Byron Chapman v. Mundo's Cafe

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 21 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BYRON CHAPMAN, No. 19-16732
Plaintiff-Appellee, D.C. No. 5:16-cv-02893-EJD
v.
MEMORANDUM*
RAKESH S. PANCHAL; MANISAH R.
PANCHAL,
Appellants,
v.
MUNDO'S CAFE; et al.,
Defendants,
and
NJ PROPERTIES INC.,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of California
Edward J. Davila, District Judge, Presiding
Submitted January 14, 2021**
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
San Francisco, California
Before: SCHROEDER, BYBEE, and R. NELSON, Circuit Judges.
Appellants Rakesh S. Panchal, Manisah R. Panchal, and NJ Properties, Inc.
(collectively, “NJ”) appeal the district court’s order granting Appellee Chapman’s
counsel $42,545 in attorney’s fees, $2,048.42 in litigation expenses, and $419.50 in
litigation costs. Because we find that Chapman was a “prevailing party” under 42
U.S.C. § 12205 and that the district court’s award was reasonable, we affirm.1
1. The district court did not err in concluding that Chapman was the
“prevailing party” under 42 U.S.C. § 12205. A party prevails when the legal
relationship between the parties is materially altered. Fischer v. SJB-P.D. Inc., 214
F.3d 1115, 1118 (9th Cir. 2000); see also Farrar v. Hobby, 506 U.S. 103, 111 (1992).
“[A] material alteration of the legal relationship occurs [when] the plaintiff becomes
entitled to enforce a judgment, consent decree, or settlement against the defendant.”
Fischer, 214 F.3d at 1118 (second alteration in original). “A settlement agreement,”
in particular, “meaningfully alters the legal relationship between parties if it allows
without oral argument. See Fed. R. App. P. 34(a)(2).
1
We have jurisdiction under 28 U.S.C. § 1291 and assume familiarity with the
facts, procedural history, and issues on appeal. We review the district court’s order
granting attorney’s fees for an abuse of discretion, its legal analysis de novo, and
its factual findings for clear error. See Barrios v. Cal. Interscholastic Fed’n, 277
F.3d 1128, 1133 (9th Cir. 2002).
2
one party to require the other party ‘to do something it otherwise would not be
required to do.’” Jankey v. Poop Deck, 537 F.3d 1122, 1130 (9th Cir. 2008) (quoting
Fischer, 214 F.3d at 1118). Thus, for purposes of attorney’s fees “a plaintiff
‘prevails’ when he or she enters into a legally enforceable settlement agreement
against the defendant.” Barrios, 277 F.3d at 1134.2 A district court’s decision to
“retain jurisdiction over the issue of attorneys’ fees” is also dispositive. Id. at 1134
n.5; Richard S. v. Dep’t of Developmental Servs. of Cal., 317 F.3d 1080, 1087 (9th
Cir. 2003). Here, the parties’ settlement agreement is enforceable in the event of
default,3 which requires NJ “to do something it otherwise would not be required to
2
NJ is incorrect that Buckhannon Board and Care Home, Inc. v. West Virginia
Department of Health and Human Resources, 532 U.S. 598 (2001) forecloses the
district court’s conclusion that a private settlement could give rise to prevailing
party status. Buckhannon does seem to limit “prevailing party” status to situations
where a party receives a “judgment on the merits” or enters into a “settlement
agreement[] enforced through a consent decree.” Id. at 603–04; see also id. at 604
n.7 (noting that private settlement agreements would not fall into either delineated
situation). This court has repeatedly not followed what it considers dictum from
Buckhannon, instead holding that a party can prevail so long as a private settlement
agreement is legally enforceable. See, e.g., Jankey, 537 F.3d at 1129–30; Richard,
317 F.3d at 1086; Skaff v. Meridien North America Beverly Hills, LLC, 506 F.3d
832, 844 (9th Cir. 2007) (per curiam); Barrios, 277 F.3d at 1134, 1134 n.5. We are
bound by these cases interpreting Buckhannon. See Koerner v. Grigas, 328 F.3d
1039, 1050 (9th Cir. 2003).
3
The record is unclear whether NJ’s promise to make architectural changes is also
enforceable under the settlement agreement, though the district court seemed to
think it was. The answer to this question is likely irrelevant, however, as NJ has
already satisfied its equitable promises, leaving the remaining monetary aspect of
the agreement enforceable in the event of default.
3
do.” See Jankey, 537 F.3d at 1130 (quoting Fischer, 214 F.3d at 1118).
Furthermore, the district court expressly retained jurisdiction over the attorney’s fee
issue. Thus, the settlement agreement created a “material alteration of the [parties’]
legal relationship,” see Fischer, 214 F.3d at 1118, making Chapman the “prevailing
party” under 42 U.S.C. § 12205.42. The district court’s award was not unreasonable. Regardless of whether NJ
challenged the fee request or hours billed below, NJ provides no arguments as to
why the district court’s award was an abuse of discretion. Contrary to NJ’s assertion
otherwise, Chapman’s attorney provided twelve pages that detailed his time spent
on legal services in one-tenth hour increments, and the district court relied on these
logs when making its determinations. Further, the district court properly considered
whether “the requested rates are in line with those prevailing in the community” for
similar services, see Hiken v. Dep’t of Def., 836 F.3d 1037, 1044 (9th Cir. 2016)
(emphasis added), not, as NJ contends, whether the overall fee is comparable to
4
NJ’s arguments to the contrary are unpersuasive. “The touchstone of the prevailing
party inquiry must be the material alteration of the legal relationship of the parties.”
Tex. State Teachers Ass’n, 489 U.S. at 792–93. The touchstone is not, as NJ claims,
whether the $20,000 payment was a “payment for damages” or a “settlement
payment only,” whether NJ admitted liability, whether the court signed the
agreement, whether the district court made a merits determination, or whether the
case was dismissed with prejudice. “Through [Chapman’s] legally enforceable
settlement agreement and the district court’s retention of jurisdiction, [Chapman]
obtained a ‘judicial imprimatur’ that alters the legal relationship of the parties . . . .”
See Richard, 317 F.3d at 1088.
4
similar cases. Nor should the district court have denied the award request based on
the simplicity of the case or the settlement amount. A “prevailing party . . . should
ordinarily recover an attorney’s fee unless special circumstances would render such
an award unjust,” Barrios, 277 F.3d at 1134, such as when the victory is “purely
technical or de minimis,” id. at 1135. This case presents no such circumstances, nor
does the record contain anything suggesting the district court’s findings were clearly
erroneous.
AFFIRMED.
5