T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T S T O N E B R A E L . P . , a D el aw ar e l i m i t ed pa rtne r s hi p, P la in tif

f - A p p e lla n t, v. T O L L B R O S ., I N C ., aP e n n s y lv a n ia c o rp o r a tio n ; T O L L B R O T H E R S , I N C ., a D e l a w a r e c orpor a t i on, D efen d an t s - A p p el l ees. N o. 11- 16161 D . C . N o . 3 : 0 8 - c v - 0 0 2 2 1 - E MC ME MOR AN DU M *

S T O N E B R A E L . P . , a D el aw ar e l i m i t ed pa rtne r s hi p, P l ai nt i ff

- A pp el l ee , v. T O L L B R O S ., I N C ., aP e n n s y lv a n ia c o rp o r a tio n ; T O L L B R O T H E R S , I N C ., a D e l a w a r e c orpor a t i on, D efen d an t s - A p p el l an t s. N o. 11- 16274 D . C . N o . 3 : 0 8 - c v - 0 0 2 2 1 - E MC



# FI LED MA R 29 2013 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2 A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e N o rth e rn D is tr ic t o f C a lif o rn ia E dw a r d M . C he n, M a gi s tr a t e J udge , P r e s i di ng A r gue d a nd S ubm i tt e d F e brua ry13, 2013 S a n F r a n c is c o , C a lif

o rn ia B efo re: S C H R O E D E R , H A W K IN S an dM U R G U IA , C i rcu i tJu d g es. P la in tif f - A p p e lla n t S to n e b r a e L .P . ap p e a ls th e d is tr ic t c o u rt’s d e n ia l o f its mo t i o n s f

o rp r e j u d g me n ti n t e r e s ta n dl i t i g a t i o n e x p e n s e s , a f t e ri ta c c e p t e daFe d . R. C iv . P . 6 8 o f

f e rf r o m D e f e n d a n t- A p p e lle e T o ll B r o s ., I n c . T o ll c r o s s ap p e a ls to c h a l l e n g e th e a mo u n to f a tt o rn e y s ’ f

e e s a w a r d e dt o St o n e b r a e . W e a f f i rm. T h e u s u a l ru le s o f

c o n tr a c t c o n s tru c tio n ap p lyto R u le 6 8 o f f e r s . G uerr er o v. C um m i ngs , 70 F . 3d 1111, 1113 ( 9th C i r . 1995) ( c i t i ng H e rr i ngton v . C ount

yof So n o ma , 12 F . 3d 90 1, 90 7 (9th C i r. 19 93 )) . E xtri nsi c e vi dence m aybe consi dere d t o res ol ve am bi gu i t i es i n a R ul e 68 o ff er , and u nres ol ved am bi gu i t i es ar e c on strued a g a in s t th e o f

f e r o r . H e rr i ngton , 1 2 F .3 da t 9 0 7 . T h e o f f e rs ta te dth a t T o ll w o u ld p a yto S to n e b r a e “[ p ]r e

ju d g m e n t in te r e s t a s d e te rm in e db yth e C o u rt p u r s u a n t to C al i forni a C i vi l C od e s ec t i on 32 87 . ” T he di s tr i c tc ourtappr opr i a t e l yr e s ol ve d anya m bi gui tybyc ons i de r i ng extri nsi c e vi dence. A l l of the re l evantextri nsi c e vi dence, i ncl ud i ng un chal l enged i n- c ourts t a t e m e nt s byT ol l ’ s a tt orne y , c onf i rm e d tha tthe R ul e 68 of f e rl e f tthe3

a w a r d of pr e j udgm e nti nt e r e s tt o the di s c r e t i on of the j udge . S t one br a e m ove d f or prej ud gm enti nt er es tun der onl y § 32 87 (a ). U nd erthatst atut e, a party m ayre cover p r e ju d g m e n t in te r e s t w h e r e s h e “is e n title dto r e c o v e rd a m a g e s c e rta in , o rc ap ab le o f b e in g m a d e c e rta in b yc a lc u la tio n . . . .” C a l. C iv . C o d e § 3 2 8 7 ( a ) . C a lif o rn iac o u rts h a v e r e d u c e dth e is s u e o f “c e rta in ty ” u n d e r§ 3 2 8 7 ( a ) to tw o que s t i ons : “ ( 1) w he the rthe de bt orknow s the a m ountow e d or( 2) w he the rthe debt or w ou l d b e abl e t o com pu t e the dam ages . ” Fi re m an ’s Fun d Ins. C o. v. A l l s tate I ns . C o. , 2 3 4 C a l. A p p . 3 d1 1 5 4 , 1 1 7 3 ( C t. A p p . 1 9 9 1 ) ; see a l so Chesapeake Indus. , Inc. v. T og ova E nter

s. , Inc. , 1 4 9 C a l. A p p . 3 d9 0 1 , 9 0 7 ( C t. A pp . 19 83 ). In thi s c as e, dam ages w er e notce rt ai n b ec ause the dam ages S t on ebra e s oughtr e qui r e d r e s ol vi ng f a c tua l di s put e s . W he r e the da m a ge s a m ountde pe nds on th e r e s o lu tio n o f

c o n f lic tin g e v id e n c e , p r e

ju d g m e n t in te r e s t is in ap p r o p r ia te . P ol s te r, I nc . v . Sw i ng , 1 6 4 C a l. A p p . 3 d4 2 7 , 4 3 4 ( C t. A p p . 1 9 8 5 ) . S t one br a e a l s o c ont e nds tha tthe R ul e 68 of f e re nt i t l e d i tt o l i t i ga t i on e x p e n s e s th a t a r e n o t a w a r d ab le u n d e rC a l. C iv . P r o c . C o d e § 1 0 3 3 .5 . T h is cont ent i on l ac ks m er i t . S t on ebra e poi nt s t o the offerl angu age thati ncl ud ed an a w a r d o f “[ c ]o s ts in c u rr e d b yp la in tif f s th r o u g h th e d a te o f

th is o f f e r .” N o th in g in the l a ngua ge of

the of f e rs ugge s t s tha tthe pa rt i e s i nt e nde d t o di ve r ge f r om the c o s ts a llo w e d b y§ 1 0 3 3 .5 . M o r e o v e r , a n ya m b ig u ityis r e s o lv e db ye x tr in s ic4

e vi de nc e be c aus e , a l though the or i gi na l c ontr a c tc ont e m pl a t e d both “ c os t s ” a nd

“ l i t i ga t i on e xpe ns e s , ” the R ul e 68 of f e ronl yi nc l ude d “ c os t s . ” S t one br a e i s not e n title d to litig a tio n e x p e n s e s . In i t s cal cu l at i o n o f th e att o rn eys’ fees aw ard , th e d i stri ctco u rtd i dn o tab u se i t s d i scret i o n i n refu si n g t o d ed u cto r red u ce th e h o u rs th atS t o n eb rae’s att o rn eys de vot e d t o i nva l i da t i ng the l i qui da t e d da m a ge s pr ovi s i on. C ourt s us e the “lo d e s ta r ” m e th o d to c a lc u la te r e a s o n ab le a tto rn e y s ’ f e e s . PL C

M G roup v. D rexler , 22 C a l . 4th 1084, 1095 ( 2000) . H our s e xpe nde d on a n unr e l a t e d a nd u n s u c c e s s f

u l c la im m a yn o t b e in c lu d e din th e lo d e s tarc a lc u la tio n . H ensleyv. E ckerh a rt , 4 6 1 U . S . 4 2 4 , 4 3 4

– 3 5 (1 9 8 3 ). C l ai m s th atari se fro m th e sam e co u rse o f c o n d u c t a r e r e la te d . Sch w a rz v. Sec’y o f H ea l th & H

u m a n Servs. , 73 F . 3d 895, 9 0 3 ( 9 th C ir . 1 9 9 5 ) . S t on ebra e broug httw o al t ernat i ve cl ai m s: on e f or the l i qu i dat ed dam ages am ou nt , and o ne for a ctual dam ages . T ol l cont ends thatthe cl ai m for a ctual da m a ge s w a s unr e l a t e d a nd uns uc c e s s f ul be c aus e S t one br a e a c c e pt e d the R ul e 68 of f e rof the l i qui da t e d da m a ge s a m ount . T hi s c ont e nt i on f a i l s . T he c l a i m f

or actu al d am ag es w as rel at ed t o th e cl ai m fo r l i q u i d at ed d am ag es b ecau se th ey aro se f r o m th e s a m e c o u r s e o f

c o n d u c t. See Sch w a rz , 7 3 F .3 da t 9 0 3 ; W e bb v . Sloan , 3305

F . 3d 11 58 , 11 68 –6 9 (9th C i r. 20 03 ). T he ho urs e xp ended o n the ac tual dam ages c la im , th e r e f

o r e , m a yn o t b e d e d u c te d . T ol l cont ends thateven i f the ac tual dam ages cl ai m w as re l at ed, i tw as uns uc c e s s f

ul be c aus e S t one br a e a c c e pt e d the l i qui da t e d da m a ge s a m ount . T he di s tr i c tc ourtc orr e c t l yc onc l ude d othe rw i s e . S t one br a e a c hi e ve d as pe e dy s e tt l e m e ntf

or$4, 774, 944, w hi c h c ons t i tut e d a l l of the r e l i e f

i ni t i a l l ys oughtby S to n e b r a e . W h e r e , a s h e r e , ap a rtya c h ie v e s a n e x c e lle n t r e s u lt, th e c o u rt s h o u ld r e f u s e to r e d u c e th e lo d e s ta ra m o u n t. See H ensley , 461 U . S . a t435. L as t , the di stri ctcourtdi d n otabuse i t s di sc re t i on i n cal cul at i ng the m arket ra t e bas ed on ra t es for c om pl ex l i t i gat i on . T he m arketfor c om pl ex l i t i gat i on i s an ap p r o p r ia te r e f

e r e n c e e v e n w h e r e am o r e s p e c if ic s u b - m a rk e t m a yb e id e n tif iab le . See P rison L egalN

ew s v . Schw arze negg er , 6 0 8 F .3 d4 4 6 , 4 5 5 ( 9 th C ir . 2 0 1 0 ) . A FFI R M ED .