Duncan v. Kihagi CA1/1 ( 2021 )

Filed 10/6/21 Duncan v. Kihagi CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
DALE DUNCAN et al.,
Plaintiffs and Appellants,
A154678
v.
ANNE KIHAGI et al., (City and County of San
Francisco Super. Ct.
Defendants and Appellants.
No. CGC-15-545655)
Respondents Dale Duncan and Marta Munoz Mendoza sued their
former landlords for tenant harassment and wrongful eviction. A jury
awarded them damages, and this court affirmed in an unpublished opinion.
(Duncan v. Kihagi (Aug. 9, 2021, A153521) (Duncan I).) In this appeal, the
three landlords—Anne Kihagi, Christina Mwangi, and Zoriall LLC—
challenge the amount of attorney fees the trial court awarded after entry of
judgment. We affirm.
I.
FACTUAL AND PROCEDURAL
BACKGROUND
We set forth the underlying facts of the case in Duncan I and need only
briefly summarize them here. Duncan and Mendoza lived together with their
daughter in a rent-controlled apartment in a building on Hill Street in San
Francisco. Kihagi and Mwangi are members of Zoriall, which purchased the
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Hill Street building in May 2014. The landlords soon began taking away
benefits that previously had been provided to the tenants; were
uncommunicative, uncooperative, and hostile with the tenants; and
eventually initiated wrongful owner move-in proceedings against the tenants,
which forced them from their home about 14 months after Zoriall purchased
the property. Duncan and Mendoza spoke with a law firm, and the firm
agreed to represent them on a contingent-fee basis.
Duncan and Mendoza sued the landlords in May 2015, when the couple
were still living in their unit. The original complaint (No. CGC 15-545655)
included allegations that the landlords removed housing services and there
were habitability defects in the tenants’ unit. The complaint alleged causes
of action for nuisance; breach of contract; negligence; violation of San
Francisco’s Residential Rent Stabilization and Arbitration Ordinance (Rent
Ordinance) (S.F. Admin. Code ch. 37, hereafter Admin. Code); and unfair
business practices (Bus. & Prof. Code, § 17200 et seq.), apparently based on
harassment under the Rent Ordinance. A few days later the tenants filed an
apparently identical first amended complaint, which was signed by a
different attorney in the tenants’ law firm.
Two other tenants of the Hill Street apartment building, Brian Smyth
and Ben Hutchinson, retained the same law firm and also sued the landlords.
They filed their separate complaint in July 2015.
The landlords initiated two separate unlawful detainer actions against
the tenants. Those lawsuits were consolidated into this action but were
never brought to trial.
The trial court’s docket reveals that the parties engaged in extensive
litigation over the following year. Then in April 2016, the tenants filed a
separate action (No. CGC 16-551512), this one alleging wrongful eviction in
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violation of the Rent Ordinance as well as negligence. In July, the second
lawsuit was consolidated with the first.
The parties litigated several discovery disputes, and the docket
indicates that the trial court ordered the landlords to pay sanctions to the
tenants’ attorneys for discovery abuses.
Two months before trial was scheduled to begin, the trial court granted
the tenants’ request that this action be consolidated with the separate
lawsuit by tenants Smyth and Hutchinson. But on the eve of the scheduled
trial two months later, the court severed the Smyth/Hutchinson case from
this action. The separate Smyth/Hutchinson case later settled and thus was
never tried.
In early September 2017, the tenants filed a second amended complaint
that combined the claims from both previous complaints but did not assert
any substantive changes. This was the operative complaint, and it alleged
causes of action for nuisance, breach of contract, negligence, violations of the
Rent Ordinance, and unfair business practices. Ultimately, however, the jury
was asked to consider only violations of the Rent Ordinance (wrongful
eviction and harassment). The jury found in the tenants’ favor and concluded
that all three landlords had harassed the tenants and engaged in an unlawful
eviction in violation of the Rent Ordinance.
Following post-trial motions and entry of an amended judgment that
awarded the tenants $2.7 million, the tenants filed a motion for attorney fees.
They sought a total of $981,480 for the work of two partners and two
associates, and they asked for a lodestar enhancement multiplier of 1.5. In
their motion, the tenants represented they were not seeking fees for the time
spent on the discovery motions that led to the imposition of sanctions against
the landlords. They also represented they were not seeking fees for their
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work on the unlawful detainer actions or on the lawsuit brought by the other
tenants, even though it had been briefly consolidated in this action.
In opposing the motion, the landlords argued that the tenants were not
entitled to fees expended for work in connection with the five causes of action
that were abandoned before trial (nuisance, breach of contract, negligence,
habitability, and unfair business practices), the hourly rates sought were
unreasonable, and the number of hours billed was excessive because of the
tenants’ efforts “to delay the litigation, manufacture meritless claims, and
expand the scope of litigation beyond the two central contentions [pled] in the
complaints.”
Following a hearing, the trial court awarded attorney fees, and used
the lodestar method to calculate the award “by multiplying the number of
hours spent by the attorneys by an hourly rate that is reasonable under the
circumstances.” (Northwest Energetic Services, LLC v. California Franchise
Tax Bd. (2008) 159 Cal.App.4th 841, 879.) The court reduced the requested
hourly rates for one of the partners (to $550 from the requested $575) and
one of the associates (to $425 from the requested $475), and it declined to
apply a multiplier. It awarded a total of $910,752.50 in attorney fees to the
tenants, reflecting a reduction of more than $70,000 in the lodestar amount
they requested, and around sixty percent of the total they requested since the
trial court declined to apply a 1.5 multiplier. The landlords appealed.
II.
DISCUSSION
The landlords do not dispute that the Rent Ordinance entitles
prevailing parties to their reasonable attorney fees. (Admin. Code §§ 37.9(f)
[attorney fees to prevailing party in wrongful-eviction action], 37.10B(c)
[attorney fees to prevailing plaintiff in tenant-harassment action].) Although
the parties’ briefs in this appeal were filed before our decision in Duncan I,
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the tenants’ rights to attorney fees cannot now be seriously questioned in
light of that decision’s affirmation of the full jury verdict against the
landlords. The landlords acknowledge that the award of attorney fees is
reviewed for an abuse of discretion. (PLCM Group, Inc. v. Drexler (2000)
22 Cal.4th 1084, 1095 [appellate court will not disturb trial court’s award
unless it is “ ‘clearly wrong’ ”].) They contend that the trial court abused its
discretion in several respects when calculating the award. We consider and
reject all their arguments.
A. The Trial Court Did Not Fail to Properly Apportion Attorney Fees
Among the Tenants’ Causes of Action.
The landlords first argue that the trial court should have declined to
award attorney fees associated with five causes of action that were alleged
but not tried to verdict. Framed this way, the tenants were successful on
“only two” of their seven causes of action. In the trial court, the landlords
argued that the tenants should thus receive only two-sevenths of their
requested attorney fees.
On appeal, the landlords apparently no longer seek such a sharp
reduction. They argue more generally that the trial court failed to analyze
“whether the claims under the Rent Ordinance were so intertwined and
overlapping that they could not be separated from the dismissed causes of
action.” (E.g., Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129–130
[attorney fees need not be apportioned when incurred for issue common to
causes of action for which fees are recoverable and those which they are not].)
But as the trial court observed, it is not as if the tenants lost on the five
causes of action they did not present to the jury. Instead, it appeared that
the tenants made a tactical decision to abandon those claims, possibly to
streamline trial.
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We agree with the tenants that the same underlying facts were the
basis of all causes of action. As the tenants’ counsel argued at the hearing on
the fees motion, “There is no question that evidence was shown at trial as to
the habitability problems, as to the failure to repair, as to the failure to
manage the property, as to interferences and nuisances caused by the
defendants. And all of that had to be investigated.” The landlords
misleadingly quote from the tenants’ motion for attorney fees to make it
sound as if the tenants “admitted” their dismissed claims were “separate and
distinct,” but the motion itself focused on the fact the tenants prevailed in full
at trial despite not pursuing some theories of relief.
The landlords attempt to characterize the trial as having focused on
“the very narrow issue of whether [the tenants] were harassed and
unlawfully evicted from Hill Street in violation of the Rent Ordinance.” Far
from being a “narrow” issue, the tenants’ claims required them to prove that
the landlords acted in bad faith, as we explained in Duncan I. Even if the
tenants had never pursued the theories that were ultimately dropped,
counsel almost certainly would have conducted the same investigation,
included the same witnesses at trial, and devoted a comparable time to trial
preparation. The trial court thus did not abuse its discretion by somehow
failing to allocate time among the tried and untried causes of action.1
1 At the hearing on the motion, the tenants’ counsel distinguished
caselaw cited by the respondents where one court reduced an award of
attorney fees by 10 percent even where there were interrelated claims.
Counsel stated that “I would think that, you know, zero to five percent is a
better number here because they were such interrelated claims.” When it
issued its final award the trial court referred to “the potential five percent
overlap” and said it was making “slight reductions” in the award, apparently
reflecting a slight reduction in the hours awarded. In any event, we agree
with the trial court that the landlords’ “2/7ths percentage is [not] the right
analysis.”
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We likewise reject the landlords’ argument that the trial court abused
its discretion by supposedly failing to apportion time that was spent on the
landlords’ two unlawful detainer actions as well as the separate
Smyth/Hutchinson actions. The tenants’ motion specifically stated that the
tenants were not seeking fees connected with those actions, and counsel
repeated at the hearing on the motion that no fees were sought for any of the
hours on the Smyth/Hutchinson action before consolidation. The landlords on
appeal claim there is “substantial evidence that a significant portion” of
attorney fees should have been apportioned among the consolidated actions
because of a representation the tenants’ counsel made at the hearing.
According to the landlords, counsel “admitted” that “approximately 20% of
the work performed during that period [when the Smyth/Hutchinson action
was consolidated with this one] was potentially attributable to the Smyth
Actions.” But the landlords omit the context of counsel’s statement. What
counsel said was that “[o]bviously after consolidation there was some work
that went into, for example, the trial brief that described the
Smyth/Hutchinson claims. There were a couple of in limine motions, but
we’re talking about maybe 20 percent of the work for a one-month period of
time that might have been attributed. And that was reasonably necessary
given the stature of the case at that time.” (Italics added.) This is hardly an
admission that a “significant portion” of the requested award should have
been reduced, and the trial court did not abuse its discretion in declining to
significantly reduce the hours awarded.
The landlords rely in their reply brief on Mann v. Quality Old Time
Service, Inc. (2006) 139 Cal.App.4th 328, but their reliance is misplaced. In
Mann, the court reduced an award of attorney fees to parties who had
partially prevailed on an anti-SLAPP motion (Code Civ. Proc., § 425.16)
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because the trial court had failed to exclude fees attributable to causes of
action that remained in the litigation after the motion. (Mann at pp. 345,
347.) In other words, since the prevailing parties had achieved only “limited
success,” the trial court should have awarded “only that amount of fees that
is reasonable in relation to the results obtained.” (Id. at p. 343, italics
omitted.) Here, the tenants prevailed in full at trial, and they did so
regardless of the fact that they ultimately decided not to proceed under every
theory they had originally alleged. The landlords have not established an
abuse of discretion by the trial court.
B. The Landlords Make No Showing that Attorney Fees Were Awarded
for Excessive Hours Spent on Litigation.
The landlords next accuse the tenants of employing a “wasteful
litigation strategy” and argue that the trial court abused its discretion “by not
determining whether the 1,888.4 hours of attorney time spent on an eviction
action involving one residential unit was reasonable.” (Italics and
capitalization omitted.) But again, the trial court in fact did reduce the hours
awarded, albeit slightly, to account for the possible overlap in time spent on
the Smyth/Hutchinson matter, showing it did weigh the reasonableness of
the hours requested.
The landlords argue that the tenants expanded the scope of a simple
eviction matter by calling supposedly unnecessary or improper witnesses,
such as tenants of other buildings owned by the landlords. But in Duncan I
we sanctioned the tenants’ reliance on these witnesses. And while the
landlords point to isolated motions brought by the tenants’ counsel that
supposedly delayed the litigation, the trial court of course was in the best
position to evaluate the reasonableness of the tenants’ litigation tactics,
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especially in light of whether they were reasonable in response to the
landlords’ own litigation strategy. Again, we find no abuse of discretion.
C. The Tenants’ Evidence Supported the Award of Attorney Fees.
The landlords next claim that the billing entries submitted by the
tenants’ attorneys did not support the requested fees. We again disagree.
True enough, the prevailing party seeking attorney fees bears the
burden of establishing entitlement to an award and documenting the hours
spent and proper hourly rates. (Christian Research Institute v. Alnor (2008)
165 Cal.App.4th 1315, 1320.) But “California law does not require detailed
billing records to support a fee award; ‘[a]n attorney’s testimony as to the
number of hours worked is sufficient evidence to support an award of
attorney fees, even in the absence of detailed time records.’ ” (Rancho Mirage
Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252,
263.) “Furthermore, ‘[a]n award for attorney fees may be made in some
instances solely on the basis of the experience and knowledge of the trial
judge without the need to consider any evidence.’ ” (Id. at p. 264.) And if a
party does not object to the adequacy of documentation submitted to the trial
court, the challenge to the adequacy of the evidentiary basis for an award of
attorney fees is forfeited. (Id. at p. 264, fn. 9.)
With these standards in mind, the landlords’ complaints about isolated
billing entries submitted by the tenants’ attorneys fall far short of
establishing that the trial court abused its discretion in awarding attorney
fees. The landlords claim that some entries were “vague and lack[ed]
substance,” but they do not show that the trial court was unable to
reasonably rely on them. And the landlords elsewhere complain that some
billing entries were “particularly troublesome” because they “use[d] the stock
phrase ‘communications with clients’ . . . without any attempt at describing
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the communications and why they were necessary,” wrongly suggesting that
the tenants were required to divulge attorney-client communications in order
to recover attorney fees.
Having again failed to establish that the trial court’s award was clearly
wrong, we reject the landlords’ arguments.
D. The Trial Court Did Not Abuse Its Discretion in Setting Attorneys’
Hourly Rates.
The landlords next argue that the trial court abused its discretion when
it set the hourly rates of attorney Ariel Gershon at $425 and attorney
Kenneth Greenstein at $525. We again are not persuaded.
1. Additional Background.
Gershon submitted a declaration in support of the tenants’ request for
attorney fees. He attested that he had been a practicing attorney since 2006
and had worked since 2007 as an associate attorney at the law firm
representing the tenants. Gershon further declared that his hourly rate was
$475. The landlords’ opposition argued that this hourly rate was excessive.
The landlords noted that Gershon previously had submitted declarations in
connection with sanction requests stating that his hourly rate was $400. In
reply, the tenants represented that Gershon’s rate had increased and that the
previous rate was what was claimed in connection with discovery motions.
At the hearing on the motion, a partner at Gershon’s law firm stressed that
$475 was actually low for Gershon because he (the partner) would pick him
over “any lawyer in this town” to try a case and he was “one of the top
attorneys in the City bar none.” The partner also stressed that he had not
had to hire an outside tech firm at a cost of tens of thousands of dollars
because “Mr. Gershon did it with his iPad while cross-examining a witness,
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and he was better than anybody at it.” The trial court ultimately set
Gershon’s hourly rate at $425.
As for Greenstein, his declaration in support of attorney fees stated
that he was the founding partner of the law firm representing the tenants
and was their lead attorney of record. He described previous lawsuits he had
managed, and he attested that his hourly rate was $525. Greenstein further
attested that the last time he had been awarded attorney fees was nearly
three years earlier, when he was awarded an hourly fee of $475 by a different
trial court judge. In opposition, the landlords noted that the current
requested rate was 10 percent above what had previously been awarded and
that $525 was “excessive and far beyond reasonable rates for attorneys with
comparable experience practicing landlord-tenant law in San Francisco.”
They compared his hourly rate to that of the $217 rate claimed by a deputy
city attorney in the Office of the City Attorney in litigation against Kihagi, as
well as the $400 hourly rate claimed by an attorney representing a plaintiff
in a different lawsuit against Kihagi. In reply, the tenants pointed out that
the deputy city attorney was a public employee whose rates are set by the
government, and the private attorney cited by the landlords had years of
experience but had “little to no experience with major and complex litigation
in the landlord-tenant area.” The trial court accepted Greenstein’s requested
hourly rate of $525 after consideration of “comparable awards [and]
comparable billing amounts throughout our court from my own experience
from very experienced counsel.”
2. Analysis.
On appeal, the landlords again acknowledge that the “ ‘experienced
trial judge is the best judge of the value of professional services rendered in
his [or her] court, and while his [or her] judgment is of course subject to
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review, it will not be disturbed unless the appellate court is convinced that it
is clearly wrong.’ ” (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) But they first
contend that the trial court abused its discretion by setting Gershon’s hourly
rate at $425 because the rate “lack[ed] any proper basis.” They summarize
the conflicting evidence presented below but do not establish that the trial
court was clearly wrong when it concluded that the rate was consistent with
its own experience.
The landlords claim that the tenants’ “silence” on why Gershon’s
claimed rate increased from when he sought fees in connection with sanctions
motions was “alarming.” In fact, at the hearing Gershon himself explained
that “I’ve been claiming during the course of this case as part of discovery
motions a rate of $400, which I think is appropriate for discovery-motion
work,” whereas the fees they were requesting after trial were for “the work
we did in prep for trial and for all the things that were not claimed in
discovery motions,” and that under the circumstances his requested rate was
reasonable. The trial court was in the best position to consider this
explanation, and we find no abuse of discretion under the circumstances.
We also reject the landlords’ argument that the trial court abused its
discretion by accepting Greenstein’s claimed hourly rate of $525. Again, they
cite to the conflicting evidence presented below but do not establish that the
trial court erred. They contend that Greenstein’s work on the case
apparently was limited to “the simple task of preparing jury instructions,” a
somewhat ironic complaint given that the landlords proposed 22 special jury
instructions of their own and argued in Duncan I that the failure to give four
of them amounted to reversible error. The trial court was in the best position
to evaluate the reasonableness of time devoted to litigating jury instructions,
and we find no reason to set aside the court’s award.
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E. The Size of the Attorney Fee Award Was Not an Abuse of Discretion.
Finally, the landlords argue that the trial court “made no effort to
determine whether the fee award resulted in double recovery” for the tenants
or the attorneys and did not “consider whether the fee award would result in
financial ruin” for the landlords. Once again we are not persuaded.
The landlords complain that because the contingency-fee agreement
between the tenants was never presented to the trial court, the court had no
basis to determine the reasonableness of the award of fees. But they cite no
authority for the proposition that recovering plaintiffs be required to produce
such a confidential document. And the case they do cite regarding
contingency-fee contracts holds that “a trial court may consider the terms of
[a contingency-fee] contract, along with other factors, but . . . the terms of the
contract do not compel any particular award.” (Vella v. Hudgins (1984)
151 Cal.App.3d 515, 520, italics added.) Such a contract “is some evidence of
the value of an attorney’s services, but as with other items of evidence, it is
not controlling.” (Id. at p. 521.) Moreover, Vella was decided before the
enactment of Business and Professions Code section 6149, which provides
that a written fee contract is considered a confidential communication.
We also reject the landlords’ argument that the trial court abused its
discretion by not considering the “financial impact” of the award of attorney
fees. The only case they cite in support of this argument actually reversed a
trial court’s decision not to order an indigent plaintiff to pay attorney fees.
(Garcia v. Santana (2009) 174 Cal.App.4th 464, 467.)
Because the landlords have again failed to demonstrate that the trial
court abused its discretion, we reject their arguments.
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III.
DISPOSITION
Appellants’ unopposed September 11, 2019 request for judicial notice is
granted.
The order awarding attorney fees is affirmed. Respondents shall
recover their costs on appeal.
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_________________________
Humes, P.J.
WE CONCUR:
_________________________
Margulies, J.
_________________________
Banke, J.
Duncan et al. v. Kihagi et al. A154678
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