Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC323951. Teresa Sanchez -Gordon, Judge.
Venable, Melanie S. Joo; Arent Fox and Aaron H. Jacoby, for Defendant and Appellant.
Consumer Legal Services, M. Nicholas Nita, David N. Barry and Jessica D. Lew, for Plaintiff and Respondent.
RUBIN, J.
This is the third time this matter has been before us on appeal, each time regarding the plaintiff’s right to statutory attorney fees under the Consumer Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.). The action arose out of the purchase of a used automobile by plaintiff and respondent Richard Sang Kim from defendant and appellant Euromotors West/The Auto Gallery (TAG). TAG appeals from a February 2009 order awarding Kim attorney fees in the amount of $84,500. As we understand TAG’s contentions, they are that the order should be reversed and remanded: (1) for clarification of the trial court’s calculation of the lodestar amount; (2) for clarification of the trial court’s reasons for applying a multiplier to fees incurred in the first two appeals; and (3) because the trial court erred in awarding costs on the first appeal because Kim did not appeal from a prior order taxing costs on the first appeal. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Because the only issue on appeal is the attorney fee award, we need not give a detailed recitation of the facts in the underlying litigation. It is sufficient to state that the complaint alleged that Kim traded in his 2001 Porsche Boxer to lease a used 2001 Porsche 996 Turbo Coupe (the vehicle) from TAG. Over the next year, Kim had to bring the vehicle back to TAG for various repairs. Ultimately, Kim revoked his acceptance of the vehicle under Commercial Code section 2608 and demanded a refund pursuant to the CLRA. After his demands were refused, Kim filed this action against Porsche and TAG in November 2004. Kim eventually settled with Porsche and TAG, but reserved the right to seek attorney fees from the trial court.
Porsche has not been a party to any of the appeals.
In January 2006, the trial court denied Kim’s motion for attorney fees, reasoning that it was impossible to determine whether there was a prevailing party under the CLRA since the matter was settled pursuant to agreement (the January 2006 order). In Kim v. Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170 (Kim I), we held that the fact that an action is settled pursuant to agreement prior to trial does not preclude a finding that the plaintiff was the prevailing party within the meaning of the CLRA; we remanded to the trial court for the limited purpose of determining whether Kim was a prevailing plaintiff under the statute and if so, the amount of attorney fees he should recover.
Following remand, the trial court found that Kim obtained a net monetary recovery but that this was not enough to justify an award of attorney fees (the May 9, 2007 order). In an unpublished opinion (Kim v. Porsche Cars North America, Inc., et al. (July 21, 2008, B19977) [nonpub. opn.] (Kim II)), we held that Kim was a prevailing plaintiff within the meaning of the CLRA based on the trial court’s finding that he obtained a net monetary recovery, and that an award of attorney fees to a prevailing plaintiff is mandatory in an action brought pursuant to the CLRA. We remanded to the trial court, this time for the limited purpose of determining the amount of attorney fees to which Kim, as the prevailing party, was entitled.
Upon remand the second time, Kim exercised a peremptory challenge to the judge who had denied Kim’s two prior attorney fees motions. In November 2008, Kim filed a third motion seeking attorney fees in the amount of $170,640 and costs in the amount of $8,391, for a total of $179,031.00. According to the motion, Kim was represented throughout the litigation by Consumer Legal Services (CLS), a consumer rights advocacy law firm, pursuant to a contingent fee agreement. Attached to the motion were time sheets for CLS Attorneys David N. Barry, M. Nicholas Nita, Joshua A. Que, Steve B. Mikhov, and Mark P. Romano. Each time sheet lists by date the particular tasks performed by the attorney, the time the attorney spent performing that task, and the attorney’s hourly billing rate. Each attorney also submitted a declaration which verified the accuracy of his time sheets and the attorney’s billing rate. The following is a chronological summary of the time sheets attached to the motion:
Dates
Attorney
Hours
Rate
Total
September 15, 2004 - October 31, 2005
Nita
15.8
$300
$4,740
March 17-September 23, 2005
Que
72.8
$300
$21,840
September 9-November 23, 2005
Romano
95.1
$400
$38,040
September 30 - November 15, 2005
Barry
37.6
$300
$11,280
October 3-26, 2005
Mikhov
11.0
$300
$3,300
May 11, 2006 - March 7, 2007
Barry (first appeal)
53.8
$300
$16,140
May 3, 2007-October 29, 2008
Barry (second appeal)
61.4
$300
$18,420
According to his declaration, Barry was responsible for the day-to-day management of all of the firm’s litigation matters and was the primary and lead counsel in Kim’s case. In addition to his own billing rate, Barry set forth the hourly billing rates (between $280 and $525) of other California attorneys who specialize in consumer litigation. Barry requested “a multiplier of 1.5 based on my contingent fee and delay in payment, for work done to date. The lodestar amount of $113,760.00 with a 1.5 multiplier equals total requested fees of $170,640.00.”
TAG opposed the motion, arguing that it was entitled to fees as the prevailing party on causes of action that were dismissed, Kim was not entitled to fees on causes of action as to which Kim was not successful, the fees Kim requested were not substantiated or reasonable, Kim sought duplicative fees, and a negative multiplier should be applied. Specifically, TAG divided the litigation into two periods: (1) before the second appeal and (2) after the second appeal. For the first period, TAG urged the trial court to award fees for just 87.7 hours at an hourly billing rate of $150 (totaling $13,155) and to apply a 0.5 negative multiplier, for a total of $6,577.50. For the second period, TAG urged the trial court to award fees for just 20.7 hours, at the same $150 hourly billing rate ($3,105) and the 0.5 multiplier for a total of $1,552.50. From this $8,130 figure, TAG argued that its costs of $1,411.59 associated with the claims on which it “prevailed,” should be deducted, leaving a total fee award of $6,718.41.
On January 12, 2009, the trial court granted TAG’s motion to tax Kim’s costs, but continued the attorney fees motion so that Kim could file additional supporting documents. In response to Barry’s request for clarification of what additional information the trial court wanted, the trial court explained: “I’ll tell you right now. Regarding computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorney’s fee award. PLCM Group [v.] Drexler [(]2000[)] 22 Cal.4th 1084. The reasonable hourly rate is that which is prevailing in the community for similar work. The trial court may make its own determination of the value of the services contrary or without the necessity for expert testimony. 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. [¶] Compensable work on post-judgment proceedings must be useful or of a type ordinarily necessary to secure the litigation’s final result. Meister [v.] Regents of the University of California [(]1998[)] 67 Cal.App.4th 437. [¶] The time records were submitted in a form which is difficult for the court to review. Scattered among the exhibits attached to the motion are various time records from various attorneys. Nowhere in the motion or exhibits is a summary of the fees requested. [¶] The court is inclined to continue the motion for plaintiff to submit further records. Plaintiff should submit one record for all the work done prior to the first appeal which includes time for all attorneys who worked on the case and which is organized by date, not by attorney. Plaintiff should submit a similar record for the first appeal, and another for the second appeal.... Does that help you? [¶] MR. BARRY: Tremendously. Thank you very much.”
In its motion to tax costs, TAG argued that Kim’s claimed costs were duplicative of costs already paid by TAG following the first remand ($1,207, reduced from $8,157). The trial court granted TAG’s motion to tax Kim’s claimed costs of $8,391 because the court could not determine “which, if any, costs were incurred in the second appeal.”
At the continued hearing on February 19, 2009, the trial court commented that it had reviewed Kim’s additional information. The only reasonable inference from the trial court’s comment is that additional information was filed, although none is included in appellant’s appendix. In any case, the trial court awarded Kim attorney fees in the amount of $84,500, comprised of $57,000 for work performed “in the trial court;” $15,000 for work performed in connection with the first appeal; and $16,500 for work performed in connection with the second appeal.
TAG filed a timely notice of appeal.
DISCUSSION
A. Remand for Clarification of the Method Used to Calculate the Lodestar Amount Is Not Necessary
Appellant contends the award of $57,000 should be reversed and the matter remanded for clarification. Appellant argues the trial court’s failure to identify the number of hours and the hourly rate it used to arrive at the $57,000 lodestar amount hampers appellant’s ability to ascertain whether the award is consistent with applicable legal principles. We disagree.
We begin with the standard of review: “ ‘Because the “experienced trial judge is the best judge of the value of professional services rendered in his court,” we will not disturb the trial court’s decision [to award or deny attorney fees] unless convinced that it is clearly wrong, meaning that it is an abuse of discretion. [Citations.] However, “ ‘[t]he scope of discretion always resides in the particular law being applied, i.e., in the “legal principles governing the subject of [the] action....” Action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an “abuse” of discretion.’ ” [Citations.]’ ” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 148-149 (Graciano).) “ ‘ “All intendments and presumptions are indulged to support [the judgment] on matters as to which the record is silent, and error must be affirmatively shown.” ’ [Citation.]... ‘It is the burden of the party challenging the fee award on appeal to provide an adequate record to assess error.’ [Citations.]” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141 (Ketchum).) The trial court is not required to state its reasons for its fee award unless it is requested to do so. (Id. at p.1140; Graciano, supra, at p. 156, fn. 7.)
We next turn to the legal principles governing determination of an award of attorney fees. In setting the reasonable amount of fees under a statutory attorney fees provision, the court must first calculate the “lodestar” amount, which is “ ‘the number of hours reasonably expended multiplied by the reasonable hourly rate.’ ” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393-1394 (Bernardi); see also EnPalm, LCC v. Teitler (2008) 162 Cal.App.4th 770, 774 [fees pursuant to contract].) To determine the reasonable hourly rate, the court looks to the hourly rate prevailing in the community for similar work. (Bernardi,at p. 1394.)
Next, the court determines whether the lodestar should be adjusted – by a so-called “multiplier” – to fix the fee at the fair market value for the particular action. The trial court’s determination of the multiplier entails consideration of factors including “ ‘(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. [Citation.]’ ” (Bernardi, supra,167 Cal.App.4th at p. 1399, citing Ketchum, supra, 24 Cal.4th at p. 1132; Graciano, supra, 144 Cal.App.4th at p. 154.)
Regarding the contingent nature of the fee award, the court in Ketchum explained the economic rationale for fee enhancement in contingency cases: “ ‘A contingent fee must be higher than a fee for the same legal services paid as they are performed. The contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. The implicit interest rate on such a loan is higher because the risk of default (the loss of the case, which cancels the debt of the client to the lawyer) is much higher than that of conventional loans.’ [Citation.] ‘A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his work if he is paid only for the second of these functions. If he is paid no more, competent counsel will be reluctant to accept fee award cases.’ [Citations.]” (Ketchum, supra, 24 Cal.4th at pp. 1132-1133.)
But courts may not double count factors. Thus, in Ketchum, the court ordered the matter remanded to the trial court for recalculation of attorney fees because it was unclear whether the trial court double counted the quality of representation factor – first in calculating the reasonable hourly rate and then again in calculating the multiplier. (Ketchum, supra, 24 Cal.4th at p. 1142.)
Trial courts also have discretion to apply a negative multiplier upon a determination that the attorney’s work is duplicative or excessive, or where the prevailing party litigated other factually or legally distinct causes of action that do not provide for entitlement to an attorney fee award. (Graciano, supra, 144 Cal.App.4th at p. 161; Thayer v. Wells Fargo Bank (2001) 92 Cal.App.4th 819, 840 (Thayer) [negative multiplier warranted where filing of numerous, duplicative class actions did not increase the value of the litigation to the class, but substantially increased defendant-bank’s exposure to large attorney fee awards].)
Here, at the beginning of the February 2009 hearing, the trial court announced its intention to award attorney fees in the amount of $84,500. The proposed award divided the litigation into three periods: (1) “the trial court;” (2) the first appeal; and (3) the second appeal. For the first period, the trial court found “the lodestar provides a sufficient fee for the case in the trial court. The reasonable fee is $57,000.” As opposed to the unadjusted lodestar awarded for the first period, the trial court found that a multiplier of 1.5 was appropriate for work performed in connection with the second two periods – the first appeal and the second appeal. Accordingly, for the first appeal, it awarded $15,000, comprised of a lodestar of $10,000 and a 1.5 multiplier. For the second appeal, it awarded $16,500, comprised of a lodestar of $11,000 and a multiplier of 1.5. The trial court explained its reasoning as follows: “The determination of what constitutes a reasonable fee generally begins with the lodestar, that is the number of hours reasonably expended multiplied by the reasonable[] hourly rate. The lodestar is the basic fee for comparable legal services in the community. It may be adjusted by the court based on factors including, as relevant herein, the novelty and difficulty of the questions involved, the skill displayed in presenting them, the extent to which the nature of the litigation precluded other employment by the attorneys, the contingent nature of the fee award. [¶] Graciano[, supra,] 144 Cal.App.4th 140.” After hearing argument, the trial court adopted the tentative as its final order.
Divided into these same three periods, the time sheets and summary (which included Nita’s hours but not the paralegal’s hours) request the following:
Thus, the record is clear that the trial court was guided in its exercise of discretion by the applicable legal principles: determination of the hours reasonably expended multiplied by a reasonable hourly rate, to be adjusted based on the novelty and difficulty of the questions involved, the skill displayed in presenting them, the extent to which the nature of the litigation precluded other employment by the attorneys and the contingent nature of the fee award. That the trial court did not explain the mathematical calculations by which it arrived at the three lodestar figures ($57,000 for the first period, $10,000 for the second period and $11,000 for the third period), was not error. Absent a request, the trial court was not required to do so, and appellants made no such request. (Graciano, supra, 144 Cal.App.4th at p. 156, fn. 7.)
Appellant’s reliance on Graciano for a contrary result is misplaced. In Graciano, the appellate court reversed an attorney fee award to the prevailing plaintiff, finding that the reasons the trial court gave for reducing the fees sought by the plaintiff were inconsistent with the applicable legal principles. Here, by contrast, the trial court’s statement of its general reasons establishes that it was, indeed, guided by the applicable legal principles. The trial court was not obligated to do more.
Graciano, like this case, involved the purchaser of an automobile suing the dealership for violation of the CLRA, among other things. The plaintiff prevailed in a bifurcated jury trial and the parties settled on the eve of the second phase of trial, leaving for the trial court the issue of attorney fees. The trial court set the reasonable hourly rate for the prevailing plaintiff’s attorneys at $250 based solely on a local rule which set $250 as the hourly rate for attorney expert testimony; it also applied a negative multiplier so that the fee award would be a specific percentage of the plaintiff’s recovery. The appellate court reversed and remanded for a new determination of the reasonable amount of attorney fees to be awarded. Regarding the hourly rate, the court reasoned that there was no evidence to support the reduction in counsel’s hourly rate (plaintiff’s counsel submitted declarations in support of their rate and defendant’s counsel did not challenge the rate) and there was no indication that the trial court engaged the relevant objective analysis – determination of the prevailing rate in the community for services rendered by counsel on consumer fraud cases. (Graciano, supra, 144 Cal.App.4th at pp. 155-156.) Regarding the negative multiplier, the court held that the percentage of recovery was not a valid basis to impose a negative multiplier in a matter involving an individual plaintiff suing under consumer protection statutes involving mandatory fee-shifting. (Id. at p. 164.)
B. Remand For Clarification of the Method Used to Calculate the Multiplier Is Not Necessary
TAG contends the fee awards to which a multiplier was applied should be reversed and remanded for “further consideration and amplification of [the trial court’s] reasoning for the application of a multiplier to fees on appeal.” Relying on Thayer, supra,92 Cal.App.4th 819, TAG argues that the listing of enhancement factors without an explanation of how they were applied is not sufficient. We find no error.
TAG questions whether a multiplier may be applied to attorney fees incurred on appeal, but offers no legal argument. Accordingly, we do not consider the issue. (Ochoa v. Pacific Gas & Electric Co. (1998) 61 Cal.App.4th 1480, 1488, fn. 3 [contention deemed waived because “[a]ppellant did not formulate a coherent legal argument nor did [he] cite any supporting authority”].)
In Thayer, nine law firms represented plaintiffs in five coordinated class action law suits arising out of the bank’s anticipatory breach of its promise to provide checking accounts free of any service charge during the life of the account. Kassof, who represented one of the plaintiffs, received a fee award of $215,460, based upon a multiplier of 2. The trial court justified its application of the multiplier on the basis of “ ‘the contingent nature of the case, the novelty and complexity of the litigation, [and] the skill displayed in fashioning an appropriate remedy....’ ” as well as “ ‘the results obtained’ and the ‘continuing obligations of Plaintiffs’ counsel.’ ” (Thayer, supra, 92 Cal.App.4th at pp. 834-835.) The bank appealed. The reviewing court observed that “ ‘the terse nature of the trial court’s ruling... gives virtually no explanation for the basis of the substantially enhanced award of fees and costs here. Because it merely lists the enhancement factors used, without a more complete explanation of their applicability in this context, the order is subject to question regarding the factual basis of the exercise of discretion made.’ [Citation.]” (Id. at p. 835.) The court found an “absence in the record of any justification for increasing Kassof’s lodestar award, either on the basis of the factors identified by the trial court or any other factors.” (Ibid.) The court in Thayer went on to apply each factor cited by the trial court to the record in that case, concluding: “While we believe a substantial reduction in the number of hours for which Kassof deserves compensation, or application of a negative multiplier reducing his basic lodestar award, is therefore warranted, in the absence of a fuller factual inquiry than was made by the trial court we are loath to ourselves determine the precise amount of the appropriate reduction. Kassof will on remand have an opportunity to demonstrate, if he can, the productive time he necessarily spent on this case, keeping in mind the substantial contributions made by able counsel representing plaintiffs in identical actions that were previously filed.” (Id. at pp. 844-845, fn. omitted.)
Thayer is inapposite because the record in this case contains the requisite factual basis for the application of the enhancement factors identified by the trial court (the contingent nature of the fee award, the novelty and difficulty of the questions involved, the skill displayed in presenting them and the extent to which the nature of the litigation precluded other employment by the attorneys). That the fee award was truly contingent (i.e., genuinely questionable) is demonstrated by the fact that it has taken Kim three appeals to obtain it. That the questions presented on appeal were novel and difficult is demonstrated by the fact that our first opinion in the case was published and even with the benefit of a published opinion a second appeal became necessary. Now, a third. Assessment of the skill displayed by CLS in presenting the issues is something uniquely within the purview of the trial court and we are loath to disregard its determination. Similarly, the extent to which the nature of the litigation precluded other employment is something the trial court was better able to assess than is this court. Finally, unlike Thayer, this case involved a single plaintiff and, therefore, there was no issue of duplication of work performed by multiple law firms. TAG has thus failed to show that the trial court’s selection of a 1.5 multiplier was an abuse of discretion.
C. Costs on the First Appeal
TAG contends the trial court erred in awarding costs on the first appeal. It argues that, although Kim appealed from the May 2007 order denying for the second time Kim’s motion for attorney fees incurred in the trial court, Kim did not appeal from the subsequent August 21, 2007 order denying Kim’s motion for costs, which included $16,140 in attorney fees incurred in the first appeal (the August 2007 order). We find no error.
Weisenburg v. Cragholm (1971)5 Cal.3d 892 (Weisenburg) is instructive. In that case, after a creditor reduced his claim to a money judgment, the judgment debtor transferred his property to third person, which rendered the judgment debtor insolvent. The trial court set aside the transfers on the ground that the transfers were made for the purpose of defrauding the judgment creditor. When the original judgment was later reversed, the judgment setting aside the transfer had to be reversed also. This was because, when a judgment is reversed, the effect is the same as if it had never been entered, except that on a retrial the opinion of the Court of Appeal must be followed as far as applicable. (Id. at p. 896.)
By parity of reasoning to Weisenburg, when a post-judgment order denying attorney fees is reversed, the effect is the same as if it had never been entered. Accordingly, where the basis of an order taxing costs is that attorney fees were previously denied, the reversal of the order denying attorney fees requires that the order taxing costs must also be reversed.
Here, we reversed the May 2007 order denying Kim attorney fees based on the trial court’s erroneous finding that Kim was not a prevailing party. The effect of that reversal was the same as if the May 2007 order had never been entered. Under Weisenburg,inasmuch as the basis of the trial court’s August 2007 order taxing costs was the May 2007 order finding Kim was not the prevailing party, our reversal of the May 2007 order voided the August 2007 order, as well.
DISPOSITION
The judgment is affirmed. Kim shall recover his costs on appeal.
WE CONCUR: BIGELOW, P. J., LICHTMAN, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
First Period (September 2004 through January 2006):
95.1 hours x $400 per hour (Romano) = $38,040
137.2 x $300 per hour (other attorneys) = $ 41,160
Total: $79,200;
Second Period (May 11, 2006 through March 7, 2007): 53.8 hours x $300 per hour = $16,140
Third Period (May 3, 2007 through October 29, 2008): 61.4 hours x $300 per hour = $18,420