Nickel v. ARB, Inc. CA4/3 ( 2014 )

Filed 5/30/14 Nickel v. ARB, Inc. CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
RACHEL NICKEL,
Plaintiff and Appellant, G048500
v. (Super. Ct. No. 30-2012-00553946)
ARB, INC., OPINION
Defendant and Respondent.
Appeal from an order of the Superior Court of Orange County, Derek W.
Hunt, Judge. Affirmed.
The Schlehr Law Firm, Sarah B. Schlehr, Richard S. McGuire and Morgan
E. Ricketts for Plaintiff and Appellant.
Jackson Lewis, Jared L. Bryan, Andrew J. Jaramillo and Matt S. D’Abusco
for Defendant and Respondent.
* * *
In this appeal, plaintiff and appellant Rachel Nickel contends the amount of
attorney fees and costs the court awarded to her pursuant to the parties’ stipulated
judgment was too small. She has not met her burden to show error. We affirm.
I
FACTS
Nickel filed a pregnancy and sex discrimination lawsuit against ARB, Inc.
Later that year, she made a Code of Civil Procedure section 998 offer to compromise.
She offered to settle her claims for “$100,000.00 plus attorneys’ fees and costs, in an
amount to be determined by the Court.” ARB, Inc. accepted the offer.
The court entered a stipulated judgment in favor of Nickel. It ordered “that
Plaintiff Rachel Nickel shall recover $100,000.00 from Defendant ARB, Inc. together
with Plaintiff’s costs and attorneys fees, the amount of which shall be later determined by
the Court.”
Nickel filed a March 29, 2013 motion wherein she sought $93,421.50 in
attorney fees and $7,609.19 in costs. ARB, Inc. opposed the motion, arguing that the
attorney fee award should not exceed $44,956.00.
In its minute order, the court stated: “The cause having been briefed,
argued, and taken under submission, the court now rules as follows: (a) motion for
attorney fees granted in the total sum of $30,000.00; Serrano v. Priest (1977) 20 [Cal]. 3d
25; (b) the court declines to award costs in addition to those sought under the
Memorandum of Costs and Disbursements filed February 13, 2013.”
Nickel appeals.
II
DISCUSSION
A. Standard of Review:
“A trial court’s exercise of discretion concerning an award of attorney fees
will not be reversed unless there is a manifest abuse of discretion. [Citation.] ‘“The
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‘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[’]—meaning that it abused
its discretion. [Citations.]”’ [Citations.] Accordingly, there is no question our review
must be highly deferential to the views of the trial court. [Citation.]” (Nichols v. City of
Taft (2007) 155 Cal. App. 4th 1233, 1239.)
“At the same time, discretion must not be exercised whimsically, and
reversal is appropriate where there is no reasonable basis for the ruling or the trial court
has applied ‘the wrong test’ or standard in reaching its result. [Citation.] ‘“The scope of
discretion always resides in the particular law being applied, i.e., in the ‘legal principles
governing the subject of [the] action . . . .’ Action that transgresses the confines of the
applicable principles of law is outside the scope of discretion and we call such action an
‘abuse’ of discretion.”’ [Citations.] Thus, in attorney fee determinations such as this
one, the exercise of the trial court’s discretion ‘must be based on a proper utilization of
the lodestar adjustment method, both to determine the lodestar figure and to analyze the
factors that might justify application of a multiplier.’ [Citation.]” (Nichols v. City of
Taft, supra, 155 Cal.App.4th at pp. 1239-1240.)
B. Application of Erroneous Standard:
Nickel claims that the court, in failing to utilize the lodestar method to
determine the amount of the attorneys fee award, applied the wrong legal standard and
that, therefore, this court must perform a de novo review. She emphasizes that Serrano v.
Priest (1977) 20 Cal. 3d 25 and subsequent cases require that attorney fee awards should
be determined in accordance with the lodestar method. Even though the court, in issuing
its minute order, cited Serrano v. Priest, supra, 20 Cal. 3d 25 in support of its
determination, Nickel says the court plainly did not use the lodestar method as required
by that case.
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The Supreme Court in Ketchum v. Moses (2001) 24 Cal. 4th 1122
explained: “Under Serrano [v. Priest, supra, 20 Cal. 3d 25], a court assessing attorney
fees begins with a . . . lodestar figure, based on the ‘careful compilation of the time spent
and reasonable hourly compensation of each attorney . . . involved in the presentation of
the case.’ [Citation.] We expressly approved the use of prevailing hourly rates as a basis
for the lodestar . . . . [Citation.]” (Ketchum v. Moses, supra, 24 Cal.4th at pp. 1131-
1132.) “Under Serrano . . . , the lodestar is the basic fee for comparable legal services in
the community; it may be adjusted by the court based on factors including, as relevant
herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in
presenting them, (3) the extent to which the nature of the litigation precluded other
employment by the attorneys, (4) the contingent nature of the fee award. [Citation.] The
purpose of such adjustment is to fix a fee at the fair market value for the particular action.
In effect, the court determines, retrospectively, whether the litigation involved a
contingent risk or required extraordinary legal skill justifying augmentation of the
unadorned lodestar in order to approximate the fair market rate for such services.”
(Id. at p. 1132.)
Nickel maintains that the court, which made no findings of fact, failed to
determine either reasonable billing rates for the attorneys involved or the number of
hours reasonably spent on the case, and failed to consider enhancement factors.
Consequently, she argues, even though the court cited Serrano v. Priest, supra, 20 Cal. 3d
25 in its minute order, it obviously did not follow that case.
She cites no case for the authority that the court was required to make
findings of fact or that because it made no findings of fact we should presume that it
applied the wrong standard in the determination of its award. As case law readily shows,
the court was not required to make such findings and we make no such presumption.
“The superior court was not required to issue a statement of decision with regard to the
fee award. [Citation.]” (Ketchum v. Moses, supra, 24 Cal.4th at p. 1140; Pellegrino v.
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Robert Half Internat., Inc. (2010) 182 Cal. App. 4th 278, 289-290.) Moreover, there is no
indication that Nickel requested a statement of decision. Consequently, “‘“[a]ll
intendments and presumptions are indulged to support [the judgment] on matters as to
which the record is silent, and error must be affirmatively shown.”’ [Citation.]”
(Ketchum v. Moses, supra, 24 Cal.4th at p. 1140; Pellegrino v. Robert Half Internat., Inc.,
supra, 182 Cal.App.4th at pp. 289-290.) Here, we presume that the court used the
lodestar method required under Serrano v. Priest, supra, 20 Cal. 3d 25, just as it indicated
it did.
Nickel says that comments the court made at oral argument on the motion
for attorney fees shows that it did not intend to utilize the lodestar method. The court
commented that Nickel and her attorneys had a contingency fee agreement, so that the
legal fees she agreed to pay “were not to be based upon the lodestar method; meaning a
specified hourly rate multiplied by the time spent.” The court also expressed some
dismay at the minimal and nonspecific way in which the attorney fees provision of the
settlement agreement had been drafted. It said: “What’s unusual about this agreement
which is before me is the completely unspecific language in the agreement about attorney
fees. By that, I mean it doesn’t even specify how those attorney fees are supposed to be
calculated. The entire subject is addressed in a single complete, unspecific sentence in
the stipulated judgment . . . .”
The court then noted that Nickel was suggesting that it should construe the
settlement agreement as an agreement that she could recover more than the amount of the
contingency percentage she agreed to pay her attorneys. It further commented on some
general principles applicable in attorney fees matters and ultimately concluded: “. . . I
believe the parties’ stipulation such as it was . . . amounts to an agreement between them
that the trial judge, meaning me, should simply exercise my discretion to select a
reasonable attorney fee award.” Nickel says this shows the trial court applied an
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erroneous legal standard—simply any fee award the court in its personal discretion felt to
be reasonable, not a fee determined by application of the lodestar method.
However, Nickel omits to mention the very next words the court uttered:
“As I see it, the operative considerations under those circumstances are such things as the
complexity of the case, the efforts that had to be made by the lawyer before their final
outcome, and my experience . . . .” (Italics added.) In other words, the court both
identified some of the lodestar factors to be applied, and indicated that it was taking the
time to mention only a few of them.
Again, inasmuch as there is no statement of decision and all presumptions
are indulged to support the award, we presume the court did exactly what it said it did in
its minute order, and used the lodestar method required under Serrano v. Priest, supra, 20
Cal. 3d 25. The court’s comments at oral argument do not show that it intended to do
otherwise and, in any event, we “refrain from using the court’s oral comments during the
hearing to impeach the final attorney fees award.” (Pellegrino v. Robert Half Internat.,
Inc., supra, 182 Cal.App.4th at p. 294.)
C. Abuse of Discretion:
Nickel reiterates the foregoing arguments and says the court abused its
discretion by applying the wrong legal standard. However, we have already held that
Nickel failed to show the court applied the wrong legal standard.
Nickel also she says the court abused its discretion because it failed to
award compensation for all hours reasonably spent. She states that she requested lodestar
fees of $62,281 in her motion, which she increased to $73,491 at the hearing on the
motion. She emphasizes that these figures were “not invented out of thin air.” Nickel
says they were based on: (1) 69.8 hours for Attorney Sarah B. Schlehr times $500 per
hour; (2) 77.37 hours for Attorney Hilary Rau times $300 per hour; (3) 13.9 hours for
Attorney Citadelle Priagula times $300 per hour; and (4) “[a]dditional time spent on the
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motion, reply and hearing,” bringing the lodestar to $73,491. She complained that the
$30,000 court award compensated the attorneys at the rate of only $158 per hour, for the
total number of hours worked.
Nickel, citing Horsford v. Board of Trustees of California State University
(2005) 132 Cal. App. 4th 359, contends that the court abused its discretion in failing to
make the award fully compensatory. The Horsford court observed: “In order to be
effective in accomplishing the legislative purpose of assuring the availability of counsel
to bring meritorious actions under FEHA, the goal of an award of attorney fees ‘is to fix a
fee at the fair market value for the particular action.’ [Citation.] ‘[F]ee awards should be
fully compensatory.’ [Citation.]” (Id. at p. 394.)
However, the court in Horsford v. Board of Trustees of California State
University, supra, 132 Cal. App. 4th 359 further stated: “While the trial court has
discretion to increase or decrease the ultimate award in order to effectuate the purposes of
FEHA and to ensure a fair and just result, the court is required to begin by determining
‘all the hours reasonably spent’ and multiplying that total by ‘the hourly prevailing rate
for private attorneys in the community conducting noncontingent litigation of the same
type.’ [Citation.]” (Id. at p. 394.)
So, the court was not required to award Nickel a fee award equal to the
number of hours her attorneys worked times their billing rates. Rather, it needed to
determine the number of hours reasonably spent, which may have been fewer than the
number actually spent, and to multiply that figure by the prevailing hourly rate, which
may have been less than the attorneys’ billing rates. It then had the discretion to either
increase or decrease the resulting amount. We do not know the number of hours the
court determined to have been reasonably spent or the amount it determined to be the
prevailing hourly rate. We further do not know if the court adjusted the resulting figures
in its discretion. However, as we have stated, we indulge all intendments and
presumptions to support the award. (Ketchum v. Moses, supra, 24 Cal.4th at p. 1140.)
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Continuing on, Nickel says the court abused its discretion in failing to
apply a fee enhancement to the basic lodestar figure based on (1) a contingent risk factor
in the FEHA context, (2) a successful result, and (3) the public interest in eliminating
workplace discrimination. In support of this assertion, she again cites the Fifth District’s
opinion in Horsford v. Board of Trustees of California State University, supra, 132
Cal. App. 4th 359, wherein the court stated “the contingent and deferred nature of the fee
award in a civil rights or other case with statutory attorney fees requires that the fee be
adjusted in some manner to reflect the fact that the fair market value of legal services
provided on that basis is greater than the equivalent noncontingent hourly rate.
[Citation.]” (Id. at pp. 394-395, italics added.)
The foregoing quotation notwithstanding, the Supreme Court in Ketchum v.
Moses, supra, 24 Cal. 4th 1122 made clear that “the trial court is not required to include a
fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other
factors, although it retains discretion to do so in the appropriate case . . . .” (Id. at p.
1138, original italics.) As the Fifth District has stated more recently, “[a]lthough the
Ketchum court explained in detail why a fee enhancement is reasonable in contingent
cases [citation], it also held that the decision remains a matter within the trial court’s
sound discretion . . . .” (Nichols v. City of Taft, supra, 155 Cal.App.4th at p. 1241.) The
Fifth District further stated: “We take it then as established principle that a trial court’s
decision whether to apply a multiplier is a discretionary one, as the Supreme Court’s
decision in Ketchum made clear. Horsford did not hold otherwise. Indeed, it expressly
acknowledged that ‘the trial court has discretion to increase or decrease the ultimate
award in order to . . . ensure a fair and just result . . . .’ [Citations.]” (Ibid.) We agree.
Moreover, we observe that, at the hearing on the attorney fees motion, the
court made quite clear that it had read the parties’ moving papers. We further observe
that in opposition to the motion for attorney fees, ARB, Inc. argued, inter alia: (1) the
case was a simple one; (2) there was very little risk involved in handling it; (3) Nickel’s
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attorneys did little to develop the facts and theories of the case and did not take one single
deposition; (4) ARB, Inc. made the first Code of Civil Procedure section 998 motion, on
the very same terms as Nickel thereafter made; (5) the billing rates were excessive; and
(6) to award the fees requested would result in a windfall for the minimal amount of time
spent on the case.
However, Nickel has not provided us with either the declarations in support
of her motion or the declarations in support of ARB, Inc.’s opposition. In other words,
we have no idea what evidence the trial court considered in reaching its decision.
“The [fee award] must be affirmed because the record provided by
[appellant] is inadequate to conclude the trial court abused its discretion in determining
the fee was reasonable. As the party challenging a fee award, [appellant] has an
affirmative obligation to provide an adequate record so that we may assess whether the
trial court abused its discretion. [Citations.] We cannot presume the trial court has erred.
The Court of Appeal has held: ‘“A judgment or order of the lower court is presumed
correct. All intendments and presumptions are indulged to support it on matters as to
which the record is silent. . . .” [Citation.]’ [Citations.]” (Vo v. Las Virgenes Municipal
Water Dist. (2000) 79 Cal. App. 4th 440, 447; accord, Pellegrino v. Robert Half Internat.,
Inc., supra, 182 Cal.App.4th at pp. 289-290.)
So, we infer that the trial court in the matter before us found that: (1) the
hours spent were not reasonable, (2) the billing rates were not reasonable, and/or (3) the
lodestar figure should be adjusted downward for some reason. (Vo v. Las Virgenes
Municipal Water Dist., supra, 79 Cal.App.4th at p. 447.) In short, Nickel has given us no
reason to conclude that the trial court abused its discretion in fixing the award of attorney
fees.
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D. Costs Award:
Finally, Nickel contends the court erred in failing to award all the costs she
sought. In her motion, Nickel stated: “Plaintiff incurred a total of $7,609.19 in litigation
costs in this case, of which a portion have already been detailed in Plaintiff’s February 7,
2013 memorandum of cost. In addition, Plaintiff has incurred $3,000 in expert fees. See
Schlehr Decl. [¶] 15.”
On appeal, Nickel has provided us with neither a copy of the February 7,
2013 memorandum of costs nor a copy of the Schlehr declaration. Consequently, we
have an inadequate record for review.1 (Pellegrino v. Robert Half Internat., Inc., supra,
182 Cal.App.4th at pp. 289-290; Vo v. Las Virgenes Municipal Water Dist., supra, 79
Cal.App.4th at p. 447.)
All we have is Nickel’s assertion that she is entitled to recover all her fees
based on Government Code section 12965, subdivision (b) and the parties’ agreement.
Government Code section 12965, subdivision (b) provides in relevant part: “In civil
actions brought under this section, the court, in its discretion, may award to the prevailing
party . . . reasonable attorney’s fees and costs, including expert witness fees.” The
section does not mandate that the court award to the prevailing party all the costs sought.
1 ARB, Inc. ought not think Nickel is the only party that needs a reminder about the
rules of appellate procedure. We suggest that ARB, Inc. review the rules on proper
citation to the record on appeal. (Cal. Rules of Court, rule 8.204(a)(1)(C), (e).) It has
cited to “Clerk’s Transcript” Nos. 3 and 10-13, none of which appear in the record, which
consists of a single-volume clerk’s transcript and a single-volume reporter’s transcript.
Even if we were to construe the citations as being to item Nos. 3 and 10-13 in the clerk’s
transcript, the citations would make no sense. Furthermore, ARB, Inc. has not even
attempted to provide one single pinpoint page reference within the various “Clerk’s
Transcripts” it has cited. (Evans v. Centerstone Development Co. (2005) 134
Cal. App. 4th 151, 165-167 [pinpoint page references required; sanctions available for
rules violations]; Del Real v. City of Riverside (2002) 95 Cal. App. 4th 761, 768
[arguments may be deemed waived for failure to provide record references].) Fortunately
for ARB, Inc., it did not have the burden to show error.
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Furthermore, the parties’ agreement provided that the lawsuit was settled
for “$100,000.00 plus attorneys’ fees and costs, in an amount to be determined by the
Court.” It did not provide that the court was required to award costs in whatever amount
Nickel sought. It left the amount of the award to the court’s discretion and Nickel has
given us no basis on which to conclude that the court erred in exercising its discretion in
the manner it did.
III
DISPOSITION
The order is affirmed. Respondent shall recover its costs on appeal.
MOORE, J.
WE CONCUR:
O’LEARY, P. J.
RYLAARSDAM, J.
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