MUSAELIAN v. John G. Warner, Objector and Appellant. (2007)

We are familiar with the background of this case through our review of a previous appeal, Reiter v. Musaelian (June 30, 2006, A110100), 2006 WL 1891799 [nonpub. opn.]  (Reiter ), which involved some of the same parties that are before us now.   There, we reversed an order of the trial court awarding sanctions on appeal.   Once again, the issue before us on appeal is the trial court's award of sanctions, this time against appellant John G. Warner, trial counsel for plaintiff Mary Musaelian,¹ in favor of defendants William L. Adams and Joseph Reiter.   We reverse.

In the published portion of this opinion, we hold that, under Code of Civil Procedure 2 section 128.7, attorney fees cannot be awarded as sanctions to an attorney representing himself.   In so doing, we disagree with the reasoning of Laborde v. Aronson (2001) 92 Cal.App.4th 459, 112 Cal.Rptr.2d 119 (Laborde ) and Abandonato v. Coldren (1995) 41 Cal.App.4th 264, 48 Cal.Rptr.2d 429 (Abandonato ).

I. Background **

II. Discussion

A. Adams Did Not Incur Attorney Fees

Adams is an attorney, and represented himself in propria persona below.   Pursuant to section 128.7, he filed a motion for sanctions against plaintiff, Mary Musaelian, and her attorney, John Warner, contending that the lawsuit they had filed against him for abuse of process and other claims was frivolous and filed for an improper purpose.   In support of his motion, Adams submitted declarations stating that his hourly fee was $250 an hour, and that he had spent a total of 100.2 hours working on the case, for total fees of $25,050.   He asked the trial court to award as sanctions those fees, as well as any further amounts the court found necessary to deter Warner from repeating his conduct.   The court awarded him $25,050 in sanctions.

Section 128.7, subdivision (c)(1) provides in part that, upon a motion for sanctions, “[i]f warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion.”  (Italics added.)   Warner contends that as a propria persona litigant, Adams did not incur any attorney fees.

Our Supreme Court considered a similar question in Trope v. Katz (1995) 11 Cal.4th 274, 45 Cal.Rptr.2d 241, 902 P.2d 259 (Trope ).   The statute in question there was Civil Code section 1717, subdivision (a), which provides in pertinent part:  “In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.”   The issue before the court was whether an attorney representing himself could recover attorney fees as compensation for time and effort expended and professional opportunities lost as a result.  (Trope, at p. 279, 45 Cal.Rptr.2d 241, 902 P.2d 259.)

In analyzing the issue, the court first noted that Civil Code section 1717 applied only to contracts providing for attorney fees incurred to enforce the contract.   As the court stated:  “To ‘incur’ a fee, of course, is to ‘become liable’ for it (Webster's New Internat.   Dict. (3d ed.1961) p. 1146), i.e., to become obligated to pay it.   It follows that an attorney litigating in propria persona cannot be said to ‘incur’ compensation for his time and his lost business opportunities.”  (Trope, supra, 11 Cal.4th at p. 280, 45 Cal.Rptr.2d 241, 902 P.2d 259.)   The court went on to note that the term “ ‘fee’ ” is defined variously as, “ ‘A recompense for an official or professional service or a charge or emolument or compensation for a particular act or service.   A fixed charge or perquisite charged as recompense for labor;  reward, compensation, or wage given to a person for performance of services or something done or to be done[ ]’ (Black's Law Dict. (6th ed.1990) p. 614);” “ ‘compensation often in the form of a fixed charge for professional service or for special and requested exercise of talent or of skill[ ]’ (Webster's New Internat.   Dict., supra, p. 833 ․);” and “ ‘a payment’ such as ‘the remuneration paid or due to a lawyer, a physician, or (in recent use) any professional man, a director of a public company, etc. for an occasional service.’  [ (5 Oxford English Dict. (2d ed.1989) p. 797.) ]”  (Ibid.) Additionally, Black's Law Dictionary defined “ ‘attorney fees' as a ‘Charge to client for services performed (e.g. hourly fee, flat fee, contingency fee).’  ( [Black's Law Dict., supra, p. 614.] )”  (Trope, at p. 280, 45 Cal.Rptr.2d 241, 902 P.2d 259.)   The court concluded that “the usual and ordinary meaning of the words ‘attorney's fees,’ both in legal and in general usage, is the consideration that a litigant actually pays or becomes liable to pay in exchange for legal representation.   An attorney litigating in propria persona pays no such compensation.”  (Ibid.)

The court in Trope also reviewed cases from before the enactment of Civil Code section 1717 that supported this interpretation of the meaning of the term “ ‘reasonable attorney's fees,’ ” and concluded that those cases “demonstrate[d] that the words ‘attorney's fees' and ‘counsel fees,’ whether used in a contract or in a statute, had an established legal meaning at the time the Legislature enacted [Civil Code] section 1717.   In the absence of some indication either on the face of that statute or in its legislative history that the Legislature intended its words to convey something other than their established legal definition, the presumption is almost irresistible that the Legislature intended them to have that meaning.  [Citations.]”  (Trope, supra, 11 Cal.4th at pp. 281-282, 45 Cal.Rptr.2d 241, 902 P.2d 259.)

Our Supreme Court has since made clear that Trope should not be taken to mean that attorney fees can only be recovered when incurred on a “fee-for-service basis,” but can extend to work performed by in-house counsel (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1097 & fn. 5, 95 Cal.Rptr.2d 198, 997 P.2d 511) or to services provided pro bono (Flannery v. Prentice (2001) 26 Cal.4th 572, 579, fn. 4, 110 Cal.Rptr.2d 809, 28 P.3d 860.) However, in each of these cases, an attorney-client relationship exists-something that is not the case with a self-represented attorney.  (See Witte v. Kaufman (2006) 141 Cal.App.4th 1201, 1211, 46 Cal.Rptr.3d 845 (Witte ).)

We have reviewed Trope in detail because one published decision has concluded that a self-represented attorney is entitled to recover attorney fees as a sanction under section 128.7.   In Laborde, supra, 92 Cal.App.4th at pages 467-469, 112 Cal.Rptr.2d 119, Division Three of the Fourth Appellate District considered whether an attorney who had represented himself in an action could receive attorney fees from his opponent as a sanction.   Acknowledging that there was no California authority directly on point, the court noted that section 128.7 is modeled on rule 11 of the Federal Rules of Civil Procedure (28 U.S.C.),¹⁵ and that in interpreting section 128.7, California courts may look to federal decisions construing rule 11.  (Laborde, at p. 467, 112 Cal.Rptr.2d 119;  see also Hart v. Avetoom (2002) 95 Cal.App.4th 410, 413, 115 Cal.Rptr.2d 511.)   Thus, the court relied on Kramer, Levin, Nessen, Kamin & Frankel v. Aronoff (S.D.N.Y.1986) 638 F.Supp. 714 (Kramer, Levin ), a federal case decided under rule 11, which awarded rule 11 sanctions to a plaintiff law firm that had acted in propria persona.  (Laborde, at pp. 467-468, 112 Cal.Rptr.2d 119, citing Kramer, Levin, at p. 726.)

We are not persuaded by the Laborde court's reliance on Kramer, Levin for the proposition that rule 11 allows a self-represented attorney to recover attorney fees.   First, Kramer, Levin does not address the question of whether such an attorney incurs fees.   A case is not authority for a proposition it does not discuss.  (People v. Senior (1992) 3 Cal.App.4th 765, 781, 5 Cal.Rptr.2d 14.)

Second, more recent federal authority squarely addresses the question at issue and reaches the opposite result from that in Laborde.   The court in DiPaolo v. Moran (E.D.Pa.2003) 277 F.Supp.2d 528, 534-537 (DiPaolo ) concluded that an attorney could not recover sanctions under rule 11 for time spent representing himself because the language of rule 11 implied an attorney-client relationship and the accumulation of fees.   In reaching this conclusion, the court reviewed the three opinions by circuit courts of appeals that had addressed whether pro se attorney litigants could receive attorney fees as sanctions.   In one of them, Massengale v. Ray (11th Cir.2001) 267 F.3d 1298, 1302-1303, the court noted that the word attorney assumes an agency, or attorney-client relationship, and concluded such an award was not available under rule 11 because “a party proceeding pro se cannot have incurred attorney's fees as an expense.”   Construing similar language contained in rule 37(a)(4)(A),¹⁶ the court in Pickholtz, supra, 284 F.3d at page 1375, likewise concluded that an attorney proceeding pro se does not incur attorney fees, reasoning “one cannot ‘incur’ fees payable to oneself, fees that one is not obliged to pay.  [Citation.]  Moreover, the word ‘attorney’ connotes an agency relationship between two parties (client and attorney), such that fees a lawyer might charge himself are not ‘attorney fees.’  [Citation.]  Nor are such fees a payable ‘expense,’ as there is no direct financial cost or charge associated with the expenditure of one's own time.”   The court in DiPaolo recognized that an earlier decision of the Ninth Circuit, Ellis v. Cassidy (9th Cir.1980) 625 F.2d 227, 230-231, had upheld an award of attorney fees to a pro se attorney litigant under the Civil Rights Act of 1964 (42 U.S.C. § 2000e-5(k)), but it was not persuaded by Ellis.   First, as the DiPaolo court noted, the Ninth Circuit in Ellis did not address the implication of the statutory term “attorney.”  (DiPaolo, supra, 277 F.Supp.2d at pp. 535-536.)   Second, the court reasoned that Ellis was of doubtful validity after the decision of which United States Supreme Court in Kay v. Ehrler (1991) 499 U.S. 432, 435-437, 111 S.Ct. 1435, 113 L.Ed.2d 486, which concluded that an attorney proceeding in pro se could not receive attorney fees under title 42 United States Code section 1988(b), which allowed “a reasonable attorney's fee” to the prevailing party in certain civil rights actions.¹⁷

Thus, the current federal authority on the topic suggests that, contrary to the conclusion of Laborde, a self-represented attorney is not entitled to attorney fees under rule 11.

The Laborde court also relied for its decision on the reasoning of Abandonato, supra, 41 Cal.App.4th at pages 267-269, 48 Cal.Rptr.2d 429.   In ruling under a predecessor statute, section 128.5, the court in Abandonato concluded that the rationale of Trope did not compel the conclusion that an attorney appearing in propria persona was not entitled to fees as a sanction.   The court in Laborde noted that Abandonato had distinguished Trope on two grounds:  First, sanctions under section 128.5 were not limited to costs and attorney fees, but included other litigation-related expenses incurred as a result of the bad faith actions and tactics, including time spent by the party's personnel and compensation for airfare and lost vacation time.   Second, unlike fees awarded under Civil Code section 1717, judgments for sanctions were “ ‘ “not routine and [were] not necessarily related to the size of the recovery or the amount of time billed by the attorney.” ’ ” (Laborde, supra, 92 Cal.App.4th at pp. 468-469, 112 Cal.Rptr.2d 119, quoting Abandonato, supra, 41 Cal.App.4th at pp. 268-269, 48 Cal.Rptr.2d 429.)   Finally, the court in Laborde found persuasive the policy considerations discussed in Abandonato-i.e., “ ‘[h]olding that the attorney in that situation could not be compensated for reasonable expenses would create a separate and artificial category of litigants who would be inadequately protected against another party's bad faith tactics.’ ”  (Laborde, at p. 469, 112 Cal.Rptr.2d 119, quoting Abandonato, at p. 269, 48 Cal.Rptr.2d 429.)

We find none of these considerations persuasive in light of our Supreme Court's decision in Trope.   We have no quarrel with the proposition that an award of sanctions is not limited to attorney fees but may also include other expenses, and that sanctions are not necessarily related to the time billed by the attorney. (§ 128.7, subds.(c)(1) & (d);  Laborde, supra, 92 Cal.App.4th at pp. 468-469, 112 Cal.Rptr.2d 119.)   Here, however, there is no evidence that Adams sustained any other expenses.   Adams declared that his billing rate was $250 an hour and that the amount of time he had spent on the case was worth $25,050, and he asked for-and was awarded-precisely that amount.   His declarations included no other expenses.   Nor do we believe a rule that self-represented parties may not receive attorney fees as a sanction creates a class of litigants who would be inadequately protected against bad faith tactics.  (See Laborde, at p. 469, 112 Cal.Rptr.2d 119.)  Section 128.7, subdivision (d) allows sanctions to include, in addition to attorney fees and other expenses, “directives of a nonmonetary nature, [or] an order to pay a penalty into court,” and allows sanctions “sufficient to deter repetition of this conduct or comparable conduct by others similarly situated.”   Even without attorney fees to a self-represented party, a trial court has the resources to deter sanctionable conduct.

Cases decided under two analogous California statutes suggest the same result.  Argaman v. Ratan (1999) 73 Cal.App.4th 1173, 1176-1180, 86 Cal.Rptr.2d 917, interpreted former section 2023, subdivision (b) (now § 2023.030, subd. (a)), which allows sanctions for misuse of the discovery process.   The available sanctions included “the reasonable expenses, including attorney's fees, incurred by anyone as a result of that conduct.” (§ 2023.030, subd. (a);  Argaman, 73 Cal.App.4th at p. 1177, 86 Cal.Rptr.2d 917.)   The Court of Appeal concluded the rationale of Trope was applicable to this statute, and that an attorney litigating in propria persona may not recover attorney fees. (Argaman, at p. 1179, 86 Cal.Rptr.2d 917.)   In doing so, the court disagreed with Abandonato's conclusion that a self-represented attorney incurs attorney fees.  (Argaman, at pp. 1180-1181, 86 Cal.Rptr.2d 917;  see also Kravitz v. Superior Court (2001) 91 Cal.App.4th 1015, 1019-1020, 111 Cal.Rptr.2d 385.)

The same result exists in the context of special motions to strike under the anti-SLAPP statute (strategic lawsuit against public participation). (§ 425.16.) Section 425.16, subdivision (c) provides that a prevailing party on a special motion to strike “shall be entitled to recover his or her attorney's fees and costs.”   The court in Witte, supra, 141 Cal.App.4th at pages 1207-1209, 46 Cal.Rptr.3d 845, concluded that a self-represented attorney who had prevailed on a special motion to strike was not entitled to attorney fees because there was no attorney-client relationship.¹⁸

Because there is no attorney-client relationship and a self-represented attorney incurs no obligation to pay fees, we conclude an attorney appearing in propria persona is not entitled to attorney fees as a sanction under section 128.7.   In reaching this conclusion, we must respectfully disagree with the contrary result of Laborde.

Because Adams claimed no other expenses, the award of sanctions must be reversed in its entirety as to Adams.

B. Violation of Section 128.7 ***

III. Disposition

The judgment is reversed.

FOOTNOTES

1.   We will refer to Mary Musaelian, the plaintiff in this action, as either plaintiff or Mary Musaelian, and will refer to her husband as Musaelian.

FN2. All further statutory references are to the Code of Civil Procedure unless otherwise indicated..  FN2. All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

FOOTNOTE.   See footnote *, ante.

15.   Subsequent references to rules are to the Federal Rules of Civil Procedure.

16.   Rule 37(a)(4)(A) allows as a discovery sanction “the reasonable expenses incurred in making the [discovery] motion, including attorney fees.”  (See Pickholtz v. Rainbow Technologies, Inc. (Fed.Cir.2002) 284 F.3d 1365, 1375 (Pickholtz ).)

17.   The court in Kay pointed out that the ordinary understanding of the word “attorney” assumes an attorney-client relationship.  (Kay v. Ehrler, supra, 499 U.S. at pp. 435-438 & fns. 6, 8, 111 S.Ct. 1435.)

18.   In reaching this conclusion, the court distinguished Laborde and Abandonato on the grounds that the purpose of the section 425.16 fee award was to compensate the SLAPP defendant, not to punish the other party for bad faith conduct;  that an award under section 425.16 is limited to costs and attorney fees, while a sanction award may include any expenses incurred;  and that the concern expressed in Trope that self-represented attorneys not be treated more favorably than other self-represented parties did not exist under sections 128.5 and 128.7, under which both an attorney litigant and a nonattorney litigant may obtain sanctions.   (Witte, supra, 141 Cal.App.4th at p. 1209, 46 Cal.Rptr.3d 845.)

FOOTNOTE.   See footnote *, ante.

RIVERA, J.