Opinion
B226932
11-08-2011
MARK BURKETT et al., Plaintiffs and Appellants, v. DOLORES CAFFARO et al., Defendants and Respondents.
Law Offices of Andrew A. Kurz and Andrew A. Kurz for Plaintiffs and Appellants. Law Offices of Jacob N. Segura, Jacob N. Segura; The Quisenberry Law Firm and John N. Quisenberry for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC375088)
APPEAL from an order of the Superior Court of Los Angeles County. Mark V. Mooney, Judge. Affirmed as modified.
Law Offices of Andrew A. Kurz and Andrew A. Kurz for Plaintiffs and Appellants.
Law Offices of Jacob N. Segura, Jacob N. Segura; The Quisenberry Law Firm and John N. Quisenberry for Defendants and Respondents.
Plaintiffs and appellants Mark Burkett and Piero Capobianco sued defendants and respondents Dolores Caffaro and Michael Hockett for fraudulent concealment, intentional misrepresentation, and negligent misrepresentation in connection with the sale of a residential property in Los Angeles. The trial court granted summary judgment for respondents and appellants appealed.
Caffaro's former husband Hockett, never owned any interest in the Property and was not a party to the sale of the Property. Appellants alleged that he conspired with Caffaro to defraud appellants. When we refer to "respondents" we include Hockett.
Respondent Caffaro then moved for attorney fees pursuant to the contractual "prevailing" party attorney fee clause in the written agreement, seeking $153,128.75 in fees. Respondent also filed a memorandum of costs in the amount of $11,671.33. Appellants filed a motion to tax costs. The trial court awarded attorney fees of $147,778.75, and costs in the amount of $10,946.41. Appellants appealed those rulings.
In an unpublished opinion filed September 1, 2011, we affirmed summary judgment in favor of respondents. In this opinion, we consider appellants challenges to the award of attorney fees and costs. Because of a computational error by the court, we modify the awards and, as modified, affirm.
FACTUAL AND PROCEDURAL SUMMARY
A full history of the underlying dispute and procedural background through the first appeal is set forth at length in our prior opinion which we will identify as Burkett I. We will not repeat the facts underlying Burkett I, but will refer to relevant facts as necessary.
Mark Burkett et al. v. Dolores Caffaro et al. (September 1, 2011, B222566, [nonpub. opn.]).
In May 2004, appellants agreed to buy and respondent Caffaro agreed to sell a residential property in Los Angeles, California, for $1,489,000. In November 2004, appellants moved into the Property and discovered cracks in the interior drywall and exterior stucco.
On July 31, 2007, appellants filed their complaint against respondents. On November 21, 2008 they filed the operative second amended complaint alleging causes of action for fraudulent concealment, intentional misrepresentation, and negligent misrepresentation. On July 2, 2009, respondents moved for summary judgment.
Respondents' sales agents were also named as defendants, but they were subsequently dismissed leaving Caffaro and Hockett as the remaining defendants.
On November 2, 2009, the trial court granted summary judgment concluding that respondents fully disclosed all material facts to appellants, appellants presented no evidence that respondents concealed or misrepresented any material facts, and respondents negated the element of reliance.
Respondent Caffaro then filed a motion to recover attorney fees and costs pursuant to an attorney fee provision at paragraph 22 of the Residential Purchase Agreement. Respondent sought $153,128.75 in fees, and an additional $11,671.33 in costs.
On February 2, 2010, appellants filed their motion to tax costs and challenged the inclusion of certain items including expert witness fees, deposition fees paid to appellants' expert, and various parking, postal, and transcript charges.
On April 13, 2010, during the hearing on the motion for attorney fees, the court expressed some concern about the amount of fees requested by respondent and stated that respondent's request for $13,207.50 for the cost of the motion for attorney fees seemed "a bit high." The court had not received respondent's reply to appellant's opposition to the motion although it had been timely filed and the matter was taken under submission.
On May 7, 2010, during the hearing on the motion to tax costs, the court found that respondent's Code of Civil Procedure section 998 offer to waive attorney fees and costs was not a "token offer," and denied the request to tax expert fees. The court denied recovery of various charges for parking, postage and transcript fees in the amount of $724.92, leaving a net award of $10,946.41.
On June 30, 2010, the trial court found that respondent was entitled to reasonable attorney fees. The court stated that it had "made an independent review of the attorney billing statements submitted in support of the motion for attorney fees" and concluded that the fees were reasonable even though the court's first impression was that they seemed high. The Court added: "In making this determination, the Court takes into consideration the hourly billing rate of counsel, the nature of the litigation, the skill required, the attorney's experience, the success of the attorney's efforts, and the time spent over the two years of the litigation." The court deducted mediation fees in the amount of $1,500, and fees related to obtaining insurance in the amount of $3,850. The court concluded: "The Court awards defendant Dolores Caffaro attorney fees in the sum of $147,778.75. The Court also awards defendant Caffaro an additional $3,500 representing the reasonable cost involved in preparation of defendants' Motion for Attorney Fees (10 hours at counsels billing rate of $350 per hour)."
Appellants timely appealed the post-judgment orders.
DISCUSSION
Appellants contend that the trial court abused its discretion in awarding excessive attorney fees and in awarding costs that were not recoverable as a matter of law, and were excessive in amount.
I. Standard of Review
A trial court order awarding attorney fees is reviewed for an abuse of discretion. (Castro v. Superior Court (2004) 116 Cal.App.4th 1010, 1017.) An award of attorney fees will be affirmed "absent an affirmative showing . . . that the award is 'manifestly excessive in the circumstances.'" (Horning v. Shilberg(2005) 130 Cal.App.4th 197, 210.) "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.)
The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1096.)
The California Supreme Court has further instructed that attorney fee awards "should be fully compensatory." (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.) Thus, in the absence of "circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee." (Ibid.)
"[T]rial courts have a duty to determine whether a cost is reasonable in need and amount. However, absent an explicit statement by the trial court to the contrary, it is presumed the court properly exercised its legal duty. [Citation.]" (Thon v. Thompson (1994) 29 Cal.App.4th 1546, 1548-1549.)
II. The Trial Court Did Not Abuse Its Discretion in Determining the Attorney Fee Award
We first address the court's award of $13,207.50 for preparation of respondent's motion for attorney fees. Appellants contend that this is an example of the "egregious overbilling that the trial court initially criticized but subsequently blessed." The court remarked during the hearing on the motion for attorney fees on April 13, 2010, that respondent's request for $13,207.50 for preparation of the motion for attorney fees seemed "a bit high." But the court did not issue its ruling on the motion until June 30, 2010, some two and a half months later. At that time, the court stated it had made "an independent review" of the respondent's motion and concluded by awarding respondent an additional $3,500 for what it deemed to be the "reasonable cost involved in preparation of defendants' Motion for Attorney Fees." Contrary to appellant's contention that this was an "additional" award for the fees motion, it is apparent to us that the court omitted to strike the requested amount of $13,207.50 consistent with its initial observations, and intended the award of $3,500 to be the sole compensation allowed for the preparation of the Motion for Attorney Fees. The court's mathematical error resulted in over compensation for preparation of the fees motion in the amount of $9,707.50 ($13,207.50 less the intended award of $3,500).
Appellant states that "it seem[ed] obvious that what the court intended to do was reduce the fee award by [$9,707.50]" but nevertheless maintains that the court's award was an abuse of discretion. The computational error by the trial court is conceded by respondent, and we find no abuse of discretion in an award of $3,500.
Appellant argues that the court's computational error supports its contention that the court "manifestly abused its discretion by awarding virtually all of the attorney's fees sought by respondents." Appellant urges that the court "either forgot or ignored its own analysis" and contends that "it does not appear the trial court based its determination on a review of the history of the litigation or scrutiny of counsel's invoices." Appellants' primary argument is that respondent's counsel spent too much time and therefore billed excessively for deposition and pleading practice.
As the party challenging the attorney fee award, the burden is on appellants to provide an adequate record so that we can determine whether the trial court abused its discretion. (Wagner v. Wagner (2008) 162 Cal.App.4th 249, 259; Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 448; see Ketchum v. Moses, supra, 24 Cal.4th at pp. 1140-1141.) As was stated in Sharon v. Sharon (1888) 75 Cal. 1, 48: "In a legal sense, discretion is abused whenever, in its exercise, a court exceeds the bounds of reason,—all the circumstances before it being considered."
Appellants contend that the court did not scrutinize respondent's motion, but they have failed to set forth any specific facts establishing an abuse of discretion. Respondent's motion for fees was accompanied by detailed billing records including spreadsheets and copies of invoices. The award of attorney fees noted that appellants failed to "satisfactorily identif[y] billing entries that [are] unreasonable or unnecessary."
Respondent's counsel also submitted a declaration which detailed his experience and expertise in this particular type of litigation, and the reasonableness of his hourly rate, which was unchallenged by appellants. The trial court correctly considered "the hourly billing rate of counsel, the nature of the litigation, the skill required, the attorney's experience, the success of the attorney's efforts, and the time spent over the two years of litigation" in granting the attorney fee award. (Niederer v. Ferreira (1987) 189 Cal.App.3d 1485, 1507.)
Appellants also contend the court took too long by "letting the matter sit for months" before rendering a decision. But, the court's identification of mediation fees and efforts to obtain insurance as unreasonable items for compensation in respondents' motion belie appellants' contention that the court "rubber-stamped" respondents' request and did not conduct an independent review.
Appellants also argue that less deference should be given to a trial court's award of fees following the conclusion of a case by summary judgment instead of trial. But, appellants present no argument or legal authority for this assertion and the issue is waived. (EnPalm, LLC v. Teitler (2008) 162 Cal.App.4th 770, 775.)
III. The Trial Court Did Not Abuse Its Discretion in Determining the Attorney Costs Award
Appellants challenge the trial court's award of costs on a number of grounds. First, appellants contend that the trial court awarded copying costs that are not recoverable as a matter of law, and alternatively, the amount awarded was excessive. Next, appellants contend that respondent was not entitled to recover fees paid to respondent's expert. Lastly, appellants contend that respondent was not entitled to recover deposition fees paid to appellants' expert. We address these contentions in turn.
A. Copying Costs
Code of Civil Procedure section 1032 provides in pertinent part: "(b) 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." Section 1033.5, subdivision (a) sets forth the items that are allowable as costs under section 1032, while section 1033.5, subdivision (b) identifies a list of items not allowable as costs, except when expressly authorized by law. Section 1033.5, subdivision (a)(12) provides that ". . . photocopies of exhibits may be allowed if they were reasonably helpful to aid the trier of fact." Finally, section 1033.5, subdivision (c)(4) provides: "Items not mentioned in this section and items assessed upon application may be allowed or denied in the court's discretion."
In this part of the discussion, all further statutory references are to the Code of Civil Procedure.
Appellants contend that respondent's copying costs are not recoverable as a matter of law because when a case concludes with a motion for summary judgment, costs may not be recovered for exhibits prepared for use at trial, citing Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 775 (Ladas).In Ladas, judgment was entered in favor of defendant before trial. The court held that costs for trial exhibits should have been disallowed because under section 1033.5, subdivision (a)(12), costs of exhibits not used at trial are not authorized. (Ladas, supra, at p. 775.)
But Ladas only considered whether the exhibit costs were allowable under section 1033.5, subdivision (a)(12), not whether they could be awarded in the trial court's discretion under subdivision (c)(4). Here, respondent's motion for summary judgment included "several big binders" of exhibits of which the court remarked "I remember there was a lot of stuff I had to go through." Respondent's copying costs while not specifically allowable under section 1033.5, subdivision (a) and not prohibited under section 1033.5, subdivision (b), are recoverable under section 1033.5, subdivision (c)(4). It was not an abuse of the trial court's discretion because the copies of the exhibits were reasonably necessary to the conduct of the litigation. (Applegate v. St. Francis Lutheran Church (1994) 23 Cal.App.4th 361, 363-364.)
Because we find no abuse of discretion pursuant to section 1033.5, subdivision (c)(4), we do not address appellants contention that the costs of photocopying exhibits are not recoverable because the trial court is not the "trier of fact" when a case is decided by way of summary judgment.
Appellants contend that a recovery of $907.40 for copying costs which equates to $1.93 per page is grossly excessive, and respondent did not establish the necessity and reasonableness of the cost. Respondent counters that the motion and supporting documents consisted of 4,272 pages, and the actual copying cost was 21 cents per page.
When an item appears to be a proper charge, a verified memorandum of costs is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the respondent. (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.) The burden of showing that an item is unreasonable is on the appellant. (Ibid.)
Respondent's submission in support of the request contained nine separate entries for costs related to photocopies, and the court remarked "I accepted [respondent's] representation that is what they spent." The court found respondent's submission reasonably necessary to the conduct of the litigation, and appellants have not shown that an award of 21 cents per page was unreasonable.
B. Respondent's Expert Witness Fees
Appellants contend the trial court abused its discretion in awarding respondent $4,450 in fees paid to respondent's own expert witness. The court's ruling was based on appellants' rejection of respondent's offer to compromise by waiving attorney fees and costs. Under section 998, if an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment, the court, in its discretion, may require the plaintiff to pay defendant's reasonable costs of expert witnesses. (§ 998, subd. (c)(1).) Appellants contend that the court abused its discretion because the offer to waive fees and costs was not reasonable.
"Whether a section 998 offer is reasonable must be determined by looking at circumstances when the offer was made. [Citation.]" (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699.) Where the defendant obtains a judgment more favorable than its offer, the judgment is prima facie evidence that the offer was reasonable. (Id. at p. 700.) Whether the offer was made in good faith and was reasonable is left to the sound discretion of the trial court. (Ibid.)
Because the trial court found the offer of a waiver of attorney fees and costs reasonable, the burden is on the appellants to show an abuse of discretion. (Nelson v. Anderson, supra, 72 Cal.App.4th at p. 136.) Appellants point to the potentially large damages in this case and argue that there was no reasonable expectation that they would accept a "token" offer of a waiver of attorney fees and costs.
But, "[e]ven a modest or 'token' offer may be reasonable if an action is completely lacking in merit. [Citation.]" (Nelson v. Anderson, supra, 72 Cal.App.4th at p. 134.) Here, the offer was made one year after the initial lawsuit was filed. Liability was predicated on whether respondents made full disclosure of the condition of the property at the time of sale, and appellants were in possession of respondent Caffaro's Transfer Disclosure Statement which listed significant defects in the property. Based on appellants' problems of proof, we agree with the trial court that the section 998 offer to waive attorney fees and costs constituted a "pretty significant amount" and was reasonable under the circumstances.
Appellants' contention that at the time the offer was made they could not foresee that respondent's fees and costs would be so significant is unavailing. Appellants had to assume that if the litigation was to continue respondent Caffaro would be forced to incur significant additional costs in preparation for trial.
Appellants contend that respondent did not provide the trial court with the hourly rate and work done by respondent's expert to substantiate the claim for $4,450 in fees. Rule 8.204(a)(1)(C) of the California Rules of Court requires that "any reference to a matter in the record" be supported "by a citation to the volume and page number of the record where the matter appears." "It is the duty of counsel to refer the reviewing court to the portion of the record which supports appellant's contentions on appeal. [Citation.] If no citation 'is furnished on a particular point, the court may treat it as waived.' [Citation.]" (Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1115.) Appellants make the assertion without any record citation; the contention is therefore waived.
C. Deposition Fees Paid to Appellants' Expert
Appellants contend that recovery of $1,750 that was paid to appellants' expert was contrary to law because there is no statutory authority for recovery of costs incurred in deposing the other side's experts.
We agree that these costs are not recoverable under section 1033.5, subdivision (b)(1), which disallows the fees of experts not ordered by the court. (See Baker-Hoey v. Lockheed Martin Corp. (2003) 111 Cal.App.4th 592, 600 [fees of experts not ordered by the court are not recoverable in the absence of a specific authorizing statute].) Nevertheless, these fees are recoverable under section 998. Subdivision (c)(1) provides in pertinent part that "[i]f an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment . . . . the court . . . . in its discretion, may require the plaintiff to pay a reasonable sum to cover costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in . . . preparation for trial . . . of the case by the defendant." (§ 998, subd. (c)(1).) Section 998 is the "specific authorizing statute" required by section 1033.5, and as there is no language in section 998 to limit recovery to the defendant's own experts, we find the cost was properly allowed.
DISPOSITION
The order awarding costs of $10,946.41 is affirmed. The attorney fee award of $147,778.75 is reduced by $9,707.50 to $138,071.25, and, as modified, is affirmed. Each party is to bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
____________, J
DOI TODD
We concur: ____________, P. J.
BOREN
____________, J.
CHAVEZ