The 2/8 DCA Determined Defense Counsel Could Have Used Its Own Knowledge Of The Case To Hire An Expert For A Determination Of Whether The Hours Requested Were Reasonable.
In Los Angeles Unified etc. v. Torres Construction, Case No. B291940 (2d Dist., Div. 8 October 26, 2020) (unpublished), Defendant was hired by Los Angeles Unified School District to renovate middle and high school cafeterias in a three-phase project involving the purchase and installation of kitchen equipment and electrical upgrades. Defendant’s performance on the project was bonded by Western Surety Company. A few years into the project, LAUSD discovered some irregularities in Defendant’s billings and filed this action against Defendant and its Surety Company for breach of contract and breach of bond.
After six years of litigation, LAUSD ultimately prevailed, and Surety Company was found liable on its bonds. After the parties settled Defendant’s offset claims for withheld payments on other jobs, in the amount of $556,296.89 plus $151,958.47 in interest, LAUSD had a net recovery of $4,555,178.49 – consisting of $3,941,829 in damages, $1,232,887.88 in prejudgment interest, and $88,716.97 in costs. Additionally, LAUSD was awarded $2,100,000.00 in attorney fees, out of a requested $2,123,277.20, against Surety Company.
This appeal ensued – with Defendant and Surety Company challenging numerous trial court orders – but we will focus on Surety Company’s challenge to the attorney fees award.
On appeal, Surety Company argued that the trial court violated its right to due process, and abused its discretion by “rubber stamping” LAUSD’s fee request – which was supported by its lead attorney’s declaration and extremely heavily redacted billings. Surety Company argued that the billing submissions were meaningless due to the heavy redactions, and that the declaration did not have enough detail to allow an evaluation of or opposition to the fee request. However, the 2/8 DCA found no abuse of discretion. Although the trial court expressed concern about the heavily redacted billings and possible duplications – with Surety Company expressing the same, as well as an inability to determine whether LAUSD’s work was reasonably necessary and efficient – the appellate panel found, based on comments by the trial court, that the trial court was familiar with the amount of work and cost of a case like this and had found the fees reasonable. Additionally, the appellate panel determined that Surety Company only disputed about $174,000 of the billings, and that the trial court’s reduction of $23,277.20 from LAUSD’s requested fees equated to 13% of that amount and likely reflected the trial court’s concern about duplicative entries.
The 2/8 DCA found no merit to Surety Company’s contention that its right to due process was violated because it was unable to effectively challenge the fees request because of the heavily redacted billing – determining that Surety Company could have evaluated the overall hours billed by LAUSD based on its own counsel’s familiarity with the work involved in the case and appropriate hours for particular tasks. The panel suggested that Surety Company could have hired an expert to estimate the appropriate hours for the work based on that information as there was not great variation in the attorney’s hourly rates, and an expert “could have simply categorized the work into one of two hourly rates.”
BLOG COMMENT: Co-Contributor Mike Hensley served as co-counsel on the appeal. Based on the record, he knew this would be an uphill battle on appeal, with the review based on discretion. Despite the appellate panel’s findings in this matter, we do not know how defense counsel, with or without an expert, would have been able to appropriately challenge LAUSD’s fee request given the extremely heavily redacted billing submission.
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