Opinion
E032485.
10-23-2003
Best, Best & Krieger and Douglas S. Phillips for Defendants and Appellants. Law Offices of David Spangenberg and David Spangenberg for Real Parties in Interest and Appellants. Toni Eggebraaten for Plaintiffs and Respondents.
Indian Springs Mobilehome Park Homeowners Association and residents of the Indian Springs Mobilehome Park (collectively, Tenants) sued Indian Springs, Ltd., Goldstein Properties, and Jim Goldstein (collectively, Indian Springs) and the City of Palm Desert (the City), seeking to invalidate a rent increase approved by the Citys mobilehome park rent review board. The trial court ruled the increase was invalid, and this court affirmed. Tenants then applied for, and were awarded, attorney fees against Indian Springs and the City.
Indian Springs and the City (collectively, appellants) now appeal from the order of the trial court granting attorney fees. We affirm the order.
I
FACTUAL AND PROCEDURAL BACKGROUND
The facts and trial court proceedings which led to the current appeal are set forth in this courts previous opinion in this matter. (Indian Springs Mobilehome Park Homeowners Association et al. v. City of Palm Desert et al. (Dec. 19, 2001) E029177 [nonpub. opn.].) The following recitation is taken in part from that opinion.
A. Original Proceeding
In 1986 the City enacted a mobilehome park rent review ordinance (the Ordinance) codified at Palm Desert Municipal Code Chapter 9.50. The Ordinance established a rent review board (the Board) and authorized the Board to grant or deny applications for rent increases. (§§ 9.50.040, 9.50.050, 9.50.070.) The Ordinance provided that rents could not be increased annually by more than three-quarters of the increase in the cost of living as indicated in the consumer price index (CPI), unless the landlord obtained from the Board a "hardship" increase. Hardship increases could be granted to cover, among other things, the costs of repair, maintenance, and capital improvements. (§ 9.50.050, subd. (E).)
Further section references are to the Ordinance unless otherwise stated.
On October 6, 1997, Indian Springs submitted an application for a hardship rent increase to the Board, seeking to recover money spent on capital improvements at the Indian Springs Mobile Home Park (the Park). Tenants opposed the application on the ground it did not comply with the Ordinance because it failed to set forth net operating income information. A hearing officer recommended the application be granted, but the Board denied it due to the lack of net operating income information. However, the Board also remanded the matter to the hearing officer to permit Indian Springs to amend the application to cure the deficiency if it wished to do so.
Instead of amending the application, Indian Springs on April 1, 1999, filed a complaint and a petition for a writ of administrative mandamus against the City and the Board. Indian Springs sought an injunction and a writ of administrative mandamus to set aside the Boards decision and to enforce the hearing officers recommendation that the application for a rent increase be granted.
Indian Springs and the City entered into a settlement of the litigation on October 26, 1999. Indian Springs agreed to dismiss its lawsuit. The City agreed to amend the Boards rent review guidelines to authorize a rent increase for the recovery of costs of capital improvements, without requiring net operating income information. The City also agreed to reconsider Indian Springss rent increase application under the amended guidelines. On November 19, 1999, the Board recommended, and the City adopted, the amendments to the guidelines as agreed. On May 17, 2000, the Board reconsidered the application under the amended guidelines. The Board voted to allow the rent increase under the new guidelines.
B. Current Proceeding
On September 5, 2000, Tenants filed a petition for a writ of administrative mandamus, seeking to vacate the Boards approval of the rent increase. On January 31, 2001, the trial court granted the petition and issued a writ commanding the City and the Board to vacate the Boards decision granting the increase. Indian Springs appealed to this court.
This court affirmed the granting of the petition. We held that Indian Springss rent increase application was so deficient as to be invalid from the beginning; the Board exceeded its jurisdiction in ordering a hearing on the application; once it had denied the application, the Board had no jurisdiction to reconsider that decision; and the Board lacked power to apply the amended guidelines to Indian Springss existing application.
After issuance of the remittitur from this court, Tenants moved for attorney fees under section 9.50.090 of the Ordinance and Code of Civil Procedure section 1021.5. The court granted the motion and awarded Tenants $21,757.50 against the City, the Board, and Indian Springs. Appellants filed the present appeal.
II
DISCUSSION
A. Standard of Review
On review of an award of attorney fees, the normal standard of review is abuse of discretion. However, de novo review is warranted where the determination of whether the criteria for attorney fees have been satisfied involves statutory construction and a question of law. (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.)
B. Whether Attorney Fees Were Authorized in This Case
The major point of contention on appeal is whether an award of attorney fees to Tenants was authorized by either section 9.50.090 or Code of Civil Procedure section 1021.5. Section 9.50.090 provides, in relevant part: "In the event of a violation by the management of a mobile home park of any maximum rents, an effective rent schedule, or a final decision and order of the rent review board, relief for such a violation shall be enforceable by the individual tenants of that park in a court of the appropriate jurisdiction . . . . In any such court proceeding, the prevailing party shall be awarded his reasonable attorneys fees . . . ."
Appellants assert that attorney fees are not available under section 9.50.090 in this case. They point out that section 9.50.060 provides that a park owner shall not increase rents beyond the authorized annual increase of three-quarters of the CPI increase, "unless and until the mobile home park owner obtains a hardship adjustment granted by the rent review board as provided herein." Here, appellants argue, Indian Springs did obtain an adjustment. Tenants did not obtain a stay of the adjustment while they litigated its validity, and Indian Springs stopped collecting the adjustment as soon as the court declared it invalid. Therefore, Indian Springs committed no "violation . . . of any maximum rents, an effective rent schedule, or a final decision and order of the rent review board," and section 9.50.090 did not authorize attorney fees.
Interestingly, Indian Springs sought attorney fees in its answer to Tenants administrative mandamus petition. Indian Springs has not explained how, if there was no authority for an award of fees to Tenants, there was such authority for an award of fees to Indian Springs.
We are not persuaded by appellants argument. We have not found any authority directly addressing whether an attorney fees provision predicated on a statutory violation can support a fee award where the conduct ultimately found to be violative was approved by a government agency before the losing party engaged in it. As a general matter, however, it is held that the good faith of the losing party in engaging in the conduct that leads to the fee award is not a defense to the award. This is held to be the case even where the losing partys conduct is sanctioned by law.
In Schmid v. Lovette (1984) 154 Cal.App.3d 466 (Schmid ), the plaintiff successfully challenged the constitutionality of former Education Code sections requiring that school employees sign an oath stating they were not knowing members of the Communist Party. The plaintiff obtained an award of attorney fees against the school district that had required her to sign the oath, pursuant to Code of Civil Procedure section 1021.5 and 42 United States Code section 1988. The district argued it should not be held liable for fees, because it was obliged to follow the Education Code sections requiring the oath until the court declared them unconstitutional.
The Schmid court noted that "non-Communist loyalty oaths were patently unconstitutional following decisions rendered long ago by both state and federal authorities. [Citations.]" (Schmid , supra, 154 Cal.App.3d at p. 474.) However, it also stated, "[E]ven if we assume appellants genuinely believed the loyalty oath statutes had not effectively been determined to be unconstitutional by the appellate courts and that as a result appellants were precluded by [Cal. Const.,] article III, section 3.5, from refusing to enforce them, they still would not be insulated against an award of attorneys fees." (Ibid .) The court observed that under both Code of Civil Procedure section 1021.5 and 42 United States Code section 1988, the fact the defendant followed the existing law in engaging in the conduct leading to the fee award did not preclude an award: "Thus, there is no `good faith exception to either the state attorneys fees statute or its federal counterpart." (Schmid at p. 475; accord, Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 231; EWAP, Inc. v. City of Ontario (1986) 177 Cal.App.3d 1108, 1118; Thirteen Committee v. Weinreb (1985) 168 Cal.App.3d 528, 537; but see Kreutzer v. County of San Diego (1984) 153 Cal.App.3d 62, 76-77 [defendants good faith, among other factors, justified denial of fees under 42 U.S.C. § 1988].)
The statutes involved in Schmid contained discretionary attorney fees provisions, stating that a court "may" award fees to a prevailing party. (Code Civ. Proc., § 1021.5; 42 U.S.C. § 1988.) The case for fees is even stronger here, as section 9.50.090 provides that a prevailing party "shall" be awarded fees. An enactment providing that a party "shall" recover attorney fees creates a mandatory right to fees. (Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 813.) If the losing partys good faith does not preclude fees even where the right to fees is discretionary, a fortiori it should not do so where the right is mandatory.
In addition, interpreting section 9.50.090 so as not to allow fees any time a rent increase is approved by the Board, even where the increase is later found to be invalid by a court, would lead to an untenable situation. A corrupt or incompetent board could grant a patently unjustified rent increase. Tenants affected by the increase would have to sue to invalidate it at their own expense, with no hope of recouping their expenses even if their objections to the increase were completely vindicated.
Of course, there has been no suggestion in this case that the Board was either corrupt or incompetent. We merely held in our previous opinion that it acted without jurisdiction. Our point here is that if the Ordinance were interpreted as appellants advocate, Tenants would be left without an effective remedy for even a clearly improper increase.
It is doubtful the City intended to place tenants in that position when it enacted section 9.50.090. It has been recognized that mobilehome owners are deserving of unique protection under state law and that many owners "have a limited or fixed income and cannot afford protracted litigation." (De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890, 910; accord, Greening v. Johnson (1997) 53 Cal.App.4th 1223, 1226.) It is also well established that remedial legislation, such as a rent control ordinance, "must be liberally construed to effect its purposes. [Citation.]" (Parkmerced Co. v. San Francisco Rent Stabilization & Arbitration Bd. (1989) 215 Cal.App.3d 490, 495; accord, Aguirre v. Lee (1993) 20 Cal.App.4th 1646, 1653.)
Obliging tenants to pay their own expenses incurred in invalidating an illegal rent increase, merely because the landlord persuaded an administrative body to approve the increase, is inconsistent with the remedial purpose of rent control provisions. The landlords obtaining of official approval before implementing an increase may be relevant to whether the court should impose a remedy above and beyond invalidating the increase, such as the treble damage award authorized by section 9.50.090. Official approval should not, however, effectively undermine tenants ability to seek relief from an illegal increase, by requiring them to fund the litigation themselves even if they prevail.
Section 9.50.090 provides in part that a court "shall be empowered to order treble damages" for charging rents in excess of the maximum. Treble damages, unlike attorney fees, do not appear to be mandatory under section 9.50.090. Presumably, then, the owners good faith in seeking prior approval of an increase could militate against a treble damage award. There is no indication Tenants sought or obtained treble damages in this case.
For these reasons, we conclude the court was authorized to award fees to Tenants under section 9.50.090. We therefore do not address whether it was authorized to award fees under Code of Civil Procedure section 1021.5.
C. Attorney Fees Against the City
The City contends that even if section 9.50.090 authorized an award of fees against Indian Springs, it did not authorize an award against the City. The City points out that section 9.50.090 by its terms authorizes fees in a proceeding "by the individual tenants" of a mobilehome park to obtain relief for "a violation by the management" of the park. Therefore, the City asserts, section 9.50.090 contemplates an award against the tenants or the management, depending on who prevails, but not against the City.
Nothing in section 9.50.090 limits its application to awards against tenants or park management. In fact, the section says nothing about which parties may be held liable for attorney fees. It states only that the prevailing party shall be awarded fees.
Where a statute provides for an award of fees to a successful party, without specifying which party or parties are to pay the fees, it is generally held that all opposing parties are liable. Code of Civil Procedure section 1021.5, for example, provides that "a court may award attorneys fees to a successful party against one or more opposing parties" without specifying the classes of parties who may be held liable. Nevertheless, "section 1021.5 is applied generally to all government and nongovernment persons and entities in California . . . ." (Planned Parenthood v. Aakhus (1993) 14 Cal.App.4th 162, 175.) " . . . Code of Civil Procedure section 1021.5 was intended to be used as a tool against any individual or entity, public or private." (County of Fresno v. Lehman (1991) 229 Cal.App.3d 340, 349.)
There can be no question that the City was a proper party to Tenants administrative mandamus proceeding. Code of Civil Procedure section 1094.5, under which the proceeding was brought, requires the court to "enter judgment either commanding respondent to set aside the order or decision, or denying the writ." (Code Civ. Proc., § 1094.5, subd. (f).) Here, the entity that made the decision Tenants sought to have the court set aside was the Board, an agency of the City. A proceeding naming only Indian Springs as a defendant would have been ineffectual.
The Ordinance, in fact, plainly contemplates that the City may be a party to an enforcement action. Section 9.50.140 provides that in any action to enforce or interpret any provision of the Ordinance, the city attorney may defend in the name of the City, and that if the City recovers it shall be entitled to attorney fees in defending.
The City argues that if section 9.50.090 is interpreted to allow an award of attorney fees against it, then no matter how it rules on a rent control case, it will be subject to an award of attorney fees in favor of either the tenants or the management. The answer, of course, is that the City will only be subject to fees if it rules improperly, because section 9.50.090 only permits a fee award in favor of a party who prevails in an enforcement action. If the Board had ruled properly in this case, i.e., if it had denied the rent increase, Tenants would not have had to sue, and even if Indian Springs had sued to challenge the denial, it would not have prevailed. The City would not have been liable for fees to either Tenants or Indian Springs.
Obviously, the City could not know in advance which way the court ultimately would rule. But that is the same dilemma faced by any party who takes a position in a matter subject to an attorney fee statute. It is not unfair to require a party who takes a position that is ultimately found to be improper to pay the attorney fees it has caused the prevailing party to incur, simply because the outcome was not known in advance.
Here, the Board, an agency of the City, was determined to have acted improperly in several respects: first, by ordering a hearing on the rent increase application; again, by reconsidering the application after it had been denied; and again, by applying the new guidelines retroactively to grant the application. This improper conduct required Tenants to seek relief in court to vacate the increase. The Board, the entity that had made the decision to approve the increase, was a necessary party to the proceeding. It was appropriate for the court to award fees against the City.
D. Computation of Fees
In support of their motion for attorney fees, Tenants submitted billing statements of their former counsel, Mr. Prawdzik, who had died by the time the motion was filed. Tenants new counsel declared that the statements appeared to correspond to the work done in the case, based on her review of the documents filed with the court.
In their written opposition to the motion, appellants objected to Mr. Prawdziks billing statements on the grounds they were hearsay and that successor counsel was not competent to testify to their authenticity or accuracy. Indian Springs also objected that the statements included charges for time spent by Mr. Prawdzik in attending board and city council hearings regarding the amendment of the rent review guidelines, which did not relate to the litigation itself.
In response, Tenants submitted a declaration of the president of the Indian Springs Mobilehome Park Homeowners Association. The declaration stated that the fee statements submitted in support of the motion were true and correct copies of the statements received and paid by the Association.
Appellants now reassert their objections to the billing statements. Tenants contend the objections were waived because appellants did not renew them, or request a ruling on them, at the hearing on the attorney fees motion. Tenants cite Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, in which the Supreme Court held that objections to evidence submitted in opposition to a summary judgment motion were waived because counsel failed to obtain rulings on them. (Id. at p. 670, fn. 1.)
Although no appellant responds to Tenants waiver argument, it is not persuasive. Ann M. v. Pacific Plaza Shopping Center based its finding of waiver on the specific terms of Code of Civil Procedure section 437c, which provides that "[e]videntiary objections not made at the [summary judgment] hearing shall be deemed waived." (Code Civ. Proc., § 437c, subd. (b).) We are not aware of any authority outside the summary judgment context requiring that objections once made in writing must be reasserted orally in order to be preserved.
However, we conclude the court was justified in awarding the amount set forth in the fee statements notwithstanding appellants objections. There could be no question that Tenants incurred some fees in bringing the mandamus proceeding. Thus, the question was whether the amount set forth in the fee statements, and paid by Tenants, was reasonable.
Although the legal basis for an attorney fee award is a question of law to be reviewed de novo, the amount awarded is within the discretion of the trial court. (Carver v. Chevron U.S.A., Inc., supra, 97 Cal.App.4th 132, 142.) Our review of the amount awarded "must be highly deferential to the views of the trial court," and the courts determination of reasonable attorney fees will be disturbed only if there has been a manifest abuse of discretion. (Childrens Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 777.)
The trial court had heard the mandamus proceeding for which the fees were claimed and was in a proper position to assess the amount of work Tenants former counsel had devoted to the proceeding, based on his written submissions and court appearances. The fact counsel was not available to confirm the authenticity of the billing statements did not preclude the court from determining that the amount set forth was reasonable in view of the work performed. "California case law permits fee awards in the absence of detailed time sheets. [Citations.] An experienced trial judge is in a position to assess the value of the professional services rendered in his or her court. [Citation.]" (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255.)
Appellants objection that former counsel for Tenants charged for time spent attending board and city council hearings concerning the new rent increase guidelines also is not persuasive. Fees incurred in connection with administrative proceedings may be recoverable in a court action if the administrative activities were useful and necessary and directly contributed to the resolution of the action. (National Parks & Conservation Assn. v. County of Riverside (2000) 81 Cal.App.4th 234, 242.) Tenants administrative mandamus petition was based, in part, on their contention that the new guidelines could not properly be applied to Indian Springss rent increase application. To make that argument, former counsel for Tenants addressed in the petition the substance of the amended guidelines and the timing of their adoption. The court reasonably could conclude counsels attendance at the administrative hearings assisted him in becoming familiar with the new guidelines and thereby contributed to the successful resolution of the mandamus proceeding by enabling him to argue persuasively that they should not apply.
III
DISPOSITION
The order appealed from is affirmed. Respondents shall recover costs on appeal.
We concur: RAMIREZ, P.J., and HOLLENHORST, J.