Opinion
C076298
03-02-2018
BRANDON EIB et al., Plaintiffs and Appellants, v. SIZZLER USA RESTAURANTS, INC. et al., Defendants and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 34201200117507CUOEGDS)
As we discuss in more detail, post, Appellants Brandon Eib, Michael Brunson, and Jared Brown (Appellants) sued Sizzler USA Restaurants, Inc., C Food Concepts, Inc., and coworker Rebekah Johnson (Respondents) claiming they were subjected to sexual harassment, retaliation, negligent supervisions/retention, assault, battery, and wrongful termination while employed at a Sizzler restaurant in Sacramento.
After some discovery and an unsuccessful mediation, Respondents made offers of compromise to each of the appellants pursuant to Code of Civil Procedure section 998 which offers included an agreement that Respondents would pay Appellants' attorney fees incurred prior to October 29, 2013, in an amount to be agreed upon or, failing an agreement, in an amount to be determined by the court.
Appellants accepted respondents' offers, but the parties were unable to agree on attorney fees. Appellants thereafter filed a motion with the trial court asking for an award of attorney fees and costs in the amount of $379,502.37 which included a 1.2 lodestar multiplier. After objections from Respondents and a review of the relevant billing and cost records, the trial court entered its order awarding Appellants $148,550 in attorney fees and $28,671.57 in costs for a total award of fees and costs of $177,221.57.
Appellants appeal contending the trial court arbitrarily reduced counsels' hourly rates and time, arbitrarily denied Appellants' expert witness fees, and, the request being unopposed, should have granted a 1.2 lodestar multiplier.
We affirm the judgment.
FACTS AND PROCEEDINGS
Appellants brought suit against Respondents alleging violations of FEHA for, among other things, sexual harassment and retaliation, including wrongful termination. Respondents generally denied the allegations of the complaints. In essence, the trial would have been a credibility contest between Appellants and one of their coworkers.
After initial discovery, the parties participated in an unsuccessful mediation. Thereafter, Respondents made joint offers of compromise individually to each appellant pursuant to Code of Civil Procedure section 998. These offers of compromise promised money to each appellant in exchange for a general release, confidentiality of the settlement, and dismissal of each of their underlying lawsuits with prejudice.
The respective offers of compromise also provided for the recovery of attorney fees and costs, stating in pertinent part:
"In addition to this Settlement Amount, Plaintiff shall also recover reasonable attorneys' fees and costs incurred to the date this offer is made, October 29, 2013, which fees and costs shall be determined by agreement of the parties, or by noticed motion." Appellants accepted the offers of compromise and filed a "Notice of Settlement of Entire Case."
The parties were unable to agree on the fees and costs. As a result, Appellants filed a motion to recover their fees and costs, requesting the court order total recovery of $379,502.37, which included the use of a 1.2 lodestar multiplier based on the complexity of the case. Appellants' notice of motion cited and quoted the offers of compromise as the basis for the attorney fees and cost recovery. Appellants sought recovery of the fees incurred in prosecuting the fee motion, in addition to the fees and costs award provided for in the offers of compromise.
Respondents' objected to the requested fees in the trial court, arguing: (1) the fees sought were inconsistent with the amount of fees that had been disclosed in mediation; (2) there was duplication of effort by Appellants' counsel, citing for example two attorneys attending the mediation; (3) that a side-by-side comparison of time entries for Appellants' counsel versus Respondents' counsel showed that the time records were inaccurate and inflated; (4) that the $30,292.50 billed for the motion to compel was excessive; and (5) that the amount of fees sought was three times greater than the amount of fees incurred by Respondents in their defense.
The trial court issued a tentative ruling in part granting and in part denying Appellants' motion.
On February 24, 2014, the court, after hearing oral argument on the motion which had been requested by all parties, took the matter under submission.
The court later issued a minute order adopting its tentative ruling. The order expressly found "that the hourly rates claimed by plaintiffs' counsel and their paralegals are unreasonably excessive for a case of this nature in this jurisdiction." The order reduced the hourly rates of three of Appellants' attorneys and their paralegals which reduced the total claimed amount of attorney fees to "roughly $204,197."
After undertaking "a detailed review of the 16 pages of billings records" the court found that not all of the hours claimed by Attorneys McKenna and White and two paralegals were "both reasonable and necessary under the circumstances." The court allowed 72 percent of the hours requested, making the following findings: (1) there were billings entries that were "so vague that it is impossible to determine whether the time spent was both reasonable and necessary"; (2) there were "unnecessarily excessive" entries for "various inter-office meetings and emails between attorneys and paralegals"; (3) there was "significant duplication of work by both Attorneys McKenna and White and the two paralegals"; (4) excessive time was spent on the motion to compel; and (5) that the time spent on the fee motion itself was excessive. The court said: "In light of the foregoing, the Court concludes that only 175 of the 233 hours billed by Attorney McKenna, only 250 of the 363 hours billed by Attorney White, and only 140 of the 195 hours billed by the two paralegals can be considered both reasonable and necessary in the context of this case." (Underlining in the original.) The court proceeded to break out the hours times the rates for each timekeeper and ultimately awarded attorney fees recoverable in the amount of $148,550.
The court further found "under the circumstances here, no additional multiplier on the attorney fee award is warranted" and refused to compensate Appellants' for the $1,450 charged by their expert on the issue of the reasonableness of the hourly rates claimed noting that the declaration may have been admissible but the court did not view it as "necessary to support this motion." Noting Respondents had not objected to the costs bill, the trial court awarded Appellants costs in the amount of $28,671.57.
DISCUSSION
I
Standard of Review
" 'The "experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong" . . . ' " (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM).) " 'It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court . . . . [Citations.] The value of legal services performed in a case is a matter in which the trial court has its own expertise. [Citation.] The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. [Citations.] The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.' " (Id. at p. 1096.) "The only proper basis of reversal of the amount of an attorney fees award is if the amount awarded is so large or small that it shocks the conscience and suggests that passion and prejudice influenced the determination." (Akins v. Enterprise Rent-A-Car Co. of San Francisco (2000) 79 Cal.App.4th 1127, 1134.)
II
The Fee Award
Appellants have challenged the trial court's attorney fees award on the basis that the court abused its discretion by (1) reducing the rates requested; (2) reducing the hours requested; (3) refusing to award the expert fees; and (4) refusing to apply a multiplier to the lodestar award. We find no error.
Even though the parties agreed that Respondents would pay the Appellants' reasonable attorney fees and costs through the vehicle of accepted offers to compromise, since those agreements arose out of actions brought under the Fair Employment and Housing Act, we are guided in our analysis of Appellants' assertions of error by Government Code section 12965 and cases construing that statute.
Government Code section 12965, subdivision (b) authorizes the court to award "reasonable attorney's fees and costs, including expert witness fees" to the prevailing party in civil actions. (Gov. Code, § 12965, subd. (b).) Under FEHA, a court should award a prevailing plaintiff "costs and attorney fees unless special circumstances would render such an award unjust." (Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97, 115.) "Pursuant to long-established precedent and practice, [Government Code] section 12965 fees are calculated by determining the number of hours reasonably worked by the attorneys who prosecuted the matter and multiplying that number by the reasonable hourly rate those attorneys should receive for such work." (Flannery v. Prentice (2001) 26 Cal.4th 572, 584.) This is known as the lodestar amount, which may be adjusted up and down through utilization of a multiplier based upon a variety of factors. (PLCM, supra, 22 Cal.4th at p. 1095; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138-1140 (Ketchum).) "When using the lodestar method to calculate attorney fees under the FEHA, the ultimate goal is 'to determine a "reasonable" attorney fee, and not to encourage unnecessary litigation of claims that serve no public purpose either because they have no broad public impact or because they are factually or legally weak.' " (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 985 (Chavez).)
A. The Hourly Rate
Appellants have failed to demonstrate the trial court erred when it determined "that the hourly rates claimed by plaintiffs' counsel and their paralegals are unreasonably excessive for a case of this nature in this jurisdiction."
The starting point for the "reasonable hourly rate" determination is the market rate in the community where the court is located. (Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc. (2014) 226 Cal.App.4th 26, 71-73.) While Appellants' submitted declarations on this issue, the trial court was not obligated to accept their submissions and was within its discretion to reject that evidence as contrary to its own experience. (See PLCM, supra, 22 Cal.4th at p. 1096 ["The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony"]; Kirk v. Culley (1927) 202 Cal. 501, 509 [expert testimony is not conclusive to attorney fee determination]; Estate of Dorland (1883) 63 Cal. 281, 282 [court was not bound by the expert testimony as to the value of the services provided by the attorney]; see also Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009 ["court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate"]; Cordero-Sacks v. Housing Authority of City of Los Angeles (2011) 200 Cal.App.4th 1267, 1286 (Cordero-Sacks).) "The trial court is in the best position to determine the reasonableness of the hourly rate of an attorney appearing before the court and the value of the attorney's professional services." (Cordero-Sacks, at p. 1286.)
None of Appellants' cited cases suggest that the absence of argument or evidence from Respondents prevents the court from exercising its discretion in determining the reasonable rate. We find the trial court acted within its discretion when setting the recoverable rates.
B. Billable Hours
Appellants have also failed to demonstrate the trial court erred in its determination of the hours that were reasonably necessary to pursue this action.
Appellants argue the trial court erred in requiring a heighted standard of "reasonable and necessary" where Government Code section 12965, subdivision (b) allows for the recovery of "reasonable . . . attorney's fees and costs." We find no error.
First, it does not appear that the trial court was imposing a heightened standard when it utilized the language "reasonable and necessary" in its fee order. On the contrary, a review of the transcript from oral argument shows the trial court equated reasonable with necessary, and that it understood its task was "to determine what it feels is reasonable based on all the facts." Requiring that hours be reasonably necessary to the litigation is consistent with the requirements for a fee award under FEHA. (See Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1250 (Taylor) [appellate court presumes the trial court reduced the lodestar to eliminate "unnecessary or duplicative billings"].)
Further, we may look to the authorities construing Code of Civil Procedure section 1021.5 when reviewing FEHA fee awards under Government Code section 12965, subdivision (b) (Chavez, supra, 47 Cal.4th at p. 985) when determining whether hours "were 'reasonably spent.' " (Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 843-845 ["[a]s our Supreme Court has repeatedly made clear, the lodestar consists of 'the number of hours reasonably expended multiplied by the reasonable hourly rate. . . .' "].) Thus, the trial court was within its discretion to determine the hours were inflated and reduce the award on that basis. (See Chavez, at pp. 990-991 [trial court would have been justified in completely refusing fee award on basis of grossly inflated request].) In fact, failure to scrutinize what appears to be duplicative and unnecessary hours is reversible error. (Thayer, at pp. 843-845 [order awarding all hours requested by attorney was an abuse of discretion where it was clear from the record that all the hours were not "reasonably spent" because of duplication between attorneys representing the client and also with co-counsel in related suits].) It is well-settled that " ' "padding" in the form of inefficient or duplicative efforts is not subject to compensation.' " (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320, 1321 (Christian Research Institute) [citing Ketchum, supra, 24 Cal.4th 1122].) Further, "[w]here, as here, the trial court severely curtails the number of compensable hours in a fee award, we presume the court concluded the fee request was padded." (Christian Research Institute, at p. 1325.)
Appellants are not aided by the holding in Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359 (Horsford). In that matter the court merely held that the trial court abused its discretion by "rejecting wholesale counsels' verified time records" (id. at p. 396) and observed that verified attorney records are "entitled to credence in the absence of a clear indication the records are erroneous." (Ibid.)
In the matter before us, the trial court did not reject wholesale Appellants' counsels' time records but did instead properly review them to determine whether the hours claimed were reasonably necessary in pursuing the litigation. Here, the trial court reviewed the time records in detail and made the findings we have set forth ante at page 4 in determining that it would award Appellants 72 percent of the requested hours.
Nor can the trial court be faulted for failing to itemize each hourly submission it chose to reduce. (See Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 7l; Taylor, supra, 222 Cal.App.4th at p. 1250.)
The trial court's decision regarding the claimed hours was not an abuse of discretion.
C. Expert Witness Fees
Appellants contend the trial court erred in denying their request for expert witness fees arguing FEHA allows for the discretionary recovery of expert fees by the prevailing party. Appellants say the submission of the declaration was necessary because it was needed to establish the prevailing market rate in the community.
Respondents counter that expert testimony is not required on a fee motion, citing Cordero-Sacks, supra, 200 Cal.App.4th at page 1286.
Implicit in the trial court's ruling lowering the hourly rates claimed by Appellants was the trial court's wholesale rejection of the rates suggested in the expert's declaration. This is further shown by the court's statement in its order that, "[w]hile Attorney Pearl's opinion may be admissible, the Court does not find these charges ostensibly incurred by [Appellants] were necessary to support this motion."
Under these circumstances, the trial court did not abuse its discretion in refusing to reimburse Appellants for their expert witness fees on the motion. (See Christian Research Institute, supra, 165 Cal.App.4th at p. 1322.)
D. The Lodestar Multiplier
Appellants finally contend the trial court erred in refusing to utilize a multiplier reflecting the contingent fee agreement counsel agreed to in representing them in this case.
While we recognize that a multiplier used to enhance the lodestar amount to reflect contingent risk is supported by law, a multiplier is also discretionary. (See Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1399.) Thus, while a court may adjust the lodestar amount through the use of a multiplier in order to fix the fee at the fair market rate for the services rendered, it is not required to do so. (See Ketchum, supra, 24 Cal.4th at pp. 1132, 1138.)
The trial court determined "that under the circumstances here, no additional multiplier on the attorney fee award is warranted."
As noted above, the court understood this was a contingent fee representation but, even so, decided no multiplier was warranted under the circumstances.
"[A] trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other factors, although it retains discretion to do so in the appropriate case; moreover, the party seeking a fee enhancement bears the burden of proof." (Ketchum, supra, 24 Cal.4th at p. 1138.)
Here, appellants had the burden to show that a multiplier was appropriate in this matter. In the trial court's view, considering all the circumstances of the litigation, the appellants failed to carry that burden, a decision that we review for an abuse of discretion. Given all the circumstances relating to the litigation that the trial court expressly considered and the trial court's at least implicit opinion that the motion for attorney fees was inflated or otherwise unreasonable, we cannot say the trial court abused its discretion in refusing to order a lodestar multiplier. (See, Christian Research Institute, supra, 165 Cal.App.4th at p. 1329.)
DISPOSITION
The judgment is affirmed. Respondents are entitled to costs on appeal. (Cal. Rules of Court, rule 8.278(a).)
HULL, Acting P. J. We concur: MURRAY, J. DUARTE, J.