Reasonable Settlement Offers and Prevailing Party Attorney’s Fees.

By: Eric Michael Papp, Esq.

The case is over and now comes the battle over attorney’s fees. However, an early and reasonable offer to settle was made, but the litigation continued unabated, achieving, in the end, no better result then the early settlement offer. In this circumstance, should the full measure of attorney’s fees be awarded?

In cases like this, one may confront what appears to be a completely unnecessary and unreasonable attorney’s fee bill. Here, one should argue that the vast bulk of these fees and costs could have and should have been avoided.

The case of Meister v. Regents of University of California (1998) 67 Cal.App.4th 437 explored the meaning of what are "reasonable attorneys’ fees" that are incurred long after a settlement offer has been made. In this regard, the Meister court noted the following:

As we have already noted, the lodestar method vests the trial court with the discretion to decide which of the hours expended by the attorneys were "reasonably spent" on the litigation. (Serrano v. Unruh, supra, 32 Cal.3d at pp. 633, 635, 639.) The lodestar amount is the product of the number of hours "reasonably spent" and the reasonable rate. In this case, the trial court found that the hours expended after the December 1993 oral settlement offer were not "reasonably spent" on the litigation because plaintiff could have obtained all of the relief he ultimately achieved, and more, by accepting that offer. Hence, plaintiff's attorneys achieved nothing by continuing to expend their time after that offer. The trial court's decision came within the lodestar framework because it was based on the court's assessment of whether the hours which plaintiff's attorneys claimed to have expended on this litigation were "reasonably spent." (Emphasis added) (Meister v. Regents of University of California (1998) 67 Cal.App.4th 437, 449.)

Such may be your very case. Moreover, in view of a reasonable settlement offer, the Meister Court noted that the trial court has, "...the discretion to decide whether attorney time spent after defendants’ December 1993 settlement offer was time "reasonably spent." (Meister , 67 Cal.App.4th at 450.) Here, you argue that the attorneys’ time was not "reasonably spent" in any respect whatsoever. In fact, all of the fees expended by counsel after the reasonable settlement offer was made were unreasonable by definition as counsel achieved "nothing" more than was already freely offered. (Meister , 67 Cal.App.4th at 449.)

As to this issue, the Meister Court went on to say, "... a trial court operating within its discretion is simply empowered to take into consideration the fact that a party continued to litigate a matter after a reasonable, albeit informal, settlement offer." (Meister, 67 Cal.App.4th at 452.) Clearly, "Attorney time spent on services which produce no tangible benefit for the client is not time ‘reasonably spent.’" (Meister, 67 Cal.App.4th at 452.)

Of course, then the argument goes, that such attorney’s fees should be reduced to a fraction of what is being demanded to reflect all of the unnecessary and unreasonable litigation efforts which counsel expended that produced "no tangible benefit for the client." (Meister, 67 Cal.App.4th at 452.)

In addition to the above, do not forget to closely inspect for any fees that are "clerical or administrative" in nature, duplicative or excessive.

Eric Papp is a licensed attorney in both California and Nevada and a licensed Real Estate Broker. Mr. Papp is the principal of the Law Offices of Eric Michael Papp located at 495 East Rincon, Suite 125, Corona, CA 92879. www.ca-nvlaw.com Mr. Papp can be reached at (951) 279-6700

Disclaimer: The content of this Article is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by jurisdiction, and the information in this Article may not apply to every reader. You should not take, or refrain from taking, any legal action based upon the information contained in this Article without first seeking professional counsel. Reading or using the information contained in this Article does not, will not and cannot create an attorney-client relationship. Additionally, to the extent permitted by law, The Law Offices of Eric Michael Papp disclaims liability to any person for any loss which may arise from relying on or by using information contained in this Article. Although the information in this Article is intended to be current and accurate, it is not guaranteed or promised to be current, accurate, or complete.