CALIFORNIA ATTORNEY'S FEES

Construction, Laffey Matrix, Lodestar, Reasonableness Of Fees: Los Angeles County Superior Court Awards A Little Over $1.3 Million In Fees And About $82,000 In Costs In Construction Dispute With Contractual Fees Clause Entitlement

Decision Provides Insights Into Judicial Resolution Of Contested Fee And Costs Issues.

            Because there has not been a lot of fee or costs decisions in the last couple of weeks, we report on a Los Angeles County Superior Court (Norwalk) final ruling on attorney’s fees and costs to a prevailing plaintiff in WnG Construction JV, Inc. v. AAA Solar Electric, Inc., et al., L.A. Superior Court Case No. VC065473 [Judge Porras]. 

            Plaintiff WnG won a construction dispute with a contractual fees clause against the defense, winning compensatory damages of about $3.116 million (inclusive of prejudgment interest) despite an offset and plaintiff not winning all that it wanted.  However, given that plaintiff did gain much of what it wanted, plaintiff was the prevailing party under the fees clause.  Plaintiff then moved for fees and costs, with various law firms submitting fee requests totaling around $2.1 million and with costs claimed of over $205,000.

            After some reductions on both counts, Judge Porras awarded fees of about $1.309 million and costs of around $82,000.

            Here are some interesting highlights to show his thinking on awarding reasonable fees and costs:

• • • An attorney disqualified based on ethical obligation violations is not entitled to any fees, an almost $223,000 reduction;
    • A law firm requesting over $653,000 in fees did not get them because they were involved in a discovery dispute which showed plaintiff deliberately spoliated evidence;
    • The principal law firm did get a majority of its requested fees, although J.D. law clerk/non-J.D. law clerk/secretarial work was not allowed and the main attorney charging $500 per hour for a breach of contract case was reasonable (but not an enhanced $750 hourly rate based on the Laffey Matrix, which the lower court found did not reflect L.A. County rates);
    • A law firm billing for potential post-trial/appellate consultation was not entitled to fees until those events materialized into situations allowing for fee recovery;
    • Although a CCP § 998 offer was rejected and could have potentially resulted in expert fee recoupment (although it is not clear from the record), the failure to identify pre-offer versus post-offer costs did not allow for an award of expert fees without a clearer allocation;
    • Charges for additional or duplicate copies of court reporter transcripts resulted in a reduction of expenses for these items.

            With that said, we give a “shout out” to Thomas F. Nowland, whose law firm and whose principal work led to him receiving a substantial portion of his fees on behalf of his client.  We thank him for providing the fee and costs ruling in this case so it could be shared with you.

Reasonableness Of Fees: Over $1.2 Million In Fees To Prevailing Party Was No Abuse Of Discretion

Lower Court Already Reduced Fee Request; This Initial Reduction Did Not Lead To The Conclusions That A Denial In Entirety Of Fees Or Further Reductions Were Required.

            Plaintiff prevailed in a contractual breach claim against a municipality in Air Combat USA v. City of Fullerton, Case Nos. G059914 et al. (4^th Dist., Div. 3 June 29,2023) (unpublished), being awarded $1.2 million in compensatory damages although that was pared down significantly by the lower court through post-trial motions.  However, the lower court granted plaintiff $1,229,520 in attorney’s fees.  City did not alter that result on appeal.  The trial judge did make reductions from plaintiff’s request, with the argument that such a reduction supported a complete denial or further reductions ignoring the abuse of discretion standard relating to the amount of fee awards.  Justice Goethals authored the 3-0 opinion.

Reasonableness Of Fees: $1.11 Million Fee Award To Two Prevailing Defendants, As Against Lloyd’s, Was Found To Be No Abuse Of Discretion

Lower Court Reduced Defendants’ Fee Requests By Over $457,720.

            Challenging the amount of an attorney’s fees award as an abuse of discretion is a daunting task, given it must be shown the award was irrational or that it shocks a jurist’s conscience.  Appellant could not satisfy this tough standard in Certain Underwriters at Lloyd’s, etc. v. Zillow Group, Case Nos. A164516 et al. (1^st Dist., Div. 4 June 28, 2023) (unpublished).

            There, Underwriters lost a summary judgment motion against two defendants in an indemnity suit featuring enterprise service agreements with fee clauses.  The lower court awarded one defendant $460,000 in fees (a $228,860.28 reduction from the ask) and another defendant $650,000 in fees (applying even a steeper reduction than the haircut given to the first defendant’s ask).

            The appellate court disagreed with Lloyd’s’ argument that the awards were an abuse of trial court discretion.  The second defendant did additional work than the first defendant, which justified the disparate amounts of the two awards.  Also not to be forgotten was the significant haircut – over $457,720 – made by the lower court in making its awards.

Laffey Matrix, Probate, Reasonableness Of Fees: Probate Court Properly Lowered Requested Attorney’s Fees For Trust Work Based On Its Knowledge And Experience

Lower Court Did Not Have to Credit The Laffey Matrix.

            Melbostad v. Kasales, Case No. A165361 (1^st Dist., Div. 3 June 16, 2023) (unpublished) demonstrates how, in California state court cases, a trial court is able to draw upon its own knowledge and experience in determining a reasonable lodestar hourly rate and in determining the reasonableness of overall fees to be awarded.

            What happened in this matter was that an attorney providing both trustee and attorney fee work waived any compensation for trustee work under Probate Code section 15687(b), claiming entitlement for $163,061.82 in attorney’s fees work for a trust.  The lower court, based on its knowledge and experience in the area, reduced the claimed $525 hourly rate to $465 and found a substantial portion of the requested hours related to waived trustee compensation, such that $48,681 should be the fee award. 

            The appellate court affirmed.  Appellant’s argument that trustee’s compensation factors should be applied to a trust attorney’s fee compensation determination was unsupported by authority.  With respect to the hourly rate, the lower court did not have to follow the Laffey Matrix rates but, instead, could rely on its knowledge and experience of what a reasonable hourly rate should be in the probate area.

Reasonableness Of Fees: $113,745 Fee Award Remanded Because It Was Unclear If Trial Court Might Have Allowed A “Double Dip” On Fees Based On Prior Discovery Motion Rulings

$10,200 Potential Difference Necessitated A Remand, Not On Appellate Modification Based On Uncertainty In The Lower Court’s Ruling.

            In Fuentes v. Betuel, Case No. B302827 (2d Dist., Div. 3 May 19, 2023) (unpublished), prevailing defendants moved to recover attorney’s fees of $128,860, with the lower court making some reductions—including adjustments to prevent a “double dip” on prior awards of fees in discovery battles—in coming to an eventual award of $113,745.  Except for one aspect of the award, the result held up on appeal.  However, the appellate court was unclear on whether the lower court maybe did “double dip” about $10,200 on the discovery issue.  Rather than modify the judgment downward, the Court of Appeal remanded so the trial judge could revisit the issue, without indicating how the lower court should rule. 

Arbitration, Prevailing Party, Reasonableness Of Fees: Client Who Reversed Post-MFAA De Novo Trial Results And Who Confirmed The Prior Arbitration Award Was The Prevailing Party

Because Client Had To Hire Appellate Attorneys Reversing The De Novo Trial Results, Client Was Awarded $334,458.11 In Fees/Costs—Affirmed By The Appellate Court.

            Soni v. Cartograph, Inc., Case No. B316270 (2d Dist., Div. 5 Mar. 23, 2023) (unpublished) is quite a megillah of an arbitration/litigation odyssey about a client-attorney dispute over fees.  Looks like the odyssey has finally come to a close.

            Although the overall alleged fee delinquency was relatively small, client took attorney through a mandatory fee arbitration proceeding under the Mandatory Fee Arbitration Act (MFAA), resulting in a net award of $2.50 to attorney.  Thirty-three days after service of the arbitration award, attorney filed a civil action against client seeking about $27,500.  Attorney won that litigation, although only obtaining a $2,890 judgment, plus interest as well as fees and costs to be determined.  Attorney requested $281,191.65 in contractual fees, with the lower court awarding $79,898.  However, client appealed the judgment, and it was reversed on appeal because attorney failed to file its action within a 30-day deadline period, reversing a denial of client’s motion to confirm the award. 

            Upon remand, the lower court granted client’s petition to confirm the arbitration award.  Both sides claimed to be prevailing parties, filing dueling fee motions.  The trial judge found that client prevailed, awarding client $328,166.50 in fees under the MFAA, Business and Professions Code sections 6203 and 6204.

            Attorney was miffed, appealing but obtaining no change in result.  Client was the prevailing party under section 6203(c) because client successfully confirmed the arbitration award, notwithstanding the tortured history by which client finally got to this final reckoning.  The appellate panel also rejected the argument that the language of the contractual fees provision governed, because the MFAA controlled over the parties’ contract provision.  Finally, the amount of the award was no abuse of discretion, given appellate expertise was necessary and given client’s attorneys worked half as many hours as attorney’s attorneys.

Lodestar, Multipliers, Reasonableness Of Fees: Plaintiff Properly Awarded $30,450 In Attorney’s Fees Rather Than The “Ask” Of $98,770

Fee Request Reduced On Hourly Rate Ask And Work On An Unfiled Summary Judgment Motion, With Plaintiff’s Multiplier Request Being Denied.

            Plaintiff accepted a defense CCP § 998 offer waiving a car purchase deficiency and paying her $2,001, with the lower court allowed to determine an award of attorney’s fees and costs to plaintiff via a motion.  She moved for $98,770 in fees (inclusive of a 1.5 positive multiplier), but the lower court only awarded $30,450.  She appealed in First Technology Federal Credit Union v. Trojan, Case No. H049919 (6^th Dist. Mar. 10, 2023) (unpublished).

            She did not obtain anything better on appeal, especially given that the lack of a reporter’s transcript of the fee hearing hampered review.  The lower court properly reduced the requested hourly rates by Santa Clara attorneys, because those rates were too high for the type of work which would be charged by attorneys in Monterey (the case venue).  There is a nice discussion of the degree of specificity that a fee claimant needs to show for purposes of justifying retention of an out-of-venue attorney charging higher rates, given that the lower court implicitly found plaintiff’s showing on this issue to be deficient.  The trial judge further did not err in reducing the fee request for work expended on a summary judgment motion that was never filed—with the appellate court locating no authority indicating that such unused work had to be compensated.  Finally, even though the case was taken on contingency, this alone does not mandate a positive multiplier, with the lower court’s determination that the case was relatively uncomplicated in nature.

Reasonableness Of Fees: When Trial Judge Gives You A Supplemental Chance To Explain Fees And Allocate Them, Take The Judge Up On It Or Face Reductions Which You Will Not Like

Defendants Requested $191,007.50 In Fees, But Were Only Awarded $74,424.71 Based On Their Failure To Provide The Trial Judge With Adequate Supplemental Information.

            Mooney v. Argus Realty Investors, Case No. G060440 (4^th Dist., Div. 3 Feb. 2, 2023) (unpublished) is a stark reminder that a fee claimant needs to pay special attention to a trial judge’s request for supplemental information, especially the need to allocate between non-compensable or unsuccessful claims.  The fee claimant in this one ignored a trial judge’s request for supplemental information on billings and suggested allocations between compensable contract/non-compensable tort claims.  That was not good for the fee claimant:  the lower court reduced the total $184,435 billed fee request down to $135,704.42 for inefficiencies/excessive time; it then reduced that smaller total in half; and then added back in $6,572.50 in unbilled time, for a total award of $74,424.71.  Because the prevailing parties failed to raise any argument against apportionment and failed to respond to major supplemental requests by the lower court, the reduced award was no abuse of discretion.  Presiding Justice O’Leary authored the 3-0 opinion. 

Landlord/Tenant, Reasonableness Of Fees: $358,133.56 In Fees Against Tenant Operating Two Illegal Marijuana Dispensaries Affirmed On Appeal

Two Law Firms’ Requests Were Largely Sustained By Reviewing Court.

            City of Santa Ana v. Yuh, Case No. G060889 (4^th Dist., Div. 3 Jan. 24, 2023) (unpublished) was a situation where a tenant lost an abatement action against the City of Santa Ana for operating two illegal marijuana dispensaries.  Two firms representing the City moved for attorneys’ fees, with the trial judge—after some reductions—awarding $358,133.56 against tenant.  In an opinion authored by Justice Sanchez, the fee awards were confirmed because the tenant did not specify objections to the fee requests.  After all, the trial judge did make some reductions.  This is yet another opinion showing the potential “bite” of fee exposure to tenants in these types of disputes. 

Fee Clause Interpretation, Homeowner Associations, Reasonableness Of Fees: $132,070.40 Fee Award To Defendant Homeowners Was Affirmed On Appeal As Against Plaintiff Homeowners In Tree Obstruction Dispute

Plaintiffs Pled CC&Rs As A Basis For Nuisance Claim, So There Was Fee Entitlement Under Civil Code Section 1717, CCP Section 1021, And Civil Code Section 5975, With The Fee Award Being Reasonable After A Minor Haircut By The Trial Judge.

            Plaintiff homeowners sued neighboring homeowners in a tree obstruction action based on nuisance and defendants’ alleged violation of certain specified CC&Rs.  After everyone attended an unsuccessful mediation, the matter proceeded to trial and was decided in defendants’ favor.  The trial judge later awarded defendants, as against plaintiffs, attorney’s fees of $132,070.40 (reduced from the $143,381.76 “ask”). 

            Plaintiffs’ appeal in Mascaro v. Brown, Case No. B319419 (2d Dist., Div. 6 Jan. 19, 2023) (unpublished) was unsuccessful.  Although challenging fee entitlement, plaintiffs’ nuisance action was also based on CC&Rs, such that fee entitlement existed under Civil Code section 1717 (based on the CC&Rs fees provision), CCP section 1021 (same; broad CC&Rs fee provision), and Civil Code section 5975 (Davis-Stirling Act fee-shifting provision applicable where governing HOA documents are being enforced).  The fees for mediation work were allowable under section 5975(c) regardless of the CC&Rs’ specific language.  With respect to the amount of the fees awarded, the trial judge did not abuse his discretion given that there was competent fee substantiation in the form of invoices and the lower court did reduce some duplicative, unnecessary work.  Finally, the appellate court agreed that the defendants were also entitled to reasonable appellate fees for their win in the appeal.

Reasonableness Of Fees: 45% Reduction In Mainly Appellate Fees Was Affirmed On Appeal

Aggrieved Party, Despite Significant Reduction, Appealed To No Avail.

            We understand that no one likes to be hit with a significant fee award.  However, when you get a significant reduction, think carefully about whether you want to appeal.  That was the moral of CDC San Francisco LLC v. Webcor Construction, L.P., Case No. A163751 (1^st Dist., Div. 1 Jan. 11, 2023) (unpublished).

            What happened here was that plaintiff/appellant was hit with an adverse fee award of $855,438 after an unsuccessful appeal in a case where there was a contractual fees clause even though the prevailing parties sought $1,555,342 in fees.  The award was a lower court reduction of 45% from the requested fees, after finding that appellate counsel’s hourly rates were excessive, and the hours claimed were grossly inflated in an appeal which was not a “bet-the-company” case.  Plaintiff thought more should be reduced, but that did not occur on appeal.

            Plaintiff wanted heightened scrutiny of the trial court’s reasoning under Kerkeles v. City of San Jose, 243 Cal.App.4^th 88 (2015), but that was a federal civil rights case that was not congruent with California state law.  Plaintiff then argued that the award was over ten times the amount awarded to trial counsel for fee work, but the appellate court rejected this argument because appellate work is more specialized, and plaintiff did not provide the amount of time/rates that its counsel charged for appellate work on a comparative level.  The significant lower court reduction took the sting out of the argument that the fee award was too shocking in nature. 

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.

Prevailing Party, Reasonableness Of Fees, Section 1717: $200,000 Fee Award To Prevailing Defendant Affirmed Because Tort Claims Allowed For Recovery, Post-Dismissal, Under Santisas

Settlement With Other Parties Did Not Impact Analysis Of Fee Reasonableness As To The Prevailing Defendant.

            Carp Property, LLC v. Corona, Case No. B316354 (2d Dist., Div. 6 Nov. 17, 2022) (unpublished) was a situation where plaintiff litigated a matter for two years where there was a contractual fees clause in an operative agreement, suing for over $2.1 million.  Plaintiff settled with some defendants for a total of $90,000 and then dismissed the prevailing defendant after that party rejected a “walkaway” settlement in exchange for a waiver of costs.  Prevailing defendant moved for $228,000 in Civil Code section 1717 fees, but the lower court awarded $200,000 after trimming the request for block billing and for higher-level attorneys performing lower level tasks.

            The appellate court affirmed the fee award.  Plaintiff dismissed both contract and tort claims, but the dismissed tort claims were inextricably intertwined with the contract claims and the broadly worded attorney’s fees provision allowed for tort claim recovery, an exception to the Santisas v. Goodin, 17 Cal.4^th 599, 621 (1998) “general rule” relating to dismissal of contractual claims.  It then found that the $90,000 settlement with some defendants did determine fee reasonableness as far as the work done by the other prevailing defendant here.  The trial court also trimmed about $28,000 from the fee request, such that some of plaintiff’s arguments for a reduction were credited—meaning the fee award was no abuse of discretion and did not shock the conscience. 

Reasonableness Of Fees: Plaintiffs Denied Contractual Fees Altogether Did Not Adequately Address All Reasons For Denial In Their Appellants’ Opening Brief

Responding To Some More Of The Defense Arguments In The Reply Brief Was Too Late.

            In GI Excellence, Inc. v. Padda, Case No. E076843 (4^th Dist., Div. 2 Nov. 7, 2022) (unpublished), plaintiffs won around $65,000 in compensatory damages and then moved to recover $755,300 in contractual attorney’s fees.  The lower court denied the request in entirety.  On appeal, plaintiffs did not address all of the defense arguments below as far as why the fee request should be denied in their opening appellants’ brief.  Although they did get to some more of the defense arguments in their reply brief, this was too late— “a day late and a dollar short,” as colorfully put by the appellate court in affirming the fee denial.

Civil Rights, Multipliers, Reasonableness Of Fees: Ninth Circuit Confirms Significant Haircut To Serial ADA Plaintiff’s Attorney’s Fees And Costs Award

No Abuse Of Discretion In District’s Reduction Of Fees And Costs Award To $9,851 From The Requested $34,899 Where Work Was Routine And Boilerplate, There Was A Lack Of Opposition, And Much Of The Motion Practice Was Unnecessary.

            In Shayler v. 1310 PCH, LLC, Case No. 21-56130 (9^th Cir. October 24, 2022) (published), serial Americans with Disabilities Act plaintiff sued defendant  for failure to comply with regulatory requirements for accessible parking spaces.  Eight months later, plaintiff moved for summary judgment, to which defendant filed a notice of non-opposition.  Plaintiff nonetheless filed a reply brief, and – after being granted summary judgment – moved for $31,714 in attorneys’ fees and $3,185 in costs.

            Explaining that it found the hourly rates and time spent by plaintiff’s attorneys unreasonable – where two partner-level attorneys performed tasks that could have been performed by low level associates or paralegals, given the straightforward boilerplate filings in the case that did not involve complex legal issues or difficult factual discovery, and spent 17 hours on an unopposed motion for summary judgment, including 7 hours on the reply brief, the district court adopted a blended hourly rate of $300 used in similar cases and applied a 65% downward multiplier – resulting in a fees award of $7,896.  Additionally, the district court awarded reduced costs of $1,955 after taxing plaintiff’s request for reimbursement for a site inspector for which plaintiff provided no invoice and no reasonable explanation as to the inspector’s importance to the case.

            On appeal, plaintiff argued that the district court failed to provide an adequate explanation for the blended billing rate and downward multiplier.  Although the Ninth Circuit found the argument reasonable given case law on this issue (Chaudhry v. City of Los Angeles, 751 F.3d 1096, 1111 (9^th Cir. 2014) [fee award vacated for district court’s failure to explain its use of a blended billing rate]; Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000) [upward and downward multipliers must be justified]), it found that the district court provided a “concise but clear explanation” of the grounds for its decision – with a “concise but clear” explanation requiring only enough reasoning to enable meaningful appellate review. (Hensley v. Eckerhart, 461 U.S. 424, 437 (1983); Jankey v. Poop Deck, 537 F.3d 1122, 1133 (9th Cir. 2008) [discussed in our August 13, 2008 post]; Gates v. Deukmejian, 987 F.2d 1392, 1398 (9th Cir. 1992).)  Concluding that the district court’s explanations for the blended billing rate and downward multiplier sufficiently supported its reduced fee award, the Ninth Circuit found no abuse of discretion and affirmed.

Reasonableness Of Fees: Failure To Provide Adequate Record Led To Affirmance Of $365,455.02 Fee Award To Defendants

Lengthy Litigation Can Lead To Large Fee Awards, Which Require An Adequate Record To Challenge.

            The moral from Westpark Village, et al. v. Khanna, Case No. A164667 (1^st Dist., Div. 2 Sept. 28, 2022) (unpublished), which involved a contractual fee award of $365,495.02 against defendants after years of litigation, is simple—make sure you have an adequate appellate record when you challenge such an award.  Here, defendants only put their fee opposition papers; failure to provide the moving paperwork was fatal. 

Landlord/Tenant, Reasonableness Of Fees: $684,000 Fee Award In Favor Of Tenants And Against Landlord Reversed And Remanded

Appellate Court Did Not Buy That Trial Court Could Just Adopt Plaintiffs’ Voluntary Reduction Without Addressing Other Objections.

            We posted today about a published decision between the parties.  Separately, Sarkany v. West, Case No. A161728 (1^st Dist., Div. 2 Aug. 30, 2022) (unpublished) was landlords’ appeal from an adverse $684,000 attorney’s fees award in favor of tenants after a favorable jury verdict, with the fee entitlement not being contested.  Without much of an explanation, plaintiffs reduced their $1.134 million fee request (inclusive of a 1.5 multiplier) by $141,245.50.  The trial court bought it, awarding a little over $684,000 to plaintiffs on the lodestar request, but denying a positive multiplier. The appellate court did not buy it.  The voluntary reduction did not address the defense objections to the fee motion, much less the trial judge’s concerns that a reduction might be justified based on plaintiffs’ sanctionable and litigious conduct.  It simply could not determine that these factors were considered, so a re-do was ordered.  One of the defendants argued no fee award was justified based on indigency, but the appellate court could only find this was a consideration for a plaintiff’s indigency, not a defendant’s indigency.  (Garcia v. Santana, 174 Cal.App.4^th 464, 476 (2009).)

Lodestar, Private Attorney General, Reasonableness Of Fees: FEHA Fee Recovery To Plaintiff’s Attorney Affirmed As Far As Reductions But Remand Issued To Determine Reasonable Hourly Rate Based On Out-Of-Town Rates

Plaintiff’s FEHA Request Was Reduced Drastically, But The Award Likely Will Go Up Some When Out-Of-Town Rates Are Considered—Although The $700,000 Award Was Substantial.

            When you are doing appellate work on abuse of discretion issues, the primary issue may be whether the lower court used the correct legal principles as far as reaching its discretionary decision.  That principle was in play to lead to a limited remand on a fee recovery in Elizondo v. Dept. of Transportation, Case No. C088987 (3d Dist. July 22, 2022) (unpublished).

            In this one, FEHA plaintiff won a $605,000 jury verdict, with the trial court later awarding over $700,000 in attorney’s fees, inclusive of a 1.2 positive multiplier out of a $4 million request (we kid you not), and $117,488.60 in costs (with the costs award largely affirmed on appeal).  The thrust of plaintiff’s appeal was that more fees should be awarded, with the principal contention being that much higher out-of-town hourly rates should have been awarded by a Bay Area attorney versus much lower rates for San Joaquin County attorneys, given that the venue was San Joaquin County.

            The Third District affirmed the fee award, except to remand with a trial court exploration of higher out-of-town hourly rates.  The lower court awarded $350 per hour to plaintiff’s counsel even though Bay Area rates were more in the $825 per hour range.  What led to the reversal was a good evidentiary showing by plaintiff’s counsel that local attorneys in Stockton and Sacramento would not take the case such that local counsel rates were not germane, with the lower court not applying the correct legal principles on out-of-town rates once plaintiff made this evidentiary showing.  With that said, the matter was remanded to look at a higher out-of-town hourly rate, but that did not detract from affirmed conclusions that the lodestar fee request was inflated for lack of preparation by plaintiff’s counsel at some junctures of the litigation, billing for political activities, billing for travel to conferences which could have been attended telephonically instead, billing for ministerial tasks, billing for unrelated administrative proceedings not expressly allowable under FEHA (see K.I. v. Wagner, 225 Cal.App.4^th 1412, 1423 (2014)), overlitigating the case, and billing for unproductive legal research.  Also, no private attorney general fees were justified because simply vindicating one plaintiff in a FEHA case did not meet the significant benefit prong of CCP § 1021.5.

Fees, Civil Rights, Employment: USDC Central District Judge Awards Full Freight Fee Award In Waiting-Time Penalties Case

Judge Finds That Fee Award Of $342,782.50 Is Reasonable In Waiting-Time Penalties Case.

        On June 17, 2022, the Hon. R. Gary Klausner issued a fee award to the prevailing plaintiff in a waiting-time penalties case. Caley Rae Pavillard v. Ignite International, Ltd. et al., USDC Central District No. 2:21-cv-01306-RGK-Ex.

        Though the fee award is not part of a published opinion, it is interesting in several respects. 

        First, this case arose out of what should have been a payment of $3,000 to plaintiff for her modeling work during a photo shoot. The court describes the factual background: "The shoot took place on October 5, 2018. However, despite Plaintiff's request for payment, Defendant did not pay her wages until May 22, 2020 -- nearly two years later. On that date, Defendant wired $3,000 to Plaintiff's agent, LA Models, who took a 20% cut and sent the remaining amount to Plaintiff." 

         Second, while it would seem unusual for a $3,000 case to generate $342,782.50 in fees, keep in mind that thirty days of waiting time penalties could amount to $3,000 X 30 = $90,000 -- and here, payment was not made immediately after 30 days, but rather made only after more than 1 1/2 years. And the Labor Code provided a basis for awarding attorney's fees.

        Third, Judge Klausner considered the bases for the award: the legal basis for fee entitlement and the reasonableness of the request: reasonableness of hourly rates, reasonableness of hours expended, and reasonableness of a lodestar multiplier of 1.5. A request for a lodestar multiplier was rejected by the judge.

        Fourth, the judge considered that the case lasted 2 years, proceeded to a jury trial, and plaintiff "achieved complete success."

        COMMENT: Defendant could have had a better outcome by timely paying $3,000. Indeed, Defendant would have had a better outcome if the waiting-time penalties had been paid, without proceeding to a jury trial. If the fee award is upheld on appeal, Defendant will be on the hook for the fee award, and will have likely incurred significant attorney's fees defending itself. While an attorney's fees award can be appealed by a defendant, it may well be an uphill battle when an experienced judge who has participated in a jury trial considers and analyzes the factors that support a fee award, and incidentally, denies plaintiff's request for a lodestar multiplier. And appeals to the 9th Circuit are not inexpensive.

        

Ethics, Reasonableness Of Fees: 2/8 DCA Justice Wiley Suggests That Ethical Games And Unprofessionalism Will Justify A Fee Recovery Denial Or Reduction

Case Did Not Involve Fees, But His Lesson Should Be Paid Attention To.

            Although the opinion in Field v. U.S. Bank National Association, Case No. B309111 (2d Dist., Div. 8 June 9, 2022) (published) is not an attorney’s fees decision per se, an observation early on in the opinion, authored by Justice Wiley, should be paid attention to.  He notes that ethical gamesmanship and unprofessionalism can give rise to denial of an attorney’s fees request or a reduction.  He cites Karton v. Ari Design & Construction Inc., 61 Cal.App.5^th 734, 747 (2021) [discussed in our March 10, 2021 post] for that proposition, an opinion he also authored and which does support that point.

Costs, Laffey Matrix, Reasonableness Of Fees: Losing Defendants/Cross-Complainants Properly Saddled With RFA Proof Of Sanctions Fees And Routine Costs

Prevailing Parties Requested $393,945.30 In Fees, But Only Awarded $38,920.14—A Win, But Adverse Party Still Unsuccessfully Appealed.

            The next case, Duncombe v. Barfresh Food Group, Inc., Case No. B308385 (2d Dist., Div. 2 May 31, 2022) (unpublished), demonstrates an important lesson:  where you obtain a significantly diminished fee award at the trial court level, you need to think long and hard on whether to appeal.

            In this one, plaintiff/cross-defendant won a jury verdict as far as obtaining consulting fees under a contract with the other side relating to consulting services in Australia.  That verdict was $43,962.56, with nothing recovered on the defense’s cross claims.  Based on some denial of RFAS ultimately proven at trial, the defense moved for attorney’s fees of $393,945.30 under the RFA costs-of-proof sanctions provision.  They also sought some routine costs of $9,000, with the non-prevailing party not filing a motion to tax costs.  In the end, the trial judge awarded $38,920.14 in costs-of-proof sanctions fees and the entirety of the requested costs.  The adverse party did appeal despite the diminished fee award.

            The appellate court affirmed.  The RFAs denied were material, such that the inquiry focused on the reasonableness of the fees.  The trial judge had a lot of discretion in this area given her involvement of the case.  The side asking for fees utilized the D.C. Laffey Matrix to support the requested hourly rates, a matrix which is an acceptable one to use within the discretion of the lower court.  As far as the costs award, the adverse party never filed a motion to tax costs such that the challenge was waived.

Prevailing Party, Reasonableness of Fees, Section 1717: Section 1717 Fees Award Of About $40,000 Affirmed For Plaintiff Who Had Fraud Claim Dismissed By Trial Court And Received Only A Portion Of Requested Damages After Bench Trial

A One-Sided Fees Provision Entitled Plaintiff To Reciprocal Prevailing Party Fees Under Section 1717, And A Trial Court’s Determination As To Reasonableness Of Fees Will Not Be Disturbed Absent A Showing That The Trial Court Is Clearly Wrong.

            In Hernandez v. Thottam, Case No. B306547 (2d Dist., Div. 4 May 10, 2022) (unpublished), plaintiff leased a unit that was without power due to a recent fire, but vacated the unit several months into the lease and sued her commercial landlord for fraud and breach of contract based on his failure to restore power to the unit.  Plaintiff was awarded $13,200 in damages following a one-day bench trial.  Additionally, the trial court concluded plaintiff was the prevailing party and awarded her about $40,000 in attorney fees– out of her request for approximately $55,000 – under Civil Code § 1717 after construing the lease against the landlord (who was an inactive attorney) as the drafting party, and concluding that the lease would have entitled landlord to attorney fees.

            Landlord appealed – claiming that the lease precluded attorney fees, that plaintiff could not be deemed a prevailing party because the trial court had denied her motion for summary judgment and had dismissed her claim for fraud, and alternatively, that the amount awarded was excessive. 

            The 2/4 DCA affirmed – finding the attorney fees award “well within the court’s discretion.”  First, the lease contained conflicting fees provisions – one stating each side was responsible for its own attorney fees, and the other requiring that plaintiff pay landlord “costs, damages, and expenses (including any and all reasonable attorney fees and expenses incurred by the [landlord]) suffered by [landlord] by reason of [plaintiff’s] defaults.”  These conflicting provisions were properly construed against the drafting party, and the one-sided fees provision provided plaintiff with a reciprocal right to fees under Civil Code § 1717.  Second, a party’s failure to obtain summary judgment is irrelevant to prevailing party status, as is a party’s success or failure on non-contract claims – with prevailing party status based on comparison of the relief awarded on the contract claims.  Finally, as to the reasonableness of the fees, each of landlord’s challenges failed because there is no requirement that each motion or opposition has to be successful to be compensable, trial courts have discretion to award fees based on declarations of counsel without the inclusion of contemporaneous invoices, and the trial court exercised its discretion to reduce the hours worked by plaintiff’s attorneys and nothing in the record suggested it made the reductions arbitrarily or without examination of the time billed.  The trial judge is in the best position to determine the reasonableness of the fees requested for services provided in his/her court, and unless an appellate court is convinced that the trial court is clearly wrong in determining the reasonableness of the claimed fees, for which the trial court has broad discretion, the trial court’s determination will not be disturbed.  (Building a Better Redondo, Inc. v. City of Redondo Beach, 203 Cal.App.4th 852, 870-873 (2012).)

Block Billing, Reasonableness Of Fees: Even With Block Billing, $170,000 Fee Award—After A $64,000 Reduction—Was No Abuse Of Discretion

Block Billing Criticisms Are Fair, Depending On The Circumstances.

            Simons v. Superior Court, Case No. B309885 (2d Dist., Div. 3 Mar. 25, 2022) (unpublished) is a situation where the appellate court affirmed a Civil Code section 1717 fee award, even with high hourly rates and block billing, when the fee factual finder awarded $170,000 after reducing the requested fees by $64,000.  The appellate court confirmed that criticisms of block billing were justified, but its application depends on the nature of the billings.  The fee finder’s reductions were ample such that nothing more needed to change. 

Consumer Statutes, Reasonableness Of Fees: 4/2 DCA Affirms Trial Court’s Almost $400,000 Haircut To Prevailing Song-Beverly Plaintiffs’ Fee Request

The Panel Found No Abuse Of Discretion In Trial Court’s Finding That The Hourly Rate And Number Of Hours Requested Were Excessive For A Case That Was Not Complex And Involved Little, If Any, Law And Motion Work.

            In Mallonee v. Toyota Motor Sales, Case No. E075088 (4^th Dist., Div. 2 March 10, 2022) (unpublished), Song-Beverly plaintiffs filed an unlimited action concerning a Prius they had purchased that they believed to have electrical issues. Following an eight day trial, the jury awarded plaintiffs the $19,559.88 their counsel argued for in closing arguments, which consisted of $6,519.96 (representing the amount plaintiffs paid toward the car before it was totaled in an accident) and a Song-Beverly penalty of $13,039.92.  Afterward, plaintiffs moved for $307,316 in fees, plus a multiplier of .4 – for a total of $430,242.40 in requested fees – and submitted time records showing that nine attorneys spent about 780 hours on the case, and paralegals/law clerks spent another 143.4 hours on the case.  However, the trial court found the work performed in the case did not justify the fee request – given the case was not complex and involved little, if any, law and motion work – and awarded $40,875 after reducing the number of attorneys necessary and reasonable for the case to two, reducing their and the paralegal’s hourly rates, and reducing the attorneys’ reasonably expended hours to a combined total of 135 and the paralegal’s to 25 hours.

            Plaintiffs appealed – arguing that the trial court improperly reduced the fee award based on the amount of the jury award.  Not so, said the 4/2 DCA. First, trial courts have the discretion to significantly reduce fee awards or award no fees at all when a fee request is unreasonably excessive.  (Chavez v. City of Los Angeles, 47 Cal.4th 970, 990 (2010); Christian Research Institute v. Alnor, 165 Cal.App.4th 1315, 1318-1319 (2008); Guillory v. Hill, 36 Cal.App.5th 802, 815 (2019); and 569 East County Boulevard LLC v. Backcountry Against the Dump, Inc., 6 Cal.App.5th 426, 432 fn. 7 (2016).)  Second, although the trial court had commented that it was “bothered” that the case should have been a limited jurisdiction case, the comment was not a final finding and could not impeach the trial court’s written ruling (Key v. Tyler, 34 Cal.App.5^th 505, 539, fn. 16 (2019)), and the written ruling confirmed that the fee award was reduced because the trial court found it to be excessive.

Lodestar, Reasonableness Of Fees: Where Matter Was Not Complex, Administrative Time Billed, and Severely Redacted Time Submissions Provided, Trial Court Was Within Its Discretion To Award $15,000 In Fees Rather Than The Requested $83,631.95

Fee Amount Is Usually A Discretionary Call.

            Bouquet Plaza SDS, LLC v. Kimmel, Case No. B306042 (2d Dist., Div. 2 Feb. 1, 2022) (unpublished) demonstrates how attorney’s fee motions should be attuned to lodestar factors, sometimes even offering voluntary reductions to maximize a favorable decision.  Otherwise, requesting inflated or improper fees could result in a substantially reduced award.

            Plaintiff did prevail against defendant lease guarantor after accepting a CCP § 998 offer of $89,000.  Plaintiff then moved to recover $83,631.95 in contractual attorney’s fees.  The lower court only granted fees of $15,000 after making observations that (1) the case was not that complex; (2) billing of secretarial and some paralegal time was improper; (3) plaintiff’s work activity demonstrated “churning”; and (4) severe redactions to itemized time entries made it difficult to determine exactly what services had been provided.  The appellate court affirmed, given that the award was no abuse of discretion.  The trial judge properly reduced the request based on lodestar factors justifying a downward adjustment.

            The lesson here is to be reasonable when requesting fees.  Attorney credibility is a key underlying construct which must be persuasively presented in fee proceedings.

Fee Clause Interpretation, Reasonableness Of Fees: Attorney Awarded Prior Frivolous Appeal Sanctions Denied “Second Bite” Request For Civil Code § 1717 Additional Fees Based On Prior Representations Made To Court Of Appeal On Reasonableness Of Work

Also, Fee Clause With “Incurred” Language Means That Fees Did Need To Be Incurred.

            The result in Korff v. Goodrich, Case No. A160917 (1^st Dist., Div. 2 Oct. 27, 2021) (unpublished) shows the wisdom in the saying “pigs get fat, hogs get slaughtered,” coined by Rubbery Figures, a satirical rubber puppet series screened in Australia in the 1890s. 

            What happened in this dispute between caregiver and deceased husband’s daughter, which led to a will contest and an eventual settlement agreement with a fees clause, is that caregiver took position inconsistent from the settlement and eventually lost three appeals after adverse decisions were made at the trial court stage.  The appellate court earlier determined that the appeals were frivolous, awarding fees as sanctions to the main prevailing party’s attorney in the sum of $49,875 (but totaling $91,084 as to other attorneys involved)—with the main attorney indicating to the appellate court that this amount represented 142.5 hours at $350/hour.  Then, before the lower court, the main attorney sought another $103,000 in compensation for additional hours at a $675 hourly rate.

            The lower and appellate courts did not buy it, with the reviewing court affirming the lower court’s denial of the requested additional compensation.  After all, main attorney’s “additional ask” contradicted representations made to the appellate court such that he was judicially estopped from claiming otherwise.  Also, the fee submissions raised the specter that there was duplicative work by three attorneys (“too many cooks in the kitchen”).  Finally, attorneys asking for additional fees did not show that their client actually “incurred” fees, although such a requirement in a fee agreement is something which must be satisfied.  (San Diego Partnership v. San Dieguito River Valley Regional etc. Authority, 61 Cal.App.4^th 910, 915, 919 (1998). 

Employment, Multipliers, Reasonableness of Fees: No Abuse Of Discretion In Trial Court’s Award Of Attorney Fees To Prevailing Plaintiffs In DJOA Action

Amount Of Fee Award Was Justified Given Trial Court’s Analysis Of The Complexity Of The Case, Results Achieved By Plaintiffs, And Plaintiffs’ Showing To Support The Fee Request.

            The Displaced Janitors Opportunity Act (Lab. Code, §§ 1060–1065) “requires contractors who are awarded contracts for janitorial or building maintenance services at a particular site to retain certain employees working for the terminated contractor for a 60-day transition employment period, and to offer those workers continued employment if their performance during the 60-day period is satisfactory.” (§ 1061, subds. (b)(1) & (f).) Under the DJOA, an employee of the terminated contractor who was not offered employment by the successor contractor may sue the successor for back pay, including the value of any lost employment benefits. (§ 1062, subd. (a).) An employee prevailing in such an action “shall” be awarded “reasonable attorney’s fees and costs as part of the costs recoverable.” (§ 1062, subd. (c).) (Jones v. Quality Coast, Inc. (2021), 62 Cal.App.5th 372, 379–380 (2021) [discussed in our February 27, 2021 post].) The Displaced Worker Protection Act (S.F. Police Code, §§ 3300C.1–3300C.6) provides for a similar 90-day transition period. (§§ 3300C.1(c) & (f), 3300C.2(b).)

            In SEIU-USWW v. Preferred Building Services, Inc., Case No. A159790 (1^st Dist., Div. 5 October 15, 2021) (partially published – fees discussion not published), a successor janitorial contractor appealed after a class of displaced janitors and their union – suing for violations of the DJOA and DWPA – successfully moved for summary judgment and were subsequently awarded attorneys’ fees.

            On appeal, Defendant challenged the amount of fees awarded – arguing the trial court should have adjusted the lodestar downward due to overstaffing with eight attorneys, double counted the attorneys’ skill by applying a multiplier when the skill level was already factored into the lodestar, and that the 1.4 multiplier (reduced from Plaintiffs’ requested 2.0) was not supported by the factors involved in the case.  The 1/5 DCA affirmed.  The trial court properly considered and analyzed the complexity of the case, results achieved by Plaintiffs, and Plaintiffs’ showing to support the fee request.  Ninety percent of Plaintiffs’ billed hours came from lead counsel and four associates, time for attorneys billing less than 10 hours was excluded, and Plaintiffs had applied an across-the-board lodestar reduction of ten percent.  As to its other contentions, Defendant did not demonstrate that the trial court improperly double counted counsel’s skill nor abused its discretion in applying the multiplier. The trial court identified four factors warranting the multiplier – where “any one of those factors may be responsible for enhancing or reducing the lodestar.” (Krumme v. Mercury Ins. Co., 123 Cal.App.4th 924, 947 (2004).)

Reasonableness Of Fees: $178,190.50 Fee Award To Residential Tenant Under Contractual Lease Clause Affirmed On Appeal

Trial Court’s Award Was No Abuse Of Discretion.

            In Javaheripour v. Sigal, Case No. B304911 (2d Dist., Div. 4 Sept. 22, 2021) (unpublished), residential tenant won an inhabitability case against landlord, winning an unlawful detainer trial and then moving for lots of fees.  And tenant got a lot of them--$178,190.50 to be exact.  That award was affirmed on appeal under the deferential abuse of discretion standard because entitlement was really not at issue.  Because landlord tenaciously litigated, the fees were warranted.  Just goes to show how a small case can produce lots of fees!

Appealability, Probate, Reasonableness Of Fees: Trustee’s Failure to Appeal Prior Separately Appealable Order On Fees Was Dispositive On Most Issues

As Far As Amount Of Fees, Failure To Include A Reporter’s Transcript Was Equally Damning.

            In Padlan v. Graves, Case No. A159576 (1^st Dist., Div. 3 Sept. 17, 2021) (unpublished), a trustee was ordered to pay certain attorney’s fees to a beneficiary based on reneging on a mediation settlement agreement.  That order was made in March 2019 and served by the trial court within 60 days.  Trustee did not appeal it.  Later, in a December 2019, the lower court refused to revisit the March 2019 fee orders, although this December 2019 order was appealed by trustee.  The 1/3 DCA decided that much of the fee challenges could not be entertained because trustee did not mention the March 2019 in her appeal of the December 2019 order and, also, the March 2019 order was separately appealable under Probate Code section 1300(g) relating to fixing of fees as it relates to a fiduciary.  With respect to the amount of the fees, that too failed because trustee failed to provide a reporter’s transcript as part of the record so as to show whether there was any abuse of discretion as far as amounts awarded. 

Civil Rights, Lodestar, Reasonableness Of Fees: $1,113,750 In FEHA Attorney’s Fees In Racial Discrimination/Retaliation Case Garnering $450,001 Compensatory Award To Successful Plaintiff Was No Abuse Of Discretion

Hourly Rate, Lodestar, And Multiplier Conclusions Were Not Beyond Reason.

            Plaintiff in Sterling v. County of Sacramento, Case No. C089616 (3d Dist. Sept. 7, 2021) (unpublished) won $450,001 in compensatory damages under FEHA racial discrimination/retaliation claims.  Plaintiff then moved for over $1.515 million in fees (lodestar plus a positive 2 multiplier enhancement).  The lower court basically sustained the lodestar request, but it instead awarded a 1.5 positive multiplier such that the FEHA fee award was $1,113,750.

            The Third District affirmed the merit and fee results.  The lower court did a proper lodestar analysis, not having to accept “padding” challenges or the defense suggestion that no more than $580,635 should be awarded as fees.  The trial judge awarded an hourly rate of $550 for the lead attorney, which was no abuse of discretion given expert testimony indicating that $650-695 per hour would be justified and given past awards to the attorney above $550.

Reasonableness Of Fees: Defendant Winning Retaliatory Eviction Action Correctly Awarded Only $2,671.50 Out Of A Requested $26, 715 In Attorney’s Fees

10% Was Reasonable Based On The Defense Not Ending The Dispute Through A Demurrer And Based On Plaintiff’s Indigency.

            Wiles v. McClure, Case No. A161165 (1^st Dist., Div. 3 Aug. 27, 2021) (unpublished) shows how a trial judge can consider numerous circumstances when determining the reasonableness of a requested fee award.

            The defense won a retaliatory eviction action which contained a prevailing party fee entitlement under Civil Code section 1942.5(i).  Defendant requested $26, 715 in attorney’s fees, but only was awarded about 10%--$2,671.50.  That reduction was affirmed on appeal.  The lower court determined that the defense could have litigated much more efficiently by bringing the dispositive issue up through a demurrer rather than a summary judgment motion, not to mention that plaintiff was indigent.  Indigency is a proper factor to consider, Garcia v. Santana, 174 Cal.App.4^th 464, 476-477 (2009), such that this was not an impermissible consideration for purposes of affirming the ultimate award in line with other factors.

Reasonableness Of Fees: $943,250 Fee Award To Title Company Under Contractual Fees Clause Was Not Excessive

Title Company Requested $1,851,575 Lodestar Request, Substantially Reduced By The Lower Court—Ultimate Award Was No Abuse Of Discretion.

            In Meridian Financial Services, Inc. v. Phan, Case Nos. D078586/D078589 (4^th Dist., Div. 1 Aug. 10, 2021) (published), Chicago Title won a summary judgment in a dispute where there was a prevailing party fees clause in lender’s escrow instructions signed by the main plaintiff.  Title insurer moved for $1,851,575 in attorney’s fees as the lodestar request, with the lower court ultimately awarding only $943,250.  Appellants’ challenge to the fee award was unsuccessful—after all, under Serrano, the lower court did substantially reduce the fee request, a viable option even if it did not expressly conclude the fee request was inflated in nature. 

Employment, Reasonableness Of Fees, Substantiation Of Reasonableness Of Fees: Third Circuit Court Of Appeals Affirms Denial Of Fees Where Wage/Hour Plaintiffs Had Limited Success And Fee Petition Was Not Properly Documented

Plaintiffs Only Recovered $6,601 Out Of Requested $180,000 In Damages And Attorneys Sought $118,569 In Fees.

            In Wang v. Chapei, LLC, Case No. 20-2975 (3d Cir. June 10, 2021) (nonprecendential), two wage/hour plaintiffs had their federal claim dismissed, were unsuccessful on class certification tries, and won about $6,601 out of a requested $180,000 in damages under a state statute with an employee-friendly fee shifting provision.  The district judge denied their $118,569 fee request in entirety based on (1) plaintiffs’ limited success, (2) the attorneys failing to justify their claimed hourly rates, and (3) sloppy fee petition drafting where the rate request was erroneously requested for over ten times the correct amount.  The Third Circuit affirmed, finding no abuse of discretion as well as indicating employment litigators should not expect large fee awards where the results were meager.

Consumer Statutes, Multiplier, Reasonableness Of Fees: Trial Court Did Not Abuse Its Discretion In Awarding $20,000 Fee Award Out Of Requested $40,113.75 Base Lodestar

The Problem Was That The Case Was Routine Such That Hours Billed For “Cut And Paste” Activities Were Excessive, With A 25% Positive Multiplier Properly Denied.

            In Fishback v. FCA US, LLC, Case No. B298677 (2d Dist., Div. 3 May 14, 2021) (unpublished), a lemon law plaintiff was awarded a lesser sum of attorney’s fees of $20,000 out of a requested $52,834,30 ($40,113.75 lodestar plus a 25% positive enhancement).  Plaintiff was not satisfied with this fee awarding, triggering an appeal.  When it comes to the amount of fees, plaintiff could not surmount the deferential abuse of discretion standard.  The lower court found that this was a routine case, the discovery was “cookie-cutter” and “cut and paste,” there was no law and motion proceedings except for the fee motion, there was limited discovery, and a settlement was reached early in the case.  None of these conclusions were disturbed on appeal.  However, we will give an example of fees found to be excessive—counsel traveling by car from Rancho Palos Verdes to Burlingame and back to defend a deposition, given a flight from LAX to SFO takes about one hour—did not justify counsel’s billing for 16.1 hours of automobile travel, as the trial judge could determine as not being reasonable in nature. 

            Also, the 25% positive enhancement correctly rejected due to the lower court’s conclusion that this was a garden-variety lemon law case. 

Reasonableness Of Fees: Reduction Of Requested Contractual Fees Award By Over $250,000 For Excessive Collaboration And Block Billing Was No Abuse Of Discretion

Defendants’ Final Award Was $410,115.50.

            In Barto/Signal Petroleum, Inc. v. Boneyard, LLC, Case No. B299794 (2d Dist., Div. 8 Apr. 29, 2021) (unpublished), defendants prevailed and sought attorney’s fee under a contractual fees clause in a settlement agreement.   They were awarded $410,115.50 in fees, a reduction of over $250,000.  That result was affirmed on appeal.  The reasons?  Excessive collaboration and block billing, with the trial judge reducing the block billed entries by 65%.

Reasonableness Of Fees, Sanctions: 50% Fee Recovery Award To Prevailing Party Was No Abuse Of Discretion

Denial Of $16,060 Sanctions Fee Request Was No Error Because It Was An Interim Ruling Not Impacting The Litigant’s Eventual Prevailing Party Status.

            In Aquino v. Klein, Case No. B301186 (2d Dist., Div. 3 Apr. 8, 2021) (unpublished), a dispute between friends, who went into business and then had a falling out romantically, resulted in a close to decades in litigation by which one party prevailed against a trustee to the tune of $422,669.93.  The prevailing party then moved for an initial recovery of $458,007.63 in fees, later reduced to $386,355.02 after the trial court asked for justification.  (BLOG HINT:  Always bad when you backpedal around $35,000 in a fee request, given that fees motions are always about credibility.)  Ultimately, the lower court only awarded $192,000.50 in fees, about 50% of the reduced request.  Prevailing party appealed this as well as the denial of an interim order denying sanctions and a $16,060 sanctions request.

            The 2/3 DCA affirmed.  The interim sanctions award was not reviewed because it was intermediate and the prevailing party obtained relief later, such that it was not reviewable under Code of Civil Procedure section 906.  With respect to the $192,000.50 appeal in which the prevailing party argued the fee award was not enough, appellant could not hurdle the abuse of discretion standard, especially given that the lower court scrutinized things and wanted further justification.  Appellant argued that a more specific basis for the fee award was warranted, but only cited federal civil rights cases which did not govern the law with respect to private parties (where no statement of decision is required, generally, under state law). 

            Judge Salter, an Orange County Superior Court Judge, sitting by assignment, authored the 3-0 decision.

Reasonableness Of Fees: In Liquidated Damages Dispute Won By Defendant, Trial Court’s Award Of $1,778,500 In Fees Under Contract Clause, About $350,000 Less Than The Request, Was No Abuse Of Discretion

Although Some Math Mistakes Were Made By Lower Court, Reduction Was Justified By The Record.

            In Micrel, LLC v. Zinn, Case Nos. A157136/A158069 (1^st Dist., Div. 1 Apr. 6, 2021) (unpublished), defendant won a battle over whether a nondefamation liquidated provision seeking $1.3 million in damages was reasonable.  The defense then sought $2,128,534.50 in contractual attorney’s fees for prevailing, with the lower court awarding $1,778,500—about a 16% reduction, prompting an appeal by the defense.  (Plaintiff also appealed on the merits of the liquidated damages clause being unreasonable, but that was affirmed on appeal.)

            The 1/1 DCA affirmed the fees award.  Although the math was a little off by the lower court, the record justified this reduction based on excessive paralegal work, $142,000 billed for work on sanctions/discovery motions which were withdrawn or denied by the lower court, and time preparing expert witnesses on issues which had been resolved.  The appellate court actually reconstructed time to show how the lower court mistakes still justified the reduction—given that the ultimate result was justified, actual fee award (reduced a bit) affirmed. 

Prevailing Party, Reasonableness Of Fees: Two Prevailing Party Fee Awards – Totaling $609,180 – To Plaintiff Assignee Attempting To Enforce Prior Judgment Affirmed On Appeal

Original Judgment Creditor Had Satisfied Mediation Requirement In The Parties’ Fees Provision, And Defendants Failed To Raise Their Challenges To Specific Billing Entries Before The Trial Court Despite A Continuance To Allow Them To Do So.

            Plaintiff buyer entered into a Purchase Agreement with defendant sellers for the purchase of sellers’ home.  The Purchase Agreement contained an attorney fees provision allowing the prevailing party to obtain fees if that party had mediated before filing a lawsuit.  When sellers tried to back out of the sale, buyer sued – obtaining a judgment that included attorney fees. 

            Seven years later, buyer assigned his interest in the judgment to his son who filed a new lawsuit against sellers to enforce the judgment.  Sellers unsuccessfully sought bankruptcy protection, and another judgment was entered against them two years later – ordering them to convey the home and to pay interest on the original judgment.  Sellers then unsuccessfully appealed the new judgment and the order granting interest.  Afterward, the parties returned to the trial court where son was awarded attorney fees based on the fee provision in the Purchase Agreement – $524,149.50 for fees incurred in non-bankruptcy proceedings, and $85,030.50 for fees incurred in sellers’ attempted bankruptcy.

            Sellers appealed in Ko v. Liang, Case No. B300550 (2d Dist., Div. 8 March 26, 2021) (unpublished) – raising two challenges to the fees awards.  First, sellers argued son was not entitled to fees because he had failed to mediate before filing the lawsuit.  Second, sellers claimed son had not met his burden of proof as to the amount of fees incurred in the bankruptcy proceedings.

            The 2/8 DCA affirmed.  The panel found the mediation requirement had been met because fees were awarded in the original judgment and sellers raised no issue regarding entitlement at that time.  As to the burden of proof regarding the reasonableness of fees incurred in the bankruptcy proceeding, the panel concluded that burden had shifted to sellers once the trial court had awarded the fees.  The trial court had continued the hearing on son’s request for fees to allow sellers to brief specific bases for reducing the fees, but they failed to do so, and sellers’ appellate briefing including asserted examples of inappropriate billing entries was “too little too late.”  Sellers failed to meet their burden of proof on appeal.  

Allocation, Employment, Reasonableness Of Fees: Employee’s Limited Success On Some Compensable Wage/Hour Claims Led To Affirmance Of $17,234 Fee Award

Employee Had Requested Fees Of $168,749.47 After Garnering Compensatory Award Of $6,958.36.

            This case is another example of how non-compensable claim allocation and limited success can lead to a substantial reduction of a fee request even where there is some fee entitlement basis.

            In Caballero v. Bill Muncey Industries, Inc., Case No. D076628 (4^th Dist., Div. 1 Mar. 17, 2021) (unpublished), an employee cook at Galley at the Marina restaurant sued an individual and company who he believed were employers under wage/hour laws (including meal and rest break statutes) as well as the Unfair Competition Law.  It looks like employee sued on behalf of a class, but certification was denied, and no recovery was had on the UCL claim.  Eventually, the individual was not found liable, but the company was found to have violated unpaid overtime and wage statement violations to the tune of $6,958.36.  Employee moved to recover $168,749.47 in fees (the full value of services—with some entitlement existing, but not for losing meal/rest break claims which are not compensable under wage/hour laws), but the lower court only awarded $17,234, apportioning out non-compensable fees on some claims and also reducing for employee’s limited success in the litigation overall.

            That determination was affirmed by the 4/1 DCA.  After all, employee only prevailed against one defendant and only prevailed on two minor wage/hour claims, with the records showing that an apportionment was possible but one which was eschewed by employee’s counsel wanting the whole thing (not a good strategy, based on many, many prior blog posts).  The problem for employee is that non-compensable claims which are apportionable and limited success are prime candidates for reduction of a large fee request where there are modest returns.  That was the “end result” conclusion by the trial court, with the Court of Appeal finding no abuse of discretion in what was decided in the superior court fee proceedings. 

Ethics, Interest, Reasonableness Of Fees, Retainer Agreements: Where Fee Agreement Is Compliant/Enforceable Under B&P § 6148, Unconscionability Factor Guides Contractual Fees Charged And Reasonableness Governs Atty. Performance Under Retainer Agreement

Attorney Obtained Substantial Pretrial Attachment, But He Did Not Obtain Substantial Interest On Delinquent Fees Because No Interest Provision Was Present In The Retainer Agreement.

            Pech v. Morgan, Case No. B300524 (2d Dist., Div. 3 Mar. 11, 2021) (published) is an instructive decision indicating how enforceable, compliant fee agreements are dealt with in pretrial attachment/merit situations and also providing some tips on some provisions to include in retainer agreements.

            This case involved an attorney suing clients for a pretty large attorney’s fees receivable where there was a retainer agreement compliant under B&P § 6148 (the provision which sets forth what needs to be contained in non-contingency retainer agreements) and work on the same basis for some other matters on the same terms.  The retainer agreement did contain a provision requesting the clients to object to any invoices, which clients did selectively to only four statements over a number of years.  The retainer agreement did not contain a provision indicating the attorney could charge interest. 

            The attorney sued based on the retainer agreement and an implied-in-fact agreement that further work was encompassed within the retainer terms (the latter theory permissible under section 6148(d)(2)).  Attorney sought a pretrial attachment against certain assets of clients, seeking $821,000 in fees and accrued interest in excess of $298,000.  Clients opposed on the basis that the fees being claimed were not reasonable under a lodestar analysis (despite the existence of a retainer contract with specified rates).  The trial judge, after rejecting the clients’ expert analysis on the reasonableness of the work effort, granted the delinquent fee request but did not award interest based on the lack of an interest provision in the retainer agreement.

            The 2/3 DCA affirmed.

            After observing there was an analytical gap on the measure of recovery for B&P noncompliant agreements (quantum meruit) versus enforceable fee agreements (one would presume contractual, but with no published decisions addressing), the Court of Appeal—giving deference to a 1993 advisory by the State Bar’s Committee on Mandatory Fee Arbitration—decided that enforceable, compliant fee agreements should be enforced by their terms, not quantum meruit, as long as the fees were not unconscionable under Rules of Professional Conduct Rule 1.5.  So, in essence, the contractual terms prevailed unless the fees were unconscionable, which was not the case.  This made sense because lodestar analysis is really aimed at what an opponent would pay to a prevailing party such that different reasonableness concerns enter into the picture.  With respect to the attorney’s performance under the retainer agreement, that was governed by a reasonableness standard—but nothing showed that the attorney did subpar work.  The pretrial attachment order was affirmed.

            But there are two additional takeaways from this opinion.  First, retainer agreements should contain a provision requesting the client to object to any invoices—this one here had no time limits and there were some objections which apparently were resolved, which aided the courts at both levels in determining that the attorney’s conduct was reasonable.  Second, if you want interest (and keep in mind attorney here “lost” about $300,000 in potential interest), make sure you have a retainer provision indicating interest will be charged (see State Bar’s Standing Comm. on Professional Responsibility and Conduct Formal Opn. No. 1980-53).