First American Title Ins. v. Cal. Dept. of Tax and Fee Admin. CA4/1

California Court of Appeal · D079025 · 2022-02-07 · Unpublished

Proceeding: appeal from an order
Trial court: Superior Court of San Diego County · No. 37-2018-00065184-CU-WM-CTL
Trial judge: Ronald F. Frazier
Outcome: reversed — Reversed with directions.
Area: civil
Panel: William S. Dato (author), Cynthia Aaron, Patricia Guerrero

Analysis

A model's reading — qwen3.8-27b, prompt v1, 2026-10-13T04:55Z · confidence high

The trial court awarded First American Title Insurance Company $204,391.97 in attorney fees as the prevailing party after it won a refund of sales tax reimbursement and a declaration that a tax regulation was unconstitutional. On appeal, the Department of Tax and Fee Administration sought reversal, and the Court of Appeal reversed the fee order based on the parties' stipulation, noting that the underlying judgment had already been reversed in a prior appeal.

Ruling reviewed	Standard	The court	The model
Order awarding attorney fees under Revenue and Tax Code section 7156 “Upon reversal of the underlying judgment, it necessarily follows that the trial court’s award of attorney fees under a statute authorizing a fee award to a prevailing party must also be reversed.”	unclear	correct	agree with court The appellate court correctly applied the principle that an award of attorney fees to a prevailing party is derivative of the underlying judgment; if the judgment is reversed, the party is no longer 'prevailing' for fee purposes, necessitating reversal of the fee award. The court relied on the prior reversal in First American I to establish this legal reality.

Authorities

relied: National Parks and Conservation Assn. v. County of Riverside (2000) 81 Cal.App.4th 234 — Reversal of an underlying judgment necessitates the reversal of an attorney fee award granted to the prevailing party in that judgment.
relied: Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal.App.4th 1324 — Public interest is advanced when a pending appeal by a state agency is resolved in its favor without incurring further expense.
relied: First American Title Ins. Co. v. California Dept. of Tax & Fee Administration (2021) 71 Cal.App.5th 603 — The underlying judgment in the related case was reversed, which legally compels the reversal of the derivative attorney fee award.

The appellate opinion: sound — The opinion is procedurally sound because it correctly applies Code of Civil Procedure section 128, subdivision (a)(8) to a stipulated reversal, finding that the legal mandate to reverse the fee award upon the reversal of the underlying judgment satisfies the public trust and nonparty interest factors. The reasoning is concise and directly addresses the statutory requirements for stipulated reversal.

How this analysis was made · dispute it

unusual disposition

A model's reading — claude-fable-5-1, prompt v1, 2026-10-13T04:30Z · confidence medium

The superior court awarded First American $204,391.97 in attorney fees under Revenue and Taxation Code section 7156 as the prevailing party in a sales tax refund action, but the Court of Appeal later reversed the underlying judgment in First American I. On the parties' stipulation, the Court of Appeal made the findings required by Code of Civil Procedure section 128, subdivision (a)(8), reversed the fee order, and remanded with directions to deny the fee motion.

Ruling reviewed	Standard	The court	The model
Postjudgment order awarding First American $204,391.97 in prevailing-party attorney fees under Revenue and Taxation Code section 7156 “Upon reversal of the underlying judgment, it necessarily follows that the trial court’s award of attorney fees under a statute authorizing a fee award to a prevailing party must also be reversed.”	unclear	error (other)	agree with court The fee award depended entirely on First American's status as prevailing party, which was eliminated when the underlying judgment was reversed in First American I. The court did not find the trial court erred when it ruled; rather, reversal of the fee order is the necessary consequence of reversal of the judgment on which it rested, as National Parks and Conservation Assn. v. County of Riverside holds. The court also properly addressed each statutory finding required by Code of Civil Procedure section 128, subdivision (a)(8), before accepting the stipulated reversal.
Acceptance of the parties' stipulated reversal under Code of Civil Procedure section 128, subdivision (a)(8) “In this case, the parties’ reason for seeking a stipulated reversal is well- grounded in legal authority.”	de novo	correct	agree with court This is the appellate court's own determination rather than review of a trial court ruling, but it is the operative legal analysis in the opinion. The court made the two express findings section 128(a)(8) requires: no reasonable possibility of harm to nonparties or the public, and that the parties' reasons outweigh erosion of public trust and reduced settlement incentives. Because reversal was compelled by law in any event, the findings are well supported.

Authorities

relied: First American Title Ins. Co. v. California Dept. of Tax & Fee Administration (2021) 71 Cal.App.5th 603 — Reversed the underlying judgment and vacated the writ of mandate, eliminating First American's prevailing-party status.
relied: National Parks and Conservation Assn. v. County of Riverside (2000) 81 Cal.App.4th 234 — When the underlying judgment is reversed, a prevailing-party attorney fee award based on it must also be reversed.
relied: Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal.App.4th 1324 — A stipulated reversal may serve the public interest where it resolves a pending appeal without further expense and does not adversely affect nonparties.

The appellate opinion: sound — The opinion correctly recognizes that a prevailing-party fee award cannot survive reversal of the judgment on which it depends and applies the governing authority for that proposition. It also expressly walks through each finding mandated by Code of Civil Procedure section 128, subdivision (a)(8), before accepting the stipulated reversal, so the result is both legally compelled and procedurally proper.

How this analysis was made · dispute it

Opinion

Filed 2/7/22 First American Title Ins. v. Cal. Dept. of Tax and Fee Admin. CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). Thi s opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

FIRST AMERICAN TITLE D079025 INSURANCE COMPANY,

Plaintiff and Respondent, (Super. Ct. No. 37-2018- v. 00065184-CU-WM-CTL)

CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION,

Defendant and Appellant.

APPEAL from an order of the Superior Court of San Diego County, Ronald F. Frazier, Judge. Reversed with directions.

Rob Bonta, Attorney General, Tamar Pachter, Assistant Attorney General, and Lisa W. Chao, Deputy Attorney General, for Defendant and Appellant. Bewly Lassleben & Miller and Leighton M. Anderson, for Plaintiff and Respondent. First American Title Insurance Company (First American) prevailed in the superior court in an action seeking (1) a refund of sales tax reimbursement it had paid to lessors of business equipment; and (2) an order vacating as unconstitutional a tax regulation providing that sales tax applied if the lessee (such as an insurance company) was exempt from paying use tax. The superior court later awarded First American $204,391.97 in attorney fees as the prevailing party under Revenue and Tax Code section 7156. The California Department of Tax and Fee Administration (Department) separately appealed from the judgment and the postjudgment order awarding attorney fees. While considering the appeal from the judgment, we stayed briefing on the attorney fee appeal. We recently reversed the underlying judgment and vacated the writ of mandate issued by the superior court. (First American Title Ins. Co. v. California Dept. of Tax & Fee Administration (2021) 71 Cal.App.5th 603 (First American I).) After the remittitur issued, we vacated the stay in the attorney fee appeal, set a briefing schedule, and encouraged the parties to reach a negotiated resolution in light of the reversal of the judgment. Acting on our suggestion to resolve this matter themselves, the parties have now stipulated to a summary reversal of the attorney fee order. DISCUSSION Code of Civil Procedure, section 128, subdivision (a)(8), provides in relevant part: “An appellate court shall not reverse or vacate a duly entered judgment upon an agreement or stipulation of the parties unless the court finds both of the following: ¶ (A) There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal. ¶ (B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement.”

2 In this case, the parties’ reason for seeking a stipulated reversal is well- grounded in legal authority. Upon reversal of the underlying judgment, it necessarily follows that the trial court’s award of attorney fees under a statute authorizing a fee award to a prevailing party must also be reversed. (See National Parks and Conservation Assn. v. County of Riverside (2000) 81 Cal.App.4th 234, 238.) Thus, there could be no erosion of public trust because reversal is compelled by law. On a broader level, public trust in the courts is enhanced, not eroded, when parties recognize the legal reality of a final disposition in a related appeal and agree to resolve other pending cases based on it. Nor will reversal adversely affect the interests of nonparties or the public. To the contrary, the public interest is advanced because a pending appeal by a state agency will be resolved in its favor without its incurring further expense. (See Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal.App.4th 1324, 1329.) And because the order being challenged pertains only to attorney fees incurred in the underlying case, reversal will have no impact on nonparties to the appeal, and indeed no such nonparties have been identified. Finally, as to the last factor, the availability of a stipulated reversal will not reduce the incentive for pretrial settlement since the pursuit of this appeal would inevitably lead to reversal in any event.

3 DISPOSITION The order awarding attorney fees is reversed and the matter is remanded to the superior court with directions to enter a new order denying First American’s motion for attorney fees. Pursuant to stipulation, the parties shall bear their own costs on this appeal, and the remittitur shall issue forthwith.

DATO, J.

WE CONCUR:

AARON, Acting P. J.

GUERRERO, J.

Cites, in this corpus

Union Bank of California v. Braille Institute of America, Inc. B148833, B149842 · 2001-10-19
National Parks & Conversation Ass'n v. County of Riverside D032228 · 2000-06-05