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Home Builders Ass'n of Northern California, Inc. v. Sunnyslope County Water Dist.

COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
Oct 3, 2011
H035899 (Cal. Ct. App. Oct. 3, 2011)

Opinion

H035899

10-03-2011

HOME BUILDERS ASSOCIATION OF NORTHERN CALIFORNIA, INC., et al., Plaintiffs and Appellants, v. SUNNYSLOPE COUNTY WATER DISTRICT, Defendant and Appellant.


NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(San Benito County Super. Ct. No. CU-08-00139)

Plaintiffs Home Builders Association of Northern California, Inc. (Home Builders) and Award Homes, Inc. (Award) challenge the trial court's order denying their motion for attorney's fees under Code of Civil Procedure section 1021.5. They contend that the trial court improperly found that the burden of the litigation costs was not disproportionate to plaintiffs' financial interests in the litigation. We conclude that the trial court did not abuse its discretion in denying plaintiffs' attorney's fees motion.

Subsequent statutory references are to the Code of Civil Procedure unless otherwise specified.

I. Background

Until March 2007, defendant Sunnyslope County Water District (the District) had a water "connection charge" of $1,225. In March 2007, the District replaced its water "connection charge" with a water "capacity charge" that exceeded $10,000. In June 2008, the District adopted a resolution, effective in August 2008, replacing the water "connection charge" with a "Water Connection/Capacity" charge that exceeded $11,000.

In October 2008, plaintiffs filed an action against the District seeking declaratory, injunctive, and mandamus relief, and invalidation of the District's water and sewer charges. The complaint alleged that Award owned 125 acres of land within the District's jurisdiction and had obtained "development entitlements . . . contemplating the development of a total of 677 homes" on that land. It also alleged that Home Builders represented the interests of "home builders, and home buyers . . . throughout Northern California and San Benito County . . . ." Plaintiffs alleged that they "are or will be subjected to" the District's charges and would be "adversely impact[ed]" by those charges. Plaintiffs alleged that, when Award acquired its property, the District's water connection/capacity charge was $1,225 per single-family home, but the District had subsequently changed its water capacity charge to $11,583.61 per single-family home. Plaintiffs asserted the new higher charge was illegal and sought its invalidation. Plaintiffs alleged in their complaint that they were "entitled to seek an award of attorney's fees" under section 1021.5 because "successful prosecution of this action will confer a significant benefit on the general public, possibly exceeding the financial burden and benefits to plaintiffs of prosecuting this action."

Plaintiffs also sought relief against the District's sewer charges, but it did not achieve any success on that claim so it is not relevant to their section 1021.5 request.

In April 2009, the court denied the District's motion to dismiss the action and its motion for judgment on the pleadings, and the court set a trial date.

In January 2010, plaintiffs and the District "agree[d] and hereby stipulate[d] that the legal issues raised by the Complaint in this action, challenging the current Water Connection/Capacity Charges under Resolution No. 502, will be rendered 'moot' " if the District adopted its proposed new "Water Connection/Capacity" charge of $5,461 per single-family home. The stipulation provided that, if the District adopted the proposed new charge, "this action may be deemed moot and may be dismissed by plaintiff[s] . . . ." The stipulation further provided that "the parties do not waive, release or compromise any rights, claims, or defenses related to this action, and that plaintiffs reserve their rights to the extent they may have such rights or claims, to seek recovery of costs of suit and reasonable attorneys fees incurred herein." In January 2010, the District adopted the proposed new charge.

In March 2010, plaintiffs filed a motion seeking their attorney's fees under section 1021.5. They asserted that they had incurred approximately $150,000 in attorney's fees and sought an award of at least that amount. In their motion, they argued that "the cost of litigation was largely disproportionate to any Plaintiff's individual stake." "Even if plaintiff Award Homes [fn. omitted], or some of the members of plaintiff Association may have had some long-term interests in trying to assure that the District's water connection fees conform with state law, such remote interests would not disqualify the Plaintiffs from recovery of fees under § 1021.5. [Citations.] There is no evidence or claim that Plaintiffs have any other 'specific, concrete and significant' non-pecuniary disqualifying interest." Plaintiffs asserted in their points and authorities, without any reference to an evidentiary basis: "Although Award owns land in the District previously approved for residential development, Award is not presently planning to seek water connections or to pay District water fees in the foreseeable future." They claimed that "Award Homes is far from being in position to construct even one home, much less more than 600 homes. Even before the housing market tanked, Award was not planning construction in the District for many years."

The District opposed the motion on the ground that plaintiffs had failed to establish "that the financial burden of litigating was out of proportion to Plaintiffs' personal stake in this case." The District claimed that both plaintiffs, "[a]s builders and sellers of new homes, . . . had an obvious financial incentive to reduce the capacity charges imposed upon new construction." Since the difference between the original water charge and the charge that plaintiffs sought to invalidate amounted to nearly $7 million if Award built the 677 homes that it planned, plaintiffs had "an extremely large stake in litigating this case." "Plaintiffs sued to avoid $7,000,000 in charges and incurred fees of $148,000." "Because Plaintiff's personal stake in this litigation was so high ($7,000,000), the fees Plaintiffs incurred were not out of proportion to their interests." "It cannot be disputed the Plaintiffs' motivation was to advance their economic interests and any benefit to the public was simply coincidental."

The District opposed the motion on a number of other grounds, but none of them are relevant to the issue before us as the trial court's order was premised solely on this ground.

At the hearing on the motion, the District argued: "[P]rivate parties like this are not entitled to fees if . . . any benefit to the public [is] outweighed by their own interests. And here it's undisputed that they had a 7 million dollar stake in this. So that clearly outweighs any interest of the public, and any public interest is just purely coincidental."

Plaintiffs' attorney argued at the hearing on their motion that, even though Award had obtained developmental approvals, "not a spade of dirt has been turned, streets, curbs, no private infrastructure has been provided. It's a project, like many, that are now on hold. And it is unlikely that any homes will be built in the immediate future, or could be built in the immediate future." "Our houses are going to be several years down the road. The benefit we get [from this litigation] is simply that they [the District] now seem to be more sensitive to the appropriate methodology. . . . [W]e do not have the type of immediate and direct benefit [that would disqualify plaintiffs from obtaining fees]. . . . Our benefit is more speculative." Plaintiffs' attorney contended that, "when this case was filed, we had no building permits that were imminent. We had a subdivision map which has a potential life of up to 15 years, but we have no assurance that we'll be able to go forward in the imminent future to take advantage of the relief that's been achieved." He claimed that "we are probably at least two years or three years away from" building the approved homes. "We were -- you know, I don't think it's a secret. One of the things we were hoping to achieve was an agreement with the district that would try to freeze or lock in fees as to our project for a period of time, and we were unable to get that." He also argued that, although Award provided "the lion's share of . . . funding" for the litigation, "some of this litigation was funded in part by an association of builders."

Plaintiffs complain on appeal that the trial court should not have concluded that Home Builders was ineligible to recover its fees under section 1021.5 even if Award was ineligible. Since plaintiffs presented no evidence to the trial court of the amount of litigation costs that Home Builders "funded," the trial court lacked any basis for separately assessing the financial burden element as to Home Builders and therefore could not separately assess Home Builders' eligibility to recover its fees under section 1021.5.

The court denied the motion. "I believe that there's a sufficient impact, financial impact, that benefits the plaintiff[s] in this action. You indicated that you're two years away from going forward, but a lot of that is economic reality, it's a choice that you're making. . . . [B]ecause the fees have been reduced from $10,000 plus or minus to $5,000 plus or minus, there is a sufficient benefit that accrues to plaintiff in this case. If you sold the project out, somebody would take advantage or consider the cost of these assessments in determining a purchase price. If you build the project yourself, there's clearly a reduction of 50 percent . . . of your assessment fees that you have benefited from. The question is a timetable which apparently you are in control of. So for that reason alone, . . . because of the financial benefit . . . of which you take advantage, . . . I'm denying the motion."

In June 2010, the court issued a written order denying plaintiffs' attorney's fees motion. "[T]he Court finds that Plaintiffs' and Petitioners' litigation costs did not transcend their personal interest and that the burden of the litigation was not disproportionate to Plaintiffs' and Petitioners' individual stakes in the outcome. Based on this finding, the motion is denied." Plaintiffs timely filed a notice of appeal from the order denying their motion.

On August 10, 2010, the District filed a notice of cross-appeal from "Order Denying Motion to Dismiss and Order Denying Motion for Judgment on the Pleadings." On August 27, 2010, the court entered judgment pursuant to the stipulation dismissing the action as moot. On September 10, 2010, plaintiffs filed an amended notice of appeal from both the attorney's fees order and the judgment.

The District asks this court to address its cross-appeal only if we credit plaintiffs' appeal. As we do not credit plaintiffs' appeal, we need not address the District's cross-appeal.

II. Discussion

Section 1021.5 provides: "Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." (§ 1021.5.)

A. Standard of Review

The parties disagree about the applicable standard of review. Plaintiffs ask us to exercise de novo review, while the District asserts that the appropriate standard of review is abuse of discretion.

" 'On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.' " (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)

Thus, identification of the appropriate standard of review depends on the nature of the issues raised on appeal. Plaintiffs plainly do not raise any issues of statutory construction on appeal. They simply challenge the trial court's conclusion that they failed to establish the statutory requirement that "the necessity and financial burden of private enforcement . . . are such as to make the award appropriate." (§ 1021.5, subd. (b).) This statutory requirement has already been definitively construed by the California Supreme Court and the Courts of Appeal. Plaintiffs ask only that we measure the trial court's ruling against this established standard.

Plaintiffs claim that they raise a "question of law" because they contend that (1) the trial court "failed to make the required comparison of litigation cost[s] to anticipated benefits as of the time of commencement" of the action, and (2) the evidence does not support the trial court's finding that plaintiffs had anticipated pecuniary benefits since Award's prospective pecuniary benefit was neither " 'direct' " nor " 'immediate' " and Home Builders had no prospective pecuniary benefit. These contentions do not present questions of law. Plaintiffs' claim that the trial court failed to apply the requisite standard is an assertion that the court either did not exercise or abused its discretion. It is not an issue that we resolve as a matter of law, but one that requires us to apply a rule of law to the facts established by the record. Similarly, plaintiffs' claim that the trial court's findings were not supported by substantial evidence is a claim that we resolve by applying the applicable rule of law to the evidence that was before the trial court. Since plaintiffs' appellate contentions are not legal issues, the appropriate standard of review is abuse of discretion.

"The decision whether to award attorney fees pursuant to [section 1021.5] lies within the discretion of the trial court and will not be disturbed on appeal absent a prejudicial abuse of discretion resulting in a manifest miscarriage of justice." (Galante Vineyards v. Monterey Peninsula Water Management Dist. (1997) 60 Cal.App.4th 1109, 1125 (Galante).)"The abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)

B. No Abuse of Discretion

The trial court declined to award plaintiffs their attorney's fees under section 1021.5 because it concluded that they had failed to establish the financial burden element, that is, that "the necessity and financial burden of private enforcement . . . are such as to make the award appropriate." (§ 1021.5, subd. (b).) The trial court's conclusion was based on its finding that plaintiffs' "litigation costs did not transcend their personal interest and that the burden of the litigation was not disproportionate to [plaintiffs'] individual stakes . . . in the outcome."

Plaintiffs claim that the trial court's "stated reason for its ruling was not consistent with the substantive law of § 1021.5 . . . ." This argument lacks any merit. The trial court's language is almost word-for-word out of a California Supreme Court opinion, which states that the financial burden element is satisfied " 'when the cost of the claimant's legal victory transcends his personal interest, that is, when the necessity for pursuing the lawsuit placed a burden on the plaintiff "out of proportion to his individual stake in the matter." [Citation.]' " (Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 941 (Woodland Hills), italics added.) The trial court's stated reason is fully consistent with the California Supreme Court's construction of the financial burden element.

"As has been observed, the necessity and financial burden requirement ' "really examines two issues: whether private enforcement was necessary and whether the financial burden of private enforcement warrants subsidizing the successful party's attorneys." ' [Citation.] The 'necessity' of private enforcement ' " ' "looks to the adequacy of public enforcement and seeks economic equalization of representation in cases where private enforcement is necessary." ' [Citations.]" ' [Citation.] . . . [¶] The second prong of the inquiry addresses the 'financial burden of private enforcement.' In determining the financial burden on litigants, courts have quite logically focused not only on the costs of the litigation but also any offsetting financial benefits that the litigation yields or reasonably could have been expected to yield. ' "An award on the 'private attorney general' theory is appropriate when the cost of the claimant's legal victory transcends his personal interest, that is, when the necessity for pursuing the lawsuit placed a burden on the plaintiff 'out of proportion to his individual stake in the matter.' [Citation.]" ' [Citation.] 'This requirement focuses on the financial burdens and incentives involved in bringing the lawsuit.' [Citation.] [¶] . . . [¶] 'After approximating the estimated value of the case at the time the vital litigation decisions were being made, the court must then turn to the costs of the litigation—the legal fees, deposition costs, expert witness fees, etc., which may have been required to bring the case to fruition. . . . [¶] The final step is to place the estimated value of the case beside the actual cost and make the value judgment whether it is desirable to offer the bounty of a court-awarded fee in order to encourage litigation of the sort involved in this case. . . . [A] bounty will be appropriate except where the expected value of the litigant's own monetary award exceeds by a substantial margin the actual litigation costs.' " (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214-1216 (Whitley).)

Plaintiffs contend that the trial court's decision cannot be upheld because the trial court failed to compare the cost of the litigation to the value of the benefits that plaintiffs anticipated at the time they commenced the litigation. The main flaw in this assertion is that plaintiffs cannot establish on appeal that the trial court failed to engage in the requisite comparison. "The doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment. [Citation.] The doctrine is a natural and logical corollary to three fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error." (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58.)

The appellate record contains no indication that the trial court did not engage in the requisite comparison. Plaintiffs, as appellants, bear the burden of "affirmatively proving error." Here, the only evidence in the record affirmatively rebuts plaintiffs' contention. The trial court's statements at the hearing reflected that it was in fact considering the actual financial benefits that plaintiffs stood to realize as a result of the litigation. The court expressly reasoned that plaintiffs would financially benefit from a reduction in the capacity charge from over $11,000 to less than $6,000 per single-family home because plaintiffs had development entitlements to build over 600 single-family homes in the District. The trial court valued those benefits as millions of dollars in savings. The trial court's written order explicitly found that plaintiffs' "litigation costs did not transcend their personal interest and that the burden of the litigation was not disproportionate to [their] individual stakes in the outcome." (Italics added.) These statements affirmatively demonstrate that the trial court did compare plaintiffs' litigation costs to their financial stake in the litigation as required by Whitley.

The trial court's express statements on the record rebut plaintiffs' claim that the trial court never "identified or quantified the value" of their financial interest in the case.

Plaintiffs suggest that the trial court erred by considering the benefits that the litigation actually yielded rather than the benefits that the litigation could reasonably be expected to yield. They also suggest that the trial court improperly failed to discount the expected yield based on the probability of success. Whitley indicates that the trial court may consider both expected and actual yields so long as it discounts the yield based on the probability of success. (See Whitley, supra, 50 Cal.4th at p. 1220 [" ' "[W]e do not look at the plaintiff's actual recovery after trial, but instead we consider 'the estimated value of the case at the time the vital litigation decisions were being made" ' "] and Whitley, at p. 1215 [a trial court may consider "financial benefits that the litigation yields or reasonably could have been expected to yield"], italics added.) Nevertheless, even if we assume that a trial court may not consider the actual financial benefits but only the financial benefits that plaintiffs could have reasonably expected, discounted for probability of success, the record does not reflect that the trial court erred. Some of the trial court's statements at the hearing suggested that it was looking at the actual benefits, but nothing in its order indicated that it had failed to look at the expected benefits or to discount those expected benefits based on the probability of success. Since the record does not affirmatively demonstrate that the trial court failed to follow the appropriate standard, plaintiffs have failed to meet their burden of affirmatively demonstrating error. Furthermore, even assuming that the trial court made the alleged errors, they could not have made a difference. At the time of the initiation of the action, plaintiffs were faced with an increase in the water capacity charge that stood to cost them an additional $6 million if it was not invalidated. Even if their action had only a 20 percent chance of success at the outset, the discounted expected financial benefit ($1.2 million) far outweighed the burden of plaintiffs' litigation costs ($150,000). Any error by the trial court in considering the actual financial benefits or in failing to discount the expected benefits based on the probability of success was clearly harmless.

The District's water capacity charge had been increased by approximately $10,000 per single-family home. Award had development entitlements for 677 single-family homes within the District. The product of these two figures if $6,770,000.

Plaintiffs argue that there is "no evidence" to support the trial court's finding that they "would in fact reap any 'direct' or 'immediate' pecuniary benefit" from the litigation. Plaintiffs place great emphasis on the words "direct" and "immediate" and contend that any financial benefit that they stood to gain as a result of the reduction in the capacity charges was too "speculative," remote, and contingent to balance out the litigation costs that they incurred.

Plaintiffs maintain that their action was not reasonably likely to result in any quantifiable financial benefit to them because invalidation of the challenged water capacity charge did not necessarily mean that the water capacity charge would be lower. The trial court, which was aware of the entire history of this litigation, could have reasonably concluded that plaintiffs, at the outset, expected that a successful invalidation of the water capacity charges would lead to significantly lower water capacity charges.

None of the cases plaintiffs cite in support of this contention supports their claim that potential financial benefits are irrelevant to a trial court's comparison of litigation costs and financial benefits.

While it is true that "[a] pecuniary interest in the outcome of the litigation is not disqualifying[,] . . . 'the issue [before the trial court] is whether the financial burden placed on the party is out of proportion to its personal stake in the lawsuit.' " (Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1352 (Lyons).) The error in Lyons was that the trial court compared the plaintiff's personal stake to the public benefits rather than comparing the plaintiff's personal stake to the plaintiff's litigation costs, and the court failed to discount the plaintiff's financial stake based on the probability of success. (Lyons, at p. 1354.) Lyons did not hold that potential financial benefits are irrelevant to a trial court's analysis of the financial burden element.

Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311 (Press)pointed out that the financial burden element does not depend on "plaintiffs' abstract personal stake, but on the financial incentives and burdens . . . ." (Press, at p. 321, fn. 11, italics added.) The point the Press court was making was that financial interests are relevant to the financial burden element while abstract nonpecuniary interests are not. Press did not hold that potential financial benefits are not relevant to the financial burden requirement.

The court in Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106 (Beach Colony)stated that the plaintiff seeking fees "bears the burden of establishing that its litigation costs transcend its personal interest." (Beach Colony, at p. 113.) While the court noted that the "benefits [the plaintiff] obtained are immediately and directly translated into monetary terms," the court did not hold that only immediate and direct monetary benefits may be considering in analyzing the financial burden element. (Ibid.)

In Baggett v. Gates (1982) 32 Cal.3d 128 (Baggett), the plaintiffs sought and obtained the enforcement of certain procedural rights related to their employment. In a cursory analysis of what it considered a "closer question," the court found that the plaintiffs' personal stake in the outcome did not outweigh their litigation costs because "enforcement of these procedural rights may well not result in any pecuniary benefit to plaintiffs themselves." (Baggett, at p. 143, italics added.) While the prospect that the litigation in Baggett would result in the enforcement of procedural rights may have offered no financial benefit to the litigant (since the exercise of those procedural rights might lead to the same result), the prospect that plaintiffs could greatly reduce their expected financial outlays for water connections was a significant potential pecuniary benefit here.

Plaintiffs also cite Otto v. Los Angeles Unified School Dist. (2003) 106 Cal.App.4th 328 (Otto). Otto, like Baggett, was a case in which the plaintiff sought to vindicate a procedural right that did not involve pecuniary gain. (Otto, at pp. 332-333.) It is equally irrelevant to the issue before us.

In Galante, supra, 60 Cal.App.4th 1109, the trial court awarded fees to petitioners under section 1021.5, but it reduced the lodestar amount by 50 percent due to the petitioners' "'significant financial interest in the outcome of this case.' " (Galante, at p. 1126.) The defendants claimed on appeal that the basis for the trial court's reduction amounted to a finding that the petitioners had failed to establish the financial burden element. (Ibid.) This court disagreed. After first noting that the petitioners' financial interests were "speculative" and indirect, and acknowledging that it was a "close" question whether the petitioners had established the financial burden element, this court held that the trial court had not abused its discretion "by doing what the [defendant] District suggested in its opposition to petitioners' motion for attorney's fees; i.e., reducing fees to reflect the financial interest of four of the six petitioners." Any error in doing so was deemed "invited [ ] error." (Galante, at pp. 1127-1128.) Galante does not stand for any proposition at issue here. It did not hold that an indirect or even speculative financial interest could not be considered by a trial court in assessing a plaintiff's financial incentives for bringing an action.

Plaintiffs' contention that the trial court was precluded from considering their potential financial benefit finds no support in Lyons, Press, Beach Colony, Baggett, or Galante.

Plaintiffs argue that their financial interest in the litigation "alone would not necessarily preclude an award of reasonable attorneys fees." In the abstract, that is true. But of course the trial court, as it was obligated to do, compared plaintiffs' financial interest to their litigation costs and found that their financial interest in the litigation far outweighed their litigation costs. The cases plaintiffs cite in support of this argument, like the other cases they cite, are not on point.

Hogar Dulce Hogar v. Community Development Com. of City of Escondido (2007) 157 Cal.App.4th 1358 did not consider any contention regarding the financial burden element. "[I]t is axiomatic that cases are not authority for propositions not considered." (People v. Alvarez (2002) 27 Cal.4th 1161, 1176.) While the financial burden element was at issue in County of Orange v. Barratt American, Inc. (2007) 150 Cal.App.4th 420 (Barratt), the trial court had awarded fees to the plaintiff, and the Court of Appeal upheld that award because the plaintiff's litigation costs dwarfed their prospective pecuniary gain. (Barratt, at pp. 441-442.) The opposite is true here.

Plaintiffs repeatedly complain that the trial court "disregarded the facts" and based its ruling "on mere speculation, rather than evidence," but plaintiffs, who bore the burden of proving the financial burden element, submitted no evidence whatsoever on this issue. Relying on RiverWatch v. County of San Diego Dept. of Environmental Health (2009) 175 Cal.App.4th 768 (RiverWatch), plaintiffs contend that the District bore the burden of demonstrating that plaintiffs had not established the financial burden element. They claim that they were "not required to 'prove a negative' . . . ." RiverWatch provides no support for this contention. In RiverWatch, the trial court awarded fees to two successful parties in an action under California's Environmental Quality Act (CEQA). On appeal, the defendants claimed that the trial court had abused its discretion in finding that one of the successful parties had established the financial burden element. The Court of Appeal explicitly stated: "The party seeking attorney fees bears the burden of establishing that its litigation costs transcend its personal interests." (RiverWatch, at p. 777.) The plaintiff in question had produced evidence, which the trial court explicitly credited, establishing that it had no financial incentive to bring the action. (Ibid.)It was in this context that the Court of Appeal said that "the burden shifted" to the defendants "to offer admissible evidence to rebut [the plaintiff's] claim of no financial interest." (RiverWatch, at p. 778.) RiverWatch has no application here. Plaintiffs presented no evidence whatsoever to support their claim that they had satisfied the financial burden element, and the trial court explicitly found that they had a substantial financial incentive to initiate the action. The trial court could properly base its finding regarding their financial interest on plaintiffs' admissions in their complaint, which demonstrated their financial interest in the case.

In support of this proposition, they cite Neary v. Regents of University of California (1992) 3 Cal.4th 273 (Neary), which they claim held, on page 282, "not require party to 'prove a negative.' " Neary said no such thing. What Neary actually said, in a discussion of the propriety of a stipulated reversal on page 284, was: "Trying to prove a negative, i.e, that there is no reason why the reversal should not be granted, is, of course, difficult." (Neary, at p. 284.) Again, plaintiffs have cited a case for a proposition to which it has no relation.

The trial court did not abuse its discretion in finding that plaintiffs had failed to satisfy their burden of establishing the financial burden element of section 1021.5 and therefore were ineligible to recover their attorney's fees.

Plaintiffs also claim that the trial court abused its discretion by failing to "consider" a "reduced or 'partial' award of fees." Section 1021.5 contains no express provision for a partial award of fees to a litigant where the litigation costs are not disproportionate to the litigant's financial interest. In Woodland Hills, supra, 23 Cal.3d 917, the California Supreme Court suggested that the trial court on remand in that case could properly conclude that "plaintiff's potential financial gain in this case is such as to warrant placing upon them a portion of the attorney fee burden, . . . [and] shift[ing] only an appropriate portion of the fees to the losing party or parties." (Woodland Hills, at p. 942, italics added.) As with so many of plaintiffs' assertions, this one fails because they cannot establish on this record that the trial court failed to consider a partial award. Instead, we must infer from the trial court's order that it considered and, exercising its discretion, rejected a partial award. Plaintiffs make no substantive argument that the trial court's decision to reject a partial award was an abuse of discretion, and we can see no basis for such an argument.

III. Disposition

The trial court's judgment is affirmed. The District shall recover its appellate costs.

Mihara, J. WE CONCUR: Elia, Acting P. J. Grover, J.

Judge of the Superior Court of Monterey County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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Summaries of

Home Builders Ass'n of Northern California, Inc. v. Sunnyslope County Water Dist.

COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
Oct 3, 2011
H035899 (Cal. Ct. App. Oct. 3, 2011)
Case details for

Home Builders Ass'n of Northern California, Inc. v. Sunnyslope County Water Dist.

Case Details

Full title:HOME BUILDERS ASSOCIATION OF NORTHERN CALIFORNIA, INC., et al., Plaintiffs…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT

Date published: Oct 3, 2011

Citations

H035899 (Cal. Ct. App. Oct. 3, 2011)