Procedural Posture

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Procedural Posture

Appellant sellers sought review of an order from the Superior Court of Los Angeles County (California), which reduced their award of contractual attorney fees after they prevailed in a real estate fraud and breach of contract action brought by respondent buyers.

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Overview

The buyers purchased an apartment building and later claimed that the sellers had made misrepresentations regarding tenants with long-term leases. The trial court excluded evidence of a purported long-term lease because its authenticity was not established. Based on that evidentiary ruling, the trial court found in favor of the sellers. The trial court calculated a reasonable attorney fee and then applied equitable principles to reduce that amount by 90 percent because one of the sellers had intentionally lied under oath about various material matters. The trial court found that this misconduct had made much of the litigation unnecessary and that, as a result, most of the lodestar figure represented attorney fees that were unreasonable. The court stated that although case law prohibited adjusting fee awards solely to punish a party, equitable principles could be applied to adjust a prevailing party’s lodestar fees under Civ. Code, § 1717. The trial court had discretion to reduce the award of contractual attorney fees to the extent that the fees were unnecessary. The use of equitable considerations to reduce the lodestar amount because most of the fees were unnecessary was proper.

Outcome

The court affirmed the attorney fee award.