Hafen v. Nielsen CA4/3

Filed 11/26/13 Hafen v. Nielsen 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
THOMAS HAFEN, as cotrustee, etc., et
al.,
G047689
Plaintiffs and Appellants,
(Super. Ct. No. 05CC07279)
v.
OPINION
RHONDA NIELSEN,
Defendant and Respondent.
Appeal from an order of the Superior Court of Orange County, John C.
Gastelum, Judge. Affirmed.
Mazur & Mazur, Janice R. Mazur and William E. Mazur, for Plaintiffs and
Appellants.
Edward M. Picozzi for Defendant and Respondent.
* * *
Thomas and Renee Hafen, as trustees of the Hafen Trust (the Hafens),
appeal from the trial court’s attorney fee award in favor of Rhonda Nielsen. The Hafens
contend the trial court abused its discretion by awarding Nielsen $65,898 of the $179,000
in fees she requested. Specifically, the Hafens argue the trial court abused its discretion
in apportioning Nielsen’s fees between her defense involving a fee-bearing agreement
that the Hafens alleged created an equitable servitude on her property and her defense
against the Hafens’ claims involving prescription and an alleged equitable servitude
arising from an agreement without a fee provision. In essence, the Hafens challenge the
sufficiency of the evidence to support the trial court’s order, and they attack in particular
the credibility of Nielsen’s attorney, Edward M. Picozzi, in attesting to his fee allocations
for the work he performed. We affirm the order.
I
FACTUAL AND PROCEDURAL BACKGROUND
This action concerns adjoining, hilltop parcels in Trabuco Canyon,
California. The Hafens own a single-family residence with panoramic views in all
directions on one parcel, located at 30021 Canyon Creek Drive (30021). The best views
from that residence are to the west across the undeveloped, adjacent parcel located at
30022 Canyon Creek Drive (30022). The only flat area readily suitable for building a
home on 30022 is the portion nearest 30021. Development on this flat area would
significantly impact the view west from the Hafens’ home on 30021.
Nielsen purchased 30022 in May 2005 from Michael Meacher. The next
month, in June 2005, Meacher faxed Nielsen a copy of a purported January 2005
agreement he entered with the Hafens (the Meacher agreement), calling for an exchange
of the flat area on 30022 for an unspecified portion of the Hafens’ property. The
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Meacher agreement also referenced a 2001 agreement (the Moshenko agreement)
between former owners of 30021 and 30022 that similarly called for a land-exchange
between the two parcels to “keep” the views from each “unobstructed.” The Moshenko
agreement included an attorney fee provision; the Meacher agreement did not.
Nielsen refused to be bound by either agreement because the land exchange
would preclude building a residence on her property and she knew nothing of the
agreements before her purchase. The Hafens sued Nielsen in June 2005.
The operative second amended complaint alleged five causes of action
against Nielsen on the theory both the Meacher agreement and Moshenko agreement
were enforceable against her as equitable servitudes.1 The first and second causes of
action sought specific performance and declaratory relief regarding the land exchange
and view easements described in the Meacher agreement. The third cause of action
alleged the Hafens acquired a prescriptive easement for the nonexclusive use of 30022’s
flat area because the Hafens and their predecessors continually used the area for
approximately 20 years. If the Meacher agreement’s land exchange and view easements
could not be enforced for any reason, the fourth and fifth causes of action sought specific
performance and declaratory relief regarding the Moshenko agreements’ view easements.
1 “An equitable servitude is a restriction on the use of real property that is
enforceable even though not imposed as a covenant in the manner provided by law. The
doctrine of equitable servitudes arose as a means of giving effect to restrictions that did
not meet the stringent legal standards required for covenants running with the land.”
(8 Miller & Starr, Cal. Real Estate (3d ed. 2009) § 24:1 at p. 24–4.) When a covenant
does not run with the land, it nonetheless may be enforced against a subsequent owner as
an equitable servitude if (1) the subsequent owner took title with knowledge of the
covenant’s terms, and (2) it would be inequitable to permit the subsequent owner to avoid
the restrictions the covenant imposed. (Marra v. Aetna Constr. Co. (1940) 15 Cal.2d
375, 378; Richardson v. Callahan (1931) 213 Cal. 683, 686–687.)
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Following a bench trial, the trial court declined to enforce either the
Moshenko agreement or the Meacher agreement as an equitable servitude and entered
judgment in Nielsen’s favor. In its statement of decision, the trial court found Nielsen
had no actual or imputed knowledge of the Meacher agreement and the evidence did not
create a duty for her to investigate the existence of an agreement regarding view
easements or a land exchange. The trial court also found that (1) the Meacher agreement
could not be enforced as a covenant running with the land because the parties failed to
record it and (2) the Moshenko agreement could not be enforced because the Meacher
agreement rescinded it. The trial court made no express ruling in its statement of
decision on the Hafens’ prescriptive easement cause of action.
The Hafens appealed, omitting any challenge regarding their prescriptive
easement claim, and we affirmed the judgment in an unpublished opinion. (Hafen v.
Nielsen (G043337, June 30, 2011) [nonpub. opn.] (Hafen I).)
Based on the Moshenko agreement attorney fees provision, Nielsen filed a
motion to recover the attorney fees she incurred defending the Hafens’ claims. The trial
court granted the motion, but awarded just $1,050 of the $179,900 Nielsen sought,
apportioning three hours of attorney time billed at Nielsen’s lawyer’s $350 hourly rate.
The court’s minute order explained, “The only basis for recovery of attorney fees is
contained in the 2001 Moshenko agreement. That agreement had been expressly
rescinded and never was recorded so could not be enforced against [Nielsen]. The fees
attributable to that agreement must be apportioned.”
When Nielsen appealed, we affirmed the necessity of apportioning her
attorney fees to (1) issues relating exclusively to the Moshenko agreement or (2) issues
common to the Moshenko agreement and the Meacher agreement or the prescriptive
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easement claim. (Hafen v. Nielsen (G044204, Nov. 28, 2011) [nonpub. opn.], p. 13
(Hafen II).) We reversed the trial court’s apportionment of just $1,050 to these matters
because the court mistakenly concluded the absence of a formal covenant running with
the land virtually eliminated attorney fees.
The trial court had reasoned, “‘This issue [] I think could have been done in
a half hour. [¶] . . . [¶] As soon as someone told me, hey, there’s a statute that says
covenants running with the land have to be recorded, that’s the end of [that aspect of] the
case. [¶] . . . [¶] The amount of time you would have to address [the Moshenko
agreement claims] compared to the rest of the case is almost zero. It’s very minimal.
That cause of action would have been out in a minute.’” (Hafen II, supra, at p. 11.) We
explained, however, that an agreement running with the land, although unrecorded, may
nevertheless be enforced as an equitable servitude, provided the subsequent owner took
title with knowledge of the covenant’s terms and it would be inequitable to permit the
subsequent owner to avoid the covenant’s restrictions. (Id. at p. 12; see fn. 1 ante.)
On remand to reapportion the fees, the former trial judge had retired,
leaving the new judge in, as he noted, “the unenviable position of ruling on a motion for
attorney fees on a case in which it was never involved pre-judgment.” The parties
submitted their briefing and declarations concerning fees, but the trial court had to
continue the hearing because Nielsen’s attorney, Edward Picozzi, forgot to attach his
billing statements. After the parties submitted supplemental declarations and briefing,
including Picozzi’s billing statements, the trial court concluded in its tentative decision
that Nielsen was entitled to approximately $66,000 of her nearly $180,000 in claimed
fees, but the tentative awarded no fees for time spent in trial because Picozzi “provide[d]
absolutely no hours [apportioning his trial time] despite a second chance to do so via the
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Supplemental Declaration.” At the hearing, the trial court granted Picozzi’s request to
file a further declaration, which he did, and the parties again briefed the issue, and the
trial court re-heard the matter, taking it under submission.
The trial court issued a very detailed order denying Nielsen her fees during
trial, but awarding nearly $66,000 in pretrial fees supported by Picozzi’s billing statement
and declarations.2 The court’s order explained: “The Court finds a total of 188.28 hours
were spent on issues relating exclusively to the 2001 [Moshenko] Agreement and issues
common to the 2001 [Moshenko] Agreement and either the 2005 [Meacher] Agreement
or the prescriptive easement claim. The court also finds Mr. Picozzi’s hourly rate of
$350 an hour over the course of five years to be very reasonable. Therefore, the total
amount of fees allowed is $65,898.00.”
The trial court meticulously specified the allocations for which it allowed
and disallowed fees. For example, “[a]s to procedural issues such as Mediation[,] Status
Conferences, CMCs, Telephone Conferences with Client, Telephone Conferences with
Counsel: The Court will allow all time and fees requested by Mr. Picozzi, . . . since these
things pertain to the entire case, and allocation is absolutely impossible. [¶] Mediation:
10.2 [hours] [¶] Status Conferences, MSC: 58.20+6.5 = 65.70 [¶] Telephone
Conferences w/ client: 14.95 [¶] Telephone Conferences w/ Counsel: 14.85.”
(Original underlining.)
The other categories in which the court allowed fees consisted of: “As to
the Plaintiff’s Ex Parte TRO and Preliminary Injunction Efforts: The Court will also
allow the 46.7 hours as sought by Mr. Picozzi. If this TRO was sought at the outset of
the litigation, Plaintiffs would have used the existence of both agreements to show the
2 The trial court also awarded Nielsen $19,250 in fees for her appeal in
Hafen II, and the Hafens do not challenge that fee award.
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existence of an easement. This is something which does not appear easy to allocate. [¶]
. . . [¶] Time for Site Inspection in the amount of 10.88 hours is allowed as viewing the
land would go to all causes of action. . . . [¶] As to Depositions, Mr. Picozzi suggests
58 hours were spent. He essentially guesses at how much time is spent on the fee-
allowing agreement and cross-over issues. He suggests 70 percent, but this is a guess.
Because Mr. Picozzi does not give a number of specific hours, the Court will allow
25 hours time — which represents about half of the time sought.” (Original underlining.)
The trial court rejected Nielsen’s fee request in the following categories:
“As to Legal research, it is difficult to see how very many issues would overlap. It
should not have taken 14.6 hours to discover the 2001 [Moshenko] Agreement (which
allowed for fees) was essentially rescinded by virtue of the 2005 [Meacher] Agreement
being signed. As research has not been broken down specifically to 2001 [Moshenko]
Agreement and overlap, the Court will deny the request for 14.6 hours. [¶] . . . [¶] As for
time spent for trial, Mr. Picozzi provides absolutely no meaningful evidentiary support
for fees for time spent in trial, despite various opportunities to do so via Supplemental
Declarations. Mr. Picozzi does not support his claim for apportionment with anything
other than his own recollection and figures. There is no real reference to billing
statements, court transcript[s], etc. Therefore, fees for trial are not allowed.” (Original
underlining.)
Concluding its order, the trial court explained: “Adding up all the hours,
the Court arrives at the sum of 188.28 total hours spent on fee-allowing agreement and
cross-over issues which are so inextricably linked that allocation is impossible.” The
trial court awarded Nielsen attorney fees at $350 an hour multiplied by 188.28 hours for a
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total of $65,898, and the Hafens now appeal. Nielsen does not appeal the hours
disallowed.
II
DISCUSSION
A. Standard of Review
As we noted in Hafen II, the standard of review is well-established.
“‘California courts have long held that trial courts have broad discretion in determining
the amount of a reasonable attorney’s fee award. This determination is necessarily ad
hoc and must be resolved on the particular circumstances of each case.’ [Citation.] In
exercising its discretion, the trial court may accordingly ‘consider all of the facts and the
entire procedural history of the case in setting the amount of a reasonable attorney’s fee
award.’ [Citation.]” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379,
1394.) “An attorney fees award ‘“will not be overturned in the absence of a manifest
abuse of discretion, a prejudicial error of law, or necessary findings not supported by
substantial evidence.”’” (Ibid.)
“Where a cause of action based on the contract providing for attorney’s
fees is joined with other causes of action beyond the contract, the prevailing party may
recover attorney’s fees under [Civil Code] section 1717 only as they relate to the contract
action. [Citations.]” (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129
(Reynolds).) Accordingly, a prevailing party seeking contractual attorney fees generally
must apportion fees between claims supporting the recovery of attorney fees and those
that do not. (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1603-
1604 (Amtower).)
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But a litigant’s “joinder of causes of action should not dilute its right to
attorney’s fees. Attorney’s fees need not be apportioned when incurred for representation
on an issue common to both a cause of action in which fees are proper and one in which
they are not allowed. All expenses incurred with respect to [issues common to all causes
of action] qualify for award.” (Reynolds, supra, 25 Cal.3d at pp. 129-130.) “Where fees
are authorized for some causes of action in a complaint but not for others, allocation is a
matter within the trial court's discretion.” (Amtower, supra, 158 Cal.App.4th at p. 1604;
Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525,
555.)
As the trial court observed, “[i]n challenges to the reasonableness of the
number of hours billed, ‘it is the burden of the challenging party to point to the specific
items challenged, with a sufficient argument and citations to the evidence.’” (Premier
Medical Management Systems, Inc. v. Caifornia Ins. Guarantee Assn. (2008)
163 Cal.App.4th 550, 564 (Premier).) The Hafens challenge the number of hours the
trial court awarded in every category it identified, and we examine each of these
challenges in turn.
B. Procedural Issues
The Hafens challenge the hours the trial court grouped together as
“procedural issues,” including mediation, status conferences, and telephone conferences
with the client and opposing counsel. The court concluded it would “allow all time and
fees requested by Mr. Picozzi, . . . since these things pertain to the entire case, and
allocation is absolutely impossible.” The Hafens argue the court abused its discretion
because “the billing statements for these procedural matters do not specify which issues
were addressed at any of these proceedings.” Picozzi, however, pared inapplicable time
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from his billing for each category and attested the remainder related to the Moshenko
agreement or common issues.
For example, he did not seek fees for 4.8 hours he spent in mediation and
preparation for the mediation on the prescriptive easement claim, nor 1.2 hours
researching issues related to the Meacher agreement, nor 2.1 hours related to a real estate
agent’s alleged written disclosure of the Meacher agreement. He also explained Nielsen
was a busy attorney herself and that most of the time he spent on the phone with her over
the five years of litigation was devoted not to discussing particular legal issues, but rather
to scheduling meetings, site visits, conferences, depositions, court dates, and other issues
common to the entire case. Picozzi explained the same was true in his telephone
conferences with opposing counsel. Picozzi nevertheless was able to specify that
approximately five of the nearly 20 hours he spent on the phone with counsel and client
did not pertain to scheduling or issues otherwise common to the Moshenko agreement,
and therefore he did not seek fees for them. We observe that 15 billable hours on the
telephone over five years of litigation does not seem incredible or inherently improbable.
“The testimony of a single witness, even if that witness is a party to the
case, may constitute substantial evidence,” and “a trial court’s credibility findings cannot
be reversed on appeal unless that testimony is incredible on its face or inherently
improbable.” (Consolidated Irrigation Dist. v. City of Selma (2012) 204 Cal.App.4th
187, 201 (Consolidated); see, e.g., Diamond Woodworks, Inc. v. Argonaut Ins. Co. (2003)
109 Cal.App.4th 1020, 1045 [where jury credited attorney’s testimony he apportioned
fees and all were reasonable and necessary, “we do not reassess such matters”]; overruled
on another ground in Simon v. San Paolo U.S. Holding Co., Inc. (2005) 35 Cal.4th 1159,
1182-1183.) Here, Picozzi’s declaration, billing statements, and explanation that he
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pared some procedural fees and the rest were incurred on common issues all support the
trial court’s award.
In particular, the Hafens’ appellate challenge to the mediation fees
illustrates the soundness of the trial court’s ruling. The Hafens complain that even after
striking out numerous hours related to the mediation, Picozzi still billed 10.2 hours for
mediation-related time though “the entire mediation took only eight hours” and Picozzi
did not explicitly segregate time spent in the mediation on the Moshenko agreement or
common issues.
But the Hafens ignore the requisite preparation and travel time for
mediation and, as they acknowledged below, “[t]ime relating to mediation is spent in
settling the case, not litigating specific issues.” (Italics added.) The Hafens sought on
this ground to deny Nielsen any fees for mediation, but the trial court reasonably could
conclude the mediation — like the telephone calls and status conferences — was a
procedural event that necessarily arose in litigating the claims the Hafens chose to assert,
and therefore these procedural matters were common to all the claims. Put another way,
Picozzi would have had to prepare for, travel to, and attend mediation even if the Hafens
had only asserted a claim based on the fee-bearing Moshenko agreement, and therefore
the scheduling and calls necessary to arrange these and other proceedings was common to
all the claims. The trial court also reasonably could conclude it was purely speculative
the mediation would have taken substantially less time had it only involved the
Moshenko agreement. The gravamen of the Hafens’ suit was to preserve their
unobstructed hilltop views, an objective common to all their claims, and the trial court
therefore reasonably could conclude Nielsen was entitled to fees for time spent
attempting to meet that objective in mediation. We discern no abuse of discretion.
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C. TRO and Preliminary Injunction Efforts
The Hafens contend the trial court erred in awarding Nielsen fees for 46.7
hours of her attorney’s time preparing for and defending against their efforts to obtain a
temporary restraining order and preliminary injunction. The trial court inferred that
because “this TRO was sought at the outset of the litigation, Plaintiffs would have used
the existence of both agreements to show the existence of an easement. This is
something which does not appear easy to allocate.” To the contrary, according to the
Hafens, “the TRO and Preliminary Injunction motion dealt exclusively with the Meacher
Agreement as it involved the exchange aspects of that agreement and Plaintiff’s right to
use the property subject to the Meacher Agreement and only the Meacher Agreement.”
They insist “it would have been a simple matter for Nielsen to attach a copy of the
Hafens’ motion for TRO/Preliminary Injunction to support her claim the motion was
based on ‘issues exclusive to either the fee allowing agreement or issues common to both
agreements’ and that her attorney [properly] expended a whopping 46.7 hours defending
those ‘intertwined’ claims . . . .”
To illuminate and correct this asserted error, the Hafens request on appeal
that we take judicial notice of their TRO and preliminary injunction motion, which they
omitted in the record on appeal because they did not provide it to the trial court as a basis
to reject Nielsen’s fee request. We decline the request for judicial notice because it
would be inappropriate to receive new evidence on appeal to consider reversing the trial
court based on evidence the Hafens omitted. Moreover, as noted, Picozzi’s declaration
and billing statements averring the manner in which he spent his time constituted
substantial evidence supporting the trial court’s award because it was for the trial court to
evaluate his credibility. (Consolidated, supra, 204 Cal.App.4th at p. 201.) Because an
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appellate court does not reweigh evidence in reviewing an attorney fee award (Weber v.
Langholz (1995) 39 Cal.App.4th 1578, 1587), we cannot say the trial court abused its
discretion in awarding fees for the TRO and injunction motion based on Picozzi’s
declaration.
At oral argument on appeal, the Hafens insisted their TRO and injunction
request was aimed predominantly at preserving the garden wall described in the Meacher
agreement, and therefore did not implicate the Moshenko agreement, and the trial court
should not have awarded fees. But they acknowledge in their opening brief that the TRO
and injunction motion “involved the exchange aspects” of the Meacher agreement, which
in turn was premised on keeping intact the Moshenko agreement’s view and land
exchange provisions. The trial court therefore reasonably could infer the purpose of the
garden wall was to safeguard these same view and land exchange interests.
Thus, the strong demarcation the Hafens now draw between the Meacher
agreement and the Moshenko agreement is not as impervious as they insist. Both
agreements pertained primarily to the view easements created on the two parcels, and the
Hafens themselves argued throughout the litigation that a prospective buyer considering
the property would not be surprised at the existence of a view easement. In particular,
they insisted circumstantial evidence common to both agreements put Nielsen on
“inquiry notice” concerning a view easement. Under the Hafens’ theory of the case, a
duty to inquire about a view easement arose in part from the proximity and layout of the
parcels, the setting so suggestive of views as a priority, clues like the garden wall from
which one might infer the mutual importance accorded the view, and the Hafens’
assertedly prescriptive activities to maintain their view.
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While this manner of viewing the evidence did not persuade the court at
trial that Nielsen actually received notice of either view agreement, the court in awarding
fees reasonably could conclude Picozzi had to prepare to meet these arguments and that
he reasonably did so from the outset of the case in opposing the TRO and preliminary
injunction. In other words, the circumstantial evidence supporting the existence of a
view easement, whether embodied in the Moshenko agreement or the Meacher
agreement, was intertwined and common to both agreements. And the legal theory for
enforcing both agreements — as an equitable servitude based on notice inherent in the
property circumstances — was the same.
The Hafens also expressly alleged the Moshenko agreement as an
alternative basis for their complaint. Given these circumstances, the trial court
reasonably could infer on the record before it that the Moshenko agreement was
implicated in their TRO and injunction request to maintain the status quo on the property.
The trial court therefore reasonably could conclude “[t]his is something which does not
appear easy to allocate” in awarding fees. In any event, as noted, the trial court’s
credibility determination on the parties’ competing declarations concerning the basis of
the TRO and injunction motion suffices by itself to support the court’s fee award.
D. Deposition Hours and Picozzi’s Credibility Generally
The Hafens argue that because the trial court labeled as a mere “guess”
Picozzi’s estimate he spent 70 percent of his 58 hours in deposition time on the
Moshenko agreement or overlapping issues, the court should have denied these attorney
fees altogether instead of awarding Nielsen nearly half — 25 hours. More generally, the
Hafens argue the trial court should have taken a stricter view of Picozzi’s claims because
it had not presided over the trial and because, for example, once Picozzi provided his
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billing statements, he revised his initial fee request downwards, suggesting he was not
credible in previously declaring his fee request reflected his best estimate of his
allocation of time.
These matters, however, were entirely within the trial court’s purview to
decide. The Hafens point out the trial court is not bound to accept an attorney’s
itemization of time spent in a billing affidavit (Hadley v. Krepel (1985) 167 Cal.App.3d
677, 682), and that the court may “exercise its discretion in assigning a reasonable
percentage to the entries, or simply cast them aside” (Bell v. Vista Unified School Dist.
(2000) 82 Cal.App.4th 672, 689). But these very quotations confirm the trial court’s
discretion to weigh the evidence before it, including an attorney’s declarations and billing
statements. These credibility determinations are for the trial court to decide and furnish
no grounds for reversal. (Consolidated, supra, 204 Cal.App.4th at p. 201.)
III
DISPOSITION
The trial court’s fee order is affirmed. Respondent is entitled to her costs
on appeal.
ARONSON, J.
WE CONCUR:
RYLAARSDAM, ACTING P. J.
IKOLA, J.
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