Fee Motion Substantiation--Do You Need to Attach Detailed Fee Billings That Reveal Attorney Client Information?

Fourth District, Division One Answers “No” and Provide Adequate Substantiation Tips in Pair of Unpublished Decisions.

            Numerous times, we have been asked and have visited the question of whether detailed fee billing statements, which may divulge attorney-client privileged information, need to be attached as exhibits to a fee motion.  The next two cases establish that such statements do not need to be produced or can be selectively redacted, as long as there is other evidence that adequate describes the services rendered or from which claims apportionment can be reviewed by the trial court.

            In Gregg v. Revelle (Gregg I), 2004 WL 2601780 (4^th Dist., Div. 1 Nov. 17, 2004) (unpublished), a trial court awarded cross-defendant Revelle $446,507.50 in attorney’s fees after he won a summary judgment against Gregg’s cross-complaint in a dispute with a contractual fees clause.  Revelle supported his fee motion with an attorney declaration making estimates of the appropriate time spent on matters related to the cross-complaint and with “summary pages from monthly billings.”  Detailed invoice information was not included for fear that the attorney-client privilege would be waived for many entries.  Gregg argued that the summaries were too incomplete to provide meaningful review of the fee request.  Revelle then supplemented with “heavily redacted” copies of billing statements, sometimes saying little more than “research,” “review,” or “telephone conference.”  At the fee motion argument, the trial court tried to broker a non-waiver stipulation on the privilege concern, but the parties were ultimately unable to come to an agreement.  Nevertheless, substantial fees subsequently were awarded.

            On appeal, the Fourth District panel reversed the $445,507.50 fee award as based upon records “too fragmented and incomplete” for the lower court to properly exercise its discretion in awarding fees.  (Id.at *5.) 

            At the outset, the appellate court observed that fees may be awarded in the absence of detailed time sheets, such as in contingent fee matters where apportionment is not required.  (See, e.g., Sommers v. Erb, 2 Cal.App.4^th 1644, 1651-1652 (1992).)  On the other hand, other circumstances—especially where there is a need to apportion between fee-allowing claims and non-fee claims—require more substantiation than a generalized attorney declaration.  (See, e.g., Bell v. Vista Unified School Dist., 82 Cal.App.4^th 672, 689 (2000), also reviewed on our June 23, 2008 post on the issue of block billing practices.)  The Court of Appeal then provided these useful “rules of thumb”:

·       “Sommers, as well as the other cases which do not require actual billing records, make it plain that a general description of tasks performed, which does not disclose any privileged attorney-client communications or attorney work product, is sufficient to support an award of attorney fees.  Given the entirely ancillary nature of an attorney fees proceeding and the unique role and ability of the trial judge who presided over the underlying litigation, we see little justification for any intrusion into the otherwise privileged matters.”  (Id.at *4.)

·       In apportionment-type fee proceedings, “[s]ome description of the pleading, discovery, motion, or portion of trial preparation, to which any of the billed tasks was related is needed so that the trial court can determine whether the hours spent on a particular task were reasonable and importantly whether they were related to the cross-complaint rather than the other portions of the complex litigation.  Such a description can be provided without disclosing any attorney-client communications or attorney work-product.”  (Ibid.)

Revelle then brought a renewed motion for fees after the Gregg I reversal.  He was again successful, garnering $473,832.50 in attorney’s fees and $1,926.70 in costs.  Gregg was unhappy again, appealing, but losing this time in Gregg v. Revelle (Gregg II), 2006 WL 2821505 (4^th Dist., Div. 1 Oct. 4, 2006) (unpublished).   After rejecting the jurisdictional challenge that the prior reversal barred a remand, especially because “[t]he exact type, amount and spirit of evidence necessary to support a particular fee award is not a clearly settled matter” and varies greatly “[d]epending on the type of case and the fees issues raised,” this time the fee award was sustained on appeal.

In the renewed fees motion, Revelle brought in new counsel who cured the prior infirmities.  New counsel obtained the billing records and redacted only time entries “clearly revealing attorney-client communications” from the records submitted to the trial court.  New counsel also provided an attorney declaration apportioning out non-fee claim work and explaining that only one-sixth of the total time related to non-fee claim work.  Both the trial and appellate courts found this newly-reformatted information adequate.  The Court of Appeal summarized its ultimate conclusion this way:  “The documentation submitted with Revelle’s renewed motion for attorney fees is more revealing.  The records state the date work was done, the initials of the professional who did the work and give a description of the work.  In some cases that description refers specifically to work done with regard to Gregg’s cross-complaint.  In some cases no such reference is made.  Nonetheless, a trial judge aware of the dates on which various events occurred in the [relevant] matters could, with the aid of the billing records submitted, make a reasonable judgment concerning the apportionment of time on the cases claimed by Revelle.”  (Id. at *9.)

BLOG SUMMARY NOTES—The two Gregg cases are helpful in distilling some generalized substantiation rules for fee motions.  First, claimants should submit detailed billing records, redacting out only selective, critically privileged information but then providing a explanatory annotation of the work performed that still shows what was done.  Second, attorney declarations and charts should be submitted in apportionment situations so that the trial judge does not have to undertake the laborious task or simply make wholesale reductions of a significant sum.  Third, we would suggest practitioners think ahead in their billing entries to avoid entry of sensitive client discussions (very seldom is it necessary to make entries of this nature).  Fourth, we believe all substantiation submitted to the trial judge should also be given to the party opposing the fee application; an offer of allowing in camera review to the trial judge has due process problems—denying an opponent the opportunity to examine the materials being relied on by the lower court in exercising its discretion.  Our suggestions are general in nature and not tailored to specific situations, which means practitioners need to use judgment in submission of fee substantiation in each particular case.  As Gregg I itself suggests for an example, detailed billings records may not be necessary in a contingency matter where apportionment is not an issue.  Nevertheless, we generally have found that trial judges still appreciate having detailed, selectively-redacted billings to review—they provide comfort in scrutiny and increase the credibility of the fee proponent who is willing to share this level of detail.