Judge Mitchell L. Beckloff, Case BS172990 2023-02-08 Tentative Ruling

Petitioner, United Homeowners’ Association II, requests attorneys’ fees and costs pursuant to Code of Civil Procedure section 1021.5 in the amount of $70,545.20. Petitioner argues it is entitled to attorneys’ fees pursuant to Code of Civil Procedure section 1021.5 (Section 1021.5).

Real Parties in Interest, Peak Capital Investments LLC and The Bedford Group (Real Parties), oppose the motion. Respondent, the County of Los Angeles (County), joins Real Parties’ opposition.

The underlying litigation involved the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq. Petitioner prevailed in that litigation. The court thereafter granted Petitioner’s motion for attorneys’ fees in the amount of $118,089 pursuant to Section 1021.5.

Real parties (and the County) challenged the attorneys’ fee award in the Court of Appeal.[1] Real Parties argued the court improperly awarded attorneys’ fees under Section 1021.5 and the court erred in its calculation (or analysis) of the amount of attorneys’ fees awarded. (Grossman Palmer Decl., Ex. P.)

Petitioner now moves for attorneys’ fees under Section 1021.5. Petitioner reasons it is entitled to such an award because it incurred the attorneys’ fees in successfully defending this court’s earlier award.

Petitioner submits evidence (the Declaration of Beverly Grossman Palmer) to support its motion. The evidence includes billing records for two attorney timekeepers, Beverly Grossman Palmer and Julia Michel.

Section 1021.5, authorizing an attorneys’ fees award in “public interest” litigation, provides in relevant part:

“. . . a court may award attorneys’ fees to a successful party . . . in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, 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, if any.”

The basic objective of the “private attorney general” doctrine “is to encourage suits enforcing important public policies by providing substantial attorney fees to successful litigants in such cases.” (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1289; Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 565.) The statute “codifies the private attorney general doctrine and acts as an incentive to pursue ‘public interest litigation that might otherwise have been too costly to bring.’ “ (Hall v. Department of Motor Vehicles (2018) 26 Cal.App.5th 182, 188.) Section 1021.5 awards successful public interest litigants with attorney fees where three statutory requirements are established. (Vasquez v. State of California (2008) 45 Cal.4th 243, 250-251.) The burden is on the fee claimant to establish each statutory requirement, including that its litigation costs transcend its personal interest in the litigation. (Save Open Space Santa Monica Mountains v. Superior Court of Los Angeles County (2000) 84 Cal.App.4th 235, 246.)

Real Parties do not argue about Petitioner’s entitlement to an award of attorneys’ fees under Section 1021.5.[2] Instead, Real Parties contend Petitioner is not entitled to any award of attorneys’ fees as a matter of equity. To the extent the court determines Petitioner is entitled to an attorneys’ fees award, however, Real Parties contend the attorneys’ fees sought are at an unreasonable and inflated hourly rate and the claimed hours are unreasonable and excessive.

Real Parties contend Petitioner should be equitably barred from recovering any attorneys’ fees because Petitioner failed to reasonably attempt to resolve the fee issue before filing this motion. (Opposition 3:8-15; Thompson Decl., ¶¶ 5-6.) Real Parties report they “offered to pay the entire sum Petitioner sought, and Petitioner unreasonably refused their settlement offer.” (Opposition 3:14-15; Thompson Decl., ¶ 6.)

Petitioner argues Real Parties offer a “complete misrepresentation of the course of the parties’ discussions . . . .” (Reply 5:9-10; 6:17 [“a complete lie”].) Petitioner acknowledges Real Parties offered to pay certain attorney fees in installments, but Petitioner further explains the offer of installment payments covered only the attorneys’ fees awarded by this court as affirmed by the Court of Appeal. (Reply 6:2-11; Grossman Palmer Reply Decl. ¶¶ 4-13, Exhs. R-Z.) Real Parties’ offer did not include any amount for Petitioner’s attorneys’ fees incurred in defending this court’s order in the Court of Appeal.

Based on the evidence before the court, the court cannot find Petitioner should be equitably barred from obtaining attorneys’ fees under the circumstances. The parties attempted to negotiate a settlement. The parties were not able to reach an agreement despite their good faith efforts. Accordingly, the court finds Petitioner is not equitably barred from recovering its attorneys’ fees incurred on appeal based on a failure to reach a settlement of the issue.

Petitioner requests attorneys’ fees in the amount of $70,545.20, which includes attorneys’ fees incurred in bringing this motion.

When assessing the amount of any attorneys’ fee award, whether made under Section 1021.5 or otherwise, courts ordinarily determine what is reasonable through the application of the “lodestar” method with adjustments for what hours and rates are reasonable given the expertise of counsel and difficulty of the matter presented. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1136.)

Under the lodestar method, a base amount is calculated from a compilation of (1) time reasonably spent and (2) the reasonable hourly compensation of each attorney. (Serrano v. Priest (1977) 20 Cal.3d 25, 48; see also Meister v. Regents of University of California (1998) 67 Cal.App.4th 437, 448-449.) The court is vested with discretion to determine whether claimed hours were reasonably spent as well as an attorney’s reasonable hourly rate. (Dover Mobile Estates v. Fiber Form Products, Inc. (1998) 220 Cal.App.3d 1494, 1501.)

Normally, a “reasonable” hourly rate is the prevailing rate charged by attorneys of similar skill and experience in the relevant community for similar work. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) That amount may then be adjusted through consideration of various 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.” (Ketchum v. Moses, supra, 24 Cal.4th at 1132.) The court may also rely on its own knowledge of reasonable attorney fees in the community to determine whether hourly rates are reasonable. (See PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at 1096 [explaining trial court has its own expertise in determining value of legal services and may make its own determination without necessity of expert testimony].)

First, as to the hourly rate, Petitioner seeks attorney fees at the following discounted hourly rates: $800 for Attorney Grossman Palmer and $495 for Attorney Michel. In support of the discounted hourly rates, Petitioner submits the declaration of Attorney Grossman Palmer, representing that her hourly rate is consistent with prevailing markets rates and is appropriate given her experience, skill, and education in this specialized field. (Palmer Decl. ¶¶ 11-13.) As to Attorney Michel, Attorney Grossman Palmer makes the same representation. (Palmer Decl. ¶¶ 14-16.)

The court notes the Superior Court for the County of Yolo found the rates sought here for both attorneys to be reasonable on May 31, 2022. (Grossman Palmer Decl., ¶ 21 a., Ex. F.) For work done in 2020, this court (the Hon. Mary Strobel) approved a stipulation for attorneys’ fees reflecting an hourly rate of $725 for Attorney Grossman Palmer. (Grossman Palmer Decl., ¶ 21.b., Ex. G.) This court previously found $695 per hour for work performed by Attorney Grossman Palmer in 2017, 2018 and 2019 to be reasonable in this proceeding.[3]

Real Parties contend the evidence Petitioner uses to substantiate the hourly rates claimed is “outdated, irrelevant, incomplete and inaccurate.” (Opposition 4:1.) Real Parties also argue other trial court’s found Attorney Grossman Palmer’s hourly rate to be excessive. Real Parties’ arguments are similar to those made to this court previously after trial. (See August 31, 2020 Order Granting in Part Petitioner’s Motion for Attorney Fees p. 7.)

Several years have passed since this court last considered and approved Attorney Grossman Palmer’s hourly rate of $695 for this proceeding based on the issues raised by the petition alleging CEQA violations. Attorney Grossman Palmer provided Petitioner with services in the Court of Appeal and here on this fee motion. The court previously considered Attorney Grossman Palmer’s hourly rate in connection with highly specialized CEQA and land use litigation.

The issues raised in the Court of Appeal as well as on this motion arise in the context of attorneys’ fees litigation. Fee litigation—whether in the trial court or Court of Appeal—is distinctly different from the highly specialized work of land use and CEQA litigation. The court acknowledges in the context of Section 1021.5 and an issue of entitlement to fees, the litigation is something more than ordinary fee litigation. That is, the attorney defending an attorneys’ fees motion in this context would require some general knowledge of land use and CEQA to defend whether her client is entitled to a fee award. An $800 hourly rate in this context, however, is excessive. (See PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at 1095. [“The reasonable hourly rate is that prevailing in the community for similar work.”])

Petitioner’s evidence of periodic surveys of law firm billing rates in Southern California supports a mid-year 2020 median hourly billing rate of $660 for a partner in Los Angeles practicing general litigation. (Grossman Palmer Decl., Ex. C.) Such evidence is consistent with this court’s experience and familiarity with hourly billing rates for general litigation matters. As noted, defending the attorneys’ fee award required more knowledge and skill than general litigation. Thus, something more than the median billing rate for a partner in Los Angeles engaging in general litigation is warranted to reflect some specialized knowledge of land use and CEQA is required where attorneys’ fees are sought under Section 1021.5. Given the evidence, the court finds a reasonable hourly rate prevailing in the community for work similar to that involved here for attorney with Attorney Grossman Palmer’s level of experience is $710 per hour.

At the time Attorney Michel rendered services to Petitioner, she had been a member of a state bar (Washington) for two and three years.[4] Petitioner’s evidence of periodic surveys of law firm billing rates in Southern California supports a mid-year 2020 median hourly billing rate of $595 for an associate in Los Angeles practicing litigation. (Grossman Palmer Decl., Ex. C.) Given Attorney Michel had only two and three years of experience while providing services to Petitioner and based on the court’s own knowledge and experience of attorney billing rates, the court finds (as does Petitioner) the median hourly billing rate excessive. The court finds a reasonable hourly rate prevailing in the community for work similar to that involved here with Attorney Michel’s level of experience is $450 per hour. As with Attorney Grossman Palmer, the court finds defending the attorneys’ fee award required more knowledge and skill than general litigation based on the land use and CEQA context.

For services provided to Petitioner on appeal and through this motion, Attorney Grossman Palmer expended approximately 53.3 hours and Attorney Michel expended approximately 55.5 hours. (See Reply 13; Grossman Palmer Decl., Exh. A; Grossman Palmer Reply Decl., Exh. Q.)

Real Parties contest the amount of hours incurred on several grounds. First, they argue the hours spent associated with the appeal are excessive considering the appeal concerned a non-complex attorneys’ fees issue. Second, Real Parties contend a reduction of the lodestar is warranted because the hours incurred includes duplicative work. Finally, they argue anticipated fees of $10,000 for work done in response to Real Parties’ opposition to this motion is grossly excessive.

Real Parties argue the 63.4 hours spent drafting a single opposition brief for the Court of Appeal was excessive. Real Parties contend the issues had been thoroughly briefed and argued in this court such that an opposition brief should have required far less work by Petitioner’s attorneys. Real Parties report their counsel expended only 49.5 hours for their opening brief. (Thompson Decl. ¶ 4.) Such circumstances, Real Parties argue, require the court to reduce the overall hours expended by Petitioner’s attorneys by 40 percent.

In the court’s view, a flat reduction of 40 percent is simply arbitrary. Such a reduction is untethered to any kind of analysis.

The court agrees, however, the amount of time expended by Petitioner’s counsel to draft the respondent’s brief in the Court of Appeal was excessive. Based on the court’s calculations, it appears Attorney Grossman Palmer expended 17.6 total hours for services related to Petitioner’s respondent’s brief. Such time expended included edits and revisions. (See time entries of November 12 and 15.) The court calculated Attorney Michel expended 38.1 total hours for services related to the respondent’s brief, including research, drafting and revisions.

Thus, Petitioner’s counsel spent a total of 55.7 hours researching, drafting, revising and editing Petitioner’s respondent’s brief. Such hours represent nearly 7 days of full-time attorney work for a respondent’s brief where the issue is entitlement to and reasonableness of attorneys’ fees. Given the briefing that had occurred in the trial court on the issues and the limited issues before the Court of Appeal, the court finds the number of hours expended unreasonable. Under the circumstances, the court finds a reduction of 15.7 hours or an allowance of 40 hours (a week of full-time work) for such services reasonable. The court allocates the reduction as follows: 4.96 hours to Attorney Grossman Palmer and 10.73 hours to Attorney Michel. (The allocations reflect the approximate ratio of hours billed by each attorney (17.6 Attorney Grossman Palmer and 38.1 Attorney Michel) to the overall hours expended for briefing (55.7).

Real Parties identify four alleged instances of duplicative billing. (Opposition 6:17-22.) On two occasions, October 13 and 14, 2021, Attorney Grossman Palmer and Attorney Michel each billed for attorney conferences—Attorney Grossman Palmer billed 1.3 hours while Attorney Michel billed 1.4 hours. The court finds both attorneys billing for such time reasonable under the circumstances. Such services provide a transfer of knowledge and strategy from an attorney with a high billing rate (Attorney Grossman Palmer) to an attorney with a substantially lower billing rate (Attorney Michel). The conference (and expense associate with it) resulted in Petitioner incurring lower attorneys’ fees overall because the conferences facilitated a majority of the work being performed by the lower billing attorney. Accordingly, the court does not find the alleged duplicative billing on those dates unreasonable.

The third identified instance of duplicative billing alleged by Real Parties is incorrect. While Attorney Grossman Palmer reflects the time expended (.5 hours) in the narrative portion of the billing, the overall number of hours charged (2.0 hours) by Attorney Grossman Palmer on that date does not include the telephone conference.

Finally, Attorney Michel billed for reviewing Attorney Grossman Palmer’s oral argument outline, conferring about judges, watching oral argument and discussing the oral argument. The court finds 1.6 hours for such services unreasonable. Given Attorney Grossman Palmer’s experience, familiarity with the case and her billing rate, the court finds the time expended by Attorney Michel unreasonable.

Petitioner seeks attorneys’ fees of $9,477 for work performed in preparing the reply brief for this motion. Based on the court’s review of Petitioner’s attorneys’ billing records, it appears Petitioner incurred attorneys’ fees of $6,448 for preparation of the motion and $9,477 for preparation of the reply. Thus, Petitioner incurred $15,925 in overall attorneys’ fees related to this motion.

Real Parties question Petitioner’s claim attorneys’ fees incurred for services related to a reply to their opposition would take “significantly longer” than those for the motion. (Opposition 7:8.) Real Parties generally argue such time was unreasonably incurred.

The court notes Petitioner’s reply brief consists of approximately 9 pages of argument. It appears Attorney Grossman Palmer drafted the brief with input from Attorney Michel. Given Attorney Grossman Palmers’ knowledge of the case and overall experience, the court finds 4.3 hours expended by Attorney Michel for her input on the reply brief unreasonable. The issues raised in opposition were not complex or particularly detailed. With the exception of .3 hours expended by Attorney Michel to research case authority on lodestar issues, it appears the services she provided were largely unnecessary (i.e., drafting an outline for the brief, discussing the introduction of settlement issues, analyzing a case or editing Attorney Grossman Palmer’s work). Therefore, the court finds 4.3 hours of work performed by Attorney Michel unreasonable.

Given the quality of the reply brief and the issues addressed, the court finds 7.8 hours of attorney time incurred by Attorney Grossman Palmer reasonable. Such time represents nearly a full day of work. The court finds an additional 1.2 hours expended to review edits made by Attorney Michel unreasonable given the time spent by an attorney with more than 18 years of experience drafted the reply brief. Accordingly, the court reduces Attorney Grossman Palmers’ hours claimed by 1.2 as unreasonable.

Accordingly, the court finds that Petitioner is entitled to attorneys’ fees in the reduced amount of $50,960.90 and costs of $432.70 from the County and Real Parties. (Total Award: Fees and Costs – $51,393.60.)

[1] The Court of Appeal opinion reflects the County filed a respondent’s brief asking that this court’s attorneys’ fee award be reversed.

[2] There appears to be no dispute Petitioner is “entitled to further section 1021.5 attorney fees for [its] efforts in protecting the fee award.” (Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 236.)

[3] Similarly, this court (Hon. Daniel S. Murphy) found Attorney Grossman Palmer’s hourly billing rate of $695 “ultimately reasonable” in connection with services provided for a petition for a writ of mandate filed in 2016. (Grossman Palmer Decl., Ex. J.)

[4] Attorney Michel graduated from law school in 2018 and became a member of the Washington bar in 2019. She became a member of the California bar in 2020.