569 East County etc. v. Backcountry etc.
569 East County etc. v. Backcountry etc.
Opinion
Filed 5/18/16; pub. order 6/16/16 (see end of opn.)
COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
569 EAST COUNTY BOULEVARD LLC et D068538 al., Plaintiffs and Respondents, (Super. Ct. No. v. 37-2014-00025797-CU-MC-CTL) BACKCOUNTRY AGAINST THE DUMP, INC., Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County, John S.
Meyer, Judge. Affirmed.
Law Offices of Stephan C. Volker, Stephan C. Volker, Daniel Garrett-Steinman and Jamey M.B. Volker for Defendant and Appellant.
Mark M. Clairmont and Paul W. Pitingaro for Plaintiffs and Respondents.
Plaintiff 569 East County Boulevard, LLC, and others (plaintiffs) filed an action against numerous entities and individuals. Plaintiffs' complaint named Backcountry Against the Dump, Inc. (BAD) as a defendant and alleged a single cause of action against BAD for unlawful interference with prospective economic advantage. BAD moved to strike the action pursuant to Code of Civil Procedure section 425.16,1 commonly referred to as the anti-SLAPP (strategic lawsuit against public participation) statute. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57.) After BAD's anti-SLAPP motion was granted, it sought attorney fees and costs in a total amount of $152,529.15 pursuant to section 425.16, subdivision (c)(1). Plaintiffs did not contest defendant's entitlement to a fees and costs award, but argued the amount sought was exorbitant. The court found BAD was entitled to attorney fees and costs incurred for the successful anti- SLAPP motion, but awarded a reduced amount of $30,752.86. BAD appeals from that order, arguing the reduced award was an abuse of discretion.
I BACKGROUND A. The Underlying Action and Anti-SLAPP Motion Plaintiffs' First Amended Complaint alleged a single cause of action against BAD for unlawful interference with prospective economic advantage.2 BAD moved to strike the action under the anti-SLAPP statute, arguing the action sought damages from BAD caused by BAD's petitioning activity, and plaintiffs could not demonstrate probable
Plaintiffs raised numerous objections to the amount of the request, asserting (1) the hourly rate charged by BAD's attorneys was excessive for the nature of the case, (2) BAD's fee request included billings for work unrelated to the anti-SLAPP motion, or unnecessary, or administrative in nature or duplicative or padded, and (3) BAD's fee request included fees premised on vague time entries or "block-billed" time. For all of these reasons, plaintiffs argued, the amount of the fee and cost award requested by BAD was unreasonable.
The court first determined a reasonable hourly rate for BAD's attorneys was $275 dollars per hour.5 The court then turned to the question of the reasonable hours expended on the anti-SLAPP motion. After noting it had "culled through the billing statement" submitted by BAD in support of its fee request, the court observed that many of the hours listed in that statement encompassed work "on the demurrer, coordinating with other counsel, work related to the [case management conference], and duplicative time with
The court awarded attorney fees of less than $30,000 to these defendants. [cocounsel]." The court also observed that, although BAD's counsel "express[ed] confusion with the pleadings, there was only one cause of action that was the subject of the anti-SLAPP motion and the issues were not especially novel or complex." The court ruled 103.6 hours was a reasonable amount of time spent on the anti-SLAPP motion and the fee motion, and awarded $28,290 as fees.
II ANALYSIS BAD asserts the court erred in calculating the fee award in two respects. First, BAD argues the court erred when it selected $275 as the reasonable hourly rate to be applied to hours worked in connection with the anti-SLAPP motion. Second, BAD argues it was error to reduce the hours worked in connection with the anti-SLAPP motion below the number of hours it claimed in its fee motion.
A. Legal Framework Principles Applicable to Attorney Fees Award Section 425.16, subdivision (c), provides that "a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney's fees and costs." It is well established that "[t]he amount of an attorney fee award under the anti-SLAPP statute is computed by the trial court in accordance with the familiar 'lodestar' method. [Citation.]
Under that method, the court 'tabulates the attorney fee touchstone, or lodestar, by multiplying the number of hours reasonably expended by the reasonable hourly rate prevailing in the community for similar work. [Citations.]' " (Cabral v. Martins (2009) 177 Cal.App.4th 471, 491 (Cabral).)
"[A]s the parties seeking fees and costs, defendants 'bear[] the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.' [Citation.] To that end, the court may require defendants to produce records sufficient to provide ' "a proper basis for determining how much time was spent on particular claims." ' " (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020.) Importantly, when considering a fee award, the trial court is not required to award the amount sought by the successful moving parties,6 but instead "is obligated to award 'reasonable attorney fees under section 425.16 [that] adequately compensate[] them for the expense of responding to a baseless lawsuit.' " (Jackson v. Yarbray (2009) 179 Cal.App.4th 75, 92.)
A prevailing defendant on an anti-SLAPP motion is entitled to seek fees and costs " 'incurred in connection with' " the anti-SLAPP motion itself, but is not entitled to an award of attorney fees and costs incurred for the entire action. (Wanland v. Law Offices of Mastagni, Holstedt & Chiurazzi (2006) 141 Cal.App.4th 15, 21; Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1383.) An award of attorney fees to a prevailing defendant on an anti-SLAPP motion properly includes attorney fees incurred to litigate the special motion to strike (the merits fees) plus the fees
Standard of Review Although a SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees, he or she is entitled " 'only to reasonable attorney fees, and not necessarily to the entire amount requested. [Citations.]' [Citation.] We review the trial court's ruling for abuse of discretion" (G.R. v. Intelligator (2010) 185 Cal.App.4th 606, 620), and we will not disturb the trial court's fee determination " ' "unless the appellate court is convinced that it is clearly wrong." ' " (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (Ketchum).) When reviewing attorney fee awards, an appellate court must "[i]ndulg[e] all inferences in favor of the trial court's order . . . [and] presume the
trial court's attorney fees award is correct."7 (McKenzie v. Ford Motor Co. (2015) 238 Cal.App.4th 695, 704.) Where, as here, a trial court severely curtails the number of compensable hours in a fee award, the operative impact of that presumption includes a presumption the trial court concluded the fee request was padded. (See, e.g., Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 817 [substantial reduction in claimed costs "indicat[es] Levy improperly inflated his claimed" amounts]; Christian Research, supra, 165 Cal.App.4th at pp. 1323 & 1326 ["[w]hen the trial court substantially reduces a fee or cost request, we infer the court has determined the request was inflated"; trial court has discretion to substantially reduce fee request where record contains evidence permitting conclusion the "fee request is unreasonably padded, vague, and worthy of little credence" based on the trial court's own observations of the proceedings and the billing records submitted].)
ANALYSIS A. The Abuse of Discretion Standard Applies to This Appeal Although BAD acknowledges the ordinary standard of review for fee awards is the deferential abuse of discretion standard, it appears to argue we should apply a de novo review to its claims in this appeal. BAD notes the determination of whether the trial court applied proper legal standards in making its fee determination is reviewed de novo. (See, e.g., City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297.) BAD cites numerous cases, including Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, to argue a fee award can be reversed when the court applied the wrong legal standards, and asserts those authorities support reversal of the fee award in this case.
The cases cited by BAD for its argument in favor of de novo review have no persuasive applicability here, because the record makes clear the court did not misunderstand the legal matrix that guided its evaluation of BAD's fee request. The minute order addressing the various fee requests specifically recites that the amount of an attorney fee award under the anti-SLAPP statute is to be computed by the lodestar method, which begins with calculating the number of hours reasonably expended on the anti-SLAPP motion (and the fees on fees motion) and excluding hours spent on non- SLAPP tasks or that were inefficient or duplicative, and then multiplying those hours by the reasonable hourly rate prevailing in the community for similar work to obtain the "lodestar" (see, e.g., Cabral, supra, 177 Cal.App.4th at p. 491), and then considering whether to adjust that lodestar upwards or downwards under the facts of the case.
Because the record affirmatively shows the court understood and employed the correct legal matrix here, the cases cited by BAD have no application. For example, in Graham v. DaimlerChrysler Corp., supra, 34 Cal.4th 553, the court merely held that a trial court award, calculated by applying the same "risk multiplier" to a lodestar amount that amalgamated both fees and "fees on fees" work, should be reconsidered "in light of this opinion's conclusion that the risk multiplier for [fees on fees work] generally should be lower than for fees in the underlying litigation." (Id. at p. 584.) Thus, the ruling in Graham was premised on the finding the trial court did not apply (and indeed could not have applied) the new principle decided in Graham, which has no application here. The other authorities cited by BAD are appear to be similarly inapposite.8 Because we
B. The Hourly Rate Claim BAD first asserts that, when tabulating the lodestar, the trial court abused its discretion when it set a flat hourly rate of $275 for all of BAD's counsel because that rate disregarded the different levels of experience for each of BAD's counsel and disregarded BAD's evidence of the prevailing market rate.
The courts have repeatedly stated that the trial court is in the best position to value the services rendered by the attorneys in his or her courtroom (see, e.g., Ketchum, supra, 24 Cal.4th at p. 1132), and this includes the determination of the hourly rate that will be used in the lodestar calculus. (See, e.g., Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 700-703.) In making its calculation, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009), the difficulty or complexity of the litigation to which that skill was applied (Syers Properties at p. 700; accord, Moreno v. City of Sacramento (9th Cir. 2008) 534 F.3d 1106, 1114), and affidavits from other attorneys regarding
reasonable hourly rate prevailing in the community was of higher rate and that evidence was unrebutted and opposing counsel indicated it was not challenging the higher rate].) prevailing fees in the community and rate determinations in other cases. (Heritage, at p. 1009.)
Here, the parties presented conflicting affidavits concerning the appropriate hourly rate for seasoned attorneys and fifth year associates. BAD's expert, who premised his opinion on numerous factors (including the so-called "Laffey Matrix"), testified that $750 per hour for Mr. S. Volker and $350 per hour for the three fifth-year associates working on the case was within the market range charged for similar services by similarly qualified attorneys. However, plaintiffs submitted contrary declarations that the market range charged for similar services by similarly qualified attorneys was much lower.9 Moreover, the court was cognizant that the rate charged by a very seasoned attorney who represented Ms. Tisdale in this same litigation, and whose anti-SLAPP motion successfully extricated her from the multiple and complex claims pleaded against her, was $275 per hour, and noted the anti-SLAPP motion by BAD's attorneys involved only a single cause of action and did not involve either novel or complex issues.
On this record, the trial court concluded $275 per hour was an appropriate rate to apply to the hours properly attributable to BAD's anti-SLAPP motion. Certainly, the trial court was not bound by the contrary opinions submitted by BAD's expert. (Syers Properties III, Inc. v. Rankin, supra, 226 Cal.App.4th at p. 702 ["the trial court was
C. The Total Hours Claim BAD's fee motion submitted declarations, along with billing summaries, averring it spent 213.7 hours on the merits motion (nearly 80 percent of which was attributed to the senior attorney's efforts) and another 86.7 hours on the fees on fees motion (largely attributed to the work of the associates). BAD argues the court abused its discretion by reducing the hours worked in connection with the merits and fees on fees motions below the hours claimed by BAD in its fee motion.12
Although BAD's billing statements in support of a fee request form the " 'starting point' " for the " ' "hours reasonably expended" ' " component of the lodestar calculation (Christian Research, supra, 165 Cal.App.4th at p. 1324), the trial court is not bound to accept the evidence submitted by counsel when making its determination (id. at p. 1326), and may reduce the hours if it concludes the attorneys performed work unrelated to the anti-SLAPP motion, or represented work that was unnecessary or duplicative or excessive in light of the issues fairly presented. (Ibid.) When a trial court "is concerned that a particular award is excessive, it has broad discretion to adjust the fee downward or deny an unreasonable fee altogether." (Ketchum, supra, 24 Cal.4th at p. 1138, fn. omitted.)
Here, the record contains sufficient support for the trial court's decision to adjust downward the hour component for the lodestar calculus. First, the court could conclude (2) to reduce the hours without providing a mathematically-based explanation for the reductions it applied to each of the two motions. However, BAD cites no authority suggesting a trial court's determination of the appropriate amount of the fee award will be reversed absent some type of statement of decision, and the law is to the contrary. (Ketchum, supra, 24 Cal.4th at p. 1140 [rejecting claim that award requires " 'reasoned explanation' " for determinations on specific items within award; a trial court is "not required to issue a statement of decision with regard to the fee award."].) Moreover, BAD cites no authority suggesting a fee award may be reversed merely because the trial court awarded a reduced amount without explicit explanations about disallowed hours or unapportioned hours, and the law appears to be to the contrary. (See, e.g., Rebney v. Wells Fargo Bank (1991) 232 Cal.App.3d 1344, 1349 [as long as record demonstrated award was based on lodestar approach, court is "not required to explain which of counsel's hours were disallowed, or how or whether any hours were apportioned" and appellate court must infer all findings on these points in favor of prevailing parties].) many of the hours represented work unrelated to either the merits motion or the fees motion, such as work on discovery, ex parte appearances, work surrounding the case management conference, and conferring with cocounsel. The court could also have concluded downward adjustment was necessary because many billings involved entries that were either vague or were "blockbilled" time entries, and represented padding.13 (Christian Research, supra, 165 Cal.App.4th at pp. 1325-1326.) Finally, the court could have concluded a substantial number of the hours claimed by BAD were unnecessary14 because it concluded that, although BAD's counsel had "expresse[d] confusion with the pleadings," the court found "there was only one cause of action that was the subject of [BAD's] anti-SLAPP motion and the issues were not especially novel or complex." Under these circumstances, we cannot conclude the trial court abused its discretion in limiting the hour component of the lodestar calculus to a combined amount, for both the merits motion and the fees on fees motion, to over 100 hours.
An attorney's chief asset in submitting a fee request is his or her credibility, and where vague, blockbilled time entries inflated with noncompensable hours destroy an attorney's credibility with the trial court, we have no power on appeal to restore it." 14 Many of the hours claimed by BAD were expended to prepare and file a demurrer (mooted by the order granting the anti-SLAPP motion) attacking causes of action not directed at BAD. Although BAD appears to assert on appeal the court erred by excluding the efforts its attorneys devoted to the demurrer, because those efforts developed legal arguments that were "clearly 'inextricably intertwined' " with the arguments necessary to its successful anti-SLAPP motion, that argument was presented below and was rejected by the court. We must presume on this record (see fn. 7, ante) that the court had substantial evidence on which to reject this claim.
DISPOSITION The trial court's attorney fees award is affirmed. Plaintiffs are entitled to their costs on appeal.
McDONALD, Acting P. J.
WE CONCUR:
AARON, J.
IRION, J.
Filed 6/16/16 CERTIFIED FOR PUBLICATION COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
569 EAST COUNTY BOULEVARD LLC D068538 et al., Plaintiffs and Respondents, (Super. Ct. No. 37-2014-00025797-CU-MC-CTL) v. BACKCOUNTRY AGAINST THE DUMP, ORDER CERTIFYING OPINION INC., FOR PUBLICATION Defendant and Appellant.
THE COURT: The opinion in this case filed May 18, 2016, was not certified for publication.
On the court's own motion, it appearing the opinion meets the standards for publication specified in California Rules of Court, rule 8. 1105): IT IS HEREBY CERTIFIED that the opinion meets the standards for publication specified in California Rules of Court, rule 8.1105(c); and ORDERED that the words "Not to Be Published in Official Reports" appearing on page 1 of said opinion be deleted and the opinion herein be published in the Official Reports.
McDONALD, Acting P. J.
Copies to: All parties
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