Fuchs & Associates
v. Lesso

 

 

 

 

 

 

 

Filed 5/29/13 
Fuchs & Associates v. Lesso CA2/2

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>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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
TWO

 
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FUCHS & ASSOCIATES, INC.,                           Plaintiff and Appellant,               v.   ELKE LESSO,                           Defendant and Respondent.

B241384         (Los Angeles County       Super. Ct. No. BC441602)

 

 

 

            APPEAL
from an order of the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County.  John Segal,
Judge.  Affirmed.

 

            Fuchs
& Associates, Inc., John R. Fuchs and Gail S. Gilfillan for Plaintiff and
Appellant.

 

            Law
Office of Thomas H. Edwards and Thomas H. Edwards for Defendant and Respondent.

 

 

 

 

            Plaintiff
and appellant Fuchs & Associates, Inc. (Fuchs) appeals from an order
awarding $21,125 in attorney fees to defendant and respondent Elke Lesso
(Lesso) as the prevailing party in a dispute concerning unpaid legal fees.  Judgment was entered in Lesso’s favor
following an arbitration proceeding
initiated by Fuchs in which the arbitrator concluded that Fuchs was not
entitled to any fees, costs, or damages.href="#_ftn1" name="_ftnref1" title="">^[1]  We affirm the trial court’s order.

>BACKGROUND

            Lesso
retained Fuchs as her attorneys in a marital
dissolution action against Piotrek Andrzejewski and in various related
lawsuits.  Lesso and Fuchs executed two
identical retainer agreements that provided for binding arbitration of “[a]ny
controversy between the parties regarding the construction, application or
performance of any services under this Agreement” and that required the parties
to bear their own legal fees and costs in connection with any such arbitration
“[e]xcept as otherwise provided herein, the parties shall bear their own legal
fees and costs for any such arbitration.”

            The
retainer agreements between Lesso and
Fuchs also contained the following attorney fees provision:

“ATTORNEYS’ FEE CLAUSE.  The prevailing party in any action or
proceeding arising out of or to enforce any provision of this Fee Agreement,
with the exception of a fee arbitration or mediation under Business &
Professions Code Sections 6200-6206, will be awarded reasonable attorneys’ fees
and costs incurred in that action or proceeding, or in the enforcement of any
judgment or award rendered.”

 

            A
dispute arose between the parties regarding unpaid fees purportedly owed by
Lesso to Fuchs.  Lesso fired Fuchs, and
Fuchs recorded a lien against certain real property owned by Lesso in the city
of Glendale.  Fuchs then sued Lesso, seeking damages in
excess of $647,688 for breach of contract
and other causes of action.  The matter
was submitted to binding arbitration in accordance with the parties’ retainer
agreements.  After a two-day arbitration,
the arbitrator issued a written decision in which he concluded, that “Fuchs
shall recover no additional attorney fees, costs or damages,” “[t]he lien
recorded by Fuchs is invalid and should be expunged,” and “Fuchs need not
refund any of the $480,998.68 previously paid [by Lesso].”  (Fuchs
I, supra, at p. 5.)

            Fuchs
filed a petition to vacate or correct the arbitrator’s award, and Lesso filed a
petition to confirm the award.  The
superior court entered an order denying Fuchs’s petition and granting Lesso’s
and then entered judgment in favor of Lesso based on the confirmation of the
arbitration award.  Fuchs appealed the
judgment, which we affirmed.  (>Fuchs I, supra, at p. 13.)

            Fuchs
then filed a motion to vacate the judgment, and Lesso filed a motion to recover
her attorney fees as the prevailing party in the arbitration and in Fuchs’s
action for unpaid fees.  In her motion,
Lesso sought to recover attorney fees she incurred in connection with the
arbitration, confirmation of the arbitration award, opposing Fuchs’s motion to
vacate the arbitration award, and opposing Fuchs’s motion to vacate the
judgment.  The trial court denied Fuchs’s
motion to vacate the judgment and granted in part Lesso’s motion for attorney
fees.  The trial court denied Lesso’s
request for attorney fees incurred in the arbitration proceeding in its entirety,
noting that the parties’ written agreements required each of them to bear their
own attorney fees and costs in connection with the arbitration.  The court granted in part Lesso’s request for
her postarbitration attorney fees at the requested hourly rate of $325, after
reducing the number of hours requested for postarbitration work from 98.5 hours
to 65 hours, for a total award of $21,125. 
That amount, the court stated, “includes reasonable attorneys’ [fees] incurred
in petitioning the court for confirmation of the arbitration award, opposing
plaintiff’s motion to vacate the award, and moving in this motion for
attorneys’ fees, but not for moving to vacate the judgment.”

            This
appeal followed.

DISCUSSION

>I. 
Applicable law and standard of review

            Code of Civil Procedure section 1032
accords the prevailing party in litigation the right to recover costs.  It provides that “[e]xcept as otherwise
expressly provided by statute, a prevailing party is entitled as a matter of
right to recover costs in any action or proceeding.”  (Code Civ. Proc., § 1032, subd. (b).)  The recoverable costs may include attorney
fees incurred by the prevailing party if an agreement between the parties provides
for the recovery of such fees, or a statute creates a right of recovery.  (Code Civ. Proc., § 1021; >Stephens v. Coldwell Banker Commercial
Group, Inc. (1988) 199 Cal.App.3d 1394, 1405, disapproved on another ground
in White v. Ultramar, Inc. (1999) 21
Cal.4th 563, 574, fn. 4.)  When
authorized by contract, Civil Code section 1717 requires a court to award
reasonable attorney fees as an element of costs to the prevailing party in an
action on the contract.  (Civ. Code,
§ 1717, subd. (a).)

            We
review de novo the trial court’s determination of the legal basis for an award
of attorney fees.  (Butler-Rupp v. Lourdeaux (2007) 154 Cal.App.4th 918, 923.)  The trial court’s determination of what
constitutes reasonable attorney fees for purposes of such an award is reviewed
under the abuse of discretion standard. 
(PLCM Group, Inc. v. Drexler (2000)
22 Cal.4th 1084, 1096.)

II.  Timeliness and propriety of
cost motion

            Fuchs
contends Lesso’s motion for attorney fees and costs was untimely and improper
because that request should have been presented to the arbitrator rather than
the trial court.  Fuchs bases this
argument on the order appointing the arbitrator and sending the matter to
binding arbitration, in which the trial court stated:  “All issues regarding the fees for
arbitration are to be presented to and decided [by] Judge Hilberman.”  The order sending the matter to arbitration
did not preclude Lesso from seeking her postarbitration costs, including
attorney fees, in a motion presented to the trial court, nor did it preclude
the trial court from awarding such costs. 
The parties’ retainer agreements expressly contemplate such a fee
award:  “The prevailing party in any
action or proceeding arising out of or to enforce any provision of this Fee
Agreement, with the exception of a fee arbitration or mediation under Business
and Professions Code Sections 6200-6206, will be awarded reasonable attorneys’
fees and costs incurred in that action or proceeding, or in the enforcement of
any judgment or award rendered.”  Lesso’s
cost motion, presented to the trial court after the arbitration proceedings had
concluded, was neither untimely nor improper. 
The trial court’s award, which excluded fees Lesso incurred in the
arbitration and included only the fees incurred in petitioning for confirmation
of the arbitration award, opposing Fuchs’s motion to vacate the arbitration
award, and moving for attorney fees, was authorized by the parties’ written
agreements and by Civil Code section 1717.

            Fuchs
next contends Lesso’s request for attorney fees was improper because it should
have been made in a memorandum of costs rather than a noticed motion.  The applicable statutes and rules expressly
state that a party requesting attorney fees based on a contract must do so in a
noticed motion.  Civil Code section 1717,
subdivision (b)(1) provides:  “The court,
upon notice and motion by a party, shall determine who is the party prevailing
on the contract for purposes of this section.” 
The California Rules of Court governs claims for attorney fees based on
a contract and sets the timeframe for filing a motion to recover such
fees:  “A notice of motion to claim
attorney’s fees for services up to and including the rendition of judgment in
the trial court -- including attorney’s fees on an appeal before the rendition
of judgment in the trial court -- must be served and filed within the time for
filing a notice of appeal under rules
8.104 and 8.108 in an unlimited civil case or under rules 8.822 and 8.823 in a
limited civil case.”  (Cal. Rules of
Court, rule 3.1702(b).)  Lesso’s motion
for attorney fees was neither procedurally improper nor untimely.

III.  Lesso as the prevailing
party

            Civil Code section
1717, subdivision (b)(1) provides that “the party prevailing on the contract
shall be the party who recovered a greater relief in the action on the
contract.”  The trial court has broad
discretion in determining which party has prevailed on a contract, and an
appellate court will not disturb that determination absent a clear abuse of
discretion.  (Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 439.)

            Fuchs
contends Lesso was not the prevailing party in the arbitration because the
arbitrator concluded that Fuchs need not refund any of the $480,998.68 in fees
previously paid by Lesso.  (>Fuchs I, supra, at p. 5.)  The arbitrator further concluded, however,
that Fuchs, who initiated the arbitration seeking to recover more than $647,000
in damages, including punitive damages, and who sought to enforce a lien
against Lesso in that amount, was entitled to no recovery whatsoever, and that
the lien recorded by Fuchs against property owned by Lesso was invalid and
should be expunged.  (>Ibid.) 
Fuchs fails to establish any abuse of discretion by the trial court in
finding that Lesso was the prevailing party for purposes of the attorney fee
award.

IV.  Amount of award

            Fuchs
challenges the amount of fees awarded as excessive, contending the court erred
in basing its award on an hourly rate of $350, when Lesso’s fee agreement with
her attorney, Thomas H. Edwards, provided that his hourly rate was $200.  The trial court’s determination of reasonable
attorney fees under Civil Code section 1717 is based on prevailing market rates
and is not limited to the amount that the client is actually obligated to pay
the attorney.  “‘The reasonable market
value of the attorney’s services is the measure of a reasonable hourly
rate.  [Citations.]  This standard applies regardless of whether
the attorneys claiming fees charge nothing for their services, charge at
below-market or discounted rates, represent the client on a straight contingent
fee basis, or are in-house counsel. 
[Citations.]’  [Citation.]”  (Chacon
v. Litke (2010) 181 Cal.App.4th 1234, 1260.)  The trial court did not abuse its discretion
by awarding $350 as a reasonable hourly rate for Lesso’s attorney.

DISPOSITION

            The order awarding Lesso her
attorney fees and costs is affirmed. 
Lesso is awarded her costs on appeal.

            NOT TO BE PUBLISHED IN THE
OFFICIAL REPORTS.

 

 

                                                                                    ___________________________,
J.

                                                                                    CHAVEZ

 

We concur:

 

 

 

_____________________________, Acting P. J.

ASHMANN-GERST

 

 

 

_____________________________, J.*

FERNS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

______________________________________________________________________

* Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California Constitution.