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Court of Appeal, Second District, Division 2, California.

Carl OLSON et al., Plaintiffs and Appellants, v. AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA, Defendant and Appellant.

No. B168730.

Decided: April 21, 2006

Law Office of Thomas K. Bourke, Thomas K. Bourke, Rizwan R. Ramji, Los Angeles, for Plaintiffs and Appellants. Morrison & Foerster, Charles E. Patterson, John Sobieski, Howard B. Soloway, Los Angeles, Phillip Bronson, Encino, for Defendant and Appellant.

Plaintiffs Carl Olson and Mark Seidenberg sued defendant Automobile Club of Southern California (the Auto Club), a nonprofit mutual benefit corporation (Corp.Code, § 7110 et seq.),1 primarily seeking various reforms in the Auto Club's election of its board of directors.   Olson and Seidenberg obtained a judgment mandating some of the various election reforms sought and were awarded approximately $1.2 million in attorney fees and costs, including expert witness fees.

 Olson and Seidenberg appeal, seeking yet more changes regarding the Auto Club's election procedures and other matters, as well as additional attorney fees and costs.   The Auto Club cross-appeals, urging that the award of expert witness fees was not authorized, and that the Auto Club was the prevailing party on most of the more important issues and thus should be entitled to costs.   We modify the judgment to eliminate the award of expert witness fees and to add appropriate attorney fees for work performed during 2003, but otherwise affirm the judgment.2



II. The appeal by Olson and Seidenberg **(D.) Issues pertaining to the nomination deadline, bylaws claims, and other discovery and damages matters

The claim by Olson and Seidenberg that the Auto Club's nominations missed the deadline is without merit.   Bylaw 27(a) required the nominating committee to submit its “list of nominees” to the secretary before the December 4, 2000, nomination deadline, and the committee submitted the list on November 29, 2000.   The contention that the list of nominees represented action by unanimous consent, which could not be counted until the last committee member signed, is belied by the evidence, which reveals that the committee did not act by unanimous consent.   In fact, the committee finalized its recommendations at a teleconference meeting on November 29, 2000.

 Regarding the contention that the court erred in approving 18 unspecified bylaw amendments, the opening brief fails to present the issues with sufficient analysis or argument.5  Likewise, the mere assertion without argument that the court erred in refusing to rule on 25 claimed violations and in finding that the Auto Club's interpretation was based on the bylaws' plain meaning, does not preserve the complaint for appeal.   A contention made without a “serious attempt to support its argument” is deemed waived.  (AICCO, Inc. v. Insurance Co. of North America (2001) 90 Cal.App.4th 579, 595, 109 Cal.Rptr.2d 359;  see also People v. Turner (1994) 8 Cal.4th 137, 214, fn. 19, 32 Cal.Rptr.2d 762, 878 P.2d 521.)

The contention that the trial court erred in striking the $10,000 compensatory damage claim and the punitive damage claim is also unavailing.   We acknowledge that proxy expenses are logical damages (Haas v. Wieboldt Stores, Inc. (7th Cir.1984) 725 F.2d 71, 73-74) and that punitive damages are recoverable (see Courtesy Ambulance Service v. Superior Court (1992) 8 Cal.App.4th 1504, 1519, 11 Cal.Rptr.2d 161).   However, Olson and Seidenberg have not challenged the finding that the changes ordered by the court would not have affected the outcome of the 2001 election.   Absent any causation, the compensatory damage claim was properly stricken.   As to punitive damages, Olson and Seidenberg have simply failed to argue the requisite elements necessary to establish an exemplary damages claim. (See Civ.Code, § 3294.)

 Also without merit is the contention that the trial court erroneously denied certain discovery on constitutional grounds when only statutory privileges are recognized.   Although California accepts only “statutory” privileges, Evidence Code section 230 defines statutes as including constitutional provisions.   The argument is thus frivolous.

(E.) Proposed restrictions on campaign spending and campaign speech

 Olson and Seidenberg contend that the general reasonableness requirement for election procedures in section 7520, subdivision (a) means that the Auto Club (1) must limit its campaign spending to reasonable and proportionate amounts in relation to the amount spent by the petition nominees, and (2) must include opposition campaign statements and biographies in Auto Club proxy solicitations.   They also urge the trial that court should have restricted the time during which the Auto Club could campaign, and that the Auto Club's board violated its fiduciary duties in authorizing campaign spending. However, these claims are meritless, as they are inconsistent with the statutory scheme and misconstrue the board's fiduciary duties.

As aptly discussed by the trial court, the question of whether it is unfair and unreasonable for a board to spend money to elect nominees it supports has been dealt with by the Legislature in section 7526, which permits spending on elections with the restriction that such expenditures are approved by the board.   Even though the Auto Club's directors will likely continue to have an advantage, the matter has been debated and the Legislature has never modified the statute on corporate spending in elections.

Regarding the amount of spending, campaign spending decisions are subject to the fiduciary duty standard in section 7231 (see § 7232, stating that § 7231 “governs the duties of directors as to any acts or omissions in connection with the election ․ of directors”), rather than any proportionate spending limits urged by Olson and Seidenberg.   After directors have made a reasonable investigation, they must act in what they in good faith believe is in “the best interests of the corporation.” (§ 7231, subd. (a).)  Moreover, no arbitrary campaign spending limits and no restrictions on the timing of campaign advocacy are imposed by the safe harbor elections procedures.  (See § 7520.)

The Auto Club asserts that it need not include opposition statements in any letters supporting its nominees.   Section 7523, one of the safe harbor provisions, states what the Legislature has determined is a reasonable equal space requirement, and it refers by its terms to a corporation publishing “any material soliciting a vote” and to the “issue of the publication” by the corporation, which the trial court has properly interpreted.

(F.) Attorney fees

The litigation spanned approximately two years, and counsel for Olson and Seidenberg claimed 14,502 hours of attorney time devoted to the case.   According to counsel for Olson and Seidenberg, under the established lodestar method of computing fees in complex public interest litigation, they were entitled to fees based on an unadjusted lodestar of $3.8 million, even without a multiplier.   And counsel volunteered to adjust the lodestar downward 10 percent.

 The trial court, however, awarded fees totaling $1,171,552.50, including $90,466.85 in expert witness fees (under Code of Civil Procedure section 1021.5), but nothing “for other than ordinary costs.”   Counsel for Olson and Seidenberg complain that the court erred in refusing to compensate for thousands of hours devoted to the case, and assert that they spent a very high percentage of their total time on claims that were successful.   They also complain that the court did not factor in any attorney time after December 2002, which was even before the date of the final statement of decision, and that the court denied fees related to inspection and disclosure issues and denied or reduced some of the costs for expert witnesses.   Counsel for Olson and Seidenberg thus seek a remand to have the trial court apply the lodestar approach to all hours reasonably spent on prevailing claims (including work on losing issues related to prevailing claims) and in obtaining catalytic relief triggered by this suit.

 The award of attorney fees is appropriate, under “a private attorney general theory” (Baggett v. Gates (1982) 32 Cal.3d 128, 142, 185 Cal.Rptr. 232, 649 P.2d 874), when a litigant has been successful “in any action which has resulted in the enforcement of an important right affecting the public interest.”  (Code Civ. Proc., § 1021.5.) “[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.   ‘California courts have consistently held that a computation of the time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fees award.’  [Citation.]  The reasonable hourly rate is that prevailing in the community for similar work.   [Citations.]  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.  [Citation.]  Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary.”   (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095, 95 Cal.Rptr.2d 198, 997 P.2d 511 (PLCM ).)

 Successful litigants must be assured of compensation that fairly covers the legal services required, and fee awards should cover all hours reasonably spent unless special circumstances render an award unjust.   (Serrano v. Unruh (1982) 32 Cal.3d 621, 632-633, 635, 186 Cal.Rptr. 754, 652 P.2d 985.)   We also acknowledge that litigants should be accorded breathing room to raise alternative legal grounds without fear that merely raising an alternative theory will threaten the subsequent request for attorney compensation.  (See Sundance v. Municipal Court (1987) 192 Cal.App.3d 268, 273-274, 237 Cal.Rptr. 269.)   And, “[w]here a lawsuit consists of related claims, and the plaintiff has won substantial relief, a trial court has discretion to award all or substantially all of the plaintiff's fees even if the court did not adopt each contention raised.”  (Downey Cares v. Downey Community Development Com. (1987) 196 Cal.App.3d 983, 997, 242 Cal.Rptr. 272.)

 Nonetheless, a reduction in fees for limited litigation success is permitted.  (See PLCM, supra, 22 Cal.4th at p. 1096, 95 Cal.Rptr.2d 198, 997 P.2d 511;  Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 249-250, 261 Cal.Rptr. 520 (Sokolow ).)   The trial court may “reduce the amount of the attorney fees to be awarded where a prevailing party plaintiff is actually unsuccessful with regard to certain objectives of its lawsuit.”   (Sokolow, supra, at p. 249, 261 Cal.Rptr. 520.)

 The trial court has discretion to determine that time spent on issues and claims on which plaintiff did not prevail was time not reasonably spent.   (Boquilon v. Beckwith (1996) 49 Cal.App.4th 1697, 1722-1723, 57 Cal.Rptr.2d 503.)  “ ‘There is no precise rule or formula for making these determinations.   The [trial] court may attempt to identify specific hours that should be eliminated, or it may simply reduce the award to account for the limited success.   The court necessarily has discretion in making this equitable judgment.’ ”  (Sokolow, supra, 213 Cal.App.3d at p. 248, 261 Cal.Rptr. 520;  see also PLCM, supra, 22 Cal.4th at p. 1096, 95 Cal.Rptr.2d 198, 997 P.2d 511.)

 The award of attorney fees “ ‘ “is a matter within the sound discretion of the trial court and absent a manifest abuse of discretion the determination of the trial court will not be disturbed.”  [Citation.]’ ”  (Lerner v. Ward (1993) 13 Cal.App.4th 155, 158, 16 Cal.Rptr.2d 486.)   In assessing attorney fees myriad factors may be considered (see City of Oakland v. Oakland Raiders (1988) 203 Cal.App.3d 78, 82-83, 249 Cal.Rptr. 606), and the trial court may rely on its own experience and knowledge in determining the reasonable value of the attorney's services.  (Niederer v. Ferreira (1987) 189 Cal.App.3d 1485, 1507, 234 Cal.Rptr. 779.)

In the present case, Olson and Seidenberg argue that the attorney fees must be calculated from the time spent, with deductions for excessive charges, unrelated losing claims and similar items, and that the trial court's deductions from the lodestar were unjustified. However, as both parties ultimately acknowledge, the court actually did not make deductions from the lodestar.   Instead, the court reasonably estimated the time that should have been spent, rather than calculating that time from the lodestar.   It did so for two reasons.

First, a lodestar analysis was difficult for several related reasons articulated by the trial court in its ruling on the motion for attorney fees:  the case was in the opinion of the court “grossly over-litigated”;  a “great majority” of the claims were unsuccessful;  “excessive time” was spent on the winning claims, showing the size, nature and operations of the Auto Club and proving context for their election claim;  and the main focus of the trial was not on reasonable election procedures.   Nor did Olson and Seidenberg establish for the trial court that their 10 percent “safety factor” lodestar deduction was adequate.

 Second, these above-noted problems could not be remedied by reference to many of the billing time sheets submitted, because the court found that so-called block billing (i.e., describing all tasks performed on a day and giving the total time spent that day) made it difficult or impossible in many instances to determine from the records how much time had been reasonably spent on successful claims. Although block billing is certainly not prohibited, when block billing is used, the trial court may “exercise its discretion in assigning a reasonable percentage to the entries, or simply cast them aside.”   (Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 689, 98 Cal.Rptr.2d 263, italics added.)   Similarly, where allocation between fee and nonfee claims is a “ ‘near impossibility,’ ” the court may simply make a reasonable estimate.  (Track Mortgage Group, Inc. v. Crusader Ins. Co. (2002) 98 Cal.App.4th 857, 867-868, 120 Cal.Rptr.2d 228.)

 Moreover, fees must be reasonable in light of the results achieved, whether or not the claims are related.  “ ‘A reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation as a whole.’ ”  (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1019, 113 Cal.Rptr.2d 625.)   As explained in Hensley v. Eckerhart (1983) 461 U.S. 424, 436, 103 S.Ct. 1933, 76 L.Ed.2d 40, “If ․ a plaintiff has achieved only partial ․ success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount ․ even where the plaintiff's claims were interrelated, nonfrivolous, and raised in good faith.”

On appeal, in arguing the attorney fees issue Olson and Seidenberg largely ignore unfavorable evidence and unfavorable aspects of the judgment.   For example, they assert they “won their election case,” but fail to describe in their opening brief the election claims they lost in the context of the attorney fees issue.   Thus, while they identify nine election claims on which they prevailed, some of which the Auto Club agreed to in mediation, Olson and Seidenberg lost what the trial court referred to as a “fundamental and overriding” election claim pertaining to the Auto Club's right to spend its funds campaigning for its nominees, and many of the contested aspects of the election were resolved in favor of the Auto Club.6 Since Olson and Seidenberg have failed to describe in their argument the claims they lost, they have failed to provide a factual basis for comparing their winning and losing claims.   Thus, they have arguably waived their challenge to any evaluation of the evidence on that issue.  (See Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881, 92 Cal.Rptr. 162, 479 P.2d 362.)

Similarly, Olson and Seidenberg have provided self-serving time estimates for supposed winning claims and ignore evidence supporting the judgment on the attorney fees issue.   For example, they contend the court erroneously denied compensation of 11,774 hours “reasonably” spent, that over 86 percent of their time “related to” winning claims, that they spent 86 percent of their time on election claims, and that over 71 percent of the trial related to the election claims.   However, they ignore certain declarations cited by the trial court which explained that (1) only 5.4 percent of the 644 discovery requests by Olson and Seidenberg and only 6.49 percent of the trial testimony related to issues they won, and (2) only 8 percent of the deposition questions directed to Auto Club directors related to the issues on which Olson and Seidenberg prevailed.

 Also without merit is the related assertion by Olson and Seidenberg that the court erred in denying fees for their inspection, accounting and reporting claims.   The Auto Club acknowledges that Olson and Seidenberg obtained some information through discovery, and that the court said inspection was justified as to some of those discovery requests.   The problem is that Olson and Seidenberg ignore applicable statutory standards.   Section 8337 authorizes fees only for the failure “without justification” to comply with a “proper” inspection demand (see also § 8323, subd. (b)), and the court found the demands grossly excessive.7  Also, the trial court is not required to but “may” (§§ 8337, 8323, subd. (b)) award reasonable expenses including attorney fees, and Olson and Seidenberg do not specifically argue the court abused its broad discretion.

Nor would we find any abuse of discretion, as the court did in some fashion factor these matters into the award of attorney fees.   As the trial court stated in its written ruling on attorney fees, “there is a likely catalytic effect arising from the litigation of some of the issues that were lost, in particular the causes of action for inspection rights and accounting books and records.   While the court ruled against [Olson and Seidenberg] on these causes of action, the court is of the view that the Judgment and Statement of Decision, and other aspects of the litigation, provide some guidance for the future and therefore are likely to have a catalytic effect.”   It is thus apparent that the trial court gave some credit on this matter in the nature of a catalytic-effect fee award, acknowledging that the lawsuit served as a catalyst for beneficial change.  (See Maria P. v. Riles (1987) 43 Cal.3d 1281, 1290, 240 Cal.Rptr. 872, 743 P.2d 932.) 8

 Olson and Seidenberg, however, properly contend that the trial court erred in denying attorney fees for work performed in 2003.9  As the Auto Club notes, the trial court's 13-page ruling on attorney fees, filed on May 16, 2003, stated that it included fees for the “time necessary to litigate this case to a successful conclusion on the issues won.”   The court's ruling also acknowledged that it knew Olson and Seidenberg had “additional [attorney time] time in 2003,” and asserted that it had somehow taken “that fact into account in choosing to calculate the fees based on the time records through 12/31/02 [, and that any] further submission of time would not cause the court to change its fee award.” Similarly, on July 2, 2003, the court stated that it had read the supplemental fee request in the motion for a new trial filed by Olson and Seidenberg on June 27, 2003, (which detailed their 2003 time), but the court did not intend to award fees for attorney work in 2003, since it had already “given what it believed to be [an] appropriate fee.”

 Thus, although the court may have thought it had awarded enough attorney fees already, it specifically did not consider work performed after December 2002, which was even before its March 19, 2003, final statement of decision.   Fee motions often cannot be determined until after judgment is fixed (here, on May 16, 2003), at which time the parties would know the exact contours of the claims won and lost.  (See Sanabria v. Embrey (2001) 92 Cal.App.4th 422, 428-429, 111 Cal.Rptr.2d 837;  Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 226-227, 226 Cal.Rptr. 265;  Cal. Rules of Court, rule 870.2.)   A court “abuse[s] its discretion in ruling on the issue of attorney fees and costs without having before it all of the evidence necessary to make a reasoned decision.”  (Dorman v. DWLC Corp. (1995) 35 Cal.App.4th 1808, 1817, 42 Cal.Rptr.2d 459.)  “To exercise the power of judicial discretion all the material facts in evidence must be both known and considered.”  (In re Cortez (1971) 6 Cal.3d 78, 85-86, 98 Cal.Rptr. 307, 490 P.2d 819.)

The Auto Club does not specifically dispute Olson and Seidenberg's claim of 1,055 hours spent in 2003, which would translate to $286,905, at the reduced rate that the trial court had essentially ruled applicable to other attorney fees awarded.   Although the court arguably could have denied all compensation for 2003 because their approximately $8.1 million fee award request (100 percent of their fees increased by a multiplier) could have been deemed unreasonable (see Serrano v. Unruh, supra, 32 Cal.3d at p. 635, 186 Cal.Rptr. 754, 652 P.2d 985), it did not do so.

Rather, the court impermissibly sought to magically deem the award to include an appropriate amount for work it acknowledged it did not consider in setting the fee award.   It prematurely set the fee award and deemed it reasonable even before it received the detailed motion for supplemental attorney fees.

We note that some of the work performed in 2003 had been ordered by the court, and some of the work included a defense of the $1.2 million award in response to the Auto Club's new trial motion.   Also, additional relief ensued as a result of work in 2003, such as the aspects of the judgment that prohibited misappropriating proxy machinery by printing advocacy proxies, and that granted certain director-compensation disclosure relief.   Since, as previously stated, the Auto Club does not refute the estimate of the value of attorney services for Olson and Seidenberg for 2003 as $286,905, based on the trial court's own valuation of reasonable rates for the other attorney work performed, we deem it appropriate to so modify the judgment as to attorney fees.10

Accordingly, but for the matter of the award of attorney fees for work in 2003, in view of all the evidence before the trial court (including the evidence not pointed out in the argument by Olson and Seidenberg), even if another judge may reasonably have assessed a more generous amount for attorney fees, we find no reversible error.   The award of attorney fees was not so small that it was “clearly wrong” (Olson v. Cohen (2003) 106 Cal.App.4th 1209, 1217, 131 Cal.Rptr.2d 620) and the trial court did not abuse its broad discretion (see PLCM, supra, 22 Cal.4th at p. 1096, 95 Cal.Rptr.2d 198, 997 P.2d 511;  Nazemi v. Tseng (1992) 5 Cal.App.4th 1633, 1642, 7 Cal.Rptr.2d 762), other than as to attorney fees for 2003.

III. The cross-appeal by the Auto Club

The Auto Club cross-appeals, raising two major issues:  that the trial court had no authority to award fees for expert witnesses it did not appoint;  and that the award of costs should be reversed and the Auto Club awarded costs as the prevailing party.   We find merit only as to the first contention and thus strike the expert witness fees awarded.

(A.) The authorization in Code of Civil Procedure section 1021.5 (hereinafter, section 1021.5) for an award of “attorneys' fees to a successful party” in a private attorney general action does not include expert witness fees

 The judgment entered against the Auto Club included an award of $90,466.85 in expert witness fees pursuant to section 1021.5.   The fee awarded represented a portion of the expert witness fees for two witnesses presented by Olson and Seidenberg, an election expert (Steinberg) and an economist (Riddlehoover).   Only one reported decision, Beasley v. Wells Fargo Bank (1991) 235 Cal.App.3d 1407, 1421, 1 Cal.Rptr.2d 459 (Beasley ), permits the award of expert witness fees under section 1021.5 for experts not ordered by the court.   We disagree with Beasley, as its conclusion is contrary to the plain statutory language and legislative intent, and its reasoning is unpersuasive.

Section 1021.5 permits a trial court to “award attorneys' fees” to a successful party where the requirements for a private attorney general action have been satisfied.  Code of Civil Procedure, section 1033.5, subdivision (b) provides that fees for experts not ordered by the court are “not allowable as costs except when expressly authorized by law.”  Beasley assumed that the Legislature intended that section 1021.5 would authorize expert fee awards.  Beasley surmised that section 1021.5 was an explicit reaction to the rejection of private attorney general fee awards in Alyeska Pipeline Serv. Co. v. Wilderness Society (1975) 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (holding federal courts could no longer award attorney fees in private attorney general actions without specific statutory authorization), and that since the Legislature “relied heavily on” prior federal decisions in framing section 1021.5's authorization for attorney fees, “we must assume” that the Legislature intended to adopt the federal court's practice with respect to expense awards. (Beasley, supra, 235 Cal.App.3d at p. 1421, 1 Cal.Rptr.2d 459.)

However, this assumption by the Beasley court is unsupported by anything in the legislative history of section 1021.5, as indicated by the legislative history provided by the “Legislative Intent Service.”  (See People v. Sanchez (2001) 24 Cal.4th 983, 992, fn. 4, 103 Cal.Rptr.2d 698, 16 P.3d 118.) For example, our review of various digests and analyses of Assembly Bill No. 1310 of the 1977-1978 Regular Session of the Legislature, the bill which became section 1021.5, reveals absolutely no mention of expert witness fees or any expenses other than attorney fees, and no determination of whether the acknowledged federal practice regarding expenses should be adopted or not.

 Olson and Seidenberg urge that since the Legislature must be presumed to have been aware for the past 15 years of the holding in Beasley and yet did nothing to overrule or limit it, even though it had otherwise amended section 1021.5 (see Stats.1993, ch. 645, § 2, p. 3747), the Legislature intended and then approved of the holding in Beasley.   Indeed, the Legislature's amendment of a statute with its failure to abrogate the holding of a case interpreting that statute can imply legislative acquiescence in the holding of the case.  (People v. Salas (2006) 37 Cal.4th, 967, 979, 38 Cal.Rptr.3d 624, 127 P.3d 40.)

 Nonetheless, that notion of legislative acquiescence is unpersuasive here for two reasons.   First, inferring legislative acquiescence in the holding of a case interpreting a statute is most compelling where the case specifically invites the Legislature to clarify the statute.  (People v. Salas, supra, 37 Cal.4th at p. 979, 38 Cal.Rptr.3d 624, 127 P.3d 40.)   Here, Beasley did not specifically invite such legislative review of the issue.   Second, it is significant that the Legislature has in other contexts demonstrated an ability to clearly and unambiguously authorize an award of expert witness fees when it intends to do so.  (See, e.g., Code Civ. Proc., 1021.8 [when the Attorney General prevails in certain actions, the court shall award “all costs of investigating and prosecuting the action, including expert witness fees, reasonable attorney's fees, and costs”].)   The Legislature's failure to use such specific additional language here indicates its intent to authorize only an award for “attorneys' fees” (§ 1021.5), as revealed by the plain meaning of those words in the statute.  (See California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 633, 59 Cal.Rptr.2d 671, 927 P.2d 1175.)

In a somewhat analogous situation, the California Supreme Court in Davis v. KGO-T.V., Inc. (1998) 17 Cal.4th 436, 71 Cal.Rptr.2d 452, 950 P.2d 567, found that Government Code section 12965, subdivision (b), which at the time authorized a court to award attorney fees and costs to the prevailing party in an action under the Fair Employment and Housing Act (FEHA), did not permit recovery of the successful litigant's expert witness fees.  “[B]oth before and after ․ section 12965, subdivision (b), was enacted, the fees of experts not ordered by the court were not an item of allowable costs.  Code of Civil Procedure section 1033.5 simply codified prior law to that effect.   [¶] ․ [T]he Legislature has created exceptions to the general rule concerning costs [ ] by expressly authorizing the shifting of the fees of an expert in specific types of actions․ [¶] Although it could have done so, it did not authorize a similar exception to the general rule for parties in a FEHA action.”  (17 Cal.4th at p. 442, 71 Cal.Rptr.2d 452, 950 P.2d 567;  see also West Virginia Univ. Hospitals, Inc. v. Casey (1991) 499 U.S. 83, 99, 111 S.Ct. 1138, 113 L.Ed.2d 68 [federal statute allowing the recovery of reasonable attorney fees in civil rights actions did not authorize recovery of expert witness fees].)

 Accordingly, none of the expert witness fees awarded by the trial court were authorized by statute, which limits recovery to “attorneys' fees.” (§ 1021.5.) The Legislature, of course, may wish to change this and permit the recovery of such fees (cf.  Stender v. Lucky Stores, Inc. (N.D.Cal.1992) 780 F.Supp. 1302, 1306, fn. 13 [noting that Congress has legislatively reversed West Virginia Univ. Hospitals, Inc. v. Casey, supra, 499 U.S. 83, 111 S.Ct. 1138, 113 L.Ed.2d 68, by permitting recovery of expert witness fees as part of the attorney fees award] ), but that is not our function.  (See California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist., supra, 14 Cal.4th at p. 632, 59 Cal.Rptr.2d 671, 927 P.2d 1175.)

Although Olson and Seidenberg claim detrimental reliance on Beasley, we decline to apply our holding herein prospectively only.   Reliance on Beasley as entrenched law is simply unwarranted.  Beasley is the only case permitting the award of expert witness fees under section 1021.5, and it flies in the face of the plain language of the statute.   In 1998, our Supreme Court specifically cited Beasley and decided “not [to] reach the question whether fees of experts may be recovered in an action ․ brought on a private attorney general theory, to benefit the public, under [section] 1021.5.”   (Davis v. KGO-T.V., supra, 17 Cal.4th at p. 446, fn. 5, 71 Cal.Rptr.2d 452, 950 P.2d 567), apparently leaving the propriety of Beasley's view of section 1021.5 an open issue.   We also note that our rejection of Beasley's view of section 1021.5 entails no impairment of contract or property rights, further negating the need for a prospective holding.  (See Estate of Propst (1990) 50 Cal.3d 448, 462-465, 268 Cal.Rptr. 114, 788 P.2d 628.)   Thus, a weighing of relevant factors favors application of the general rule of full retroactive effect (Id. at p. 462, 268 Cal.Rptr. 114, 788 P.2d 628), and the award of expert witness fees must be stricken from the judgment.

(B.) The trial court did not abuse its broad, equitable discretion in finding Olson and Seidenberg the prevailing parties and thus entitled to costs ***


The judgment is modified by striking $90,466.85 in expert witness fees awarded to Olson and Seidenberg, and by adding to the award of attorney fees for Olson and Seidenberg the additional sum of $286,905 for attorney work performed in 2003.   In all other respects, the judgment is affirmed.   Each party is to bear its own costs on appeal.


1.   Unless otherwise indicated, all further statutory references are to the Corporations Code.

2.   We grant the motions for judicial notice filed by both parties.   Thus, we have before us additional case law on attorney fees and various items pertinent to the legislative history of section 7110 et seq. and Code of Civil Procedure section 1021.5, the so-called private attorney general statute, which authorizes the award of attorney fees in a successful action affecting the public interest.

FOOTNOTE.   See footnote *, ante.

5.   Only the amendment to Bylaw 6(b) was specifically noted, but it was not sufficiently argued with supporting authority.   In any event, the complaint that the Auto Club improperly changed the bylaw without member approval so that no longer only 1 percent of the Auto Club's members could call a special meeting, but that now 5 percent of the members had to join together to call a special meeting, is without merit.   The amendment simply brought that bylaw into compliance with section 7510, subdivision (e), which provides that in addition to a special meeting being called by the board and certain specified corporate personnel, a special meeting also “may be called by 5 percent or more of the members.”

6.   For example, Olson and Seidenberg failed in the following goals:  to change the Auto Club's nomination procedures;  to disqualify three Auto Club nominees;  to declare the petition nominees elected;  to obtain a new election;  to obtain equal space in Auto Club campaign literature;  to require SEC-type disclosures;  to apply the unfair business practices statute to nonprofit corporate election campaigns;  to obtain compensatory and punitive damages;  to require a “proxy ballot”;  to establish that the inspector of elections had violated his duties;  to prohibit the postponement of the annual meeting;  to change the procedures of the member meeting;  to disqualify the chair of the Auto Club as a proxy holder;  and to require the meeting to be reconvened to announce the results.

7.   Regarding fees for requiring the Auto Club to publish the yearly notice of members' rights to receive a copy of the financial report (§ 8321), this claim entailed almost no work because the Auto Club immediately complied when the issue was first raised and agreed that the judgment could include a provision requiring compliance.   Nonetheless, Olson and Seidenberg continued and unsuccessfully attacked the placement and size of the notice.

8.   To the extent Olson and Seidenberg request an award of attorney fees on appeal by summarily requesting “fees and costs” at the conclusion of their opening brief, such fees can only be awarded “[u]pon motion.”   (Code Civ. Proc., § 1021.5.) They may file such a motion in the trial court, pursuant to California Rules of Court, rule 870.2.

9.   The Auto Club asserts that Olson and Seidenberg waived this matter by not objecting to premature timing as to the fee request scheduling deadline set by the trial court.   However, in their motion for attorney fees (filed November 8, 2002), Olson and Seidenberg did request that the court retain jurisdiction for supplemental awards for fees, expenses and court costs, and thus they have not waived the matter.

10.   Olson and Seidenberg also complain that the trial court awarded none of the $50,905.29 in extraordinary costs claimed, even though the costs were incurred on prevailing election claims, and some on nonprevailing claims that acted as catalysts.   On appeal, the only legal issue raised is that the trial court's decision was arbitrary because “it gave no reasons.”   However, no reasons were required.  (Cf. Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140, 104 Cal.Rptr.2d 377, 17 P.3d 735 [“ ‘reasoned explanation’ ” not required for fee award].)Regarding the complaints by Olson and Seidenberg as to the court's reduced award of expert witness fees (expert witnesses Steinberg and Riddlehoover) and denial of any award in other regards (expert witness Searfoss), the issue is dealt with hereinafter in the discussion of the Auto Club's cross-appeal.

FOOTNOTE.   See footnote *, ante.



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