California Court of Appeals, First District, Second Division
Superior Court of the City and County of San Francisco No. CGC-10-498299 Honorable Wallace P. Douglass Judge.
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Wilson, Elser, Moskowitz, Edelman & Dicker, Edward Garson, Robert Cooper for Defendant and Appellant:
Swanson & McNamara, Edward Swanson, Britt Evangelist; Cooper, White & Cooper and Sarah Jane Banola for Plaintiff and Respondent.
This is the third in a series of appeals filed by appellant David Lujan in this case, the general background of which was described in our introduction in the earlier opinion: “A prominent Guam attorney [Lujan] was sued in two lawsuits in Hawaii, followed by a third lawsuit in California, the last of which, were it to succeed, could have cost the attorney millions of dollars, loss of his reputation, and perhaps his license to practice law. The attorney hired a law firm with offices in San Francisco and Guam to represent him, a representation that quickly came to include the filing of two more proceedings. The representation was vigorous indeed, and quickly generated significant billings about which the attorney came to complain, ultimately refusing to pay a large balance. The firm withdrew from the representation, and sued. Following a lengthy jury trial, the jury returned a verdict for the firm of $945, 947.90, the full amount sought. The trial court later awarded $331, 545.51 in prejudgment interest.” Lujan appealed, and we affirmed both the judgment and the award of prejudgment interest. (Calvo Clark & Jacob LLP v. Lujan (July 28, 2014, A138210) [nonpub. opn.].)
This appeal involves two issues arising out of two postjudgment filings by the law firm: (1) a memorandum of costs, and (2) a motion for attorney fees based on the engagement letter Lujan had signed with the firm. Following thousands of pages of briefing and extensive oral argument, the trial court filed its order awarding the law firm $1, 532, 674 in attorney fees, and $123, 227 in expert witness fees, based on a Code of Civil Procedure section 998 offer. Lujan appeals that order. We again affirm.
To put the case in perspective, we begin with a quotation from our earlier opinion:
“The Setting: The Parties, the Participants, and the Proceedings
“Appellant David Lujan is an attorney in Guam, the senior partner in the firm of Lujan, Aguigui & Perez LLP. Lujan is very experienced, having done
‘hundreds of trials, ’ and is apparently well regarded, having represented many high profile people, including governors, lieutenant governors, and other politicians, in Guam and the Commonwealth of the Northern Mariana Islands. But it was his representation of a minor named Junior Larry Hillbroom (Junior) that would lead to the appeal before us here.
“In 1995, Lujan took on the representation of Junior, seeking to prove that Junior was an heir of Larry Hillblom (Hillblom), one of the founders of DHL Worldwide Express, who disappeared while piloting an airplane near Saipan. Lujan’s efforts on behalf of Junior were successful, with Junior ultimately receiving some $90 million from Hillblom’s estate. Lujan received a contingency fee, apparently of 38 percent.
“The settlement with the estate closed in April 2000, but Lujan’s involvement with Junior continued.... Keith Waibel was designated as trustee of Junior’s trust, with Lujan to serve as a “protector” who oversaw the trustee. Lujan continued on in his role as protector (and perhaps other roles as well) over the course of several years, during which he received substantial sums of money in connection with those services-substantial sums of money that led to Lujan being sued. Specifically:
“In October 2008, two actions were filed in Hawaii, filed by Waibel, as trustee of the JLH Trust and the JLH Pacific Trust (the Hawaii actions). The Hawaii actions essentially sought to recover monies the trustee claimed were owed the trusts by Lujan and his wife. The Hawaii actions were relatively modest in scope, one involving $250, 000 or less, the other a dispute with Waibel whether Lujan’s monthly fees should be reduced. The next action was far more serious.
“In February 2009, Junior, now having reached the age of majority, filed suit in the United States District Court for the Central District of California, in an action entitled Junior Larry Hillbroom v. David J. Lujan, Barry J. Israel, and Keith A. Waibel, case no. CV 09-0841 (the California action). The California action was filed on behalf of Junior by the firm of Girardi Keese, a prominent plaintiff’s law firm in southern California, and alleged claims for legal malpractice, breach of fiduciary duty, fraud, civil conspiracy, violations of 18 U.S.C. § 1961 et seq. (RICO), and violations of Business and Professions Code section 17200 et seq. The thrust of the California action was that Lujan conspired with Waibel (Junior’s former guardian and the then-current trustee of his trusts) and Barry Israel (Lujan’s co counsel during his representation of Junior as a minor) to fraudulently increase the contingent fee in Junior’s recovery from the Hillblom estate from 38 percent to 56 percent. The California action sought to recover millions of dollars, including punitive damages against Lujan.
“It was at this point that Lujan turned to Eduardo Calvo.
“Calvo is a lawyer in Guam, and the senior name partner in the firm of Calvo & Clark, which had offices in Guam and San Francisco. Calvo was well known to Lujan, as Calvo had been involved as an attorney in the Hillbloom probate with whom Lujan had worked closely. And following the close of probate, Calvo had referred significant business to him. As Lujan described it, throughout the years, he and Calvo spent ‘hundreds of days and evenings... together’ and, ‘I thought we were friends.’ (Fn. omitted.) Thus, and because Calvo had practiced in Hawaii, Lujan decided to retain Calvo to represent him. In short, Calvo and the manner in which he represented his clients were well known to Lujan.
“In February 2009, Calvo & Clark prepared, and Lujan and his wife signed, a letter referenced ‘Engagement of Legal Services’ (engagement letter). The engagement letter was four pages long, single spaced, and began with confirmation of Calvo & Clark’s ‘understanding that we will provide you with representation’ in the Hawaii and California actions.... [¶]... [¶]
“Lujan became involved in two more lawsuits after the engagement letter was signed, and the parties agreed that the agreement would also cover these lawsuits. The first of these lawsuits was filed in April 2009, by Calvo & Clark on behalf of Lujan in the Guam Superior Court (the Guam action). The Guam action alleged among other things a claim for defamation against Girardi Keese, based on statements made to the press in Guam concerning Lujan’s earlier representation of Junior. The Guam action also asserted claims against Waibel and others, seeking to recoup monies Lujan asserted he was owed by Waibel, Junior, and one of the trusts under the contingency fee agreement.
“The second post-engagement letter proceeding was Calvo & Clark’s filing on Lujan’s behalf a motion to reopen and unseal the Guardianship of Junior Larry Hillbroom, Special Proceeding, Guam Superior court number JP0624-95 (the guardianship action). The guardianship action arose out of Calvo & Clark’s defense of Lujan in the California action, where it developed that some pleadings and/or orders filed in the guardianship proceedings, now closed with the record sealed, might be necessary to the defense in the California action (and perhaps prosecution of the Guam action). That is, it appeared that Junior’s counsel would cite or quote from the pleading if helpful to their case. But if a sealed record was damaging, they would assert it could not be publicly disclosed because it was under seal. [¶]... [¶]
“A few things are undisputed, however, and bear brief mention here. The first is that Calvo & Clark devoted significant resources to its representation
of Lujan, and quickly generated significant legal fees. A second undisputed fact is that Lujan complained about the size of the bills and fell behind in paying them. A third is that the relationship was one where the client and his lawyers were in constant contact and communication, with testimony from Lujan and his expert witness, testifying from Lujan’s own time records, confirming that in the months of February, March, April and May, they talked essentially every day, sometimes multiple times a day. (Fn. omitted.) A final undisputed matter is that by March 2010 the representation was over, Calvo & Clark having withdrawn.
“As of that point, Lujan had paid Calvo & Clark $326, 180, with the firm claiming a balance owed of some $1, 120, 000. Calvo & Clark tried to negotiate resolution of the outstanding balance with Lujan, to no avail, leading to the action here.
“The Underlying Action
“In April 2010, Calvo & Clark filed a complaint for damages in San Francisco Superior Court. The complaint alleged claims for breach of contract, common count, quantum meruit, and account stated. The breach of contract claim sought damages of $1, 181, 034, plus prejudgment interest; the other three claims sought $1, 027, 435.89.
“In December 2010, Lujan filed an answer and a cross-complaint. The cross complaint asserted 10 causes of action against Calvo & Clark, styled as follows: (1) legal negligence; (2) breach of contract; (3) fraud in the inducement; (4) negligent and/or intentional non-disclosure of material facts; (5) bad faith; (6) unjust enrichment; (7) breach of fiduciary duty; (8) negligent misrepresentation; (9) abuse of process; and (10) accounting.
“Over the following months, Calvo & Clark filed demurrers and motions, the effect of which was to eliminate all of Lujan’s claims except for breach of contract and breach of the covenant of good faith and fair dealing. Along the way Calvo & Clark’s noncontract claims went by the wayside, the upshot of which was that the matter proceeded to trial with each side asserting essentially its contract based claims, including Lujan’s bad faith claim. And Calvo & Clark’s damage claim was now $945, 947.90.
“The case proceeded to jury trial, which began on November 7, 2012, with motions in limine....
“Testimony began on November 16 and was taken over 18 days. On December 12, after the close of Lujan’s case on his cross-complaint, Calvo &
Clark moved for nonsuit, which the court granted. Thus ended Lujan’s action against Calvo & Clark, a ruling which Lujan has not pursued on appeal. (Fn. omitted.)
“On December 17 the jury returned its verdict for Calvo & Clark, awarding it $945, 947.90, the full amount sought.
“The Motion for Prejudgment Interest
“Four days later, on December 21, Calvo & Clark filed a motion for prejudgment interest, seeking interest of 18 percent pursuant to the engagement letter. The trial court ultimately awarded Calvo & Clark interest, not at the rate requested, ...