Bonacci v. Maranhas CA2/5 ( 2020 )

Filed 12/29/20 Bonacci v. Maranhas CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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
SECOND APPELLATE DISTRICT
DIVISION FIVE
CHRISTOPHER BONACCI et al., B298194
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No.
v. BC632711)
MICHAEL JOSEPH MARANHAS,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Terry A. Green, Judge. Affirmed.
Epstein, Becker & Green, David Jacobs, Deanna L.
Ballesteros, and Susan Graham, for Plaintiffs and Appellants.
Koletsky, Mancini, Feldman & Morrow, Marc S. Feldman
and Brett G. Hampton, for Defendant and Respondent.
Plaintiffs and appellants Christopher Bonacci (Bonacci)
and Joy Ingoglia (Ingoglia) (collectively, Plaintiffs) appeal the
trial court’s denial of their motion for an award of prevailing
party attorney fees in a lawsuit brought against their landlord,
defendant and respondent Michael Joseph Maranhas
(Defendant). We consider whether the trial court abused its
discretion when determining Plaintiffs’ acceptance of Defendant’s
$150,000 settlement offer, which Defendant maintained was
essentially the costs he would incur to defend the case at trial,
did not establish Plaintiffs prevailed “on a practical level” in the
case. In considering that issue, we also address Plaintiffs’
contention that the trial court’s conclusion is predicated on
certain erroneous evidentiary rulings.
I. BACKGROUND
According to their complaint, Plaintiffs began renting their
apartment in 2001 from Defendant’s predecessor. When
Defendant purchased the property in December 2005, Plaintiffs’
rent was $1,550 per month.
In October 2015, almost ten years after he purchased the
property, Defendant sent Plaintiffs a new lease, which among
other things would have increased their rent to $1,596 per month
effective January 1, 2016. Although Plaintiffs refused to sign the
new lease until certain repairs had been made, they agreed to
pay the increased rent in reliance on promises by Defendant that
he would remedy various defective conditions in and around their
apartment.
A dispute later arose between the parties over the condition
of and repairs to Plaintiffs’ apartment. Plaintiffs eventually
complained to the Los Angeles Housing and Community
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Investment Department (HCIDLA), which, in June 2016 ordered
Defendant to remedy 18 code violations, including three
violations HCIDLA classified as “high” severity violations.
Shortly thereafter, Defendant attempted to terminate Plaintiffs’
tenancy by applying to HCIDLA for permission to withdraw their
apartment from the rental market. One day after HCIDLA
denied Defendant’s application, Plaintiffs filed suit.
A. The Parties’ Litigation Objectives as Framed by Their
Pleadings
In their September 2016 complaint, Plaintiffs alleged 17
causes of action, including various statutory claims. Among the
statutory causes of action were a discrimination claim under the
Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900
et seq.), a retaliatory eviction claim under the Civil Code (Civ.
Code, § 1942.5), and a Civil Code claim for breach of the warranty
of habitability (Civ. Code, §§ 1941, 1941.1, & 1942.4).
Plaintiffs’ complaint sought various forms of relief.
Plaintiffs sought economic damages “in an amount to be proven
at trial” and alleged the value of their leasehold had been
damaged by Defendant’s failure to remedy the condition of their
apartment “in an amount equal to the rental payments due and
paid” during his tenure as their landlord. (In the alternative,
they also sought restitution and disgorgement of all rent paid to
Defendant.) Plaintiffs also prayed for noneconomic damages,
again in an amount to be proven at trial, for emotional distress
they alleged they suffered from “hostile . . . behavior” from
Defendant’s roommate, who allegedly acted as Defendant’s agent.
In addition, Plaintiffs sought preliminary and permanent
injunctions to prohibit their eviction and remedy the code
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violations, statutory penalties and damages, treble damages,
statutory and common law punitive damages, and attorney fees.
Although their lease did not include a provision authorizing
attorney fees to a prevailing party, the FEHA and Civil Code
statutes that served as the basis for some of their alleged causes
of action permit a prevailing party to recover attorney fees. (Gov.
Code, § 12965, subd. (b); Civ. Code, §§ 1942.4, subd. (b)(2),
1942.5, subd. (i).1)
In his amended answer, Defendant denied the allegations
of Plaintiffs’ complaint, asserted 30 affirmative defenses, and
contended the complaint should be dismissed with prejudice.
B. The Parties’ Settlement and Plaintiffs’ Motion for
Attorney Fees
Two months before trial, and before his motion for
summary adjudication could be heard, Defendant served
Plaintiffs with offers to compromise pursuant to Code of Civil
Procedure section 998 (the section 998 offers). Defendant offered
to settle the lawsuit for a total of $150,000 ($15,000 to Bonacci
and $135,000 to Ingoglia). The offers were silent on the question
of attorney fees but expressly stated they were not admissions of
liability.
1
When Plaintiffs filed their complaint, the applicable
attorney fees provision in Civil Code section 1942.5 was found in
subdivision (g). Effective January 1, 2018, however, the
Legislature amended section 1942.5 so that the attorneys’ fee
provision was renumbered as subdivision (i). Because the trial
court denied Plaintiffs’ motion for attorney fees after the
amendment of section 1942.5, our references are to that section’s
subdivisions as currently numbered.
4
Less than two weeks later, without making a counter-offer,
Plaintiffs accepted the section 998 offers. After being advised of
the settlement, the trial court took Defendant’s motion for
summary adjudication off calendar.
After accepting the section 998 offers, Plaintiffs filed a
motion seeking $819,171.75 in attorney fees ($546,114.50 in
hourly fees, augmented by a 1.5 multiplier) on the theory they
were prevailing parties on their FEHA and Civil Code causes of
action. Plaintiffs argued an award of fees was justified because
they “received a net monetary gain of $150,000.” Plaintiffs’
motion was supported by declarations from their attorneys that
addressed the course of the litigation, their hourly rates, and the
total number of hours they billed in the litigation. Plaintiffs’
attorneys did not discuss their clients’ litigation objectives or
alleged damages.
Plaintiffs also asked the trial court to take judicial notice of
21 documents filed in the litigation, including discovery-related
motions and orders and papers they submitted in support of their
opposition to Defendant’s motion for summary adjudication.
With one exception, Plaintiffs did not attach copies of the
identified documents to their request for judicial notice and they
did not ask the court clerk to make arrangements to have the
unattached documents electronically or physically available to
the trial court at the time of the hearing.
In opposition, Defendant argued attorney fees should not be
awarded because a net monetary gain by way of a compromise
settlement that did not admit liability was insufficient to
establish Plaintiffs prevailed in the litigation—especially because
the settlement amounts accepted were calculated based on
anticipated “‘cost[s] of defense.’”
5
Supporting the opposition, and this last costs of defense
argument in particular, was a declaration submitted by
Defendant’s attorney Marc S. Feldman (Feldman). The
declaration described the events leading up to the decision to
make the section 998 offers and averred Feldman estimated,
before serving the section 998 offers on Plaintiffs, that the cost of
completing discovery and conducting a two and a half to three-
week trial would be $144,502. Feldman declared he sent his
litigation budget to his client’s insurance carrier and the carrier
then authorized the section 998 offers. Feldman further asserted
that it was his understanding, “pursuant to conversations with
[P]laintiffs’ counsel . . . that [P]laintiffs’ demand was over one
million dollars.” Feldman did not, however, provide any dates or
details about his conversations with Plaintiffs’ counsel.
Plaintiffs objected to most of the substantive statements in
Feldman’s declaration. With one exception, Plaintiffs asserted a
number of objections to each challenged statement. The
exception was Feldman’s statement about the $1 million
valuation; to that, Plaintiffs objected only on Evidence Code
section 1119 grounds.2
In addition, Plaintiffs’ lead attorney submitted a
supplemental declaration. He did not directly dispute Feldman’s
claim that Plaintiffs sought to recover more than $1 million, but
2
In pertinent part, Evidence Code section 1119 states: “No
evidence of anything said . . . in the course of, or pursuant to, a
mediation or a mediation consultation is admissible . . . [¶] . . . [¶]
All communications, negotiations, or settlement discussions by
and between participants in the course of a mediation or a
mediation consultation shall remain confidential.” (Evid. Code,
§ 1119, subds. (a) & (c).)
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he stated he never communicated any settlement demands
directly to Defendant’s counsel at a July 2018 mediation; all such
demands were made only to the mediator. Plaintiffs’ attorney
also stated that in response to an inquiry from Feldman in
December 2017 about the scope of a potential settlement, he had
estimated Plaintiffs’ attorney fees at the time to be several
hundred thousand dollars.
C. The Trial Court’s Ruling
The trial court held a hearing in April 2019 on Plaintiffs’
motion for attorney fees. The court said it was inclined to find
Defendant was the prevailing party because he settled the case
for costs of defense and thereby achieved more of his litigation
objectives than Plaintiffs, who sought injunctive relief as well as
a large monetary recovery through their 17 causes of action. The
court stated it also considered the disparity between the amount
of Plaintiffs’ recovery with the size of its attorneys’ fee request:
“Well, you wanted $800,000 in fees in a case you settled for
$150,000. That’s another issue. [¶] . . . [¶] I have a real problem
with attorney’s fees that are way out of proportion to the value of
the case.” The court took the matter under submission and said
it was overruling Plaintiffs’ objections to attorney Feldman’s
declaration.
In a written ruling filed the following day, the trial court
found “[n]either party achieved their goals in so complete a
manner as to ‘prevail’ over the other party.” The court
elaborated: “The Section 998 offer in this case was a true
compromise. [Bonacci] recovered an amount below this court’s
jurisdictional limit; [Ingoglia] received a larger but still
comparatively unremarkable sum. Plaintiffs did not get the
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injunctions they requested. [Defendant] for his part did not
escape unscathed, but he was not required to admit fault and
paid no more than he would have if the case had been tried to a
defense verdict. Each party got something, and each party gave
up something. As a practical matter, there is no prevailing party
here.”
In crafting its ruling, the trial court relied on the Feldman
declaration’s statements about the cost of defense, but the court
did not refer to or discuss Feldman’s statements about his
communications with Plaintiffs regarding the asserted $1 million
valuation of their case. The court also rested its decision, in part,
on the size of Plaintiffs’ fee request. The court characterized the
amount demanded as “inflated” and stated “that, even if
Plaintiffs were the prevailing parties, [the fees] might well be
drastically cut.” As to evidentiary matters, the court’s ruling
states Plaintiffs’ objections to the Feldman declaration were
overruled and 20 of Plaintiffs’ 21 requests for judicial notice were
denied because they “failed to comply with California Rule of
Court Rule 3.1306(c), which requires that Plaintiff[s] submit
copies of the material to be judicially noticed.”
II. DISCUSSION
The section 998 offers were made and accepted prior to
trial, without a full or summary adjudication of any claim or
defense and without an admission of liability. The trial court
accordingly had to determine whether either side had prevailed
“on a practical level,” and the court was within its discretion to
decide that Plaintiffs had not prevailed despite their unqualified
acceptance of the pre-trial settlement amount defendant chose to
offer. The court did not rest its ruling on impermissible
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consideration of settlement communications and the law does not
preclude the court from relying on an inflated attorney fees
request to conclude no award of attorney fees is warranted.
There was no other evidentiary error (Plaintiffs mount no serious
appellate challenge to the admissibility of the Feldman
declaration and the trial court’s judicial notice ruling does not
warrant reversal), so we shall affirm the decision not to award
fees.
A. The Trial Court Did Not Err in Denying Plaintiffs’
Motion for “Prevailing Party” Attorney Fees
Under FEHA, a tenant who suffers discrimination “may”
recover attorney fees against a landlord if the tenant is the
“prevailing party” in litigation. (Gov. Code, § 12965, subd. (b).)
Civil Code sections 1942.4 (authorizing an action against a
landlord to repair substandard housing) and 1942.5 (prohibiting
retaliation against tenants) state a court “shall” award
reasonable attorney fees and costs to a “prevailing party” in
litigation. (Civ. Code, §§ 1942.5, subd. (b)(2), 1942.5, subd. (i).)
Neither FEHA nor the Civil Code statutes define “prevailing
party,” however.
“‘In the absence of legislative direction in the attorney fees
statute, the courts have concluded that a rigid definition of
prevailing party should not be used. [Citation.] Rather,
prevailing party status should be determined by the trial court
based on an evaluation of whether a party prevailed “‘on a
practical level,’” and the trial court’s decision should be affirmed
on appeal absent an abuse of discretion.’ [Citation.]” (Sharif v.
Mehusa (2015) 241 Cal.App.4th 185, 192.)
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Among the factors a trial court must consider in
determining whether a litigant is a prevailing party is “the extent
to which each party has realized its litigation objectives, whether
by judgment, settlement, or otherwise.” (Santisas v. Goodin
(1998) 17 Cal.4th 599, 622.) A party’s litigation objectives are
defined by “the pleadings, trial briefs, opening statements, and
similar sources.” (Hsu v. Abarra (1995) 9 Cal.4th 863, 877 (Hsu);
see also Marina Pacific Homeowners Assn. v. Southern California
Financial Corp. (2018) 20 Cal.App.5th 191, 204 [“We reject the
notion that . . . settlement communications constitute ‘pleadings,
trial briefs, opening statements, and similar sources’ that Hsu
tells us the trial court is to use . . .”].)
In determining prevailing party status, our Supreme Court
has instructed courts to “respect substance rather than form.”
(Hsu, supra, 9 Cal.4th at 877.) “‘Typically, a determination of no
prevailing party results when both parties seek relief, but neither
prevails, or when the ostensibly prevailing party receives only a
part of the relief sought.’ [Citation.]” (Id. at 875; accord, Scott
Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109 [“If neither party
achieves a complete victory . . . , it is within the discretion of the
trial court to determine which party prevailed . . . or whether, on
balance, neither party prevailed sufficiently to justify an award of
attorney fees”].) On the other hand, when the outcome of the
litigation is “purely good news for one party and bad news for the
other,” our Supreme Court has instructed that a “trial court has
no discretion to deny attorney fees to the successful litigant.”
(Hsu, supra, at 876.)
We review a trial court’s prevailing party determination
using the abuse of discretion standard of review. (Chavez v. City
10
of Los Angeles (2010) 47 Cal.4th 970, 989 (Chavez).) Under that
deferential standard, there is no cause for reversal.
The parties’ settlement was neither purely good news for
Plaintiffs nor purely bad news for Defendant. Plaintiffs obtained
a monetary recovery ($150,000), but it was significantly less than
the amount of damages contemplated by their complaint.
Plaintiffs sought to recover—at a minimum—all the rent they
paid Defendant, an amount that totaled more than $200,000.3 In
addition to these rent payments, Plaintiffs also sought damages
for emotional distress, various statutory penalties, other damages
(including treble damages), and punitive damages. On the other
side, Defendant obviously did not achieve an unqualified defense
verdict, but there was evidence the trial court could credit
(unrebutted by Plaintiffs) that the accepted settlement amount
was not much more than Defendant would have paid to take the
case through trial. The settlement amount and attendant
circumstances, in our view, support the trial court’s
determination that there was no prevailing party and no award
of attorney fees was warranted.
The trial court also considered what it believed was an
inflated fee request from Plaintiffs (over $800,000 in fees,
including their proposed multiplier, for a $150,000 settlement) in
declining to award attorney fees. Contrary to Plaintiffs’ assertion
that this was improper, it was in fact a valid additional reason
3
As alleged in their complaint, Plaintiffs paid Defendant a
total of $217,920 in rent between January 2006 and August 2018
($186,000 between January 1, 2006, and December 31, 2015, and
$31,920 during the period between January 1, 2016, and their
acceptance of the section 998 offers in August 2018).
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supporting the trial court’s discretionary decision—as our
Supreme Court’s decision in Chavez illustrates.
In Chavez, the Supreme Court affirmed a trial court’s
denial of attorney fees to a plaintiff who prevailed on a FEHA
retaliation claim and reasoned that “in light of [the] plaintiff’s
minimal success and grossly inflated attorney fee request, the
trial court did not abuse its discretion in denying attorney fees.”
(Chavez, supra, 47 Cal.4th at 976.) The Court elaborated:
“Whether plaintiff was entitled to an award of attorney
fees . . . requires consideration of another established principle
governing fee awards [besides litigation success]: ‘A fee request
that appears unreasonably inflated is a special circumstance
permitting the trial court to reduce the award or deny one
altogether.’ [Citations.] Here, the trial court reasonably could
and presumably did conclude that plaintiff’s attorney fee request
in the amount of $870,935.50 for 1,851.43 attorney hours was
grossly inflated when considered in light of the single claim on
which plaintiff succeeded, the amount of damages awarded on
that claim [$1,500 in economic damages and $10,000 in
noneconomic damages], and the amount of time an attorney
might reasonably expect to spend in litigating such a claim.” (Id.
at 990-991.) The circumstances in this case are not materially
different.
Further, we do not believe, as Plaintiffs argue, that the
trial court’s attorney fees ruling was influenced by consideration
of an impermissible factor. Plaintiffs claim the trial court relied
on statements in the Feldman declaration about their case
valuation communicated during confidential settlement
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communications.4 But the record does not show the trial court
relied on Feldman’s assertion in reaching its final decision. The
trial court remarked on Feldman’s statement about Plaintiffs’
purported $1 million valuation at the hearing, but the court’s
ruling does not rely upon, examine, or even reference that
statement. We review the court’s ruling, not its colloquial
musings and questions.5 (See, e.g., In re Cheynne B. (2012) 203
Cal.App.4th 1361, 1367, fn. 11 [“A trial court’s written statement
of decision cannot be impeached by oral expressions of the trial
court to the contrary”].)
4
There appears to be a dispute as to the source of Feldman’s
$1 million valuation statement. The trial court overruled
Plaintiffs’ objection that the statement was based on protected
settlement communications. As discussed post, Plaintiffs do not
meaningfully challenge that ruling.
5
Plaintiffs also maintain the trial court erred when it took
into account the fact that they failed to obtain the injunctive
relief prayed for in their complaint. In support of their argument,
Plaintiffs rely heavily on a reporter’s transcript of a November
30, 2017, hearing where Defendant’s counsel purportedly made
statements about his client’s changed position on eviction.
Plaintiffs lodged the transcript with the trial court, but they did
not ask the court to take judicial notice of it. Even if the
transcript was appropriately before the trial court, Plaintiffs
never abandoned their request for injunctive relief and, without
disclaiming the need for such relief, the trial court was not
prohibited from considering it in its analysis.
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B. The Trial Court’s Evidentiary Rulings Do Not
Warrant Reversal
Plaintiffs’ opening brief asserts defense attorney Feldman’s
declaration was “inadmissible.” But Plaintiffs never actually
argue why the declaration was inadmissible nor do they argue
how the trial court erred in overruling the evidentiary objections
they raised in the trial court. The point is therefore waived; a
conclusory assertion of error is not enough. (Cahill v. San Diego
Gas & Elec. (2011) 194 Cal.App.4th 939, 956 [“‘Appellate briefs
must provide argument and legal authority for the positions
taken. “When an appellant fails to raise a point, or asserts it but
fails to support it with reasoned argument and citations to
authority, we treat the point as waived”’”].)
Plaintiffs also argue the trial court wrongly refused to
judicially notice certain court filings and orders pursuant to
Evidence Code sections 452 and 453.6 Rule 3.1306(c) of the
California Rules of Court states: “A party requesting judicial
notice of material under Evidence Code sections 452 or 453 must
provide the court and each party with a copy of the material. If
the material is part of a file in the court in which the matter is
being heard, the party must: [¶] (1) Specify in writing the part of
the court file sought to be judicially noticed; and [¶] (2) Either
6
Section 452 provides that a court “may” take judicial notice
of, among other things, the records of “any court of this state.”
(Evid. Code, § 452, subd. (d).) Section 453 provides that the trial
court “shall take judicial notice of any matter specified in Section
452 if a party requests it” and (1) gives each adverse party
sufficient notice of the request; and (2) “[f]urnishes the court with
sufficient information to enable it to take judicial notice of the
matter.”
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make arrangements with the clerk to have the file in the
courtroom at the time of the hearing or confirm with the clerk
that the file is electronically accessible to the court.” Plaintiffs
did not ask the court clerk to make the requested documents
available for the trial judge at the time of the attorney fees
hearing and the record is devoid of any attempt by Plaintiffs to
confirm separately with the clerk that the requested documents
would be electronically available. This noncompliance with the
Rules of Court establishes reversal is not warranted because the
trial court declined to judicially notice the documents in question.
(See Willis v. State of California (1994) 22 Cal.App.4th 287, 291
[no error in denying judicial notice where plaintiff simply
requested the court take judicial notice without appending any
information].)
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DISPOSITION
The order denying Plaintiffs’ motion for attorney fees is
affirmed. All parties shall bear their own costs on appeal in the
interests of justice.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BAKER, J.
We concur:
RUBIN, P. J.
MOOR, J.
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