Opinion
10-31-1956
Irving ARENSON, Plaintiff and Appellant, v. NATIONAL AUTOMOBILE AND CASUALTY INSURANCE CO., a California corporation, Defendant and Respondent.* Civ. 21839.
Irving ARENSON, Plaintiff and Appellant,
v.
NATIONAL AUTOMOBILE AND CASUALTY INSURANCE CO., a California corporation, Defendant and Respondent.*
Oct. 31, 1956.
Rehearing Denied Nov. 26, 1956.
Hearing Granted Dec. 24, 1956.
Fox, J., dissented.
William Katz, Los Angeles, for appellant.
Parker, Stanbury, Reese & McGee, by Charles Agor Harrison, Los Angeles, for respondent.
ASHBURN, Justice.
Plaintiff-appellant challenges upon this appeal an award of attorney fees made to cover services rendered by his attorney in defense of an action brought against him, one which defendant National Automobile and Casualty Insurance Company was obligated to defend under a policy issued by it and which it mistakenly refused to defend. The award is in the sum of $175 which appellant's counsel brands as 'a plain and palpable abuse of discretion' and 'such an unreasonable and arbitrary decision as to shock the conscience.'
Plaintiff's minor son set fire to his classroom, causing damage in the amount of $255.16. The property belonged to the Los Angeles City School District of Los Angeles County and it sued this plaintiff, Irving Arenson, under § 16074, Education Code, which, so far as pertinent, provides: 'Any pupil who wilfully cuts, defaces, or otherwise injures in any way any property, real or personal, belonging to a school district is liable to suspension or expulsion, and the parent or guardian shall be liable for all damages so caused by the pupil. * * *' The district alleged the boy's tort to have been wilful. Arenson was covered (as it was ultimately determined) by a comprehensive insurance policy issued by defendant herein. He demanded that the insurance company defend the action but it refused. Arenson then hired an attorney who defended the case for him on a quantum meruit basis.
The attorney immediately conceived the statute to be unconstitutional as an unreasonable and arbitrary classification of boys attending public school as distinguished from all other boys; he fought the case through on that basis. After judgment had been rendered in the municipal court for $255.16 and costs, he took an appeal to the appellate department of the Los Angeles superior court. That department reversed the judgment, saying: 'We regard the statute here involved, Education Code section 16074, as valid. But the evidence is not sufficient to show that the damage complained of was caused by any act of defendants' child. It was error to admit evidence of statements made by that child the next day after the damage occurred. He was not a defendant to the action, these statements were not a part of the res gestae, and they were inadmissible hearsay.' For some reason, which does not satisfactorily appear, 1 counsel stipulated to an amendment of the settled statement on appeal and upon that basis the school district obtained a rehearing and reargument of the case. Thereupon the appellate department affirmed the judgment saying, in part: 'As now before us the record shows facts, established by stipulation of the parties, from which the trial court could infer that injury to the school property was caused by a fire that had been started by the willful act of the defendants' son acting jointly with another pupil of the school. With such a record the error committed in receiving the hearsay statement from the police officer is without prejudice. * * * We entertain no doubt about the constitutionality of section 16074 of the Education Code.' That ended the case and fixed the date for termination of the services to be compensated through the award which is now under discussion.
Plaintiff thereupon sued defendant insurance company seeking a judgment that it was obligated to pay the municipal court judgment, plus an attorney fee of $2,000. The superior court held that the defense of the school district's claim against plaintiff was not covered by the policy. The district court of appeal affirmed 276 P.2d 140, but the Supreme Court reversed the judgment in Arenson v. Nat. Automobile & Cas. Ins. Co., 286 P.2d 816, 45 Cal.2d 81. The opinion concluded with this statement: 'Plaintiff is entitled to recover the principal amount of the judgment against him with interest together with court costs and attorneys' fees properly incurred by him in defense of the school district's claim.' 45 Cal.2d at page 84, 286 P.2d at page 819.
Upon retrail the court had before it the records of the municipal court and the appellate department of the superior court and the testimony of the attorney. He detailed his services, which were centered upon the constitutional point raised by him, and valued them at $2,152.50. As above indicated, the trial judge appraised those services at $175, which sum includes the appeal to the appellate department.
The elements properly considered in fixing a reasonable attorney fee are summarized in 6 Cal.Jur.2d § 181, p. 379: 'What constitutes a reasonable fee in a particular case depends on various factors, such as the nature of the litigation; its importance to the parties; its difficulty; the time consumed; the overhead expense of the attorney; the skill required, the skill employed, and the attention given; the attorney's standing in the profession; the success or failure of the attorney's efforts; the contingent character of any compensation due for his services; the fee agreed upon by the parties; and the attorney's age and experience in the type of work for which he claims compensation.' Of course the trial judge is not bound by the expert testimony. In Theisen v. Keough, 115 Cal.App. 353, 362, 1 P.2d 1015, 1019, it is said: 'It is too well settled to require citation that the value of attorney's services is a matter with which a judge must necessarily be familiar. When the court is informed of the nature and extent of such services, its own experience furnishes it with every element necessary to fix their value. Spencer v. Collins, 156 Cal. 298, at page 307, 104 P. 320, 20 Ann.Cas. 49.'
It is not the province of a reviewing court to reweigh the evidence except to the extent of determining whether there was an abuse of discretion in the trial judge's assessment of the value of the services in question. 'One of the most important elements that goes to the makeup of a quantum meruit award is the value of the issue litigated. * * * The judge needs only the approximate value of the land in order to estimate the effect the element of value should have in fixing a reasonable fee.' United States v. Preston, 9 Cir., 202 F.2d 740, 741. The amount for which Arenson was sued was $255.16, plus costs. So far as disclosed by this record he was interested in one thing, relief from that asserted obligation. If it had been paid without contest by the insurance company that would have been satisfactory to him. Indeed, his lawyer wrote the company warning it that large attorney fees would be incurred unless the claim was paid or settled: 'This letter is intended to put you on notice of the fact that the reasonable amount of attorneys fees incurred and to be incurred by the Arenson's in the defense of the action against them will be much greater than the total amount of the claim, in order that you may prefer to settle or satisfy the claim of the Los Angeles School District rather than to expose yourself to the additional claim which will be made against you for the services yet to be rendered to Mr. and Mrs. Arenson in said action, and the costs, fees and expenses, including attorneys fees, which will necessarily be incurred by them.' There is nothing to show or suggest that the client was interested in establishing any point of constitutional law or that the insurance company, which was supposed to carry the burden ultimately, was interested in any elaborate litigation. The point was raised and nurtured by Arenson's counsel. The fact that the expense was to be paid by the insurer afforded no justification for incurring costs or rendering services out of proportion to the amount involved in the litigation. 45 C.J.S., Insurance, § 934, p. 1062, speaking of an insurer's refusal to defend, says: 'Accordingly in such a case insured may employ an attorney to defend the suit, and should use reasonable care and diligence in conducting the defense, being under a duty to conduct it in such a manner as to make the loss as small as he reasonably can'. This language also appears in 36 C.J. § 104, p. 1113, and is quoted by the court in Aetna Life Ins. Co. v. Heiden, 184 Ark, 291, 42 S.W.2d 392, 394. Southern Ry. News Co. v. Fidelity & Casualty Co., Ky., 83 S.W. 620, 622: 'Appellant [plaintiff-insured], after having notified appellee that the liability had been incurred by reason of the injury, was bound to make the loss as small as possible, so far as it reasonably could, although appellee did not avail itself of the provision in the policy to personally conduct the defense to the suit.'
The terse comments of the appellate department of the superior court indicate how serious the judges thought the constitutional point raised by Arenson's attorney. The case was reversed in that department on the ground, among others, that the evidence was insufficient to sustain the finding of liability. The record was then changed by stipulation in such manner that it resulted in a holding that the evidence was legally sufficient and Arenson was liable. The judge at the trial below well could have viewed this as unnecessary, ill-advised and not beneficial to the attorney's client or the insurance company. Counsel testified that he had repeatedly billed his client, Arenson, for the amount now claimed, but also said he knew his financial condition and did not expect to get that amount from him. Any services which may have been rendered to the end of punishing the insurance company cannot be compensated, and it cannot be said upon this record that the trial judge was not warranted in rejecting a large part of the attorney's services upon that theory. We do not find any abuse of discretion in the fixing of the attorney fee in this case.
Appellant complains of the quashing of a subpoena duces tecum which he had caused to be served on defendant requiring it to produce its files of actions pending in the municipal court in the years 1951 to 1955, inclusive, in which it had employed counsel for or on behalf of the defendant or had itself defended, together with its records of the services rendered by counsel, the bills and statements submitted by such counsel, the ledger, cash disbursement book, or other record showing the amounts paid by defendant for the services so rendered. The court held these matters to be immaterial. The argument is that they would have thrown light upon the value of the services now under consideration. Manifestly, they would not have been admissible. The ruling is correct.
A small mistake crept into the judgment however. The court orally awarded interest at the statutory rate of seven per cent per annum, but the judgment as signed carries interest at six per cent. Appellant computes the difference to be $8.18 and the findings and judgment should be corrected accordingly.
The conclusions of law are amended by substituting the phrase, 'with interest thereon at the rate of 7% per annum, from May 14, 1953, amounting to $51.38,' for the phrase, 'with interest thereon at the rate of 6% per annum, from May 14, 1953, amounting to $43,20.' The judgment is modified by substituting the sum of $496.54 in place of $488.36.
As thus modified the judgment is affirmed.
MOORE, P. J., concurs.
FOX, Justice.
I dissent.
In my view of the record, an award of $175 to plaintiff as attorney's fee for the trial and subsequent appeal of the municipal court case places an unconscionably low value on the services of capable legal counsel. --------------- * Opinion vacated 310 P.2d 961. 1 The attorney testified, at the trial which led to the judgment now under review, with respect to the reason for the change of the record: 'Because of the fact that that would have meant a retrial of the action and there wasn't any question with respect to what the facts could or would establish. County Counsel and counsel for the defendants entered into a stipulation to amend the then record on appeal in certain respects, so that a petition for re-hearing could be filed before the Appellate Department of the Superior Court based upon the facts as they would have been developed had we gone back for a re-trial and re-corrected these errors and then presented the matter again to the Court so that we could get a decision that would be determinative of the problem from the standpoint of the actual legal liability, because either the section was not constitutional or because under the facts they could not recover and not merely have procedural errors that could be corrected. Those procedural errors were eliminated.'