Kalfin v. Kalfin CA4/3 ( 2013 )

Filed 11/6/13 Kalfin v. Kalfin CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
DEBRA R. KALFIN,
Plaintiff and Respondent, G046639
v. (Super. Ct. No. 30-2010-00422625)
JUDITH A. KALFIN, ORDER MODIFYING OPINION;
NO CHANGE IN JUDGMENT
Defendant and Appellant.
It is ordered that the opinion filed on October 15, 2013, be modified as
follows:
On page 30, add the following:
“V. Attorney Fees on Appeal
“Debra requests her reasonable appellate attorney fees and costs under
Welfare and Institutions Code section 15657.5, subdivision (a). As we noted in the
concurrently filed companion appeal Debra R. Kalfin v. Judith A. Kalfin (Oct. 15, 2013,
G047275) [nonpub. opn.], as prevailing party Debra is entitled to an award of costs and
attorney fees incurred on appeal, which includes the costs and fees incurred in defending
the judgment and the attorney fees award, in an amount to be determined by the trial
court. (Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499 [‘statute authorizing an
attorney fee award at the trial court level includes appellate attorney fees unless the
statute specifically provides otherwise’]; Sebago, Inc. v. City of Alameda (1989)
211 Cal.App.3d 1372, 1388 [party who successfully defends an award of attorney fees is
entitled to appellate attorney fees as well].)”
On page 30, modify the final sentence of the disposition to read,
“Respondent is awarded her costs and attorney fees on appeal.”
This modification does not change the judgment.
O’LEARY, P. J.
WE CONCUR:
FYBEL, J.
THOMPSON, J.
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Filed 10/15/13 (unmodified version)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
DEBRA R. KALFIN,
Plaintiff and Respondent, G047275
v. (Super. Ct. No. 30-2010-00422625)
JUDITH A. KALFIN, OPINION
Defendant and Appellant.
Appeal from a postjudgment order of the Superior Court of Orange County,
H. Michael Brenner, Judge. (Retired judge of the Orange Super. Ct. assigned by the
Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed as modified.
Freeman Firm, Thomas H. Keeling, Franklin J. Brummett; Law Offices of
Scott E. Schutzman and Scott E. Schutzman for Defendant and Appellant.
Lamb & Kawakami, Patrick L Rendon; Adams & Nelson and Keith A.
Robinson for Plaintiff and Respondent.
Judith A. Kalfin appeals from the postjudgment order awarding
attorney fees to her sister, Debra R. Kalfin.1 In the underlying action, Debra prevailed on
her claim for financial abuse of a dependent adult, which entitled her to attorney fees.
(Welf. & Inst. Code, §§ 15610.30, 15657.5, subd. (a).) On appeal, Judith does not
challenge Debra’s statutory entitlement to attorney fees, but argues the order must be
reversed because: (1) the award is excessive and the court applied improper criteria;
(2) amounts awarded based on work by one group of Debra’s attorneys should have been
stricken because there was an illegal fee-splitting agreement between Debra’s attorneys;
and (3) the contingent fee agreement between Debra and her attorneys was
unconscionable. We reject her contentions, modify the award to delete minor amounts
Debra concedes should not have been awarded, and affirm the order as modified.
FACTS & PROCEDURE
The facts concerning the underlying dispute are fully addressed in our
concurrently filed opinion in Debra R. Kalfin v. Judith A. Kalfin (Oct. 15, 2013,
G046639) [nonpub. opn.] (Kalfin 1). We adopt and incorporate by reference the facts
and analysis from our opinion in Kalfin 1 and will not repeat them here. In that opinion,
we affirmed the judgment awarding Debra approximately $1.4 million in compensatory
damages and $260,000 in punitive damages against Judith on causes of action for breach
of oral contract and financial abuse in violation of Welfare and Institutions Code
section 15610.30.
Debra’s Motion for Attorney Fees
Debra filed a motion for her attorney fees pursuant to Welfare and
Institutions Code section 15657.5, subdivision (a), which provides a plaintiff who
1 For convenience and clarity, we will refer to the family members by their
first names, with no disrespect intended.
2
prevails on a claim for financial abuse under Welfare and Institutions Code
section 15610.30, “shall [be] award[ed her] reasonable attorney’s fees . . . .” Her motion
was accompanied by a declaration from her lead attorney, Patrick L. Rendon, who
detailed the claimed “lodestar” amount, i.e., the hours reasonably spent on the litigation
multiplied by a reasonable hourly rate.
Rendon’s declaration explained Debra agreed to hourly rates of $600 for
partners, $450 for associate attorneys, and $250 for paralegals. He stated, “Pursuant to
the terms of the engagement with [Debra, she] agreed that we are entitled to [50] percent
of the gross amount recovered plus costs.” Rendon declared because they recognized
attorney fees were potentially recoverable, “we agreed to accept the [court’s] award of
attorneys’ fees . . . in lieu of the amount due by applying the [50 percent] contingency but
only if the . . . award . . . exceeds the amount due by applying the [50 percent]
contingency.” Rendon explained Debra’s ability to pay any attorney fees otherwise was
doubtful in view of her disability and lack of any source of income beyond her $1,200 a
month in combined social security and disability insurance payments.
Rendon detailed the experience of the attorneys and paralegals who worked
on the litigation. Some of the attorneys and paralegals were employed by Rendon’s firm,
Lamb & Kawakami, but others including attorney Keith A. Robinson were employed by
Robinson’s firm, Adams & Nelson.
Rendon’s declaration attached a 24-page invoice from Lamb & Kawakami
submitted to Debra shortly before her attorney fees motion was filed detailing the time
spent and charges of each attorney and paralegal who worked on the matter. The invoice
also detailed litigation costs advanced by Rendon’s firm totaling $82,251.88. In sum,
Rendon himself spent 1,027.75 hours on the litigation at $600 an hour; Robinson spent
199.05 hours at $600 an hour; five other attorneys from the two law firms collectively
spent 267.3 hours at rates ranging from $450 to $600 an hour; and four paralegals from
the two law firms spent 117.25 hours at $250 an hour. A total of 1,611.35 hours were
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claimed for a total lodestar amount of $893,465. Rendon urged the court to apply a
multiplier of four to the lodestar amount because of the complexity of the litigation.
Judith’s Opposition
Judith opposed the attorney fees motion, arguing the amounts claimed were
excessive, although the only item specifically identified in her opposition was a charge of
14.75 hours of Rendon’s time for trial of the partition action, in which Debra did not
prevail. Judith asserted the 50 percent contingency fee agreement was unconscionable
and not enforceable because not only was 50 percent too much, but the retainer
agreement described by Rendon permitted him to keep 50 percent of the jury verdict plus
whatever attorney fees award the court made.
Judith also argued Debra should not be allowed to recover fees for work
performed by attorneys employed by Robinson’s law firm. She argued the arrangement
constituted fee-splitting, which was illegal pursuant to Rules of Professional Conduct,
rule 2-200 (rule 2-200) unless specifically consented to in writing by the client.
Judith’s opposition included a declaration from her attorney, Scott E.
Schutzman, stating that in his opinion, a 50 percent contingency fee was unconscionable,
and Rendon and the other attorneys had an illegal fee-splitting arrangement. Schutzman
declared that based on “a quick review” of the invoice the hours claimed by attorney
Rendon were excessive and inflated, but he gave only three examples: 7.5 hours billed
January 14, 2011, for reviewing a tentative ruling and attending a hearing, 12 hours billed
for preparing for and attending Marjorie Solomon’s deposition on February 7, 2011, and
the 14.75 hours billed for attending trial in the partition action. Schutzman declared his
total bills to Judith for her defense in this matter were “well under $200,000” and that
was the maximum that should be awarded.
Debra’s Reply
In her reply, Debra conceded the 14.75 hours for trial in the partition action
should be omitted from her request. Rendon submitted an additional declaration
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providing more detail regarding his billings, including the two items Judith specifically
raised in her opposition (i.e., the 7.5- and 12-hour charges).
Debra submitted her own declaration concerning the tremendous difficulty
she had finding an attorney to take her case. She contacted eight or nine other attorneys
(most found through bar association referrals and a few referred by friends). Most would
not return her calls, but those who did were not interested in taking the case or wanted
large retainers, which she could not afford. Rendon was the only attorney she found who
would take her case on a contingency basis and who would advance costs. Debra
declared, “Rendon informed me of the fact that . . . Robinson and the other attorneys at
[Robinson’s firm] would be working on this case[.] I approved of this in writing and
continue to approve of this.”
At the hearing on the attorney fees motion, Rendon represented to the court
his retainer agreement with Debra did not permit him to keep the 50 percent contingent
fee plus the attorney fees award as suggested by Judith. The retainer agreement was that
if the attorney fees award exceeded 50 percent of the jury’s verdict, Rendon got the
attorney fees award and waived the contingent fee. If the award was less than 50 percent
of the jury’s verdict, he got the 50 percent contingent fee, and Debra got to keep the
attorney fees that were awarded. “We don’t get both. And I want to be very clear about
that. . . . We get one or the other, but we don’t get both.”
Ruling
On June 12, 2012, the trial court granted Debra’s attorney fees motion
awarding her a total of $700,000 in attorney fees. The court found the attorneys’ hourly
billing rates were “a little high,” and set Rendon’s billing rate at $500 an hour and
Robinson’s at $400. It awarded the fees as follows: $520,000 for Rendon’s services;
$80,000 for Robinson’s services; and $100,000 for the services of all other attorneys and
paralegals. The court declined to utilize a multiplier. The court stated it did not find the
50 percent contingent fee agreement unconscionable under the circumstances of the case.
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DISCUSSION
1. Reasonableness of Attorney Fees
As the prevailing plaintiff in a financial abuse case Debra was statutorily
entitled to recover her reasonable attorney fees. (Welf. & Inst. Code, § 15657.5,
subd. (a).) Judith does not contest Debra’s entitlement to her attorney fees, but contends
the attorney fees awarded were excessive and the trial court relied on improper criteria in
fashioning the award. We reject her contentions.
An attorney fees award is reviewed for abuse of discretion. (Citizens
Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 233.) Abuse of
discretion will be found only when it is shown there was no reasonable basis for the trial
court’s action. (Ibid.) “‘[T]he appropriate test for abuse of discretion is whether the trial
court exceeded the bounds of reason.’ [Citation.]” (Dove Audio, Inc. v. Rosenfeld,
Meyer & Susman (1996) 47 Cal.App.4th 777, 785.) “‘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’—meaning that it abused its discretion.”
(PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)
The trial court is not required to issue a statement of decision addressing
disputed legal and factual issues when ruling on a motion for attorney fees. (Rebney v.
Wells Fargo Bank (1991) 232 Cal.App.3d 1344, 1348-1349.) “No specific findings
reflecting the court’s calculations [are] required. [Citation.] ‘The record need only show
that the attorney fees were awarded according to the “lodestar” or “touchstone”
approach.’ [Citation.] On appeal we infer all findings in favor of the prevailing parties.
[Citation.]” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 254.)
“[T]he lodestar method requires the trial court to first determine a
touchstone or lodestar figure based on a careful compilation of the time spent and
reasonable hourly compensation for each attorney. [Citations.] The trial court may then
6
augment or diminish the touchstone figure by taking various relevant factors into
account. [Citations.]” (Vo v. Las Virgenes Municipal Water Dist. (2000)
79 Cal.App.4th 440, 445-446; see Serrano v. Priest (1977) 20 Cal.3d 25, 48.)
The record reflects the trial court engaged in the appropriate lodestar
method in fashioning the attorney fees award. Debra’s motion was accompanied by a
declaration from attorney Rendon and invoices detailing the number of hours expended
by each attorney and paralegal who worked on this case, the experience of each, and the
billing rate of each. The moving papers demonstrated 1,611.35 hours were spent at
hourly rates ranging from $250 for paralegals to $600 for partners, for a total lodestar
amount of $893,465. The trial court believed the hourly billing rates of the attorneys
were too high and reduced the hourly compensation of Debra’s primary attorneys,
Rendon and Robinson, to $500 and $400 respectively, and concluded reasonable attorney
fees for their time was $520,000 and $80,000. It found a reasonable fee for the services
of all other attorneys and paralegals who worked on the litigation was $100,000.2
Judith contends the attorney fees award must be reversed because the trial
court did not “carefully review” the time Debra’s attorneys spent on the case, as evidence
by its comment when ruling that “[t]hese fee bills are always somewhat difficult for the
[c]ourt because there’s no way to really examine the amount of time spent.” Judith gloms
on to this comment characterizing it as an admission by the trial court that it never looked
at or assessed the reasonableness of the claimed hours and instead just picked a figure out
of thin air that was only “slightly less than Debra’s request” and then worked backward
to justify the number by whittling down the billing rate to achieve its desired result.
2 In passing Judith asserts the court’s failure to specify the hourly rate for
each of these attorneys and paralegals requires reversal. The argument is devoid of any
reasoned legal analysis or citation to authorities. Accordingly, we consider the point
waived. (See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [when
appellant raises issue “but fails to support it with reasoned argument and citations to
authority, we treat the point as waived”]; see also Kim v. Sumitomo Bank (1993)
17 Cal.App.4th 974, 979 [same].)
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There is nothing in the record that support’s Judith’s contention the court did not
carefully examine the moving papers and the claimed hours spent on the case. The
court’s remark was nothing more than a comment on the difficulty of the task before it.
Its final award of $700,000, represented a significant 22 percent reduction from the
claimed fees. Judith also makes much of the fact the amount the court awarded
attributable to Rendon’s work, $520,000, was based on its finding $500 an hour was a
reasonable billing fee, which means the court compensated Rendon for 1,040 hours,
when his times sheets claimed only 1,027.75, hours. We cannot say this minor
discrepancy of 12.25 hours demonstrates the trial court misunderstood or abdicated its
responsibilities.3
Judith also contends the trial judge ignored duplicative billings, billings
with “vague description[s],” and billings done in quarter hour increments. Not only does
Judith not provide adequate citations to the record for her claims, citing non-existent
pages in the clerk’s transcript, but none of these items were challenged below. “In
challenging attorney fees as excessive because too many hours of work are claimed, it is
the burden of the challenging party to point to the specific items challenged, with a
sufficient argument and citations to the evidence. General arguments that fees claimed
are excessive, duplicative, or unrelated do not suffice. Failure to raise specific challenges
in the trial court forfeits the claim on appeal.” (Premier Medical Management Systems,
Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 564.) Moreover, we
3 In her respondent’s brief, Debra agrees the attorney fees award should be
reduced to reflect the correct hours claimed by Rendon, 1027.75, i.e., the award should be
reduced by $6,125 (12.25 x $500). We also note that at the hearing below, Debra
conceded the 1027.75 hours, should be reduced by the 14.75 hours attributable to the
partition action trial (another $7,375), but it does not appear the trial court made this
adjustment and we will do so on appeal. Accordingly, we will modify the award to
reflect Rendon’s total hours of 1,013 at the reasonable hourly rate set by the trial court of
$500, for a total award based on Rendon’s work of $506,500, and a final attorney fees
award of $686,500.
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cannot say the trial court abused its discretion by finding the total hours claimed by all
attorneys were reasonable. We are very familiar with the underlying litigation. The
original complaint was filed in November 2010. It was aggressively litigated by Judith
and Debra. Judith filed several pre-trial motions, including motions to compel arbitration
and for summary judgment. Debra had to file several motions to compel discovery from
Judith. The matter went to a jury trial lasting 10 days, followed by posttrial motions filed
by Judith including a motion for judgment notwithstanding the verdict and a motion for
new trial. Judith has not shown the trial court abused its discretion in determining the
amount of reasonable attorney fees.
Finally, Judith argues the trial court improperly utilized the attorney fees
award as a way to “further compensate Debra.” She argues that rather than simply decide
what constituted Debra’s reasonable attorney fees, the court used the attorney fees award
to get more money back to Debra from the 50 percent contingency fee she had to pay her
attorneys so as to increase her ultimate recovery. She cites comments the court made
while trying to clarifying with Rendon how the contingent fee agreement worked. The
following colloquy took place:
“The Court: So whatever I -- so what you're saying is you’re in for
50 percent of the verdict. I can decide how much of it I want Judy to have to pay Debby.
“Mr. Rendon: Yes.
“The Court: That’s it, essentially.
“Mr. Rendon: Yes
“The Court: But I mean, even that’s kind of odd. Because I might want to
say, well, I've got a feeling for what the attorney[] fees are worth, but I don’t know, poor
Debby, I can in a sense award her more money by -
“Mr. Rendon: Well, I think -
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“The Court: -- Giving -- I can shift it. Maybe what I’ll do is I’ll just shift
some more from Judy to Debby, up the attorney[] fee[s] award. [¶] Do you see what I’m
saying?
“Mr. Rendon: I hear what you’re saying, your honor. I just think you -- I
mean, I agree, it’s an unpleasant position to be in.”
Citing Walker v. Ticor Title Co. of California (2012) 204 Cal.App.4th 363,
373, in which the court observed “a losing party’s financial condition should not be
considered in the setting the amount of [an award of contractual attorney fees]” (italics
added), Judith argues it was improper for the court to take into consideration its sympathy
for Debra in fashioning the attorney fees award. The only proper consideration was what
constituted reasonable attorney fees.
Judith reads too much into the court’s comments. In their context, it is
apparent the court was commenting on counsel’s argument, not stating its plan for how it
would calculate the fees. Judith has not carried her burden to show the attorney fees the
court ultimately awarded to Debra—an almost 20 percent reduction in the fees she
sought—were not reasonable.
2. Fee-Splitting
Judith argues an illegal fee-splitting agreement existed between Debra’s
primary attorney, Rendon, and his law firm, Lamb & Kawakami, and attorney Robinson
and his law firm, Adams & Nelson. Therefore, Judith argues Debra is not entitled to
recover attorney fees attributable to work done by Robinson or other Adams & Nelson
attorneys and those fees should be stricken from Debra’s attorney fees award.
Judith relies on rule 2-200, which provides, in relevant part: “A member
shall not divide a fee for legal services with a lawyer who is not a partner of, associate of,
or shareholder with the member unless: [¶] (1) The client has consented in writing
thereto after a full disclosure has been made in writing that a division of fees will be
made and the terms of such division . . . .” Judith asserts “[t]here is not the slightest
10
indication that [Debra] ever gave such [written] approval[,]” although Debra declared she
approved in writing of Robinson and other attorneys from his law firm working on her
case.
We need not decide whether rule 2-200 has been violated, as Judith has no
standing to invoke it. As this court explained in Mark v. Spencer (2008) 166 Cal.App.4th
219, 225 (Mark), “fee-splitting agreements create a potential conflict of interest between
the client and the attorneys” (italics added) and rule 2-200 exists to protect the client
from potential conflicts arising from undisclosed fee-splitting arrangements. (See also
Strong v. Beydoun (2008) 166 Cal.App.4th 1398, 1404 [rule 2-200 adopted for protection
of client, who is consumer of attorney’s legal expertise, “The consumer protection comes
from the attorney’s written disclosure and the client’s written consent”].) To that end
courts have routinely held the attorney may not enforce a fee-splitting agreement
obtained without the client’s consent against the other attorney. Indeed, all the cases
cited by Judith in her brief involve such efforts. (Chambers v. Kay (2002) 29 Cal.4th
142, 162 [attorney could not enforce fee-splitting agreement with co-counsel]; Barnes,
Crosby, Fitzgerald & Zeman, LLP v. Ringler (2012) 212 Cal.App.4th 172 [same]; Mark,
supra, 166 Cal.App.4th 219 [same]; Margolin v. Shemaria (2000) 85 Cal.App.4th 891[same].) Rule 2-200 is a disciplinary rule to protect the client from a conflict of interest
between her attorneys. Judith offers no basis on which as Debra’s losing opponent in
litigation, she may raise a potential conflict between Debra and her attorneys to prevent
Debra from recovering her attorney fees. (See Gregori v. Bank of America (1989)
207 Cal.App.3d 291, 303 [a disciplinary rule “‘does not imply that an antagonist in a
collateral proceeding or transaction has standing to seek enforcement of the rule.’
[Citations.]”].)
3. Contingent Fee Agreement
Judith contends the 50 percent contingent fee agreement between Debra
and her attorneys is unconscionable and violates rule 4-200(A) of the California Rules of
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Professional Conduct, which provides, “A member [of the bar] shall not enter into an
agreement for, charge, or collect an illegal or unconscionable fee.” Accordingly, she
argues, the contingent fee agreement cannot stand and Debra is not entitled to an award
of attorney fees based on the fee agreement.
We reject Judith’s argument for the same reason as above—Judith has no
standing to challenge the retainer agreement between Debra and her attorneys. The
professional rule prohibiting an unconscionable fee is for the protection of the client and
not to protect the client’s opponent in litigation from an attorney fees award. Moreover,
the fee award made in this case was not based on the contingent fee agreement. The trial
court assessed attorney fees based on the reasonable hours spent in this litigation and a
reasonable hourly rate. We also note, Judith’s argument is based on a
mischaracterization of what we have in the record concerning the contingent fee
agreement. The actual retainer agreement is not before us. In his declaration, Rendon
explained the agreement provided “we agreed to accept the [court’s] award of attorneys’
fees . . . in lieu of the amount due by applying the [50 percent] contingency but only if
the . . . award . . . exceeds the amount due by applying the [50 percent] contingency.”
Judith argues this means if the court awarded attorney fees in an amount less than
50 percent of the jury verdict, Debra’s attorneys could collect the contingent amount plus
keep any attorney fees awarded by the trial court. But at the hearing on the attorney fees
motion, Rendon was emphatic, “[W]e get one or the other, but we don’t get both.”
4. Attorney Fees on Appeal
Debra requests her reasonable attorney fees and costs on appeal. As
prevailing party she is entitled to an award of costs and attorney fees incurred on appeal,
which includes the costs and fees incurred in defending the judgment and the attorney
fees award, in an amount to be determined by the trial court. (Evans v. Unkow (1995)
38 Cal.App.4th 1490, 1499 [“statute authorizing an attorney fee award at the trial court
level includes appellate attorney fees unless the statute specifically provides otherwise”];
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Sebago, Inc. v. City of Alameda (1989) 211 Cal.App.3d 1372, 1388 [party who
successfully defends an award of attorney fees is entitled to appellate attorney fees as
well].)
DISPOSITION
The postjudgment order awarding attorney fees is modified to reduce the
attorney fees award to $686,500, and as modified the order is affirmed. Respondent is
awarded her costs and attorney fees on appeal.
O’LEARY, P. J.
WE CONCUR:
FYBEL, J.
THOMPSON, J.
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