Trial Court’s Significant Reductions in Requested Fees Obviated Need to Apportion With Mathematical Precision.
The next case illustrates a result we see often in appellate decisions when apportionment of fees is necessary as between compensable and noncompensable claims: a lower court’s reduction of fee requests obviates the need to perform a CPA-like audit of billings when undertaking apportionment activities.
In our prior post of June 25, 2009, we explored Harm v. Hetman (Harm II), a case where the Fourth District, Division 3 reversed the denial of a $201,150 fee request by plaintiffs in “an acrid dispute between neighbors” in an HOA. The reversal occurred based upon an earlier appeal in which certain ruling reversals meant that plaintiffs were prevailing parties under the CC&Rs, Civil Code section 1717, and Civil Code section 1354. Now, this “acrid dispute” apparently has ended for now with the third appeal affirming the lower court’s award of fees to plaintiffs upon remand.
Harm v. Hetman, Case No. G043206 (4th Dist., Div. 3 Mar. 16, 2011) (unpublished) (Harm III) involved an appeal from the lower court’s decision to award plaintiffs the total sum of $190,065 in attorney’s fees, broken down as $75,754 for trial work and $114,311 for appellate work. Defendant Hetman appealed.
Plaintiffs, on remand from Harm II, had requested fees of $385,083, $201,500 for trial work and $183,953 for posttrial work. The lower court determined supplemental papers were needed so that billings could be scrutinized and apportionment undertaken. After supplementing their initial request, Plaintiffs lowered their requests to 60% of the trial work billings and 90% of the posttrial work billings. Eventually, the trial court awarded fees as described in the preceding paragraph of this post.
The first issue was a jurisdictional one: defendants appealed from a November 16, 2009 order decreeing that plaintiffs recover “attorneys fees and costs in the amount of $_____________” but not a subsequent December 17, 2009 order actually determining the amount of fees awarded. The January 29, 2010 appeal only referenced the November 16 order. The appellate court determined, although noting that “the most prudent thing for [defendants] to do would have been to file an appeal from [the December 17] order,” that Grant v. List & Lathrop, 2 Cal.App.4th 993, 998 (1992) controlled, because the notice of appeal subsumed any later order setting the amounts of the fee award. (BLOG OBSERVATION--As we have urged many times before on this issue, the safe route is to always appeal the postjudgment order settling the amount of fees.)
That brought the appellate court to the merits, mainly challenging the apportionment made by the lower court. The “bottom line” here was that the appellate court kinda backtracked from its earlier apportionment directions because billings entries very seldom allocate time on a cause-of-action by cause-of-action basis. Even though a few of the entries might have been suspect, this did not justify a wholesale rejection of the billing records. Given the 63% reduction of the posttrial work request, the trial court certainly demonstrated that it did apportion out activities unrelated to the CC&Rs. No mathematical audit--or, as the appellate court said, awarding fees “on a fractional basis”--had to be made. (See Akins v. Enterprise Rent-A-Car Co., 79 Cal.App.4th 1127, 1134 (2000) [award reflecting significant reduction from the original request showed that trial court exercised its discretion when awarding fees].)
Justice Moore authored the 3-0 affirmance on behalf of the 4/3 panel.
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