Barham Construction v. City of Riverbank CA5 ( 2015 )

Filed 7/21/15 Barham Construction v. City of Riverbank CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
BARHAM CONSTRUCTION, INC., et al.,
F068373
Plaintiffs, Cross-defendants and Respondents,
v. (Super. Ct. No. 350298)
CITY OF RIVERBANK,
Defendant, Cross-complainant and Appellant. OPINION
BARHAM CONSTRUCTION, INC., F068914
Plaintiff, Cross-defendant and Respondent,
v.
CITY OF RIVERBANK,
Defendant, Cross-complainant and Appellant.
APPEAL from a judgment and orders of the Superior Court of Stanislaus County.
Roger M. Beauchesne, Judge.
Costanzo & Associates and Neal E. Costanzo for Defendant, Cross-complainant
and Appellant.
Cassinat Law Corporation, John E. Cassinat and Ronald L. Carello for Plaintiff,
Cross-defendant and Respondent Barham Construction, Inc.
Rivera & Associates and Jesse M. Rivera for Plaintiff, Cross-defendant and
Respondent Nationwide Mutual Insurance Company.
-ooOoo-
Appellant, City of Riverbank, appeals for the second time from the judgment
against it in an action based on alleged breaches of a construction contract. In the first
appeal,1 we reversed and remanded with directions for the trial court to make specific
determinations. The trial court made the determinations and entered judgment. It then
made awards of costs and contractual attorney fees to the prevailing parties. Appellant
appeals from the judgment, contending the trial court was required to reopen and
redetermine basic liability issues, either because the judgment on appeal required this or
because it was made necessary by a subsequent change in the law. Appellant also
appeals from the orders awarding costs and attorney fees. We conclude the trial court
properly interpreted the scope of the remand order and its scope was not expanded by any
subsequent change in the law. Further, appellant has not established any abuse of the
trial court’s discretion in the awards of attorney fees and costs. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Barham Construction, Inc. (Barham) was the general contractor on a skate park
project for the City of Riverbank (Riverbank). The project was not completed by the date
specified in the contract between the parties. Riverbank withheld funds from its final
payment to Barham, contending the contract entitled it to liquidated damages for the
delay. Barham withheld funds from its payments to the grading subcontractor, Ragsdale
& Sons, Inc. (Ragsdale), contending the delay in completion of the project was
attributable to Ragsdale. Ragsdale sued Barham to recover the unpaid balance on its
1 Barham Construction, Inc. v. City of Riverbank (Aug. 8, 2011, F058692).
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contract. Barham sued Riverbank for breach of contract to recover the balance it
contended was still due on its contract. Riverbank cross-complained against Barham and
its bond provider, Nationwide Mutual Insurance Company (Nationwide). It sought
recovery for Barham’s delay in performance, failure to pay Ragsdale, and breach of
warranty based on alleged defects in the construction. Riverbank also sought recovery
from Nationwide on Barham’s performance and payment bonds. The Ragsdale and
Barham actions were consolidated.
After a court trial, the trial court found there were three main delays in the critical
path of the construction project. It concluded Riverbank was solely or concurrently
responsible for all three and awarded damages to Barham on its complaint. It entered
judgment in favor of Ragsdale on its complaint against Barham. The trial court found in
favor of Barham and Nationwide on Riverbank’s cross-complaint for breach of warranty,
concluding there were no defects in the construction. It made an award of contractual
attorney fees from Riverbank to Barham on the complaint, and an award from Riverbank
to Barham and Nationwide on the cross-complaint. It also awarded Barham as damages
the attorney fees Barham was ordered to pay to Ragsdale because it was the prevailing
party on Ragsdale’s complaint.
Riverbank appealed from the judgment and from the postjudgment orders
awarding attorney fees. In that appeal, we affirmed the judgment in favor of Ragsdale,
and Ragsdale’s action is no longer in issue. We determined Barham was responsible for
one of the major delays: late delivery of the prefabricated restroom. We reversed the
judgment in favor of Barham and Nationwide and the order awarding them attorney fees
on the cross-complaint. We remanded the matter to the trial court with directions to
make nine specific determinations and to enter the remainder of the judgment in
accordance with its prior determinations that were unaffected by the appeal.
On remand, the parties disagreed about the scope of the issues the trial court was
to determine. After extensive briefing, the trial court issued two amended statements of
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decision and two judgments, separately addressing Barham’s complaint and Riverbank’s
cross-complaint. As to the complaint, the court found Barham was responsible for 28
days of the restroom delivery delay, and this was a critical path delay. Accordingly, it
found Riverbank was entitled to liquidated damages of $500 per day for 28 days, for a
total award of $14,000. It offset the original award of $155,467.21 damages to Barham
by that amount, and awarded Barham damages of $141,467.21. It also revised the award
of prejudgment interest.
Barham and Nationwide sought recovery of their costs and attorney fees.
Riverbank also moved for an award of attorney fees as a prevailing party, contending
Ragsdale’s judgment against Barham for payment of the balance due on its subcontract
established that Barham breached the construction contract with Riverbank by failing to
pay a subcontractor; therefore Riverbank contended it was the prevailing party on that
claim, entitling it to attorney fees. Additionally, the trial court determined that
Nationwide was liable to Riverbank on the payment bond, so Riverbank sought attorney
fees for prevailing on that claim.
After extensive briefing, the trial court entered its order on the attorney fees
motions. It awarded Barham attorney fees for prevailing on the complaint and on the
warranty claim in the cross-complaint; it made no award of attorney fees to Nationwide.
It awarded Riverbank, as the prevailing party on the payment bond claim in the cross-
complaint, attorney fees from Nationwide.
Riverbank appeals from the judgment against it, and from the attorney fee awards
made in its favor and against it.
DISCUSSION
I. Appeal from the judgment on the complaint
A. Compliance with our directions in the disposition of the prior appeal
The court of appeal “may affirm, reverse, or modify any judgment or order
appealed from, and may direct the proper judgment or order to be entered, or direct a new
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trial or further proceedings to be had.” (Code Civ. Proc., § 43; accord, Code Civ. Proc.,
§ 906.) The court’s decision is embodied in the disposition section of its opinion, which
constitutes the judgment on appeal. (Ducoing Management, Inc. v. Superior Court
(2015) 234 Cal. App. 4th 306, 312.) The orders and directions of the court contained in
the disposition are conveyed to the trial court by the remittitur, and must be followed on
remand. (Id. at pp. 312-313.) The remittitur defines the scope of the jurisdiction of the
court to which the matter is returned. (Ayyad v. Sprint Spectrum, L.P. (2012) 210
Cal. App. 4th 851, 859 (Ayyad).) “[W]hen an appellate court remands a matter with
directions governing the proceedings on remand, ‘those directions are binding on the trial
court and must be followed. Any material variance from the directions is unauthorized
and void.’” (Id. at p. 860.)
Thus, when the remittitur issued and the matter was remanded to the trial court
after the prior appeal, the trial court had jurisdiction only to take the actions directed by
this court. Riverbank’s current appeal from the judgment on the complaint addresses
only the first four of the nine issues the disposition of the prior appeal directed the trial
court to determine: “(1) the length of the delay attributable to Barham, in light of our
conclusion that Barham was responsible for the delay in delivery and installation of the
restroom; (2) whether and in what amount Barham is liable for liquidated damages for the
delay attributable to it; (3) the amount recoverable by Barham on the contract, as offset
by any liquidated damages imposed; (4) the appropriate amount of prejudgment interest
to be awarded to Barham, based on the balance due to Barham after any offset for
liquidated damages.”
Riverbank contends the trial court was to attribute the entire delay in “delivery and
installation” of the restroom to Barham. The trial court found Barham was responsible
for the restroom delivery delay only during the period from November 18 to December
16, 2003. Riverbank asserts installation was not completed until March 18, 2004, when
the electricity was hooked up and operative. Thus, it contends the trial court should have
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attributed the entire period from October 28, 2003, to March 18, 2004, to Barham’s delay
and should have imposed liquidated damages against Barham for that entire period.
Whether the trial court correctly interpreted the dispositional language in our prior
opinion in this action is subject to de novo review. (Ayyad, supra, 210 Cal.App.4th at
p. 859.) “The trial court’s interpretation of those directions is not binding on us.
[Citation.] We look to the wording of our directions to determine whether the trial
court’s order comports with them. [Citation.] When, as in this case, the reviewing court
remands the matter for further proceedings, its directions must be read in conjunction
with the opinion as a whole.” (Ibid.)
1. Issue (1)
The first issue the trial court was to address on remand was the length of the delay
for which Barham was responsible due to the delay in delivery and installation of the
restroom. According to our prior opinion, the trial court found the restroom was
delivered and installed on December 16, 2003, although it was not fully operational until
the electrical connection was completed in March 2004. We observed:
“Barham also argues that … the delay in delivery of the restroom was
concurrent with the Santa Fe elevation delay for which the trial court found
Riverbank responsible. The trial court, however, did not expressly find that
the restroom delivery delay was concurrent with the Santa Fe elevation
delay. The trial court found the restroom delivery delay was the first
critical path delay, referring to it as ‘[t]he gorilla in the room.’ The period
of that delay ran from October 28, 2003, to December 16, 2003. The court
found the CMU wall delay ran from October 10, 2003, through November
18, 2003, and was concurrent with the restroom delivery delay. It found the
Santa Fe elevation issue was first identified on October 24, 2003, but did
not become critical until December 16, 2003. At that point, it became the
controlling critical activity, until June 8, 2004. If Barham, rather than
Riverbank, is chargeable with the restroom delivery delay, it is not clear
which party or parties the trial court would have found to be wholly or
partially chargeable with the delay between November 18, 2003, and
December 16, 2003.”
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The passage recognized that the restroom delivery delay ran from October 28 to
December 16, 2003, but other delays overlapped or ran concurrently during that time
period. Because the trial court originally attributed all of the delays to Riverbank, it did
not make express findings regarding which was the controlling critical path delay during
some of that time period. Our remand required the trial court to make that limited
determination and recalculate the portions of the judgment affected by it: the liquidated
damages to which Riverbank was entitled, the damages to be awarded to Barham after
deducting the liquidated damages, and prejudgment interest.
The trial court previously determined the Santa Fe elevation delay was the
controlling critical path delay after December 16, 2003. On remand, it reiterated its
finding the CMU wall delay, for which Riverbank was responsible, ran concurrently with
the restroom delay from October 28 to November 18, 2003, and therefore Barham could
not be charged with the delay during that time period. In keeping with our directions on
remand, the trial court determined Barham was solely or primarily responsible for the 28-
day delay between November 18 and December 16, 2003, because the restroom delivery
and installation delay was a critical path delay. This determination complied with the
directions in the judgment in the prior appeal. We find no error in the trial court’s
determination.
2. Issue (2)
The second issue on remand required the trial court to determine the amount of
liquidated damages for which Barham was liable based on the length of the delay
attributable to it. In response, the trial court awarded liquidated damages of $500 per day
for the 28-day period between November 18 and December 16, 2003, for a total of
$14,000. The trial court’s determination was consistent with the construction contract
and with the directions in the judgment in the prior appeal. Barham has not established
any error.
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3. Issue (3)
The third issue to be addressed on remand was the amount to be awarded to
Barham, as offset by the liquidated damages awarded to Riverbank. The amount
originally awarded to Barham without offset was $155,467.21. Deducting the $14,000 in
liquidated damages, results in a damage award to Barham of $141,467.21. This is the
amount the trial court awarded to Barham in the judgment on the complaint. It is
consistent with the judgment in the prior appeal, and we find no error.
4. Issue (4)
The fourth issue the trial court was directed to determine was the amount of
prejudgment interest to be awarded to Barham based on the damages awarded to it after
offset. The trial court recalculated prejudgment interest on the new judgment amount,
and awarded $67,937.03. Riverbank does not challenge the new amount.
We conclude the trial court, in making the determinations reflected in its statement
of decision and the judgment on Barham’s complaint, acted properly and in conformity
with the directions set out in the disposition of the prior appeal. Riverbank has failed to
establish any error.
B. Effect of a change in the law
Riverbank’s second argument for reversal of the judgment on the complaint is that
there was a change in the law between issuance of the remittitur in the prior appeal and
entry of the trial court’s judgment on remand, and the trial court should have applied the
new law, redetermined all the issues in the case affected by it, and entered an entirely
new judgment in favor of Riverbank. The law does not support Riverbank’s argument.
Riverbank’s argument relies on the law of the case doctrine. The law of the case
doctrine provides that, when an appellate court, in its opinion deciding an appeal, states a
rule of law necessary to the decision, it conclusively establishes that rule and makes it
determinative of the rights of the same parties in any subsequent retrial or appeal in the
same case. Both the trial court and the appellate court must adhere to the rule in
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subsequent proceedings in the case. (People v. Dutra (2006) 145 Cal. App. 4th 1359,
1364-1365 (Dutra); Lucky United Properties Investment, Inc. v. Lee (2013) 213
Cal. App. 4th 635, 651.) Riverbank asserts law of the case does not establish facts, so the
trial court on remand was not bound by prior factual findings. Further, Riverbank
maintains the doctrine is not jurisdictional, so it can be disregarded in certain
circumstances, including when a change in the law, or new law, was made after the prior
appeal. Riverbank contends Greg Opinski Construction, Inc. v. City of Oakdale (2011)
199 Cal. App. 4th 1107 (Opinski), a decision issued by this court two months after our
decision in the prior appeal in this case, changed the law applicable to time extensions in
construction contracts containing provisions similar or identical to those in the contract
between Barham and Riverbank. Riverbank contends that trial court on remand should
have followed the Opinski decision, found Barham was not entitled to any extensions of
the contract completion time, and awarded Riverbank liquidated damages for the entire
period of delay.
Opinski involved a dispute between a city and the general contractor on its
construction project. (Opinski, supra, 199 Cal.App.4th at p. 1109.) The trial court
awarded the city liquidated damages for delays in completion of the project. It refused to
consider whether the city had caused the delays, because the contract required the
contractor to obtain any extensions of time by applying for change orders, and the
contractor had not done so. The contractor relied on Peter Kiewit Sons’ Co. v. Pasadena
City Junior College Dist. (1963) 59 Cal. 2d 241 (Kiewit) in arguing that an owner is not
entitled to damages for late completion of construction if the delay was caused by the
owner’s conduct, even if the contract required extensions of time to be requested pursuant
to procedures set out in the contract and the contractor did not make such a request.
(Ibid.) Opinski held this portion of the Kiewit decision “was superseded by a 1965
amendment to Civil Code section 1511, which allows parties to specify in a contract that
a party intending to avoid the effect of its failure to perform by asserting that the other
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party’s act caused the failure must give written notice of this intention within a
reasonable time.” (Opinski, supra, 199 Cal.App.4th at p. 1109.) Accordingly, it was
proper for the trial court to give effect to the contractual provisions requiring that the
contractor request a change order if it wished to obtain an extension of the contract time.
The contractor had not made such a request, so the trial court did not err in enforcing the
contractual provisions, which allocated to the contractor the risk of delays when the
contractor failed to follow the required procedures for notifying the owner of its intent to
claim the right to an extension. (Id. at pp. 1117-1118.)
Riverbank contends the contract in Opinski contained provisions identical to those
in the contract between Riverbank and Barham requiring that the contractor request and
obtain a change order in order to obtain an extension of time for completion of the
contract. Riverbank contends Barham, like the contractor in Opinski, failed to obtain a
change order extending the contract completion date for any of the critical path delays the
trial court found were the responsibility of Riverbank. Thus, Riverbank concludes, all of
the delays must be charged to Barham.
The law of the case doctrine is not jurisdictional. (Dutra, supra, 145 Cal.App.4th
at p. 1365.) The court will not adhere to the doctrine when its application will result in an
unjust decision, such as where existing law has been misapplied, resulting in a substantial
injustice, or where a change in the law has occurred after remand. (Ibid.) However, the
rule requiring the trial court to follow the directions in the disposition portion of the
appellate decision, as conveyed to the trial court in the remittitur, is jurisdictional. (Id. at
p. 1367.) After issuance of the remittitur, the trial court is revested with jurisdiction of
the case, but only to carry out the judgment as ordered by the appellate court. (Id. at
p. 1366.) The trial court’s jurisdiction is so limited regardless whether the trial court
believes the appellate court’s decision to be right or wrong, or impaired by subsequent
decisions. (Id. at p. 1367.) A trial court may not disobey a remittitur, as that would
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amount to overruling the appellate court’s decision, which a court of inferior jurisdiction
may not do. (Id. at p. 1362.)
“The terms of the remittitur define the trial court’s jurisdiction, not law of
the case. The force of the remittitur does not depend on, nor is it limited by
the law of the case: ‘Where a reviewing court reverses a judgment with
directions … the trial court is bound by the directions given and has no
authority to retry any other issue or to make any other findings. Its
authority is limited wholly and solely to following the directions of the
reviewing court.’” (Dutra, supra, 145 Cal.App.4th at p. 1367.)
Our directions to the trial court after the first appeal required it to make specific
determinations, none of which involved whether Barham properly requested or obtained a
change order pursuant to the procedures set out in its contract with Riverbank. Thus, the
trial court did not have jurisdiction to reconsider and redetermine that issue, regardless
whether there was a subsequent change in the law, as contended by Riverbank.
Moreover, Opinski is distinguishable. It determined the contractor was required to
obtain a change order to extend the time within which it was to complete the
construction, but the contractor had not even requested a change order pursuant to either
of the procedures set out in the contract. In this case, the trial court determined Barham
did request change orders extending the time for completion of the project, but Riverbank
improperly denied them. Nothing in Opinski addressed or changed the law regarding the
means by which a contractor complies with contractual procedures for requesting a
change order, and nothing in Opinski requires a change in the outcome of this case.
Riverbank has not established any error in the judgment on the complaint.
II. Appeal from awards of attorney fees and costs
Attorney fees may be awarded to the prevailing party as part of an award of costs,
when an award of fees is authorized by contract. (Code Civ. Proc., §§ 1032, subd. (b),
1033.5, subd. (a)(10)(A); Civ. Code, § 1717, subd. (a).) The fees awarded must be
reasonable in amount and reasonably necessary to the conduct of the litigation. (Code
Civ. Proc. § 1033.5, subd. (c)(2) & (3).) The amount of the fee award is reviewed for
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abuse of discretion. (Connerly v. State Personnel Bd. (2006) 37 Cal. 4th 1169, 1175.)
The trial court’s award is presumed to be correct on appeal. (Cruz v. Ayromloo (2007)
155 Cal. App. 4th 1270, 1274 (Cruz).)
“The amount to be awarded as attorney’s fees is left to the sound discretion of the
trial court. The trial judge is in the best position to evaluate the services rendered by an
attorney in his courtroom; his judgment will not be disturbed on review unless it is
clearly wrong.” (Vella v. Hudgins (1984) 151 Cal. App. 3d 515, 522.) “Reasonableness of
the fee is determined by looking to a variety of factors: ‘“the nature of the litigation, its
difficulty, the amount involved, the skill required and the skill employed in handling the
litigation, the attention given, the success of the attorney’s efforts, his learning, his age,
and his experience in the particular type of work demanded [citation]; the intricacies and
importance of the litigation, the labor and the necessity for skilled legal training and
ability in trying the cause, and the time consumed.”’” (Martino v. Denevi (1986) 182
Cal. App. 3d 553, 558 (Martino).)
After entry of judgment on remand, Barham as plaintiff, through attorney
Cassinat, moved for an award of attorney fees for its work prosecuting the complaint;
Riverbank opposed the motion. Cassinat also filed a memorandum of costs, and
Riverbank moved to strike or tax it. The trial court noted the previous award of attorney
fees to plaintiff Barham was $215,000, and Barham was requesting an additional $19,455
in postappeal attorney fees. It awarded plaintiff Barham $209,064 in attorney fees on
remand.
Barham as cross-defendant, through attorney Rivera, also moved for an award of
attorney fees, and filed a belated memorandum of costs along with its reply brief on the
motion for attorney fees. Riverbank opposed Rivera’s motion and orally objected to the
late filing of the memorandum of costs. The trial court awarded cross-defendant Barham
attorney fees of $192,000 for defense of the breach of warranty claim; it awarded
$12,388.92 in costs, taking judicial notice of the memorandum of costs filed by Barham
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prior to the first appeal and finding Barham was not required to file a new memorandum
of costs on remand.
Riverbank moved for an award of attorney fees as a prevailing party as well. It
contended Ragsdale’s judgment against Barham for payment of the balance due on its
subcontract established that Barham breached the construction contract with Riverbank
by failing to pay a subcontractor; therefore Riverbank was the prevailing party on that
claim, and was entitled to attorney fees. Additionally, the trial court had determined on
remand that Nationwide was liable to Riverbank on the payment bond, so Riverbank
sought attorney fees for prevailing on that claim. The trial court awarded Riverbank
$16,030.65 in attorney fees related to the payment bond claim, which was 10 percent of
the amount requested.
A. Award of attorney fees to Barham for prevailing on breach of warranty
claim in Riverbank’s cross-complaint
Riverbank challenges the attorney fee award to Barham for prevailing on the claim
in Riverbank’s cross-complaint alleging defective construction. Originally, the trial court
made a joint award to Barham and Nationwide for prevailing on the breach of warranty
and performance bond claims in Riverbank’s cross-complaint. The decision in the prior
appeal determined Nationwide was not entitled to an award of attorney fees in connection
with the warranty claim. Riverbank alleged Nationwide was liable to it on the
performance bond it issued to Barham, which obligated Nationwide to pay Riverbank for
its claims against Barham in the event Barham failed to do so. The performance bond,
however, did not contain a provision for recovery of attorney fees by the prevailing party.
Accordingly, the disposition in the prior appeal directed the trial court to eliminate the
award of attorney fees to Nationwide for defending against Riverbank’s performance
bond claim.
On remand, the trial court awarded Barham $192,000 for its attorney fees incurred
in defending the breach of warranty cross-complaint, a $6,000 reduction from the
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$198,000 previously awarded to Barham and Nationwide. Riverbank contends the trial
court should have reduced the original award of attorney fees for the breach of warranty
and performance bond claims by 50 percent on remand. It asserts a surety’s liability is
secondary and derivative; when it is required to pay on the bond, it is liable to the same
extent as its principal. Consequently, Riverbank concludes, Barham and Nationwide
faced the same potential liability, and everything that was done to defend Barham from
the warranty allegations protected Nationwide equally against liability on the
performance bond.
In the trial court, “the burden is on the party seeking attorney fees to prove that the
fees it seeks are reasonable.” (Gorman v. Tassajara Development Corp. (2009) 178
Cal. App. 4th 44, 98.) On appeal, however, we presume the judgment is correct and the
appellant must establish prejudicial error. (Id. at p. 67.) “‘In reviewing an award of
attorney fees, the amount awarded by the trial court will not be set aside absent an
affirmative showing of abuse of discretion in that the award is “manifestly excessive in
the circumstances.”’” (Cruz, supra, 155 Cal.App.4th at p. 1274.) Riverbank has not
demonstrated any such error.
In Barham’s motion for attorney fees on remand, attorney Rivera, who represented
Barham on the warranty cross-complaint, submitted a declaration in which he stated he
had reviewed the fee documents submitted in support of the motion for attorney fees
made prior to the first appeal and found no more than 50 hours were spent on the defense
of Nationwide. Barham asserted that amounted to no more than $7,000. Barham stated
no discovery was ever directed to Nationwide, and the only evidence submitted against
Nationwide at trial was the performance and payment bonds themselves.
Riverbank asserts Rivera’s declaration “contains nothing but hearsay, conclusion,
and Rivera’s opinions” about the content of documents submitted in support of the fee
claims. It contends the documents submitted by Barham were not copies of billings
actually sent to the client, but “some form of internal recordation of hours of time spent
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by persons in Rivera’s firm without any indication of what the time was spent on.”
Riverbank suggests these documents are unreliable and too general; they do not
specifically identify the tasks performed or the issues to which they relate.
“In California, an attorney need not submit contemporaneous time records in order
to recover attorney fees …. 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.” (Martino, supra, 182 Cal.App.3d at p. 559.) It is
recommended, however, that the attorney present evidence of the services actually
performed, including information about “the number of hours worked, billing rates, types
of issues dealt with and appearances made on the client’s behalf.” (Ibid.) With its
original motion for attorney fees, Barham, as cross-defendant, filed Rivera’s declaration
summarizing the number of hours worked and billing rates of the attorneys who
performed work on the case. Barham subsequently filed another declaration with its
reply papers, and attached to it over 300 pages of invoices for the case, with inapplicable
charges redacted. On remand, Barham filed a motion for attorney fees, again supported
by a declaration of Rivera. Rivera referred to the billings submitted in support of the
previous motion, and represented he had reviewed them and redacted billings that were
not related to the defense of Barham as a cross-defendant. In a supplemental declaration
filed with his reply papers, Rivera requested that the trial court take judicial notice of the
billing records submitted with the prior motion for attorney fees.
The trial court has broad discretion to determine the amount of a reasonable fee,
and the award of such fees is governed by equitable principles. (Gorman, supra, 178
Cal.App.4th at p. 92.) In its order, the trial court stated that it considered the relevant
factors in reaching its decision. Among the factors to consider are: the necessity for the
litigation, 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. (Gorman, supra, 178 Cal.App.4th at p. 64.)
15.
The same judge who ruled on the attorney fee motion had presided at the trial and had
observed the amount of time and effort expended by the parties in addressing each of the
issues before the court. He was aware of the nature and complexity of the various issues,
the parties’ respective positions on the issues, and the parties’ relative successes in the
outcome. Based on the proceedings before it, the trial court was in a position to judge the
credibility of counsel’s statements under penalty of perjury concerning the hours billed,
the billing rates, and the work performed, as well as his representation that no more than
50 hours were spent in the defense of Nationwide on the performance bond claim.
The trial court was not required to apportion the fees equally between Barham and
Nationwide. “‘Where a cause of action based on the contract providing for attorney’s
fees is joined with other causes of action beyond the contract, the prevailing party may
recover attorney’s fees under [Civil Code] section 1717 only as they relate to the contract
action.’” (Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155
Cal. App. 4th 525, 555 (Thompson).) Fees need not be apportioned, however, “‘when
incurred for representation on an issue common to both a cause of action in which fees
are proper and one in which they are not allowed. All expenses incurred with respect to
the [issues common to all causes of action] qualify for award.’ [Citation.] Thus,
allocation is not required when the issues are ‘so interrelated that it would have been
impossible to separate them into claims for which attorney fees are properly awarded and
claims for which they are not.’” (Ibid.) Allocation is within the trial court’s discretion;
its discretion is abused only when the decision exceeds the bounds of reason when all
relevant circumstances are considered. (Ibid.)
Barham was potentially liable to Riverbank on the warranty, if its construction
was defective. Nationwide was potentially liable on the performance bond, if Barham
was liable for breach of warranty and failed to meet its obligation to compensate
Riverbank for that breach. Thus, issues of defective construction and breach of warranty
were common to the liability of both Barham and Nationwide. Riverbank concedes
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Nationwide’s liability was derivative of Barham’s, the same evidence of Barham’s
conduct was relevant to Nationwide’s liability under the performance bond, and work
performed in defending Barham also benefited Nationwide. Riverbank concedes the
services performed by Rivera benefited the defense of both Barham and Nationwide.
Thus, the issues relevant to the claims against them were “so interrelated that it would
have been impossible to separate them into claims for which attorney fees are properly
awarded and claims for which they are not.” (Thompson, supra, 155 Cal.App.4th at
p. 555.)
We conclude Riverbank has not established that the trial court abused its
discretion by permitting Barham to recover substantial fees incurred in litigating issues
common to Barham and Nationwide that arose out of the breach of warranty cross-
complaint.
B. Timeliness of Barham’s motion for attorney fees
Riverbank next contends Barham’s motion for attorney fees on the complaint was
not timely filed. A motion for attorney fees must be filed within the time for filing a
notice of appeal, which is generally within 60 days after notice of entry of the judgment
has been served, or within 180 days of entry of judgment, if no notice of entry is served.
(Cal. Rules of Court, rules 3.1702(b)(1), 8.104(a)(1).) The judgment was entered in two
separate documents: one identified as the judgment on Barham’s complaint against
Riverbank and the other identified as the judgment on Riverbank’s cross-complaint
against Barham and Nationwide.2 Notice of entry of judgment on the cross-complaint
was served first; notice of entry of judgment on the complaint was served about a week
later. Riverbank contends Barham’s motion for attorney fees was filed within 60 days of
service of notice of entry of the second judgment (on the complaint), but not within 60
2 There was some overlap in the judgments, however; the judgment on the complaint
included an offset against Barham’s damages for the liquidated damages Barham was found
obligated to pay to Riverbank based on claims made in Riverbank’s cross-complaint.
17.
days of service of notice of entry of the first judgment (on the cross-complaint).
Riverbank cites the “one judgment rule” and asserts the two documents together
constituted a single final judgment in the action. Without citation of authority, Riverbank
then claims the time for filing the motion for attorney fees began to run when notice of
entry of the first portion of the judgment was served. Since it was not filed within 60
days of that notice, Riverbank concludes the motion was not timely filed and should not
have been granted.
“Under California’s ‘one final judgment’ rule, a judgment that fails to dispose of
all the causes of action pending between the parties is generally not appealable.” (Kurwa
v. Kislinger (2013) 57 Cal. 4th 1097, 1100.) The rule applies even when the remaining
causes of action have been severed for separate trial or may be characterized as separate
and independent of those on which judgment has been entered. (Id. at p. 1101; Morehart
v. County of Santa Barbara (1994) 7 Cal. 4th 725, 743.) Thus, the one final judgment in
an action does not exist until all of the causes of action have been disposed of. We
conclude that, when judgment on different portions of the action is entered separately,
and notice of entry of each portion of the judgment is given separately, notice of entry of
the final appealable judgment has not been given until notice of both portions of the
judgment has been given. Accordingly, the time for filing a notice of appeal, which is
also the time for filing a motion for attorney fees, does not begin to run until notice of
entry of the entire, final judgment has been given. Here, that occurred when the second
notice of entry of judgment was given, not when the first notice was given, as Riverbank
claims. Riverbank’s contention the motion for attorney fees on the complaint was not
timely is without merit.
C. Inclusion of fees incurred by Barham in defending against Ragsdale’s
claim
Riverbank contends the award to Barham of attorney fees incurred in connection
with the prosecution of Barham’s complaint improperly included fees for actions
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Cassinat’s law firm took in defending Barham against Ragsdale’s claims. Since Barham
did not prevail against Ragsdale, Riverbank asserts such fees are not recoverable.
Riverbank identifies certain entries in the Cassinat firm’s billings it contends reflect work
involving Ragsdale.
The trial court originally awarded Barham $215,000 in attorney fees for prevailing
on its complaint. On remand, Barham asked for a total award of over $241,000,
including the $215,000 originally awarded and an additional $19,455 for fees incurred
postappeal. Riverbank opposed Barham’s motion, asserting generally that Barham’s
billings included fees for services incurred in the unsuccessful defense of Ragsdale’s
complaint. Its argument seemed to address, in part, the order in the original judgment
that required Riverbank to pay to Barham as damages the amount Barham was required
to pay to Ragsdale as attorney fees because Ragsdale was the prevailing party on its own
complaint. That award of attorney fees as damages was reversed on appeal and we
directed the trial court to eliminate it from the new judgment. The trial court complied
with that direction.
In the trial court, Riverbank asserted generally that Barham’s billings included
fees for work involving Ragsdale’s claim, but did not challenge any specific items in
Barham’s billing records. Riverbank now objects to particular items in Barham’s billing
records. “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e.,
the number of hours reasonably expended multiplied by the reasonable hourly rate….
The lodestar figure may then be adjusted, based on consideration of factors specific to the
case, in order to fix the fee at the fair market value for the legal services provided.”
(PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1095 (PLCM).) In determining
the lodestar figure, the trial court need not specify which fees or hours it is allowing or
disallowing. “‘In California, the trial court has no sua sponte duty to make specific
factual findings explaining its calculation of the fee award and the appellate courts will
infer all findings exist to support the trial court’s determination.” (Taylor v. Nabors
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Drilling USA, LP (2014) 222 Cal. App. 4th 1228, 1250 (Taylor).) The trial court is not
required to identify each item it found to be unsupported or unreasonable because “‘“[w]e
do not want ‘a [trial] court, in setting an attorney’s fee, [to] become enmeshed in a
meticulous analysis of every detailed facet of the professional representation. It … is not
our intention that the inquiry into the adequacy of the fee assume massive proportions,
perhaps dwarfing the case in chief.’”’” (PLCM, supra, 22 Cal.4th at p. 1098.) “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.)
Here, the trial court awarded Barham less in attorney fees on the complaint than
Barham requested. It was not asked to, and did not, specify any particular items in the
attorneys’ billings it allowed or disallowed. In the absence of evidence to the contrary,
and none has been brought to our attention, we must presume the trial court properly
considered the challenges raised by Riverbank in its opposition, and made appropriate
allowances and disallowances in reaching its decision concerning the amount of attorney
fees to award to Barham for prevailing on its breach of contract claim. (Evid. Code,
§ 664; Christian Research Institute v. Alnor (2008) 165 Cal. App. 4th 1315, 1324.)
Riverbank has not demonstrated otherwise. Consequently, Riverbank has not established
prejudicial error in the award of attorney fees to Barham on its complaint.
D. Duplication in the fee awards
Riverbank contends there is significant duplication of effort in the work performed
by Cassinat’s firm in prosecuting the complaint and by Rivera’s firm in defending against
the cross-complaint, and the duplicative charges should have been eliminated from the
fee awards.
“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,
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with a sufficient argument and citations to the evidence. General arguments that fees
claimed are excessive, duplicative, or unrelated do not suffice.” (Premier Medical
Management Systems, Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal. App. 4th
550, 564.) .) “‘[A]n experienced trial judge is in a much better position than an appellate
court to assess the value of the legal services rendered in his or her court.’” (Taylor,
supra, 222 Cal.App.4th at p. 1250.) The trial court was aware at the time it made the
awards of attorney fees that Barham was represented by two sets of attorneys,
representing it in separate capacities and on different claims. We assume the trial court
took into account any unnecessary or duplicative billings when it determined the amount
of attorney fees to award and set the award at an amount less than Barham’s fee request.
Riverbank has not demonstrated the trial court failed to take the dual representation into
account in determining the amount of fees to award. Likewise, it has not demonstrated
the trial court abused its discretion in making the award of attorney fees.
E. Reduction of award in light of mixed result
When the results of an action on the contract are mixed, that is, not a simple,
unqualified win for one party, but good news and bad news for both parties, the trial court
may find there is no prevailing party for purposes of awarding attorney fees. (Hsu v.
Abbara (1995) 9 Cal. 4th 863, 875-876 (Hsu).) Riverbank argues that, as an alternative to
denial of fees, the trial court may reduce the award of attorney fees to reflect the party’s
limited success. Further, it seems to argue that, in a mixed result case, the trial court
must adjust the amount awarded to the prevailing party to correspond to the degree or
percentage of success the party achieved. The cases it cites, however, did not espouse or
apply such a rule. Hilltop Investment Associates v. Leon (1994) 28 Cal. App. 4th 462
upheld the denial of an award of attorney fees in a mixed result case. Hsu held that, when
the result was not mixed, but was a simple, unqualified win for one party, that party was
the prevailing party as a matter of law and was entitled to an award of reasonable attorney
fees. (Hsu, at pp. 865-866, 877.)
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Civil Code section 1717 and the cases reviewing awards of attorney fees merely
require that the awards be reasonable. The cases identify multiple factors to consider in
setting the amount of the award, including: the necessity for and nature of the litigation,
its difficulty, the skill required and employed in handling the litigation, the attention
given to it, the success or failure of the attorney’s efforts, the time consumed, and other
circumstances of the case. (PLCM, supra, 20 Cal.4th at p. 1096; Martino, supra, 182
Cal.App.3d at p. 558.) Thus, if the prevailing party is only partially successful in the
litigation, the trial court may adjust the award appropriately in light of that limited
success. Mathematical precision, however, is not required. The court need not eliminate
fees from the award when the issues in the various claims overlap, so that services
performed in connection with successful claims also relate to unsuccessful claims.
Apportionment is not “‘required when the issues in the fee and nonfee claims are so
inextricably intertwined that it would be impractical or impossible to separate the
attorney’s time into compensable and noncompensable units.’” (Taylor, supra, 222
Cal.App.4th at p. 1251.) The trial court was not required to reduce the award of attorney
fees in proportion to Barham’s success or lack of success in the litigation. Riverbank has
not established any abuse of the trial court’s discretion.
F. Inclusion of unrecoverable expenses as attorney fees
Riverbank contends the billings submitted by Cassinat included expenses that are
not recoverable as costs and may not be recovered as attorney fees. It specifies various
pages of the billings on which such expenses purportedly appear. The pages to which
Riverbank refers are copies of invoices from the Cassinat firm to its client, Barham.
Each month’s invoice sets out the professional services rendered, including the date, a
description of the services, the time spent, and the amount charged, followed by a total of
the charges for professional services. Each invoice then sets out any additional charges,
including postage, facsimile charges, and copying costs, followed by a total of the
additional charges. At the end of the pages of invoices, the Cassinat firm included a
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summary of the charges claimed in the motion for attorney fees. For each month, the
amount claimed corresponds with the total charged for professional services on the
monthly invoice. It does not include the additional charges. Consequently, the evidence
presented in the trial court does not support Riverbank’s claim that the attorney fee award
improperly included unrecoverable costs. No abuse of discretion has been demonstrated.
G. Timeliness of Rivera’s memorandum of costs
Riverbank asserts that the award to Barham of costs incurred by the Rivera firm
was unauthorized because, on remand, Rivera did not file a timely memorandum of costs
on behalf of Barham as cross-defendant. After the original judgment was entered, Rivera
filed a memorandum of costs, and an amended memorandum of costs, setting out the
costs it had incurred up to that time, which it sought to recover. Riverbank responded
with a motion to tax costs. The trial court heard the motion, taxed some of the costs, and
awarded Barham the remainder, $12,708.
On remand, after judgment was entered, Rivera filed a motion for an award of
attorney fees and costs to Barham; in its memorandum of points and authorities filed in
support of the motion, Rivera requested that the court take judicial notice of the
memorandum of costs previously filed. Additionally, Barham requested $319.80 in costs
incurred after remand. It did not file a new memorandum of costs until it filed its reply
papers in connection with the fee motion; the new memorandum of costs requested
$12,708 in costs, the amount previously awarded. The new memorandum of costs was
not filed within the required time period. (Cal. Rules of Court, rule 3.1700(a)(1).)
At oral argument, Riverbank objected that the memorandum of costs was not
timely. The trial court concluded a new memorandum of costs was not required to be
filed and took judicial notice of the memorandum of costs Rivera filed in connection with
the original judgment. The trial court awarded Barham the costs reflected in the new
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memorandum of costs and in the original, as taxed ($12,708), but deducted the $319.80 in
postremand costs.3
The time limit for filing a memorandum of costs is not jurisdictional. (Hoover
Community Hotel Development Corp. v. Thomson (1985) 168 Cal. App. 3d 485, 487-488.)
“[A] trial court has broad discretion in allowing relief from a late filing where … there is
an absence of a showing of prejudice to the opposing party.” (Id. at p. 488, fn. omitted.)
Instead of exercising its discretion to permit Barham to file a late memorandum of costs,
the trial court took judicial notice of the previously filed memorandum and based the
award on its previous order, which taxed some of the costs sought. It effectively took
into account the objections Riverbank had previously made to the cost bill and denied
recovery of any new costs. Riverbank has not demonstrated any prejudice it suffered as a
result of this procedure. The trial court could have permitted Barham to file a late
memorandum of costs, which would have required another motion to tax costs by
Riverbank, causing both parties to incur further attorney fees. Riverbank has not
suggested any new arguments it would have made in a motion to tax costs that would
have caused the trial court to render a different decision. Generally, error is reversible on
appeal only if prejudicial. (Jones v. Farmers Ins. Exchange (2013) 221 Cal. App. 4th 986,
999.) No prejudicial error has been demonstrated.
3 The trial court apparently made a transpositional error and used the figure $319.08, which
Rivera brought to the trial court’s attention at oral argument. The trial court corrected the
$319.80 figure in the final order, but failed to correct the computation of the award, resulting in
an award of $12,388.92.
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DISPOSITION
The judgment and orders from which appealed are affirmed. Barham and
Nationwide are entitled to their costs on appeal.
_____________________
HILL, P.J.
WE CONCUR:
_____________________
POOCHIGIAN, J.
_____________________
DETJEN, J.
25.