Court Opinion

ID: 4582477
Source: CourtListenerOpinion
Date Created: 2020-10-30 18:02:36.132484+00
Date Added: 2024-06-11T13:46:45.298590
License: Public Domain

Filed 10/30/20 Walters v. Moore 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                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

 DAVID WALTERS et al.,

    Plaintiffs, Cross-defendants and                                     G058689
 Respondents,
                                                                         (Super. Ct. No. 30-2016-00841613)
           v.
                                                                         OPINION
 KEITH MOORE,

    Defendant, Cross-complainant and
 Appellant.

                   Appeal from a postjudgment order of the Superior Court of Orange County,
Nathan R. Scott, Judge. Affirmed. Respondents’ motion for sanctions denied.
                   Kutak Rock, Kevin J. Grochow, Christopher P. Parrington, Andrew R.
Shedlock and Edwin Richards for Defendant, Cross-complainant and Appellant.
                   Law Offices of Richard A. Jones, Richard A. Jones and Jarrick S.
Goldhamer for Plaintiffs, Cross-defendants and Respondents.

                                             *               *               *
              Two parties agreed to pay the reasonable attorney fees of the prevailing
party in the event of a legal dispute. After three years of litigation and a four-day court
trial, the prevailing plaintiff, cross-defendant and respondent, Laguna Advisory Partners
LLC (Laguna), requested about $320,000 in attorney fees. Laguna attached a spreadsheet
listing the number of hours its two attorneys had worked on the case and declarations
supporting their hourly rates. The trial court disallowed about $32,000 and found
$287,256 to be a reasonable amount “of attorney fees at a reasonable rate.”
              The unsuccessful defendant, cross-complainant and appellant, Keith Moore,
appeals solely from the attorney fee award. Moore does not challenge his agreement with
Laguna for the payment of its attorney fees. Rather, Moore argues the trial court abused
its discretion by setting $287,256 as the amount of “reasonable” attorney fees.
              We disagree and affirm the postjudgment order. However, we do not find
this appeal to be frivolous or filed for purposes of delay, so we deny Laguna’s motion for
sanctions against Moore for filing the appeal. (See Cal. Rules of Court, rule 8.276(a)(1).)

                                              I
                     FACTS AND PROCEDURAL BACKGROUND
              In March 2006, Laguna and Moore formed Monarch Bay Management
Company LLC, which later became Cardiff Partners LLC (the Company). The Operating
Agreement states: “The purpose of the Company is to conduct all lawful businesses that
the Members deem necessary or desirable.”
              The Operating Agreement further provides: “In the event that any dispute
between the Company and the Members or among the Members should result in
litigation, arbitration or any other alternative dispute resolution procedure, the prevailing
party in such dispute shall be entitled to recover from the other party all reasonable fees,
costs and expenses of enforcing any right of the prevailing party, including without
limitation, reasonable attorneys’ fees and expenses.” (Italics added.)

                                              2
              Laguna LLC and Moore are the only members of the Company. Laguna is
jointly owned by David Walters (Walters) and Marian Walters. At some point, the
Company took out a bank loan, which was separately guaranteed by Moore, Laguna,
Walters individually, and Walters and Marian Walters as trustees of the DMW 2000
Trust (the Trust). The subsequent litigation largely involved purported oral agreements
among the parties as to the repayment of the loan (the lawsuit did not involve the
enforcement of the Company’s Operating Agreement).

Court Proceedings
              In March 2016, Walters filed a complaint against Moore alleging a breach
of an oral contract. Walters claimed he and Moore had agreed to each pay back 50
percent of the bank loan, but Walters had paid back much more on the loan than Moore
($150,000). Walters was represented by attorneys Richard A. Jones and Jarrick S.
Goldhamer (who also represented Laguna, Marian Walters, and the Trust).
              In April 2016, Walters filed a first amended complaint adding three causes
of action: common counts; equitable contribution; and declaratory relief.
              In July 2016, Walters filed a second amended complaint.
              In June 2017, Walters filed a third amended complaint in which Laguna
was added as a named plaintiff.
              In August 2017, Moore filed a cross-complaint.
              In April 2018, Moore filed a first amended cross-complaint naming as
cross-defendants Laguna, Walters and Marian Walters as individuals, and Walters and
Marian Walters as trustees. There were three causes of action for contribution and one
cause of action for a breach of an oral contract. Moore alleged the cross-defendants owed
him $200,258.05 (jointly and severally).
              In December 2018, Walters and Laguna filed a fourth amended complaint,
which included a request for attorney fees.

                                              3
              In May 2019, after a four-day court trial, the trial court issued a ruling and
statement of decision. On the plaintiffs’ breach of oral contract and common counts
causes of action, the court found Walters and Laguna had not proven their claims. On the
equitable contribution cause of action “the Court finds for Plaintiffs. Plaintiff David
Walters shall take $1,208.50 from Defendant Keith Moore. Plaintiff Laguna . . . shall
take $60,421.95 from Defendant. [¶] On the first amended cross-complaint, the court
finds for cross-defendants. Cross-complainant Keith Moore shall take nothing.”
              In August 2019, Laguna filed a motion seeking $321,712.50 in attorney
fees from Moore. After receiving further briefing and conducting a hearing on the
motion, the trial court ordered Moore to pay Laguna $287,256 in attorney fees. Moore
filed an appeal from the postjudgment order. Laguna filed a motion to impose sanctions
against Moore for filing the appeal. Moore filed an opposition to the motion.

                                              II
                                       DISCUSSION
              We review a trial court’s attorney fee award for an abuse of discretion.
(Ramos v. Countywide Home Loans, Inc. (2000) 82 Cal.App.4th 615, 621.) “The amount
to be awarded as attorney’s fees is left to the sound discretion of the trial court. The trial
judge is in the best position to evaluate the services rendered by an attorney in his [or her]
courtroom; his [or her] judgment will not be disturbed on review unless it is clearly
wrong.” (Vella v. Hudgins (1984) 151 Cal.App.3d 515, 522.)
              When we review for an abuse of discretion, we will not disturb a trial
court’s ruling unless “it ‘was arbitrary, capricious or without rational basis.’” (Yamaha
Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 8-9.) “If the trial court
has made no findings the receiving court will infer all findings necessary to support the
judgment and then examine the record to see if the findings are based on substantial
evidence.” (Finney v. Gomez (2003) 111 Cal.App.4th 527, 545.)

                                              4
                In this discussion we will: A) consider the legal principles regarding
attorney fee awards; B) review the relevant proceedings in this case; C) apply the law to
the facts under an abuse of discretion standard of review; and D) briefly address Laguna’s
motion to impose sanctions against Moore for filing this appeal.

A. Legal Principles Regarding Attorney Fee Awards
                Generally, “each party to a lawsuit ordinarily pays its own attorney fees.”
(Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751.)
However, “parties may validly agree that the prevailing party will be awarded attorney
fees incurred in any litigation between themselves, whether such litigation sounds in tort
or in contract.” (Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341.)
                “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
                                                                                  1
agreement, express or implied, of the parties . . . .” (Code Civ. Proc., § 1021.) The term
“‘[p]revailing party’ includes the party with a net monetary recovery, a defendant in
whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant
obtains any relief, and a defendant as against those plaintiffs who do not recover any
relief against that defendant.” (§ 1032, subd. (a)(4), italics added.)
                When requesting a “reasonable” amount of attorney fees, litigants usually
rely on lodestar: the number of hours times a reasonable hourly rate. Courts may then
adjust the lodestar, usually by applying a positive or negative multiplier. The court may
consider a variety of factors when adjusting the lodestar amount such as the difficulty of
the issues involved and the relative skill level of the attorneys. (Ketchum v. Moses (2001)
24 Cal.4th 1122, 1135.)

1
    Further undesignated statutory references are to the Code of Civil Procedure.

                                               5
B. Relevant Proceedings
              Laguna filed a motion for attorney fees and attached the Company’s
Operating Agreement with the operative attorney fee provision. The motion also
included declarations from Jones and Goldhamer, who each averred as to their education,
legal experience, and hourly rates. Laguna’s motion also included a declaration from an
attorney who was familiar with Jones and Goldhamer. This attorney averred that “these
rates reflect the reasonable market value of litigation services in the community for this
type of quality business litigation experience.”
              Laguna’s motion further included a 12-page spreadsheet detailing: each
billable “activity” (e.g., “Draft Opposition to Demurrer”); the date of each activity
(starting on 3/16/16 and ending on 8/22/19); the number of hours each attorney had
worked on each activity (listed to the tenth of an hour); and the resulting attorney fee for
each activity (e.g., $822.50 for drafting the opposition to the demurrer).
              Laguna’s initial attorney fee request was for a total of $321,712.50, which
was the product of Jones’ hours (329.9), and Goldhamer’s hours (459.8) times their
respective hourly rates ($650 and $235 per hour). Goldhamer later filed a supplemental
declaration to correct for an overstatement of his hours (8.7); Goldhamer accordingly
adjusted his attorney fee request downward ($2,044.50). Laguna did not request a
multiplier.
              Moore filed an opposition. Moore argued Laguna’s attorneys should only
be compensated for hours spent on the successful claim (equitable contribution) and not
for any hours spent on the unsuccessful claims (e.g., breach of oral contract and common
counts). Moore also argued Laguna was the only “arguable” member of the Company
entitled to attorney fees, and therefore the award should not include any hours on behalf
of Walters, Marian Walters, and the Trust. Moore further argued that “the fee submission
entries” by the attorneys “begin on March 16, 2016, more than fourteen months before
[Laguna] even became a party to the case.”

                                              6
              Laguna filed a reply arguing it had received a monetary recovery on its
complaint (59,213.62), and Moore received nothing on his cross-complaint; therefore, it
was the “net” prevailing party. Jones also attached a second declaration stating the hours
“cannot be delineated between the different named parties.” Jones further averred, “my
office is requesting less than 74 hours prior to beginning work on the amendment to the
complaint to name Laguna . . . in June 2017, amounting to $32,412.00.”
              Following a hearing on the motion, the trial court filed a written ruling:
              “Plaintiff [Laguna’s] motion for attorney fees is granted. . . . [¶] Defendant
Keith Moore shall pay $287,256 in reasonable attorney fees to plaintiff.
              “[Laguna] showed it and [Moore] are parties to an extraordinarily broad
attorney fees agreement: ‘In the event that any dispute . . . among the Members should
result in litigation . . . the prevailing party in such dispute shall be entitled to recover from
the other party . . . reasonable attorneys’ fees and expenses.’ [Citations.]
              “Notably, this is not an action on the written contract containing the
attorney fee clause. (Cf. Civ. Code, § 1717.) This is instead an action on alleged oral
agreements and for equitable contribution.
              “Nonetheless, the attorney fee clause is ‘phrased broadly enough’ to
support an attorney fee award to the prevailing party here. (See Santisas v. Goodin
(1998) 17 Cal.4th 599, 608 [tort claims].) The clause couldn’t be broader – it covers ‘any
dispute . . . among the Members.’ [Laguna] and [Moore] were the members. [Citations.]
This was certainly a dispute. [¶] And [Laguna] did prevail. It obtained a net monetary
judgment on its complaint and avoided liability on the cross-complaint. (See Code Civ.
Proc., § 1032, subd. (a)(4).)
              “The court disallows $32,412 incurred by other parties before [Laguna] was
added to the case. [Citation.] [Laguna] has withdrawn $2,044.50 from its initial request.
[Citation.] The remaining fees [($287,256)] reflect a reasonable number of attorney fees
at a reasonable rate.”

                                               7
C. Application and Analysis
              Laguna’s motion for attorney fees was supported by a detailed spreadsheet
listing the hours Jones and Goldhamer had worked on each activity. The reasonableness
of their hourly rates was supported by the two attorneys’ declarations, and a declaration
of a third attorney. Notably, Laguna did not request a multiplier and Goldhamer candidly
admitted to an error that resulted in a $2,044.50 reduction.
              In short, while $287,256 is a sizable attorney fee award, the court’s ruling is
supported by substantial evidence and we cannot say it is “clearly wrong.” (See Vella v.
Hudgins, supra, 151 Cal.App.3d at p. 522.) There is also no indication the court acted in
an arbitrary or capricious manner. Thus, we find no abuse of discretion.
              Moore argues the trial court abused its discretion because it: 1) failed to
reduce the attorney fee award for claims in which Laguna did not prevail; 2) failed to
apportion the award between Laguna and three other clients of the attorneys; and 3) failed
to provide an “analysis” of its ruling. We shall analyze each argument.

              1. The trial court was not required to lower the attorney fee award to
account for Laguna’s unsuccessful claims, nor would it have been feasible to do so.
              Moore argues: “The trial court abused its discretion when it failed to
deduct and reduce [Laguna’s] attorneys’ fees request for claims in which it did not
prevail in its attempt to enforce its rights.” (Capitalization & boldfacing omitted.) Moore
is mistaken because this was not an “action on a contract” containing an attorney fee
provision. (See Civ. Code, § 1717, subd. (a).)
              “In any action on a contract, where the contract specifically provides that
attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded
. . . to the prevailing party, then the party who is determined to be the party prevailing on
the contract, whether he or she is the party specified in the contract or not, shall be
entitled to reasonable attorney’s fees . . . .” (Civ. Code, § 1717, subd. (a), italics added.)

                                               8
              Here, the attorney fee provision was included in the Company’s Operating
Agreement. But the lawsuit was not an action on that contract; rather, the litigation
involved alleged oral contracts and claims of equitable contribution. Therefore, Moore’s
legal citations are largely inapposite because they involve actions to enforce contracts
that contain attorney fee provisions under Civil Code section 1717. (See, e.g., Reynolds
Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129 [“Where a cause of action based on the
contract providing for attorney’s fees is joined with other causes of action beyond the
contract, the prevailing party may recover attorney’s fees under [Civil Code] section
1717 only as they relate to the contract action”].)
              As the trial court noted, the Company’s broad attorney fee provision in its
Operating Agreement required the payment of attorney fees to the “prevailing party” in
“any dispute . . . among the Members.” And because the court awarded Laguna
$59,213.62 on its complaint and awarded Moore nothing on his cross-complaint, Laguna
was plainly the prevailing “party with a net monetary recovery” in the lawsuit. (See
§ 1032, subd. (a)(4).) Thus, by the terms of their agreement, Moore was obligated to pay
the reasonable attorney fees of the net prevailing party in the lawsuit (Laguna), without
regard to the sole net prevailing claim in the lawsuit (equitable contribution).
              Moreover, in our review of Laguna’s spreadsheet it appears the attorneys’
hours are inextricably intertwined among the various claims. For example, the 3.5 hours
billed for “Draft Opposition to Demurrer” presumably applied to all the causes of action
alleged in the complaint. It appears that it simply would not have been feasible for the
trial court to have lowered Laguna’s attorney fee award “for claims in which it did not
prevail” as suggested by Moore. (See Abdallah v. United Savings Bank (1996) 43
Cal.App.4th 1101, 1111 [a court is not required to apportion attorney fees between claims
when it reasonably finds all claims in the case were inextricably intertwined].)

                                              9
              2. The trial court did attempt to reasonably apportion the attorney fees
between Laguna and the attorneys’ three other clients.
              Moore argues the trial court “failed to make any attempt to apportion the
attorneys’ fees between those parties that could legally recover attorneys’ fees [(Laguna)]
and those that could not recover attorneys’ fees (David Walters, Marian Walters and the
Trust) . . . .” We disagree.
              The trial court disallowed $32,412 of Laguna’s attorney fee request. This
resulted in Jones and Goldhamer not being compensated for any of their work on the case
when Walters was the sole plaintiff (from May 2016 to June 2017), prior to the filing of
the third amended complaint (when Laguna was added as a named plaintiff). Thus,
Moore’s argument is belied by the record.
              As far as hours billed after the filing of the third amended complaint, Jones
averred the hours “cannot be delineated between the different named parties.” Jones’
statement appears credible to this court on appeal. More importantly, given the standard
of review, we must presume the trial court made the same finding. (See Finney v.
Gomez, supra, 111 Cal.App.4th at p. 545 [we must “infer all findings necessary to
support the judgment”].)
              In his opening brief, Moore mentions at least seven times that Laguna did
not provide its “engagement letter” with Jones and/or Goldhamer. But Moore cites no
legal authority stating how this would constitute an error by the trial court.
Consequently, to the extent that Moore may be making that argument on appeal, it is
waived. (See Vo v. City of Garden Grove (2004) 115 Cal.App.4th 425, 447-448 [“A brief
must contain reasoned argument and legal authority to support its contentions, or the
court may treat the argument as waived”].)
              Moore further suggests because Laguna was only one of four clients,
Laguna is entitled to only 25 percent of the $287,256 attorney fee award. This would
seem to be a rather arbitrary approach to the determination of a “reasonable” amount of

                                             10
attorney fees; and again, Moore has cited no legal authority in support of this notion. In
any event, Moore purportedly made this request in the trial court and it was presumably
                                                       2
rejected as a matter well within the court’s discretion.

              3. The trial court was not required to explain its “lodestar analysis” of the
attorney fee award.
              Moore argues: “The Trial Court abused its discretion when it awarded
$287,256 in reasonable attorneys’ fees to [Laguna] because the Trial Court never actually
performed a sufficient lodestar analysis to determine if the requested attorneys’ fees were
reasonable.” We disagree.
              A trial court is not required to explain its analysis when making an award of
reasonable attorney fees. (In re Tobacco Cases I (2013) 216 Cal.App.4th 570, 589 [trial
court “not required to explain its rationale” for an attorney fee award]; Gorman v.
Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 101 [“there is no general rule
requiring trial courts to explain their decisions on motions seeking attorney fees”];
RiverWatch v. County of San Diego Dept. of Environmental Health (2009) 175
Cal.App.4th 768, 776 [a trial court’s ruling will not be disturbed “absent a showing that
there is no reasonable basis in the record for the award”].)
              Here, the trial court provided a clear and concise written ruling, which was
helpful to this court on review. The trial court did not explain its “analysis” of every
component of the lodestar, but such a justification is not required. In sum, there is a

2
 In his opening brief, Moore mentioned what was orally argued in the hearing on the
motion for attorney fees, but Moore provided no transcript or settled statement of that
hearing as part of the record on appeal. We caution counsel on appeal to refrain from
discussing matters outside of the record. (See Reserve Insurance Co. v. Pisciotta (1982)
30 Cal.3d 800, 813 [“It is an elementary rule of appellate procedure that . . . an appellate
court will consider only matters which were part of the record”].)

                                             11
reasonable basis in the record to support Laguna’s $287,256 attorney fee award. Thus,
there was no abuse of the court’s discretion.

D. Motion to Impose Sanctions
              “An appeal that is prosecuted for an improper motive—to harass the other
side or to delay the effect of an adverse judgment—or that any reasonable attorney would
agree is totally and completely without merit will support an award of sanctions on
appeal.” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 192.)
              “Whether to impose appellate sanctions is a matter within our discretion.”
(Citizens for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5th 1159,
1194.) However, “sanctions should be used sparingly to deter only the most egregious
conduct.” (J.B.B. Investment Partners Ltd. v. Fair (2019) 37 Cal.App.5th 1, 16-17.)
              Laguna’s counsel asserts that Moore’s appeal is frivolous and has been
filed for purposes of delay. Moore’s counsel responds that the appeal was not filed “for
any frivolous or dilatory purpose.”
              Here, we have found Moore’s appeal to be meritless. But that is not the
same as finding Moore’s appeal to be frivolous. Generally, counsel on both sides made
reasoned arguments in support of their clients. And beyond the bare assertion of
Laguna’s counsel, we have no evidence that Moore filed the appeal for dilatory or
otherwise improper purposes. In short, we find no evidence of egregious conduct.
              Thus, we deny Laguna’s motion to impose sanctions against Moore for
filing the instant appeal.

                                            12
                                          III
                                    DISPOSITION
             The postjudgment order is affirmed. Costs on appeal are awarded to
       3
Laguna.

                                                MOORE, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

IKOLA, J.

3
 We are declining to rule on Laguna’s request for attorney fees on appeal; that request
may be made in the trial court upon the issuance of the remittitur. (See Harbour
Landing-Dolfann, Ltd. v. Anderson (1996) 48 Cal.App.4th 260, 264-265.) Further, we
deny Laguna’s motion for sanctions against Moore for filing the appeal. (See Cal. Rules
of Court, rule 8.278(a)(1).)

                                          13