Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County, Yuri Hofmann, Judge. Super. Ct. No. GIC849802
McCONNELL, P. J.
Plaintiffs, Poway Royal Mobile Homeowners Association and 273 of its members (collectively the Owners Association), appeal a postjudgment order awarding the defendants, the City of Poway, the City Council of the City of Poway, the City Manager James Bowersox, and the Redevelopment Agency (collectively the City), attorney fees for prevailing on the second amended complaint's claim arising under California's Mobilehome Residency Law (Civ. Code, § 798 et seq.). The Owners Association contends the award is excessive because it includes fees incurred (1) in defending against the first amended complaint, which ostensibly did not include any claim based on the Mobilehome Residency Law, and (2) in bringing an unnecessary motion to consolidate. We agree with the latter point, and reverse the order insofar as it concerns the amount of the award and direct the court to recalculate it. In all other respects, we affirm the order.
FACTUAL AND PROCEDURAL BACKGROUND
The Owners Association filed a first amended complaint against the City for promissory estoppel and declaratory relief, alleging the City reneged on an agreement to give tenants of the Poway Royal Mobilehome Park (the Park) the opportunity to purchase the Park at fair market value. Instead, the City adopted resolutions to allow it to ultimately sell the Park to a nonprofit housing corporation using tax exempt bond financing, which excluded the Owners Association and residents of the Park since they cannot qualify as a nonprofit entity.
The City successfully demurred, and the Owners Association filed a second amended complaint that added a cause of action for breach of the implied covenant of good faith and fair dealing based on leases between the City and Park tenants. The complaint alleged the leases incorporated by reference the Mobilehome Residency Law, which requires an owner to notify tenants of the intent to sell a mobilehome park (Civ. Code § 798.80), and the notice the City gave the tenants here was a "sham" because it was not "notice of an intent to sell the park on true, real and non-illusory terms."
The City again demurred and the court sustained the demurrer without leave to amend. The court determined the second amended complaint did not allege unusual circumstances to justify a claim for promissory estoppel against a public agency, and estoppel would thwart the protection of the statute of frauds and statutory procedures for public contracts. The court also found the complaint failed to state a cause of action for breach of the implied covenant as such a cause of action may not extend beyond the terms of the contract in force between the parties, and in any event, the City complied with the notice requirement. The Owners Association appealed the judgment of dismissal to this court and we affirmed it. (Poway Royal Mobilehome Owners Association v. City of Poway (2007) 149 Cal.App.4th 1460.)
In this opinion, we also reversed a judgment for the City on its action to validate actions taken to divest itself of ownership of the Park and associated bond financing.
The City moved for $51,575.88 in attorney fees incurred in defending against a claim in the Owners Association's first amended complaint under Civil Code section 798.85, a provision of the Mobilehome Residency Law. The court rejected the Owners Association's argument the first amended complaint did not contain a claim under the Mobilehome Residency Law. The court did deduct 20 hours from the claim for a motion to consolidate the Owners Association's action with the City's related validation action, as the Owners Association had stipulated to consolidation. The court awarded the City $47,666.48 in fees.
DISCUSSION
I
Mobilehome Residency Law
Under Civil Code section 798.85, the prevailing party in any action "arising out of" the Mobilehome Residency Law shall be entitled to reasonable attorney fees and costs. The Owners Association concedes the City is entitled to fees related to the second amended complaint. It contends, however, that the court should not have awarded the City attorney fees for defending against the first amended complaint because it did not arise out of the Mobilehome Residency Law.
" 'An order granting or denying an award of attorney fees is generally reviewed under an abuse of discretion standard of review; however, the "determination of whether the criteria for an award of attorney fees and costs have been met is a question of law." [Citations.]' " (MHC Financing Ltd. Partnership Two v. City of Santee (2005) 115 Cal.App.4th 1372, 1397.) Whether Civil Code section 798.85 applies is a question of law. (Ibid.)
The first amended complaint contained causes of action for promissory estoppel and declaratory relief. The section containing general allegations stated that beginning in 1991 the City promised to give the Owners Association and tenants of the Park the opportunity to purchase the Park and convert their leases to ownership interests, and the promises "were consistent and in accordance with the public policy of . . . California, both under case authority and . . . Civil Code § 798.80, " a provision of the Mobilehome Residency Law.
The general allegations also quoted Civil Code section 798.80, subdivision (a) which provides: "Not less than 30 days nor more than one year prior to an owner of a mobilehome park entering into a written listing agreement with a licensed real estate broker . . ., for the sale of the park, or offering to sell the park to any party, the owner shall provide written notice of his or her intention to sell the mobilehome park by first-class mail or by personal delivery to the president, secretary, and treasurer of any resident organization formed by homeowners in the mobilehome park. . . ."
The first amended complaint's promissory estoppel cause of action alleged: "Through the acts or omissions of the defendants, they breached their promises and assurances to plaintiffs, violated the public policy of California and the City and Agency for resident ownership, acted contrary to their stated intent and policy of working with the [Owners Association] and tenants/residents toward resident ownership of the park, violated Civil Code § 798.80 and breached the covenant of good faith and fair dealing in the leases with the individual plaintiffs."
In the second amended complaint, the general allegations repeated the same information pertaining to Civil Code section 798.80 that appeared in the general allegations of the first amended complaint. Further, the second amended complaint's promissory estoppel cause of action repeated the allegation cited above from the first amended complaint pertaining to Civil Code section 798.80. The second amended complaint added a cause of action for breach of the implied covenant of good faith and fair dealing, based on the leases between the City and Park tenants and the City's alleged failure to comply with the notice provision of Civil Code section 798.80.
The Owners Association asserts that to recover fees related to the first amended complaint, "the promissory estoppel action had to originate from a specific source, the [Mobilehome Residency Law]. The allegations, however, show the action originated or arose from the City's allegedly breaching verbal and written promises to give the [Owners Association] and the [P]ark residents a true, real and non-illusory opportunity to purchase the [P]ark from the City. The notice provisions in Civil Code § 798.80, while related to the action, were definitely not the source of the promissory estoppel claim."
We disagree with the Owners Association. The first amended complaint alleged a violation of the Mobilehome Residency Law notice requirements, and the City was required to defend against it. The notice issue was based on and intertwined with a public policy argument that purported to support and evidence the City's alleged promises. Both the first and second amended complaints arose out of a common core of operative facts, and thus no allocation or apportionment was appropriate. (See Del Cerro Mobile Estates v. Proffer (2001) 87 Cal.App.4th 943, 951.) Indeed, the Owners Association prayed for attorney fees in its first amended complaint, presumably based on the Mobilehome Residency Law.
II
Consolidation Motion
It is undisputed that on July 14, 2005, counsel for the Owners Association, James Mitchell, told counsel for the City, Jeff Robbins, of the Stradling Yocca Carlson & Rauth (Stradling) firm, that the Owners Association would stipulate to the consolidation of its complaint with the City's validation action. Yet, several months later the Stradling firm brought a motion to consolidate the action, and it billed the City for a substantial amount of work on the matter between August 23 and October 3, 2005. Before the scheduled hearing on October 17, the parties filed a stipulation to consolidate the actions.
The trial court allowed 4.25 hours for the consolidation motion — although the only document required was the parties'stipulation — and the Owners Association does not challenge that ruling. It contends it was overcharged for fees based on the declaration of attorney Evertz of the Stradling firm, which assertedly misrepresented the actual billings submitted.
The Evertz declaration stated the billings contained numerous "joint entries" for work on the motion for consolidation and work on a supplemental complaint in the validation action, and the entries totaled 48.5 hours. Evertz, however, did not specify any particular entries. The Stradling firm claimed fees for the consolidation motion, but not for the supplemental complaint as there was no ground for fees for that pleading in the validation action. Evertz evenly split the time for the joint entries and reduced the claim by 24.25 hours for the supplemental complaint. With the court's allowance of 4.25 hours for the consolidation motion, it reduced the total claim by 20 hours at an average rate of $195.47 per hour, or $3,909.40.
We agree that the Stradling firm's statements for September 15, October 27 and November 30, 2005, show the Association was overcharged for fees. Although difficult to precisely ascertain, it appears the statements include 13 joint entries for the consolidation motion and the supplemental complaint totaling 48.2 hours. The statements, however, also include four entries totaling an additional 14.9 hours for the consolidation motion alone. Since the Stradling firm claimed fees for the consolidation motion, the Evertz declaration did not address the entries reflecting only that work, and the court did not take them into consideration in reducing the award.
These entries are for August 23, 24, 25, 26, 30 and 31, and September 2, 6, 7, 8 (two entries), 29, and 30.
These entries are for August 27 and 29 and October 3.
Additionally, an entry on August 17 for 2.2 hours is for research regarding both the consolidation motion and "promissory estoppel, " and an entry on September 12 for 8.5 hours is for work related to the consolidation motion, including traveling to and from an ex parte hearing in San Diego, but is also for work to "prepare and revise demurrer to first amended complaint." Neither the Evertz declaration nor the court addressed these entries, a portion of which may be allowable as unrelated to the motion to consolidate.
We find abuse of discretion. The recoverable fees should be reduced by at least another 14.9 hours for the entries solely for work on the consolidation motion, and also by the number of hours on the August 17 and September 12 entries allocable to the consolidation motion. Because the record contains no evidence that allows us to make the allocation, we reverse the award insofar as the amount of fees is concerned and direct the court to rehear the matter and recalculate the award. Further, because some of the billing entries are difficult to decipher, the court is not required to accept our numbers and may, with the assistance of the parties on rehearing, recalculate the overcharges.
The Owners Association asserts the award should have been reduced by an additional 43.35 hours, but its calculations are incorrect. For instance, the Owners Association did not take into consideration that the court already reduced the award by 20 hours. Further, the court allowed the City 4.25 hours for the consolidation matter instead of the four hours the Owners Association used in its calculation. Even if on remand the court were to determine the total 2.2 hours for the August 17 entry and the 8.5 hours for the September 15 entry are unrecoverable, the Owners Association would have been overcharged a total of only 25.6 hours. Again, however, these numbers may not be exact because of ambiguities in the billing entries.
The City asserts no further reduction of hours is appropriate because many of the Stradling firm's invoices contain joint entries, and "some of the joint entries pertain[] to not only the motion to consolidate and efforts to file a supplemental complaint in the [v]alidation [a]ction, but also to an ex parte application seeking immediate consolidation, which ex parte application was necessitated by the fact that any delay in resolving the pending litigation would add significant costs to the proposed bond issuance as a result of rising interest rates." The record, however, contains no evidence showing an order shortening time was necessary, given the Owners Association's stipulation early in the case to consolidate the actions. The City raised this argument at the trial court, the trial court properly rejected it, and it is not an issue on appeal.
DISPOSITION
The order is reversed insofar as it concerns the amount of the attorney fees award. The trial court is directed to hold a hearing to recalculate the award in line with this opinion. In all other respects, the order is affirmed. The parties are to bear their own costs on appeal.
WE CONCUR: HALLER, J., IRION, J.