Fees

Gilbert Development is a long complicated case about real estate sales, fiduciary duties, and contracts.  I’m not going to talk about the facts or those aspects of the law.  What I found interesting is the Court of Appeals’ discussion of the award of attorney’s fees to the prevailing party (reasonable fees award under contract).  The discussion does not even start until paragraph 44 of the opinion, so you have to go a good way into the opinion to find the fee discussion.  It is quite interesting, and in some places troubling.  Among other points, the Court holds that fees are recoverable for vindication of contract rights – kind of boilerplate.  An unsuccessful motion for summary judgment is not under that description.  (¶ 52)  In this instance the Court points to a number of factors leading to the conclusion – the motion was denied, of course, but also that although the claim at issue was dismissed two years later, there was nothing showing a connection between the dismissal and the motion, and that the trial court never adopted the major argument of the motion.  That seems reasonable – no vindication no fees. 

Consider, however, how likely it is that the paragraph will next show up in an argument that fee recovery is limited to successful dispositive and non-dispositive motions.  The argument will be that a motion that does not get granted should not be included in fees.  The possibility is raised by the cursory treatment by the Court of Appeals of the trial court’s explanation of how and why unsuccessful motions, even for summary judgment, are valuable and advance both the case and the vindicated claims.  The trial court’s explanation is summarized without comment and then ignored.  The Court of Appeals treats that part of the decision below as just stuff to recite, and then drop.  That is problematic because of implications, beyond the inevitable efforts to expand (and efforts to expand by losing sides will be inevitable and pervasive).  It suggests that fee requests will need to be even more detailed and even more difficult to obtain: even more detailed time keeping and allocations, ever more detailed memoranda memorializing strategic values of motions, ever longer chains linking motions or other work to ultimate outcomes.  Where the case is simple, those conditions may be easy to satisfy, but in complex cases (like Gilbert) that can be an enormous undertaking.  In Gilbert the fee request included a 67-page declaration justifying fees – people went over every time entry covering six years.  Coupled with the increasing bar on block billing, attorneys need to start recording time with it in mind that there may be a fee recovery, and that means ever longer entries broken into ever small segments and ever longer applications and ever longer oppositions and ever greater burdens on the trial courts.  Judges do have to assess whether the fees are reasonable, but I am a little worried that they have insufficient understanding of the increasing burdens they are creating.  (It is unclear whether the preparation of a fee request is a recoverable expenditure of fees.)

I should also note that the Court of Appeals took the right course on the “locality” factor:  the trial court can consider whether the case justified counsel from elsewhere who charged rates appropriate for their home, that there is no presumption in favor of the rates in the immediate vicinity of the courthouse.