Opinion
NOT TO BE PUBLISHED
Superior Court County No. 2007-00306268 (Ventura County), Henry J. Walsh, Judge
Beach, Whitman, Codrey; Thomas E. Beach, Andrew K. Whitman and Katherine L. Cody, for Appellants.
Gregory L. Johnson. Lascher & Lascher, Wendy C. Lascher, for Respondent.
YEGAN, J.
Appellants, Victoria Ventura Health Care LLC, dba Victoria Care Center and The Ensign Group, Inc., appeal an award for $125,290 attorney fees entered against them after appellants settled a negligence, elder neglect, and Patients' Rights (Health & Saf. Code, § 1430 subd. (b)) action for $126,000. The settlement agreement provided that plaintiff-respondent Jessie Rodriguez would be awarded attorney fees on the Patients' Rights (PR) cause of action in an amount to be determined on noticed motion. We vacate the award for fees against The Ensign Group, Inc. because it is not a defendant in the PR cause of action or a skilled nursing facility licensee within the meaning of Health and Safety Code section 1430, subdivision (b). As modified, the judgment is affirmed.
Health & Safety Code section 1430, subdivision (b) provides in pertinent part: "A current or former resident or patient of a skilled nursing facility... may bring a civil action against the licensee of a facility who violates any rights of the resident or patient as set forth in the Patients Bill of Rights in Section 72527 of Title 22 of the California Code of Regulations, or any other right provided for by federal or state law or regulation.... The licensee shall be liable for up to five hundred dollars ($500), and for costs and attorney fees. ..." (Italics added.)
Procedural History
On October 27, 2007 Jessie Rodriguez, through her guardian ad litem Edward Rodriguez, sued appellants for negligence, elder neglect and violation of Patients' Rights. (Health & Saf. Code, § 1430, subd. (b); tit. 22, Cal. Code of Regs., § 72527.) Rodriguez allegedly suffered bedsores, medication errors, and massive dehydration and malnutrition while a patient at appellants' skilled nursing facility, Victoria Care Center.
The case was set for trial three times. Two days before a mandatory settlement conference, appellants offered to compromise the elder neglect/negligence causes of action for $125,000 with each party bearing their own costs and attorney fees. (Code Civ. Proc., § 998.) The offer to compromise stated that appellants would settle the PR cause of action for "$1,000.00, with each party bearing their own statutory costs, and the matter of attorney[']s fees decided by binding arbitration."
Rodriguez's attorney, Gregory Johnson, asked whether the settlement offer included attorney fees pursuant to Health and Safety Code section 1430, subdivision (b). Appellants told Johnson that "attorney fees under [Health & Safety Code section] 1430(b) were 'statutory costs' " and that appellants were "not offering one dime of fees."
Johnson complained that the settlement offer was a "malpractice trap" and drafted a new offer to compromise reserving Rodriguez's right to statutory attorney fees. The new offer to compromise stated that Rodriguez would dismiss the entire action with prejudice based on the following settlement terms:
"Causes of action numbers 1 and 3: Elder Neglect and Negligence: $125,000.00, with each party to bear their own costs and attorney fees; [¶] Cause of Action 2: Violation of Patient's Rights: $1,000 and attorney fees. The amount of attorney fees to be determined by noticed motion."
After appellants accepted the settlement offer, judgment was entered February 26, 2009. The judgment awarded Rodriguez $126,000 and "[a]ttorney's fees and costs pursuant to Health & Safety Code section 1430(b) in the amount of $ pursuant to noticed motion."
Rodriguez filed a motion for fees and costs. The motion included 27 pages of billing records and stated that Johnson, a second attorney, and a paralegal worked 879.6 hours on the case and incurred $19,02.89 costs. Rodriguez sought attorney fees at the rate of $350/hour and paralegal fees at the rate of $95/hour for a $247,104 lodestar amount. Rodriguez also requested a 2.0 lodestar multiplier to compensate for the risk, delay, and public policy interest in the litigation.
Appellants opposed the motion on the ground that the time records did not specify what fees were directly related to the PR cause of action. Appellants did not dispute the hourly rates or time spent but argued that fees on the negligence/elder neglect causes of action had to be segregated from the PR cause of action.
The trial court allocated 262 hours of attorney time and 64 hours of paralegal time to the PR cause of action. It found that Johnson had a boutique practice in elder abuse and nursing home law, and awarded attorney fees at the rate of $350/hour and $95/hour for paralegal time. Based on the costs advanced and the contingent risk, the trial court applied a 1.3 multiplier "to attorney fees only." Rodriguez was awarded $125,290 attorney fees and $7,164.37 costs.
Settlement Agreement
Appellants argue that the settlement agreement is subject to de novo review. The offer to compromise, which was accepted by appellants, states that Rodriguez will recover $1,000 and attorney fees on the PR cause of action. When interpreting a written instrument, we are bound to give effect to the plain and ordinary meaning of the language used by the parties. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265.) "If contractual language is clear and explicit, it governs. (Civ. Code, § 1638.)" (Id. at p. 1264.)
The trial court found that not to award fees would make the language in settlement agreement "either meaningless, or consciously deceptive." We concur. The settlement agreement clearly provides for attorney fees in an amount to be determined on noticed motion. (Civ. Code, § 1643 [contract must receive interpretation as will make it lawful, operative, definitive, reasonable and capable of being carried into effect].)
Overlapping Fees
Appellants contend that the "the plain language" of the settlement agreement shows that Rodriguez "agreed to forego" attorney fees on the elder neglect/negligence causes of action. They argue that the trial court erred in awarding fees because the PR claim is inextricably intertwined with the elder neglect/negligence causes of action. But this is contrary to the settlement agreement which states that the parties will "bear their own costs and attorney fees" on the negligence/elder neglect causes of action. There is no language that Rodriguez agreed to "forego" attorney fees on common issues relating to the PR cause of action.
Appellants argue that the right to recover "overlapping fees" was waived but waiver requires the clear, unequivocal and intentional relinquishment of a known right. (A.J. Industries, Inc. v. Ver Halen (1977) 75 Cal.App.3d 751, 759.) When appellants advised Johnson that the settlement offer did not include attorney fees, Johnson rejected the offer and drafted a new offer to compromise to make it clear that Rodriguez was reserving her right to statutory attorney fees. After Johnson served the offer to compromise, appellants responded with a December 17, 2008 letter asking for "a summary of all costs, time and services devoted to the prosecution of your 1430b Claim.... This information is necessary to properly evaluate your statutory offer."
Estoppel and waiver are questions of fact for the trial court. (Brookview Condominium Owners' Assn. v. Heltzer Enterprises-Brookview (1990) 218 Cal.App.3d 502, 513.) "The burden is on the party claiming the waiver 'to prove it by evidence that does not leave the matter doubtful or uncertain and the burden must be satisfied by clear and convincing evidence that does not leave the matter to speculation.' [Citation.]" (Ibid.) Substantial evidence supports the finding that Rodriguez reserved her right to attorney fees on the PR cause of action. Appellants were represented by experienced counsel and, in accepting the offer to compromise, were on notice that Rodriguez was not waiving her claim for statutory fees under Health & Safety Code section 1430, subdivision (b.)
Apportionment of Fees.
Appellants argue that the trial court erred in not apportioning fees between the negligence/elder neglect causes of action and the PR cause of action. The record, however, shows that there was an apportionment of fees. The trial court allocated 262 hours to the PR cause of action. It is well-settled that the amount of fees to be awarded is within the trial court's broad discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)
It is also-well settled that "[a]ttorney's fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed." (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130.) Where "liability issues are so interrelated that it is... impossible to separate them into claims for which attorney fees are properly awarded and claims for which they are not, then allocation is not required. [Citation.]" (Akins v. Enterprises Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133.) Nevertheless, the trial court did an apportionment. It did not abuse its discretion in awarding the fees that it did. (Id., at p. 1134.)
Public Policy – Fee Shifting Statutes
Citing Wood v. Santa Monica Escrow Co. (2007) 151 Cal.App.4th 1186 (Wood) and Carver v. Chevron U.S.A., Inc. (2004) 119 Cal.App.4th 498 (Carver), appellants argue there is no right to statutory fees if the PR cause of action is inextricably intertwined with the other causes of action. Carver was an action for violation of the Cartwright Act (Bus. & Prof. Code, § 16720 et seq.), fraud, and breach of contract. Defendant prevailed and moved for attorney fees, but under the Cartwright Act only a prevailing plaintiff could recover attorney fees. (Carver, supra. 119 Cal.App.4th at p. 503.) The trial court declined to award attorney fees that related exclusively to or inextricably overlapped Cartwright Act issues. The Court of Appeal affirmed, holding that "the unilateral fee-shifting provision of [Business and Professions Code] section 16750, subdivision (a) prohibits an award of attorney fees for successfully defending Cartwright Act and non-Cartwright Act claims that overlap. To allow Chevron to recover fees for work on Cartwright Act issues simply because the statutory claims have some arguable benefit to other aspects of the case would superimpose a judicially declared principle of reciprocity on the statute's fee provision, a result unintended by the Legislature, and would thereby frustrate the legislative intent to 'encourage improved enforcement of public policy.' [Citation.]" (Id., at p. 504.)
In Wood, the defendant prevailed in a financial elder abuse action and was denied attorney fees. We affirmed on the ground that the elder abuse statute (Welf. & Inst. Code, § 15657.5, subd. (a)) contained a unilateral fee-shifting provision similar to the fee-shifting provision discussed in Carver. (Wood, supra, 151 Cal.App.4th at p. 1191.) There was no reciprocal attorney fee provision for a prevailing defendant. "Because... all the causes of action alleged here arose from a single transaction, all causes of action overlap the elder abuse cause of action. [Defendant] is not entitled to an award of fees." (Ibid.)
Here the award for fees is consistent with Health and Safety Code section 1430, subdivision (b) which provides that a plaintiff who prevails on a PR action is entitled to attorney fees. (Ante, fn. 1.) It advances an important public policy to ensure that certain enumerated patient rights are not violated. (See California Assn. of Health Facilities v. Dept. of Health Services (1997) 16 Cal.4th 284, 301-302; Tit 22, Cal. Code of Regs., § 72527, subd. (a).) "An agreement by a resident or patient of a skilled nursing facility... to waive his or her rights to sue pursuant to this subdivision shall be void as contrary to public policy." (Health & Saf. Code, § 1430, subd. (b).)
Unlike Carver and Wood, the trial court was not required to deny overlapping attorney fees if the negligence/elder neglect causes of action were based on the violation of the Patient's Bill of Rights found in section 72527 of title 22 of the California Administrative Code. (See Norman v. Life Care Centers of America, Inc. (2003) 107 Cal.App.4th 1233, 1246-1248; Conservatorship of Gregory (2000) 80 Cal.App.4th 514, 522-524; Klein v. BIA Hotel Corp. (1996) 41 Cal.App.4th 1133, 1140-1141.) The apportionment of fees is difficult to do in cases where the fees are inextricably intertwined. But such difficulty cannot thwart private actions to enforce the Patient's Bill of Rights. (See California Assn. of Health Facilities v. Dept. of Health Services, supra, 16 Cal.4th at pp. 301-302 [discussing legislative history of section 1430, subdivision (b)].) The overlapping-fee contention that appellants raise in this appeal, if credited, would undermine Health and Safety Code section 1430, subdivision (c) which provides: "The remedies specified in this section shall be in addition to any other remedy provided by law."
Lodestar Multiplier
In awarding statutory attorney fees, the fee amount can be based on the lodestar method with adjustments up or down as was done here. (See Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131-1132.) The trial court first determines a 'lodestar' figure by multiplying the hours expended by a reasonable hourly rate. (Serrano v. Priest (1977) 20 Cal.3d 25, 48.) The court then exercises its discretion to apply a multiplier to adjust the lodestar upward or downward in order to arrive at a fee that reflects the fair market value of the service rendered, based on 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, (4) the contingent nature of the fee award. [Citation.].' " (Graham v. DaimlerChryslter Corp. (2004) 34 Cal.4th 553, 579.)
Appellants argue that a significant portion of the fees are unrelated to the PR cause of action. The trial court, however, took that into account in awarding attorney fees (262 hours at $350/hour) for less than 30 percent of the total hours (879.6 hours) Rodriguez's attorneys spent on the case. The trial court did not abuse its discretion In reducing the lodestar amount from $247,104 to $97,780 (a 60.5 percent reduction) and applying a 1.3 multiplier on attorney fees. "One of the most common fee enhancers, and one used by the trial court in the present case, is for the contingency risk." (Id., at p. 579.)
The time records and supporting declarations show that it was a complex case, that Johnson took the case on a contingency fee basis and had to advance $19,026 in costs, and that Johnson obtained a favorable result despite a contingent risk. Johnson devoted 90 percent of his practice to elder abuse litigation and stated that, in his experience, "even the most egregious cases often result in token offers until all the depositions are taken and all the money is spent."
The instant case is no exception. It was a "document intensive" case that required 16 depositions, the review of 29 depositions in three related elder abuse cases, and multiple discovery demands. The case file filled an entire room and included more than 10,000 pages of medical records and tens of thousands of pages of discovery. Rodriguez's medical chart at Victoria Care Center consisted of 1,070 pages, but on subsequent discovery responses, grew to 1,087 pages and then 1,177 pages. After Johnson threatened to file a motion to compel production of the original medical chart, appellants produced 33 new pages of medical records that had "false charting." The case settled a month later.
This is a complex case and the trial court did not abuse its discretion in using the lodestar method to calculate fees and applying a 1.3 multiplier on attorney fees. On review, it is presumed that the court considered all appropriate factors in choosing a multiplier and applying it to the lodestar amount. (See e.g., Downey Cares v. Downey Community Development Com. (1987) 196 Cal.App.3d 983, 998.)
Ensign
Appellant, The Ensign, Inc. (Ensign), argues that it is not liable for statutory fees because it is not a defendant in the PR cause of action. The complaint states that Victoria Ventura Healthcare, LLC is the holder of the skilled nursing facility license and "has statutory liability to ensure that [Victoria Care Center] is, at all times, operated in full compliance with all State and Federal laws and regulations. Several of these duties are, by California law, non-delegable."
Ensign, a management company, is a codefendant on the negligence/elder neglect causes of action. It is not named in the PR cause of action and is not the holder of a skilled nursing facility license within the meaning of Health and Safety Code section 1430, subdivision (b). (See Health & Saf. Code, § 1418, subd. (d) [defining "licensee"].) Although Victoria Ventura Health Care LLC and Ensign agreed to settle the PR cause of action for $1,000, the trial court erred in awarding attorney fees against Ensign.
Before the case settled, Ensign unsuccessfully moved for summary judgment. Rodriguez, in her motion for attorney's fees, conceded that the time spent opposing the summary judgment motion (40.3 hours) was not related to the PR cause of action.
We vacate the award for $125,290 fees against Ensign and affirm the judgment, as modified. The parties shall bear their own costs on appeal.
We concur: GILBERT, P.J. PERREN, J.