In Suarez v. City of Corona, 2014 DJDAR 12101, the California Court of Appeal for the Fourth Appellate District decided an interesting case concerning the interpretation of California Code of Civil Procedure Section 1038. That statute provides a statutory ground for a public entity to recover attorney fees for “frivolous” litigation brought against a municipality.
The plaintiff was a passenger in a motor vehicle. The vehicle exploded while filling up at a fueling station operated by the City of Corona (the City). The plaintiff sued the City, contending that the filling station and its equipment was defective. However, discovery revealed that the vehicle being “filled up” at the station had defective tanks which caused the explosion. The evidence supported the conclusion that there were no gas leaks at the filling station. The City repeatedly demanded to be dismissed but the plaintiff refused.
Significant defense costs were incurred after the dismissal demands were made by the City. The City moved for summary judgment, arguing that the lawsuit was “frivolous” within the meaning of Code of Civil Procedure Section 1038. That statute provides a remedy for a city to obtain a fee award for unmeritorious (i.e. frivolous) litigation.
The trial court awarded the City $135,905.00 in fees which were assessed jointly against the plaintiff and his attorneys. The plaintiff appealed, arguing that Section 1038 did not authorize an award of fees against a “non‑party attorney.”
The court of appeal agreed and reversed the award. The court noted that in proceedings that are not brought in good faith and with reasonable cause, it “shall render judgment” in favor of the prevailing party. Although Section 1038 was silent as to whom the award of defense costs may run against, the court concluded that a “judgment” cannot lie against an attorney who is not a “party” to the action.