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Attorney Fee Award Can Be Reduced If Hours Stem in Part from Attorney's Incivility

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From Karton v. Ari Design & Construction, Inc., decided yesterday by my former colleague Justice John Shephard Wiley, joined by Justices Tricia Bigelow and Elizabeth Grimes:

Trial judges deciding motions for attorney fees properly may consider whether the attorney seeking the fee has become personally embroiled and has, therefore, over-litigated the case. Similarly, judges permissibly may consider whether an attorney’s incivility in litigation has affected the litigation costs.

Here, the trial judge found attorney David Karton’s fee motion triggered these concerns. Karton had a dispute with his home remodeling contractor: defendant and appellee Ari Design and Construction, Inc. At one point, their difference amounted to only $22,096: Karton said Ari owed him $35,096, while Ari contended it owed $13,000.

Karton sued Ari and won a judgment for $133,792.11 plus postjudgment interest [largely under a state statute] {which entitles those using an unlicensed contractor to all compensation they paid the unlicensed contractor, even if they knew the contractor was unlicensed}. Karton then sought attorney fees of $271,530, which were later increased to $287,640 in the trial court and now to $292,140 in this court. The trial court awarded $90,000 in attorney fees. We affirm this award against Karton’s argument that $90,000 is not enough….

[T]he Kartons said their attorney devoted more than 600 hours to this litigation. The court did not doubt it, but thought the hours were “excessive by a lot.”

The court gave five good reasons for concluding 600 plus hours was unreasonable.

First, the trial court rightly found the questions in this case were relatively simple…. Here the issues were pedestrian: whether a contractor had insurance and a license. On the issue of how much Ari owed the Kartons, Cheryl Karton testified Ari owed $35,096, and “[t]his testimony was not controverted by the Defendants.” …

Second, the court had an ample basis to conclude the Kartons over-litigated this matter. They had about a $23,000 dispute with their contractor: the Kartons had said Ari owed $35,096 and Ari had claimed the debt was only $13,000. A $23,000 argument must be resolved, but it does not justify launching a disproportionate litigation offensive. The Kartons’ strategy netted them windfall gains: the harshness of contractor licensing laws allowed them to recoup all their construction monies, plus $10,000, and to retain the benefit of months of free construction work….

Third, the trial court fairly attributed some of the over-litigation to Karton’s personal embroilment in the matter. Karton is an experienced lawyer. He brought this suit about his own home. Karton declared, “I was substantially involved in this case because I was cheated. So, yes, I was involved.” The trial court observed Karton’s demeanor at the hearings and saw he was “agitated about this case. This is your personal matter, and I understand that. I see that you have strong feelings about this case and strong feelings about the course of this litigation and how it has proceeded.” The court had reason to conclude embroilment undermined objectivity about the appropriate scale of litigation.

Fourth, the trial court rightly sought an appropriate relationship between the result achieved and the size of the fee. For a century or more, California courts have considered the success or failure of attorney efforts when evaluating attorney fee requests.

The size of a judgment is pertinent to rational evaluation of a requested fee. Rational decisionmaking weighs benefits and costs…. [R]ational investors or buyers would not spend [$2] to get something worth $1. The trial court properly connected the fee to the judgment.

Fifth, the court correctly noted the incivility in Karton’s briefing. Attorney skill is a traditional touchstone for deciding whether to adjust a lodestar. Civility is an aspect of skill.

Excellent lawyers deserve higher fees, and excellent lawyers are civil. Sound logic and bitter experience support these points.

Civility is an ethical component of professionalism. Civility is desirable in litigation, not only because it is ethically required for its own sake, but also because it is socially advantageous: it lowers the costs of dispute resolution. The American legal profession exists to help people resolve disputes cheaply, swiftly, fairly, and justly. Incivility between counsel is sand in the gears.

Incivility can rankle relations and thereby increase the friction, extent, and cost of litigation. Calling opposing counsel a liar, for instance, can invite destructive reciprocity and generate needless controversies. Seasoning a disagreement with avoidable irritants can turn a minor conflict into a costly and protracted war. All those human hours, which could have been put to socially productive uses, instead are devoted to the unnecessary war and are lost forever. All sides lose, as does the justice system, which must supervise the hostilities.

By contrast, civility in litigation tends to be efficient by allowing disputants to focus on core disagreements and to minimize tangential distractions. It is a salutary incentive for counsel in fee-shifting cases to know their own low blows may return to hit them in the pocketbook….

The Kartons respond to criticism of their personal attacks by attacking.

First the Kartons maintain opposing counsel indeed did knowingly make false statements. They point to a report by a discovery referee. The cited pages, however, recount the parties stipulated certain evidence would be inadmissible. They do not find someone knowingly made false statements. In oral argument on appeal, however, Karton continued to assert opposing counsel was a liar.

Next the Kartons defend calling opposing counsel’s comments “frivolous.” They claim a meet and confer letter was so meritless as to justify this language. The Kartons do not, however, cite a finding faulting this supposedly meritless letter.

On this point, the Kartons quote the Phil Spector murder case at some length, to no avail. There, in closing argument a prosecutor told a jury that expert witnesses will say anything if you pay them enough. This case is irrelevant. Spector involved neither an attack on opposing counsel’s integrity nor appropriate factors in setting an attorney fee award. Instead, it involved a closing argument about an expert witness jurors had to evaluate.

Finally, the trial court noted the Kartons denigrated the actions of opposing counsel as “typical of the improper tactics employed by defendants and their counsel.” The Kartons argue “this characterization falls within the scope of the type of advocacy approved in People v. Spector ….” The Spector case did not involve attacks on the integrity of opposing counsel. This argument fails.

In short, in this appeal the Kartons have come out swinging, apparently believing the best defense is a good offense. This approach demonstrates the trial court was within its discretion to conclude the Kartons conducted litigation that was less than civil.

In sum, these five grounds were sound bases for reducing the requested attorney fee from about $300,000 to $90,000….

Disclosure: The judge whose decision on this point was affirmed by the court, L.A. Superior Court Judge Elaine Mandel is a very dear friend of mine, but I didn’t even notice this was her case until I was about to put up the blog post.



Source: https://reason.com/volokh/2021/03/10/attorney-fee-award-can-be-reduced-if-hours-stem-in-part-from-attorneys-incivility/


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