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Pacelli v. Jaffe

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE
Jan 9, 2012
B213228 (Cal. Ct. App. Jan. 9, 2012)

Opinion

B213228

01-09-2012

ZENAIDA C. PACELLI, Plaintiff, Cross-defendant and Respondent, v. HOWARD M. JAFFE, etc., Defendant, Cross-complainant and Appellant.

Jaffe & Martin, Howard M. Jaffe and Arthur L. Martin for Defendant, Cross-complainant and Appellant. No appearance for Plaintiff, Cross-defendant and Respondent.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. NC016962)

APPEAL from orders of the Superior Court of Los Angeles County, Joseph E. DiLoreto, Judge. Modified, and as modified affirmed.

Jaffe & Martin, Howard M. Jaffe and Arthur L. Martin for Defendant, Cross-complainant and Appellant.

No appearance for Plaintiff, Cross-defendant and Respondent.

Since 1999, we have addressed numerous appeals in this case involving the dispute between Howard M. Jaffe and Zenaida C. Pacelli, in which Jaffe obtained a default judgment against Pacelli. This latest appeal addresses two postjudgment attorney fees orders. In Jaffe v. Pacelli (2008) 165 Cal.App.4th 927 (Jaffe I), this court held that Jaffe was entitled to recover attorney fees for efforts taken to enforce the judgment in the bankruptcy court, and we remanded the matter to the trial court to determine the appropriate amount. On remand, the trial court exercised its discretion and reduced the requested fees by approximately 40 percent. In the other attorney fees order, the trial court awarded Jaffe fees incurred on appeal in Jaffe I, but denied the request for additional attorney fees incurred from March 2007 to January 2009. We find no abuse of discretion, and affirm, but we modify the first order to correct a mathematical error.

BACKGROUND

We recite only the necessary background facts from Jaffe I, and pick up the case following remand to the superior court.

1. The 1996 Judgment

In 1991, Pacelli executed a straight note in the sum of $325,956 for the purchase of real property. The note included an attorney fees provision: "Should suit be commenced to collect this note or any portion thereof, such sum as the Court may deem reasonable shall be added hereto as attorney's fees."

Pacelli defaulted on the note. On October 7, 1996, Jaffe obtained a default judgment against Pacelli in the amount of $458,621.83, which included $6,351.84 in attorney fees. We affirmed the order denying the motion to set aside the default and default judgment. (Cruz v. Jaffe (July 28, 1999, B120607 [nonpub. opn.].)

By 2003, with the accumulation of interest and costs, the judgment against Pacelli was $900,660.99. (Jaffe I, supra, 165 Cal.App.4th at p. 930.) On March 4, 2003, the superior court entered a renewed judgment against Pacelli.

Jaffe acts as the judgment creditor in his role as the sole remaining trustee of the estate of Edward Vernon Hamilton. (Jaffe I, supra, 165 Cal.App.4th at p. 930, fn. 3.) In April 2004, Jaffe filed a fraudulent transfer action against Pacelli in the superior court. (Jaffe v. Pacelli (Super. Ct. L.A. County, No. BC313713).) In response, Pacelli filed a petition in the bankruptcy court, seeking to discharge the judgment. (Jaffe I, supra, at p. 931.) Jaffe filed an adversary proceeding in the bankruptcy court, and in November 2005, the bankruptcy court entered a default judgment against Pacelli. (Ibid.) Pacelli filed three unsuccessful appeals with the district court and one with the Ninth Circuit Court of Appeals, challenging the bankruptcy court's rulings. (Id. at p. 932.) The bankruptcy court dismissed the case and closed the adversary proceeding. (Ibid.)

In 2003, Pacelli filed an appeal from the superior court's order denying her claim that funds in a savings account were exempt from levy, which we affirmed. (Pacelli v. Jaffe (Nov. 10, 2005, B170237 [nonpub. opn.].) Thereafter, Pacelli's counsel appealed a sanctions order against him for failure to comply with postjudgment discovery and a sanctions order imposed following a motion for reconsideration, which we affirmed. (Aguiluz v. Jaffe (Nov. 10, 2005, B172670) [nonpub. opn.].)

On February 13, 2007, the trial court struck Pacelli's answer in the fraudulent transfer action still pending in the Los Angeles Superior Court. (Jaffe I, supra, 165 Cal.App.4th at p. 932.) Pacelli's appeal was dismissed. (Ibid.)

2. Attorney Fees Awarded to Enforce the 1996 Judgment

Pursuant to the note, Jaffe was entitled to reasonable attorney fees and costs incurred to enforce the judgment. In 2000, the trial court awarded Jaffe $21,271.25, for defending the appeals from the judgment, and $29,111.25 in attempting to enforce the judgment through January 20, 2000.

In 2003, Jaffe sought and obtained another $74,396.50 in attorney fees and costs.

In 2007, Jaffe moved to recover fees incurred from 2003 through 2007 to enforce the judgment, which included fees incurred in the bankruptcy court. (Jaffe I, supra, 165 Cal.App.4th at p. 933.) The trial court awarded Jaffe his request for $534,571.25 in attorney fees for the superior court actions, but did not award the additional $274,495 incurred in the bankruptcy proceeding. In Jaffe I, we held that pursuant to Code of Civil Procedure section 685.040, Jaffe was entitled to recover reasonable attorney fees and necessary costs incurred in the bankruptcy proceeding, and we remanded the matter to the trial court to make that determination. (Jaffe I, supra, at p. 938 & fn. 9.)

In 2008, the trial court awarded Jaffe his requested attorney fees of $42,747.50 in securing the dismissal of the consolidated appeal in the fraudulent transfer action.

PRESENT APPEAL

1. Attorney Fees Awarded to Enforce the Judgment in the Bankruptcy Court

Upon remand, Jaffe renewed his motion to recover $274,495 in fees and $27,878.91 in costs incurred in the bankruptcy proceeding. Jaffe also sought interest from March 12, 2007, the date he was initially denied these fees. The trial court awarded the interest and the requested costs, but reduced the fees to $164,697 (2008 order).

The trial court's order contains a mathematical error. The order states $192,275.91, but the sum of the attorney fees and costs is $192,575.91.

2. Attorney Fees Awarded as Prevailing Party in Jaffe I

Jaffe filed an unopposed motion for attorney fees as the prevailing party in Jaffe I, seeking $41,187.50 in fees, and $1,401.01 in costs. Jaffe also requested $128,900 in fees and $4,025.75 in costs for efforts expended from March 2007 through January 2009 to enforce the judgment.

The trial court granted Jaffe's request for attorney fees and costs incurred in Jaffe I, but denied the request for fees and costs incurred from March 2007 through January 2009 (2009 order). During the hearing on the motion, the trial court reviewed its previous attorney fees orders. The trial court asked counsel: "When is all this going to end?" Counsel responded: "When the judgment is paid, Your Honor." The court told counsel that "these requests are getting out of hand, they're getting excessive, they're getting abusive . . . ." While counsel argued that Jaffe is entitled to reasonable fees and costs under the statute, the court responded: "I know, but the court has some discretion as to when all this is going to end. . . ." Thereafter, the trial court stated: "I think the amount of work they're doing on this is excessive and not justified by the status of this case. . . ."

Jaffe timely appealed both attorney fees orders, and these appeals have been consolidated. While this appeal was pending, Pacelli filed another petition in the bankruptcy court. (In re Zenaida Cruz Pacelli, Petition No. 2:09-bk-39353-EC (Bankr. C.D.Cal.). We issued an order staying this case on January 12, 2010. On September 1, 2011, Jaffe filed a status report regarding the bankruptcy proceeding, and we lifted the stay based upon that report.

Pacelli did not file a respondent's brief. Therefore, we decide the appeal on the record and on the opening brief. (Cal. Rules of Court, rule 8.220(a)(2).)

DISCUSSION

Code of Civil Procedure section 685.040 permits a judgment creditor to recover reasonable and necessary attorney fees incurred in enforcing a judgment, which also includes attorney fees and costs incurred in enforcing the judgment in the bankruptcy court. (Jaffe I, supra, 165 Cal.App.4th at pp. 934-938.) Jaffe contends the trial court abused its discretion because (1) the 2008 order improperly reduced the attorney fees incurred to enforce the judgment in the bankruptcy proceeding, and (2) the 2009 order improperly denied attorney fees and costs incurred from March 2007 through January 2009 to enforce the judgment. The calculation of attorney fees and costs is a matter addressed to the discretion of the trial court. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1096.) We review the attorney fees orders for an abuse of discretion. (Id. at p. 1095.)

Dissatisfied with the 2009 order, Jaffe also levels serious accusations at the trial court, questioning its impartiality and judicial ethics. Attacking the trial court based upon an unfavorable ruling is never effective in the reviewing court and almost always counter-productive. (In re S.C. (2006) 138 Cal.App.4th 396, 422.) It is "contemptuous" for an attorney to make unsupported assertions of judicial bias, which impugns the integrity of the court. (In re Koven (2005) 134 Cal.App.4th 262, 271.) We do not find Jaffe's attacks on the trial court pertinent to the resolution of the issues raised on appeal.

1. The Trial Court Did Not Abuse its Discretion in Reducing the Requested Attorney Fees Incurred in the Bankruptcy Proceeding

Jaffe contends the 2008 order reducing the amount of attorney fees awarded to him in the bankruptcy proceeding constituted an abuse of discretion, and he raises several arguments to make that point. We reject these arguments.

Jaffe argues the trial court erred by not properly applying the "lodestar" (i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate) and did not provide any analysis to support its reduction of Jaffe's claimed attorney fees from $274,495 to $164,697. The trial court is not required to state its reasoning in awarding attorney fees. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140.) While the analysis begins with the time records, once the trial court performs the lodestar calculation, it must determine whether the total award so calculated is more than a reasonable amount and, if so, reduce the award to a reasonable figure. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at pp. 1095-1096.) The trial court may exercise its discretion to award less than requested. (Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 810, 816.) Because the record contains no calculations, we presume the court, using its sound discretion, found the lodestar more than a reasonable amount and reduced the award to a reasonable figure. (Id. at p. 816.) Stated another way, based upon the trial court's determination, we presume the trial court concluded the request was inflated. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1324-1326.) When the trial court reduces the award, it is not required to specifically state which services it found to be duplicative or unreasonable. (See Ketchum v. Moses, supra, at p. 1140.) We find nothing in the trial court's order reducing these fees to support Jaffe's contention that the reduction " 'shocks the conscience and suggests that passion and prejudice influenced' " the trial court's determination.

There also is no merit to Jaffe's argument that the trial court's order is arbitrary and punitive because it awarded all the requested fees incurred in the state court, but not in the bankruptcy court. Likewise, Jaffe's assertion that the $110,000 reduction in the requested fees was a penalty for seeking appellate review in Jaffe I, is not supported by the record and is unpersuasive. The trial court exercised its discretion and concluded the requested attorney fees were not reasonable.

We find meritless Jaffe's argument that based upon Code of Civil Procedure section 685.040, the trial court had no discretion to reduce the requested fees because Jaffe was "the prevailing party" in the bankruptcy proceeding. There is no such language in the statute. Code of Civil Procedure section 685.040 states attorney fees are recoverable costs (which are reasonable and necessary to enforce the judgment) if the underlying judgment contains a contractual fee provision. Under this provision, the trial court has discretion to award reasonable fees, not all the requested fees. Thus, we find no abuse of discretion arising from Jaffe's dissatisfaction that he was not awarded all of his requested attorney fees incurred in enforcing the judgment in the bankruptcy court.

2. The Trial Court Did Not Err in Denying Fees Incurred in 2007-2009

Jaffe maintains that the 2009 order denying fees and costs incurred from March 2007 through January 2009 is legal error and an abuse of discretion. We disagree on both counts.

Jaffe contends the trial court misinterpreted Code of Civil Procedure section 685.040 as giving the court discretion to deny attorney fees after awarding a "sufficient amount of attorneys' fees and expenses." This argument is based upon Jaffe's misunderstanding of the trial court's remarks during the hearing on the motion. Jaffe states the trial court "prejudged - and foredoomed - all future motions" to recover attorney fees. Jaffe overstates his case.

Jaffe states in his brief that the trial court "impugned the bona fides and besmirched the professional escutcheons of Jaffe and his counsel by stating, '[It] just seems like that's all this case is any more, just you coming into court and asking for more money all the time. I think these requests are getting out of hand, they're getting excessive, they're getting abusive and that's what I think.' " The trial court's comment focused on whether the second request for attorney fees was a reasonable one, not on Jaffe or his counsel.
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The trial court did not "cap" Jaffe's attorney fees. We find nothing in the colloquy during the motion hearing that suggests the trial court read Code of Civil Procedure section 685.040 in that manner. Rather, the trial court's remarks refer to the reasonableness of the request. From the trial court's perspective, the focus was on the "reasonableness" of incurring significant attorney fees during 2007 through 2009 when the judgment remained uncollectible after 13 years.

The trial court also did not abuse its discretion in determining that the requested fees for the 2007-2009 period were excessive and unreasonable. Jaffe again contends the trial court did not use the lodestar method and ignored the undisputed evidence tallying the services rendered to enforce the judgment. The record reveals the trial court performed its duty to review the record and was familiar with Jaffe's billing records and requests, but did not consider the request a reasonable one.

If a trial court considers a particular award excessive, it has broad discretion to determine a reasonable fee. " 'A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.' " (Ketchum v. Moses, supra, 24 Cal.4th at p. 1137; Christian Research Institute v. Alnor, supra, 165 Cal.App.4th at p. 1323.) Apart from requesting fees incurred on appeal in Jaffe I, Jaffe requested another $76,857.50 for 271.9 hours. Additionally, Jaffe sought fees for 167.8 hours of professional services, which included the following: 54.1 hours to oppose a motion to dismiss and to monitor the appeal in Jaffe I; 45.1 hours to prepare the renewed motion on remand after Jaffe I; 16.5 hours to file an improper motion to reconsider the 2008 order; 38.7 hours to prepare the motion to recover fees incurred in Jaffe I and to recover fees during the 2007-2009 period; and 13.4 hours to draft correspondence to trust beneficiary clients providing an update of judgment enforcement activities since the 2006 update.

Other than the appellate fees in Jaffe I, the trial court viewed the request for an additional $128,900 in fees as excessive and unproductive. The trial court was within its discretion to deny attorney fees for an improperly filed motion, to question the number of hours billed for professional services in filing the renewed motion and in filing the second motion for attorney fees, and to consider the reasonableness of the attorney fees incurred for correspondence to trust beneficiaries. It is apparent from this record that as of 2007, after Jaffe made numerous attempts to enforce the judgment, Pacelli did not intend to pay any sum in satisfaction of the judgment. "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. . . . ' " (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) Under these circumstances, we are not convinced that the trial court was clearly wrong; we find no abuse of discretion.

We understand Jaffe's frustration with Pacelli's litigation tactics to avoid the 1996 judgment, but the trial court's focus on these motions was on whether Jaffe's requested attorney fees were reasonable. As we have stated, the trial court's exercise of discretion is not a basis for Jaffe to claim judicial bias and a violation of judicial ethics. We decline Jaffe's request to disqualify the trial court from this action after the determination of this appeal. If we are once again presented with another appeal in this case, we advise Jaffe and his counsel that the interests of justice require the presentation of issues and well reasoned arguments, not unsubstantiated character assassination that impugns the integrity of the court.

DISPOSITION

The order of November 3, 2008 is modified to reflect the trial court award of $192,575.91, and as modified is affirmed. The January 27, 2009 order is affirmed. Jaffe is to bear all costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ALDRICH, J. We concur:

KLEIN, P. J.

KITCHING, J.


Summaries of

Pacelli v. Jaffe

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE
Jan 9, 2012
B213228 (Cal. Ct. App. Jan. 9, 2012)
Case details for

Pacelli v. Jaffe

Case Details

Full title:ZENAIDA C. PACELLI, Plaintiff, Cross-defendant and Respondent, v. HOWARD…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE

Date published: Jan 9, 2012

Citations

B213228 (Cal. Ct. App. Jan. 9, 2012)