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Highland Springs Conference and Training Center v. City of Banning

California Court of Appeals, Fourth District, Second Division

November 21, 2019

HIGHLAND SPRINGS CONFERENCE AND TRAINING CENTER et al., Plaintiffs and Appellants,
v.
CITY OF BANNING, Defendant and Respondent SCC ACQUISITIONS, INC., et al., Real Parties in Interest and Respondents.

          APPEAL from the Superior Court of Riverside County No. RIC460950. Thomas H. Cahraman, Judge. Reversed with directions.

          Chatten-Brown, Carstens & Minteer, Joshua R. Chatten-Brown and Jan Chatten-Brown, for Plaintiff and Appellant Highland Springs Conference and Training Center.

          Leibold McClendon & Mann and John G. McClendon for Plaintiff and Appellant Banning Bench Community of Interest Association.

          Aleshire & Wynder and Anthony R. Taylor and Stephen R. Onstot for Defendant and Respondent.

          Voss, Cook & Thel, Francis T. Donohue III; Bruce V. Cook and Andrew P. Cook for Real Parties in Interest and Respondents.

          OPINION

          RAMIREZ P. J.

         I. INTRODUCTION

         Plaintiffs and appellants, Highland Springs Conference and Training Center (Highland Springs) and Banning Bench Community of Interest Association (Banning Bench), appeal from the August 3 and 4, 2017, orders limiting the attorney fees plaintiffs could recover from real parties in interest, SCC/Black Bench LLC (SCC/BB) and SCC Acquisitions, Inc. (SCCA). In cost memoranda, and again in duplicative fee motions, plaintiffs sought to recover fees they incurred in successfully pursuing a motion to amend their October 2008 judgments against SCC/BB, to add SCCA to the October 2008 judgments as an additional judgment debtor. We reverse and remand the matter to the court with directions to redetermine the amount of each plaintiff's fee award.

         II. BACKGROUND[1]

         In April 2008, a judgment was entered in favor of plaintiffs against defendant and respondent, City of Banning (the City), and SCC/BB, on plaintiffs' writ petitions challenging the City's certification of an environmental impact report for a development project known as the Black Bench project. (Highland Springs, supra, 244 Cal.App.4th at p. 272.) SCC/BB was the only named real party in interest in the writ petitions. In October 2008, the court awarded Highland Springs $421, 819.96, and awarded Banning Bench $288, 920.01, in costs and attorney fees against SCC/BB. (Code Civ. Proc., §§ 1032, 1033.5, 1021.5.)[2]

         By the end of 2008, SCC/BB lost the Black Bench property in foreclosure and had exhausted around $14 million in capital. (Highland Springs, supra, 244 Cal.App.4th at pp. 272, 277.) SCC/BB appealed the April 2008 judgment, but its appeal was dismissed in September 2008 after it failed to deposit the costs of preparing the record on appeal. (Id. at p. 272.) In October 2012, plaintiffs filed an alter ego motion, under section 187, seeking to add SCCA to the April 2008 and October 2008 judgments as an additional judgment debtor, and thus render SCCA liable, along with SCC/BB, for paying plaintiffs' attorney fees and costs awards against SCC/BB. The court denied the alter ego motion on the sole ground that plaintiffs failed to act with diligence in bringing the motion, and plaintiffs appealed. (Id. at p. 273.)

         In Highland Springs, this court reversed the order denying the alter ego motion. (Highland Springs, supra, 244 Cal.App.4th at p. 273.) This court concluded that the motion was erroneously denied based on plaintiffs' delay in bringing it, because SCCA did not show it had been prejudiced by the delay. Thus, SCCA did not meet its burden of showing that the alter ego motion was barred by laches. (Id. at pp. 273, 282-289.) The matter was remanded to the court to determine whether plaintiffs had proved their alter ego claim against SCCA. (Id. at pp. 289-290.) SCC/BB did not appear in Highland Springs. (Id. at p. 272.) The remittitur issued on May 3, 2016.[3]

         Following further trial court proceedings on the alter ego motion between plaintiffs and SCCA, on February 8, 2017, the court entered a judgment in favor of plaintiffs on the motion, adjudicating SCCA to be SCC/BB's alter ego and amending the October 2008 judgments against SCC/BB to add SCCA to those judgments as an additional judgment debtor.

         On February 9, 2017, notice of entry of the February 8, 2017, judgment was served, and each plaintiff filed a memorandum of costs after judgment (§ 685.070) seeking fees and costs incurred in having successfully pursued the alter ego motion. In its cost memorandum, Highland Springs sought $446, 710 in fees incurred between July 2012 and February 2017, plus $815.53 in costs. In its cost memorandum, Banning Bench sought $216, 545 in fees incurred between January 2009 and January 2017, plus $320.38 in costs. On February 17, 2017, SCC/BB filed motions to tax each cost memorandum, and SCCA later joined SCC/BB's motions to tax.

         On April 10, 2017, each plaintiff filed a motion for attorney fees, seeking the same fees listed in their cost memoranda, plus additional fees. In its fee motion, Highland Springs sought $737, 870.25 in fees ($490, 698.50 in lodestar fees [hours worked times hourly rates] times a multiplier of 1.5), plus fees not yet incurred in bringing the fee motion. Banning Bench sought $536, 454.39 in fees and costs (including $324, 817.50 in lodestar fees, multiplied by 1.5), plus fees not yet incurred in bringing the fee motion. Each fee motion stated that it was being brought pursuant to sections 685.040 to 685.080 of the Enforcement of Judgments Law (the EJL) (§ 680.010 et seq.) and section 1021.5. On May 10, 2017, SCC/BB and SCCA filed a joint opposition to the fee motions.

         Banning Bench moved to strike SCC/BB's and SCCA's motions to tax and also filed a motion for sanctions against counsel for SCC/BB and SCCA. (§§ 128.5, 128.7.) Banning Bench claimed that SCC/BB's counsel had wrongfully caused SCC/BB to file the motions to tax, despite knowing that SCC/BB was “cancelled in California in 2010 and... ceased to exist in 2011.”[4]

         On August 3 and 4, 2017, the court denied Banning Bench's motion for sanctions and motions to strike SCC/BB's motions to tax, and entered judgment in favor of plaintiffs on their cost memoranda and fee motions. The court granted the fee motions, in part, and granted the motions to tax, in part, by awarding each plaintiff fees but limiting those fees to $80, 000 for each plaintiff, substantially fewer fees than each plaintiff was requesting.

         The court based its $80, 000 fee awards on three considerations. First, the court ruled that plaintiffs were not entitled to recover any of the fees they incurred on appeal in Highland Springs, because they did not file a timely motion for attorney fees on appeal within 40 days after the remittitur in Highland Springs issued on May 3, 2016, pursuant to rule 3.1702(c)(1) of the California Rules of Court.[5]

         Second, the court ruled that, under section 685.080, subdivision (a), of the EJL, plaintiffs were not entitled to recover any fees they incurred more than two years before they filed their fee motions.[6] Third, for the two-year period during which plaintiffs could recover fees, which, the court ruled, excluded any fees incurred on appeal in Highland Springs, the court ruled that 200 hours of attorney time for each plaintiff was a reasonable number of hours, and a blended rate of $400 per hour was a reasonable hourly rate, to award each plaintiff under section 1021.5.

         Thus, the court awarded each plaintiff $80, 000 in fees (200 hours times $400 per hour), on each fee motion. The court expressly found no basis for applying a lodestar multiplier to the lodestar fee requests under section 1021.5. Plaintiffs timely appealed.

         III. DISCUSSION

         A. TheFees PlaintiffsIncurred in Pursuing Their Alter Ego Motion are Prejudgment Fees Incurred in Obtaining the February 8, 2017, Judgment; Thus, the Fee Motions are Governed ...


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