NED GOLDSTEIN v. CYNTHIA BECK

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Court of Appeal, Second District, California.

NED GOLDSTEIN et al., Plaintiffs and Appellants, v. CYNTHIA BECK, Defendant and Appellant.

B226418

    Decided: December 08, 2011

Law Offices of Michael G. Steiniger and Michael G. Steiniger for Defendant and Gwire Law Offices and William Gwire for Defendant and Appellant.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Appellant.

Weintraub Genshlea Chediak and Lawrence M. Berman for Plaintiffs and

Respondent.

In the prior proceeding in this court, we affirmed the judgment after trial and ordered costs to be paid to Ned and Marcia Goldstein, the successful respondents in that matter.   Cynthia Beck now appeals the award of attorney's fees by the trial court.   Finding no abuse of discretion in that award, we affirm.

FACTUAL AND PROCEDURAL SUMMARY

After trial in a boundary dispute matter, the jury awarded Ned and Marcia Goldstein (the “Goldsteins”) $6 million dollars in compensatory and punitive damages, to which the trial court added an award of attorney's fees to the Goldsteins.   We affirmed the judgment, and ordered costs to the Goldsteins, which, because of the agreement between the parties that was at issue, entitled them to attorneys' fees.1  On remand, the Goldsteins made, and the court granted, a motion for post-judgment fees in the sum of $446, 302.21.   Cynthia Beck now appeals that order.

A. Goldstein I.

1.  The Parties' Boundary Dispute.

The Goldsteins purchased a home at 141 North Beverly Glen Boulevard in Los Angeles in May 2000.   The property was improved with a swimming pool built sometime in the 1930s, and with a reflecting pool next to a guest house.   Beck bought her home next door at 111 North Beverly Glen in January 2001.   The southern boundary of the Goldsteins' property is the northern boundary of Beck's property, and there is a grade difference between the two properties.   The two properties are separated by a 10 foot high brick wall;  the Goldsteins' reflecting pool ran along the edge of the wall.   The wall functioned as a retaining wall.

Beck desired to add a second story addition to her house, and believed the Goldsteins' pool interfered with her plans.   Beck commissioned a survey showing that the brick wall encroached on her property by 5 feet and the pool by 1.97 feet.   Beck claimed that the Goldsteins did not have permits for their pool work, and that they had moved the wall and the pool to encroach on her property.   In June 2001, Beck advised the Goldsteins by letter that she claimed a portion of the wall and the Goldsteins' reflecting pool was on her property.   She demanded that the encroachments be removed within 24 hours.   On November 7, 2001, the Goldsteins filed their complaint against Beck seeking quiet title (adverse possession, prescriptive easement, and agreed boundary) and injunctive and declaratory relief.   On December 18, 2001, Beck filed a cross-complaint for ejectment, trespass, declaratory relief, quiet title, and nuisance.

2. September 2002 Mediation and Settlement Agreement.

On September 17, 2002, the parties participated in a mediation before a retired judge and entered into a handwritten Settlement Agreement.   The Settlement Agreement provided that (1) Beck would pay the Goldsteins $75,000, (2) the Goldsteins would convey title in the disputed portion of their property to Beck, (3) Beck would demolish the brick wall and build a wall of used brick on her side of the boundary line “consistent with the existing brick wall,” (4) the Goldsteins would remove or fill in the pool on the boundary line, subject to Beck's approval of the Goldsteins' engineer's plans.   The parties agreed that the Settlement Agreement would be binding and enforceable under Code of Civil Procedure section 664.6, and that any disputes arising out of the Settlement Agreement would be submitted to the retired judge, whose decision would be binding.   The prevailing party to any action to enforce the Settlement Agreement would be entitled to attorneys' fees.

B. Goldstein II

The parties had continued disagreements concerning the terms and enforcement of the Settlement Agreement, ultimately leading to the filing of a second action.   On April 13, 2005, the Goldsteins filed a new action for breach of contract, promissory fraud, and nuisance.   On December 30, 2005, Beck filed a cross-complaint;  her operative first amended cross-complaint alleged claims for ejectment, willful trespass, negligent trespass, quiet title, nuisance, fraud, zoning and building code violations, intentional infliction of emotional distress, negligence, breach of contract, specific performance, negligent misrepresentation, reformation of contract, cancellation of instrument, rescission, declaratory relief, and permanent injunction.   The matter was tried to a jury in June, 2007.   The jury found for the Goldsteins on their breach of contract and nuisance claims, and awarded $2 million in compensatory damages.   The jury rejected Beck's cross-complaint.   The jury also awarded the Goldsteins $4 million in punitive damages.

The court ruled against Beck on the equitable issues in her cross-complaint, denying her requests for ejectment, specific performance, quiet title, rescission, reformation, and declaratory relief.   The trial court awarded the Goldsteins $1.25 million in attorneys' fees, and denied Beck's posttrial motions for judgment notwithstanding the verdict and new trial.

C. Appeal and Subsequent Proceedings

Beck timely appealed the judgment against her, and this court affirmed the judgment, including the award of attorneys' fees, in December, 2009.   The matter was remanded to the trial court, where, consistent with our disposition, the Goldsteins filed a memorandum of costs, and a motion for attorneys' fees.   Beck opposed the motion, asserting that the fees were unreasonable, both as to the hourly rate and the number of hours expended on the work.   She supported the opposition with the declarations from an expert witness, Brand Cooper, and one of her appellate counsel, Curt Cutting.   The Goldsteins filed a reply memorandum and objections to the Cooper declaration.

After a hearing on June 21, 2010, the trial court sustained the objections and granted fees to the Goldsteins in the amount requested in an order dated August 2, 2010.   The court found that “$446,302.21 represents reasonable attorneys' fees and costs incurred ․ based on a reasonable number of hours expended multiplied by a reasonable hourly rate.”   Beck timely appealed the award, although she did not challenge the evidentiary ruling.

DISCUSSION

On appeal, as she did at the trial court, Beck argues that both the hourly rate and the number of hours expended were unreasonable, and therefore that the court had abused its discretion in making the fee order.   Beck has failed to demonstrate such an abuse of discretion and, accordingly, we affirm.

A. Standard of Review

The analysis of an award of attorneys' fees in California commences with a determination of whether the trial court properly determined the lodestar, based on the prevailing hourly rates for comparable legal services and the reasonable number of hours billed.  (Ketchum v. Moses (2001) 24 Cal.4th 1122,1131 (Ketchum );  PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084,1094–1095.)   As the parties acknowledge, we review such an award for abuse of discretion.   The reason is that “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.”  ‘ “ (Ketchum, supra, 24 Cal.4th at p. 1132, 104 Cal.Rptr.2d 377, 17 P.3d 735, quoting Serrano [v. Priest (1977) ] 20 Cal.3d [25,] 49, [141 Cal.Rptr. 315, 569 P.2d 1303].)  “ ‘ “ ‘While the concept “abuse of discretion” is not easily susceptible to precise definition, the appropriate test has been enunciated in terms of whether or not the trial court exceeded “ ‘the bounds of reason, all of the circumstances before it being considered․’  “ [Citations.]'   [Citation.]  ‘A decision will not be reversed merely because reasonable people might disagree.  “An appellate tribunal is neither authorized nor warranted in substituting its judgment for the judgment of the trial judge.”  [Citations.]  In the absence of a clear showing that its decision was arbitrary or irrational, a trial court should be presumed to have acted to achieve legitimate objectives and, accordingly, its discretionary determinations ought not be set aside on review.’  [Citation.]”  (Gouskos v. Aptos Village Garage, Inc. (2001) 94 Cal.App.4th 754 [762, 114 Cal.Rptr.2d 558].)   Accordingly, an abuse of discretion transpires if “ ‘the trial court exceeded the bounds of reason’ “ in making its award of attorney fees.  (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785 [54 Cal.Rptr.2d 830].)'  (Maughan v. Google Technology, Inc. (2006) 143 Cal.App.4th 1242, 1249–1250 [49 Cal.Rptr.3d 861] (Maughan ).)”  (Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 557 (Premier ).)

Premier was a challenge to a fee award after a successful motion to strike under Code of Civil Procedure section 425.16.   In that case, as here, the party seeking fees sought no more than the fees charged to their clients;  they sought no enhancement of the lodestar amount, but only the amount based on the hourly rates multiplied by the number of hours charged.   There, as we will do here, the deference afforded the trial court extended not only to fees incurred at the trial court, but also to fees incurred on appeal.   The question in each case is whether the challenging party has met its burden of affirmatively demonstrating error either in determining the appropriate rate or the reasonableness of the hours incurred.  (Premier, supra, 163 Cal.App.4th at p. 564.)

B. Hourly Rates

Beck asserts that the hourly rates charged by the Goldstein's counsel were unreasonable.   As we have already discussed, it is Beck's burden as the party challenging the fees to demonstrate error.   Beck has failed to do so, for three independent reasons.

First, Beck has forfeited the issue of the proper hourly rate.   At the time of the hearing on this matter, the parties discussed with the trial court the fact that the Goldsteins' lawyers had previously been awarded attorneys' fees, an award upheld on appeal by this court.   The Goldsteins argued that the rate sought in the new application was the same rate approved earlier, with an adjustment of less than 5 percent for a short period of time, and therefore that the rate was no longer at issue.   In response, Beck's counsel stated:  “First of all, let me tell you that we do agree with Mr. Berman about—not much, but we do agree it would have been correct to calculate their hours at the rate that was approved in Judge Kalen's court in 2007.   That was an error we made in calculation.  [¶] I have recalculated that.   It amounts only to the difference between the $620 rate and the $525 rate that Mr. Cooper used․  [¶] ․ [¶] So the amount of fees that we submit is correct based on Mr. Cooper's expert testimony, approximately $167,000 instead of $145,000.”   From that point, counsel addressed solely the proper number of hours.   Having thus acceded to the rate below, Beck cannot challenge it here.2

Even were that not the case, Beck's additional arguments would fail.   While she relies on the declaration of her counsel on the prior appeal, whose rates in 2008–2009 ranged from $600–$620,3 the rate requested by the Goldsteins' counsel was $650.   The difference in rates is not so significant as to indicate an abuse of discretion.

Finally, Beck relies on her expert, Brand Cooper, who concluded a reasonable rate was $525.   Beck fails to disclose to this court, however, that this testimony was excluded by the trial court, and she has not appealed that evidentiary ruling.   As a result, Beck has waived any issue concerning the correctness of that ruling and we consider the evidence to have been properly excluded.  (Lopez v. Baca (2002) 98 Cal.App.4th 1008, 1014–1015.)   Thus, this argument is without any evidentiary basis.

C. Number of Hours

Beck asserted, at the trial court, and in this court, that the number of hours expended were unreasonable, relying again on the excluded testimony of her expert.   Disregarding that testimony, the remaining challenges do not demonstrate an abuse of discretion by the trial court.

Beginning with the comparisons of hours and costs between the parties, Beck asserts that the Goldsteins' counsel, who should have had fewer tasks as respondent's counsel, actually incurred more hours and more fees than appellant's counsel.   The record indicates that the Goldsteins reported 1128 hours expended.   The record also indicates that Beck's counsel incurred 1050 hours.   The difference is 78 hours.4

Beck is correct that courts have found the presence of more than one law firm for a party, as was true of the Goldsteins here, raises the risk of overbilling due to duplication and inefficiencies, the issues she complains of.5  In Donahue v. Donahue (2010) 182 Cal.App.4th 259 (Donahue ), that issue was addressed by the court.   The court contrasted the large team on one side against the two lawyer team on the other, and concluded that a comparison of the two sides' efforts “may be a [reasonable] check on the reasonableness of any fee request.”  (Id. at p. 272.)   Given the disparity in fees due to the special rates in this case, we compare only the number of hours.   In light of the discretion we afford to the experienced trial judge deciding the matter, a difference of 78 hours in the context of the more than 2000 hours expended by the parties does not demonstrate that the trial court abused its discretion.

The Goldsteins bore the burden of producing evidence to evaluate the time spent.  (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315,1320 [in reviewing fees claim, “The evidence should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended”].)   The detailed time records submitted by the Goldsteins met that burden;  and “absent circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent.  ․” (Ketchum, supra, 24 Cal.4th at p. 1133.)

The challenging party, in the absence of an argument that the fees are excessive as a matter of law, is charged with presenting evidence that the hours are excessive.  (Premier, supra, 163 Cal.App.4th at p. 560.)   The only evidence presented by Beck in opposition was the Brand declaration, which as set forth above, we disregard, and the declaration of one of her lawyers, Curt Cutting.   Three paragraphs of that declaration addressed the specific hours:  paragraph 11 challenged the preparation of a sur-reply brief, which had been refused for filing, but did not specify the number of hours attributed to that brief;  paragraph 12 addressed time spent on the reconstruction of transcripts, approximately 10 hours;  and paragraph 13 challenged $77,000 in fees incurred by counsel seeking to uphold the denial of Beck's affirmative claims against the Goldsteins.   The Goldsteins responded in their reply, provided a supplemental declaration, and the parties presented argument to the court.   The court specifically inquired with respect to the sur-reply brief and gave both counsel the opportunity to be heard on the matter.   The court concluded in light of the complexity of the matter, the number of issues, and the size of the record, that the fees were necessary, appropriate, and not excessive.

The duplication and superfluous conduct found by the court in Donahue was not found here, and Beck has failed to demonstrate that the trial court's determination was arbitrary, irrational, or exceeded the bounds of reason.   We will not substitute our judgment and, accordingly, affirm the award.

DISPOSITION

The award of attorneys' fees is affirmed.   Respondents are to recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

We concur:

FOOTNOTES

FN1. Goldstein v. Beck (December 23, 2009, B204904 [nonpub. opn.] ).   The summary of factual background is taken from that unpublished opinion..  FN1. Goldstein v. Beck (December 23, 2009, B204904 [nonpub. opn.] ).   The summary of factual background is taken from that unpublished opinion.

FN2. The Goldsteins assert that Beck is collaterally estopped from challenging the hourly rate.   In light of the disposition of this issue, we do not reach that argument..  FN2. The Goldsteins assert that Beck is collaterally estopped from challenging the hourly rate.   In light of the disposition of this issue, we do not reach that argument.

FN3. Beck also refers to other counsel charging lower rates, all in excess of $500 an hour..  FN3. Beck also refers to other counsel charging lower rates, all in excess of $500 an hour.

FN4. While Beck also points out that her total attorney's fees were approximately half of the Goldstein's, the record demonstrates what her argument excludes:  her lawyers were working at a substantially discounted hourly rate in the case pursuant to an agreement with her insurer..  FN4. While Beck also points out that her total attorney's fees were approximately half of the Goldstein's, the record demonstrates what her argument excludes:  her lawyers were working at a substantially discounted hourly rate in the case pursuant to an agreement with her insurer.

FN5. The Goldsteins assert that Beck in fact also used two law firms on appeal and urge us to speculate as to the number of hours the second firm may have expended.   As the record does not contain any evidence of those hours, we decline to do so..  FN5. The Goldsteins assert that Beck in fact also used two law firms on appeal and urge us to speculate as to the number of hours the second firm may have expended.   As the record does not contain any evidence of those hours, we decline to do so.

PERLUSS, P.J. JACKSON, J.

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