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Marion v. 396 Investment Co.5/17/2005
l damages, plus attorney fees and costs, to Vista Royale. The award included $391,545 in attorney fees and $366,212 in costs.
Anaheim contends the court erred in making this award, for several reasons. It argues Code of Civil Procedure section 1036 permits the court to award fees and costs when it awards a plaintiff compensation , but because the court did not award compensation to Vista Royale, no award of fees and costs was appropriate. Also, Anaheim asserts that Vista Royale never could have incurred any fees or costs in pursuing its inverse condemnation claim because it never did pursue the claim. Rather, Anaheim insists, Vista Royale must have incurred its fees and costs only in defending itself in the litigation. Finally, Anaheim maintains that Vista Royale could not reasonably have incurred $757,757 in fees and costs in pursuing its inverse condemnation claim, when it did not even seek damages. We will address these points in turn.
It is true that Code of Civil Procedure section 1036 provides that "the court rendering judgment for the plaintiff by awarding compensation " shall award to the plaintiff attorney fees and costs as a part of that judgment. Here, the court held Anaheim liable for inverse condemnation and awarded "nominal damages" to Vista Royale. Clearly, the court entered judgment in favor of the homeowners association on the inverse condemnation claim. Anaheim cites no authority for the proposition that an award of nominal damages is insufficient to trigger the application of section 1036.
It would only have preserved an additional layer of complexity in the litigation had Vista Royale refrained from settling with 396, instead remaining in the suit for the purpose of proving the amount of damages to the portion of the slope it owned, or had 396 pressed that damages issue after it acquired the right to do so. In the context of this complex litigation, were we to construe a nominal damages award as precluding an award of fees and costs, we would be discouraging settlement in a case that cried out for it.
As for Anaheim's argument that the fees and costs should be construed as having nothing to do with the inverse condemnation claim, we could not disagree more. While the fees and costs in question were incurred before the settlement with 396, this does not mean that they had nothing to do with the inverse condemnation proceeding. True enough, when Vista Royale was drawn into the litigation, it was initially a defendant. However, that does not change the fact that the reason the litigation was commenced at all was because of the landslide precipitated by the leakage of 34 million gallons of water per year from Anaheim's reservoir. The fact that no one knew when the litigation began how it would shake out in the end does not mean that the gist of the problem was ever anything other than Anaheim's activities with respect to its reservoir.
Just to be on the conservative side, however, Attorney Stephen D. McNamara, the attorney who represented Vista Royale before the settlement with 396, carefully went through volumes of attorney fee and costs bills and culled out those items that could have been construed as not pertaining to Anaheim. As shown by the declaration of Attorney McNamara, filed in support of the motion for attorney fees and costs, he eliminated "time spent in relation to the cross-complaint of 396 Company or other developer issues, the claims asserted by the City of Orange, administrative matters for the Association, amendments to pleadings, and time incurred solely to deal with insurance coverage issues." Thus, Anaheim is protected against having to pay any fees that did not relate to the inverse condemnation issues.
As
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