​After securing a defense verdict in 2024 in a 16-day bench trial in San Mateo Superior Court's Complex Division, Marty Ready (Partner-San Diego, CA) and Michael McCloskey (Senior Counsel-San Diego, CA) convinced the presiding Judge to limit a statutory attorney fee award to $35,800 of the over $2 million requested by the California Attorney General (AG). The underlying case was an enforcement action by the California AG's office against our clients a nonprofit and one of its five directors alleging various breaches of fiduciary duties primarily arising from an alleged series of self-dealing transactions and diversion of charitable assets. The case was initiated as an investigative audit of the nonprofit, which ultimately led to the litigation. The case was contentious and heavily litigated by the parties for five years. At the conclusion of trial, the court only assessed $14,000 in fines and penalties against the nonprofit and two of its directors related to minor deficiencies in the its tax returns. Although this was an exceptional result, the real risk to our clients was a statutory attorney fee award that was mandatory in an enforcement action brought by the California AG's Charitable Trust Section. As expected, the California AG moved for an award of more than $2 million in attorney's fees and expert costs spanning the investigation and litigation. After extensive briefing and two days of oral arguments on the California AG's fee motion, the court awarded the AG $35,800 based on its lack of success at trial and representative of the amount of time related to obtaining a nominal amount at trial for errors on a nonprofit's tax returns. The California AG has appealed the judgment and is expected to appeal the fee award.​