Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County, No. 06CC02833, W. Michael Hayes, Judge.
Berger Kahn and Allen L. Michel for Defendant and Appellant.
John M. Boyko for Plaintiffs and Respondents.
OPINION
O’LEARY, ACTING P. J.
Berger Kahn appeals from an order denying its request for attorney fees pursuant to Code of Civil Procedure section 425.15, subdivision (c), after the trial court granted Berger Kahn’s special motion to strike pursuant to section 425.16, subdivision (a). Berger Kahn argues the trial court erroneously denied its motion for attorney fees. We disagree and affirm the order.
All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.
FACTS
We need not recite the underlying facts of this dispute as they are provided in our prior unpublished opinion SPM, Inc. et al. v. Berger Kahn (June 13, 2007, G037290) [nonpub. opn.]. Suffice it to say, Berger Kahn filed a notice of judgment lien for unpaid legal fees in an unrelated pending lawsuit in which SPM was a plaintiff. SPM sued Berger Kahn “for intentional and negligent interference with prospective economic advantage.” The trial court granted Berger Kahn’s special motion to strike the complaint as a strategic lawsuit against public participation, i.e., “SLAPP” suit (§ 425.16). On appeal, we affirmed the court’s granting of Berger Kahn’s special motion to strike. (SPM, Inc., et al. v. Berger Kahn, supra, G037290.)
While the matter was pending on appeal, Berger Kahn filed a motion for attorney fees pursuant to section 425.16, subdivision (c). SPM opposed the motion contesting, not that Berger Kahn was not entitled to attorney fees, but that the fee request was “unreasonable.” Berger Kahn responded.
SPM filed a supplemental response to the motion, this time contesting whether Berger Kahn was entitled to attorney fees at all. Based on the then newly decided case Witte v. Kaufman (2006) 141 Cal.App.4th 1201 (Witte), SPM claimed Berger Kahn was not entitled to attorney fees because it represented itself in the action. Berger Kahn filed a supplemental reply brief.
After considering the written briefs and listening to oral argument, the trial court issued a minute order, which stated: “The [c]ourt has read the cases cited by both parties and has come to the conclusion that Witte[, supra, ] 141 Cal.App.4th 1201[,] is controlling on this point. [¶] In that decision the [c]ourt stated the rule as follows: ‘Here, unlike PLCM Group[, Inc. v. Drexler (2000) 22 Cal.4th 1084 (PLCM)] and Gilbert [v. Master Washer & Stamping Co., Inc. (2001) 87 Cal.App.4th 212 (Gilbert)], but like Trope [v. Katz (1995) 11 Cal.4th 274 (Trope)], there is no attorney-client relationship between KLA and its individual attorneys. The individual KLA attorneys are not comparable to in-house counsel for a corporation, hired solely for the purpose of representing the corporation. The attorneys of KLA are the law firm’s product. When they represent the law firm, they are representing their own interests. As such, they are comparable to a sole practitioner representing himself or herself.’ [¶] In this case the attorneys who successfully represented . . . Berger Kahn were the product of the law firm. The attorneys were not hired for the sole purpose of representing the firm as ‘in-house counsel.’ So to fall within the category of attorneys described in PLCM [;supra,] 22 Cal.4th 1084. [Sic.] [¶] It is true that a corporation, including a law corporation, must be represented by counsel in litigation. However, where there will be an attempt to collect attorney fees by a law corporation if they are successful, it will be necessary, under the Witte authority, to hire counsel other than the members of the firm who are the product of the organization. [¶] The request for attorney fees is denied.” Berger Kahn timely appealed.
The reporter’s transcript from September 29, 2006, indicates SPM’s counsel did not appear.
Berger Kahn makes much of the fact that the trial court stated a couple times that no matter how it ruled, it was wrong. The court’s final order supercedes any prior, tentative rulings or earlier statements of opinion. (In re Marriage of Ditto (1988) 206 Cal.App.3d 643, 646-647.)
DISCUSSION
Berger Kahn argues the trial court erroneously denied its motion for attorney fees because a section 425.15, subdivision (c), award of attorney fees is mandatory, Witte, supra, 141 Cal.App.4th 1201, is “distinguishable and inapposite,” and the court denied Berger Kahn equal protection of the laws pursuant to the California Constitution. After we provide the applicable statutory and decisional authority, we will address each of his claims in turn.
I. Applicable Legal Principles
Section 425.16, subdivision (c), states, in relevant part: “In any action subject to subdivision (b), a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” Whether a law firm successfully litigating a special motion to strike may recover section 425.16, subdivision (c), attorney fees is an issue of statutory interpretation. Section 425.16 is to be construed broadly. (§ 425.16, subd. (a).)
In Trope, supra, 11 Cal.4th at page 279, the California Supreme Court addressed the issue of whether a law firm that represented itself could recover “reasonable attorney’s fees” under Civil Code section 1717 as compensation for the time and effort expended and the professional business opportunities lost as a result. The court reasoned “[Civil Code] section 1717 applies only to contracts specifically providing that attorney fees ‘which are incurred to enforce that contract’ shall be awarded to one of the parties or to the prevailing party[,]” and “[t]o ‘incur’ a fee[]” means to “‘become liable’ for it [citation], i.e., to become obligated to pay it.” (Id. at p. 280.) The court opined that “an attorney litigating in propria persona cannot be said to ‘incur’ compensation for his time and his lost business opportunities.” The court explained attorney fees in both legal and general usage is defined as “the consideration that a litigant actually pays or becomes liable to pay in exchange for legal representation[,]” i.e., an attorney-client relationship, and “[a]n attorney litigating in propria persona pays no such compensation.” (Ibid.) The court held, “For the reasons stated, we hold that an attorney who chooses to litigate in propria persona and therefore does not pay or become liable to pay consideration in exchange for legal representation cannot recover ‘reasonable attorney’s fees’ under [Civil Code] section 1717 as compensation for the time and effort he expends on his own behalf or for the professional business opportunities he forgoes as a result of his decision.” (Id. at p. 292.) Finally, the court left for another day the issue of “whether a litigant represented by in-house counsel can or cannot recover ‘reasonable attorney’s fees’ under [Civil Code] section 1717.” (Id. at p. 291.)
Civil Code section 1717, subdivision (a), provides: “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.” (Italics added.)
In PLCM, supra, 22 Cal.4th at page 1088, the California Supreme Court addressed the issue of “whether an entity . . . represented by in-house counsel may recover attorney fees under Civil Code section 1717.” The court explained, “in-house attorneys, like private counsel but unlike pro se litigants, do not represent their own personal interests and are not seeking remuneration simply for lost opportunity costs that could not be recouped by a nonlawyer. A corporation represented by in-house counsel is in an agency relationship, i.e., it has hired an attorney to provide professional legal services on its behalf. . . . The fact that in-house counsel is employed by the corporation does not alter the fact of representation by an independent third party. Instead, the payment of a salary to in-house attorneys is analogous to hiring a private firm on a retainer.” (Id. at p. 1093, italics added, fn. omitted.) The court could “discern no basis for discriminating between counsel working for a corporation in-house and private counsel engaged with respect to a specific matter or on retainer. Both are bound by the same fiduciary and ethical duties to their clients. [Citation.] Both are qualified to provide, and do provide, equivalent legal services. And both incur attorney fees and costs within the meaning of Civil Code section 1717 in enforcing the contract on behalf of their client.” (Id. at p. 1094, fn. omitted.) The court held, “Like private counsel, in-house counsel stand in an attorney-client relationship with the corporation and provide comparable legal services. In the case of such representation, the trial court retains broad discretion under Civil Code section 1717 to fix an award of attorney fees in a reasonable amount.” (Id. at p. 1088.)
In Witte, supra, 141 Cal.App.4th at pages 1201, 1207, the court addressed the issue of whether defendant law firm was entitled to attorney fees upon bringing a successful special motion to strike when they represented themselves in the litigation and, therefore, did not incur attorney fees. The court explained, “Section 425.16, subdivision (c), . . . is intended to compensate the SLAPP defendant for attorney fees incurred in bringing a motion to strike, not to punish the SLAPP plaintiff.” After reciting section 425.16, subdivision (c)’s statutory language, the court explained, “in all cases where a SLAPP defendant prevails, an award of costs and attorney fees is mandatory, i.e., routine. [Citation.]” (Id. at p. 1209.) In rejecting defendant’s contention it was entitled to attorney fees because it was not appearing in propria persona, but rather it was being represented by three of the firm’s attorneys, the court opined defendant could only appear “through one or more of its attorneys, or through outside counsel[,]” and noted that “[i]n Trope, the party that was denied attorney fees under Civil Code section 1717 was a law firm that appeared through one of its attorneys.” (Id. at p. 1210.)
After discussing PLCM, supra, 22 Cal.4th 1084, the Witte court confronted Gilbert, supra, 87 Cal.App.4th 212, in which defendant was represented by members of his firm. The court, quoting the Gilbert court, stated: “‘[A] member of a law firm who is represented by other attorneys in the firm “incurs” fees within the meaning of Civil Code section 1717. Either the represented attorney will experience a reduced draw from the partnership (or a reduced salary from the professional corporation) to account for the amount of time his or her partners or colleagues have specifically devoted to his or her representation, or absorb a share of the reduction in other income the firm experiences because of the time spent on the case. This is different from the “opportunity costs” the attorney loses while he or she is personally involved in the same case, because the economic detriment is caused not by the expenditure of his or her own time, but by other attorneys working on his or her behalf.’ [Citation.]” (Witte, supra, 141 Cal.App.4th at pp. 1210-1211.)
The Witte court noted the Gilbert court found the existence of an attorney-client relationship dispositive based on that court’s distinction between Trope, where there was not an attorney-client relationship, and PLCM, where there was an attorney-client relationship. (Witte, supra, 141 Cal.App.4th at p. 1211.) There court opined: “Here, unlike PLCM . . .and Gilbert, but like Trope, there is no attorney-client relationship between [defendant] and its individual attorneys. The individual [defendant] attorneys are not comparable to in-house counsel for a corporation, hired solely for the purpose of representing the corporation. The attorneys of [defendant] are the law firm’s product. When they represent the law firm, they are representing their own interests. As such, they are comparable to a sole practitioner representing himself or herself. Where, as in Gilbert, an attorney is sued in his or her individual capacity and he obtains representation from other members of his or her law firm, those other members have no personal stake in the matter and may, in fact, charge for their work. Not so with a law firm that is sued in its own right and appears through various members.” The court concluded defendant “incurred no attorney fees in bringing its motion to strike, because all the work was done by members of the firm on their own behalf.” (Ibid.)
II. Analysis
A. Section 425.16, subdivision (c)
While we agree with Berger Kahn that a prevailing defendant on a special motion to strike is entitled to attorney fees, we conclude Berger Kahn was not represented by an independent third party. Therefore, Berger Kahn did not incur attorney fees within the meaning of section 425.16, subdivision (c).
In his declarations, Allen L. Michel stated he was “the attorney primarily responsible for the handling of this matter,” and “he enlisted the assistance of Alex Wong, an associate at the firm . . . .” In his initial declaration, Michel stated he was “Managing Partner of the firm’s Los Angeles office,” but in his supplemental declaration, he claimed he was “in-house general counsel[.]” He mentions three other attorneys who worked in varying capacities on the case, and all are Berger Kahn employees, three of whom are “partner level attorneys[.]” Michel explained both he and Wong “are both employees of the corporation. We are both paid salaries based on our at-will employment relationship with the firm. Each of us might become entitled to a performance bonus in the firm’s discretion, but neither one of us is entitled to any particular share of the earnings of the corporation by virtue of any contract with the firm or by virtue of share ownership with the corporation.” He stated, “As the firm’s general counsel, I have an ongoing attorney-client relationship with Berger Kahn. I communicate to the Board of Directors my findings and opinions in connection with all legal matters of concern to the firm, whether litigated or not. . . . [¶] Over the course of the last [12] years, I have never had any confidential communications with Berger Kahn, including the Board of Directors, successfully challenged[.]”
Michel also described the billing procedure for matters he handles in which Berger Kahn is a litigant. He stated: “When a matter is brought to my attention as counsel for Berger Kahn and lawyer time needs to be devoted to it, I regularly open a file (i.e., assign a file number). The time I and any other Berger Kahn lawyers devote to such matters is posted to the file via our computer billing system, just as is the time that any lawyer spends on another case (the firm grants ‘billable hour’ credit services provided on such cases, just as if the work were done for an outside client). . . . We only record and bill the time of the lawyers performing legal services for the firm or, if an individual is named, the individual.” He added, “Monthly bills for cases involving the firm are generated just as they are for outside clients, and, in an internal accounting procedure similar to that described in PLCM . . ., the various offices of Berger Kahn . . . share in the allocation of the fair market cost attributable to legal services I or others working under me to provide to the firm.”
It is clear Berger Kahn was represented in this matter by five of its own attorneys: Michel, either a managing partner or in-house counsel, Wong, an associate, and Jason Wallach, Michael Aiken, and Marcy Tieger, all partners. We cannot conclude Berger Kahn was represented by independent third parties as all the attorneys who worked on this matter were Berger Kahn’s product. When they represented Berger Kahn, they represented their own interests. The Witte reasoning applies equally to in-house counsel and associates who were hired years before to contribute to the law firm’s product. The fact Michel claims he has an attorney-client relationship with Berger Kahn’s Board of Directors does not alter this fact. Neither Michel nor the attorneys who worked on this matter were independent of Berger Kahn.
Berger Kahn’s Web site indicates Michel is a “Principal” in the firm. ( [as of April 30, 2008].) At oral argument, Michel stated he is a salaried shareholder.
SPM requested we take judicial notice of a table from unknown origin listing numerous California courts, the case number, and the party that Michel has appeared for Berger Kahn on behalf of third parties. This document is not one on which we may take judicial notice. (Evid. Code, §§ 452, subds. (d), (h), 459; Cal. Rules of Court, rule 8.252(a).) SPM’s request for judicial notice is denied.
Nor does analogizing its “internal accounting procedure” to the one described in Trope, supra, 11 Cal.4th 274, persuade us otherwise. Ultimately, Berger Kahn’s in-house “fees” are bookkeeping entries to value the in-kind legal services the firm has provided itself. Berger Kahn is not going to sue itself if the “bill” is unpaid. Contrary to Berger Kahn’s contention denying it attorney fees requires the application of a judge-made exception to section 425.16, subdivision (c), we conclude its mandates Berger Kahn not recover attorney fees because it did not incur attorney fees. Without involving an independent third party attorney, Berger Kahn is not entitled to an award of attorney fees.
B. Witte
Berger Kahn contends Witte, supra, 141 Cal.App.4th 1201, is “distinguishable and inapposite.” First, Berger Kahn contends Witte is faulty because its holding was based on Trope, which did not involve section 425.16, subdivision (c), or its important public concerns. Second, Berger Kahn argues Witte is distinguishable because the Berger Kahn attorneys who worked on this matter were not named in the lawsuit, and they were not representing themselves in propria persona, i.e., “[t]hey were merely corporate employees with no financial stake in the outcome, and they were not representing their own interests.” Neither of these contentions have merit.
First, it is true the Witte court did not discuss the public policy purpose underlying section 425.16, subdivision (c), or that section 425.16 is to be construed broadly. Instead, the Witte court examined Trope, PLCM, and Gilbert, all cases addressing Civil Code section 1717’s attorney fees provision, and concluded the law firm defendant did not “incur” attorney fees within the meaning of section 425.16, subdivision (c). (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1141 (Ketchum) [in addressing issue whether trial court properly calculated attorney fees under section 425.16 court explained attorney fees award includes attorney fees incurred for underlying claim and also attorney fees incurred in enforcing right to mandatory fees].) And, the Witte court analogized to Trope, where the court concluded the absence of an attorney-client relationship mandated the denial of attorney fees pursuant to Civil Code section 1717. We have explained why Michel’s claim he has an attorney-client relationship with Berger Kahn’s Board of Directors does not alter our conclusion. Berger Kahn’s reliance on Ketchum, supra, 24 Cal.4th 1122, to undermine Witte is misplaced. Ketchum involved an attorney fees award pursuant to section 425.16, subdivision (c), where an attorney represented defendant on a contingency fee basis, not where defendant law firm represented itself. (Ketchum, supra, 24 Cal.4th at pp. 1127-1128.)
Second, although the Witte court concluded the attorneys did not have an attorney-client relationship with defendant law firm, and Michel claims he does have such a relationship with Berger Kahn’s Board of Directors, as we explain above, that fact does not alter our conclusion. The Berger Kahn attorneys who worked on this matter were all Berger Kahn’s product. Berger Kahn’s reliance on the PLCM court’s observation “that, by definition, the term ‘attorney fees’ implies the existence of an attorney-client relationship” (PLCM, supra, 22 Cal.4th at p. 1092), does not mean that if an attorney-client relationship exists, the defendant law firm incurred fees. When a law firm represents itself, the focus of the inquiry is whether a defendant law firm incurred fees. Whether an attorney-client relationship exists might be one factor, but is not the only factor, in making that determination.
Berger Kahn’s reliance on U.S. v. Rowe (9th Cir. 1996) 96 F.3d 1294, is inapposite as that case concerned the scope of the attorney-client privilege.
At oral argument, Berger Kahn relied on Do v. Superior Court (2003)109 Cal.App.4th 1210 (Do), a decision from another panel of this court, to support its claim Witte was wrongly decided. In Do, the court addressed the issue of whether defendant who was represented pro bono was entitled to monetary discovery sanctions under former section 2025. In reversing the trial court’s denial of sanctions, the court stated: “It is thus obvious that the rule enunciated in Trope is limited to its facts: lawyers representing themselves in cases involving contractual fees under Civil Code section 1717 are not entitled to such fees because of the resulting disparate treatment between lawyer and nonlawyer litigants.” (Do, supra, 109 Cal.App.4th at p. 1216.) In making its ruling, the court stated, “a mechanical reading of the word ‘incur’ does not determine entitlement to fees[,]” and the recovery of “fees does not merely turn on the question of whether such fees were ‘incurred.’” (Id. at pp. 1216-1217.) First, Do is inapposite because counsel was representing defendant pro bono and not representing himself. Second, Do involved monetary discovery sanctions under section 2025, not attorney fees pursuant to section 425.16, subdivision (c).
Former section 2025, enacted in 1986, was repealed in 2004 and replaced by a new section 2025.450 addressing the same subject matter. (Stats. 2004, ch. 182, § 23, pp. 659-660.)
C. Equal Protection
Berger Kahn argues that allowing in-house counsel who work for non-attorney corporations to recover attorney fees on a special motion to strike, but not in-house counsel that works for law firms, is a violation of the California Constitution’s equal protection and uniform operation guarantees. Not so.
California Constitution article I, section 7(a), states: “A person may not be deprived of life, liberty, or property without due process of law or denied equal protection of the laws . . . .” California Constitution article IV, section 16(a), provides, “All laws of a general nature have uniform operation.”
As we have explained, an award of attorney fees is required only when a party is represented by an independent third party and incurs attorney fees. Because Berger Kahn was not represented by an independent third party and represented its own interests, it did not incur fees, and it is not entitled to an attorney fees award. Lost opportunity costs are not attorney fees. (PLCM, supra, 22 Cal.4th at p. 1092.) Thus, no pro se defendants, whether attorneys or nonattorneys, who prepare their own special motions to strike are entitled to attorney fees. If law firms that prepared their own special motions to strike were awarded attorney fees, other pro se defendants would claim they were denied their equal protection rights. (Ibid.) Berger Kahn has been treated no differently than other pro se defendants.
D. Reasonableness of Attorney Fees
Finally, because we conclude the trial court properly denied Berger Kahn’s motion for attorney fees, we need not address its final contention that the amount requested was reasonable.
DISPOSITION
The order is affirmed. Respondents shall recover their costs on appeal.
I CONCUR: MOORE, J.
Aronson, J., Concurring.
The majority opinion correctly determines that Berger Kahn is not entitled to attorney fees because no attorney-client relationship arose between it and the individual attorneys handling the special motion to strike. I write separately, however, because I believe the majority inappropriately places emphasis on the question whether Berger Kahn “incurred” fees.
A. The Distinctions Between Code of Civil Procedure Section 425.16 and Civil Code Section 1717 Do Not Affect the Outcome Here
All statutory references are to the Code of Civil Procedure unless otherwise noted.
Taking its cue from Trope v. Katz (1995)11 Cal.4th 274 (Trope), the majority declares: “When a law firm represents itself, the focus of the inquiry is whether a defendant law firm incurred fees.” (Maj. opn., ante, at p. 11.) Section 425.16, however, does not expressly require the moving party to “incur” fees; instead, the statute simply states that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” (§ 425.16, subd. (c).) Thus, in my view, the question whether attorney fees are “incurred” is inapplicable to section 425.16.
Trope involved a fee request under Civil Code section 1717, which allows recovery of “attorney’s fees and costs, which are incurred to enforce that contract . . . .” (§ 1717, subd. (a), italics added.) Trope observed that “[Civil Code] section 1717 applies only to contracts specifically providing that attorney fees ‘which are incurred to enforce that contract’ shall be awarded to one of the parties or to the prevailing party,” and “[t]o ‘incur’ a fee[]” means to “‘become liable’ for it [citation], i.e., to become obligated to pay it.” (Trope, supra, 11 Cal.4th at p. 280.) The court concluded “an attorney litigating in propria persona cannot be said to ‘incur’ compensation for his time and his lost business opportunities.” (Ibid.)
Trope’s definition of the word “incur” as requiring a party to become personally liable or obligated to pay attorney fees has not survived. As our division previously recognized, “the rule enunciated in Trope is limited to its facts.” (Do v. Superior Court (2003) 109 Cal.App.4th 1210, 1216 (Do).) Indeed, seven years after deciding Trope, the Supreme Court explained: “In practice, it has been generally agreed that a party may ‘incur’ attorney fees even if the party is not personally obligated to pay such fees.” (Lolley v. Campbell (2002) 28 Cal.4th 367, 373.) Thus, “in cases involving a variety of statutory fee-shifting provisions, California courts have routinely awarded fees to compensate for legal work performed on behalf of a party pursuant to an attorney-client relationship, although the party did not have a personal obligation to pay for such services out of his or her own assets.” (Ibid.)
In Do, this division held a defendant represented by pro bono counsel was entitled to monetary discovery sanctions under former section 2025, observing that “a mechanical reading of the word ‘incur’ does not determine entitlement to fees,” (Do, supra, 109 Cal.App.4th at p. 1216) and the recovery of “fees does not merely turn on the question of whether such fees were ‘incurred’” (id. at p 1217). More specifically to the point here, the Supreme Court in Ketchum v. Moses (2001) 24 Cal.4th 1122, 1127 (Ketchum), permitted an attorney fee award under section 425.16 to an indigent defendant whose attorney agreed to work on a contingency fee basis. (See also Rosenaur v. Scherer (2001) 88 Cal.App.4th 260, 287 [defendant represented by pro bono counsel may recover attorney fees under section 425.16].) The definition of the word “incur” has now reached a point in the case law where our division has aptly concluded that “[m]odern jurisprudence does not require a litigant seeking an attorney fee award to have actually incurred the fees.” (Moran v. Oso Valley Greenbelt Assn. (2004) 117 Cal.App.4th 1029, 1036.)
Although the Court of Appeal in Witte v. Kaufman (2006) 141 Cal.App.4th 1201, 1211 (Witte)concluded the law firm in that case “incurred no attorney fees in bringing its motion to strike,” the court did not base its holding on Trope’sdefinition of the word “incur,” but on the Supreme Court’s definition of “attorney fees.” As the Supreme Courtnoted: “We explained [in Trope]that, by definition, the term ‘attorney fees’ implies the existence of an attorney-client relationship, i.e., a party receiving professional services from a lawyer. [Citations.]” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1092 (PLCM).) It was the nonexistence of an attorney-client relationship Witte found dispositive in denying an attorney fee award under section 425.16 to a self-represented law firm. (Witte, at p. 1211.)
“In the absence of some indication either on the face of [a] 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.” (Trope, supra, 11 Cal.4th at p. 282.) Berger Kahn has provided nothing demonstrating the Legislature intended a different meaning for the term “attorney’s fees” when it enacted section 425.16 than from the term’s meaning when it enacted Civil Code section 1717 earlier. Thus, section 425.16’s reference to “attorney’s fees” requires the existence of an attorney-client relationship to obtain recovery for time expended by an attorney in bringing an anti-SLAPP motion, even thought the statute does not expressly require that fees be “incurred.”
The fact that Civil Code section 1717 and section 425.16 differ in purpose does not aid Berger Kahn. The Supreme Court in PLCM noted the Legislature’s purpose in enacting Civil Code section 1717 was “‘to establish uniform treatment of fee recoveries in actions on contracts containing attorney fee provisions.’” (PLCM, supra, 22 Cal.4th at pp. 1094-1095.) In contrast, the fee-shifting provision in section 425.16 was “intended to discourage . . . strategic lawsuits against public participation by imposing the litigation costs on the party seeking to ‘chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.’ [Citation.] The fee-shifting provision also encourages private representation in SLAPP cases, including situations when a SLAPP defendant is unable to afford fees or the lack of potential monetary damages precludes a standard contingency fee arrangement.” (Ketchum, supra, 24 Cal.4th at p. 1131, emphasis added.)
Thus, the Legislature intended section 425.16 in part to deter frivolous lawsuits, similar to the operation of statutes authorizing sanctions. Nevertheless, courts have not uniformly granted attorneys fees as sanctions to attorneys acting in propria persona. For example, courts have held that a self-represented attorney may not recover attorney fees as a sanction for their opponent’s misuse of discovery. (Kravitz v. Superior Court (2001) 91 Cal.App.4th 1015, 1016-1022; Argaman v. Ratan (1999) 73 Cal.App.4th 1173, 1175-1182 (Argaman).)
Witte distinguished section 425.16 from sanctions statutes, observing: “Section 425.16, subdivision (c), . . . is intended to compensate the SLAPP defendant for attorney fees incurred in bringing a motion to strike, not to punish the SLAPP plaintiff.” (Witte, at p. 1209.) Witte cites no authority for the foregoing statement, which I view as incomplete in light of Ketchum.
True, this division has granted attorney fees to self-represented attorneys under section 128.5. (Abandonato v. Coldren (1995) 41 Cal.App.4th 264, 268-269 (Abandonato); see also Laborde v. Aronson (2001) 92 Cal.App.4th 459, 467-469 (Laborde) [involving § 128.7 sanctions].) In so doing, these decisions did not expand the statutory definition of “attorney fees,” but recognized that “sanctions under [section 128.5] are not limited to court costs and attorney fees but include those reasonable expenses ‘directly related to and in furtherance of the litigation’ which are ‘incurred as a result of bad faith actions and tactics.’” (Abandonato, supra, 41 Cal.App.4th at p. 268 (internal citations omitted).) Section 425.16, subdivision (c), however, allows only an award of “attorney’s fees and costs.” Again, Berger Kahn has provided nothing demonstrating the Legislature intended the phrase “attorney’s fees and costs” to mean anything other than its accepted meaning. Thus, as in Witte, the lack of an attorney-client relationship precludes recovery of attorney fees under section 425.16, subdivision (c).
Our decisions in Abandonato and Laborde have been the subject of some criticism. (See Argaman, supra, 73 Cal.App.4th at p. 1180.) The Supreme Court has accepted review of a case criticizing these two decisions to address the specific question “[w]hether an attorney who is appearing in propria persona is entitled to attorney fees as a sanction under Code of Civil Procedure section 128.7.” (Musaelian v. Adams (2007) 169 P.3d 882.)
B. The Lack of an Attorney-Client Relationship Is Dispositive of the Attorney Fee Issue
The majority suggest that the existence of an attorney-client relationship is not the dispositive factor in determining a law firm’s entitlement to a fee award under section 425.16. (Maj. opn. ante, at p. 11.) I disagree. An attorney-client relationship arises when an attorney is hired to perform legal services for the client, whether the attorney is hired under a retainer agreement with a law firm or under an employment agreement as in-house counsel. (See PLCM, supra, 22 Cal.4th at p. 1093.) Berger Kahn hired its attorneys to perform legal services to others in order to contribute to its bottom line, i.e., as the firm’s product. Despite Michel’s claimed status as Berger Kahn’s in-house counsel, he also represents third parties as part of the firm. Thus, Berger Kahn’s in-house “fees” represent nothing more than lost opportunity costs of the type that nonlawyers representing themselves are unable to recover. (Ibid; see also Trope, supra, 11 Cal.4th at p. 285.) Thus, there were no “attorney fees” for Berger Kahn to recover under section 425.16, subdivision (c).
A Lexis search reveals a number of cases in which Michel has appeared on behalf of third parties as part of Berger Kahn. (See, e.g., Louise Gardens of Encino Homeowners’ Ass’n v. Truck Ins. Exch. (2000) 82 Cal.App.4th 648; Sindell v. Gibson (1997) 54 Cal.App.4th 1457.)