s restitution statute, the Div. One panel said, the mere fact that such damages made up part of the award does not automatically require a portion of the attorney fee to be subtracted from restitution.
That is especially true in car accident cases, like the one in which Gary Overton won the right to restitution of the full $25,000 attorney fee he had to pay his lawyer to pursue a civil case, the court said. The restitution of the civil case fee was awarded as part of the criminal prosecution of the drunk driver who collided head-on with Overton.
It is not reasonable to assume that the value of the lawyer’s work can easily be divided to reflect the proportions of economic and non-economic damages, Justice Judith Haller said.
“Rather, as is typical in car accident cases, an attorney’s efforts necessarily focus on proving liability and the nature and extent of the plaintiff’s economic damages, with the amount of non-economic damages dependent on substantiating these issues,” Haller said. “Commonly, attorney services expended in obtaining the two types of damages overlap and recovery of the non-economic damages is dependent on the attorney’s time and effort proving the victim’s economic damages.”
Overton’s injuries were caused by Nathan Fulton, who was driving with a 0.16 blood-alcohol level when he drove his car over the center line and crashed into Overton. Overton was severely injured, required surgery, and missed several weeks of work.
He hired San Diego lawyer Barbara Savaglio on a 25 percent contingency fee arrangement to pursue legal action. Savaglio sought $100,000 from Fulton’s insurance company—the policy limit—and filed suit when she was offered only $70,000.
After discovery, Savaglio negotiated a settlement—for $100,000.
The lawyer spent 135 hours of her own time on the case, in addition to 50 hours of her legal assistant’s time. Under the contingency fee arrangement, she received $25,000, plus litigation costs.
Meanwhile, in the criminal proceeding, Fulton was sentenced and then faced a restitution hearing under Penal Code Sec. 1202.4.
Fulton tired to hold restitution for Savaglio’s fees to only the amount that led to recovery of economic damages—an amount he argued was half the fee amount, or $25,000.
Prosecutors argued that under the statute even a victim who incurs only a small amount of economic damage could still get a huge fee restitution award if the lawyer recovered a large non-economic damage award.
Haller called an interpretation of the statute that allowed for restitution of a fee that has no meaningful relationship to restitution for the underlying damages “incongruous.”
But she said it is the defendant who bears the burden of showing that the fee restitution award should be limited. Fulton did not carry that burden here, she said, in a case in which the lawyer might easily have had to spend the same amount of time and effort to recover only the economic damage portion of the award.
In a separate analysis, the court found Savaglio’s efforts on her client’s behalf, and the amount of time she spent and the percentage she recovered as her fee, to be reasonable.
The case is People v. Fulton, 02 S.O.S. 3419.
Copyright 2002, Metropolitan News Company