Law Firm That Took Slumlord On Gets No Fee

A major Los Angeles law firm lost its bid Wednesday to recover nearly $700,000 in legal fees racked up in its successful battle against a millionaire slumlord--a blow, attorneys said, to future tenants without resources who may want to take on their landlords.

Gibson, Dunn & Crutcher, the city’s largest law firm, had argued that the record $1.83-million judgment it won in April for tenants of a dilapidated mid-Wilshire area apartment building reinforced the right of all California residents to decent, habitable housing.

But Superior Court Judge Max F. Deutz ruled that former landlord Michael Schaefer was not obligated to pay attorney fees on top of the judgment, although he said it “might be nice to have such a figure as a penalty.”

The case, one of the costliest legal battles ever waged against a Los Angeles slumlord, stemmed from tenant complaints that Schaefer’s six-story building was infested with rats, cockroaches and mice and that the hallways were home to hoodlums.

Yet repeated fines levied by the city, even a short jail term, failed to spur Schaefer to clean up the building. Gibson, Dunn & Crutcher finally agreed to represent the tenants in a pro bono (without fee) class-action civil suit against Schaefer, a former San Diego city councilman and unsuccessful candidate this month for the U.S. Senate in Maryland.

The court battle went on for nearly five years. Schaefer, often representing himself, filed so many motions and writs that Gibson, Dunn & Crutcher at one point had 20 attorneys working on the case just to keep ahead of them.

“I must say that you did a job that only a Gibson, Dunn & Crutcher or an O’Melveny & Myers could do. Nobody else could economically afford to tackle a situation like this,” Deutz conceded.

“A slumlord finally took on someone with the staying power to stick with him to the end,” said Brian Monkarsh, one of the lead attorneys on the case.

‘Litigation Tactics’

But Monkarsh said the difficulty in collecting fees in slumlord cases--Gibson, Dunn & Crutcher agreed to take no fees out of the judgment--and the “abusive litigation tactics” often employed in such cases make other attorneys reluctant to take on slumlords.

“Our purpose (in seeking a court award of attorney fees) is to encourage members of the private bar to get involved,” Monkarsh said. “Public agencies, despite their best efforts, have been unable to remedy the problem of slumlording practices, and unless the private bar becomes involved in a big way, I don’t think we are going to be able to stop slumlords.”

In applying for the fees, Gibson, Dunn & Crutcher had cited a provision in state law allowing for recovery of attorney fees in a case in which an important right is protected for the benefit, not only of the individual clients but for the public at large.

But Deutz ruled that in the end, it was the 150 to 200 tenants of Schaefer’s building who won.

‘No Mandate’

“While you may say they established an overall message to the world that these types of conditions should not exist, there was no mandate to anybody in the world, except Mr. Schaefer, to do anything about it,” Deutz said.

Schaefer’s attorney, former San Diego City Councilman Floyd Morrow, argued vigorously against awarding of the fees, but Schaefer declined comment except to say, “They already got a million dollars worth of good publicity for $700,000.”