Businesses involved in California appeals should review a recent decision by the California Court of Appeal clarifying when a party that prevails in an appeal can seek an award of appellate attorney’s fees. In Butler-Rupp v. Lourdeaux, 65 Cal.Rptr.3d 242 (Cal. App. 2007), the court held that a refusal to award costs on appeal does not preclude a prevailing party from later seeking an award of appellate attorney’s fees in the trial court after remand. This ruling will give companies that prevail in an appeal an opportunity to seek an award of fees from the trial court without reference to the appellate court’s determination with respect to what party was responsible for costs on appeal.
The case arose out of a commercial landlord-tenant dispute involving both tort and contract claims. In a prior opinion, the Court of Appeal reversed a $500,000 damages award for negligent infliction of emotional distress, affirmed a contract-based award of $855,000, and reversed the trial court’s order denying plaintiffs their attorney’s fees incurred in connection with the trial. At the conclusion of its opinion, the Court of Appeal stated that “the parties to the appeal are to bear their own costs on appeal.” After remand, plaintiffs filed a motion in the trial court seeking an award of attorney’s fees incurred in connection with the appeal. The trial court granted the motion, awarding $200,000 in attorney’s fees for the prior appeal.
The court rejected the defendants’ contention that the trial court had no jurisdiction to award appellate attorney’s fees. Defendants argued that by ordering each side to bear its own costs, the court foreclosed any award of attorney’s fees by the trial court. In analyzing the issue, the court noted that the authority for making any attorney’s fees award in this case was based on the parties’ contract, which provided for an award of fees to a prevailing party. Code of Civil Procedure section 1033.5 also grants a superior court the authority to award costs, including attorney’s fees, authorized by contract, statute, or law. An award of fees may be requested from the appellate court while the appeal is pending or in the trial court after the remittitur is issued.
The court concluded that its prior decision to have each party bear its own costs did not preclude the plaintiffs from seeking an attorney’s fees award. During the prior appeal, plaintiffs did not request an award of attorney’s fees. Unless specified, costs on appeal do not include attorney’s fees, and an appellate court ruling with respect to costs does not affect a party’s ability to seek an attorney’s fees award in the trial court. In the wake of Butler-Rupp, businesses involved in California appeals should be aware that after remand, appellate attorney’s fees will still be available where the appellate court did not deny a request for such fees even if the court did not award costs to the prevailing party.