IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (San Joaquin)
December 29, 2010
GREENLAW GRUPE, JR. OPERATING COMPANY, PLAINTIFF AND APPELLANT,
LAND UTILIZATION ALLIANCE ET AL., DEFENDANTS AND RESPONDENTS. GREENLAW GRUPE, JR. OPERATING COMPANY, PLAINTIFF AND APPELLANT,
SHAWDOWBIRD, INC., DEFENDANT AND RESPONDENT.
(Super. Ct. No. CV018132)
The opinion of the court was delivered by: Robie , Acting P.J.
Greenlaw Grupe Operating v. Land Utilization Alliance
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. CV018132)
In this action, plaintiff Greenlaw Grupe, Jr. Operating Company (Grupe) sought to regain title to a parcel of undeveloped property next to a habitat conservation area based on the fact that defendant Land Utilization Alliance (Alliance) had violated a deed condition prohibiting Alliance from transferring the property to anyone else. The party to which Alliance had deeded the property, defendant ShadowBird, Inc. (ShadowBird), successfully defended Grupe's lawsuit, obtaining a ruling from the trial court that the deed condition was void as an unreasonable restraint on alienation under Civil Code section 711.*fn1 On ShadowBird's subsequent motion for attorney fees as a private attorney general under Code of Civil Procedure section 1021.5 (hereafter, section 1021.5), the trial court ordered Grupe to pay ShadowBird over $1 million in fees.
On appeal from the judgment, Grupe contends the trial court erred in determining the deed condition prohibiting Alliance from transferring the property to anyone else was void as an unreasonable restraint on alienation. We disagree. The restraint imposed by the condition on alienation of the property was substantial, but the apparent justification for the condition was not equally weighty. Accordingly, the restraint was void under section 711. Furthermore, notwithstanding Grupe's arguments to the contrary, nothing in the Marketable Record Title Act (§ 880.020 et seq.) affects this conclusion.
On appeal from the postjudgment award of attorney fees, Grupe contends the trial court erred in determining that ShadowBird was entitled to fees as a private attorney general and, in any event, the amount of fees awarded was erroneous. We conclude the trial court abused its discretion in awarding ShadowBird fees that were not supported by any evidence, except for the total amount charged, and we will modify the attorney fee award accordingly. Other than that, however, Grupe has not carried its burden of showing the attorney fee award was clearly wrong.
FACTUAL AND PROCEDURAL BACKGROUND
Sometime in the 1980's, an entity known as Grupe Development Associates (Development Associates) sought entitlements from the City of Stockton (the city) for the development of a master planned subdivision known as Brookside Estates. Concerned about the environmental impact of the project, Alliance, a nonprofit organization, sued the city.
In May 1989, Development Associates and Alliance entered into a "Memorandum of Understanding and Agreement" relating to the project. As part of that agreement, Development Associates committed to provide a 50-acre "Habitat Compensation Site," a 50-acre "buffer" parcel to "be maintained as agricultural or open space" for "protection" of the "Habitat Compensation Site." Title to the buffer parcel was to "be vested in a non-profit entity to be designated by" Alliance, subject to certain "reversionary interests" provided in the agreement. Specifically, the agreement provided that the buffer parcel would be "subject to a reversionary interest to [Development Associates] to the extent [the property was] converted for use(s) other than [its] dedicated and related environmental purpose," such that if "the dedicated and related environmental purpose(s) are vacated or abandoned, by operation of law or activity, then [Development Associates] shall, upon the repayment of the previous purchase monies received, receive a deed to the property and shall be entitled to an appropriate court order to enforce this provision."
In 1990, the litigation between Alliance and the city was settled based in part on the May 1989 agreement between Alliance and Development Associates.
The "Habitat Compensation Site" and the adjacent buffer parcel were apparently never owned by Development Associates, but instead were owned by Grupe -- a related entity.*fn2 In December 1994, to effectuate the terms of the May 1989 agreement between Alliance and Development Associates, Grupe conveyed the buffer parcel to the city, and the city immediately conveyed it to Alliance. Both deeds contained the following provision:
"The grant herein is made on the express conditions that (1) [the buffer parcel] is used only for the purpose of agricultural or open space land for the protection of the Habitat Site . . . , or (2) Grantee herein, or any subsequent owner(s), conveys no interest in [the buffer parcel], except to . . . Alliance, which Grantor expressly consents to such conveyance, or (3) . . . Alliance continues to be legally recognized and/or maintain its status as a nonprofit or not-for-profit entity. If at any time (1) any portion of [the buffer parcel] is used for any purpose other than agricultural or open space land for the protection of the Habitat Site . . . , or (2) should the Grantee herein, or any subsequent owner(s), convey any interest in [the buffer parcel], except to . . . Alliance, or (3) should . . . Alliance not continue to be legally recognized and/or maintain its status as a nonprofit or not-for-profit entity, then Grantor or its heirs, successors and assigns, upon the payment of the purchase price paid to Grantor herein for [the buffer parcel], and for no other consideration and without liability of any kind, shall have the power to terminate all right, title, and interest in the property granted by this deed to the City of Stockton, and its successors and assigns, in the manner provided by law for the exercise of this power of termination. Immediately upon such termination, Grantee shall forfeit all rights or title to the property and the property shall revert to Grantor or its assigns. Each of the above conditions are conditions not personal covenants of Grantee(s), and are made for the benefit of Grantor, their successors and assigns."*fn3
In November 2000, Alliance deeded the buffer parcel to ShadowBird, another nonprofit organization that was formed "specifically to take responsibility for the . . . buffer [parcel]."
In August 2002, Grupe sought to exercise its power of termination by suing Alliance and ShadowBird for cancellation of the deed between the two entities.*fn4 Alliance and ShadowBird initially pursued a joint defense. Later, however, Alliance shifted its allegiance to side with Grupe, and Alliance and ShadowBird pursued cross-complaints against each other, although only ShadowBird pursued its cross-complaint through trial.
Grupe's complaint and ShadowBird's cross-complaint against Alliance were tried to a jury, with the court ruling on equitable issues. The court concluded that the power of termination Grupe sought to enforce, which prohibited Alliance from selling or transferring the buffer parcel on penalty of forfeiture, was "unenforceable [under section 711] as an absolute restraint on alienation of a fee estate." Accordingly, Grupe took nothing on its complaint against ShadowBird.
After the court ruled in favor of ShadowBird on Grupe's complaint, the jury returned a verdict for nearly $60,000 in damages in favor of ShadowBird on its cross-complaint against Alliance. The court entered judgment in November 2008, and Grupe timely appealed.
Thereafter, ShadowBird moved for an award of attorney fees from Grupe as a private attorney general under section 1021.5. The trial court determined that ShadowBird qualified for a fee award under the statute. The court then determined that ShadowBird was entitled to fees at $395 per hour for 565 hours of work by its attorney, plus $112,514 for work by that attorney while he was with another firm, for a total lodestar amount of $335,689. The court also determined that ShadowBird was entitled to a fee enhancement, and so the court tripled the lodestar amount and ordered Grupe to pay ShadowBird $1,007,067 in attorney fees. Again, Grupe timely appealed.
Restraints On Alienation
Because this case involves restraints on alienation of property, we begin with the basic principles on that point.
"Alienation in real property law has been defined as 'the transfer of the property and possession of lands, tenements, or other things, from one person to another.'" (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 354-355 (Carma).) Section 711 provides that "[c]onditions restraining alienation, when repugnant to the interest created, are void." "This statute does not prohibit all restraints on alienation, [but] only those which are unreasonable . . . . [Citations.] 'Reasonableness is determined by comparing the justification for a particular restraint on alienation with the quantum of restraint actually imposed by it. "[T]he greater the quantum of restraint that results from enforcement of a given clause, the greater must be the justification for that enforcement."'" (Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1059.)
The Marketable Record Title Act
As its first argument on appeal, Grupe contends that by enacting the Marketable Record Title Act (sometimes, the Act), the Legislature essentially declared, as a matter of law, that powers of termination like the one Grupe sought to exercise here are reasonable restraints on alienation for purposes of section 711. As we will explain, we find no merit in this argument.
"In 1982, the Legislature enacted the Marketable Record Title Act in order to make real property more freely alienable and marketable. (§ 880.020, subd. (a)(1).) To further this goal the legislation sought to simplify and facilitate real property title transactions by enabling persons to determine the status and security of recorded real property titles from an examination of recent records." (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707-1708.) "To this end, a series of statutes enacted in 1982 and 1984 set forth procedures for both preservation of interest in real property and for termination of old interests in real property." (Worthington v. Alcala (1992) 10 Cal.App.4th 1404, 1409, fns. omitted.)
Of particular significance here is chapter 5 of the Marketable Record Title Act, which deals with powers of termination. (§§ 885.010-885.070.) In section 885.020, the Legislature "abolished" two types of restraints on the alienation of property -- "[f]ees simple determinable and possibilities of reverter." (§ 885.020.) The Legislature determined that "[e]very estate that would be at common law a fee simple determinable is deemed to be a fee simple subject to a restriction in the form of a condition subsequent" and "[e]very interest that would be at common law a possibility of reverter is deemed to be and is enforceable as a power of termination." (§ 885.020.) Thus, as Grupe points out, the Legislature specifically chose to preserve the power of termination as an enforceable interest in real property. (See § 885.010, subd. (b).)
In the remainder of the chapter, however, the Legislature imposed three limitations on powers of termination. First, the Legislature provided for the expiration of a power of termination after 30 years, unless the power is renewed through recording a notice of intent to preserve it. (§ 885.030.) Second, the Legislature provided for the expiration of a power of termination that has become obsolete.*fn5 (§ 885.040.) Third, the Legislature provided for exercise of a power of termination only by notice or civil action within five years after the breach of the restriction triggering the power. (§ 885.050.)
Beyond these specific provisions relating to powers of termination, Grupe points to two general "intentions" behind the Marketable Record Title Act in support of its argument, so we turn our attention to those.*fn6 First, the Legislature declared that "[i]nterests in real property and defects in titles created at remote times, whether or not of record, often constitute unreasonable restraints on alienation and marketability of real property because the interests are no longer valid or have been abandoned or have otherwise become obsolete." (§ 880.020, subd. (a)(2).) Second, the Legislature stated that its purpose "in enacting this title [was] to simplify and facilitate real property title transactions in furtherance of public policy by enabling persons to rely on record title to the extent provided in this title, with respect to the property interests specified in this title, subject only to the limitations expressly provided in this title and notwithstanding any provision or implication to the contrary in any other statute or in the common law." (§ 880.020, subd. (b).)
With these provisions in mind, we turn back to Grupe's arguments. First, Grupe contends that because the Legislature's purpose in enacting the Marketable Record Title Act was "to purge from the State's land records 'unreasonable restraints on alienation,'" but the Legislature "specifically preserv[ed] the . . . power of termination" as an enforceable interest in real property, "the Legislature necessarily found the . . . power of termination [as limited by the Act] to be [a] reasonable restraint" on alienation. Second, Grupe points out that the Legislature's purpose was to enable "persons to rely on record title . . . 'with respect to the property interests specified in'" the Marketable Record Title Act -- including, powers of termination -- and points out that the power of termination here was a matter of record. From those observations, however, Grupe draws no clear conclusion. Finally, Grupe contends that because "the Act was to apply regardless of any other 'provision or implication to the contrary in any other statute or in the common law,'" and because of the Legislature's "avowed purpose of ridding records of 'unreasonable restraints on alienation,'" "the Legislature meant this thorough and thoughtful modern statute to control over the single sentence of section 711 of the 1872 Code of Civil Procedure."
In effect, then, Grupe contends that the effect of the Marketable Record Title Act was to render powers of termination like the one here valid and enforceable, notwithstanding the restriction in section 711 against unreasonable restraints on alienation. Thus, in Grupe's view, the Marketable Record Title Act controls over section 711 and makes powers of termination like the one here reasonable as a matter of law for purposes of section 711.
Of course, not even Grupe contends the Legislature intended the Marketable Record Title Act to establish that every power of termination is reasonable, regardless of the terms under which that power may be exercised. Acknowledging that "[r]acially restrictive conditions, for example, have been unenforceable in state courts for more than 60 years," Grupe suggests that powers of termination that "discriminate on ground[s] of race, religion or other suspect classification" or "transgress any explicit other state policy" are indeed invalid, but powers of termination that do not transgress any explicit state policy are valid.
We do not agree with Grupe's strained interpretation of how the Marketable Record Title Act and section 711's restriction on unreasonable restraints on alienation intersect and interact. Unlike Grupe, we find nothing in the Act indicating the Legislature intended to limit the judicial application of the rule embodied in section 711 that unreasonable restraints on alienation are void. What the Legislature sought to address in the Marketable Record Title Act was the reliability of record title, particularly with respect to old interests in real property. Thus, the Legislature recognized that old interests "often constitute unreasonable restraints on alienation and marketability of real property because the interests are no longer valid or have been abandoned or have otherwise become obsolete." (§ 880.020, subd. (a)(2).)
With respect to powers of termination in particular, the Legislature sought to eliminate, or at least reduce, this problem by eliminating powers that were old (beyond a reasonable expiration date) or obsolete. In this way, the Legislature furthered its goal of eliminating "unreasonable restraints on alienation" -- the same goal served by section 711. In no way, however, can the Legislature's action in this regard be taken as a wholesale validation of all powers of termination that were neither old nor obsolete, regardless of the terms under which those powers could be exercised. Even a brand new power of termination -- freshly minted, of record, and not inconsistent with any other express state policy -- may be "unreasonable" pursuant to the balancing test traditionally applied under section 711. (See Superior Motels, Inc. v. Rinn Motor Hotels, Inc., supra, 195 Cal.App.3d at p. 1059.) We find nothing in the Marketable Record Title Act to contradict this, nor to suggest the Legislature intended to preempt the power of the courts to determine the reasonableness of a power of termination under section 711 just because the power of termination is relatively new and not obsolete within the meaning of the Act.
Indeed, in subdivision (b) of section 880.310 of the Act, the Legislature expressly recognized that an interest in real property that can be preserved from expiration under the terms of the Act by recording a notice of intent to preserve the interest may still be "unenforceable pursuant to other law." Thus, the Legislature specified that "[r]ecordation of a notice of intent to preserve an interest in real property does not preclude a court from determining that an interest has been abandoned or is otherwise unenforceable under other law, whether before or after the notice of intent to preserve the interest is recorded, and does not validate or make enforceable a claim or interest that is otherwise invalid or unenforceable." (§ 880.310, subd. (b).) What this provision establishes is that other laws regarding the enforceability of interests in real property -- like section 711 -- are not supplanted by the Marketable Record Title Act. Thus, Grupe's reliance on the Act is misplaced.
Grupe next contends the Supreme Court's analysis of an "[a]nalogous '[r]estraint'" in Carma demonstrates the validity of the power of termination at issue here. Again, we disagree.
Carma involved "the validity of a provision in a commercial lease allowing the lessor to terminate the lease and recapture the leasehold upon notice by the lessee of intent to sublet or assign." (Carma, supra, 2 Cal.4th at p. 350.) On summary adjudication, the trial court determined that "'[a] "reasonableness" standard [had to] be read into [the termination and recapture clause] of the Lease to prevent that provision from being void as an unreasonable restraint on alienation and to prevent a forfeiture of the Lease.' That court then ruled Marathon's exercise of its termination and recapture rights under the lease for the purpose of realizing the appreciated rental value was a breach of that implied 'reasonableness' term . . . ." (Ibid.)
On appeal following a jury verdict awarding damages to Carma, the appellate court "affirmed, holding that . . . the termination and recapture clause of the lease was 'repugnant' to the free alienability of the leasehold estate, that in exercising the clause to obtain a profit, Marathon's purpose was per se unreasonable, and that the clause was therefore void as an invalid restraint on alienation." (Carma, supra, 2 Cal.4th at pp. 350-351.)
On review, the Supreme Court "conclude[d] the termination and recapture clause did not pose an unreasonable restraint on alienation" and that "recent legislation resolving the rights of contracting parties to restrict alienation of commercial leases (Civ. Code, § 1995.010 et seq.) [wa]s applicable . . . and expressly authorize[d] the clause in question." (Carma, supra, 2 Cal.4th at p. 351.)
Grupe contends the power of termination at issue here is valid under "both analyses" the Supreme Court applied in Carma. We will explain why that is not so.
First, Grupe relies on the Supreme Court's determination that the termination and recapture clause in Carma was expressly authorized by then-recent legislation. At issue was the recent addition "to the Civil Code [of] a new chapter (Civ. Code, § 1995.010 et seq.) governing transfer restrictions in commercial leases." (Carma, supra, 2 Cal.4th at p. 366.) The court pointed out that "[s]section 1995.210, subdivision (a), provides: 'Subject to the limitations in this chapter, a lease may include a restriction on transfer of the tenant's interest in the lease.'" (Carma, at p. 367.) The court then immediately concluded, "This section, by authorizing all restrictions on transfer except where prohibited in other provisions of the chapter, effectively supersedes the restrictions imposed by section 711 as they would otherwise apply to commercial leases." (Carma, at p. 367.) The court then went on to find that the termination and recapture clause was "within the types of transfer restrictions contemplated by the Legislature in enacting the new chapter." (Id. at p. 369.)
Grupe contends that just like the provision in section 1995.210, subdivision (a), the Marketable Record Title Act "'supersedes the restrictions imposed by section 711.'" Not so. The new legislation at issue in Carma was specifically "intended to resolve the rights of the parties to a commercial lease to impose restrictions on transfer by the lessee." (Carma, supra, 2 Cal.4th at p. 366.) To achieve that end, the Legislature specifically authorized such restrictions subject only to the limitations contained in the new legislation. Under these circumstances, it necessarily followed that the new legislation superseded the restrictions of section 711 as they would have otherwise applied to commercial leases because the restrictions of section 711 were not part of the limitations contained in the new legislation.
Neither the terms of the Marketable Record Title Act nor the circumstances of its enactment compel a similar conclusion here. Specifically, there is no indication that the Act was intended to address the reasonableness or unreasonableness of all powers of termination, like the new legislation at issue in Carma was "intended to resolve the rights of the parties to a commercial lease to impose restrictions on transfer by the lessee." (Carma, supra, 2 Cal.4th at p. 366.) On the contrary, as we have explained, the purpose of the Act (as relevant here) was to eliminate unreasonable restraints on alienation by eliminating old and obsolete powers of termination. Nothing suggests the Legislature intended this action as a determination that all other powers of termination are necessarily reasonable, as long as they do not violate any other express policy of the state. In other words, there is nothing in the Act, or the circumstances of its creation -- as there was in the new legislation at issue in Carma -- that suggests the Legislature intended the Act to supersede the restrictions of section 711 as they otherwise apply to powers of termination. On the contrary, as we have observed, subdivision (b) of section 880.310 of the Act specifically allows for the continued enforcement of "other law" that may render a power of termination unenforceable. For this reason, Grupe's reliance on the first method of analysis in Carma is misplaced.
Grupe next relies on the Supreme Court's more traditional analysis in Carma, by which the court concluded that the termination and recapture clause did not pose an unreasonable restraint on alienation.
The Carma court began by setting out the balancing test for determining the reasonableness of a restraint on alienation, which we have set out already, ante. (Carma, supra, 2 Cal.4th at p. 356.) As the court explained, under that test "'the greater the quantum of restraint that results from enforcement of a given clause, the greater must be the justification for that enforcement.'" (Ibid., quoting Wellenkamp v. Bank of America (1978) 21 Cal.3d 943, 949.) The court then began the balancing test "by underscoring that the interest involved [t]here [wa]s a leasehold." (Carma, at p. 358.) The court explained that the restriction against restraints on alienation originated with respect to fee simple estates, because "any attempt to restrain alienation in the transfer of a fee estate tended to defeat the very purpose of the interest created." (Ibid.) "Where the interest created is a leasehold, a restriction on alienation is less likely to be considered repugnant" because "[s]ince very early times, the common law recognized the validity of restrictions on leasehold interests." (Ibid.) The court continued, "A lease, by its very nature, is limited in duration and scope and is therefore already less alienable than a fee estate. [Citation.] Consequently, any restriction on alienation of a tenant's leasehold interest is less detrimental to the overall free flow of property than a comparable restriction on a fee estate. [Citation.] In addition, restrictions on alienation of a tenant's leasehold interest, especially a commercial interest, do not implicate either an owner's right to transfer property to those the owner chooses, such as heirs, or concern over present owners tying up property indefinitely." (Id. at pp. 358-359.)
The Carma court then categorized the termination and recapture clause as a "forfeiture restraint" and noted that "[f]orfeiture restraints are generally viewed more favorably than comparable disabling restraints and have gained widespread acceptance." (Carma, supra, 2 Cal.4th at p. 359.) As the court explained, "The reason is obvious. A disabling restraint binds the lessee to the lease throughout its term. By contrast, a forfeiture restraint permits the lessee to extricate itself if a suitable transferee can be found. The lessor must either approve a proposed transfer, releasing the lessee from all but surety obligations, or terminate the lease, releasing the lessee altogether. And since the lessor already retains a reversionary interest in the property, a forfeiture restraint merely accelerates the inevitable." (Ibid.)
Based on the foregoing considerations, the Carma court concluded "it is logical to assume a freely negotiated forfeiture restraint should . . . be upheld." (Carma, supra, 2 Cal.4th at p. 360.) Nevertheless, because "a challenged restraint is not to be examined in a vacuum," the court went on to "consider the circumstances under which" the termination and recapture clause was applied in the case before it. (Ibid.) Based on that analysis, the Carma court disagreed with the Court of Appeal's "characterization of the quantum of restraint imposed by [the termination and recapture clause] as 'total,'" in part because "the underlying instrument [wa]s a lease" and "[t]herefore, by definition, the restraint is limited both by the duration and scope of the leasehold interest created." (Id. at p. 361.) The Carma court also "disagree[d] with the Court of Appeal's conclusion that justification for [the termination and recapture clause] [wa]s completely lacking." (Ibid.) The Carma court determined that "termination for the purpose of appropriating increased rental value" was not unreasonable where the parties expressly bargained for that result by including the termination and recapture clause in the lease. (Id. at pp. 361-363.) Under the specific facts of that case, the court concluded the termination and recapture clause, "as written and applied, [was] a reasonable restraint on alienation" because "the strong public policy favoring freedom of contract in connection with a commercial lease outweighs any marginal restraint on alienation caused." (Id. at p. 363.)
With this understanding of the second analysis from Carma in mind, we turn back to Grupe's argument based on that analysis. Grupe first argues that, like the termination and recapture clause in Carma, the power of termination here is not "'absolute, total and unfettered,'" as the trial court concluded it was. Pointing to the provisions of the Marketable Record Title Act again, Grupe claims: (1) "the power of termination can last no more than 30 years (with some exceptions)"; (2) "if the condition is breached it must be enforced, by exercise of the power of termination, within five years, or the power expires"; and (3) "the power of termination expires if it becomes 'obsolete.'" Grupe suggests that given the limitations the Act imposes on the power of termination, the "quantum of restraint," for purposes of applying the traditional balancing test for reasonableness under section 711, is not as great as the trial court concluded it was.
We are not persuaded. As we have seen, the balancing test for determining if a restraint on alienation is unreasonable involves comparing the justification for the restraint with "the quantum of restraint that results from enforcement of [the] given clause." (Wellenkamp v. Bank of America, supra, 21 Cal.3d at p. 949.) Stated another way, the quantum of restraint is the "the actual practical effect upon alienation which would result from enforcement of the restraint." (Tucker v. Lassen Sav. & Loan Assn. (1974) 12 Cal.3d 629, 636.) For example, in Tucker, which involved "a so-called 'due-on' clause commonly used in security transactions in real property to provide, at the option of the lender, for the acceleration of the maturity of the loan upon the sale, alienation, or further encumbering of the real property security," the Supreme Court concluded that "the automatic enforcement of a 'due-on' clause in instances where the trustor-obligor has entered into an installment land contract to sell the secured property would result in a restraint on alienation of very considerable proportions" because "such enforcement would operate to virtually eliminate alienation by installment land contract in all situations where the property to be conveyed was subject to a deed of trust and the obligation under the note remained substantial." (Id. at pp. 631, 637.) In contrast, the court observed that in the context of "an outright sale," "the automatic application of the 'due-on' clause results in little if any restraint on alienation because the terms of the second sale usually provide for full payment of the prior trust deed. In other words, the trustor-vendor normally receives enough money through the financing of the second sale to pay off his note, and he is normally required to do so. Little, if any, restraint on alienation results through enforcement of the provision." (Id. at p. 637.)
Thus, the balancing test under section 711 is not concerned with limitations that may exist on the restraint holder's ability to enforce the restraint -- such as the limitations imposed by the Marketable Record Title Act -- but with the quantum of restraint that results if the clause is, in fact, enforced. Thus, just because the power of termination at issue here may not last in perpetuity because of the limitations in the Marketable Record Title Act does not mean the quantum of restraint that power of termination imposes is not great for purposes of determining its reasonableness under section 711, thus requiring comparably great justification for its enforcement.
As we have previously alluded to, the Supreme Court in Carma concluded the termination and recapture clause in the commercial lease at issue there was not a "total" restraint on alienation for several reasons. Comparison of those reasons to the facts of this case helps illustrate why Grupe's attempt to analogize this case to Carma with respect to the quantum of restraint involved in each case is doomed to failure.
First, the Carma court observed that because "the underlying instrument [wa]s a lease," "by definition, the restraint [imposed by the termination and recapture clause] [wa]s limited both by the duration and scope of the leasehold interest created." (Carma, supra, 2 Cal.4th at p. 361.) In other words, the termination and recapture clause did not limit alienation of fee title to the property, but limited only alienation of the leasehold interest, which was lesser both in duration and in scope than the underlying fee interest. As the court had already observed, "any restriction on alienation of a tenant's leasehold interest is less detrimental to the overall free flow of property than a comparable restriction on a fee estate." (Id. at p. 359.) So the restraint was not total because it did not prohibit alienation of fee title to the property. Obviously, the same cannot be said here.
Second, the Carma court observed that the termination and recapture clause was "in the nature of a forfeiture" and "therefore pose[d] no obstacle to release of the lessee from an unfavorable lease." (Carma, supra, 2 Cal.4th at p. 361.) This point harkened back to the court's distinction between "disabling restraints" -- "those making an attempted alienation void" -- and "forfeiture restraints" -- "those making all or part of the property interest subject to termination." (Id. at p. 359.) As the court had observed, "Forfeiture restraints are generally viewed more favorably than comparable disabling restraints" because "[a] disabling restraint binds the lessee to the lease throughout its term," while "a forfeiture restraint permits the lessee to extricate itself if a suitable transferee can be found." (Ibid.)
While this observation makes sense in the context of a lease, the reverse is necessarily true in the context of fee title. Thus, a disabling restraint on the alienation of a fee interest in property prevents the transfer but leaves the owner of the fee with title to the property. On the other hand, a forfeiture restraint not only prevents the transfer but also deprives the owner of the fee. In the context of fee title, then, there is no benefit to a forfeiture restraint comparable to being released from the obligations of a leasehold; instead, the owner simply forfeits his or her property without any offsetting benefit. Thus, the second reason for finding the restraint in Carma was not a "total" restraint also has no application here, where the power of termination restricted Alliance's power to transfer fee ownership of the property to another on penalty of forfeiting the property altogether.
Third, the Carma court observed that "because the lessor is only likely to exercise its right of termination when it can benefit thereby, the restraint only affects alienation in a rising market. Even then, alienation is impeded only when the lessee desires to relocate or curtail operations and the benefits of doing so are outweighed by the risk of lost profits and lost use of whatever portion of the premises the lessee desires to retain. In all other instances, the inability of the lessee to profit from a transfer should not affect its decision to do so." (Carma, supra, 2 Cal.4th at p. 361.) To understand this observation, it is necessary to lay out more of the court's discussion in Carma.
The Carma court first observed that "Marathon [the lessor] terminated the lease at a time when Carma [the tenant] had already curtailed operations in the area and proposed to sublease 80 percent of the premises. This sublease would have allowed Carma to reduce overhead costs commensurate with its reduced operations while at the same time realizing a profit in the form of higher rent charged the sublessee. Marathon terminated the lease in order to appropriate this profit to itself." (Carma, supra, 2 Cal.4th at p. 360.)
The court then explained as follows:
"The practical effect of [the termination and recapture clause] in this context is twofold: (1) allocation of increased rental value to the lessor and (2) subjection of the entire leasehold to termination upon a proposed sublease. . . . Our concern is not with the fair allocation of increased rental value but the effect of the agreed allocation on the power of alienation.
"As a practical matter, reserving appreciated rental value to the lessor has no effect on alienation of the lessee's interest. A commercial lessee desiring to sublease or assign solely to realize appreciated rental value of the premises, and not to curtail or relocate operations, would face the prospect of leasing alternate space for its operations after the transfer. This space would presumably be priced at the increased market rate as well, thereby nullifying any profit realized from the transfer.
"Only when this denial of profit is coupled with a desire to relocate or curtail operations does a restraint arise. For example, a lessee wishing to relocate all of its operations may find the inability to realize increased rental value through an assignment outweighs the advantages of such a move, since current market rates would have to be paid at the new location. Alienation is restrained to the extent the advantages of the move do not exceed the increased cost of space at the new location.
"If the lessee wishes to discontinue or relocate only a portion of its operations, a further restraint is introduced--the risk that all rights in the premises will be lost. Alienation is restrained to the extent the lessee is unwilling to risk losing all rights in the premises, including the value of tenant improvements, in order to be free of further obligation for the unwanted space. The magnitude of this restraint will depend upon the amount of space the lessee wishes to retain, the remaining value of tenant improvements in that space, and the extent of increase in market value." (Carma, supra, 2 Cal.4th at pp. 360-361, fn. omitted.)
It was in the context of this discussion that the Carma court concluded the restraint of the termination and recapture clause was not total because the lessor was only likely to exercise its right of termination in a rising market, and even then alienation would be impeded only in certain situations. Grupe points to no similar circumstances here. Again, that the power of termination may be unenforceable some day under the provisions of the Marketable Record Title Act if it becomes obsolete, or if Grupe fails to renew it, or if Grupe fails to exercise it within the time allowed by the Act, has no bearing on the quantum of restraint involved. The restraint at issue here precluded Alliance from transferring the property to anyone, period, for any use whatsoever, and any attempt to do so would result in loss of the property.
"It is against this effect that we must measure the factors advanced in justification." (Tucker v. Lassen Sav. & Loan Assn., supra, 12 Cal.3d at p. 638.) Turning to this point, Grupe argues about "'the facts and circumstances surrounding the creation and application' of the power of termination" and asserts that "[q]uestions arose as to who would be the proper vestee [i.e., owner of the property], and in the end [Grupe] agreed it would be . . . Alliance." According to Grupe, "Alliance was thought to be the most appropriate steward for the property." The evidence Grupe cites, however, suggests a different explanation for restricting ownership of the buffer parcel to Alliance.
Kevin Huber, a representative of Grupe, testified that in 1993, Alliance sought to designate itself as the nonprofit entity in which title to the buffer parcel would be vested pursuant to the terms of its 1989 agreement with Development Associates. In response, Development Associates asserted it was "disingenuous" for Alliance to designate itself to hold title to the parcel. According to Huber, the two sides "continued to go back and forth" "for approximately a year," with Development Associates arguing that Alliance "didn't have experience maintaining habitat sites or open space." Development Associates also was not "certain of [Alliance's] funding capability to pay reclamation district fees or other things that [it might] be responsible for on the property." Ultimately, however, Development Associates "concluded that as long as . . . [Alliance] had one right of designation and that this property wasn't going to continue to be pawned off on a chain of entities that [might] or [might] not be responsible to maintain it, that [Development Associates] would agree to [Alliance] designating [itself], provided that the reversionary language was expanded to include language that said that they basically [could not] deed it to anybody else."
In our view, this evidence falls far short of showing that Alliance was so much more qualified to steward the buffer parcel than any other person or entity that ownership of the parcel could be reasonably limited to Alliance and no one else. Rather, it appears Development Associates decided to allow Alliance to be the steward of the parcel despite concerns about Alliance's qualifications for that role.
This justification for the restriction on alienation of the buffer parcel does not rise to the level required by the balancing test under section 711. If, as appears from the evidence, the concern underlying the restriction was that the buffer parcel might be transferred to some person or entity that was not qualified or able to maintain it for its designated use, that concern could have been addressed by restrictions far less onerous than the absolute bar on conveyance of the parcel. By restricting ownership of the property to Alliance, and Alliance alone, upon penalty of forfeiture, Grupe placed a significant restraint on alienation of the property, which required an equally great justification for its enforcement. (Carma, supra, 2 Cal.4th at p. 356.) Grupe has failed to show sufficient justification. Accordingly, we find no error in the trial court's determination that the power of termination at issue here was void under section 711.
Grupe contends that "even if the judgment concerning title is upheld the fees award should be reversed, because the judgment does not satisfy the criteria for private attorney general fees." We will reduce the amount of the award to exclude fees for which ShadowBird offered no supporting evidence, but will otherwise affirm the award as modified.
"Section 1021.5 codifies the 'private attorney general doctrine' adopted by our Supreme Court in Serrano v. Priest (1977) 20 Cal.3d 25 [141 Cal.Rptr. 315, 569 P.2d 1303]. [Citations.] The doctrine is designed to encourage private enforcement of important public rights and to ensure aggrieved citizens access to the judicial process where statutory or constitutional rights have been violated. [Citation.] In determining whether to award attorney fees under section 1021.5 to the 'successful party,' we apply a three-prong test inquiring whether (1) the litigation resulted in the enforcement of an important right affecting the public interest, (2) a significant benefit has been conferred on the general public or a large class of individuals, and (3) the necessity and financial burden of private enforcement renders the award appropriate. [Citations.] Regarding the nature of the public right, it must be important and cannot involve trivial or peripheral public policies. The significance of the benefit conferred is determined from a realistic assessment of all the relevant surrounding circumstances. As to the necessity and financial burden of private enforcement, an award is appropriate where the cost of the legal victory transcends the claimant's personal interest; in other words, where the burden of pursuing the litigation is out of proportion to the plaintiff's individual stake in the matter." (Ryan v. California Interscholastic Federation (2001) 94 Cal.App.4th 1033, 1044.) To justify an award of attorney fees under the "private attorney general" theory, the parties seeking fees must establish that the public benefit achieved by the action was "disproportionately important and valuable in comparison to" any personal benefit the parties achieved for themselves. (County of Inyo v. City of Los Angeles (1978) 78 Cal.App.3d 82, 90.)
Grupe contends review of the attorney fee award here is de novo because the operative facts are not disputed. We disagree. Traditionally it has been held that "[t]he decision whether the claimant has met his burden of proving each of these prerequisites and is thus entitled to an award of attorney fees under section 1021.5 rests within the sound discretion of the trial court and that discretion shall not be disturbed on appeal absent a clear abuse. [Citations.] In other words, an attorney fees award under section 1021.5 will only be reversed where '"it is clearly wrong or has no reasonable basis."'" (Ryan v. California Interscholastic Federation, supra, 94 Cal.App.4th at p. 1044.)
Under Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, "'de novo review of [an award of attorney fees after trial] is warranted where the determination of whether the criteria for an award of attorney fees and costs . . . have been satisfied amounts to statutory construction and a question of law.'" (Id. at p. 1175.) There, the question was whether one of the parties against which an award of fees had been assessed under section 1021.5 was "an 'opposing party[ ]' within the meaning of that statute." (Connerly, at p. 1175.) The Supreme Court reasonably concluded that because the material facts were largely undisputed this was a question of law subject to de novo review. (Id. at pp. 1175-1176.)
Here, Grupe fails to explain how this case is comparable to Connerly because Grupe does not point to a disputed issue that would make the determination of whether ShadowBird satisfied the criteria for an attorney fee award under section 1021.5 amount to an issue of statutory construction. Instead, the question here is simply the usual one under section 1021.5 -- whether the party claiming fees satisfied the requisite elements of the statute. Under these circumstances, we review the award for abuse of discretion, giving appropriate deference to the trial court's determination. Furthermore, and in any event, on appeal the trial court's order is presumed correct, all intendments and presumptions are indulged in favor of its correctness, and the burden of establishing error rests on the appellant. (In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1056.)
Enforcement Of Important Right Affecting The Public Interest
Grupe contends ShadowBird's defense of Grupe's complaint for cancellation of the deed from Alliance did not result in the enforcement of an important right affecting the public interest because ShadowBird merely defended "its own claimed title to the [buffer parcel]." We find no abuse of discretion in the trial court's determination to the contrary.
It has been held that where a litigant's "primary purpose" was "to pursue and protect its own property rights rather than to further a significant public interest," it is not an abuse of discretion to deny an award of attorney fees under section 1021.5. (Terminal Plaza Corp. v. City and County of San Francisco (1986) 177 Cal.App.3d 892, 914.) It is far from clear, however, how that principle applies in a case such as this, where the litigant is a nonprofit entity and the property rights at issue are the nonprofit entity's ownership of property that is to be maintained as agricultural land or open space as buffer for land devoted to habitat conservation. Obviously in such a case the litigant is not motivated by its own interest in any profit-making enterprise. But does that necessarily mean that the litigant must be deemed to be acting in the public interest instead of its own interest?
In the trial court, ShadowBird argued that its stewardship of the buffer property had been "exemplary" and that "[t]he public interest was vindicated by ShadowBird's successful defense of this lawsuit because [the] condition -- that the land must remain open space or agricultural -- would not have bound Grupe, if Grupe had won the case and the land had reverted to Grupe." It is this second point that Grupe disputes on appeal. Specifically, Grupe contends ShadowBird could not have been defending the lawsuit to protect the use of the land as open space because, "[w]hatever the ownership, restrictions in the chain of title will preserve the Buffer Parcel as open space." Grupe contends this is so because the separate deed restriction requiring the parcel to be used "only for the purpose of agricultural or open space land for the protection of the Habitat Site" will "remain enforceable regardless of a reversion."
We are not convinced. The deed of the buffer parcel from Grupe to the city did not simply contain a restriction limiting future use of the parcel to agricultural or open space, such that any future owner would be bound by that restriction. Rather, it contained several conditions subsequent coupled with a power of termination, which purported to allow Grupe to regain ownership of the parcel if any of the conditions were met (or violated, depending on how you look at it). Under the condition litigated here, if Alliance transferred the parcel to anyone else, Grupe had "the power to terminate all right, title, and interest in the property granted by this deed to the City of Stockton, and its successors and assigns," and "[i]mmediately upon such termination" the parcel was to "revert to" Grupe. Under this circumstance, it does not appear to us that Grupe itself would have been bound by the condition subsequent relating to use of the land for agricultural use or open space if Grupe had regained title to the parcel because of breach of the condition subsequent regarding continued ownership by Alliance. At the very least, however, the answer to this question was sufficiently uncertain to defeat the conclusion that ShadowBird was necessarily acting in its own personal interest rather than in the public interest in defending against Grupe's attempt to exercise its power of termination.
Separate from the deed provisions, there has been no showing that Grupe would have been bound to maintain the buffer parcel as agricultural land or open space by the terms of the May 1989 agreement between Development Associates and Alliance. Elsewhere, Grupe admits it was not "a party to the [agreement], nor in contractual privity to a party[,] and the effect of that contract cannot affect the outcome of this appeal."
Irrespective of whether it would have been legally bound by the deeds or the agreement between Development Associates and Alliance to maintain the buffer parcel as agricultural land or open space, Grupe asserts that it "independently pledged to the court below, and reiterates its pledge to this Court, to maintain the property in open space in perpetuity." Grupe cites no authority, however, for the proposition that such a pledge is legally enforceable. In the absence of such authority, ShadowBird was not bound to conclude that Grupe's pledge made defense of this action unnecessary to preserve the open-space character of the buffer parcel.
In its reply brief, Grupe argues that under the "Habitat Compensation Agreement" it entered into with the city in January 1993, in which it agreed to convey title to the buffer parcel to the city, the restriction on use of the buffer parcel for agricultural purposes or open space "runs with the land," and therefore Grupe would have been bound to that restricted use in the event of a reversion. We do not understand that agreement to so provide. In any event, at the very least the matter is sufficiently unclear that, again, ShadowBird was not bound to conclude that its defense of this action was unnecessary to preserve the open-space character of the buffer parcel.
Based on the foregoing, we conclude Grupe has not shown that ShadowBird's defense of this action was in its own selfish interest, as opposed to the public interest. Accordingly, Grupe has not shown an abuse of discretion in the trial court's implicit finding to the contrary.
Conveyance Of Significant Benefit
In a brief, perfunctory argument, Grupe contends that ShadowBird's victory in this case did "not confer a significant benefit on the public or a large class of people" for the very same reasons Grupe contended ShadowBird's defense of the action did not result in the enforcement of an important right affecting the public interest, namely, because Grupe's "representative testified at trial that the Buffer Parcel would remain open space." We have concluded already that, at the very least, there was substantial uncertainty as to whether Grupe would have been bound to maintain the buffer parcel as agricultural land or open space if Grupe had regained title to the parcel by exercising its power of termination. Under this circumstance, the trial court could reasonably have found that ShadowBird's defense of this action conveyed a significant benefit on the public by ensuring that the buffer parcel would remain subject to the agricultural/open space condition in Grupe's original deed to the city, because ShadowBird, as a successor-in-interest to the city, is bound by that condition. Thus, Grupe has shown no abuse of discretion on this element of section 1021.5 either.
Grupe contends the necessity and financial burden of private enforcement did not render an attorney fee award appropriate here because the burden of defending the litigation was not out of proportion to ShadowBird's individual stake in the matter. According to Grupe, "ShadowBird's opposing the operation of the reversionary clause was prompted purely by its interest in retaining ownership of the Buffer Parcel," and "[t]he financial burden of its defense of ownership was fully in proportion to its interest."
What Grupe ignores, however, is that ShadowBird is a nonprofit organization, the purpose of which is to ensure the use of the buffer parcel as agricultural land or open space. ShadowBird did not have an "individual stake" in this litigation within the traditional understanding of that term -- that is, an individual stake separate and apart from any public interest involved. Under this circumstance, Grupe has again failed to show an abuse of discretion in the trial court's determination that ShadowBird was entitled to an attorney fee award under section 1021.5.
Amount Of Fees Awarded
Grupe contends that even if ShadowBird was entitled to some fee award under section 1021.5, it was not entitled to the amount of fees the trial court actually awarded. There are three aspects to this argument, which we address in turn.
1. Fees Without Time Records
Grupe first argues that ShadowBird "did not submit time records for fees claimed for work in 2003 through 2005" and therefore its "claims for these amounts should [have] be[en] rejected." We agree.
Along with his declaration in support of the attorney fees motion, ShadowBird's attorney, Paul Marks, submitted the time slips for the services he provided ShadowBird between May 12, 2006, and February 10, 2009, while with Neufeld Law Group. These slips showed the services performed and the time spent performing those services. The total hours worked during that period was 617.*fn7 Marks also referenced a trial exhibit that showed the total amount he billed on the matter between March 2003 and December 2005 while with another law firm (Holland & Knight), which was $112,514.04.
This exhibit was an invoice dated January 25, 2006, which billed for $30.58 in reimbursable costs incurred during that billing period. The invoice also included a listing of 21 outstanding invoices, dated between March 31, 2003, and December 30, 2005, which apparently had not been paid. The total due on those invoices was $112,483.46. The list did not detail any of the legal services performed for the charges on those outstanding invoices nor did it identify the number of hours spent performing those services. Instead, it was just a bare list of the total charges on each invoice.
In opposition to the fee motion, Grupe raised the same argument it raises here -- that ShadowBird should not recover any of the fees claimed for the work performed while Marks was with Holland & Knight, because the trial exhibit offered in support of that claim did "not provide any descriptions of the work performed or hours worked." Grupe complained that "the need for written descriptions of the work performed by counsel" was "all the more [crucial] here" because "[d]uring 2003 and 2005, ShadowBird's counsel devoted most of his attention to resisting [Alliance]'s effort to disqualify him for conflict of interest, and not to defending against [Grupe]'s complaint."
In its reply brief in support of the attorney fee motion, ShadowBird did not address this aspect of Grupe's opposition. The same is true in this court. Rather than address Grupe's arguments about the lack of supporting evidence for the fees incurred through 2005, ShadowBird "respectfully invites the Court to consider the arguments made in the trial court." Of course, as we have noted, ShadowBird made no arguments on this point in the trial court. Thus, we are left with Grupe's arguments alone.
As Grupe points out, our Supreme Court has agreed that "'[t]he starting point of every fee award, once it is recognized that the court's role in equity is to provide just compensation for the attorney, must be a calculation of the attorney's services in terms of the time he has expended on the case. Anchoring the analysis to this concept is the only way of approaching the problem that can claim objectivity, a claim which is obviously vital to the prestige of the bar and the courts.'" (Serrano v. Priest (1977) 20 Cal.3d 25, 48, fn. 23 (Serrano III).) In making a fee award, "[t]he basis for the trial court's calculation must be the actual hours counsel has devoted to the case, less those that result from inefficient or duplicative use of time." (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395.) "[A] court assessing attorney fees begins with a touchstone or lodestar figure, based on the 'careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.'" (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131-1132.)
"[I]n the absence of such crucial information as the number of hours worked, billing rates, types of issues dealt with and appearances made on the client's behalf, the trial court is placed in the position of simply guessing at the actual value of the attorney's services. That practice is unacceptable and cannot be the basis for an award of fees." (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) "[T]rial courts must carefully review attorney documentation of hours expended; 'padding' in the form of inefficient or duplicative efforts is not subject to compensation." (Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.)
Based on the foregoing authorities, we conclude it was an abuse of discretion for the trial court to award ShadowBird $337,542 -- the $112,514 actually billed, tripled by the multiplier the court applied -- for the work Marks performed while at Holland & Knight when ShadowBird did not submit any evidence of any kind regarding the number of hours worked or the services provided during that period. We will modify the attorney fee award accordingly.
2. Fees For Work On The Cross-Complaints
Grupe next argues that the trial court should not have awarded ShadowBird fees "for work relating to the cross-complaints ShadowBird and [Alliance] filed against one another." Grupe argues that work on the cross-complaints was not "useful and necessary to resolution of" Grupe's complaint against ShadowBird.
We are not persuaded by this argument. Rather than presenting an argument specifically crafted for this court, based on the ruling the trial court made on ShadowBird's motion, Grupe has simply copied the argument it made in the trial court, almost verbatim, into its respondent's brief. While this approach may work sometimes (as with Grupe's immediately previous argument), it does not work in this instance. This is largely so because the trial court, in ruling on ShadowBird's motion, actually trimmed 52 hours from the amount sought for "work on Jury Instructions/Question and the JNOV motion" because that "work did not involve the issues presented in [Grupe's] complaint," but instead related only to issues raised by ShadowBird's cross-complaint against Alliance. As to the rest of the hours claimed, however, the court found that "[a]ll other time would have related to the issues presented by the complaint."
In reiterating the very same argument it made in the trial court, Grupe necessarily fails to address this aspect of the trial court's ruling.*fn8 Thus, Grupe fails to explain why the trial court was wrong in concluding that all of Marks's services other than those relating to the jury instructions and the motion for judgment notwithstanding the verdict were "related to the issues presented by the complaint."
An additional flaw in Grupe's approach is that virtually none of its argument is supported by citations to the record on appeal. Thus, for example, when Grupe purports to explain how the issues raised by its complaint were different from the issues raised by the cross-complaints, we have no way of knowing whether this is true, or what the significance of the difference is, because Grupe does not direct our attention to where the cross-complaints appear in the record on appeal. In fact, they do not appear there at all. Accordingly, not only is Grupe's brief insufficient to carry Grupe's burden on appeal, but the record is too.
Based on the foregoing, we conclude Grupe has failed to demonstrate any abuse of discretion in the trial court's attorney fee award based on distinguishing between the services that were related solely to the cross-complaints and those that were related to Grupe's complaint.
3. The Multiplier
Finally, Grupe contends ShadowBird was not entitled to a multiplier. We are not persuaded.
"Under Serrano III, the lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including . . . (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. [Citation.] The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services. The '"experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong."'" (Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.)
Grupe first contends a multiplier was not appropriate here because "[t]he questions in this lawsuit below were neither 'novel' nor 'difficult.'" Grupe does not sufficiently expand on this assertion, however, for us to assess its validity. This approach -- simply asserting that the issues were neither novel nor difficult, without explaining why this was so -- might have sufficed in the trial court, where that court was intimately familiar with the issues that had just been tried and where ShadowBird, as "the party seeking a fee enhancement," "b[ore] the burden of proof." (Ketchum v. Moses, supra, 24 Cal.4th at p. 1138.) It does not suffice in this court, however, where Grupe, as the appellant, bears the burden of persuading us that the fee award was "'"clearly wrong."'" (Id. at p. 1132.)
Grupe next contends that a multiplier was "not appropriate" "[w]ith respect to the skill-of-counsel criterion." As Grupe observes, "a trial court should award a multiplier for exceptional representation only when the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation. Otherwise, the fee award will result in unfair double counting and be unreasonable." (Ketchum v. Moses, supra, 24 Cal.4th at p. 1139.) Grupe asserts there was "no evidence of exceptional representation that would support an enhancement" here, but that bare assertion is not sufficient to carry Grupe's burden on appeal of demonstrating error. The trial judge was in a far better position than are we to determine the quality of the legal services Marks performed for ShadowBird in the trial court, and simply asserting that there was no evidence of exceptional representation does not persuade us that the trial judge could not have reasonably concluded otherwise based on what he saw.
Grupe next asserts there was "no evidence showing that this case precluded [ShadowBird's] counsel from taking on other work," and in fact there was evidence Marks "was able to try at least one other jury case the year this case was tried." On this point, Grupe is correct. In support of ShadowBird's fee motion, Marks did not make any assertion about the extent to which the nature of this litigation precluded other employment.
On the final criterion from Ketchum -- the contingent nature of the fee award -- the Supreme Court explained that "'[a] contingent fee must be higher than a fee for the same legal services paid as they are performed. The contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. The implicit interest rate on such a loan is higher because the risk of default (the loss of the case, which cancels the debt of the client to the lawyer) is much higher than that of conventional loans.' [Citations.] 'A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his work if he is paid only for the second of these functions. If he is paid no more, competent counsel will be reluctant to accept fee award cases.'" (Ketchum v. Moses, supra, 24 Cal.4th at pp. 1132-1133.) The court also stated that "[t]he purpose of a fee enhancement, or so-called multiplier, for contingent risk is to bring the financial incentives for attorneys enforcing important constitutional rights . . . into line with incentives they have to undertake claims for which they are paid on a fee-for-services basis." (Id. at p. 1132.)
Focusing on the Supreme Court's latter assertion, Grupe contends "ShadowBird vindicated no important constitutional or other public right in defending this lawsuit. It simply kept title to property." We have already rejected this assertion, however, in determining that the trial court could have reasonably found that ShadowBird's defense of this action conveyed a significant benefit on the public by ensuring that the buffer parcel would remain subject to the agricultural/open space condition in Grupe's original deed to the city. Thus, Grupe has failed to show that the contingent nature of the fee award criterion weighed against applying a multiplier here.
Based on the foregoing, all Grupe has done on appeal is shown that one of several criteria for determining the appropriateness of a multiplier did not apply here. That is not sufficient, however, to show the trial court was "clearly wrong" in deciding to employ a multiplier to enhance ShadowBird's fee award.
The judgment is affirmed. The attorney fee order is modified to reduce the amount of the fee award from $1,007,067 to $669,525, and as modified the attorney fee order is affirmed. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)
Focusing on the Supreme Court's latter assertion, Grupe contends "ShadowBird vindicated no important constitutional or other public right in defending this lawsuit. It simply kept title to property." We have already rejected this assertion, however, in determining that the trial court could have reasonably found that ShadowBird's defense of this action conveyed a significant benefit on the public by ensuring that the buffer parcel would remain subject to the agricultural/open space condition in Grupe's original deed to the city. Thus, Grupe has failed to show that the contingent nature of