Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. YC049375, Ramona G. See, Judge.
Raiskin & Revitz and Steven J. Revitz for Defendants and Appellants.
Ayscough & Marar and Sidney Lanier for Plaintiff and Respondent.
EPSTEIN, P. J.
This is an appeal from a fee award in an interpleader action. Appellants Timothy M. Morrison and T.M. Morrison and Associates, Inc. (TMMA) argue that the award was excessive because it included compensation for activities beyond litigation of the interpleader action. They also contend there is no support for certain hours. Appellants have not demonstrated an abuse of discretion or other error by the trial court. We affirm the award. We also deny a motion for sanctions on appeal brought by respondent Ayscough & Marar.
FACTUAL AND PROCEDURAL SUMMARY
This is the second time this interpleader action has come before us. Since the present appeal is limited to the issue of fees, we provide only a brief factual summary, taken in large part from our first nonpublished opinion (Ayscough & Marar v. Morrison (Aug. 08, 2006, B183065) (Morrison I)).
Morrison delivered two Japanese screens to Yasumi’s Fine Arts Services (Yasumi’s) for an estimate of the cost of repair. Yasumi’s determined that the screen depicting a warrior was a reproduction, not an original, and had little value. The other screen, depicting fans, was authentic. Yasumi’s quoted a price for the restoration of the screens, which were in poor condition. The reproduction warrior screen was picked up by a person who said he was a representative of Morrison. Morrison denied that it had an employee pick up the screen, and sued for conversion.
The conversion suit, against “John Casner dba Yasumi’s Fine Arts Services” resulted in a default judgment. Yasumi’s claimed there was no such person as “John Casner.”
Yasumi’s moved out of California and left the fan screen with its lawyers, Ayscough & Marar, for delivery to the rightful owner. Faced with threats by Morrison that it would sue if the fan screen was not returned, and understandably reluctant to turn the screen over to a messenger in light of the dispute over the warrior screen, Ayscough & Marar asked Timothy Morrison to swear by declaration that he owned the screen and would pick it up in person. Morrison refused, and eventually presented a document purporting to be an assignment of the screen from Mauro Santoyo Gomez to Morrison.
Morrison and Gomez were partners in a real estate investment company. Gomez is not a party to this appeal.
In August 2004, Ayscough & Marar filed a complaint in interpleader naming Morrison, TMMA, and Santoyo Gomez, requesting a judicial determination of ownership of the screen, and attorney fees. The defendants filed a cross-complaint for conversion, and successfully moved for summary judgment.
Ayscough & Marar obtained an order discharging it from liability. Pursuant to the trial court’s order, it returned the screen to Morrison at the Torrance Police Department. Ayscough & Marar then moved for attorney fees of $41,082.30 pursuant to Code of Civil Procedure section 386.6. The trial court awarded $12,630 in fees against Morrison and TMMA.
Morrison appealed individually from the order discharging Ayscough & Marar from liability, and Morrison and TMMA collectively appealed the fee award. We affirmed the discharge order, but remanded the matter for redetermination of the fee award. We concluded that Ayscough & Marar’s work went beyond the duties and compensable conduct of an interpleading party. Fees incurred in conducting discovery to determine ownership of the screen were not allowed because that inquiry rests solely with the trial court.
On remand, the trial court denied further briefing and awarded $10,170 in fees, representing 33.9 hours at $300 per hour. The court itemized the award as follows: “(1) 4.6 hours to prepare the interpleader complaint; (2) 4.5 hours in preparing, drafting and attending hearing on defendant’s motion to strike portions of the interpleader complaint; (3) 21 hours in preparing the motion to discharge, reviewing the opposition to the motion to discharge and attending the hearing on plaintiff’s motion to discharge; (4) 1.4 hours to deliver the screen to the Torrance Police Department and to prepare the proposed judgment; and (5) 2.4 hours to prepare the motion for attorney’s fees.” Morrison and TMMA appealed from this order.
DISCUSSION
I
Code of Civil Procedure section 386.6, subdivision (a) is the governing statute. It provides: “A party to an action who follows the procedure set forth in Section 386 . . . may insert in his motion, petition, complaint, or cross complaint [sic] a request for allowance of his costs and reasonable attorney fees incurred in such action. In ordering the discharge of such party, the court may, in its discretion, award such party his costs and reasonable attorney fees from the amount in dispute which has been deposited with the court. At the time of final judgment in the action the court may make such further provision for assumption of such costs and attorney fees by one or more of the adverse claimants as may appear proper.” In accordance with the statutory scheme, we review the award for abuse of discretion. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 886.)
Our opinion in Morrison I is law of the case. “Where an appellate court states in its opinion a principle or rule of law necessary to its decision, that principle or rule becomes the law of the case. (Clemente v. State of California (1985) 40 Cal.3d 202, 211.) The law of the case must be adhered to both in the lower court and upon subsequent appeal. (Ibid.)” (Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2007) 157 Cal.App.4th 149, 156.)
In Morrison I we examined the activities which are compensable under section 386.6: “An interpleading party is not responsible for determining the proper ownership of the interpleaded property. That is the responsibility of the trial court. Attorney fees must be limited to those incurred in pursuit of the stakeholder’s remedy. ‘Fees incurred for such activities as negotiations, investigation, dispute over validity of claims (or their amount), cross-complaints for affirmative relief, and the like, are not properly allowable under . . . section 386.6.’ (Sweeney v. McClaran [(1976)]58 Cal.App.3d [824,] 830.)” (Morrison I, supra, B183065.) We held that Ayscough & Marar is not entitled to expenses incurred in investigating ownership of the screen. We directed the trial court on remand “to determine the amount of fees attributable to compensable conduct by an interpleading party, and limit its award to that amount.” (Morrison I, supra, B183065) With these principles in mind, we examine the particular items challenged on appeal.
A. Preparation of Interpleader Complaint
The trial court awarded 4.6 hours for preparation of the interpleader complaint. Appellants argue this amount is excessive because the complaint was replete with irrelevant matter which they detail in their opening brief. The challenged portions of the complaint set out the factual background leading to the necessity for the interpleader action. The trial court did not abuse its discretion in its award for preparation of the complaint.
B. Opposition to Motion to Strike Interpleader Complaint
Ayscough & Marar were awarded 4.5 hours for opposing appellant’s motion to strike the interpleader complaint. Appellants challenge this item on the same grounds raised as to the complaint itself, that the allegations which were the subject of the motion to strike were irrelevant. In addition, they contend that while a plaintiff in interpleader may be awarded fees for preparation of the complaint, fees should not be allowed for responding to a motion to strike. We find no merit in these arguments. The allegations challenged in the motion to strike were not irrelevant, and were appropriate to the complaint. In Morrison I, we expressly approved fees incurred in “defending the status of the moving party as an interpleader if such standing is challenged, . . .” (Morrison I, supra, B183065)
C. Motion for Discharge
Appellants challenge the award of 21 hours in connection with the motion for discharge on the ground that the motion and exhibits contained matters “irrelevant and inappropriate to an interpleader action,” largely because exhibits relating to discovery and the conversion action brought by Morrison are irrelevant. They contend that only one hour was required for preparation of the motion, and argue that only one of the two attorneys appearing for Ayscough & Marar was necessary. We note that appellants filed an opposition to the motion to discharge with supporting declarations exceeding 35 pages in length, necessitating preparation of a reply.
In addition, appellants claim that there is no support in the billing records submitted by Ayscough & Marar for five hours claimed for the preparation of the motion for discharge. We disagree. Appellants failed to take into account each entry relating to discharge. On this record, we find no abuse of discretion in the award of 21 hours.
D. Delivery of Screen/Preparation of Judgment
The trial court awarded 1.4 hours to Ayscough & Marar “to deliver the screen to the Torrance Police Department and to prepare the proposed judgment.” In their opening brief, appellants characterize this item as pertaining to delivery only, and characterize the award as excessive in light of their unsuccessful offers to exchange the screen at the courthouse. We find no abuse of discretion in the award of a mere 1.4 hours to accomplish both the delivery and preparation of the judgment.
E. Fee Motion
Finally, appellants argue that time spent on preparation of the fee motion should not be compensated, and that the trial court’s award of 2.4 hours for that task was an abuse of discretion. Implicit in Code of Civil Procedure section 386.6’s allowance of fees in an interpleader action is recognition that a fee motion will be necessary and should be compensated. We find no abuse of the trial court’s discretion in this award.
II
Ayscough & Marar moved for $18,360 in sanctions on appeal. It cites Code of Civil Procedure section 907, which allows us to award sanctions when an appeal is frivolous or taken solely for delay. “Past cases applying section 907 have recognized that the assessment of damages in this context is a particularly delicate task because of the potential danger of improperly ‘chilling’ valid appeals (In re Marriage of Flaherty (1982) 31 Cal.3d 637), and section 907 leaves the determination of this matter to a reviewing court which is generally in the best position both to evaluate the frivolousness of the appeal and to gauge damages so as to avoid the deterrence of legitimate appeals.” (Coleman v. Gulf Ins. Group (1986) 41 Cal.3d 782, 788.)
Ayscough & Marar argues that the appeal was undertaken for the improper purpose of delay, citing correspondence from counsel for appellants attached to the sanctions motion. The cited correspondence offers to pay an amount in advance of resolution of this appeal to facilitate withdrawal of a lien based on the abstract of judgment which was interfering with Morrison’s refinancing of another project. Ayscough & Marar has failed to demonstrate an improper purpose for the appeal.
Alternatively, Ayscough & Marar argues that the appeal was taken for the improper purpose of forum shopping. It cites a letter from counsel for appellants noting that we expressed concern at the oral argument on Morrison I that the original fee award was excessive. Ayscough & Marar argues: “Appellants, noting that the [C]ourt of [A]ppeal in the first appeal agreed with their position that the fees awarded might be excessive, filed the subject appeal hoping the appellate court would give them a better deal than the trial court which had found they had acted in bad faith. Appeals are not to be taken because a party or counsel merely disagrees or is disappointed with the trial court’s ruling.” We find no basis for the award of sanctions in this argument. Taking an appeal from an appealable order cannot be considered forum shopping on this record.
Ayscough & Marar also argues the appeal is sanctionable as completely frivolous, based on appellants’ analysis of the number of hours that would have been appropriate for the various tasks connected with the interpleader action. That exercise was not relevant to review of the trial court’s ruling according to Ayscough & Marar.
While we find no basis for reversal in the arguments made by appellants, we cannot conclude that the appeal was frivolous. The motion for sanctions is denied.
DISPOSITION
The fee order is affirmed. The motion for sanctions on appeal brought by Ayscough & Marar is denied.
We concur: WILLHITE, J. SUZUKAWA, J.