Judge James C. Chalfant, Case 21STCV26902 2022-09-08 Tentative Ruling

The People of the State of California on the Relation of the City of Lancaster v. Michael Rives, 21STCV26902

Tentative decision on motion for (1) attorney’s fees: denied; (2) costs: no ruling necessary

Plaintiff People of the State of California on the Relation of the City of Lancaster (“City” or “Relator”) moves for an award of $136,599.10 in attorney’s fees and $2,008.87 in costs from Respondent Michael Rives (“Rives”) as a director of the Antelope Valley Healthcare District ("Healthcare District").

The court has read and considered the moving papers (no opposition was filed)[1], and renders the following tentative decision.

Plaintiff Relator commenced this proceeding on July 21, 2021, alleging violations of Government (“Govt.”) Code section 1099. The quo warranto Complaint alleges in pertinent part as follows.

At all times relevant to this action, Defendant Rives was a director of the Antelope Valley Healthcare District (“Healthcare District”). He was elected to the Board of Directors for the Healthcare District on November 3, 2020 and was sworn in on December 8, 2020.

Also, on November 3, 2020, he was elected to the Board of Trustees of the Antelope Valley Community College District (“College District”). He was sworn in on December 11, 2020.

The Healthcare District provides healthcare services for the benefit of the College District, and the two districts enter into contracts for mutual programs. Both agencies are in relevant part within the City. The positions of Healthcare District director and College District director are incompatible within the meaning of Govt. Code section 1099 because the Healthcare and College Districts have overlapping territory, duties, and responsibilities.

Relator seeks a judgment that Rives is not entitled to hold or exercise the office of director of the Healthcare District. Relator further seeks costs of these proceedings pursuant to CCP section 809.

On July 27, 2021, Relator served Defendant Rives with the Complaint, Summons, and moving papers.

On January 18, 2022, the court vacated Relator’s motion for summary judgment without prejudice.

On May 11, 2022, Relator submitted a proposed writ of quo warranto. The court rejected it on May 20, 2022, for failure to match the judgment.

On July 11, 2022, Relator submitted an amended writ of quo warranto. The court rejected it for failure to file a motion to amend.

CCP section 1021.5 (“section 1021.5”) codifies the “private attorney general” exception to the general rule that each side bears its own fees unless the parties contracted otherwise. See CCP §1021. Section 1021.5 permits a trial court to award fees to a successful party in any action that: “has resulted in the enforcement of an important right affecting the public interest if (a) a significant benefit has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery. The issue is committed to the trial court’s discretion. Flannery v. California Highway Patrol, (1998) 61 Cal.App.4th 629, 634.

Courts take a “broad, pragmatic view of what constitutes a ‘successful party’” in order to effectuate the policy underlying section 1021.5. Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 565. The party seeking attorney’s fees need not prevail on all of its alleged claims in order to qualify for an award. Harbor v. Deukmejian, (1987) 43 Cal.3d 1078, 1103; Daniels v. McKinney, (1983) 146 Cal.App.3d 42, 55. The party is considered successful under section 1021.5 if the litigation “contributed substantially to remedying the conditions at which it was directed.” Planned Parenthood v. Aakhus, (1993) 14 Cal.App.4th 162, 174. In other words, the “successful” party under section 1021.5 is the party that succeeds on “any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Maria P. v. Riles, (1987) 43 Cal.3d 1281, 1292; see Tipton-Whittingham v. City of Los Angeles, (2004) 34 Cal.4th 604, 610. A prevailing party who qualifies for an award under section 1021.5 are entitled to compensation for all hours reasonably spent by their counsel. Serrano v. Unruh, (1982) 32 Cal.3d 621, 632–33.

Unlike the separate substantial benefit doctrine, “the ‘significant benefit’ that will justify an attorney fee award need not represent a ‘tangible’ asset or a ‘concrete’ gain but, in some cases, may be recognized simply from the effectuation of a fundamental constitutional or statutory policy.” Woodland Hills Residents Assn., Inc. v. City Council, (1979) 23 Cal.3d 917, 939. “[T]he benefit may be conceptual or doctrinal and need not be actual or concrete; further, the effectuation of a statutory or constitutional purpose may be sufficient.” Braude v. Automobile Club of Southern Cal., (1986) 178 Cal.App.3d 994, 1011. Moreover, the extent of the public benefit need not be great to justify an attorney fee award. See, e.g., Protect Our Water v. County of Merced, (2005) 130 Cal.App.4th 488, 496 (significant public benefit where litigation prompted agency to improve methods of creating and managing its CEQA records). The trial court determines “the significance of the benefit, as well as the size of the class receiving benefit, from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case.” Woodland Hills, supra, 23 Cal.3d at 939–940.

The party seeking attorney’s fees must show that the necessity for pursuing the lawsuit placed a burden on the plaintiff “out of proportion to his individual stake in the matter.” Woodland Hills, supra, 23 Cal. 3d at 941. Although cases refer to this requirement as the “financial burden” criterion, nothing in the language of CCP section 1021.5 limits the consideration of the necessity and financial burden clause to solely financial interests. Hammond v. Agran, (2002) 99 Cal.App.4th 115, 125. “The idea is that the litigation for which fees are claimed must transcend one's interests, whether pecuniary or not.” Id. at 127. The question is whether advancement of the public interest was merely coincidental to the attainment of the party’s personal goals. Bowman v. City of¿Berkeley (2005) 131 Cal.App.4th 173, 181. The party seeking attorney’s fees bears the burden of establishing that its litigation costs transcend its personal interests. Save Open Space Santa Monica Mountains v. Superior Court, (2000) 84 Cal.App.4th 235, 247. The trial court's application of the financial burden criterion involves a “realistic and practical comparison of the litigant's personal interest with the cost of suit.” Families Unafraid to Uphold Rural El Dorado County v. Bd. of Supervisors, (2000) 79 Cal.App.4th 505, 515.

The petitioner bears the burden of proof as to the reasonableness of any fee claim. CCP §1033.5(c)(5). This burden requires competent evidence as to the nature and value of the services rendered. Martino v. Denevi, (1986) 182 Cal.App.3d 553, 559. “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Id. “‘The reasonable market value of the attorney's services is the measure of a reasonable hourly rate. This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel. ’” Center For Biological Diversity v. County of San Bernardino, (2010) 188 Cal.App.4th 603, 619 (citations omitted).

A plaintiff’s verified billing invoices are prima facie evidence that the costs, expenses, and services listed were necessarily incurred. See Hadley v. Krepel, (1985) 167 Cal.App.3d 677, 682. “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” Lunada Biomedical v. Nunez, (2014) 230 Cal.App.4th 459, 488.

In determining whether the requested attorney’s fees are reasonable, the court’s “first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. The lodestar figure may then be adjusted, based on consideration of facts specific to the case, in order to fix the fee at the fair market value for the legal services provided.” Gorman v. Tassajara Development Corp., (2008) 162 Cal.App.4th 770, 774 (“Gorman”). In adjusting the lodestar figure, the court may consider the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. EnPalm LLC v. Teitler, (2008) 162 Cal.App.4th 770, 774; see also PLCM Group, Inc. v. Drexler, (2000) 22 Cal.4th 1084, 1095.

Rives was sworn in as a director of the Healthcare District on December 8, 2020 and as a director of the College District on December 11, 2020. Burns Decl., ¶10, Ex. A.

On December 18, 2020, Lancaster’s Mayor wrote a letter to Rives informing him that simultaneously holding both postions violates Govt. Code section 1099 because of the potential for significant clash of duties or loyalties. Burns Decl., ¶11, Ex. B. He requested that Rives step down from his position as a director of the Healthcare District by January 3, 2021. Burns Decl., ¶11, Ex. B.

On January 27, 2021, the Healthcare District excused Rives from the final portion of an executive session to discuss potential litigation against him – the quo warranto Complaint. Burns Decl., ¶12, Ex. C. The City had asked the Healthcare District to join the lawsuit and submit a letter of support. Burns Decl., ¶12, Ex. C. The remaining directors unanimously voted to provide the letter. Burns Decl., ¶12, Ex. C.

On January 29, 2021, Relator filed a Request with the Attorney General for leave to file a complaint in quo warranto against Defendant. Burns Decl., ¶13. Relator personally served Defendant with a copy of the Request on January 29, 2021. Burns Decl., ¶13. On February 23, 2021, Rives submitted his response, which failed to address any of Relator’s claims and instead made accusations of other conflicts of interest. Burns Decl., ¶13.

On July 15, 2021, the Attorney General granted the request for leave to file the quo warranto Complaint and issued an opinion that there was significant potential for conflict between the positions Rives held. Burns Decl., ¶14.

On July 28, 2021, the day after Relator served Rives with the Complaint, it again requested that Rives resign from the Healthcare District. Burns Decl., ¶15. Rives refused and filed an Answer with a declaration on August 24, 2021. Burns Decl., ¶¶ 15-16.

On January 18, 2022, the court vacated Relator’s motion for summary judgment without prejudice. Burns Decl., ¶17.

On April 19, 2022, the court granted the City’s quo warranto Complaint. Burns Decl., ¶¶ 10, 17, Ex. A. The court held that the offices are incompatible and that no statute or ordinance allowed Rives to hold both offices despite that. Burns Decl., ¶¶ 10, 17, Ex. A.

On May 16, 2022, pursuant to that decision, the court signed a judgment for a writ of quo warranto ordering Rives ousted from his position on the Healthcare District as of December 11, 2020. Burns Decl., ¶10, Ex. A. The judgment fined him $5,000 and stated that Relator is entitled to recover its costs and attorneys’ fees from Rives. Burns Decl., ¶10, Ex. A.

Counsel for Relator Allison Burns (“Burns”) billed $400 per hour, whereas the prevailing market rate for attorneys with her experiences is from $400 to $650. Burns Decl., ¶2. Her associate Jennifer R. Toghian (“Togian”) and Gregory Maestri (“Maestri”) each billed $293 per hour, whereas the prevailing market rate for attorneys with their experience is from $325 to $450. Burns Decl., ¶¶ 3-4. Paralegal Kelly E. Curran (“Curran”) billed $204 per hour, whereas the prevailing market rate for paralegals with her experiences is from $145 to $225. Burns Decl., ¶6. There rates are consistent with rates that trials courts have approved in past similar motions for attorney’s fees. Burns Decl., ¶¶ 5-6.

Counsel has calculated the hours each team member spent every day on one of 24 tasks for this litigation, with privileged information redacted. Burns Decl., ¶¶ 7-8, Ex. D. The total attorney fees incurred and claimed is $136,599.10 for 443.2 hours of work between all four members. Burns Decl., ¶¶ 8-9, Ex. D.

Section 1021.5 permits a trial court to award fees to a successful party in any action that: “has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit has been conferred on the general public or a large class of persons; (b) the necessity and financial burden of private enforcement, or of enforcement by a public entity against another public entity, are such as to make the award appropriate; and (c) such fees should not in the interest of justice be paid out of the recovery. The issue is committed to the trial court’s discretion. Flannery v. California Highway Patrol, (1998) 61 Cal.App.4th 629, 634.

Relator asserts that it meets the first element because the Complaint yielded significant public benefit because, per Govt. Code section 1099, Rives’ presence on both boards created a conflict of interest that could harm the public. Mot. at 5-6.

The court will assume that is true, but Relator cannot meet the second element that the necessity and financial burden of private enforcement, or of enforcement by a public entity against another public entity, are such as to make the award appropriate.

First, as stated in the case cited by Relator, City of Maywood v. Los Angeles Unified School District, (2012) 208 Cal.App.4^th 362, 432-33, prior to 1993 a public entity could not recover attorney’s fees under section 1021.5. In 1993, the Legislature expanded section 1021.5 to permit a public entity to collect attorney’s fees from other another public entity if it meets all other requirements of the statute. Id. However, the express language of section 1021.5 as amended only permits a public entity to collect from another public entity. Specifically, the moving public entity must show that the necessity and financial burden of “enforcement by one public entity against another public entity, are such as to make the award appropriate....” (emphasis added). There is nothing in the amended section 1021.5 that permits a public entity to recover section 1021.5 attorney’s fees from a former public official, or even a current public official. The party against whom fees are awarded must be another public entity. This motion is against Rives in his individual capacity, and section 1021.5 does not permit the City to collect attorney’s fees from him.

Second, even where a public entity can recover section 1021.5 attorney’s fees, it must establish that the financial burden of enforcement outweighs the pecuniary interests of it and its constituents. Maywood, supra, 208 Cal.App.4^th at 431-34 (citing Conservatorship of Whitley, 2010) 50 Cal.4^th 1206, 1225). The City points out that the quo warranto action was necessary to remove Rives as an officeholder, and that it incurred a significant financial burden in bringing it. Mot. at 6-7. Yet, the City does not present any evidence about its pecuniary interests and that of its constituents. While one might presume that Relator has no pecuniary interest in removing Rives from office, the court will not do so where the City is attempting to impose a fee award upon him.

It appears that the City is relying on the judgment signed by the court which purports to award it attorney’s fees and costs. It should be noted that the court signed this judgment as presented by the City on May 16, 2022 because Rives failed to object to it. This fact does not mean the City is entitled to attorney’s fees, however, where the law does not permit it. The judgment is ordered amended to delete an award of attorney’s fees.[2]

The motion for attorney’s fees is denied. The court will sign an amended writ as no initial writ has been issued in this case.

[1] Rives has submitted two letters to the court, one objecting to the judgment and the other seeking a continuance of the hearing in order to prepare. Rives is informed that the only legal means of seeking a court order is a motion or ex parte application; the court does not respond to letters. Nor is there any reason to grant a continuance of the instant hearing as will be seen post.

[2] In contrast to attorney’s fees, the City is entitled to costs. Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. CCP §1032(b). The City succeeded on its quo warranto Complaint and obtained a judgment, and is entitled to a writ, removing Rives from his position on the Healthcare District and is the prevailing party. Burns Decl., ¶¶ 10, 17, Ex. A. The City filed a memorandum of costs which was not challenged by Rives. Therefore, it is entitled to its $2,008.87 in costs as a matter of law without further action from the court.