Court Opinion

ID: 3170932
Source: CourtListenerOpinion
Date Created: 2016-01-20 20:11:05.912921+00
Date Added: 2024-06-11T12:00:43.407023
License: Public Domain

Filed 1/20/16 Asphalt Professionals v. Emaron Homes CA2/6
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     SECOND APPELLATE DISTRICT

                                                   DIVISION SIX

ASPHALT PROFESSIONALS, INC.,                                                 2d Civil No. B261674
                                                                           (Super. Ct. No. SC044181)
     Plaintiff and Appellant,                                                  (Ventura County)

v.

EMARON HOMES, LLC et al.,

     Defendants and Respondents.

                   Asphalt Professionals Inc. (API) appeals an order awarding costs and a total
of $390,000 attorney fees to defendants Emaron Homes, LLC (Emaron); Fairland
Construction, Inc. (Fairland); and Real Estate Spectrum, Inc. (RES). We conclude,
among other things, that the trial court did not abuse its discretion in making the attorney
fee award. We affirm.
                                                        FACTS
                   API filed actions against T.O. IX, LLC, Emaron, Fairland, RES and other
defendants. API alleged causes of action for breach of a construction contract, quantum
meruit and fraud involving services it provided on a T.O. IX housing development
project. API alleged Emaron, Fairland and RES were alter egos of T.O. IX and other
defendants. The construction contract contained an attorney fee provision.
                   The trial court bifurcated the case into three phases. Phase one involved the
breach of contract and quantum meruit causes of action.
              In 2010, API prevailed against T.O. IX on phase one. In 2011, the trial
court found Emaron, Fairland and RES were not alter egos.
              In 2013, Emaron, Fairland and RES filed a motion for attorney fees. The
trial court denied the motion, ruling it was untimely. They appealed. In 2014, we
reversed and ruled the attorney fee motion was timely.
              These three prevailing defendants filed a motion for costs and attorney fees.
In the motion lead counsel Leonard Tavera said that because this litigation was
"complex," he had to secure help from additional counsel. Counsel defended "sixteen
defendants" in this case. Some of the defendants he represented did not prevail. In
seeking fees for Emaron, Fairland and RES, the "fees were apportioned to [these]
prevailing defendants based on when they were first named in one of the five complaints
in the instant action." Tavera said for the time the attorneys spent jointly representing all
16 defendants, he reduced the attorney fee request for Emaron, Fairland and RES to only
a tiny fraction of the total defense costs--"1/16th each."
              Emaron, Fairland and RES sought a total attorney fee award of
$613,767.43. API filed an opposition and objections.
              The trial court awarded attorney fees in the amount of $390,000. It rejected
API's claim that fees were not proper because "these moving defendants are alter egos" of
other defendants. It accepted "the authenticity of the billing sheets submitted by [the]
moving defendants."
                                       DISCUSSION
                                  The Attorney Fee Award
              The three defendants prevailed on the alter ego issue and were entitled to
attorney fees based on the attorney fee provision of the contract. (Pueblo Radiology
Medical Group, Inc. v. Gerlach (2008) 163 Cal.App.4th 826, 829; see also Hsu v. Abbara
(1995) 9 Cal.4th 863, 877.) Attorney fees for a successful party "include compensation
for all hours reasonably spent, including those necessary to establish and defend [an
attorney] fee claim." (Serrano v. Unruh (1982) 32 Cal.3d 621, 639.)

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              The trial court has substantial discretion in determining the size of an
attorney fee award. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133; Sternwest Corp. v.
Ash (1986) 183 Cal.App.3d 74, 76.) "Trial judges are entrusted with this discretionary
determination because they are in the best position to assess the value of the professional
services provided in their courts." (Cates v. Chiang (2013) 213 Cal.App.4th 791, 821.)
Consequently, awards of attorney fees will not be reversed unless "the appellate court is
convinced the ruling is clearly wrong." (Id. at pp. 820-821.)
                                       Documentation
              API contends the award of fees to the three defendants must be
substantially reduced because the motion for fees was not properly documented.
              The motion for attorney fees was supported by the declarations of three
attorneys--Leonard Tavera, Mark B. Chassman, and John D. Henrichs. The motion
contained the extensive billing records for all counsel who performed services.
              API claims that for some attorneys the motion includes their attorney time
records without a declaration from the attorney who performed the services reflected in
those records. It contends the trial court was consequently required to deny
compensation for all the hours claimed by those lawyers because they were not supported
by a proper declaration.
              But all of the attorney time records API challenges were included in the
declaration of attorney Tavera. Tavera is the lead counsel who has worked on this case
for many years. He said his declaration was made on his "own personal knowledge." He
declared that the "attorneys keep detailed, contemporaneous time records and bill clients
to the nearest tenth of an hour." Tavera said, "All of my time as well as that of my
associates and partners is reflected in the detailed billing records attached hereto." He
said the time and billing records were "true and correct copies" of the actual invoices sent
to his clients for "work performed in the instant action."
              API suggests Tavera's statements about the time records must be rejected
because he could not credibly make representations about the work of other lawyers. But
as the defendants note, the trial court alone resolves credibility issues. (In re Shelley J.

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(1998) 68 Cal.App.4th 322, 329.) Moreover, there are additional declarations in the
record from Martin Barrett, the treasurer of codefendant D & S Homes, Inc. and Stephen
Bock, the CEO of that company. They stated: 1) "All defendants were jointly liable" for
the time and billing record invoices from the law firms representing the defendants; and
2) "[t]hese invoices accurately reflect the amounts incurred by defendants for legal
services." (Italics added.) The trial court found those declarations showed the
defendants' liability for their attorneys' services. Those time and billing record invoices
show the attorneys performed a substantial amount of legal work and provide detailed
documentation of their services and hours.
              A better practice would have been for each attorney to file a separate
declaration attached to their own time and billing records. But even if the defendants'
procedure was flawed, that does not mean the trial court was required to deny all fees for
the successful work of these lawyers. (Cates v. Chiang, supra, 213 Cal.App.4th at
p. 821.)
              In Cates, the Court of Appeal noted that there were flaws and deficiencies
in an attorney fee motion. It said, "[I]t would have been preferable if the two attorneys
had maintained contemporaneous records and had filed declarations in the fee litigation.
However, the flaws in the supporting evidence did not mean the court was required as a
matter of law to award no fees for the substantial work provided by these two attorneys."
(Cates v. Chiang, supra, 213 Cal.App.4th at p. 821, italics added.) It ruled that in lieu of
declarations and billing records from the two counsel who performed the services,
another lawyer could "reconstruct" their hours for the attorney fee claim. (Id. at pp. 821-
822.) Consequently, a fee motion that is procedurally flawed or incomplete does not
deprive the trial court of its discretion to determine a reasonable attorney fee. (Id. at
p. 821; East West Bank v. Rio School Dist. (2015) 235 Cal.App.4th 742, 750; Fed-Mart
Corp. v. Pell Enterprises, Inc. (1980) 111 Cal.App.3d 215, 227; California Interstate Tel.
Co. v. Prescott (1964) 228 Cal.App.2d 408, 411.)

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                                      Abuse of Discretion
               API suggests the trial court abused its discretion by not making a
substantial reduction in fees for the attorneys who submitted their billing records without
their declarations. It notes that had the court eliminated all of the fees for those lawyers,
the defendants' request for fees would have been reduced by the following amounts:
"Emaron: $86,517.85, Fairland: $103,260.08, [RES]: $103,260.08."
               The defendants respond that the trial court did make a large reduction.
They note that they sought "$613,767.43 for fees," but the court reduced that to
$390,000.00. They claim this downward adjustment shows the court took into
consideration any alleged deficiency in the documentation. The court said it considered
API's objections to the billing statements in making its determination on the amount of
attorney fees. The size of the reduction in fees because of documentation deficiencies is
a matter within the trial court's sound discretion. (Cates v. Chiang, supra, 213
Cal.App.4th at p. 821.)
               The trial court also had the record of the years of extensive litigation in this
case. It was consequently in the best position to consider that record in evaluating the
amount of attorney fees. (Cates v. Chiang, supra, 213 Cal.App.4th at p. 821; Weber v.
Langholz (1995) 39 Cal.App.4th 1578, 1587 ["The trial court could make its own
evaluation of the reasonable worth of the work done in light of the nature of the case"].)
"That some proceedings occurred prior to the assignment of the action to the trial court,
does not prevent the court from estimating fees based on the record." (East West Bank v.
Rio School Dist., supra, 235 Cal.App.4th at p. 750; see also Fed-Mart Corp. v. Pell
Enterprises, Inc., supra, 111 Cal.App.3d at p. 227 ["An award for attorney fees may be
made in some instances solely on the basis of the experience and knowledge of the trial
judge without the need to consider any evidence"]; California Interstate Tel. Co. v.
Prescott, supra, 228 Cal.App.2d at p. 411 [the court may set a fee based on its evaluation
of the litigation history in the record].)
               Moreover, a party who challenges the attorney fee award must also make a
showing "to demonstrate that any amount sought was unreasonable." (Lin v. Jeng (2012)

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203 Cal.App.4th 1008, 1026.) API has not cited evidence showing that the attorneys'
hours, services, or rates were excessive or unreasonable. (Premier Medical Management
Systems, Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 562.)
                                       Unity of Interest
               API contends the three defendants had a "unity of interest" in a joint
defense and they "filed joint answers, motions and responses." It suggests the trial court
erred by not denying their defense costs and litigation expenses for counsels' joint
representation of the prevailing and losing defendants under the unity of interest doctrine.
We disagree.
               "One defendant who prevails may recover costs even though the plaintiff
recovers against another defendant." (7 Witkin, California Procedure (5th ed. 2008)
Judgment, § 94, p. 633; see also Benson v. Kwikset Corp. (2007) 152 Cal.App.4th 1254,
1278.)
               Under the unity of interest doctrine, "'[i]n those instances in which several
defendants are united in interest and/or join in making the same defenses in the same
answer,'" fees and costs incurred are subject to potential reduction. (Slavin v. Fink (1994)
25 Cal.App.4th 722, 726.) But whether to make "'the allowance or disallowance of an
award to prevailing defendants lies within the sound discretion of the court.'" (Ibid.)
Most courts apply the unity of interest doctrine. One court, however, has concluded that
where the trial court finds the defendants are the prevailing parties, "the unity of interest
principle permitting discretionary denial of costs to a prevailing party defendant who
jointly litigated the case with a nonprevailing defendant . . . cannot be applied . . . ."
(Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 442.) But under either
approach the result does not change.
               Here the trial court could reasonably infer counsel for the defendants had
initially reduced the fees for Emaron, Fairland and RES to take into account their joint
representation of other defendants. (In re Tobacco Cases 1 (2013) 216 Cal.App.4th 570,
586-587 [voluntary percentage reduction in fees by counsel may eliminate the need for
the court to make an apportionment].) Defense counsel noted that the fees and costs

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sought for the three defendants were only a small fraction of the total defense costs when
they were jointly representing all 16 defendants in this case. API has not shown counsels'
reduction in fees and costs was unreasonable. There were some issues common to all
defendants. But the trial court has discretion to decline to apportion fees where the issues
litigated by the prevailing defendants are closely intertwined. (Webber v. Inland Empire
Investments, Inc. (1999) 74 Cal.App.4th 884, 920.) API has not shown why the trial
court could not also reasonably infer litigation on the alter ego status involved some
unique facts for each defendant. Moreover, a substantial portion of the fee motion
involved compensation for attorney time on the last appeal in this case. This involved
attorney services exclusively for these three defendants.
                API contends the trial court did not evaluate the unity of interest factors.
But unless otherwise shown, we presume that the "trial court considered the relevant
factors" (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 67), and
that "the court's order is supported by the record" (Fair v. Bakhtiari (2011) 195
Cal.App.4th 1135, 1148). The court found "defendants at issue here incurred their own
costs." It based this finding on declarations in the record. Substantial evidence supports
that finding.
                                      Fairland's Standing
                API contends Fairland should not be entitled to collect attorney fees
because its corporate status has been suspended for failure to pay taxes.
                A corporation that has had its corporate powers suspended for failure to pay
taxes may not pursue litigation. (Rochin v. Pat Johnson Manufacturing Co. (1998) 67
Cal.App.4th 1228, 1236-1237.) After it obtains "a certificate of revivor of its corporate
status," it may continue litigation. (Ibid.) A revivor certificate will validate "'the
procedural steps taken on behalf of the corporation while it was under suspension . . . .'"
(Id. at p. 1237.)
                In the respondents brief, counsel for the defendants states Fairland has paid
its taxes and "has been reinstated and revived." But this is an evidentiary issue that must
initially be decided by the trial court.

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              Several weeks after the trial court issued its attorney fee order, the court
found there was a suspension of corporate status. It stayed its previous order on attorney
fees and costs for Fairland because it found "it is a suspended corporation." API has not
shown the court abused its discretion by making this order or any reason to modify it.
                                        Disposition
              The attorney fee and cost orders are affirmed. Costs on appeal are awarded
in favor of respondents Emaron and RES.
              NOT TO BE PUBLISHED.

                                           GILBERT, P. J.

We concur:

              YEGAN, J.

              PERREN, J.

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                               Rebecca S. Riley, Judge

                          Superior Court County of Ventura

                         ______________________________

             Law Offices of Ray B. Bowen, Jr., Ray B. Bowen, Jr. for Plaintiff and
Appellant.
             Semper Law Group, LLP, Leonard M. Tavera; Henrichs Law Firm, PC,
John D. Henrichs for Defendants and Respondents.

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