Opinion
G061379
09-25-2023
CAESAR ELMI, Plaintiff and Appellant, v. RELATED MANAGEMENT COMPANY, L.P., Defendant and Respondent.
Litigation Advocacy Group and Glenn A. Murphy for Plaintiff and Appellant. Goodkin Law Group, Daniel L. Goodkin, and Michael A. Shakouri for Defendant and Respondent.
NOT TO BE PUBLISHED
Appeal from a judgment and order of the Superior Court of Orange County No. 30-2019-01105181, Richard J. Oberholzer (retired judge of the Kern County Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) and Layne H. Melzer, Judges. Affirmed.
Litigation Advocacy Group and Glenn A. Murphy for Plaintiff and Appellant.
Goodkin Law Group, Daniel L. Goodkin, and Michael A. Shakouri for Defendant and Respondent.
OPINION
GOETHALS, J.
Caesar Elmi appeals from the trial court's order awarding him attorney fees in his case against Related Management Company, L.P. (Related). Although Elmi sought fees in excess of $302,000, the court awarded him $19,440. He argues the court erred by ruling that his right to recover fees terminated as of the date of Related's Code of Civil Procedure section 998 (section 998) offer to compromise, which offered Elmi a greater amount of damages than he later recovered as a consequence of his own section 998 offer that resolved the case.
The original plaintiff in this lawsuit was Mohammad Elmy, but after he passed away in November 2021, his son, Caesar Elmi, was substituted in as plaintiff. We refer to father and son collectively as "Elmi."
Elmi argues the court erred because, although the damage amount of Related's section 998 offer was $2 more than his own later offer, his settlement offer was nonetheless more valuable because (1) it allowed him to recover statutory attorney fees whereas Related's offer did not support an award of statutory fees; and (2) it accrued interest when Related failed to pay him by the deadline it specified. We are unpersuaded by these arguments; we therefore affirm.
Related's section 998 offer affirmatively stated it would pay Elmi's reasonable attorney fees. That provision was enforceable as a matter of contract, without regard to whether statutory fees would have otherwise been recoverable if Elmi had accepted Related's section 998 offer. And Elmi's reliance on an alleged right to recover interest is forfeited because it was merely referenced-but not supported by either evidence or argument-in the trial court, and also because the alleged factual basis for the argument is not supported by citations to evidence in the record on appeal.
FACTS
Elmi's complaint alleges a single theory of liability: Related violated the Investigative Consumer Reporting Agencies Act (Civ. Code § 1786, et. seq. (ICRAA)), which regulates landlords and agencies that gather information on consumers for use by landlords and others in making residential rental decisions. The complaint alleges that Related violated ICRAA by failing to notify Elmi that it was requesting an investigative consumer report regarding his "character, general reputation, personal characteristics, and mode of living" (Civ. Code, § 1786.16, subd. (a)(3)), and by failing to provide him with a written form containing a box he could check to indicate he wished to receive a copy of that report (Code Civ. Proc., § 1786.16, subd. (b)(1)).
In April 2021, Related served a Code of Civil Procedure section 998 settlement offer, offering to have a judgment entered in favor of Elmi for $10,001-i.e., $1 over the $10,000 statutory penalty amount-and to "pay to Plaintiff his statutory costs, including reasonable attorney's fees, incurred to the date of this offer in the amount determined by the Court." Elmi did not accept.
Instead, on November 17, 2021, Elmi filed his own 998, offering to settle for $9,999 "in satisfaction of [his] claim in this action for damages under California Civil Code section 1786.50 based on Related's violation of [ICRAA]." Elmi's offer also required Related to "agree[] that it will comply with the requirements of the ICRAA . . . if Related hereafter requests any investigative consumer report about Mohammad Elmy" and "to pay the reasonable attorney fees and costs incurred by Plaintiff Mohammad Elmy in this action as determined by the Court based on Related's violation of the ICRAA." Related accepted that offer the next day.
In December 2021, Elmi filed his motion for attorney fees, seeking a total recovery of $302,146. That amount was comprised of 318.6 hours worked at a rate of $650 per hour, plus a multiplier of 1.4 to compensate him "for the risk of non-payment, the inevitable delay in receiving payment, the good result achieved, and to encourage attorneys to undertake litigation of similar importance," plus an additional 18.8 hours worked after Related's acceptance of the section 998 offer.
In its opposition, Related emphasized that Elmi was seeking to recover $302,146 in fees "for a simple matter seeking a statutory penalty in the total amount of $10,000, [even though] Defendant admitted the violation and Plaintiff suffered no actual damages." It argued the request was patently unreasonable. (Bold and italics omitted.) More specifically, Related asserted that (1) Elmi could not recover fees for the period after it had served its own section 998 offer because he failed to obtain a more favorable judgment; (2) the amount Elmi requested had been inflated by the inclusion of items such as his attorney purporting to bill his usual rate of $650 per hour for 20 full days of being "on call" for trial; and (3) Related had admitted the factual basis for Elmi's claim in its response to discovery, and thus Elmi's counsel unreasonably overlitigated the case.
The court ruled Elmi was not entitled to fees incurred after the date of Related's rejected section 998 offer, as it had been more favorable than the judgment he later obtained as a consequence of his own offer. The court rejected Elmi's reply argument suggesting his offer had been more favorable than Related's because in addition to the monetary payment, it required Related to comply with ICRAA in relation to Mohammed Elmy in the future, and to pay his attorney fees based on a violation of ICRAA. The court noted Related's offer included an unconditional offer to pay Elmi's reasonable fees and that a nonmonetary declaration establishing defendant's wrongdoing did not enhance the "worth" of a section 998 offer.
Having concluded Elmi was not entitled to recover any fees incurred after the date of Related's 998 offer, the court rejected his attempt to recover "221.8 'on-call for trial' hours," among other specific claims of unreasonableness and overlitigation. The court observed this case involved "a simple issue and it's been overly litigated."
As to Elmi's pre-offer fees, the court calculated Elmi had incurred a total of 43.4 hours of attorney time prior to Related's section 998 offer; it then determined the requested hourly rate of $650 was too high. The court elected instead to award fees at a rate of $450 per hour, which it characterized as "relatively generous for the simple and straight-forward issue presented in the instant action." The court then awarded Elmi $19,440. The court thereafter entered the judgment in favor of Elmi.
DISCUSSION
Section 998, subdivision (c)(1), states in relevant part: "If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer." For purposes of this rule, "costs" include recoverable attorney fees. (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1107.)
Elmi's sole contention on appeal is that the court erred by concluding Related's section 998 offer was more favorable than the judgment Elmi later obtained as a consequence of his own offer and was thus effective to cut off his right to attorney fees after that date. Specifically, Elmi argues his judgment is more valuable than Related's offer because it allowed him to recover statutory attorney fees, whereas those fees would not have been recoverable under Related's offer. We disagree.
Elmi's first contention, that his offer was more valuable because Related's offer did not allow for recovery of attorney fees, is based on the notion that statutory fees are not available after a plaintiff recovers a judgment following a section 998 compromise. (See Linton v. County of Contra Costa (2019) 31 Cal.App.5th 628, 634 (Linton); Doran v. North State Grocery, Inc. (2006) 137 Cal.App.4th 484, 49 (Doran).)
In Doran, the court reversed an award of attorney fees to the plaintiff following a section 998 compromise of his claim under the Unruh Civil Rights Act (Civ. Code, § 51 et seq.; the Unruh Act). The court reasoned that a plaintiff's right to an award of statutory fees under the Unruh Act was dependent upon a finding that the defendant was liable for violating the act, and that a section 998 compromise did not imply any such finding. (Doran, supra, 137 Cal.App.4th at p. 491.)
And in Linton, the court followed Doran in affirming the denial of statutory fees to a plaintiff who had sued under the Unruh Act and the California Disabled Persons Act (Civ. Code, § 54 et seq.; DPA.) and recovered her judgment based on a section 998 compromise. In that case, although the compromise stated Linton was entitled to recover "'attorney's fees allowed by law as determined by the court'" (Linton, supra, 31 Cal.App.5th at p. 631), the trial court properly concluded that no fees were allowed under either statute because the compromise judgment did not support a finding that the defendant had violated either the Unruh Act or the DPA (id. at p. 632).
As the Linton court explained, while a plaintiff who obtains a judgment pursuant to a section 998 compromise may be deemed the prevailing party for purposes of costs, where the accepted offer is silent as to attorney fees it will support such an award only if "attorney fees are authorized by statute or contract." (Linton, supra, 31 Cal.App.5th at p. 632.) Thus, in both that case and Doran, the prevailing plaintiff was entitled to make the motion for fees, but in both cases, the courts properly concluded that fees were not recoverable. (Id. at p. 634.)
Doran or Linton are inapposite here. In contrast to both of those cases, Related's section 998 offer in this case affirmatively stated Elmi would be entitled to recover his reasonable attorney fees. Thus, had Elmi accepted the offer, that provision would have been enforceable as part of his compromise recovery. Stated simply, the acceptance of a section 998 offer creates a contract. "Since section 998 involves the process of settlement and compromise and since this process is a contractual one, it is appropriate for contract law principles to govern the offer and acceptance process under section 998." (T.M. Cobb Co. v. Superior Court (1984) 36 Cal.3d 273, 280.) Once that contract was formed by Elmi's acceptance, he had the right to rely on it as the basis for recovering his reasonable attorney fees.
Elmi seeks to portray Related's offer as essentially the same as the Linton provision offering '"attorney's fees allowed by law"' (Linton, supra, 31 Cal.App.5th at p. 631), by claiming it would have allowed him to "seek attorney fees as 'determined by the Court, according to proof.'" But Related's offer stated, unequivocally, that it would "pay to Plaintiff his statutory costs, including reasonable attorney's fees, incurred to the date of this offer in the amount determined by the Court." Had Elmi accepted that offer, it would have been clear error for the trial court to deny him reasonable fees. And to the extent Elmi seeks to liken this case to Linton because Related's offer also included the words "according to proof," the suggestion misses the mark. "Proof" refers to evidence supporting the claim for fees. A requirement of proof in support of a fee claim does not render the offer to pay fees an illusory or conditional one.
Elmi also relies on the recent case of Gutierrez v. Chopard USA Ltd. (2022) 82 Cal.App.5th 383 (Gutierrez), as additional support for his position. In Gutierrez, the plaintiff was able to recover fees because the parties' joint stipulation for settlement stated that the defendant would not dispute liability under the Unruh Act and would not dispute that the plaintiff was entitled to attorney fees and costs under that act. (Id. at p. 386.) We do not think the case supports Elmi here. In Gutierrez, the appellate court distinguished Doron on the basis that the plaintiff in that case "could have tendered a counteroffer that included an apportionment of the attorney fees," but did not do so-thus affirming that a party could explicitly provide for the recovery of fees as part of a section 998 compromise. (Gutierrez, supra, 82 Cal.App.5th at p. 392.) And Gutierrez distinguished Linton on the basis that Gutierrez had negotiated for the right to recover his fees, and it was the terms of his settlement that established his entitlement to recover fees. The same is true here.
We consequently reject Elmi's assertion that his judgment was more valuable than Related's section 998 offer because he might not have been able to recover his attorney fees under Related's offer.
Elmi's second argument is that his judgment was more valuable than Related's offer because his judgment required Related to pay the $9,999 compromise amount by a specified date (which was 30 days from the date of Related's acceptance)- and when Related failed to pay the compromise amount by the deadline, the amount accrued interest. This argument is forfeited both because Elmi failed to raise it below and because he has failed to support his factual claim of late payment with any citation to the record in this court. (Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856 ["'It is the duty of a party to support the arguments in its briefs by appropriate reference to the record, which includes providing exact page citations'"]; Mueller v. County of Los Angeles (2009) 176 Cal.App.4th 809, 816, fn. 5 ["The claimed existence of facts that are not supported by citations to pages in the appellate record, or not appropriately supported by citations, cannot be considered by this court"]; People v. Hoyt (2020) 8 Cal.5th 892, 939 ["[B]y failing to support his appellate arguments with record citations, defendant has forfeited any claim of error on appeal"].)
In a footnote in his reply brief below, Elmi did reference this assertion, stating, "Defendant breached the 998 offer and has refused to pay Plaintiff. Thus, the $9,999.00 has accrued interest since December 18, 2021 and is now far over $10,000.00." But he failed to either support that assertion with evidence or develop it with any legal analysis supporting his right to recover prejudgment interest.
But even if it had not been forfeited, the argument is unpersuasive. Elmi bases his claim of accrued interest on Code of Civil Procedure section 685.020, subdivision (a). That provision establishes only the right to recover postjudgment interest; it would not entitle Elmi to recover interest based on any delay in payment prior to entry of judgment. Instead, as a general rule, prejudgment interest based upon late payment of a debt is recoverable only if pleaded and proved as damages in a complaint. (See Watson Bowman Acme Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279, 292 ["Conceptually, prejudgment interest is an element of damages, not a cost of litigation"].)
Elmi's right to recover postjudgment interest would not distinguish the judgment he obtained from the more valuable one he could have obtained by accepting Related's earlier section 998 offer. That judgment would have accrued postjudgment interest as well.
In any event, even if we assumed Elmi had a right to recover prejudgment interest based on Related's delay in payment of the compromise amount, it would not make any difference. In deciding whether a prior offer is more favorable than the judgment, we compare it to the judgment that is obtained, not a theoretically better one that might have been available if additional remedies had been pursued. In this case, the judgment was not entered until after the court had already ruled on the attorney fee issue-and nearly four months after the stated deadline for payment. Despite that long delay, the judgment entitles Elmi to $9,999 without any added prejudgment interest.Thus, the amount of the judgment entered was less than Related's offer of $10,001.
Elmi acknowledges as much in his opening brief: "Section 998 requires comparing the unaccepted offer with the subsequent 'judgment' ...."
The judgment requires Related to pay Elmi $9,999 by December 20, 2021- nearly four months prior to the April 14, 2022 entry of judgment-but it includes no award of prejudgment interest based on the alleged failure to pay by that deadline.
DISPOSITION
The order and judgment are affirmed. Related is entitled to its costs on appeal.
WE CONCUR: MOORE, ACTING P. J., SANCHEZ, J.