Lodestar, Reasonableness Of Fees: Fee Award Of $700,000 To HOA In Uncomplicated Homeowner Dispute Was Reversed And Remanded

Record Was Unclear Whether The Lower Court Utilized The Proper Lodestar Reduction Factors For Over-Conferencing, Duplication, Over-Staffing, And Results Obtained.

            Ladera Ranch Maintenance Corp. v. Tinsley, Case No. G060730 (4^th Dist., Div. 3 Jan. 9, 2023) (unpublished) is must reading for practitioners and jurists on salient factors that a party opposing a fee request and a trial judge assessing the same should focus in on for purposes of examining a substantial fee request in a relatively uncomplicated case.

            In this one, homeowners did lose an HOA dispute involving community standards for a large tarp they erected adjacent to their home, failure to replace two trees they removed from their yard, and removal of an entryway chain, as well as lost a cross-complaint against the HOA for trash can, noise/parking, and prank-playing child issues.  HOA then moved to recover attorney’s fees for “a breathtaking number approaching $700,000 ($699,598.72).”  The lower court made some minor haircuts for over-conferencing, pre-litigation activities, unconnected matters, and insurance appointed counsel coordination, awarding HOA a total of $585,067.30.  The trial judge also did note the submitted billings showed duplication, unnecessary work, nonchronological entries, billing for tasks which could have been performed by paralegals, and excessive conferencing with HOA’s corporate counsel. 

            The 4/3 DCA, in an opinion authored by Justice Goethals, reversed and remanded for a re-do.  The appellate court was concerned that the lower court abused its discretion by not looking at the bigger picture which showed significant amounts of over-conferencing by six lawyers over uncomplicated issues—well over one-half of a billable year on just the HOA’s complaint, not to mention significant time which could have done by a paralegal and significant over-staffing.  Nothing indicated that the court looked for task padding, attorney stacking, or inflated billing in other areas but over-conferencing.  Beyond that, the fee award must be reasonable in relation to the results obtained.  The record showed that the lower court failed to assess the fee request with factors which would be used when a request is “manifestly excessive.”  A remand was necessary so that the trial judge could restudy the fee request and amplify on his reasoning as for as the ultimate fee awarded.