Court of Appeal rejects landlords' weigh-the-evidence appeal and splits a $1,000 lease cap on costs and fees
The substantial evidence standard of review decides many appeals before the merits begin. In Aviles v. Shenon, landlords facing a $39,000 bad-faith penalty argued that the evidence, on balance, favored them. The Second District answered in five words: “That is not the standard.” That passage is in an unpublished part of the opinion. The published part voids a lease cap on costs but enforces it on attorney fees.
What happened in Aviles v. Shenon
The Shenons leased a Los Angeles home to Aviles and held a $19,500 security deposit. Aviles moved out in November 2022. The deposit was never returned, and no accounting was provided. A jury found that the Shenons violated Civil Code section 1950.5, breached the lease and acted in bad faith. The trial court imposed a $39,000 statutory penalty and entered judgment for $61,801.67, with costs and fees to be determined.
The post-judgment fight turned on one lease provision, which allowed the prevailing party fees and costs “collectively not to exceed $1,000.” Aviles filed a memorandum of costs for $24,773.27. The trial court granted the Shenons' motion to tax under that provision. It then denied Aviles's motion for $136,896.50 in attorney fees, because “the $1,000 has already been granted as a part of a cost award.”
The Shenons appealed the judgment. Aviles cross-appealed the cost order and separately appealed the fee order, and the Court of Appeal consolidated the appeals (Nos. B342634 and B344966). Part B of the Discussion, on Aviles's appeals, is certified for publication. Part A, on the Shenons' appeal, is not, and may not be cited (Cal. Rules of Court, rule 8.1115(a)). The next two sections below come from Part A.
What is the substantial evidence standard of review on appeal?
The Shenons argued that “[o]n balance, the substantial evidence presented at trial weighs against a finding of bad faith.” The court applied what it called “the highly deferential substantial evidence standard” and rejected that framing:
“That is not the standard.”
A reviewing court does not reweigh. It resolves conflicts in favor of the prevailing party and draws reasonable inferences in support of the judgment. The Shenons' evidence pointed one way, and Aviles's testimony and the staging photos pointed the other. The court accepted the evidence favoring the finding and inferred that the Shenons knew the damage predated the tenancy yet refused to refund the deposit. That was enough. For more on how the governing standard can shape an appeal, see our note on de novo review of a nonsuit.
Does a legal error reverse a judgment without prejudice?
The Shenons also argued that the court, not the jury, should have decided bad faith. The panel did not decide who was right. It assumed error and found none of it prejudicial, because the trial judge had said the decision on bad faith would have been the same as the jury's, and explained why. As the opinion puts it: “The court made an independent finding of bad faith after the jury verdict.”
The bad-faith finding then carried the setoff issue as well. Under section 1950.5, subdivision (h)(7), the court held, “the finding that the Shenons acted in bad faith precludes them from claiming a setoff.”
Can a residential lease cap prevailing-party costs and attorney fees?
This is the published holding, and the court split the clause in two.
Costs. Civil Code section 1953, subdivision (a)(4), voids a lease provision by which a tenant agrees to modify or waive procedural rights in litigation. The court held that “the Code of Civil Procedure section 1032, subdivision (b) right to prevailing party costs is procedural,” so the cap on costs is void.
Attorney fees. Aviles identified no right to fees apart from the lease itself. The provision therefore “creates a limited right to recover such fees up to a certain amount” and does not waive anything. Striking the provision as unconscionable would have left Aviles with “no right to any attorney fees at all,” so the court did not reach that argument. At oral argument, Aviles asked the court to strike only the $1,000 limit. In a footnote, the court said that request conflicts with settled severance principles.
Footnote 4 notes that whether section 1953 voids a tenant's agreement to limit prevailing-party costs “is an issue currently before the California Supreme Court” in Gogal v. Deng (review granted Nov. 19, 2025, S292779). The costs holding may not be the final word.
How the court disposed of the appeals
The judgment was affirmed. The order taxing costs was reversed, and the trial court must reconsider that motion. The fee order was “provisionally reversed”: the trial court may consider fees only if the costs it awards come to less than $1,000, and it may not award fees that would push combined costs and fees above $1,000. Costs themselves are no longer capped by the lease. The parties bear their own costs on appeal.
What it means in practice
- An appeal from a factual finding has to be built around the evidence supporting that finding, not the evidence against it.
- Showing error is half the task. The appellant must also show prejudice, and a trial judge's independent finding can close that door.
- Post-judgment orders on costs and fees can each carry their own appeal. See our notes on appeal deadlines and on appealable orders.
- A winning tenant's fee recovery here depended on the wording of the lease, whatever the size of the verdict.
Key takeaways
- In an unpublished part of the opinion, on substantial evidence review, the court accepted the evidence favoring the finding and rejected an argument that the evidence, on balance, weighed the other way.
- Also in the unpublished part, the court assumed it was error for the jury to decide bad faith and found no prejudice, because the trial judge independently found bad faith.
- The published part holds that Civil Code section 1953 voids a residential lease cap on prevailing-party costs under Code of Civil Procedure section 1032, subdivision (b).
- The same cap stands as to attorney fees, because Aviles identified no right to fees other than the lease provision.
- The costs question is pending before the California Supreme Court in Gogal v. Deng.
Why appeals like this one need an appellate lawyer
Look at where this appeal was decided. The landlords' challenge to a $39,000 penalty met the standard of review before it met the facts: an argument about the balance of the evidence is not the question a reviewing court asks. Their point about who should decide bad faith met the prejudice requirement, because the trial judge had already said on the record what the court would have found. The penalty stands.
The tenant won at trial and won on appeal, yet he can recover fees only if costs come in under $1,000, and then only up to a $1,000 combined total, against a request for $136,896.50. That result was set by the words of a lease.
An appellate lawyer starts from these points: what standard will govern, what the record shows, whether an error can be tied to prejudice, and which orders must be separately appealed and when. Those questions are easiest to answer before a deadline runs or a record is lost. If you face a judgment or a post-judgment order, talk to an appellate lawyer early.
What this post is not. This post is attorney advertising and general information about a court decision. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts and record, and appellate deadlines are short and often jurisdictional — talk to appellate counsel about your case promptly.
Facing a ruling you may need to appeal or challenge by writ? Yisrael Gelb · yisrael@gelblawapc.com · (323) 632-6864