Filed 9/21/26 Ryan v. Kinney CA1/3
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
MARTIN RYAN et al.,
Plaintiffs, Appellants, and
Cross-respondents, A173329
v. (City & County of San Francisco
ANSEL D. KINNEY, Super. Ct. No. CGC-22-601147)
Defendant, Respondent, and
Cross-appellant.
Martin Ryan and Claire Ryan (collectively, plaintiffs) filed a legal
malpractice action against their former attorney, Ansel D. Kinney, who
represented them in their lawsuit against 1001 California Street
Condominium Association (HOA) and others. The underlying lawsuit, which
resulted in a settlement, alleged misrepresentation by the HOA regarding
plaintiffs’ purchase of a condominium. It also alleged claims related to
breach of the governing covenants, conditions, and restrictions (CC&R’s)
regarding the provision of heat to the condominium and enforcement of those
CC&R’s under the Davis-Stirling Common Interest Development Act (Davis-
Stirling Act; Civ. Code, § 4000 et seq.; all further undesignated statutory
references are to this code). We refer to this second category of claims as the
“heating claims.”
1
After a bench trial, the court found legal malpractice on the basis that,
but for Kinney’s negligence in the underlying action, plaintiffs would have
recovered greater damages for their misrepresentation claim than they
received in the settlement. The court did not find malpractice related to the
heating claims and found plaintiffs would have owed attorney fees to the
HOA on those claims.
Plaintiffs assert the court erred by finding they would have lost on the
heating claims, by declining to apportion the HOA’s attorney fees to limit
them to fees related to the heating claims, and by awarding interest only
through the hypothetical trial date in the underlying action rather than
through the date of judgment in the malpractice action. In his cross-appeal,
Kinney challenges the court’s finding that plaintiffs are entitled to damages
on the misrepresentation claim and its denial of his quantum meruit claim
for an offset of attorney fees.
We conclude the trial court erred by failing to award prejudgment
interest through the date of judgment in this action and by failing to
apportion the HOA’s attorney fees (to limit them to the heating claims); we
therefore remand for recalculation of damages. In all other respects, we
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We begin by recounting the relevant facts and procedural history from
plaintiffs’ underlying lawsuit before turning to the instant case. For ease of
comprehension and meaning no disrespect, we refer to plaintiffs by their first
names.
Condominium Purchase
In August 2014, plaintiffs purchased a condominium for $2.7 million
from the Estate of George Wiley (Wiley Estate) through its trustee, Diane
2
Wiley. The condominium is in a 10-unit Beaux Arts-style building in the Nob
Hill neighborhood of San Francisco.
Prior to the purchase, the HOA’s agent, Karen Katz, disclosed to
plaintiffs in a written financial disclosure statement dated June 2014 that
the HOA anticipated a “roofing project” that “might warrant a special
assessment” beginning later that year. The statement indicated the HOA
had approximately $100,000 in reserves.
The Wiley Estate’s realtor, Joanne Stein of Pacific Union International,
Inc. (PUI), sought clarification from Katz regarding the special assessment.
According to an e-mail memorializing their conversation, Katz told Stein the
special assessment was to be paid by all condominium owners for a possible
roof replacement. Katz informed Stein the HOA was still obtaining bids for
the project, but the anticipated cost was about $300,000, and the HOA had
about $100,000 in reserves.
Stein, in turn, told plaintiffs their anticipated share of the cost of the
roof repair was $12,000. Stein reached that number by subtracting the HOA
reserves from the $300,000 figure relayed by Katz and dividing by the
condominium’s 6 percent share of the building. Stein did not disclose the
background data or her calculations to plaintiffs.
Plaintiffs did not negotiate with the Wiley Estate for a lower purchase
price as the $12,000 expected share was very small compared to the $2.7
million cost of the condominium. Repairs to the building began in 2015 and
were more extensive and costly than plaintiffs were initially told. There were
numerous repairs to the exterior of the building that were not known to
plaintiffs until after they purchased the condominium. Ultimately, plaintiffs’
share of the total repair costs totaled $665,443.
3
Plaintiffs also learned prior to their purchase of the condominium that
it had steam heat provided by a boiler in the basement. Plaintiffs were told
by Stein in a September 2014 e-mail (the month after the purchase) that the
steam heat was included in their HOA dues, which were then $2,760 per
month. At the time, the boiler provided heat to plaintiffs’ condominium, two
other condominiums, and the building’s lobby; the remaining condominiums
used their own internal heating systems.
In 2015, a leak was discovered in the steam heating pipes and repaired.
Around that time, the HOA informed plaintiffs of its intent to decommission
the boiler system. During an ensuing unsuccessful mediation with plaintiffs,
in 2016, the HOA’s attorney signed a note stating the existing boiler would
not be removed until a new heat source was installed. However, the HOA
decommissioned the steam heating system in 2017 without providing an
alternative heat source to plaintiffs’ condominium.
Plaintiffs’ Underlying Lawsuit
In 2017, through their first attorney (not Kinney), plaintiffs filed a
complaint and first amended complaint against the HOA raising multiple
claims. Also through their first attorney, plaintiffs filed a complaint against
Stein and her agency, PUI, asserting claims for misrepresentation based on
Stein’s informing them that their share of the roof repair would be only
around $12,000.
In 2018, plaintiffs replaced their first attorney with Kinney, who filed
second and third amended complaints in 2018 and 2019 that consolidated the
claims against the HOA, Stein, and PUI, and added as a defendant Diane
Wiley as trustee of the Wiley Trust.
The third amended complaint alleged claims for intentional and
negligent misrepresentation regarding the $300,000 estimate provided to
4
plaintiffs by Stein via Katz, the HOA’s property manager. Specifically,
plaintiffs averred the HOA and Katz knew the cost of the roof repair was far
greater when those representations were made as the HOA had been aware
of serious deficiencies in various common areas of the building, including the
“building envelope,” roof, roof decks, and waterproofing membranes, for many
years but had deferred necessary repairs and failed to disclose the extent of
the deficiencies. They contended that Stein reported they could not access
the roof to inspect it themselves as the owner of the building’s penthouse had
exclusive access to the roof. Plaintiffs also alleged claims for gross negligence
and breach of fiduciary duty based on the HOA’s failure to make the repairs
or build adequate financial reserves for them.
Additionally, plaintiffs asserted two causes of action based in part on
the HOA’s decommissioning of the steam heating system, specifically for
breach of the CC&R’s and for a violation of the Davis-Stirling Act. The
relevant portion of the Davis-Stirling Act provides that the covenants and
restrictions “shall be enforceable equitable servitudes, unless unreasonable,
and shall inure to the benefit of and bind all owners of separate interests in
the development.” (§ 5975, subd. (a).)
The applicable CC&R’s provisions are sections 6.01 and 6.02. Section
6.01 provides it is the HOA’s responsibility to maintain “necessary utility
services for the Common Area, and to the extent not separately metered or
charges [sic], for the Units.” Under section 6.02, it is the owners’
responsibility to “[m]aintain, repair, replace and restore . . . water heaters
and other internal installations and utilities and any other equipment that is
installed for the exclusive use and enjoyment in the Owner’s Unit” and
located within the unit. Plaintiffs contended the CC&R’s obligated the HOA
5
to provide heat to their condominium, but it had failed to provide an
alternative heating system.
Around this time, Katz and her property management company were
added to the proceedings via a cross-complaint filed by Stein and PUI.
HOA’s Motion for Summary Judgment
In February 2020, the HOA filed a motion for summary judgment
(MSJ) on the third amended complaint. Plaintiffs opposed the MSJ,
supported by a declaration by Kinney with exhibits attached.
Among the 10 exhibits attached to Kinney’s declaration were various
documents noted above, including the June 2014 financial disclosure form
stating the HOA anticipated a roofing project, the June 2014 e-mail from
Stein to Katz memorializing their discussion of the estimated $300,000 cost
for the roof repairs, the September 2014 e-mail from Stein stating heat is
included in HOA dues, the 2016 note from the HOA’s attorney during
mediation on finding an alternate heat source, and sections 6.01 and 6.02 of
the CC&R’s.
The exhibits also included two reports submitted to the HOA prior to
plaintiffs’ purchase of their condominium indicating the needed repairs to the
roof were extensive. First, an October 2013 “Site Watertesting [sic]
Summary” sent from Aquatech Consultancy, Inc. (Aquatech) to Katz stated
that there were multiple cracks observed in balusters on the roof of the
building leading to leaking and that waterproofing was needed. Second, a
summary by Neumann Sloat Blanco Architects LLP (Neumann Sloat) from
early June 2014—prior to the date of the financial disclosure form or the
6
discussion between Katz and Stein regarding the estimate for the repairs—
recommending the removal and repair of the entire roof structure.1
The trial court treated the MSJ as a motion for judgment on the
pleadings. It dismissed the cause of action for breach of fiduciary duty,
granted the motion as to the heating claims with leave to amend, and denied
the motion as to the remaining causes of action.
Discovery Sanctions
In August 2020, Stein and PUI moved to compel discovery responses
from plaintiffs, asserting plaintiffs failed to respond to various
interrogatories, requests for admissions, and requests for production of
documents propounded in October 2019 and March 2020.
The court granted the motion to compel and imposed monetary
sanctions. The order required plaintiffs to serve verified, code-compliant
responses without objections to numerous specified interrogatories and
requests for production of documents and deemed certain requests for
admissions admitted.
Rather than provide specific answers to the interrogatories, Kinney
served a two-page answer that attached plaintiffs’ opposition to the MSJ.
The answer stated plaintiffs could not answer the interrogatories “in
customary manner” as they concerned allegations in the third amended
complaint but plaintiffs had since filed a fourth amended complaint. It
1 Specifically, the Neumann Sloat report recommended “removing
everything down to the structural deck, patching, repairing and introducing
slope as required and installing [a waterproof] membrane. This would
include removing the skylight and all egress doors and a portion of the
exterior finishes to integrate the membrane and existing door with new fluid
applied flashings and water resistive barrier.” It also recommended
repairing the balustrade as all the balusters were damaged, all new roof
drains, and correcting any deficient construction.
7
continued: “Plaintiffs cannot be more specific about the underlying facts, the
persons involved, the documents relied on, and the legal theories underlying
their claims than they were in their written Opposition to the [MSJ].
Accordingly, they incorporate by reference their Opposition and any and all
testimony and documents identified there as their responses to PUI’s special
interrogatories.”
In response, Stein and PUI moved to compel further responses and
sought evidentiary and terminating sanctions against plaintiffs. The court
ordered plaintiffs to comply with the prior order to answer interrogatories
without objections. Crucially for purposes of this appeal, the court imposed
evidentiary sanctions precluding plaintiffs “from presenting evidence or
witnesses not identified in their [MSJ] opposition papers (as to any
allegations present in the current operative complaint).”
Temporary Dismissal of Heating Claims
As noted above, Kinney filed a fourth amended complaint in late 2020
that omitted the prior causes of action for gross negligence and breach of
fiduciary duty.
The HOA demurred to the fourth amended complaint. Kinney did not
file an opposition; instead, he tried to file a fifth amended complaint, which
was rejected by the clerk of court. The HOA’s demurrer was sustained
without leave to amend as to the heating claims.2
Thereafter, Kinney moved for relief from mistake and for permission to
file a fifth amended complaint, asserting he believed he could file a successive
complaint in lieu of an opposition to the demurrer. The court denied the
2 Although not relevant here, the court also granted in part PUI and
Stein’s unopposed demurrer to the fourth amended complaint.
8
motion for relief from mistake on both procedural and substantive grounds
and denied the motion for permission to file the fifth amended complaint.
As a result of those rulings, the HOA was—for the time—the prevailing
party on the heating claims, and it moved for attorney fees and costs. Kinney
filed an untimely opposition, which the court ordered stricken. The court
granted the HOA’s motion as unopposed and awarded the HOA $471,587.57,
representing the attorney fees of $450,637.60 plus recoverable costs of
$20,949.97.
Ongoing Pretrial Proceedings in Underlying Action
Amid these proceedings, the case was assigned for trial in December
2020.
Kinney filed an exhibit list identifying 75 proposed trial exhibits. He
also filed an expert disclosure statement identifying two retained experts and
three nonretained experts for trial. The retained experts were Charles Allen,
to testify concerning alternatives for installing a heating system in the
condominium, and Tracy McLaughlin, to testify regarding property value and
damages from the repairs. The planned nonretained experts were the two
authors of the Aquatech and Neumann Sloat summaries and Claire, a real
estate broker, to testify regarding the lack of increase in market value in the
condominium from the repairs.
The court granted the HOA’s motion in limine No. 2, to preclude from
trial any evidence not referenced in plaintiffs’ opposition to the MSJ (in
accordance with the evidentiary sanctions order),3 and motion in limine
3 Kinney incorrectly asserted at oral argument that the court denied
the HOA’s motion in limine No. 2. The record reflects the court tentatively
granted that motion and then adopted its tentative ruling.
9
No. 1, to exclude evidence not turned over in discovery by November 14, 2020
(as Kinney filed late responses to the HOA’s discovery requests).
Additionally, the court granted the HOA’s motion in limine No. 6, to
exclude testimony by expert witnesses Allen and McLaughlin for failure to
produce them for deposition. The court denied the HOA’s motion in limine
No. 3, that Claire be precluded from testifying as an unqualified expert, but it
ordered her deposition.
Attorney Jeffrey Judd Enlisted to Help Kinney
In early 2021, Kinney brought in another attorney, Jeffrey Judd of the
Buchalter Firm, initially at his own expense, to help on the case. With Judd’s
help, Kinney moved for reconsideration of the order denying the motion for
relief from mistake—which had been based on Kinney’s mistaken belief he
could file the fifth amended complaint instead of opposing the demurrers to
the fourth amended complaint—and the court granted reconsideration in
January 2021.
The effect of this ruling was to resurrect the demurrers to the fourth
amended complaint, which the court sustained with leave to amend. Around
this time, plaintiffs retained Judd as lead trial counsel while Kinney
remained on the case as cocounsel.
In February 2021, Judd and Kinney filed a fifth amended complaint.
The court sustained PUI, Stein, and Wiley’s demurrers without leave to
amend, effectively dismissing the claims against them in the underlying
action.
However, the court overruled the HOA’s demurrer to the fifth amended
complaint, which meant plaintiffs’ heating claims were reinstated. As a
result, the court also vacated the $471,587.57 award of attorney fees and
costs to the HOA.
10
In May 2021, Judd filed the sixth (and final) amended complaint.
Underlying Lawsuit Settlement
The case was reassigned to Judge Jeffrey Ross, who held a series of
settlement conferences.
In August 2021, a settlement agreement was reached among all parties
that had been in the underlying action, with a stipulation for settlement
executed in September 2021. Under the terms of the agreement, plaintiffs
received $366,500. The bulk of this sum, $320,000, came from the HOA,
Katz, and Katz’s company; the remainder was comprised of $40,000 from
Wiley and $6,500 from Stein. As their direct out-of-pocket litigation costs
and fees for the case were $365,403, plaintiffs’ net gain in the underlying
action was merely $1,097.
Malpractice Proceedings
In 2022, plaintiffs filed the instant malpractice lawsuit against Kinney,
claiming professional negligence, breach of fiduciary duty, and breach of
contract. In July 2024, the parties proceeded to trial solely on the claim for
professional negligence, with plaintiffs represented by new counsel, Paul A.
Frassetto. Kinney, Judd, both plaintiffs, and Brian Neumann (the Neumann
Sloat summary author) testified, along with a standard of care expert for
plaintiffs. The following is a summary of the relevant trial testimony.
Kinney’s Testimony
Kinney’s testimony regarding the underlying series of events largely
mirrored the above recitation. He further stated that, although he included
75 exhibits on his trial exhibit list, he did not intend to use most of them at
trial. However, upon questioning as to the significance of numerous exhibits
on the trial exhibit list that were subject to the evidentiary sanctions—which
we refer to as “excluded exhibits” as the court found they would have been
11
excluded from trial in the underlying action—Kinney acknowledged several
had evidentiary value, particularly for proving damages and knowledge of the
HOA as to the need for repairs. For example:
One excluded exhibit listed the breakdown of the special assessments
made by plaintiffs for building repairs, which was intended to be the evidence
of what plaintiffs paid and when they paid it (relevant to the
misrepresentation claims). That exhibit also included a column detailing the
total amount of interest that plaintiffs would have been due on their
damages. Other excluded exhibits contained further evidence of repair costs
and a late fee incurred by plaintiffs because of Kinney’s advice not to pay one
of the special assessments.
Additional excluded exhibits included various documents supporting
plaintiffs’ claim that the HOA knew about and deferred work on significant
repairs for the building prior to plaintiffs’ condominium purchase.
Another excluded exhibit was a comparative market analysis prepared
by Claire showing the condominium had not appreciated in value since their
purchase, which was intended to counter a claim that plaintiffs were not
entitled to recover for their costs of the repairs.
Moreover, Kinney inadvertently left out from the exhibit list an
October 2013 Aquatech “Site Observation Summary” (different from the
water testing summary), which would have been evidence of the author’s
opinion that the entire balustrade needed to be removed, repaired, and
replaced.
Neumann’s Testimony
Neumann testified regarding his inspection of the roof and summary of
inspection sent to the HOA in June 2014, which detailed the significant work
needed on the roof and the high costs involved in such repairs. He estimated
12
the cost of just the roof and balustrade repair at the time was close to $1.5
million as the entire roof and balustrade needed to be replaced. Neumann
fully informed Katz and the HOA of the scope of repairs he believed were
necessary in 2014.
Ultimately, after discovering significant issues with other aspects of the
building beyond just the roof and balustrade, the repairs required covering
the building in scaffolding and netting for multiple years.
Judd’s Testimony
Judd testified that, when he was working on the underlying action, he
believed plaintiffs’ heating claims were very strong but heard contrary views
in settlement discussion.
Further, although he believed some of the information that had been
excluded from trial in the underlying action (due to the evidentiary sanctions)
could be presented at trial through witness testimony, the orders precluding
evidence were a “big problem.” Judd agreed documentary evidence would
have been stronger than merely soliciting testimony from the percipient
witnesses, such as Katz.
Jamie Uziel’s Testimony
Plaintiffs’ standard of care expert, Jaime Uziel, identified three areas
in which he believed Kinney breached the standard of care. First, by failing
to properly respond to PUI and Stein’s written discovery requests and comply
with the orders on the motions to compel, instead providing a one-paragraph
response and attaching the opposition to the MSJ. As a result of this, instead
of the 75 exhibits Kinney had included in the trial exhibits list, plaintiffs
were limited to the 10 documents attached to the opposition to the MSJ.
Further, the failure to respond to the interrogatory asking for facts related to
damages could result in those facts being excluded from trial.
13
Second, Kinney breached the standard of care by deciding not to oppose
the demurrers to the fourth amended complaint and instead attempting to
file a fifth amended complaint without obtaining leave of court to do so.
Third, Kinney erred by failing to make plaintiffs’ expert witnesses
available for deposition, which meant they could not be presented at trial.
Martin’s Testimony
Martin and Claire wished to go to trial but, according to Martin,
decided to settle “when it was explained to us that most of our evidence was
gone, and that the experts that we had hired and that we valued were no
longer in the case, and then Joanne Stein was out of the case, and Wiley, the
lady that sold us our unit, was out of the case, and what we would have to do
to bring them back into the case.”
Martin stated they moved out of the building in 2015 due to the
construction and wound up commuting from Sausalito to San Francisco to
take their daughter to school. They could not rent the condominium because
they did not have heat. It took six years, from 2017 to 2023, to install code-
compliant heat. Even when they moved in, they had separate meters in the
unit for electricity and gas.
If he and Claire knew what the HOA had known at the time of the
purchase, they would not have bought the condominium.
Claire’s Testimony
Claire and Martin purchased the condominium so that their daughter
could attend a nearby school. She listed the apartment for rent in 2023 after
the heat was installed, and they were able to rent it out in 2024.
Claire also provided testimony regarding the exhibits that were
excluded from trial under the evidentiary sanctions order that was consistent
with Kinney’s explanation of the exhibits.
14
Claire stated that, if it were not for the evidentiary sanctions and
exclusions of experts, they would have rejected the settlement offer and
proceeded to trial. Judge Ross frequently brought the sanctions and excluded
experts up during the settlement negotiations and reminded them they did
not have “anything” to go forward in trial with and no witnesses to present.
It was her recollection that these statements referred to both the heating and
misrepresentation claims.
Statement of Decision
In December 2024, the trial court found Kinney’s professional
negligence caused plaintiffs to settle the underlying case against the HOA for
less than they would have been awarded in settlement or at trial absent the
negligent representation. The court noted Kinney did not contest that he
breached the standard of care or offer any expert witness testimony on the
issue.
Applying the “case-within-a-case” approach, it found plaintiffs would
have prevailed in the underlying case on the misrepresentation claim. The
court rejected Kinney’s assertion that, under Filbin v. Fitzgerald (2012) 211
Cal.App.4th 154 (Filbin), plaintiffs could not prove their damages were
caused by his professional negligence. Rather, it found his negligence
“severely compromised” the misrepresentation action and led them to settle
instead of pursuing the claims at trial. However, it found plaintiffs would
have lost on the heating claims at trial regardless of Kinney’s negligence
because the court based its decision on its interpretation of CC&R’s sections
6.01 and 6.02; there was no evidence relevant to its determination excluded
from trial due to Kinney’s negligence.
The court awarded plaintiffs a total of $215,871.60. As further detailed
below, the court offset the $1,054,228.60 it found plaintiffs should have
15
recovered for the misrepresentation claim by (1) the $471,587 in estimated
HOA attorney fees on the heating claims and (2) the $366,500 settlement
amount to arrive at a total of $215,871.604 in damages awarded to plaintiffs.
On the misrepresentation claim, plaintiffs were awarded $669,055 for
their out-of-pocket losses for the building repair ($681,055 paid for special
assessments minus the $12,000 they expected to spend on such repairs) plus
prejudgment interest of $145,173.60. The prejudgment interest was
calculated at a 10 percent rate (on the $669,055) from when the assessments
were fully paid in July 2019 up to a hypothetical date a judgment would have
been entered after trial, which it calculated to be September 10, 2021. The
court also awarded damages for loss of use of the condominium that was
proximately caused by the misrepresentation, which it calculated to be
$240,000. Thus, the court found plaintiffs should have recovered a total of
$1,054,228.60 on their successful misrepresentation claim.
However, as the court found plaintiffs would not have prevailed on the
heating claims regardless of any actions by Kinney, it determined the award
of damages had to be offset by the attorney fees the HOA would have been
due as the prevailing party on those claims. The court stated “the closest
estimate” it could reach was the $471,587 granted to the HOA in fees and
costs in the underlying action when the HOA was temporarily the prevailing
party on the heating claims (though that order was subsequently vacated).
The court declined to allocate between the heating and misrepresentation
fees as it “would be difficult at best.” The court also found an offset was
4 This amount is $270 less than the $216,141.60 we reach from these
calculations. We encourage the court to take this discrepancy into account
when recalculating damages upon remand.
16
appropriate to account for the $366,500 plaintiffs received for settling the
underlying action.
Finally, though Kinney requested $75,000 in quantum meruit attorney
fees as an offset against any damages, the court found he failed to present
evidence that he was entitled to such fees.
Judgment was entered on January 8, 2025. Plaintiffs moved for a new
trial, but the order (granting new trial solely so that the parties could litigate
apportionment of attorney fees on the heating claims) was vacated as void
because it was entered after the 75-day statutory time limit.
Plaintiffs appealed from the January judgment and Kinney cross-
appealed. We permitted plaintiffs to file a supplemental brief limited to
“whether the trial court erred by awarding attorney’s fees to respondent.”
DISCUSSION
A “ ‘settle and sue’ ” attorney malpractice case such as this one involves
a former client suing on the basis that the settlement was less than it should
have been due to the attorney’s negligence. (Filbin, supra, 211 Cal.App.4th
at p. 157.)
In a legal malpractice action arising from a civil proceeding, the
plaintiff must establish “(1) the duty of the attorney to use such skill,
prudence, and diligence as members of his or her profession commonly
possess and exercise; (2) a breach of that duty; (3) a proximate causal
connection between the breach and the resulting injury; and (4) actual loss or
damage resulting from the attorney’s negligence.” (Coscia v. McKenna &
Cuneo (2001) 25 Cal.4th 1194, 1199.) The elements of causation and damage
are closely linked. (Namikas v. Miller (2014) 225 Cal.App.4th 1574, 1582
(Namikas).)
17
Plaintiffs in a malpractice action must establish by a preponderance of
the evidence that, but for the attorney’s negligent acts or omissions, they
would have obtained a more favorable judgment or settlement in the
underlying lawsuit. (Namikas, supra, 225 Cal.App.4th at p. 1582.) “This
standard requires a ‘trial-within-a-trial’ of the underlying case, in which the
malpractice jury [or judge in a bench trial] must decide what a reasonable
jury or court would have done if the underlying matter had been tried instead
of settled.” (Ibid.)
“In reviewing a judgment based upon a statement of decision following
a bench trial, we review questions of law de novo. [Citation.] We apply a
substantial evidence standard of review to the trial court’s findings of fact.
[Citation.] Under this deferential standard of review, findings of fact are
liberally construed to support the judgment and we consider the evidence in
the light most favorable to the prevailing party, drawing all reasonable
inferences in support of the findings.” (Thompson v. Asimos (2016) 6
Cal.App.5th 970, 981 (Thompson).)
“A single witness’s testimony may constitute substantial evidence to
support a finding. [Citation.] It is not our role as a reviewing court to
reweigh the evidence or to assess witness credibility. [Citation.] ‘A judgment
or order of a lower court is presumed to be correct on appeal, and all
intendments and presumptions are indulged in favor of its correctness.’ ”
(Thompson, supra, 6 Cal.App.5th at p. 981.) After a bench trial, we must
infer the trial court impliedly made every factual finding necessary to support
its decision. (Ibid.)
The parties raise challenges to the court’s substantive findings as to the
misrepresentation and heating claims, as well as to its calculation of
damages. We address the issues in turn.
18
I. Challenges to Substantive Findings on Misrepresentation and
Heating Claims
Kinney argues the court erred by finding that, due to his negligence,
plaintiffs received less in the underlying lawsuit than they otherwise would
have on their misrepresentation claim. Plaintiffs aver the court incorrectly
found they would not have succeeded on their heating claims. We are not
convinced by either contention.
A. Substantial Evidence Supports the Court’s
Misrepresentation Findings
Kinney agrees that plaintiffs would have prevailed at trial on their
misrepresentation claim. His position is that the court erred by finding his
actions—specifically, those resulting in evidentiary sanctions—caused
plaintiffs to settle the underlying action for less than they would have
otherwise received in settlement or at trial. Simply put, he argues that
plaintiffs were not damaged by his actions.
The trial court found plaintiffs had every intention of taking the case to
trial and that their settlement demand never fell below one million dollars
prior to their learning about the evidentiary sanctions during the settlement
conference. It further found that, because of Kinney’s negligence, plaintiffs’
expert witnesses were excluded and their documentary evidence was reduced
to only a few documents that did not contain any proof of their damages from
the misrepresentation. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th
1226, 1239 & fn. 4 [an essential element of both intentional and negligent
misrepresentation is resulting damages].)5 Hence, due to Kinney’s
5 Though the underlying action alleged causes of action for both
intentional and negligent misrepresentation, the trial court appears to have
focused on the claim of intentional misrepresentation. As damages are
required for either claim, the distinction is immaterial to our analysis.
19
mismanagement of the case, plaintiffs’ case was severely compromised and
they opted to settle for the amount offered rather than pursue the case at
trial.
The court’s findings are supported by substantial evidence. Plaintiffs
testified they planned to proceed to trial and only settled because of the
evidentiary sanctions. Kinney’s and Claire’s testimonies demonstrated the
evidence included in the trial exhibit list that was excluded due to the
evidentiary sanctions provided the sole documentary evidence of damages for
plaintiffs’ misrepresentation claim.
And, contrary to Kinney’s contention, it was not just Claire’s testimony
but his own description of this evidence that supported the court’s conclusion.
For example, Kinney testified exhibit 95 broke down the special assessments
paid by plaintiffs for building repairs over four phases and several years. He
testified exhibits 96 and 97 contained further evidence of costs incurred by
plaintiffs due to additional repairs and a late fee levied as a result of his
advice not to pay an assessment. Claire’s description of these exhibits was
consistent with Kinney’s.
All these exhibits were excluded from trial as they were not part of the
MSJ opposition. More importantly, as Kinney concedes, none of the exhibits
that were attached to the MSJ opposition provided any evidence of plaintiffs’
damages from the misrepresentation claim. Therefore, the court’s finding of
detriment due to the lack of documentary evidence to prove damages, an
essential element of a misrepresentation claim (Alliance Mortgage Co. v.
Rothwell, supra, 10 Cal.4th at p. 1239 & fn. 4), is plainly supported by
substantial evidence.
In arguing to the contrary, Kinney asserts plaintiffs’ evidence of
damages was not hampered by the evidentiary sanctions because a pretrial
20
ruling in the underlying action permitted plaintiffs to testify as to their
opinions on the value of the property. Putting aside that evidence of property
value was intended to counter any claim that damages should be offset by
appreciation in value, Kinney misses the point, which is whether there was
substantial evidence in support of the judgment.
Here, there is copious support in the record for the court’s finding that
numerous documents with significant evidentiary value to plaintiffs’
misrepresentation claims against the HOA were not available due to his
professional negligence, and that the unavailability of those documents for
trial was a significant factor in the settlement. Whether or not plaintiffs
could testify as to the value of the property does not negate the absence of
this significant documentary evidence, along with the absence of experts due
to Kinney’s negligence, and the impact of these absences on settlement
decisions.6
6 Kinney contends that Claire’s deposition in the underlying action
“covered [the] damage claims in exhaustive detail.” The deposition transcript
is not part of the record on appeal. Its presumed existence does not undercut
the import of the lack of documentary and expert evidence.
Further, at oral argument, Kinney relied heavily on an August 23, 2021
e-mail from Judd to plaintiffs, just before the settlement was reached,
indicating Judge Ross discussed various potential estimates for damages on
the misrepresentation claim without referencing the evidentiary sanctions.
Kinney avers this supports his claim that the evidentiary sanctions did not
hamper plaintiffs’ ability to prove damages as to misrepresentation or cause
them to settle for less than they would have received at trial.
Again, Kinney’s assertion misconstrues our role in reviewing a ruling
for substantial evidence; we are tasked with determining whether there is
credible evidence that supports the court’s ruling, not whether a piece of
evidence could lead to a contrary finding. (See In re Marriage of Nelson
(2025) 115 Cal.App.5th 904, 915 [“In reviewing a substantial evidence
challenge, we ignore all contrary evidence and determine whether the
evidence the court relied upon was substantial as defined by the law.”].)
21
And we are not persuaded by Kinney’s vague contentions that expert
witnesses were needed to explain how the excluded evidence impacted
plaintiffs’ misrepresentation claims in the underlying lawsuit. Kinney fails
to identify what kind of expert plaintiffs should have called and we do not see
why the trial court or a jury would need expert evidence to understand how
the excluded evidence related to the misrepresentation claim. (See McCoy v.
Gustafson (2009) 180 Cal.App.4th 56, 100, 99 [expert testimony is not
necessary “ ‘to a plaintiff’s case where the fact sought to be proved is one
within the general knowledge of laymen’ ”; it is only required where “ ‘ “the
matter in issue is one within the knowledge of experts only and not within
the common knowledge of laymen” ’ ”].)
Finally, Kinney’s continued attempt to liken this case to Filbin is
unavailing. In Filbin, the court concluded a legal malpractice action failed
because of the lack of any nexus between the attorney’s representation and
the decision to settle. (Filbin, supra, 211 Cal.App.4th at p. 172.) “No past
decision by [the attorney] hobbled [the plaintiffs]” in deciding whether to
proceed to trial or settle. (Id. at p. 171.)
Kinney’s assertion that, as in Filbin, there was no “ ‘lingering
impairment’ ” (Filbin, supra, 211 Cal.App.4th at p. 171) from the evidentiary
sanctions is without merit. As we have explained, the court’s finding that
Kinney’s actions “severely compromised” plaintiffs’ claim—particularly as to
the lack of evidence of damages—and led them to mitigate their losses by
settling rather than proceed to trial is well supported.
B. Substantial Evidence Supports the Court’s CC&R’s Findings
At this juncture, it is worth a reminder that it was on plaintiffs to prove
their professional negligence claim against Kinney, in other words, to prove
that conduct by Kinney caused them to settle their heating claims for an
22
amount lower than they would have recovered at trial or via settlement
absent his negligent representation. Without “a proximate causal connection
between the breach and the resulting injury,” there is no case for negligent
misrepresentation. (Coscia v. McKenna & Cuneo, supra, 25 Cal.4th at
p. 1199.)
But plaintiffs’ briefing on the heating claims focuses exclusively on
their interpretation of the CC&R’s, without consideration of any extrinsic
evidence, rather than on any actions by Kinney that caused them to lose the
heating claims. This makes sense as plaintiffs and the HOA maintained
throughout the course of the proceedings that the CC&R’s sections were
unambiguous—though of course their interpretations of those sections were
at odds in regard to whether the HOA was obligated to provide a heat source
once the prior heat source was no longer available.
Therefore, and without objection, the sole evidence relied upon by the
court was the relevant CC&R’s sections, sections 6.01 and 6.02. Those
sections were attached to the MSJ opposition and thus not excluded from
trial due to the evidentiary sanctions. Accordingly, plaintiffs have not met
their burden of demonstrating that Kinney’s actions resulted in a less
favorable outcome on the heating claims.7 (Namikas, supra, 225 Cal.App.4th
at p. 1582.)
7 Plaintiffs asserted at oral argument that Kinney’s actions caused
them to lack evidence of damages on the heating claims in the underlying
action. However, we decline to find plaintiffs have met their burden to prove
professional negligence when their briefing on those claims centered solely on
the language of the CC&R’s, which they do not, and cannot, contend were
excluded from the underlying action due to Kinney. Regardless, the court’s
finding that plaintiffs would not have succeeded on the heating claims, which
we uphold for the reasons we explain herein, was not premised on the lack of
evidence of damages.
23
As a result, plaintiffs instead argue Kinney somehow lulled them into
not adequately arguing the applicability of the CC&R’s because Kinney
opined that their heating claims had merit and never argued—including in
the professional negligence bench trial—that their condominium was
separately metered for heat.
Despite this assertion, plaintiffs do not demonstrate that Kinney
deprived them of an opportunity to litigate this issue at the professional
negligence trial. There is no evidence that Kinney prevented plaintiffs from
providing arguments to bolster the strength of their heating claims, which
they knew the trial court was tasked with assessing in the “case-within-a-
case” before it. As the court stated: “[Plaintiffs] were well aware that
interpretation of the CC&Rs as a question of law was at issue here and had
ample opportunity to address the issue during trial and in post-trial briefing.”
Being “well aware” of the issue, plaintiffs chose through their counsel
to proceed under the theory that the CC&R’s were clear and unambiguous
and did not seek to argue that extrinsic evidence would have been needed to
make their case in the underlying lawsuit. That was their strategy,
independent of Kinney. And it was a strategy decided upon after going
through settlement proceedings in which the settlement judge shared his
views that they would lose their heating claims based on the language of the
CC&R’s.
Once plaintiffs went to trial on the professional negligence claim, the
trial judge reviewed the CC&R’s and reached the conclusion that, on their
face, they did not require the HOA to provide heating to plaintiffs’
condominium because their condominium was “separately metered” for heat
under CC&R’s section 6.01. She is correct.
24
We interpret CC&R’s according to the usual rules of contract
interpretation. (Harvey v. The Landing Homeowners Assn. (2008) 162
Cal.App.4th 809, 817 (Harvey).) “The language of the CC&R’s governs if it is
clear and explicit, and we interpret the words in their ordinary and popular
sense unless a contrary intent is shown.” (Ibid., citing § 1644.) Where the
trial court’s interpretation of the CC&R’s does not turn on the credibility of
extrinsic evidence, we independently interpret its meaning. (Harvey, at
p. 817.)
The question at trial was “whether a replacement heating system was
the responsibility of the HOA under section 6.01 as a utility not separately
metered or charged.” CC&R’s section 6.01(a) states the HOA’s “Maintenance
Responsibilities” include: “Water, sewer, garbage, electrical, telephone, gas
and other necessary utility services for the Common Area, and to the extent
not separately metered or charge[d] for the Units.” (Boldface added.)
The parties do not dispute that heat is a necessary utility service and that
the HOA had to maintain heat if it was not separately metered or charged.
Based on the plain language of the CC&R’s, the court concluded the
HOA was not required to provide an alternate heat source to plaintiffs after
removing the boiler because their condominium “contained separate meters
for gas and electricity—the very utilities that power heating systems—even if
the existing gas and electricity systems were not being used for heat when
the boiler system was decommissioned.”
Plaintiffs concede that their condominium had separate meters for gas
and electricity. However, they argue that, despite having gas and electricity
meters, their condominium was not “separately metered” for heat. As this
contention was wholly unsupported by any evidence regarding the existence
25
of a separate “heating meter” and the lack of such a meter for their
condominium, it was properly rejected by the court.
Though we recognize the HOA had historically supplied heat to
plaintiffs’ condominium through the boiler system, nowhere do the CC&R’s
require the HOA to provide heat to the individual units once the boiler
system was decommissioned. Such a requirement is certainly not in section
6.01. And plaintiffs’ reliance on section 6.02 of the CC&R’s is of no assistance
as that section provides that it is the owners’ responsibility to “[m]aintain,
repair, replace and restore . . . water heaters and other internal installations
and utilities and any other equipment that is installed for the exclusive use
and enjoyment in the Owner’s Unit.” Section 6.02 does not shed light on the
critical question of whether the HOA is required to provide heat to each unit.
Instead, it simply provides that if a unit has individual equipment and
utilities the owners (not the HOA) must maintain them.
As plaintiffs’ condominium undisputedly had separate meters for gas
and electricity (the utilities that power heat), we conclude their condominium
was “separately metered” for heat under the “ordinary and popular sense” of
the words (Harvey, supra, 162 Cal.App.4th at p. 817; § 1644) and the CC&R’s,
including section 6.01, did not require the HOA to provide heat to their
condominium. Therefore, the HOA was not responsible for providing heat to
plaintiffs’ condominium and the trial court did not err.
However, as we discuss in part II.C., post, the court should have
apportioned the HOA’s fees to be limited to solely the heating claims.
II. Challenges to Damages Calculations
Kinney contends the court erred by finding he failed to prove
entitlement to an offset for attorney fees. We find his argument unavailing.
26
Plaintiffs assert the court erred by failing to award prejudgment
interest through the time of the judgment in this case (as opposed to the
hypothetical judgment date in the underlying action) and by failing to
apportion the attorney fees to only the HOA’s heating claims. On these
points, we agree.
A. Substantial Evidence Supports Finding that Kinney Failed
To Prove Entitlement to Quantum Meruit Fees
Kinney sought an offset of attorney fees on a quantum meruit basis as
he never signed the fee agreement with plaintiffs.
Assuming the attorney fee agreement was voided, “the attorney may
recover the reasonable value of the services [he or] she performed in the
action pursuant to a common count for quantum meruit.” (Leighton v.
Forster (2017) 8 Cal.App.5th 467, 490; Bus. & Prof. Code, § 6148, subd. (c)
[attorney entitled to collect “a reasonable fee”].)
Providing evidence of the number of hours worked and rates claimed is
a useful starting point but not the end of the analysis in a quantum meruit
action as the party seeking fees must also show they were reasonable.
(Mardirossian & Associates, Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 272.)
“Factors relevant to that determination include ‘[t]he nature of the litigation,
its difficulty, the amount involved, the skill required in its handling, the skill
employed, the attention given, the success or failure of the attorney’s efforts,
the attorney’s skill and learning, including his [or her] age and experience in
the particular type of work demanded.’ [Citations.] Because evidence and
analysis of all these factors can be a ‘formidable undertaking’ [citation],
expert testimony in a quantum meruit action for attorney fees is appropriate
to assist the fact finder.” (Ibid.)
27
We review the court’s findings on Kinney’s quantum meruit claim for
substantial evidence (see Fergus v. Songer (2007) 150 Cal.App.4th 552, 567)
and find no error.
1. Additional Relevant Background
Kinney submitted an exhibit at trial listing his billing statements for
plaintiffs from March 2018 through April 2021 for attorney fees (at an hourly
rate of $350) plus costs, totaling, by our calculations, around $391,500. He
also submitted a document showing plaintiffs had paid him $167,779.14,
which appears to be the total fees and costs billed through March 25, 2020.
At trial, Kinney’s sole testimony regarding the quantum meruit claim
was as follows. The rate of $350 per hour was below market. He was paid
$167,000 by plaintiffs. “[B]eyond that, [he] billed $153,664.59.” Kinney then
went through and removed some of the bills because he did not want to spend
more time justifying them or arguing about it.
Specifically, he removed some entries related to “endless motions to
bifurcate,” one bill from October 2020, and apparently one from July 2020.
He then “[took] out basically everything, until then we get to the spring,
April—let me see the last bill—I took out three bills totaling $178,500. . . . [¶]
So the remainder from the 253[,000] taking out the 178[,000] is $75,164.
That’s work I did.” He also paid $5,500 for two deposition transcripts after
the case was over.
Kinney presented no expert testimony or other evidence in support of
his quantum meruit claim. He submitted a fee agreement that was signed by
plaintiffs in 2018 but not signed by him.
The trial court found Kinney failed to establish he was entitled to
attorney fee offset because he “presented no evidence to support a finding that
28
his services benefited his clients in an amount greater than $167,779 they
had already paid.”
2. Analysis
Kinney argues the billing exhibits and his testimony were sufficient to
establish his entitlement to his claimed attorney fee offset. We conclude the
court’s finding that Kinney failed to demonstrate he was entitled to recover
more than the over $167,000 already paid by plaintiffs is supported by
substantial evidence.
As an initial matter, we note Kinney asserts the bills totaled over
$421,000, whereas the bills in the exhibit he cites to appear to total around
$391,500. Regardless, Kinney did not present any testimony or evidence
explaining how he arrived at the roughly $178,000 he was deducting from the
bill request other than to vaguely suggest that amount related to motions to
bifurcate and mention two months’ bills from 2020.
More crucially, Kinney did not meet his burden to establish the
additional fees he sought were reasonable. (Mardirossian & Associates, Inc.
v. Ersoff, supra, 153 Cal.App.4th at p. 272.) He made no attempt to
undertake the “ ‘formidable’ ” task of presenting evidence or testimony
describing the nature of the litigation, its difficulty, the skill and attention
employed, or his experience in this type of work. (See ibid.) Nor did he offer
expert testimony to assist the court in making such determinations, which
the court appropriately noted was missing when denying the quantum meruit
claim. (See ibid.)
Accordingly, substantial evidence supports the court’s finding that
Kinney failed to prove he was entitled to an offset of attorney fees from the
award of damages to plaintiffs.
29
B. Plaintiffs Are Entitled to Prejudgment Interest up to the
Date of the Malpractice Judgment
Plaintiffs assert that, while the court properly awarded prejudgment
interest on damages through the hypothetical date judgment would have
been entered after trial in the underlying action (September 10, 2021), it
should have also awarded interest through the entry of judgment in this case.
We agree.
As a reminder, the court awarded plaintiffs $669,055 for their out-of-
pocket losses on special assessments paid for the building repair and also
awarded prejudgment interest at a rate of 10 percent per annum from July
2019 through September 10, 2021, adding $145,173.60 in interest to the
$669,055 award. It found prejudgment interest was appropriate under both
sections 3287 and 3288 and cited section 3289 for the 10 percent rate.
Section 3287, subdivision (a), provides that “[a] person who is entitled
to recover damages certain, or capable of being made certain by calculation,
and the right to recover which is vested in the person upon a particular day,
is entitled also to recover interest thereon from that day.” Section 3288
allows for prejudgment interest to be awarded in the discretion of the jury, or
judge in a bench trial, “ ‘[i]n an action for the breach of an obligation not
arising from contract.’ ” (Michelson v. Hamada (1994) 29 Cal.App.4th 1566,
1586; see id. at pp. 1586–1588.)
We note that, though plaintiffs at times frame their claim as one for
postjudgment interest, they correctly acknowledge their request is
“technically” one for prejudgment interest—that is, interest preceding the
judgment in the malpractice action—on their out-of-pocket losses for the
30
special assessments as they have been denied the use of those funds since
they were paid in 2019 through the judgment in this case.8
“From a plaintiff’s perspective, prejudgment interest compensates for
the loss of the use of the money during the period between the assertion of
the claim and the rendition of judgment. . . . [¶] From the defendant’s
perspective, the certainty requirement promotes equity because liability for
prejudgment interest occurs only when the defendant knows or can calculate
the amount owed and does not pay.” (Watson Bowman Acme Corp. v. RGW
Construction, Inc. (2016) 2 Cal.App.5th 279, 293 (Watson).)
Therefore, the award of prejudgment interest focuses on a defendant’s
knowledge of the amount of a plaintiff’s claim. (Watson, supra, 2 Cal.App.5th
at p. 294.) Only if the defendant had actual knowledge of the amount owed or
could have computed that amount from reasonably available information
should prejudgment interest be awarded. (Ibid.)
“Under this test for certainty as to amount, a dispute or denial of
liability does not make the amount of damages uncertain. [Citation.] As
stated by our Supreme Court: ‘Generally, the certainty required of Civil Code
section 3287, subdivision (a), is absent when the amounts due turn on
disputed facts, but not when the dispute is confined to the rules governing
liability.’ ” (Watson, supra, 2 Cal.App.5th at p. 294, quoting Olson v. Cory
(1983) 35 Cal.3d 390, 402.)
8 To the extent plaintiffs seek postjudgment interest under Code of
Civil Procedure section 685.010, which provides that interest accrues at the
rate of 10 percent annually “on the principal amount of a money judgment
remaining unsatisfied” (Code Civ. Proc., § 685.010, subd. (a)(1)), plaintiffs
apparently ask us to assume the judgment would have remained unsatisfied
in the underlying action. We have no basis for making such a speculative
conclusion and decline to do so.
31
We conclude that, whether under section 3287 or 3288, plaintiffs are
entitled to prejudgment interest on their out-of-pocket losses related to the
misrepresentation claim through the time judgment was entered in the
malpractice action as their inability to use those funds did not end when the
hypothetical judgment would have been entered in the underlying action.
Instead, that loss of use continued until the court awarded damages in the
instant case. Further, the loss amount was calculable from reasonably
available information and therefore meets the test for certainty. (Watson,
supra, 2 Cal.App.5th at p. 294.)
Importantly, we must distinguish between two different periods of loss
of use: first, between the time the special assessments were paid in July 2019
until September 2021 (when trial would have happened but the settlement
was instead executed); and second, between September 2021 and the January
2025 judgment in the malpractice action.
The trial court correctly found the first period of loss was attributable
to the HOA’s misrepresentation and was reasonably certain as the HOA
could have calculated plaintiffs’ unexpected expenditures on special
assessments up until the time judgment would have hypothetically been
entered in the underlying action. We see no reason to doubt the court’s
finding that plaintiffs’ out-of-pocket losses during this first period of loss was
$669,055.
The second period of loss was attributable to Kinney; but for his
professional negligence, plaintiffs would have had access to their out-of-
pocket losses between September 2021 and January 2025. However,
plaintiffs were partially compensated in September 2021 via the $366,500
they received in the settlement. Therefore, their losses attributable to the
unexpected special assessments must be offset by the settlement amount.
32
Further, the court incorrectly found this amount was not certain. There is no
reason Kinney could not have computed these losses with readily available
information, especially given he had represented plaintiffs for years and was
quite aware of the basis for their misrepresentation claim.
Also, contrary to the court’s finding that interest under section 3288
was inappropriate for the second period of loss because the malpractice claim
was not one for oppression, fraud, or malice, the court could have awarded
prejudgment interest for both periods of loss under section 3288 (in addition
to section 3287) as both the misrepresentation claim and the professional
negligence claim were based in tort.9 (See Bullis v. Security Pacific National
Bank (1978) 21 Cal.3d 801, 814 [“a party does not have to prove both a breach
of a noncontractual obligation and oppression, fraud or malice” to be awarded
prejudgment interest under § 3288].)
Finally, the court incorrectly calculated the rate of interest at 10
percent. The court cited section 3289 as the basis for that rate, but that
statute applies only to contracts, not tort. When an action is not based on a
contract, “the rate of prejudgment interest should be that fixed by article XV,
section 1 of the California Constitution; namely, 7 percent per annum.”
(Children’s Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740,
775.) Accordingly, the proper interest rate for both the first and second
period of loss is 7 percent.
As the trier of fact in the malpractice action, the court must recalculate
the prejudgment interest in this case, accounting for the settlement amount
as an offset and applying the correct interest rate, upon remand.
9 Although plaintiffs also pled breach of contract in the legal
malpractice action, they proceeded to trial only on the claim of professional
negligence.
33
C. Remand Is Appropriate for Apportionment of the HOA’s
Attorney Fees
Plaintiffs aver the court should have apportioned the HOA’s attorney
fees when calculating damages. They contend apportionment was required
as the heating claims (which allowed for recovery of attorney fees) and
misrepresentation claims (which did not) were factually and legally distinct.
Plaintiffs further note the same law firm represented the HOA and Katz and
assert only the HOA, but not Katz, was entitled to recover attorney fees as
Katz was not a party to the heating claims.
We conclude remand is appropriate for the court to apportion attorney
fees to be limited to only the HOA’s portion of the heating claims. (See
Charton v. Harkey (2016) 247 Cal.App.4th 730, 743–744 [“ ‘ “When a
prevailing party has incurred costs jointly with one or more other parties who
are not prevailing parties for purposes of an award of costs, the judge must
apportion the costs between the parties.’ ” ’]; Akins v. Enterprise Rent-A-Car
Co. (2000) 79 Cal.App.4th 1127, 1133 (Akins) [“When a cause of action for
which attorney fees are provided by statute is joined with other causes of
action for which attorney fees are not permitted, the prevailing party may
recover only on the statutory cause of action.”].)
Kinney’s argument that the court’s estimate of the HOA’s attorney fees
was “drastically low” involves findings of fact that are not properly made by
this court in the first instance. Further, his assertion that there is no way to
separate the legal work associated with the various claims—citing Akins,
supra, 79 Cal.App.4th at page 1133 (allocation not required when liability
issues “so interrelated that it would have been impossible to separate them
into claims for which attorney fees are properly awarded and claims for
which they are not”)—calls for conjecture.
34
In any event, we note that “Akins stands only for the proposition that
no formal allocation of hours is required”; it does not prevent the trial court
from allocating fees based on a determination of the reasonable value of
services attributed to the causes of action for which attorney fees are
allowed—here, the heating claims. (Track Mortgage Group, Inc. v. Crusader
Ins. Co. (2002) 98 Cal.App.4th 857, 868.) We leave such factual
determinations for the trial court to make upon remand.
Finally, we decline the parties’ invitation to determine which party
bears the burden of proof on remand.
DISPOSITION
The judgment based on the December 18, 2024 statement of decision is
reversed as to the court’s calculation of interest and the failure to apportion
attorney fees in the underlying action. In all other respects, the judgment is
affirmed. The matter is remanded for the limited purposes of recalculating
the prejudgment interest, consistent with this opinion, and litigating the
apportionment of attorney fees to only the HOA’s portion of the heating
claims, to the extent reasonably possible. The parties shall bear their own
costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3), (5).)
35
PETROU, J.
WE CONCUR:
TUCHER, P. J.
FUJISAKI, J.
A173329 / Ryan v. Kinney
36
