WOODLAND HILLS RESIDENTS ASSN. et al., Petitioners and Appellants, v. CITY COUNCIL OF LOS ANGELES et al., Respondents and Respondents; CONSOLIDATED RESOURCES, INC., Real Party in Interest and Respondent.
Plaintiffs (petitioners in a mandamus action) appeal from a portion of a judgment rendered in their favor in the trial court. The appeal is taken from that portion of the judgment which denied an award of attorney's fees.
The litigation had its genesis in a mandamus action filed by plaintiffs (Woodland Hills Residents Assn., Inc. and some individual members) against three entities of the City of Los Angeles: (1) the City Counsel of Los Angeles; (2) the Planning Commission; and (3) the Advisory Agency. The mandamus action sought to have each of the three entities vacate its decision approving a tract map of a proposed subdivision to be made by a real estate developer in Woodland Hills.
The proposed subdivision was located in a hillside area of 38 acres. The developer proposed to cut approximately 90 feet from the top of a ridge and fill the adjacent valleys with 750,000 cubic yards of earth. This would create a mesa that would be subdivided into 123 lots upon which would be constructed 123 single family homes. A judgment against plaintiffs was entered in the trial court and plaintiffs appealed from the judgment. The judgment against plaintiffs was reversed in Woodland Hills Residents Assn., Inc. v. City Council (1975) 44 Cal.App.3d 825, 118 Cal.Rptr. 856 (hereinafter Woodland Hills I ).
In Woodland Hills I plaintiffs contended that each of the three entities of the City of Los Angeles had unlawfully approved the tract map in failing to make a finding that it was consistent with the city's general plan; in failing to have an environmental impact report prepared prior to approval of the tract map; and in failing to fulfill its duty under the California Environmental Quality Act. It was the view of plaintiffs that the tract map was in fact inconsistent with the general plan.
In reversing the judgment against plaintiffs, the Woodland Hills I court remanded the case to the trial court “with the direction that the superior court remand the matter to the city council for proceedings in the manner required by law, particularly as required by section 11526, subdivision (c), of the Business and Professions Code, with respect to finding whether the proposed subdivision map is consistent with that part of the general plan adopted by the council as the Canoga Park-Winnetka-Woodland Hills District Plan; and as required by the case of Topanga Assn. For A Scenic Community v. County of Los Angeles, 11 Cal.3d 506, 113 Cal.Rptr. 836, 522 P.2d 12, with respect to making findings.” (Woodland Hills I, supra, 44 Cal.App.3d 825, 838-839, 118 Cal.Rptr. 856, 864.)
Upon retrial, the trial court made findings of fact and conclusions of law and entered a judgment consistent with the views expressed in Woodland Hills I. Of the conclusions of law made by the trial court, paragraph 3 was as follows: “Respondents City Council, Planning Commission and Advisory Agency, and each of them, were and are required by law to render specific written findings that a proposed tentative tract map properly before it is consistent with the general plan, prior to their respective approvals of a tentative tract map. This conclusion shall not prevent a higher administrative body from approving a map, provided it has first made the necessary finding of consistency and otherwise acted in the manner required by law, irrespective of whether any lower administrative body has made such a finding or rendered such an approval.”
Paragraph 4 of the conclusions of law reads as follows: “The failure of respondents City Council, Planning Commission and Advisory Agency, and any of them, to render express written findings that Tentative Tract 28569 when before them was consistent with the general plan constitutes a prejudicial abuse of discretion as that phrase is used in California Code of Civil Procedure section 1094.5, and requires that the decisions of respondents and each of them be set aside.”
Paragraph 5 of the conclusions of law reads as follows: “Prior to any future approval of Tentative Tract 28569, respondents City Council, Planning Commission, and Advisory Agency, and each of them, when and if the tract is otherwise properly before them, must first find in writing that Tentative Tract 28569 is consistent with the general plan. If any of such respondents at the time the tract is properly before it does not find that Tentative Tract 28569 is consistent with the general plan, or finds that Tentative Tract 28569 is not consistent with the general plan, it may not approve the Tentative Tract map. This conclusion shall not prevent a higher administrative body from approving a map, provided it has first made the necessary finding of consistency and otherwise acted in the manner required by law, irrespective of whether any lower administrative body has made such a finding or rendered such an approval.”
As a part of the judgment rendered upon retrial, the trial court ordered that: “A peremptory writ of mandamus shall issue from this Court, commanding respondents to set aside their decisions approving Tentative Tract 28569, and remanding the proceedings to respondent City Council (which may in its discretion further remand these proceedings to respondents Planning Commission or Advisory Agency), to reconsider their actions in light of the Court's findings of fact and conclusions of law, and to take any further action specially enjoined upon them by law; but nothing in this judgment or in that writ shall limit or control in any way the discretion legally vested in respondents.”
At the retrial of the mandamus action, plaintiffs sought an award of attorney's fees against the City of Los Angeles. In denying an award to plaintiffs, the trial court made finding no. 19, which reads as follows: “Petitioners did not establish that a substantial public benefit has been conferred on respondents in this action. The Court makes no determination in the abstract as to whether petitioners, in prevailing herein, in fact conferred substantial public benefits on respondents.”
In paragraph 6 of its conclusions of law the court stated: “Petitioners are not entitled to recover the amount of reasonable attorney's fees in trial court and on appeal, incurred in the prosecution of this action, either under the substantial benefit rule or the private attorney general rule.”
In appealing from the judgment rendered and entered upon the retrial, plaintiffs are attacking only the disallowance to plaintiffs of attorney's fees as embraced in paragraph 19 of the findings of fact and paragraph 6 of the conclusions of law. The judgment made and entered by the court does not mention the matter of attorney's fees. We are construing plaintiffs' appeal as an appeal from the judgment for its failure to declare that plaintiffs were entitled to an award of attorney's fees against the City of Los Angeles and to fix an amount thereof.
On this appeal, plaintiffs contend that the trial court erred in not awarding attorney's fees to plaintiffs as a part of the judgment in plaintiffs' favor. Plaintiffs contend that they were entitled to an award of attorney's fees on two nonstatutory theories: (1) the “substantial-benefit” principle and (2) the “private-attorney-general” principle.
The statutory provision governing allowance of attorney's fees is set forth in section 1021 of the Code of Civil Procedure. This section provides, in pertinent part, as follows: “Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; . . .” A literal reading of section 1021 would seem to indicate that provisions for a court award of attorney's fees must be predicated either on (1) some specific statute or (2) pursuant to agreement of the parties.
However, the decisional law of this state has created certain exceptions to section 1021 based upon the inherent equity powers of the courts. To date two such exceptions have become generally recognized as creatures of nonstatutory law.
One exception is known as the “common-fund” principle. This principle applies in a situation in which a number of persons are entitled, on a common basis, to a specific fund and an action is brought by one or more plaintiffs for the benefit of all. If such action results in the creation or preservation of a particular fund, the common-fund principle permits the plaintiff or plaintiffs to be awarded attorney's fees to be paid out of the particular fund. The common-fund rule of law for the allowance of attorney's fees was the initial exception to section 1021 established by the decisional law.
The second court-created exception to section 1021 is known as the “substantial-benefit” or “common-benefit” doctrine. This second nonstatutory exception has been defined by the California Supreme Court in the following language: “(W)hen a class action or corporate derivative action results in the conferral of substantial benefits, whether of a pecuniary or nonpecuniary nature, upon the defendant in such an action, that defendant may, in the exercise of the court's equitable discretion, be required to yield some of those benefits in the form of an award of attorney's fees.” (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 25, 112 Cal.Rptr. 786, 804, 520 P.2d 10, 28.)
In Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303 (hereinafter Serrano III ),[FN1] the court made clear, however, that the substantial-benefit award of fees was not dependent upon a benefit to the defendant. The substantial-benefit doctrine “ ‘permit(s) reimbursement (of attorneys fees) in cases where the litigation has conferred a substantial benefit on the members of an ascertainable class, and where the court's jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them.’ ” (Serrano III, supra, 20 Cal.3d 25, 40, fn. 10, 141 Cal.Rptr. 315, 322, 569 P.2d 1303, 1310.)
Plaintiffs contend that their victory in Woodland Hills I, in requiring City of Los Angeles officials to comply with statutory provisions relating to an orderly development of housing subdivisions conferred a substantial benefit upon the citizens of Los Angeles and that this brings plaintiffs within the scope of the substantial-benefits doctrine for an award of attorney's fees. The substantial benefit urged by plaintiffs is that of enforcement of environmental standards which Los Angeles officials were failing to enforce.
If a substantial benefit has been conferred upon the citizens of Los Angeles by plaintiffs' victory in Woodland Hills I, the instant case is then not unlike that of Mandel v. Hodges (1976) 54 Cal.App.3d 596, 127 Cal.Rptr. 244.
In Mandel, plaintiff, a state employee, sued California state officials to have declared unconstitutional the procedure and practice of the state's payment of salary to employees for time taken off from work during a three-hour period on Good Friday. Mandel sustained the trial court's award of attorney's fees to the plaintiff's attorney fees made payable by the State of California, not a party defendant in the action. The theory adopted in Mandel was the substantial-benefit principle. The Mandel court concluded that the plaintiff state employee had “rendered a ‘substantial benefit’ to the citizens and taxpayers of this State (saving them the public funds expended for work not performed by State employees during the three-hour ‘holiday’ period of Good Friday: . . .)” (Mandel, supra, 54 Cal.App.3d 596, 623, 127 Cal.Rptr. 244, 261, fn. omitted.) As noted, in Mandel, attorney's fees were awarded to plaintiffs and against the State of California, which was not a party defendant. In similar fashion, plaintiffs in the instant case seek an award of fees to be paid by the City of Los Angeles, not a party defendant but in effect represented by defendant public entities the City Council of Los Angeles, the Planning Commission and the Advisory Agency.
A key issue under the substantial-benefit rule for the awarding of attorney's fees concerns whether benefits are of a sufficiently substantial nature to justify an award of fees. What test is to be applied in making a determination of whether benefits to an ascertainable class are sufficiently substantial to justify an award of attorney's fees to plaintiffs?
Serrano III makes clear that benefits of a conceptual or doctrinal character are insufficient, “that to award fees on the ‘substantial benefit’ theory on the basis of considerations of this nature separate and apart from any consideration of actual and concrete benefits bestowed would be to extend that theory beyond its rational underpinnings.” (Serrano III, supra, 20 Cal.3d 25, 42, 141 Cal.Rptr. 315, 323, 569 P.2d 1303, 1312.) (Emphasis added; fn. omitted.) These concrete benefits cannot be found solely in the effectuation of constitutional or statutory policy.
Substantial benefits in the nature of actual and concrete benefits may take various forms, nonpecuniary as well as pecuniary in nature. Thus, Serrano III points out that Mills v. Electric Auto-Lite (1970) 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593, and Hall v. Cole (1973) 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702, are examples of cases that illustrate the concept of concrete, substantial benefits under the “substantial-benefits” theory. “In each of those cases a concrete benefit, in the form of informed corporate suffrage in Mills, and enhanced union free speech rights in Hall, had been achieved by the litigation and bestowed upon the entities against which fees were awarded.” (Serrano III, supra, 20 Cal.3d 25, 42, fn. 13, 141 Cal.Rptr. 315, 324, 569 P.2d 1303, 1312.)
In the instant case, plaintiffs concede that they received benefits from the judgment in their favor since they live and own property near the proposed housing subdivision in issue. But has an ascertainable class of Los Angeles citizens received substantial benefits from plaintiffs' victory in Woodland Hills I ? Plaintiffs make the argument that all citizens of Los Angeles are benefited by the decision in Woodland Hills I in that all future housing subdivisions must be developed in accordance with the general plan of the City, thus assuring meaningful land use development that tends to give environmental protection to all citizens of the City. This contention is meritorious and supplies a basis for an award of attorney's fees to plaintiffs under the substantial-benefit doctrine. We consider the environmental protection afforded to citizens in the enforcement of meaningful land use development a concrete benefit similar in stature to the benefit of informed corporate suffrage recognized in Mills and the enhanced union free speech rights recognized in Hall, and a benefit of substantiality that is not found solely in the effectuation of statutory policy.
Since the benefits from the Woodland Hills I litigation accrued to plaintiffs as property owners in a particular area more directly than to citizens of Los Angeles spread out over the entire city, we suggest certain principles which should be applied in determining the amount of an award of fees in the case before us. If the benefit from litigation is greater for the plaintiffs than the benefit to the public generally or a substantial segment of the public, a reasonable award against a public entity and its taxpayers should have as its basis that plaintiffs must bear the greater portion of the reasonable value of the legal services rendered by plaintiff's attorneys.
In applying the substantial-benefits doctrine of an award of attorney's fees, it is appropriate that the totality of circumstances be taken into account in each specific case to reach a result that is fair to the public entity and its taxpayers and to the victorious plaintiffs and their counsel. In many situations, such as that presented in the case at bench, the circumstances will indicate that fairness to all parties concerned will require that the city, county or state and its taxpayers not be saddled with the full value of the services of plaintiffs' attorneys since the benefit to plaintiffs is greater than the benefit to the taxpayers in general. In such a case the attorneys for plaintiffs cannot be expected to be reimbursed for the full value of their services unless their clients who have the more substantial interest in the outcome of the lawsuit and who receive the greater benefit are able to pay the greater proportion of the reasonable value of the services rendered by the attorneys.
Plaintiffs also urge that they are entitled to an award of attorney's fees under the private-attorney-general concept. In Serrano III, the California Supreme Court upheld an award of attorney's fees predicated on the private-attorney-general theory for the enforcement of a constitutional right. But the court did not render a holding that the private-attorney-general doctrine was applicable to the enforcement of a statutory right as contrasted with a constitutional right. “(W)e need not, and do not, address the question as to whether courts may award attorney fees under the ‘private attorney general’ theory, where the litigation at hand has vindicated a public policy having a statutory, as opposed to, a constitutional basis. The resolution of this question must be left for an appropriate case.” (Serrano III, supra, 20 Cal.3d 25, 47, 141 Cal.Rptr. 315, 327, 569 P.2d 1303, 1315.)
Since we have determined that plaintiffs are entitled to recover an award of attorney fees on the substantial-benefit theory, we find it inappropriate to consider the “private attorney general” doctrine left unresolved by the Serrano III court. The Serrano III court points out that three factors are necessary to establish a right to fees under the private-attorney-general doctrine: (1) the societal importance of the public policy indicated by the litigation being one of constitutional stature; (2) the necessity for private enforcement that places upon plaintiff a burden out of proportion to his individual stake in the matter; and (3) the benefits flowing from such enforcement must accrue to a wide number of the state's citizens.
But Serrano III holds that the actual and concrete benefits to a significant class of persons, required under the substantial-benefit doctrine, is not required for the private-attorney-general doctrine for an award of fees to a plaintiff's attorney. The private-attorney-general concept permits an award of attorney's fees based upon benefits inherent in the effectuation of constitutional policy, without more. Whether the California Supreme Court will adopt such a basis for an award of attorney's fees based upon benefits inherent in the effectuation of statutory policy, without more, is left open in Serrano III.
In the case at bench, since we conclude that plaintiffs' litigation resulted in an actual and concrete benefit to many citizens of Los Angeles, we need not, and do not, deal with the question of whether plaintiffs are entitled to recover attorney's fees under the private-attorney-general concept which, if applicable to the enforcement of statutory rights, would not require actual or concrete “substantial benefits,” but only benefits inherent in the effectuation of statutory policy. This result is not changed by the 1977 addition of section 1021.5 to the Code of Civil Procedure. Section 1021.5 provides: “Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any. With respect to actions involving public entities, this section applies to allowances against, but not in favor of, public entities, and no claim shall be required to be filed therefor.”[FN2]
Section 1021.5 constitutes a legislative declaration of policy on attorney's fees, which combines elements of the judicially declared substantial-benefits doctrine and the private-attorney-general doctrine. However, since it does not become applicable until January 1, 1978, we do not consider the question of its interpretation.
The portion of the judgment appealed from is reversed, with directions to the trial court to award to plaintiffs reasonable attorney's fees, to be determined in accord with the views expressed herein.
1. This is the third time that the Serrano case has been before the California Supreme Court. See Serrano v. Priest (1971) 5 Cal.3d 584, 96 Cal.Rptr. 601, 487 P.2d 1241 and Serrano v. Priest (1976) 18 Cal.3d 728, 135 Cal.Rptr. 345, 557 P.2d 929.
2. Added by Statutes of 1977, chapter 1197.
JEFFERSON, Associate Justice.
KINGSLEY, Acting P. J., concurs.