By Michael R. Diliberto
The concept of determining attorney fees for the winning party often revolves around the “lodestar” method. This approach, commonly employed by judges and arbitrators, involves calculating fees by multiplying a reasonable hourly rate by the number of hours spent on the case. However, is it possible for a court to consider the lack of civility as a valid reason to reduce an attorney fee request? According to the recent case of Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, the answer is a resounding “yes.”
In this particular case, attorney Karton engaged the services of contractor Ari for a home remodeling project, paying a total of $92,651. However, Karton discovered that Ari lacked the necessary contractor’s license and proper insurance, prompting the suspension of the project. Since the Kartons had already overpaid for the work completed up to that point, they sought a refund of the difference, which amounted to $22,096. Unable to reach a resolution, the Kartons took legal action and ultimately recovered the full $92,651, as Ari was an unlicensed contractor.
Following this victory, the Kartons requested attorney fees totaling $271,530, along with discovery sanctions. The court, however, chose to postpone the fee hearing to gather more evidence regarding the fee request. When the second fee hearing took place, the court made note of the Kartons’ lack of civility in their written submissions, which contained numerous attacks on defense counsel. Additionally, the court observed that the Kartons’ supplemental briefing, which far exceeded the court’s 10-page limit order, was indicative of excessive litigation. In light of these factors, the court awarded a total of $90,000 in attorney fees. Dissatisfied, the Kartons decided to appeal.
Upon review, the Court of Appeal found that the trial court presented five compelling reasons for limiting the Kartons’ attorney fees to $90,000. Of these reasons, three were directly linked to the issue of incivility. Firstly, the court emphasized that the Kartons engaged in excessive litigation for a relatively minor $23,000 dispute with their contractor. Secondly, some of this over-litigation could be attribute to Karton’s personal entanglement in the matter. Lastly, the court pointed out that Karton’s written submissions lacked civility. Notably, the court emphasized that civility is an integral aspect of attorney skill and that exceptional lawyers deserve higher fees, with civility being a core element of exemplifying such skill.
To illustrate the importance of civility in litigation, the court provided an example: “Calling opposing counsel a liar, for instance, can invite destructive reciprocity and generate needless controversies.” In contrast, the court noted that promoting civility in the legal process tends to lead to greater efficiency by allowing parties to focus on the core issues at hand, thereby minimizing distractions. The court stressed the positive effect that knowing one’s own low blows might have financial repercussions can serve as an incentive for counsel involved in fee-shifting cases. Lastly, the court concluded that Karton’s personal involvement compromised objectivity when it came to assessing the appropriate scale of litigation.
The key lesson to be learned from this case is that California courts retain the discretion to adjust a lodestar calculation, either by increasing or reducing it, to ensure a reasonable fee award. In this context, judges have the authority to consider civility as an essential factor when determining attorney fees. Nonetheless, it is worth noting that David S. Karton, the plaintiff in this case and an attorney of record, has expressed intent to request the California Supreme Court to depublish Part One of the opinion, which pertains to the criteria for determining attorney fee awards. Karton asserts that the opinion lacks support from the actual facts and fails to provide clear guidance on the exercise of judicial discretion in fee awards. It remains to be seen whether the California Supreme Court will consider this request, as they have depublished 22 opinions in the past, according to the Judicial Council of California’s 2020 Court Statistics Report.
About the Author:
Michael R. Diliberto is a seasoned mediator and arbitrator affiliated with ADR Services, Inc. He regularly shares valuable insights on litigation and strategies for achieving successful settlements in his monthly articles, which can be found at www.DilibertoADR.com.