Kimberly Kralowec at The Appellate Practitioner points out a case from earlier this month, Roybal v. Governing Board of the Salinas City Elementary School District, case no. H030596 (Jan. 11, 2008, ordered published Feb. 6, 2008), in which the Court of Appeal neatly summarizes the proper standards of review to apply when reviewing attorney fee awards made pursuant to California’s “private attorney general” statute, Code of Civil Procedure section 1021.5. The case recognizes the Supreme Court’s 2006 departure from the one-size-fits-all “abuse of discretion” standard in recognition that some awards may be due more deferential review in light of their fact-intensive nature, while those revolving around legal issues like statutory interpretation should be closely scrutinized. See her post for the money quote from the case.
Appellate Attorney Greg May on Practice and Developments in the Appellate Courts of California
Tag Archive: Attorney Fees
Post-Arbitration Petition Attorney Fee Order is Appealable
In Otay River Constructors v. San Diego Expressway, case no. D049612 (4th Dist. Jan. 7, 2008), the Court of Appeal holds that an order denying an award of contractual attorney fees to a party who succeeded in defeating a petition for arbitration in an action brought solely for that purpose is appealable.
The court reasoned that where an action is brought solely to enforce a contractual arbitration provision, then a defendant’s defeat of that petition is effectively a final judgment because it disposes of the only issue before the court, even if further litigation is contemplated.
Thus, an order denying an award of attorney fees to the party who successfully opposed the petition for arbitration is appealable as a “special order after final judgment” under Code of Civil Procedure section 1294, subdivision (e). Section 1294 controls, rather than Code of Civil Procedure section 904.1, subdivision (a)(2), which makes appealable an order made after a final judgment, because the former is part of legislatively created “comprehensive procedural scheme to govern arbitration proceedings.”
On the merits, the court of appeal reverses the order denying fees. Since the order denying the petition to compel arbitration disposed of the only issue before the court, the defendant was the “prevailing party” for purposes of Civil Code section 1717, notwithstanding that the parties may later litigate the substance of their dispute in a later action.
“Big Law” Comes to a Small Town
Last week’s attorney fee case of Nichols v. City of Taft, case no. F051147 (5th Dist. Oct. 2, 2007), has been written about by several blogs — Legal Pad, The Opening Brief, and California Appellate Report among them — so I’ll summarize it very briefly before giving my take.
The plaintiff had hired some “big gun” attorneys from the big city to litigate her employment case in a small town. The case was settled, and the settlement provided for attorney fees to be fixed by the court. The essential holdings are that (1) before seeking statutory attorney fees in excess of fees that would be charged in the local community, a party must demonstrate that it sought local representation before being forced to use outside counsel; (2) whether the fees should be adjusted upward from what would be reasonable in the small town location is within the discretion of the court. In the end, the big guns may have to be satisfied with the small town fees.
I got to wondering if courts will allow an attorney from outside the local area to seek rates reasonable for that area if they are higher than the rates that attorney charges in his hometown. In my town of Ventura, for example, hourly rates tend to be significantly lower than they are for attorneys of similar experience in Los Angeles, which is barely an hour’s drive away (an hour away in time, but a world away in lifestyle). If I prevail in a case in a Los Angeles court and seek fees under a fee-shifting statute, am I entitled to recover at a higher hourly rate — the one I would charge if I were an L. A.-based attorney?
In my exchange with Tom Caso at The Opening Brief in the comments to his post covering the case, he seems to think that I could. I agree with him that the reasoning in Nichols leads to that result. Better than that, Tom has some real world experience with the question.
UPDATE (10/9/07): Cal Biz Lit has a very detailed, and highly recommended, post on this topic generally, including comments on Nichols. Here’s a line from it that will make litigants cringe: “And, on top of everything else, the plaintiff attorneys are likely entitled to their fees incurred in obtaining fees.”
The Pro Bono Road to Riches!
Don’t be shy about asking for attorneys fees. Don’t be shy to ask for more than 100 times the suggested schedule in the local rules. Don’t be shy to ask for an amount that far exceeds the amount of damages awarded to your client. Don’t be shy about anything, including the fact that you’re asking for several hundred thousand dollars in fees for a case you took on pro bono.
Had O’Melveny and Myers been more forward, they might have received more than the roughly $124,000 in fees approved by the trial court and affirmed by the Court of Appeal in Cruz v. Ayromloo, case no. B190959 (2d Dist. Oct. 3, 2007).
The Case
The landlord in Cruz was sued by more than 30 tenants on several causes of action arising from landlord’s refusal to let the tenants return to their units after they were evacuated by the city because the building was unsafe. The trial court awarded a per-rental-unit measure of damages, plus damages individual to each tenant, such as the return of security deposits, loss of personal property, and emotional distress.
Four of the tenants — apparently the only ones with written lease agreements that included an attorney fee provision — moved for attorney fees of more than $400,000. They insisted this figure excluded fees unique to the remaining plaintiffs (such as for discovery relating only to other plaintiffs or for trial time related to issues exclusive to the other plaintiffs).
The trial court significantly trimmed the amount but awarded nearly $124,000 in fees. The Court of Appeal affirms in full.
The Rejected Challenges to the Attorney Fee Award
First, the fact that the award exceeds the amount set forth in the schedule of suggested fees in the local rules (specifically, Los Angeles Superior Court Local Rule 3.2) — indeed, the landlord contends the amount of fees awarded is 39 times the guideline in the schedule (and the fees awarded were less than a third of what was requested!) — doesn’t mean the court abused its discretion. The rule itself allows the court to depart from the guidelines and Civil Code section 1717 says fees shall be “fixed by the court.” It was reasonable for the court to use a “lodestar” method of calculation: hours times hourly rates.
Second, the court did not abuse its discretion in awarding fees in an amount greater than the damages awarded. “It is not uncommon to award attorneys’ fees in an amount higher than the total damages awarded to a plaintiff or plaintiffs in a particular case.”
Third, the court did not err by awarding fees for the non-contract claims as well as the contract claim. The fee provision in this case applied to any action “in connection with” the lease. Since all the claims and damages, including those in tort, arose from the breach of the lease, there was no need to apportion fees between contract and tort causes of action.
Fourth, the decision confirms that fees for work done regarding issues of fact or law common to all the plaintiffs do not have to be reduced to the requesting plaintiffs’ pro rata share:
In any event, respondents sought fees for legal work performed solely on their behalf and the fees were awarded only to them and not to the other tenants. Respondents and the other tenants all lived in the same building, were evacuated from the building, and were not allowed to return to the building by appellant. All tenants asserted the same causes of action. The attorneys conducted legal research pertaining to the overarching legal issues common to all tenants, including the Los Angeles Rent Stabilization Ordinance and the claims for forcible detainer, wrongful eviction, and negligent infliction of emotional distress. The attorneys had to do the same legal research and analysis in preparing their case on behalf of respondents, irrespective of the number of potential tenants benefiting from the legal work performed.
***
[T]he fact other tenants incidentally benefited from the legal work performed on behalf of respondents does not diminish respondents’ contractual right to recover attorneys’ fees litigating issues common to all.
(Footnotes omitted.)
The Pro Bono Angle
Finally, it’s very interesting that the trial court trimmed the $413,000 request by half right off the top because “counsel knew this was a mildly pro bono type of work.” Mildly pro bono?
Plaintiffs did not cross-appeal to contest the amount of the award. I’m sure O’Melveny now wishes they did:
Finally, we find it important to emphasize something we are not deciding in this case. Respondents elected not to appeal the trial court’s ruling the fee award should be reduced in part because respondents’ counsel had agreed to provide representation on a “pro bono” basis. This court’s affirmance of the judgment should not be construed as signifying our approval of this particular element of that judgment. We do not find it self-evident a law firm’s commendable willingness to provide its services on a pro bono basis to low income clients should necessarily justify a diminishment in the fee award when that pro bono representation proves successful. Because respondents did not directly challenge the court’s decision to reduce the fee award based on the pro bono nature of the litigation, we had no reason to invite the parties to brief the issue. Our research indicates courts reduce a fee award to adjust, for example, for duplicative work, for lack of success on certain issues, or the like. However, our research uncovered no case in which a trial court reduced a fee award simply because of the “pro bono type of work” involved. Moreover, in the analogous situation of contingent fee and legal aid lawyers—where again the clients are not responsible for paying legal fees out of their own pockets—the majority of courts have approved awards at a full level of “reasonable” fees.
(Footnotes omitted.)
This is very interesting in light of the fact that the attorneys who represented the plaintiffs “pro bono” in the recent U.S. Supreme Court case against Seattle Public Schools have generated some controversy for seeking $1.8 million in statutory fees.
Admittedly, the cases do implicate somewhat different concerns. In Cruz, no one is going to complain much about sticking it to a landlord who is seen as stealing his tenants’ homes out from under them. In the Seattle Schools case, however, much of the controversy centers around the fact that the attorneys are seeking fees from a public entity, and specifically from a school district. The argument against recovery is that if pro bono representation is indeed for the public good, then the attorneys should not take funds from education.
Might the Cruz court have felt differently in the case of a public sector defendant?
For more on the Seattle schools case
From the Seattle Times: If attorneys get paid for pro bono work, is it still pro bono?
From the Seattle Post-Intelligencer: “. . . a little contrary to the idea that pro bono is for the public good” and some letters to the editor that include several on the side of the attorneys.
And here’s some coverage by the ABA, the Sound Politics blog, and Overlawyered.
UPDATE (10/9/07): I did not make this point as clearly as I should have – the court’s discussion on recovering fees in pro bono cases is dictum, as is made plain by the court’s opening words: “Finally, we find it important to emphasize something we are not deciding in this case.” (Emphasis added.) This is all interesting discussion, but not something that can result in Supreme Court review of the issue.
One other item to note in the decision is that the trial court’s award of fees was pursuant to a contractual provision rather than a fee-shifting statute. The California cases cited in the court’s dictum in support of the proposition that fees should be recoverable in pro bono cases were all concerned with fee-shifting statutes. One wonders whether a party who agrees to a contractual fee provision contemplates paying out fees where none actually accrue.
UPDATE # 2 (10/10/07): I am writing an article on this case, and so looked at it yet again. Relevant to my contract provision/fee statute dichotomy, the fee provision in this case entitled a party to recover “any reasonable attorney’s fees,” much like many fee statutes do. It did not explicitly require fees to be “incurred” to be recoverable. The existence of “incurred” as a modifier of “fees” in a fee-shifting statute, however, has seldom, if ever, been an obstacle to recovery in a California pro bono case. I’ll elaborate in the article.