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Maldonado v. Fresh

California Court of Appeals, Third District, Yolo
Oct 9, 2009
No. C055954 (Cal. Ct. App. Oct. 9, 2009)

Opinion


ARACELI MALDONADO, Plaintiff and Respondent, v. CLUB FRESH, Defendant and Appellant. C055954 California Court of Appeal, Third District, Yolo, October 9, 2009

NOT TO BE PUBLISHED

Super. Ct. No. CV05354

RAYE , J.

Plaintiff Araceli Maldonado worked in a production line cutting fresh fruit and vegetables for defendant Club Fresh, LLC, a wholesaler of precut, fresh produce to supermarkets. While working, Maldonado suffered injuries after she slipped on a melon peel. Club Fresh accommodated Maldonado’s disability for a period of time, but ultimately told her the company was unable to provide work for her. Maldonado filed suit against Club Fresh alleging failure to accommodate and wrongful termination. A jury awarded Maldonado $16,536.

Maldonado moved for an award of attorney fees. The trial court awarded Maldonado $189,503.40 in fees. Club Fresh appeals, contending the court abused its discretion in awarding fees, the court erred in determining the lodestar figure, and the court erred in its selection and application of a 1.5 multiplier. We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The Underlying Suit and Trial

Maldonado began working for Club Fresh as a production line worker in 1999. Club Fresh sells trays and buckets of precut fruits and vegetables to supermarkets. Maldonado worked anywhere from 12 to 18 hours a day cutting produce. In 2002, while at work, she slipped on a melon peel and fell, injuring her knee and wrist.

The day after the accident, Maldonado saw a physician, who notified Club Fresh that Maldonado could no longer do repetitive bending or stooping, pushing or pulling, and had to limit the use of her right hand because of her injuries. Maldonado continued to see the physician on a weekly, then monthly, basis. Maldonado received disability certificates stating that her work restrictions included limited activity with her right hand.

For a year following her accident, Maldonado’s supervisors told her to return to her regular job and to ignore the pain and keep working. She repeatedly asked her supervisor about a different position to accommodate her injury, but the supervisor told her there was no limited work. Maldonado continued to cut and peel, although this necessitated wearing a splint and taking pain medication.

In March 2003 Club Fresh transferred Maldonado to another job that complied with her physician’s restrictions. Maldonado attached labels to the lids of produce containers. She was able to perform this job without any accommodation.

In December 2003, nearly nine months after her assignment to the labeling position, Club Fresh’s process control manager in the labeling department informed Maldonado “she needed a doctor’s disability certificate, and she couldn’t work.” At trial, there was conflicting evidence concerning what exactly transpired. Maldonado contends Club Fresh effectively fired her by telling her, “There is no more work here.” Maldonado does not speak English and argues none of the other people present spoke Spanish. Club Fresh contends there was conflicting testimony about whether Maldonado had a translator present during the conversation.

Maldonado filed a complaint alleging failure to accommodate and wrongful termination. Club Fresh filed a motion for summary judgment, which the trial court denied. Maldonado dismissed her wrongful termination cause of action prior to trial.

Following a five-day trial, a jury awarded Maldonado $16,536. The jury returned a special verdict finding that Club Fresh, knowing of Maldonado’s limited ability to work, withdrew a previously extended reasonable accommodation. The jury awarded Maldonado $16,536 in past economic damages, but no past or future noneconomic damages.

Motion for Attorney Fees

Maldonado filed a motion for attorney fees under Government Code section 12965, subdivision (b). In support of the motion, Maldonado filed declarations by lead trial counsel and a certified public accountant (CPA), and a memorandum of points and authorities.

Lead counsel, David Rancaño, stated his firm spent over 500 hours on the case and anticipated spending 10 more hours on associated motions. Rancaño attached a detailed billing statement.

Rancaño also described his general legal experience and his specific practice in litigating disability discrimination cases. Based on his knowledge and experience, Rancaño testified as to reasonable hourly rates: “Market rates for my firm’s claimed hourly billing are as follows: myself—$375; associate attorney Hada Fernandez—$235; senior paralegal Ken Van Arsdel—$210; legal assistants Alma Montalbo and Sandra Herrera—$175.”

Rancaño stated Maldonado’s case took two years to prosecute. The legal fees covered discovery, including depositions; opposing the summary judgment motion; and a five-day jury trial. Rancaño testified in his declaration as to several factors affecting the billing rate for the Maldonado case.

According to Rancaño, Maldonado retained his firm on a wholly contingent fee basis with the understanding that counsel would be compensated by a lodestar and enhancement multiplier usually awarded in employment rights cases. Maldonado’s financial situation necessitated the firm’s advancing statutory costs and expenses. In addition, Rancaño described the “small amount of damages relative to the effort and expense of prosecuting the case”; the case venue 100 miles from the firm’s office; a vigorous defense from Club Fresh’s counsel; and prosecution in Yolo County, “where jurors are generally reputed to be more conservative in terms of verdicts” than in surrounding counties.

Rancaño also outlined the complexity of legal issues in the case. These issues included whether the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.) statute of limitations was tolled by a continuing course of conduct, what constitutes reasonable accommodation for Maldonado’s disability and whether reasonable accommodation had been made, Club Fresh’s available defenses to compensatory or punitive damages, the question of whether Club Fresh placed Maldonado on leave or terminated her, and the availability of a new trial to address the jury’s failure to award past or future noneconomic damages.

The CPA, after setting forth his accounting experience, stated Rancaño’s rates for attorney and legal services fell “within the range of the ‘market rates’” in the Pacific region. The CPA based his opinion on two publications: Altman & Weil, Inc., The Small Law Firm Economic Survey (2006), and International Paralegal Management Association and Altman Weil, Inc., Annual Compensation Survey for Paralegals/Legal Assistants and Managers (2006).

The memorandum of points and authorities in support of the motion for attorney fees requested a $171,981 lodestar and 2.0 multiplier. Maldonado also requested that the fee award not be limited by the $16,536 verdict.

Club Fresh opposed the motion, arguing Maldonado’s minimal success on the merits justified a denial of any fees whatsoever. In the alternative, Club Fresh urged the court to deny a fee enhancement, and to substantially reduce the lodestar in light of the high hourly rates charged by Maldonado’s counsel, the inclusion of clerical time in the fee claim, and Maldonado’s limited success at trial. Club Fresh also argued Maldonado had not proved hourly rates for similar services in Yolo or San Joaquin County or the rates that counsel “actually bills clients.”

The trial court awarded Maldonado $189,503.40 in fees. This amount reflected lodestar deductions for clerical tasks (23.4 hours), duplicative entries (.10 hours), and excessive travel time (13.5 hours). The court reduced the resulting fees another 20 percent, finding that Maldonado prevailed on only one of her causes of action. The court found the other claim, for wrongful discharge, involved some facts that were different from those supporting the cause of action on which she prevailed.

The court applied a 1.5 multiplier to the resulting lodestar. The court stated the 1.5 multiplier was “reasonable.”

The judgment awarded $16,536 for the verdict, $189,503.40 in attorney fees, and $14,520.37 for costs, for a total award of $220,559.77. Club Fresh appealed from the order awarding attorney fees.

DISCUSSION

I

The parties agree that an award of attorney fees under FEHA lies within the discretion of the trial court. (Villanueva v. City of Colton (2008) 160 Cal.App.4th 1188, 1200.) The trial court possesses broad authority to determine the reasonable amount of attorney fees. Our Supreme Court has noted that an experienced trial judge is the best judge of the value of the professional services rendered in his or her courtroom. While the trial court’s judgment is subject to review, we will not disturb the court’s determination unless we are convinced it is wrong and that the court has abused its discretion. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 (PLCM).) “Accordingly, there is no question our review must be highly deferential to the views of the trial court.” (Nichols v. City of Taft (2007) 155 Cal.App.4th 1233, 1239 (Nichols).)

In assessing an attorney fee award, we resolve conflicts in the evidence in favor of the prevailing party, and the trial court’s resolution of any factual issue is conclusive. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1322.) However, the trial court’s exercise of its discretion must be based upon proper utilization of the lodestar adjustment method, both to determine the lodestar figure and to analyze the factors that might justify application of a multiplier. (Nichols, supra, 155 Cal.App.4th at pp. 1239-1240.)

II

Club Fresh contends the court erred in determining the lodestar because Maldonado presented no evidence that the rates the court used were consistent with rates prevailing in the community. According to Club Fresh, Maldonado’s counsel merely testified as to his market rates, failing to show those rates were consistent with rates charged for similar services by attorneys of like skill and experience in Yolo County.

Government Code section 12965, subdivision (b) authorizes the court to award reasonable attorney fees to the party prevailing in a FEHA lawsuit. (Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 647.) To establish a reasonable fee, the court multiplies the number of hours reasonably expended by a reasonable hourly rate to compute what is called the lodestar, or touchstone. (Nichols, supra, 155 Cal.App.4th at p. 1240; Davis v. City of San Diego (2003) 106 Cal.App.4th 893, 903 (Davis).)

“The reasonable hourly rate is that prevailing in the community for similar work.” (PLCM, supra, 22 Cal.4th at p. 1095.) The “court’s use of reasonable rates in the local community, as an integral part of the initial lodestar equation, is one of the means of providing some objectivity to the process of determining reasonable attorney fees. Such objectivity is ‘“‘vital to the prestige of the bar and the courts.’”’” (Nichols, supra, 155 Cal.App.4th at p. 1243, quoting Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (Ketchum).)

Here, counsel submitted a declaration setting forth the market rates for the firm’s hourly billing. Club Fresh contends this is not a sufficient basis for the trial court to determine reasonable fees. We disagree.

A declaration of plaintiff’s counsel is sufficient evidence of the market rates charged in the legal community. (Davis, supra,106 Cal.App.4th at pp. 902-903; MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 13.) In Davis, the trial court awarded the plaintiff police officers association attorney fees under Code of Civil Procedure section 1021.5. The defendant city appealed, contending the trial court abused its discretion in not requiring the association to present evidence beyond its counsel’s declaration sufficient to show its requested rates were in line with those prevailing in the community for similar services by lawyers of comparable skill and experience. (Davis, at pp. 902-903.)

The appellate court rejected the city’s contention, noting the association submitted evidence that its counsel had ample experience in similar cases, was one of the few attorneys with the applicable practice, and the rates quoted had been determined to be reasonable in other matters. (Davis, supra, 106 Cal.App.4th at p. 904.) Alternatively, the city “presented no evidence to the contrary.” (Ibid.) Therefore, the court upheld the award as reasonable. (Ibid.)

A contrary result was reached in Nichols. There, the plaintiff recovered attorney fees based on legal services obtained from a large city law firm that charged more than local attorneys. The appellate court reversed. However, in Nichols, both sides submitted declarations as to the appropriate fee rates to be charged. The plaintiff’s counsel submitted a declaration setting forth the services his firm provided, the firm’s experience, and the hourly rates of the attorneys involved. (Nichols, supra, 155 Cal.App.4th at p. 1237.) In opposition to the motion, the defendant presented declarations showing that the prevailing hourly rates for services in the local community were far less than those charged by the plaintiff’s counsel. (Id. at pp. 1237-1238.) The defendant also pointed out the plaintiff failed to establish that local attorneys were unavailable. (Id. at p. 1238.)

Here, Club Fresh offered no evidence of hourly rates charged in the local community in opposing Maldonado’s attorney fees motion. Instead, Club Fresh merely presented the generic argument that Maldonado had not proved hourly rates for similar services in Yolo or San Joaquin County.

The facts in the present case are similar to those in Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140 (Graciano). In Graciano, the plaintiff consumer sued the defendant auto dealership and recovered attorney fees. The consumer submitted a declaration from counsel stating the firm’s rates were well within the range charged by other plaintiffs’ counsel in similar litigation. The court sought supplemental briefing on the question of whether it could consider prevailing rates from outside the area. In supplemental briefing, the consumer presented declarations from local attorneys that the requested fees were reasonable for the area. The dealership did not challenge the evidence, but simply asserted that counsel’s rate should be based on Imperial County standards. These standards included a local rule setting an hourly rate for attorney expert testimony, a rate the trial court utilized in setting the fee rates. (Id. at p. 154.)

The trial court based its award on the county standards and the appellate court reversed. The appellate court noted the sole evidence before the court demonstrated the consumer’s counsel requested fee rates that were reasonable for similar cases in the area, and the dealership did not challenge that evidence. (Graciano, supra, 144 Cal.App.4th at p. 155.) The appellate court concluded the consumer’s “unrebutted declarations established the prevailing rates in the region for attorneys with comparable skills and expertise, and her evidence compelled a finding that the requested hourly rates were within the reasonable rates for purposes of setting the base lodestar amount.” (Id. at p. 156.)

Here, Rancaño and the CPA provided declarations establishing the market rates for the legal services necessary to litigate Maldonado’s claims. The CPA based his evaluation of the rates on a small law firm economic survey. Club Fresh failed to provide any contradictory evidence showing those rates to be unreasonable. Nor did Club Fresh offer any evidence, other than mere argument, that the rates quoted by Maldonado’s counsel differed from reasonable attorney fees charged in Yolo County, where the litigation took place. Accordingly, the trial court did not abuse its discretion in setting the rate.

III

Club Fresh contends the trial court improperly included substantial clerical services in the lodestar and in the final fee award. According to Club Fresh, legal assistant Montalbo and paralegal Van Arsdel performed strictly clerical tasks, which should not have been included in the award.

Clerical services that are essential to legal representation and ordinarily billed in the legal marketplace may be included in a fee award. (Salton Bay Marina, Inc. v. Imperial Irrigation Dist. (1985) 172 Cal.App.3d 914, 951.) However, clerical and other overhead expenses are ordinarily included in an attorney’s hourly rates and are not separately recoverable unless they represent expenses ordinarily billed to a client. (City of Oakland v. McCullough (1996) 46 Cal.App.4th 1, 7.)

In opposing Maldonado’s attorney fees motion, Club Fresh objected to the inclusion of fees for clerical work in the amount of at least $4,220.50. The trial court reviewed these challenges and deleted from the award “23.4 hours spent on clerical tasks.” Club Fresh finds this reduction insufficient, claiming another 35.8 hours should be cut from the lodestar.

In support of its contention, Club Fresh references the billings from Montalbo and Van Arsdel. According to Club Fresh, Montalbo’s billings reveal “strictly clerical” services such as “filing and indexing; mailing and faxing documents; preparing check photocopying; scheduling and coordinating meetings and a deposition; calendaring; and preparing and mailing proofs of service.” Van Arsdel’s billings reveal “purely clerical tasks” such as drafting proofs of service; telephone conferences with Maldonado about her deposition, scheduling deposition preparation, and confirming the need for an interpreter; sending documents to Maldonado; and checking for Maldonado’s correct telephone number and address.

As noted, the trial court considered Club Fresh’s contention concerning improperly included clerical services, reviewed the billing statements, and reduced the award. Despite Club Fresh’s attempts to characterize all the disputed billing entries as “clerical” and not “legal,” we are not persuaded that the trial court abused its discretion in disallowing only a portion of the disputed entries. Many of the entries Club Fresh objects to are clearly connected to the Maldonado litigation, and Club Fresh has not established that these services are not among those ordinarily billed to a client. The court did not abuse its discretion in reducing the award to exclude clerical services.

IV

Club Fresh asserts the court erred in failing to analyze and articulate the factors justifying its selection of a 1.5 multiplier. According to Club Fresh, the low amount of Maldonado’s recovery justified a negative multiplier. In addition, Club Fresh argues the same multiplier cannot be applied to both the time spent litigating the merits of Maldonado’s claims and the time spent on the fee motion.

“[T]he awarding of attorney fees and the calculation of attorney fee enhancements are highly fact-specific matters best left to the discretion of the trial court.” (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 581.) The trial court’s determination to apply a multiplier to increase an attorney fees award is discretionary. (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1399 (Bernardi).)

Here, the trial court issued a tentative ruling explaining the factors it used to determine specific deductions and to decrease the lodestar figure by 20 percent. The court concluded: “The court applied a reasonable multiplier of 1.5 to the lodestar amount.” Club Fresh did not request clarification of the tentative ruling, nor did it object to the tentative ruling, which became the court’s final order.

However, on appeal, Club Fresh contends the trial court erred in failing to articulate its reasons for its selection of a 1.5 multiplier. The trial court is not required to issue a statement of decision with regard to a fee award. When a party opposing an attorney fees motion fails to request a statement of decision with specific findings, all intendments and presumptions are indulged to support the judgment on matters as to which the record is silent. The party must affirmatively show error on the part of the trial court. (Ketchum, supra, 24 Cal.4th at pp. 1140-1141.) We uphold the trial court’s judgment if supported by substantial evidence. (Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 233.)

The court’s choice of a multiplier is supported by the declaration of Maldonado’s counsel. Maldonado requested a 2.0 multiplier based on several factors, including the contingent nature of the case and the public policy importance of the litigation.

An enhancement to the lodestar amount to reflect the contingency risk is one of the most common fee enhancers. A contingent fee contract, since it involves a gamble on the result, may properly provide for greater compensation than would otherwise be reasonable. (Bernardi, supra, 167 Cal.App.4th at p. 1399; Ketchum, supra, 24 Cal.4th at p. 1132.) The multiplier creates a financial incentive to undertake risky litigation that would otherwise be lacking if payment were limited to the attorney’s usual hourly rate.

Club Fresh argues that the fact that fees are contingent does not compel enhancing the lodestar. We agree, but the contingent nature of Maldonado’s representation provides a sufficient basis for the trial court’s multiplier. Maldonado’s counsel set forth the professional and financial risks faced by his firm in taking on Maldonado’s case. This risk included the possibility of a small amount of damages recovered at trial as compared to the effort and expense of prosecuting the action.

Club Fresh also disputes that Maldonado’s claims reflected any issues of public importance. However, the trial court had before it Maldonado’s counsel’s declaration that the case raised novel and difficult issues in disability law, and served to deter employers who would deny legally required accommodations to disabled workers.

In setting fees, trial courts must consider the need to encourage private attorneys to litigate actions required to vindicate important social rights. (Lealao v. Beneficial California Inc. (2000) 82 Cal.App.4th 19, 33; Ketchum, supra, 24 Cal.4th at p. 1132.) Maldonado’s counsel attested to this factor in representing her, and the court properly considered his declaration in support of the multiplier.

Club Fresh argues the court abused its discretion in awarding the same multiplier to the time spent litigating the merits and the time spent on the attorney fees motion. It contends the fee time should have either not been enhanced, or enhanced at a lower multiplier. However, Club Fresh failed to object to the multiplier in the trial court; we uphold the multiplier if supported by substantial evidence.

Finally, Club Fresh makes much of Maldonado’s relatively small recovery and implies, by its selective recall of the evidence, that a larger recovery could not have been expected. While we acknowledge this visceral reaction to an attorney fee award that greatly exceeds the monetary recovery, California does not impose a rule of proportionality on fee awards and has rejected federal rules that limit fee enhancements generally and exclude consideration of the contingent nature of payment. (See Ketchum, supra, 24 Cal.4th at pp. 1136-1137.) We thus reject Club Fresh’s invitation to apply Hensley v. Eckerhart (1983) 461 U.S. 424 [76 L.Ed.2d 40], Beaty v. BET Holdings, Inc. (2000) 222 F.3d 607, and Harman v. City and County of San Francisco (2006) 136 Cal.App.4th 1279, involving the application of federal law. Accordingly, the question remains whether the trial court abused its discretion in applying the established factors for determining whether the lodestar should be enhanced by a multiplier. And on that question, the rule is that “‘[t]he “experienced trial judge is the best judge of the value of professional services rendered in his [or her] court, and while his [or her] judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.” [Citations.]’ [Citation.]” (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1176.) We are not persuaded the trial court abused its discretion.

IV

Maldonado requests attorney fees for time spent defending this appeal. Club Fresh offers no response to this request. In FEHA cases, a prevailing plaintiff is entitled to attorney fees for the time spent defending the underlying award. (Vo v. Las Virgenes Municipal Water Dist. (2000) 79 Cal.App.4th 440, 448; Gov. Code, § 12965, subd. (b).) “There is no reason to require plaintiff to pay the fees out of his recovery. The public policy provided in the antidiscrimination statutes is to encourage suits which protect or bring about benefits to a broad group of citizens.” (Stephens v. Coldwell Banker Commercial Group, Inc. (1988) 199 Cal.App.3d 1394, 1406.)

This appeal concerns the propriety of the fees awarded to Maldonado’s counsel, not the underlying merits of her claim. The fees from this appeal do not address Maldonado’s claims and will not penalize Maldonado, the rationale for allowing such fees. Therefore, we deny Maldonado’s request for attorney fees on appeal.

DISPOSITION

The judgment is affirmed. Maldonado shall recover costs on appeal.

We concur: SCOTLAND , P. J., BLEASE , J.


Summaries of

Maldonado v. Fresh

California Court of Appeals, Third District, Yolo
Oct 9, 2009
No. C055954 (Cal. Ct. App. Oct. 9, 2009)
Case details for

Maldonado v. Fresh

Case Details

Full title:ARACELI MALDONADO, Plaintiff and Respondent, v. CLUB FRESH, Defendant and…

Court:California Court of Appeals, Third District, Yolo

Date published: Oct 9, 2009

Citations

No. C055954 (Cal. Ct. App. Oct. 9, 2009)