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January 15, 2007

Prevailing Party Statute Construed

This is a common issue that I encountered in practice: a statute says that a trial court must award a "prevailing party" attorney fees, costs, or some other award. Easy enough if the plaintiff files suit and gets a judgment of a billion dollars. What happens if the plaintiff wins on its claim, but the defendant wins on a counterclaim that exceeds the plaintiff's claim? How do you value noneconomic awards in that circumstance? There are various fact patterns that have led to myriad case law.

On December 15, 2006, in Wakefield v. Bohlin, 006 WL 3691607, __ Cal. Rptr3d. __ (Cal. App. 6th Dist. Dec. 15, 2006), this issue was litigated again, this time with a dissent (as is also fairly common) that spent a fair amount of time analyzing both the plain meaning and legislative history and purpose of the California statute.

The legislature had tried to eliminate some of these interpretative problems by including this definition of "prevailing party."

(a) As used in this section, unless the context clearly requires otherwise:
[¶] ... [¶] 4) ‘Prevailing party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. When any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.”

So, if a party falls within one of the first four categories, the party is automatically a "prevailing party." If not, then there's the last "catch-all" which is discretionary. In this case, there were various claims, and the party that "won" $34,000 at trial had by settlement paid out just as much.

It's an interesting read.

January 15, 2007 in Current Affairs | Permalink

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