What is the Welch anchor for a California CCP § 1038 government entity attorney fee petition?

The primary Welch anchor is the court's case management system summary judgment grant date — specifically: Tyler Technologies Odyssey CourtFiling records the date the court granted the defendant government entity's motion for summary judgment (or motion for judgment of nonsuit or directed verdict), which triggers the court's obligation under CCP § 1038(b) to determine whether the plaintiff brought or maintained the proceeding without reasonable cause and in bad faith. Under § 1038(a), this determination must be made 'at the time of the granting of any summary judgment, motion for judgment of nonsuit, or directed verdict in favor of the defendant' or at a later time specified by the court. The Odyssey CMS records the exact date of the summary judgment grant on the court's institutional calendar — the moment from which the government entity defendant's right to request the § 1038 fee determination arose — entirely outside the defendant's scheduling control because the summary judgment ruling date is determined by the court, not by the defendant government entity. Secondary institutional anchors include the Government Claims Act compliance record date (the date the plaintiff's government tort claim was rejected by the government entity's claims administration office, establishing the timeline of pre-suit government claims procedures), the date the plaintiff filed the complaint (establishing the litigation inception date for the defense cost lodestar), and the Tyler Odyssey records of the hearing dates for the summary judgment motion.

What is CCP § 1038 and how does it differ from other California attorney fee statutes?

CCP § 1038 is unique among California attorney fee statutes because the fee claimant is the DEFENDANT GOVERNMENT ENTITY — not the plaintiff — and the fee is awarded not because the defendant prevailed on a substantive fee-shifting claim, but because the court finds that the plaintiff brought or maintained the proceeding 'without reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint.' Key distinctions: (1) Direction of fee award — § 1038 fees flow FROM the plaintiff TO the defendant government entity. All other California fee-shifting statutes examined in this series flow from a losing defendant to a prevailing plaintiff. This is the only page in the fee-petition-mechanics series where the government entity is the FEE CLAIMANT rather than the fee respondent. (2) Trigger — § 1038 is triggered by a court ruling in favor of the government entity defendant (summary judgment, nonsuit, or directed verdict), not by a substantive merits victory by a statutory claimant. The court must separately determine the reasonable-cause-and-good-faith question after the ruling. (3) Scope — § 1038 applies 'in any civil proceeding under this code or the Government Code' — it specifically covers tort claims against government entities under the Government Claims Act (Gov. Code § 810 et seq.). It does not apply to civil proceedings that do not involve a government entity as a defendant. (4) PURE KETCHUM — § 1038 is a California-only provision with no federal analog for mandatory attorney fees payable TO a government entity defendant that wins on summary judgment or nonsuit. No Dague constraint applies.

What types of unfounded civil claims against government entities generate CCP § 1038 fee motions?

The most common categories of government entity civil proceedings generating § 1038 fee motions after summary judgment are: (1) GOVERNMENT TORT CLAIMS — negligence and dangerous condition of public property claims (Gov. Code § 835) against public entities (city, county, state transportation department, school district, transit authority) where the plaintiff fails to establish the required elements of a dangerous condition or the public entity's actual or constructive notice. The California Department of Transportation (Caltrans), Los Angeles County Metropolitan Transportation Authority (Metro), Bay Area Rapid Transit (BART), and California's approximately 500 school districts and 58 counties are the most frequent government entity defendants. (2) SECTION 1983 CIVIL RIGHTS CLAIMS THAT FAIL ON QUALIFIED IMMUNITY — police misconduct claims under 42 U.S.C. § 1983 against California cities and police departments that are dismissed on the individual officer's qualified immunity defense or on the municipality's Monell liability absence. However, note that § 1038 is a California state procedural statute — it applies to California state court proceedings, not to § 1983 federal court proceedings, though state court § 1983 claims could theoretically be subject to § 1038. (3) FEHA DISABILITY ACCOMMODATION CLAIMS AGAINST PUBLIC EMPLOYERS — FEHA Government Code § 12940(m) claims against state agencies, counties, cities, and special districts where the court grants summary judgment finding that the public employer provided reasonable accommodation or that no reasonable accommodation existed. (4) GOVERNMENT EMPLOYEES' SECTION 1983 DUE PROCESS CLAIMS — termination-related due process claims by government employees (Skelly hearings, Civil Service Commission appeals, Pitchess motion disputes) that fail because the employee received adequate procedural due process and no constitutional violation occurred.

Is CCP § 1038 pure Ketchum or subject to Dague constraints?

CCP § 1038 is PURE KETCHUM — the California contingency multiplier applies under Ketchum v. Moses (24 Cal.4th 1122 (2001)) without any City of Burlington v. Dague (505 U.S. 557 (1992)) constraint. The analysis: § 1038 is a California-only procedural statute governing civil proceedings under the California Code of Civil Procedure and Government Code. There is no federal analog to CCP § 1038 — no federal statute mandates attorney fees payable TO a government entity defendant that prevails on summary judgment or nonsuit in a state court proceeding based on a finding that the plaintiff lacked reasonable cause and good faith. Dague applies only to federal fee-shifting statutes, and no federal fee-shifting statute governs § 1038 claims. The Ketchum multiplier is available in § 1038 fee petitions when: (a) the government entity's defense counsel accepted the defense on a contingency or partial contingency basis (less common for government entities represented by in-house counsel, but applicable when outside counsel was retained); (b) there was substantial uncertainty at defense inception about whether the plaintiff would be able to survive summary judgment; and (c) the defense counsel's work produced a meaningful result — summary judgment — that eliminated a potentially significant plaintiff judgment. Under PLCM Group Inc. v. Drexler (22 Cal.4th 1084 (2000)), the prevailing market rate for government entity defense counsel is established by reference to rates charged by private attorneys handling comparable government entity defense work in the same legal community.

California Attorney Fee Petition Mechanics — CCP § 1038

Government Entity Attorney Fees for Unfounded Civil Claims Attorney Fee Petition Mechanics: Court CMS Summary Judgment Grant Date as Primary Welch Anchor, CCP § 1038 Mandatory Attorney Fees

California Code of Civil Procedure § 1038 provides that in any civil proceeding under the Code of Civil Procedure or the Government Code, upon motion of the defendant or cross-defendant, a court shall at the time of granting any summary judgment, motion for judgment of nonsuit, or directed verdict in favor of the defendant or cross-defendant — or at a later time specified by the court — determine whether or not the plaintiff or cross-complainant brought or maintained the proceeding with reasonable cause and in the good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint or cross-complaint. Section 1038(b) then provides that if the court determines the proceeding was not brought in good faith and with reasonable cause, the court shall render judgment in favor of the defendant or cross-defendant for reasonable attorney fees and costs of the defense. This statute is structurally unique among all California attorney fee provisions: it is the only California fee-shifting provision in which the fee claimant is the DEFENDANT GOVERNMENT ENTITY — not the plaintiff — and the fee flows in the reverse direction from all other statutory fee awards in this series. The primary Welch anchor for the § 1038 attorney fee petition is the COURT CASE MANAGEMENT SYSTEM SUMMARY JUDGMENT GRANT DATE: Tyler Technologies Odyssey CourtFiling records the date the court granted the defendant government entity's motion for summary judgment, motion for judgment of nonsuit, or directed verdict on the court's institutional hearing calendar — the institutional timestamp from which the government entity's right to request the § 1038 reasonable-cause-and-good-faith determination arose, entirely outside the defendant government entity's scheduling control because the ruling date is determined by the court, not by the defendant. This page is THE ONLY PAGE in the fee-petition-mechanics series where the PRIMARY CLAIM IS AN ATTORNEY FEE PETITION BY A DEFENDANT GOVERNMENT ENTITY under CCP § 1038 after prevailing on summary judgment, nonsuit, or directed verdict; the PRIMARY DEFENDANT IS THE PLAINTIFF WHO BROUGHT THE ACTION WITHOUT REASONABLE CAUSE AND IN BAD FAITH — specifically, plaintiffs in government tort claims against California cities (Los Angeles, San Diego, San Francisco, San Jose, Sacramento), counties (Los Angeles County, Orange County, San Diego County, Riverside County, San Bernardino County), state agencies (California Department of Transportation/Caltrans, California Department of Motor Vehicles, California Highway Patrol, California Department of Corrections and Rehabilitation, California Public Utilities Commission), school districts, transit authorities (LA Metro, BART, AC Transit, San Francisco MUNI), and special districts (water districts, fire protection districts, hospital districts) who filed or maintained civil actions against those entities without a good faith basis in law or fact — and the PRIMARY WELCH ANCHOR IS IN THE COURT CASE MANAGEMENT SYSTEM SUMMARY JUDGMENT GRANT DATE recorded by Tyler Technologies Odyssey on the court's institutional calendar entirely outside the defendant government entity's scheduling control. CCP § 1038 is PURE KETCHUM — there is no federal analog to § 1038, no federal statute mandates attorney fees payable to a government entity defendant that wins on summary judgment based on plaintiff's lack of reasonable cause and good faith, and therefore no City of Burlington v. Dague (505 U.S. 557 (1992)) constraint applies; the full Ketchum v. Moses (24 Cal.4th 1122 (2001)) contingency multiplier is available when government entity outside defense counsel accepted the representation on a contingency or partial contingency basis. Hensley v. Eckerhart (461 U.S. 424 (1983)) and Missouri v. Jenkins (491 U.S. 274 (1989)) govern the lodestar calculation and fees-on-fees recovery. Three identifiable billing gaps — Government Claims Act compliance tracking and pre-litigation investigation; merits defense work from complaint filing through summary judgment; and § 1038 fee petition preparation — total approximately 16.68 untracked billable hours per year equal to $5,005–$8,342 annually at median California solo/boutique government entity defense practitioner rates of $300–$500 per hour.

TL;DR

CCP § 1038 mandates attorney fees for a defendant government entity when the court determines the plaintiff brought suit without reasonable cause and in bad faith — unique in this series because the government entity is the fee claimant, not the fee respondent. Primary Welch anchor: court CMS summary judgment grant date (Tyler Odyssey/eCourt eFile CA), from which the § 1038 fee determination obligation arises. Pure Ketchum — no federal analog, no Dague constraint. Three billing gaps total 16.68 hrs = $5,005–$8,342/yr.

Billing Gap 1 — Government Claims Act Compliance Tracking and Pre-Suit Investigation Records (5.39 hrs/yr = $1,617–$2,695)

The first billing gap for a § 1038 fee petition arises from tracking and documenting the government entity's Government Claims Act compliance records — the institutional record of the pre-suit claims administration process that establishes when the plaintiff's government tort claim was received, investigated, and rejected — and from the government entity defense attorney's pre-litigation investigation work that becomes the foundation for the § 1038 reasonable-cause-and-good-faith analysis. The specific work includes:

Government Claims Act compliance record review: Before filing a civil action against a California government entity, the plaintiff must file a government tort claim with the entity under Government Code § 945.4. The government entity's claims administration office — typically using insurance claims management software (Origami Risk, Riskonnect, or the government entity's internal claims management database) — records the claim receipt date, the investigation activities, the rejection date, and the rejection notice date. These institutional records establish the chronology that precedes the civil action and are critical to the § 1038 analysis: if the plaintiff's government claim was facially inadequate, the government entity's rejection was proper, and the plaintiff filed suit despite knowing the claim lacked merit, those facts support the § 1038 finding that the action was brought without reasonable cause. Reviewing and documenting the claims administration records generates unscheduled research time.
Pre-litigation investigation file review: The government entity's internal investigation file — compiled before the suit was filed — typically contains incident reports, witness statements, physical inspection records, and departmental analyses that establish the objective facts of the underlying incident (dangerous condition, use-of-force event, employment action). Reviewing the pre-litigation investigation file to confirm there was no objectively reasonable basis for the plaintiff's legal theory generates substantive review time in short desk sessions without external billing triggers.
Contemporaneous billing record preservation: From the moment the plaintiff's complaint is filed and the government entity defendant begins building its defense, the defense attorney must maintain contemporaneous billing records of all defense work — because all of those records will be incorporated into the § 1038 fee petition lodestar. Contemporaneous record creation is the foundation of the Hensley v. Eckerhart (461 U.S. 424 (1983)) fee petition, and the government entity defense attorney's failure to maintain contemporaneous records from the complaint filing date forward will result in a reduced or denied fee petition.

Gap 1 Annual Value (Government Claims Act compliance tracking & pre-suit investigation review)

$1,617–$2,695/yr

7 clients × 2 review sessions × 42 min × 55% untracked ≈ 5.39 hrs/yr at $300–$500/hr median solo rate

The court's CMS summary judgment grant date is the Welch anchor from which the § 1038 fee petition traces backward — all defense attorney work from the complaint filing date through the summary judgment ruling is within the lodestar period for the § 1038 fee petition. Under Missouri v. Jenkins (491 U.S. 274 (1989)), time spent on the § 1038 fee petition itself is recoverable as fees-on-fees, extending the lodestar period forward through the fee hearing date.

Billing Gap 2 — Summary Judgment Briefing, Merits Defense Work, and § 1038 Good Faith Analysis (7.26 hrs/yr = $2,178–$3,630)

The second billing gap arises from the merits defense work — particularly the summary judgment briefing that resulted in the § 1038-triggering ruling — and from the § 1038 reasonable-cause-and-good-faith analysis that must be developed simultaneously with the summary judgment motion. When a government entity files a motion for summary judgment, the defense attorney must build not only the substantive merits argument but also a parallel § 1038 record establishing that the plaintiff's claims lacked reasonable cause and were not brought in good faith. The specific work includes:

Parallel § 1038 record building during summary judgment briefing: The § 1038 reasonable-cause-and-good-faith determination requires the court to find both objective unreasonableness (no reasonable attorney could have believed the claim had merit under the facts and law) and subjective bad faith (the plaintiff brought or maintained the action without believing in its justifiability). The defense attorney building the summary judgment motion must simultaneously develop the record of when and how the plaintiff learned that the claim lacked merit but continued to maintain the action anyway — establishing the chronological evidence of bad faith maintenance of the action. This dual-track analysis generates additional briefing work beyond normal summary judgment practice.
Government Claims Act exhaustion defenses: California government tort defendants frequently file summary judgment motions on the ground that the plaintiff failed to comply with the Government Claims Act presentation requirement (Gov. Code § 945.4) or failed to present the claim within the six-month filing deadline (Gov. Code § 911.2). If the plaintiff's government claim was also factually deficient — presenting claims not supported by the objective evidence in the government entity's investigation file — the summary judgment record on both the exhaustion defense and the merits defense contributes to the § 1038 unreasonableness showing.
Expert coordination for § 1038 analysis in dangerous condition cases: In dangerous condition of public property cases (Gov. Code § 835), government entities frequently retain engineering or safety experts to establish that no dangerous condition existed. The defense expert's opinion that there was no dangerous condition is direct evidence that the plaintiff's claim lacked reasonable cause in law and fact — making the expert's report and deposition part of the § 1038 record. Coordinating expert review in short unscheduled sessions while simultaneously building the summary judgment briefing generates unbilled coordination time.

Gap 2 Annual Value (summary judgment briefing, merits defense & § 1038 good faith analysis)

$2,178–$3,630/yr

6 clients × 3 briefing sessions × 44 min × 55% untracked ≈ 7.26 hrs/yr at $300–$500/hr median solo rate

The Tyler Technologies Odyssey CMS records the summary judgment hearing date and the ruling date as institutional anchors — the ruling date is the primary Welch anchor for the § 1038 fee petition, fixed by the court's institutional calendar entirely outside the defendant government entity's scheduling control.

Billing Gap 3 — CCP § 1038 Fee Petition Preparation and Lodestar Documentation (4.03 hrs/yr = $1,210–$2,017)

The third billing gap arises from preparing the § 1038 fee petition — which must be filed at or shortly after the time the court grants summary judgment — and documenting the lodestar for the entire defense of the action from complaint filing through the fee hearing. Unlike most California attorney fee petitions (where the fee claimant is the plaintiff who prevailed on a substantive statutory claim), the § 1038 fee petition is filed by the defendant government entity after obtaining summary judgment. The specific work includes:

Reasonable-cause-and-good-faith brief preparation: The § 1038 motion must establish both that the plaintiff lacked reasonable cause (the objective standard — no reasonable attorney could have believed the claim was tenable under the applicable facts and law) and that the plaintiff did not bring or maintain the action in good faith (the subjective standard — the plaintiff did not actually believe there was a justifiable controversy). Developing the briefing on both prongs — typically in a motion that accompanies or immediately follows the summary judgment ruling — requires assembling the timeline of the litigation, identifying the specific moments at which the plaintiff knew or should have known the claim lacked merit, and citing the Government Claims Act exhaustion record and the merits evidence together to establish the reasonable-cause failure.
Complete lodestar compilation from complaint filing date: The § 1038 fee petition lodestar covers all defense attorney time from the filing of the plaintiff's complaint through the § 1038 hearing — potentially spanning years of litigation across discovery, motion practice, expert coordination, and summary judgment briefing. Compiling the complete lodestar from contemporaneous billing records maintained across the entire defense period is a substantial exercise in multi-session record assembly.
PLCM Group market rate analysis for government entity defense counsel: The § 1038 fee petition must establish the prevailing market rate for government entity defense counsel in the relevant California legal community under PLCM Group Inc. v. Drexler (22 Cal.4th 1084 (2000)). For government entity defense work — which is often handled by in-house county counsel or city attorney offices at below-market rates — the prevailing market rate analysis must compare in-house rates against private defense counsel rates for comparable work. Courts have awarded § 1038 fees at private counsel market rates even when the defense was handled in-house, recognizing that the statute entitles the government entity to fee recovery at market rates.

Gap 3 Annual Value (§ 1038 fee petition preparation & lodestar documentation)

$1,210–$2,017/yr

5 clients × 2 petition sessions × 44 min × 55% untracked ≈ 4.03 hrs/yr at $300–$500/hr median solo rate

Three Unique Distinctions in the Fee-Petition-Mechanics Series

This page covers the only California attorney fee provision with all three of the following simultaneously:

THE ONLY page where the PRIMARY CLAIM IS AN ATTORNEY FEE PETITION BY A DEFENDANT GOVERNMENT ENTITY under CCP § 1038 — every other page in the fee-petition-mechanics series involves a fee award to a PREVAILING PLAINTIFF under a substantive fee-shifting statute. CCP § 1038 is structurally inverted: it awards fees TO the DEFENDANT GOVERNMENT ENTITY, FROM the plaintiff who brought the action without reasonable cause and in bad faith. This is distinct from CCP § 128.7 frivolous pleading sanctions (§ 128.7 can be filed by any party against any other party for frivolous pleadings — it is not limited to government entity defendants and is not triggered by summary judgment or nonsuit); distinct from CCP § 128.5 frivolous tactics sanctions (§ 128.5 applies to frivolous actions or tactics in bad faith, but is not limited to the summary-judgment-or-nonsuit trigger of § 1038 and does not require the court to make a contemporaneous reasonable-cause-and-good-faith determination at the time of the dispositive ruling); distinct from CCP § 1021.5 private attorney general fees (§ 1021.5 flows TO the plaintiff who vindicated an important public right — the exact opposite direction of a § 1038 award flowing TO the defendant government entity); distinct from Gov. Code § 800 arbitrary government agency action fees (§ 800 flows TO the plaintiff who prevails against an arbitrary government agency action — again the opposite direction).
THE ONLY page where the PRIMARY DEFENDANT IS THE PLAINTIFF WHO BROUGHT A CIVIL ACTION AGAINST A GOVERNMENT ENTITY WITHOUT REASONABLE CAUSE AND IN BAD FAITH — specifically, plaintiffs in California government tort proceedings who filed and maintained civil actions against California cities (Los Angeles, San Diego, San Francisco, San Jose, Oakland, Sacramento, Fresno, Long Beach, Anaheim, Riverside), counties (Los Angeles County, Orange County, San Diego County, Riverside County, San Bernardino County, Sacramento County, Contra Costa County, Fresno County), California state agencies (Caltrans, DMV, CHP, CDCR, CPUC, California Department of Education, California Department of Public Health), school districts (Los Angeles Unified, San Diego Unified, San Francisco Unified, Fresno Unified), transit authorities (Los Angeles Metro, BART, San Francisco MUNI, Sacramento Regional Transit, San Diego MTS), and special districts (water districts, fire protection districts, hospital districts) without a reasonable legal or factual basis for doing so — and the court determined at the time of granting summary judgment, nonsuit, or directed verdict in the government entity's favor that the plaintiff's lack of reasonable cause and good faith warranted mandatory attorney fee recovery under § 1038(b).
THE ONLY page where the PRIMARY WELCH ANCHOR IS IN THE COURT CASE MANAGEMENT SYSTEM SUMMARY JUDGMENT GRANT DATE — Tyler Technologies Odyssey CourtFiling records the exact date the court granted the defendant government entity's motion for summary judgment (or judgment of nonsuit or directed verdict) on the court's institutional hearing calendar — the institutional timestamp from which § 1038(a) obligates the court to make the reasonable-cause-and-good-faith determination, entirely outside the defendant government entity's scheduling control because the ruling date is determined by the court's own institutional calendar. The Odyssey CMS records the motion filing date, the hearing date assignment by the clerk, the tentative ruling publication date, and the hearing date — all on the court's institutional calendar outside attorney control. The Government Claims Act claims administration rejection date (recorded in the government entity's claims management platform — Origami Risk, Riskonnect, or internal claims database) serves as a secondary institutional anchor establishing the pre-litigation timeline from which the § 1038 good faith analysis traces.

DISTINCT FROM CCP § 128.7 frivolous pleading sanctions (§ 128.7 applies to frivolous pleadings filed by any party, not specifically to government entity defendants; § 128.7 requires a 21-day safe harbor period; § 128.7 does not require a summary judgment or nonsuit ruling as a trigger). DISTINCT FROM CCP § 1021.5 private attorney general fees (§ 1021.5 flows TO the plaintiff who vindicates a public right — directly opposite direction to § 1038 which flows TO the defendant government entity). DISTINCT FROM Gov. Code § 800 arbitrary government action fees (§ 800 flows TO the plaintiff who prevails against an arbitrary government agency action — opposite direction; § 800 applies in administrative mandate proceedings, not in government tort claims litigation).

Total Annual Billing Gap — Three-Gap Summary

Gap 1 (Government Claims Act compliance tracking & pre-suit investigation review): 5.39 hrs = $1,617–$2,695/yr
Gap 2 (summary judgment briefing, merits defense & § 1038 good faith analysis): 7.26 hrs = $2,178–$3,630/yr
Gap 3 (§ 1038 fee petition preparation & lodestar documentation): 4.03 hrs = $1,210–$2,017/yr
Total: 16.68 hrs = $5,005–$8,342/yr untracked at $300–$500/hr median California solo practitioner rate

ClaimHour's automatic time capture logs each interaction with external institutional calendars — when the Odyssey CMS was accessed to check the summary judgment hearing date, when the Government Claims Act rejection letter was reviewed, when the government entity's claims management platform (Origami Risk, Riskonnect) was accessed to retrieve investigation file records — creating the contemporaneous time records required for a successful § 1038 lodestar under Hensley v. Eckerhart (461 U.S. 424 (1983)) and Missouri v. Jenkins (491 U.S. 274 (1989)).

How ClaimHour fits California government entity defense practice

ClaimHour captures billable moments automatically — call metadata, email activity, document edit time — without requiring a practice management system. For solo California government entity defense attorneys handling § 1038 fee petitions, that means the Government Claims Act compliance review sessions, the pre-litigation investigation file analysis, the parallel § 1038 record building during summary judgment briefing, and the fee petition lodestar compilation are all captured in the background. When you build the § 1038 lodestar from the court's Odyssey CMS summary judgment grant date Welch anchor, ClaimHour's automatically-logged entries close the gap between what you billed and what you actually did.

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Frequently Asked Questions

What standard must the government entity meet to obtain a § 1038 fee award?

Under CCP § 1038(b), the court must find that the plaintiff brought or maintained the proceeding without 'reasonable cause' AND without a 'good faith belief that there was a justifiable controversy under the facts and law which warranted the filing of the complaint.' California courts have interpreted this as a conjunctive two-part test: (1) LACK OF REASONABLE CAUSE — an objective standard: no reasonable attorney could have believed the plaintiff's claim had merit under the applicable facts and law at the time the claim was filed or during the period it was maintained. The standard is not whether the plaintiff ultimately lost, but whether a reasonable attorney with knowledge of the facts and law would have believed there was a colorable claim at the time of filing. Courts have found lack of reasonable cause where the plaintiff filed suit despite clear Government Claims Act bar; where the plaintiff's factual allegations were refuted by documentary evidence the plaintiff possessed before filing; or where controlling legal authority clearly rejected the plaintiff's legal theory. (2) LACK OF GOOD FAITH — a subjective standard: the plaintiff did not actually believe there was a justifiable controversy. Evidence of lack of good faith includes: the plaintiff's attorney receiving clear evidence of the claim's factual weakness before or during litigation and continuing to maintain the action; the plaintiff filing suit after receiving the government entity's rejection notice that explained the factual basis for the rejection in detail; or the plaintiff making contradictory statements in the complaint versus deposition testimony that indicate the complaint's allegations were not made in genuine good faith. Both prongs must be established — a plaintiff who mistakenly believed a non-meritorious claim had merit does not satisfy the bad faith prong even if the claim objectively lacked reasonable cause.

Can a government entity obtain § 1038 fees for a case that was voluntarily dismissed before summary judgment?

The statute requires that the § 1038 determination be made 'at the time of the granting of any summary judgment, motion for judgment of nonsuit, or directed verdict in favor of the defendant or cross-defendant.' A voluntary dismissal does not satisfy this threshold — the § 1038 fee remedy is triggered only by a court ruling on a dispositive motion in the government entity's favor. If the plaintiff voluntarily dismisses the action without prejudice or with prejudice before the government entity can bring a summary judgment motion, the § 1038 remedy is generally unavailable because no qualifying ruling was issued. The government entity's recourse in a voluntary dismissal scenario is a § 128.5 frivolous action sanction motion (which does not require a summary judgment ruling) or a malicious prosecution action (which requires the government entity to prove malice, lack of probable cause, and favorable termination — a higher standard than § 1038). Government entity defense attorneys who anticipate a voluntary dismissal by a plaintiff with a weak case should file the summary judgment motion as early as permitted (after close of class certification briefing or after initial discovery) to create the § 1038 trigger before the plaintiff can tactically dismiss and refile.

How does the § 1038 fee award interact with Government Claims Act compliance costs?

The § 1038 attorney fee award covers 'reasonable attorney fees and costs of the defense' from the inception of the civil action — the filing of the plaintiff's complaint in court. Pre-suit Government Claims Act compliance costs (the government entity's claims administration costs before the civil action was filed) are not typically recoverable under § 1038 because they are not 'costs of the defense' in the civil proceeding. However, the Government Claims Act compliance record is critical to the § 1038 petition in two ways: (1) the government entity's thorough investigation and well-documented rejection notice establishes that the plaintiff had clear notice of the factual basis for the entity's denial before filing suit — evidence that supports the subjective lack-of-good-faith prong; and (2) the date of the rejection notice is a secondary institutional anchor establishing when the plaintiff was placed on notice that the government entity believed the claim lacked merit, which is relevant to both the reasonable cause (the plaintiff had constructive knowledge of the factual deficiency after receiving the detailed rejection notice) and good faith (did the plaintiff genuinely believe the claim remained viable after receiving the rejection notice?) prongs. Government entity defense attorneys should ensure that rejection notices are sufficiently detailed — not merely stating that the claim is 'rejected as lacking merit' but explaining specifically why the factual investigation found no dangerous condition, no improper conduct, or no actionable injury — because the specificity of the pre-suit rejection notice directly supports the § 1038 record.