Filed 9/23/26 Siry Investments v. Farkhondehpour CA2/2
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
SIRY INVESTMENTS, L.P., B340681
(Los Angeles County
Plaintiff and Respondent, Super. Ct.
No. BC372362)
v.
SAEED FARKHONDEHPOUR
et al.,
Defendants and
Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Stephanie M. Bowick, Judge. Affirmed in part,
reversed in part, and remanded.
Law Offices of Mohammad A. Fakhreddine, Mohammad A.
Fakhreddine; Anand Law Group and Harvinder S. Anand for
Defendants and Appellants.
G. Hagen Law Office, Gregory D. Hagen; Wilson, Elser,
Moskowitz, Edelman & Dicker and Robert Cooper for Plaintiff
and Respondent.
Defendants and appellants Saeed Farkhondehpour and 415
South Wall Street, Inc. (collectively, appellants) appeal from the
order granting plaintiff and respondent Siry Investments, L.P.’s
(respondent) motion for attorney’s fees pursuant to Penal Code1
section 496, subdivision (c). Appellants contend, among other
matters, the trial court erred in finding respondent is the
prevailing party and awarding attorney’s fees, with a 1.6
multiplier, for its counsel’s services in the appellate proceedings
of this case.
We conclude the fees for the services of respondent’s
counsel, Gregory Hagen, performed on a contingency basis should
have been determined by use of the lodestar method. The trial
court, however, acted reasonably within its discretion as to its
remaining findings on the motion. We therefore affirm in part,
reverse in part, and remand.2
BACKGROUND
Facts and procedural history
The parties in this case formed a limited partnership,
formed in 1998, to renovate and lease space in a mixed-use
building in downtown Los Angeles. In June 2007, respondent
1 All undesignated statutory references are to the Penal
Code.
2 We hereby deny appellants’ motion for summary reversal
or leave to file supplemental brief, motion to augment record on
appeal, motion for judicial notice, and second motion for judicial
notice. We grant respondent’s motion to strike portions of
appellants’ reply brief.
2
sued appellants and Morad Neman3 for underpayment and
improperly diverting the partnership’s rental income to
themselves. The case was tried to a jury verdict in 2009, in
respondent’s favor. Respondent was awarded $242,975 in actual
damages and $1.1 million in punitive damages against
Farkhondehpour and $2 million against Neman.
In late 2012, the judgment was reversed due to a defect in
the special verdict form, which did not require the jury to specify
if appellants were liable to respondent individually or as trustees
of the various trusts. After the case was remanded, terminating
sanctions were imposed against appellants due to violations of
discovery orders. The trial court consequently struck appellants’
answers and entered default judgment in the amount of
$12,023,066.10, including treble damages of $2,869,461 pursuant
to section 496, subdivision (c), and attorney’s fees of
$4,010,008.97, as well as compensatory damages, punitive
damages, and interest.
Appellants then challenged the default judgment by filing a
motion to vacate judgment and a motion for new trial. The
motion to vacate judgment was denied. In the motion for new
trial, appellants maintained the trial court: (1) erroneously
awarded treble damages pursuant to section 496, subdivision (c),
and allowed respondent to also recover punitive damages; (2)
miscalculated the treble damages award; (3) awarded a
constitutionally excessive amount in punitive damages; and (4)
erroneously awarded attorney’s fees under section 496,
3 Neman was sued in his individual capacity and as trustee
of The Neman Family Irrevocable Trust and the Yedidia
Investments Defined Benefit Plan Trust (Neman parties). The
Neman parties are not parties to this appeal.
3
subdivision (c), and Code of Civil Procedure 1029.8. The motion
for new trial was partially granted—total damages were reduced
to $7,066,579.10. An amended judgment was entered in the
reduced amount.
Appellants appealed the original default judgment and the
amended judgment. Respondent filed a cross-appeal from the
amended judgment, challenging appellants’ standing to file the
motion for new trial. This court upheld the trial court’s
imposition of terminating sanctions. (Siry Investment, L.P. v.
Farkhondehpour (2020) 45 Cal.App.5th 1098, 1118–1128.)
Appellants were held to have standing to move for new trial to
challenge the amount in damages awarded. (Id. at pp. 1129–
1132.) This court held section 496, subdivision (c), does not apply
to this case, reducing the damages award to $3,143,596. (Siry
Investment, at pp. 1132–1138.)
In April 2020, respondent entered into a confidential
settlement agreement with the Neman parties. In May 2020,
respondent appealed this court’s decision to our Supreme Court,
which granted review. In July 2020, appellants made a
settlement offer to respondent to fully resolve the case that was
declined.
In July 2022, our Supreme Court affirmed appellants had
standing to move for new trial to challenge the amount of
damages awarded. (Siry Investment, L.P. v. Farkhondehpour
(2022) 13 Cal.5th 333, 339, 367.) The Supreme Court, however,
reversed the determination that section 496, subdivision (c), does
not apply to this case, concluding treble damages and attorney’s
fees may be recovered thereunder. (Siry Investment, supra, at
pp. 339, 367.) On remand, this court reinstated the treble
damages and attorney’s fees award (Siry Investment, L.P.
4
Farkhondehpour (Oct. 27, 2022, B277750) (nonpub. opn.). The
amended judgment, however, was ordered to be modified to strike
$376,437 in attorney’s fees that respondent incurred from a prior
lawsuit.
The motion for attorney’s fees
In August 2023, respondent moved for attorney’s fees
pursuant to section 496, subdivision (c). Respondent requested
$4,274,982 in attorney’s fees, which included a 1.6 multiplier, for
the services of its counsel, Robert Cooper and Gregory Hagen.4
The fees requested were for postjudgment services rendered after
the original default judgment was entered on July 20, 2016.
Respondent contended the total amount requested is reasonable
because appellants’ aggressive litigation tactics substantially
increased the legal fees. Included in the requested fees was
$993,033 for part of Hagen’s services performed on a contingency
basis. Respondent argued this amount is reasonable because
Hagen risked recovering no fees.
Respondent also claimed it may recover the attorney’s fees
for its cross-appeal because respondent is entitled to the fees for
its interim appellate services, even unsuccessful ones, if they
were reasonably incurred in obtaining a favorable result.
Respondent maintained, among other reasons, that a multiplier
is justified due to the complexity and novelty of the matter and
the extraordinary skills required to succeed on appeal in our
Supreme Court.
4 Part of Hagen’s services were performed on an hourly basis
when Hagen was at his former law firm. Hagen later opened his
own practice but continued to represent respondent in this case
on a contingency basis.
5
In opposition, appellants contended they should be
considered the prevailing party because the amended judgment
was reduced by $376,437 on appeal. Appellants asserted
respondent did not prevail in its cross-appeal because the Court
of Appeal and the Supreme Court both affirmed the trial court’s
ruling that appellants had standing to move for new trial.
Appellants argued the time spent appealing the matters
concerning section 496, subdivision (c), was unnecessary because
appellants offered a formal settlement. Appellants maintained
respondent’s attorney’s fees should also be reduced by
respondent’s settlement with the Neman parties.
As to Hagen’s contingency-based services, appellants
argued respondent did not provide Hagen’s timesheets and is not
entitled to fees based on his contingency rate. Appellants also
asserted respondent’s fees request for the interim appeal is
untimely and challenged the reasonableness of the attorney’s fees
and multiplier requested.
The trial court heard the motion in June 2024. The court
awarded respondent a reduced amount of $4,268,597.97 in
attorney’s fees, finding there is no prevailing party requirement
under section 496, subdivision (c). The court concluded, even if
there is such a requirement, respondent would be the prevailing
party because it achieved its main litigation objective by
obtaining a net monetary judgment and prevailing on most of the
appeals.
As to Hagen’s contingency-based services, the court found
the $993,033 requested for these services to be reasonable. The
court indicated detailed time records are not required in
assessing the reasonableness of the contingency fees. In addition,
the court found timely the request for attorney’s fees for the
6
interim appeal. The court explained it was proper to extend the
motion deadline because the court lacked jurisdiction to decide a
fees motion under the discovery statutes in 2017, and the
Supreme Court did not decide the applicability of section 496
until 2022.
The court further found the 1.6 multiplier respondent
requested to be reasonable due to the complex nature of the
appellate proceedings, the numerous novel legal issues involved,
and the fact Hagen was precluded from taking other cases. The
fees award, however, was reduced because the requested amount
included clerical tasks and duplicative billing.
Appellants subsequently moved to vacate the order
granting the attorney’s fees, which respondent opposed. Before
the trial court could rule on the motion to vacate, appellants
timely appealed the underlying fees motion.
CONTENTIONS ON APPEAL
Appellants assert seven main arguments. First, appellants
argue respondent should not be deemed the prevailing party on
all of the appeals. Second, appellants assert the attorney’s fees
for respondent’s cross-appeal were erroneously awarded because
the cross-appeal is based on different facts and legal theories
than appellants’ appeal. Third, appellants maintain Hagen’s
contingency fees were erroneously awarded because the fees are
unsupported and the lodestar method must be applied. Fourth,
appellants posit the trial court erred in awarding a 1.6 multiplier
because the determinant factors for the multiplier are
unsupported and it is improper to grant Hagen’s contingency
fees. Fifth, appellants contend the court erroneously found the
attorney hours respondent spent after it rejected appellants’
7
settlement offer were reasonably necessary to litigate its claim.
Sixth, appellants argue the court erred by awarding attorney’s
fees for issues raised solely by the Neman parties, whose
settlement with respondent was required to be submitted for a
good faith determination. Finally, appellants assert the court
erroneously awarded attorney’s fees for the interim appeal
because respondent untimely filed its fees motion.
DISCUSSION
I. Standard of review and applicable law
“[A]n appeal of an award of attorney fees is generally
reviewed under the abuse of discretion standard.” (Powerhouse
Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013)
221 Cal.App.4th 867, 887.) “Under this standard of review, the
trial court’s order will be upheld on appeal unless, considering all
the evidence viewed most favorably in support of the order and
indulging all reasonable inferences in its favor, no judge could
reasonably make the order.” (In re Marriage of Rangell (2023) 95
Cal.App.5th 1206, 1218 (Rangell).) “‘Discretion is abused when its
exercise is arbitrary, whimsical, or capricious.’” (Ibid.)
“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.” (Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132,
142.) “An appellate court reviews a determination of the legal
basis for an award of attorney fees independently as a question of
law.” (Leamon v. Krajkiewcz (2003) 107 Cal.App.4th 424, 431.)
“[W]here the material facts are largely not in dispute, our review
8
is de novo.” (Mountain Air Enterprises, LLC v. Sundowner
Towers, LLC (2017) 3 Cal.5th 744, 751.)
II. The trial court’s attorney’s fees award is reasonable,
but lodestar applies for Hagen’s contingency-based
services
A. The trial court reasonably found respondent the
prevailing party under section 496, subdivision
(c)
Appellants contend the trial court erred in finding
respondent achieved its litigation objectives and is the prevailing
party in this matter, arguing respondent did not prevail because
respondent failed to achieve its litigation objective of restoring
the original judgment of $12,023,066 on appeal. We disagree.5
Section 496, subdivision (c), states: “Any person who has
been injured by a violation of subdivision (a) or (b) may bring an
action for three times the amount of actual damages, if any,
sustained by the plaintiff, costs of suit, and reasonable attorney’s
fees.”
“‘In the absence of legislative direction in the attorney fees
statute, the courts have concluded that a rigid definition of
prevailing party should not be used. [Citation.] Rather, prevailing
party status should be determined by the trial court based on an
evaluation of whether a party prevailed “‘on a practical level,’”
5 Appellants also assert the trial court erroneously found no
prevailing party requirement under section 496, subdivision (c).
The court nevertheless found respondent is the prevailing party
in this matter and explained its decision. Thus, we need not
specifically address if the statute has a prevailing party
requirement, especially since we conclude here the court
reasonably found respondent to be the prevailing party.
9
and the trial court’s decision should be affirmed on appeal absent
an abuse of discretion.’” (Sharif v. Mehusa, Inc. (2015) 241
Cal.App.4th 185, 192.) “Among the factors the trial court must
consider in determining whether a party prevailed is the extent
to which each party has realized its litigation objectives.”
(Zuehlsdorf v. Simi Valley Unified School Dist. (2007) 148
Cal.App.4th 249, 257.)
“‘[I]n determining litigation success, courts should respect
substance rather than form, and to this extent should be guided
by “equitable considerations.” For example, a party who is denied
direct relief on a claim may nonetheless be found to be a
prevailing party if it is clear that the party has otherwise
achieved its main litigation objective.’” (Silver Creek, LLC v.
BlackRock Realty Advisors, Inc. (2009) 173 Cal.App.4th 1533,
1539.) Factors favoring a finding the plaintiff prevailed may
include the plaintiff obtaining a net monetary recovery or
otherwise “‘get[ting] most or all of what he wanted by filing the
action.’” (See Kim v. Euromotors West/The Auto Gallery (2007)
149 Cal.App.4th 170, 179–180, 181 [“[W]hile [the defendant]
obtained a dismissal in the settlement agreement, [the plaintiff]
obtained many of his litigation objectives including return of the
car, cancellation of the lease and a monetary recovery.”].) “[A]
court’s ruling on who is the prevailing party ‘should be affirmed
on appeal absent an abuse of discretion.’” (Artus v. Gramercy
Towers Condominium Assn. (2022) 76 Cal.App.5th 1043, 1050.)
“The trial court ‘“‘is given wide discretion in determining which
party has prevailed on its cause(s) of action….’”’” (Sears v.
Baccaglio (1998) 60 Cal.App.4th 1136, 1158.)
“Generally, parties ‘who qualify for a fee should recover
compensation for “all the hours reasonably spent ….”’” (State
10
Farm General Ins. Co. v. Lara (2021) 71 Cal.App.5th 197, 218
(State Farm).) “This includes work on unsuccessful arguments.”
(Ibid.) “‘Litigation often involves a succession of attacks upon an
opponent’s case; indeed the final ground of resolution may only
become clear after a series of unsuccessful attacks. Compensation
is ordinarily warranted even for unsuccessful forays.’” (City of Los
Angeles v. Metropolitan Water Dist. of Southern California (2019)
42 Cal.App.5th 290, 307 (Metropolitan Water Dist.).)
We conclude the trial court’s finding respondent to be the
prevailing party in this matter was reasonable. Respondent
successfully obtained a judgment in its favor regarding its section
496 claim, which was affirmed on appeal. While this court
determined section 496, subdivision (c), does not authorize treble
damages and attorney’s fees under the circumstances of the case,
respondent successfully appealed that decision to the Supreme
Court.
Indeed, appellants fail to show respondent can be the
prevailing party only if none of its damages were reduced in the
appellant proceedings. Appellants’ narrow view of attorney’s fees
under section 496, subdivision (c), is unsupported. The recovery
of attorney’s fees pursuant to section 496, subdivision (c), is tied
generally to litigating the civil claim under the statute, not to any
particular aspect of the litigation such as success in a related
appeal. “[F]ee awards should be fully compensatory.” (Ketchum v.
Moses (2001) 24 Cal.4th 1122, 1133 (Ketchum).) “‘[A]bsent
circumstances rendering the award unjust, an attorney fee award
should ordinarily include compensation for all the hours
reasonably spent’ in litigating the action to a successful
conclusion.” (Horsford v. Board of Trustees of California State
University (2005) 132 Cal.App.4th 359, 394 (Horsford).)
11
Here, the trial court can reasonably find the hours spent in
the appellate proceedings were necessary to litigating the section
496 claim. The claim was the subject of the appellate proceedings
and respondent had significant successes on appeal. Respondent
succeeded in affirming the terminating sanctions entered against
appellants. Respondent also succeeded on the issue of whether
section 496, subdivision (c), applied to this case and allowed
respondent to recover treble damages and attorney’s fees.
While respondent did not succeed on all issues in the
appellate proceedings, appellants fail to establish this was
required. Respondent ultimately retained the judgment entered
in its favor and was able to recover treble damages and attorney’s
fees pursuant to section 496, subdivision (c). As discussed above,
compensation of attorney’s fees is ordinarily warranted even for
unsuccessful arguments. (See Metropolitan Water Dist., supra, 42
Cal.App.5th at p. 307.) The fact that respondent did not prevail
on its cross-appeal and damages were reduced does not mean the
trial court abused its discretion by finding the hours were
reasonably necessary for litigating the claim.
Appellants contend net monetary recovery should not be a
factor considered in deciding the prevailing party in this matter
because the claim at issue is not a contract claim. Appellants
assert courts only assess whether a party achieved its litigation
objective and prevailed on a practical level when the claim is
statutory. Appellants’ assertion is unsupported, however, since
factors showing the claimant prevailed on a statutory claim may
include the claimant obtaining a net monetary recovery or
otherwise “‘get[ting] most or all of what he wanted by filing the
action.’” (See Kim v. Euromotors West/The Auto Gallery (2007)
149 Cal.App.4th 170, 179–180, 181 [“[In claim under the
12
Consumer Legal Remedies Act], while [the defendant] obtained a
dismissal in the settlement agreement, [the plaintiff may be
considered the prevailing party because he] obtained many of his
litigation objectives including return of the car, cancellation of
the lease and a monetary recovery.”].) Nothing shows net
monetary recovery cannot be considered a factor favoring a
finding that the claimant prevailed on a statutory claim.
Appellants also argue this court should apply the Supreme
Court’s analysis in Smith v. Rae-Venter Law Group (2002) 29
Cal.4th 345 (Smith) for determining the prevailing party on
appeal. Appellants posit Smith shows the final judgment must be
compared with the judgment from which the appeal was taken.
Smith involves the specific fee-shifting provision in Labor Code
section 98.2, subdivision (c), which provides “the court shall
assess costs and reasonable attorney fees against an appellant
who ‘is unsuccessful in the appeal.’” (Smith, at p. 350.) “The
purpose of this fee-shifting provision is to discourage frivolous
and meritless appeals from the [labor] commissioner’s decisions.”
(Ibid.) As discussed above, the attorney’s fees provision in section
496, subdivision (c), is tied generally to litigating the civil claim
under the statute, not to success in any specific aspect of
litigation. There is nothing in section 496 regarding success in an
appeal. Accordingly, Smith is inapposite to determining the
issues here.
Further, appellants assert the trial court erroneously found
the parties’ settlement discussions and respondent’s settlement
with the Neman parties after the first appellate opinion are
irrelevant to determining the prevailing party. We conclude the
court did not abuse its discretion by finding the settlement
negotiations should not decide who is the prevailing party.
13
“‘Settlement communications are not sources “similar” to
“pleadings, trial briefs, [and] opening statements.” [Citation.]
They were not presented at trial,’” and “‘[t]he objectives in
settlement negotiations are utterly unlike litigation objectives
stated in court proceedings to obtain a legal decision.’”
(Waterwood Enterprises, LLC v. City of Long Beach (2020) 58
Cal.App.5th 955, 967–968.) Hence, it was not unreasonable for
the court to decide the settlement discussions should not
determine the prevailing party in this case.
B. The trial court did not err in awarding the
attorney’s fees for the cross-appeal
Appellants posit the trial court erroneously awarded
attorney’s fees for respondent’s cross-appeal, because it is based
on separate and distinct facts and legal theories from appellants’
appeal and was not reasonably necessary for litigating the claim.
Appellants contend the issue as to their standing to move for new
trial was a “distinctly different claim” and not “intertwined
inextricably” with their appeal regarding the applicability of
section 496, subdivision (c). Appellants argue they never raised
the standing issue in their appeal and the issue does not share a
common core of facts therewith.
We disagree with appellants’ contention that the attorney’s
fees associated with the cross-appeal are unrecoverable because
the cross-appeal is a “distinctly different claim” separate from the
appeal concerning section 496, subdivision (c). Appellants’ narrow
framing of the issues here is unsupported. As discussed above,
the trial court needs only to find the hours spent on a matter
were reasonable for litigating the claim. (See Horsford, supra,
132 Cal.App.4th at p. 394.) Appellants’ motion for new trial
challenged, among other matters, the treble damages and
14
attorney’s fees awarded under section 496, subdivision (c).
Respondent filed its cross-appeal to challenge appellants’
standing, as parties in default, to bring the motion for new trial.
Accordingly, the cross-appeal was not unrelated to the litigation
of the section 496 claim and can reasonably be found to be a part
of respondent’s efforts to oppose appellants’ challenges to the
claim.
As mentioned earlier, a party need not prevail on a matter
toward litigating its claim to recover the attorney’s fees
associated with that matter. (See State Farm, supra, 71
Cal.App.5th at p. 218; Metropolitan Water Dist., supra, 42
Cal.App.5th at p. 307.) The Court of Appeal and our Supreme
Court both reviewed whether appellants had standing to bring
their motion for new trial. The standing issue was never found to
be baseless or devoid of merit. Hence, the trial court can
reasonably find the hours spent on the cross-appeal, despite it
being ultimately unsuccessful, were reasonably necessary for
litigating the section 496 claim.
C. The lodestar method was necessary to determine
reasonable attorney’s fees for Hagen’s
contingency-based services
Appellants argue respondent is not entitled to recover
attorney’s fees based on the contingency rate it agreed to with its
counsel, Hagen. Appellants posit the lodestar method is required
to determine statutory attorney’s fees, unless the underlying
statute expressly provides for another method of calculation. We
agree.
“In statutory fee-shifting cases, in which the prevailing
party is statutorily authorized to recover his or her attorney’s
fees from the losing party, the lodestar method is the primary
15
method for establishing the amount of recoverable fees.”
(Glaviano v. Sacramento City Unified School Dist. (2018) 22
Cal.App.5th 744, 750–751 (Glaviano).) “[A]lthough the lodestar
method is not the only approach for calculating fees and is not
required for every fee-shifting statute, the Legislature appears to
have endorsed the lodestar method except in limited situations
where the Legislature has expressly indicated that method is not
appropriate.” (Id. at p. 753.) “When the Legislature has
determined that the lodestar adjustment approach is not
appropriate, it has expressly so stated.” (Ketchum, supra, 24
Cal.4th at p. 1135.) “[T]he California Supreme Court intended its
lodestar method to apply to a statutory attorney’s fee award
unless the statutory authorization for the award provided for
another method of calculation.” (Meister v. Regents of University
of California (1998) 67 Cal.App.4th 437, 448–449 (Meister).)
“Under the lodestar method, the trial court must first
determine the lodestar figure—the reasonable hours spent
multiplied by the reasonable hourly rate—based on a careful
compilation of the time spent and reasonable hourly
compensation of each attorney involved in the presentation of the
case.” (Glaviano, supra, 22 Cal.App.5th at p. 751.)
We conclude the lodestar method was required for
determining the hours reasonably spent by Hagen. Section 496,
subdivision (c), does not expressly authorize another method of
calculating reasonable attorney’s fees for the claim. Indeed, the
statute is completely silent as to the appropriate method for
establishing the amount of recoverable fees. The statute’s
language on attorney’s fees is sparse, providing no detail
regarding the proper approach for determining reasonable fees.
As discussed above, the appropriate method for deciding
16
reasonable attorney’s fees is the lodestar method unless the
statute expressly provides for another method of calculation. (See
Glaviano, supra, 22 Cal.App.5th at pp. 750–751; Ketchum, supra,
24 Cal.4th at p. 1135; Meister, supra, 67 Cal.App.4th at pp. 448–
449.) Since section 496, subdivision (c), provides for no other
method of calculation, the proper approach for establishing
reasonable attorney’s fees must be the lodestar method.6 Thus, a
contingency rate could not be accepted for deciding Hagen’s
reasonable attorney’s fees.
Here, the order indicates Hagen’s contingency rate was
accepted in determining reasonable attorney’s fees. The trial
court found Hagen’s declaration was credible regarding the work
performed to support the contingency fees. But nothing in the
record shows the number of hours and hourly rate for the work
Hagen performed were considered for these fees. Accordingly,
this matter must be remanded for the trial court to determine
these fees based on the lodestar method.
6 Respondent cites and quotes from Fed-Mart Corp. v. Pell
Enterprises, Inc. (1980) 111 Cal.App.3d 215, 229, suggesting this
case allows the use of contingency rates for determining
reasonable attorney’s fees for section 496 claims. While
respondent represents section 496 is at issue in Fed-Mart, the
case actually involves Corporations Code section 317. (See Fed-
Mart, at pp. 218–219, 221–222, 229.) Fed-Mart does not even
mention section 496, and respondent fails to show how it
otherwise directly applies to the attorney’s fees provision of the
statute.
17
D. The trial court reasonably awarded a multiplier
for Hagen’s services
Appellants contend the trial court unreasonably awarded a
multiplier for Hagen’s services.7 Appellants argue a multiplier is
not justified because Hagen and his former firm were not
precluded from other employment, he only assisted in reviewing
the draft appellate briefs and preparing for oral arguments, and
the results on appeal were mixed at best. We disagree.
“The amount of attorney fees awarded pursuant to the
lodestar adjustment method may be increased or decreased. Such
an adjustment is commonly referred to as a ‘fee enhancement’ or
‘multiplier.’” (Mikhaeilpoor v. BMW of North America, LLC (2020)
48 Cal.App.5th 240, 247.) “The trial court is neither foreclosed
from, nor required to, award a multiplier.” (Ibid.) “Rather,
applying a multiplier is discretionary.” (Rey v. Madera Unified
School Dist. (2012) 203 Cal.App.4th 1223, 1242.) “The Supreme
Court has ‘set forth a number of factors the trial court may
consider in adjusting the lodestar figure. These include: “(1) the
novelty and difficulty of the questions involved, and the skill
displayed in presenting them; (2) the extent to which the nature
of the litigation precluded other employment by the attorneys;
[and] (3) the contingent nature of the fee award, both from the
point of view of eventual victory on the merits and the point of
view of establishing eligibility for an award.”’” (Mikhaeilpoor,
7 Appellants separately argue Hagen is not entitled to a
multiplier for the services he performed on a contingency basis
because the factors for determining a multiplier are the same as
those to justify the contingency fee award. This argument is moot
because we have concluded the lodestar method must be used to
determine Hagen’s services.
18
supra, at p. 248.) “‘A court may rely on these factors to increase
or decrease the lodestar. [Citation.] Any one factor may be
sufficient to apply a positive or negative multiplier.’” (The
Kennedy Com. v. City of Huntington Beach (2023) 91 Cal.App.5th
436, 467 (The Kennedy Com.).)
We conclude the trial court reasonably granted a 1.6
multiplier for Hagen’s services. The court based its ruling on
multiple appropriate factors that justified the enhancement. The
court reasonably found the complex and difficult nature of the
appellate proceedings justified the multiplier. This court issued a
lengthy, complicated published opinion concerning, in part, the
availability of treble damages and attorney’s fees in this case
under section 496, subdivision (c), which respondent appealed to
our Supreme Court and was granted review. The Supreme Court
ruled in respondent’s favor on this significant issue, finding the
statute’s unambiguous words provide for treble damages and
attorney’s fees in this case. The Supreme Court concluded the
Legislature can be expected to amend the statute accordingly to
the extent such remedies are problematic as a matter of policy.
Respondent provided evidence the Supreme Court’s decision was
widely covered in legal journals and major publications. These
facts show the issues litigated involve novel and difficult
questions having significant impact, which support an
enhancement of fees.
Further, the trial court reasonably found the quality of the
representation justified the multiplier. Hagen had extensive
knowledge of this case as he represented respondent for more
than a dozen years in this litigation. Further, he tried the matter
to a jury in October 2009, which found in respondent’s favor.
Hagen detailed his substantial trial and litigation experience in
19
multiparty, complicated cases involving large exposures. Hagen
established he was involved in reviewing draft appellate briefs,
suggesting revisions, and exchanging multiple drafts of each brief
before their finalization. Further, Hagen invested substantial
time and effort preparing Cooper for his oral arguments by
developing themes, framing anticipated questions, and
conducting postmoot strategy sessions.
Appellants assert the multiplier for Hagen’s work at his
former law firm is not justified because Cooper primarily handled
the appellate proceedings. This assertion, however, is merely
appellants’ interpretation of the significance of Hagen’s
contributions to respondent’s representation. Deciding such facts
requires this court to improperly reweigh the evidence. (See
Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4
Cal.App.5th 982, 1006 [“The abuse of discretion standard
includes a substantial evidence component: ‘We defer to the trial
court’s factual findings so long as they are supported by
substantial evidence ….’”]; see also Daugherty v. City and County
of San Francisco (2018) 24 Cal.App.5th 928, 944 [Under “‘“the
substantial evidence test on appeal, we may not reweigh the
evidence …. [Citations.] The question on appeal is whether the
evidence reveals substantial support—contradicted or
uncontradicted—for the trial court’s conclusion that the weight of
the evidence supports the commission’s findings of fact.”’”].)
Appellants fail to show a lack of substantial evidence supporting
the trial court’s findings. As discussed above, Hagen detailed his
background and contributions to respondent’s representation.
The court found Hagen’s involvement in the case was significant
enough to warrant a multiplier for his services. Appellants do not
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establish a multiplier cannot be awarded merely because Hagen
was not respondent’s lead attorney for the appellate proceedings.
Appellants also maintain a multiplier is unjustified because
the results on appeal were mixed. But, as mentioned earlier,
respondent prevailed on a significant issue that substantially
impacts the amount respondent may recover in the litigation.
“‘“[P]laintiffs may be considered ‘prevailing parties’ for attorney’s
fees purposes if they succeed on any significant issue in litigation
which achieves some of the benefit the parties sought in bringing
suit.”’” (Graciano v. Robinson Ford Sales, Inc. (2006) 144
Cal.App.4th 140, 153.) Thus, it was not unreasonable for the trial
court to award a multiplier based on the success respondent
achieved despite not prevailing on every single issue on appeal.
Appellants argue Hagen and his former law firm were not
precluded from other employment. These arguments are, again,
merely appellants’ own interpretation of the evidence and factors
that should be weighted for the multiplier. Hagen attested he
was precluded from taking other representation when he
continued representing respondent after he opened his office.
Hagen also attested to the contingency nature of his agreement
with respondent, indicating he was entitled to 28 percent of “net
recovery” on the appeal. Hagen indicated he would have only
been entitled to $10,000 had the Supreme Court not decided in
respondent’s favor. While appellants attempt to identify some
evidence and factors in their favor, we note that a single factor is
sufficient to apply a positive multiplier. (See The Kennedy Com.,
supra, 91 Cal.App.5th at p. 467.) Substantial evidence supports
the trial court’s findings as to the difficulty and significance of
the issues involved in the appellate proceedings and the quality
of respondent’s counsel’s representation. Accordingly, the court
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was not unreasonable in awarding the multiplier for Hagen’s
services.
E. The trial court reasonably awarded a multiplier
for Cooper’s services
Appellants posit a multiplier is not justified for Cooper’s
services because this case was within his special expertise as a
certified appellate specialist. Appellants assert a multiplier
should only be applied when the quality of representation far
exceeds the representation that would have been provided by an
attorney of comparable skill.
As similarly discussed above, appellants’ arguments here
fail because they are merely appellants’ interpretation of the
evidence. Respondent provided evidence that other similar-sized
firms handling appeals in intermediate courts had hourly rates
exceeding Cooper’s. Respondent also submitted evidence that
Cooper worked with a lean staff on the case, thus, providing
substantial evidence Cooper’s services far exceeded those that
would have been provided by an attorney of comparable skill.
F. Appellants fail to show error concerning the
matters involving the Neman parties
Appellants maintain respondent was erroneously awarded
attorney’s fees for time spent solely litigating issues raised by the
Neman parties. Appellants assert they should not be penalized by
having to pay the fees for litigating the Neman parties’ distinct
claims.
Appellants, however, fail to identify the billing entries and
the total hours they claim involved work performed on the
Neman parties’ separate issues. “‘The most fundamental rule of
appellate review is that an appealed judgment or order is
presumed to be correct.’ [Citation.] It is the appellant who bears
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the burden of overcoming that presumption.” (State Water
Resources Control Bd. Cases (2006) 136 Cal.App.4th 674, 836.)
“To ‘rebut[] the presumption of correctness accorded to the trial
court’s decision,’ the appellant must ‘“‘“supply[] the reviewing
court with some cogent argument supported by legal analysis and
citation to the record.”’”’” (Cruz v. Tapestry, Inc. (2025) 113
Cal.App.5th 943, 954; see Cal. Rules of Court, rule 8.204(a)(1)(C)
[“Each brief must … [¶] Support any reference to a matter in the
record by a citation to the volume and page number of the record
where the matter appears.”].) “It is not the task of the reviewing
court to search the record for evidence that supports the party’s
statement; it is for the party to cite the court to those references.
Upon the party’s failure to do so, the appellate court need not
consider or may disregard the matter.” (Regents of University of
California v. Sheily (2004) 122 Cal.App.4th 824, 826, fn. 1.)
Here, appellants assert the work performed solely on the
Neman parties’ separate issues are clearly identified in the
billing statements of respondent’s counsel, Cooper. But
appellants fail to cite the portions of the record that support this
assertion. Without the evidence properly identified, it is unclear
what hours, if any, were even spent on the matters appellants
claim are problematic and unrecoverable. Accordingly, appellants
fail to satisfy their burden of showing error on this issue.
In addition, appellants posit respondent was required to
submit its settlement with the Neman parties to the trial court
for a good faith determination because the defendants were
jointly and severally liable. Appellants argue the settlement
likely resolved the Neman parties’ obligations to respondent’s
attorney’s fees and costs, which are relevant here because
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respondent would not be entitled to any hours spent on
appellants and the Neman parties’ joint arguments.
But good faith determination applies “[w]here a release,
dismissal with or without prejudice, or a covenant not to sue or
not to enforce judgment is given in good faith before verdict or
judgment to one or more of a number of tortfeasors claimed to be
liable for the same tort ….” (Code Civ. Proc., § 877, italics added.)
“[S]ection 877 applies only to settlements reached before liability
is established by jury verdict or by judgment. (Southern Cal.
White Trucks v. Teresinski (1987) 190 Cal.App.3d 1393, 1405.)
Respondent settled with the Neman parties after the amended
judgment was entered and the Court of Appeal issued its opinion
in 2020. Appellants contend the amended judgment was not final
because it was on appeal in the Supreme Court. Appellants fail to
establish, however, how that fact is material given their liability
as to the section 496 claim was never vacated.
Even if a good faith determination was required, appellants
fail to show they properly raised this matter in the trial court.
Appellants request this court to compel respondent to disclose the
terms of its settlement with the Neman parties. But appellants
do not establish they ever sought to compel discovery of such
matter in the trial court. “Generally, a reviewing court will not
consider claims raised for the first time on appeal that could have
been but were not presented to the trial court.” (Pratt v. Union
Pacific Railroad Co. (2008) 168 Cal.App.4th 165, 174.) “Failure to
raise a claim may be forfeited or waived. ‘“‘[F]orfeiture is the
failure to make the timely assertion of a right, waiver is the
“intentional relinquishment or abandonment of a known
right.”’”’” (Ibid.) We conclude appellants forfeited this matter
because they never timely asserted their rights thereon in the
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trial court. Nothing in the record shows the court ever denied a
request for discovery of respondent’s settlement with the Neman
parties.
Without providing any terms of respondent’s settlement
with the Neman parties, appellants’ argument is entirely
speculative. Appellants cannot identify anything in the record
indicating the settlement was intended to resolve attorney’s fees
and costs. At best, appellants can only speculate the settlement
was likely to resolve such issues. Thus, appellants fail to meet
their burden of demonstrating error on this issue.
G. The award of attorney’s fees for services
performed after respondent declined appellants’
settlement offer was reasonable
Appellants assert the trial court should not have awarded
attorney’s fees for the hours spent on appeal after respondent
rejected appellants’ settlement offer. Appellants argue those fees
should have been denied because their settlement offer was
higher than the amount of the judgment respondent ultimately
received after the appeals.
We conclude the trial court acted within its discretion when
it did not weigh the declined settlement offer in appellants’ favor.
Respondent provided evidence detailing appellants’ history of
broken promises in settlement discussions and commitments in
this case. Respondent indicated appellants’ inability to keep
promises is what ultimately led to the court issuing terminating
sanctions. Respondent also demonstrated it would have been
worse off accepting appellants’ settlement offer because the offer
disregarded the attorney’s fees respondent had already incurred
to that point. Given the foregoing evidence, the court could
properly find it was not unreasonable for respondent to reject the
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settlement offer. Respondent’s evidence shows the settlement
offer was not in its best interest, and respondent was reasonably
skeptical of appellants’ commitment to a settlement.
Further, appellants posit the trial court should have
considered the policy concerns of Code of Civil Procedure section
998 under Meister, supra, 67 Cal.App.4th 437. Appellants
contend Meister controls even when Code of Civil Procedure
section 998 does not apply.
Meister holds only a trial court may in its discretion
consider the policy concerns of Code of Civil Procedure section
998 when the statute does not apply to a case. (See Meister,
supra, 67 Cal.App.4th at p. 450 [“However, the inapplicability of
[Code of Civil Procedure] section 998 did not prevent the trial
court from allowing the underlying policy concerns addressed by
that section to guide its exercise of its discretion in this case.”].)
Meister does not hold a court must consider the policy concerns of
Code of Civil Procedure section 998 when a party makes a
nonstatutory settlement offer. (See Meister, at p. 452
[“Consideration of a nonstatutory settlement offer by a trial court
where appropriate does not involve the creation of a ‘rule’ similar
to [Code of Civil Procedure] section 998 but without its precise
requirements. Instead, a trial court operating within its
discretion is simply empowered to take into consideration the fact
that a party continued to litigate a matter after a reasonable,
albeit informal, settlement offer.”].) Meister is thus not
instructive here. The court here acted reasonably within its
discretion when it did not weigh in appellants’ favor the rejection
of the settlement offer.
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H. The trial court did not err in awarding
attorney’s fees for the interim appeal
Finally, appellants contend the trial court erred by
awarding attorney’s fees for the interim appeal because
respondent’s fees motion was untimely filed. Appellants maintain
the parties’ stipulation to extend the deadline to file the motion
did not extend to the fees for the interim appeal and the court
erroneously found it lacked jurisdiction in 2017 to decide a fees
motion under the discovery statutes.
“Flexibility is built into [California Rules of Court,] rule
3.1702 through subdivision (d), which allows a judge ‘[f]or good
cause’ to ‘extend the time for filing a motion for attorney’s fees in
the absence of a stipulation or for a longer period than allowed by
stipulation.’” (Robinson v. U-Haul Co. of California (2016) 4
Cal.App.5th 304, 326.) Further, “we can infer [the trial court]
found good cause for any additional time needed.” (State Farm,
supra,71 Cal.App.5th at p. 213.) “[T]he time limits [for moving for
attorney’s fees] are not jurisdictional, just mandatory.” (Ibid.)
We conclude the trial court did not abuse its discretion by
extending the deadline for respondent to move for attorney’s fees
for the interim appeal. The court indicated respondent could not
seek those fees under section 496, subdivision (c), in 2017 because
our Supreme Court did not decide the applicability of that statute
until 2022. Since respondent may recover the fees under section
496, subdivision (c), it was not arbitrary or capricious for the
court to extend the deadline to file the fees motion until after the
issue was decided. The court acted reasonably because the
applicability of section 496, subdivision (c), was relevant to
respondent’s fees motion. Because the court had a reasonable
ground to extend the motion deadline, we need not decide the
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other issues appellants raise. (See Rangell, supra, 95 Cal.App.5th
at p. 1218 [“Under [the abuse of discretion] standard of review,
the trial court’s order will be upheld on appeal unless … no judge
could reasonably make the order…. We reverse ‘“‘only if
prejudicial error is found after examining the record of the
proceedings below.’”’” [Citations omitted.]].)
DISPOSITION
The June 13, 2024 order granting, in part, respondent’s
motion for attorney’s fees is reversed as to the award of Hagen’s
contingency fees. On remand, the trial court shall vacate the
award of Hagen’s contingency fees and enter a new order
determining the reasonable attorney’s fees for Hagen’s
contingency-based services based on the lodestar method. The
order is affirmed as to the remaining issues.
Each party is to bear its own costs of appeal.
CHAVEZ, J.
We concur:
LUI, P. J.
RICHARDSON, J.
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