Charles Virzi Construction v. Studer CA4/3

Filed 3/4/13 Charles Virzi Construction v. Studer 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
CHARLES VIRZI CONSTRUCTION,
INC.,
G044326
Plaintiff, Cross-defendant and (consol. w/ G045498)
Appellant,
(Super. Ct. No. 07CC02257)
v.
OPINION
G. KEVIN STUDER et al.,
Defendants, Cross-complainants and
Respondents;
CHARLES VIRZI,
Cross-defendant and Appellant.
Appeal from an order of the Superior Court of Orange County, Richard
Luesebrink, Retired Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed as
modified.
David B. Dimitruk for Plaintiff, Cross-defendants and Appellants.
Keathley & Keathley, H. James Keathley and Katherine D. Keathley for
Defendants, Cross-complainants and Respondents.
* * *
Plaintiff Charles Virzi Construction, Inc., and cross-defendant Charles
Virzi appeal from a judgment for defendants G. Kevin Studer and Wells Fargo Bank.1
Virzi‟s briefs and the record on appeal are voluminous, but fundamentally inadequate.
Nonetheless, we find in the record ample support for the judgment for Studer on Virzi‟s
complaint and Studer‟s cross-complaint. In short, substantial evidence demonstrates
Virzi breached its contract with Studer and acted negligently by deficiently remodeling
Studer‟s home. We modify the judgment to correct an inexplicable surplus in Studer‟s
attorney fee award, and affirm.
FACTS
Studer Hires Virzi to Remodel His House
Charles is a licensed general contractor and the owner of Virzi, which itself
holds a general contracting license. Studer had been personal friends with Charles since
about 1995.
In 2003, Studer asked Charles to look at a San Clemente house that Studer
was thinking about buying. They discussed whether it could be “cost effectively
remodeled,” including adding a second story. Studer bought the house. Charles
recommended a draftsman to draw plans, and reviewed the plans and suggested revisions.
1
“Virzi” refers to plaintiff and collectively to cross-defendants. When
necessary for clarification, “Charles” will refer to Charles Virzi as an individual.
2
Studer hired Virzi to remodel the house in 2005. Charles “proposed the
idea of doing a cost plus contract very early in [the] design and planning activities.
[Studer] told [Charles] that [he] was absolutely not interested in pursuing that kind of a
construction relationship with him. [Studer] felt that that was far too open-ended and far
too much risk. And [so Studer] stated [he] would only go forward on the basis of a for-
fixed-price contract.”
Charles gave Studer a copy of Virzi‟s standard form contract, leaving the
price blank. Studer prepared a budget spreadsheet reflecting a fixed price of $431,420,
which included a 10 percent contractor‟s margin (exhibit 26). Virzi wanted a 15 percent
margin instead. Eventually, Studer and Virzi orally agreed to a contractor‟s margin of 12
percent. But Studer “inadvertently did not update the spreadsheet for 12 percent prior to
sending it to Wells Fargo.”
Studer called Virzi on May 13, 2005, to ask Charles to sign the contract so
Studer could submit it to Wells Fargo Bank (Wells Fargo). Studer and Charles agreed
Studer would use the “number . . . that was on the budget spreadsheet” to fill in the
contract price. Charles instructed Studer “to sign on his behalf” because Charles “was
not anywhere close to the local area.” Studer filled out the contract with the $431,420
fixed price, signing his name and Charles‟s name to it (exhibit 28.) He faxed the signed
contract to Wells Fargo (exhibit 29).
Virzi delivered two additional form contracts to Studer in June 2005. Virzi
wanted a single written contract to encompass the originally budgeted work plus a change
order for approximately $150,000 in additional structural work required by the City of
San Clemente (City). Studer signed the blank form contracts after Charles told him he
would correct typographical errors and estimate the amount of the change order. Charles
signed the two contracts, dated one June 10, 2005, and returned it to Studer with the
contract price still blank (exhibit 39).
3
Charles kept the other signed contract. He dated that one June 11, 2005,
and filled out the contract price as “cost plus 12 percent” (exhibit 50). He never gave a
copy of that contract to Studer — not until Virzi filed a mechanic‟s lien in December
2006.
Charles sent a letter to Studer on September 8, 2005. The letter stated,
“I‟ve had many conversations with you about our budget. You said we have only
$489,000 or close to this amount.” Studer wrote a letter in response, noting the “project
budget” was “$431,420 with a 10 percent contingency, for a grand total of $474,562” —
“This is consistent with your bid based on the plans that you had provided for your
bidding purposes.” Virzi did not respond to this letter.
The Trial
Virzi sued Studer and Wells Fargo in 2007. It asserted causes of action
including breach of contract, conversion, foreclosure of mechanic‟s lien, and declaratory
relief. Virzi alleged Studer requested extra work above and beyond the contract, but
failed to pay for it. It attached a copy of the June 11, 2005 contract to its verified
complaint.
Studer filed a cross-complaint against Virzi and Charles. He asserted
causes of action for breach of contract, fraud, negligence, and common counts. He
alleged Virzi “failed to complete the work in the time agreed in the contract” and
“undertook work without [Studer‟s] request and without authorization through
contractually-required change orders.” He further alleged Virzi negligently performed
the work, requiring total demolition.
At trial, Virzi called Charles to testify about the contract. He claimed there
was “never” any “agreement or discussion of a fixed [price] contract. It was always
going to be a cost plus. We were — our normal fee is cost plus 15 percent. Mr. Studer
really didn‟t want to pay that much. And [Charles] agreed to do it for cost plus 12
4
percent.” Charles conceded the “cost plus 12 percent” provision was not contained in the
June 10, 2005 version, even though “it was already agreed to before then”; he first “put in
cost plus 12 percent” in the June 11, 2005 version.2
Virzi also called Charles, an expert general contractor, and several
subcontractors to testify about the work on the house. In general, they opined the work
met the standard of care and complied with code — and any work violating code was
either excused by the building inspector on site (Hardesty), or requested or accepted by
Studer. The expert conceded the house needed some repairs, like fixing the leaky roof.
And the expert did not “conduct any electrical investigation [him]self on the property.”
Virzi did not call Hardesty.
Studer testified to his account of the contract formation. He stated the
parties agreed to a fixed price of $431,420, and that Charles authorized him to sign the
May 2005 contract for Virzi. Ultimately, he paid Virzi just over $556,000 for its work.
Studer also called an expert general contractor, an expert electrician, and
the City‟s senior building inspector. The expert general contractor (Christakes) testified
the house as built contained “numerous” unpermitted deviations from the permitted plans
and did not reflect $560,000 worth of work. The senior building inspector (Tullius)
testified there were “some code violations there that should have been taken care of prior
to the final” permit approval. Tullius explained Hardesty should not have issued the final
permit due to “code-related items.” Any deviations in construction from the City-
2
Virzi‟s counsel told the court “we get to the same end point whether you
conclude it‟s contract A or B” — in other words, Virzi‟s contract damages were the same
whether the contract was for a fixed price of $431,420 (plus $150,000 for the additional
structural work), or whether it was for cost plus 12 percent. Either way, Virzi sought to
recover about $87,000 from Studer. Virzi‟s counsel conceded the contract formation
issue “doesn‟t have relevance to the damages,” but offered it may have “relevance as to
credibility.”
5
approved plans should have gone “back into plan check, and they [had] to be approved
for what‟s in the field, drawn up by the architect and approved by the engineer.”
Here is just some of Studer‟s expert testimony on specific contract
deviations and code violations. The experts testified to other shortcomings, too. And the
court saw the house in person when it conducted a site visit.
Electrical. Studer‟s expert electrician (Griffith) testified “the design and
installation on this project were subpar,” with numerous code violations. At least 50
electrical connections had wires “just . . . twisted together,” without the required
mechanical connectors. There were open light fixtures over the bathtubs. The distance
between receptacles violated code, and ordinary receptacles were installed where the
code required ground fault circuit interrupter receptacles. None of the smoke detectors
had power because grounded and ungrounded conductors on that circuit had come into
contact, causing a short. A forced air unit was not on a dedicated circuit. The wall ovens
and cook tops were on a 30 amp circuit instead of a 40 amp circuit. Junction boxes, a hot
tub motor, and the air conditioning compressor disconnects were inaccessible.
The house also contained many fire hazards. These included an overloaded
junction box, exposed wiring within junction boxes, multiple grounded conductors
connected to a single screw in the electrical panel, and junction boxes without covers.
The expert electrician concluded the electrical work at the house fell below
the standard of care “[b]ecause for an installation to be acceptable it needs to meet all of
the code requirements. And this property does not.” A building inspector “cannot
approve a code violation.”
Deck. The deck was “loaded with thousands of pounds of additional
weight in lathing, concrete and tile” — “somewhere in the neighborhood of 12- to 15,000
pounds” — that “impacted the engineering of the property.” And the deck “leak[ed] into
the family room.” A fireplace on the deck was “a fire hazard” and had already “burned
the paint off the cowl.”
6
Roof. The roof was “a disaster” — “no part of the roof” was “salvageable.”
It was “framed poorly,” and “with the wrong pitch.” The “miserable framing” included
misplaced or twisted rafters, broken frieze blocks, and “really, really poor work on the
fascia.” Eleven dormers were missing, leading to inadequate ventilation. The roof tiles
were a cheap substitute for the ones called out on the plans, and they were “not installed
according to the manufacturer‟s installation.” The installation was “hideous,” “just very
sloppy roofing.” The expert concluded the roof‟s “workmanship is atrocious, and not
acceptable by any custom and practice in the construction industry.”
Forced air units. The furnaces were placed “in new locations, not [as]
depicted on the plans.” Moreover, “the new locations don‟t comply with code” because
they do not allow for proper air circulation.
Master bedroom and bath. One “entire wall” of the master bedroom
“need[ed] to be reframed,” and doors needed to be refinished and rehung. The entire
master bathroom “just has to start over.” Its exterior wall needed to be “rework[ed]”
because it was “not framed to plan,” the hot tub needed to be reinstalled, the stone needed
to be reinstalled, and “there‟s no glass block that was bid into the project.”
Wrought iron. The ornamental wrought iron on an internal spiral staircase
and the balcony “is going to have to come out,” to be “re-sprayed and re-installed.” The
stairs‟ radius does not comply with code.
Kitchen. The kitchen sink lacked an air gap. That is “the little device by
your faucet that looks — that‟s about, oh, an inch in diameter, two inches high,” that
prevents sewage water from backing up into the dishwasher.
The Judgment
The court issued a 17-page statement of decision, finding for Studer on
Virzi‟s complaint and Studer‟s cross-complaint. It “found [Studer] to generally be an
accurate historian who was credible and [Charles] to be a not very credible witness . . . .”
7
It noted Charles “took positions and either omitted or committed acts and conduct that
one would never expect from an experienced contractor and builder.” It further noted
Charles “had the misfortune of being convicted of felony interstate sales of drugs which
is a factor in weighing credibility . . . .”
On the contract formation issue, the court “accept[ed] the testimony of
[Studer] and reject[ed] the testimony and [Charles] and conclude[d] Exhibits 28 and 29
were the agreement between the parties, contrary to [Virzi‟s] claim that the contract was
forged by [Studer] without [Virzi‟s] knowledge or consent.” It found “$431,420 plus a
10% contingency plus an additional loan of $150,000 by [Wells Fargo] or a total of
$624,544 was available against the Agreement which provided for labor and materials
and a 12% built-in factor not to exceed $431,420 plus a 10% contingency was the
projected money available for the project.”
As to the work itself, the court credited Studer‟s expert, who “spent
approximately 85 hours on the case” and whose testimony was “very meticulous and
detailed.” Virzi‟s expert, in contrast, was “well-qualified” but “spent 2 hours on his
inspection and 1 hour taking photos.”
The court generally found “as construction progressed, many
undocumented changes in the plans were taking place and sub-standard work by
[Charles] and [Virzi] became more and more apparent.” It found “there were scores of
variances and changes from the City‟s approved building plans too numerous to
recite . . . .”
The court found Studer was entitled to recover just over $150,000 in
compensatory damages, either in contract or tort. It awarded the following damages
(amount rounded to nearest thousand): (1) electrical — $51,000 “necessary in order to
remedy deficiencies in the electrical system”; (2) “view deck, fireplace and drainage” —
$30,000; (3) roof — $23,000 “for the very sub-standard construction of the roof and
failure to install pursuant to plans”; (4) forced air units — $19,000; (5) roof leak —
8
$9,000; (6) plans — $9,000 “as a result of the need to have new plans and specifications
prepared in order to effectuate the remedial work necessary to be done as a result of sub-
standard performance by [Virzi] and [Charles]”; (7) master bedroom and bath — $5,000
“as a result of sub-standard construction”; (8) wrought iron — $5,000 “as a result of
fabrication errors in the wrought iron railing”; (9) kitchen — $1,000 “to install an air gap
in the sink.” It declined to award damages for Studer‟s claims regarding framing, stucco,
mold, interior stairs/marble, kitchen countertops and backsplashes, hardwood floors, and
loss of use of property.
The court awarded further recovery to Studer. First, it awarded “costs as
damages under the authority of Stearman v. Centrex Homes (2000) 78 Cal. App. 4th 611,
in an amount to be determined by motion therefor.” Next, it awarded “prejudgment
interest in an amount according to law.” Finally, it awarded “costs of suit, including
reasonable attorneys‟ fees pursuant to a post-judgment motion.” The court signed a
“JUDGMENT” on August 2010.
Studer filed the contemplated posttrial motions. The court granted his
motion to recover his investigative and repair costs, i.e., his Stearman costs. (See
Stearman v. Centrex Homes supra, 78 Cal.App.4th at pp. 624-625 (Stearman).) It
awarded almost $35,000 in Stearman costs to Studer. Next, the court granted two
motions by Studer to recover his attorney fees, awarding over $330,000 to Studer.
The court entered an “AMENDED JUDGMENT” for Studer in May 2011.
The amended judgment included the compensatory damages, Stearman costs, attorney
fees, as well as over $16,000 in statutory costs and more than $30,000 in prejudgment
interest. The total judgment for Studer and against Virzi and Charles, jointly and
severally, was for $566,210.85.
9
DISCUSSION
Virzi Makes Four Major Missteps in Its Appeal
Early on, we granted Virzi‟s request to file an oversized opening brief. In
hindsight, that may have been improvident.
Virzi filed a 138-page opening brief containing more than 44,000 words.
The table of contents identified 64 separately numbered issues, sub-issues, sub-sub-
issues, and sub-sub-sub-issues. Virzi assured us this exacting detail was required by the
“number of novel issues” here. Virzi claimed each of “the approximate[ly] 50 separate
categories and subcategories of damages . . . involves different facts and different laws,”
and that there were “multiple reasons why the trial court erred as to every category and
subcategory of damages it awarded, save one category.” Virzi followed up with a reply
brief that used each and every one of the 28,000 words allowed by rule.
Despite the briefs‟ length, Virzi‟s case suffers from two glaring omissions
and two fundamental misconceptions. Any of these flaws dooms its appeal.
The first omission is this: there is no concise statement of facts supporting
the judgment. Virzi‟s 138-page opening brief dedicates about five full pages to a
statement of facts. They refer to some evidence supporting the court‟s findings on
contract formation. But there is no reference to any evidence supporting the court‟s
findings on breach, negligence, or damages. Reading only those pages, one would
conclude Virzi built the perfect home. Any references to Studer‟s contrary evidence are
scattered about the other 133 pages.
This is woefully inadequate. “„It is well established that a reviewing court
starts with the presumption that the record contains evidence to sustain every finding of
fact.‟ [Citations.] [Virzi‟s] contention herein „requires [it] to demonstrate that there is no
substantial evidence to support the challenged findings.‟ (Italics added.) [Citations.] A
recitation of only [Virzi‟s] evidence is not the „demonstration‟ contemplated under the
10
above rule.” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal. 3d 875, 881.) “[A]n attack
on the evidence without a fair statement of the evidence is entitled to no consideration
when it is apparent that a substantial amount of evidence was received on behalf of the
respondent. [Citation.] Thus, appellants who challenge the decision of the trial court
based upon the absence of substantial evidence to support it „“are required to set forth in
their brief all the material evidence on the point and not merely their own evidence.
Unless this is done the error is deemed waived.”‟” (Nwosu v. Uba (2004) 122
Cal. App. 4th 1229, 1246.)
The second omission is this: Virzi did not transmit the trial exhibits to this
court, though it relies heavily on them. For example, it claims exhibit 46, the
construction loan agreement, “contains a number of statements . . . that precluded the trial
court from reaching certain determinations . . . .” One sentence in the opening brief
describing the construction work is followed by a citation to 28 exhibits. And another
sentence cites to 28 different exhibits. There were six binders of trial exhibits containing
“in excess of 4,000 pages,” according to Virzi‟s request to file an oversized brief. But
Virzi did not transmit these binders. So we do not have, for instance, the photographs
taken by Studer‟s expert general contractor or his repair estimate.3
“We presume the evidence supports every finding of fact unless [the]
appellant demonstrates otherwise . . . .” (El Escorial Owners’ Assn. v. DLC Plastering,
Inc. (2007) 154 Cal. App. 4th 1337, 1357 (El Escorial).) Thus, a party relying on trial
exhibits must arrange to have them transmitted to the appellate court. (See Cal. Rules of
3
Virzi did attach two exhibits comprising three pages to its opening brief.
Some other exhibits happen to fall here and there in the appellant‟s appendix, usually as
attachments to one motion or another. But when Virzi cites to exhibits in its briefs it does
so by exhibit number, not appendix page, rendering those exhibits unhelpful. “Counsel is
obligated to refer us to the portions of the record supporting his or her contentions on
appeal.” (Sharabianlou v. Karp (2010) 181 Cal. App. 4th 1133, 1149.) “[W]e will not
scour the [1,500 page appendix] on our own in search of supporting evidence.” (Ibid.)
11
Court, rule 8.224(a)(1), (b)(1).) The failure to do so may doom an appeal. “„While
certain contentions based upon these exhibits are made in appellant‟s briefs, it may be
assumed that he has abandoned these contentions since he has not desired to arrange to
have these exhibits sent here as a part of the record.‟” (Brown v. Copp (1951) 105
Cal. App. 2d 1, 9.) At the very least, “[w]here exhibits are missing we will not presume
they would undermine the judgment.” (Western Aggregates, Inc. v. County of Yuba
(2002) 101 Cal. App. 4th 278, 291.)
Turning to the two misconceptions, the first is this: Virzi improperly seeks
to retry the case on appeal. Virzi goes to great lengths to convince us that Studer testified
inconsistently or unbelievably, and that his experts were just plain wrong. “These are not
issues we rework on appeal. Appellate courts „do not reweigh evidence or reassess the
credibility of witnesses. [Citation.]‟ [Citation.] Put another way, „[t]he Court of Appeal
is not a second trier of fact . . . .‟” (In re Marriage of Balcof (2006) 141 Cal. App. 4th
1509, 1531.) “It was the function of the trial court, not this court, to resolve
inconsistencies and contradictions, if any, in the testimony of these witnesses. The trier
of fact may believe and accept a portion of the testimony of a witness and disbelieve the
remainder. On appeal that portion which supports the judgment must be accepted, not
that portion which would defeat, or tend to defeat, the judgment.” (Sidney v. Martin Iron
Works (1951) 105 Cal. App. 2d 295, 298; accord In re Frederick G. (1979) 96 Cal. App. 3d
353, 366.) And “we must draw all reasonable inferences from the record to support the
judgment.” (El Escorial, supra, 154 Cal.App.4th at p. 1357.) The court accepted
Studer‟s account of how the contract was negotiated and executed. It credited Studer and
his experts. It did its own site visit. Simply put, the court just did not believe Charles or
Virzi‟s witnesses.
The second misconception is this: Virzi repeatedly flyspecks the statement
of decision instead of analyzing the record. The attack is misguided. “A statement of
decision may be wrong, but the judgment must be affirmed “„if it is correct on any
12
theory . . . .”‟” (El Escorial, supra, 154 Cal.App.4th at p. 1352.) “„[A]n appellate court
reviews the action of the lower court and not the reasons given for its action;
and . . . there can be no prejudicial error from erroneous logic or reasoning if the decision
itself is correct. “The fact that the action of the court may have been based upon an
erroneous theory of the case, or upon an improper or unsound course of reasoning, cannot
determine the question of its propriety. . . .”‟” (Id. at pp. 1352-1353.)
And a threshold matter, Virzi‟s 22-page written request for a statement of
decision was ineffective. It improperly sought “an inquisition, a rehearing of the
evidence” by asking for findings on 86 separately numbered issues.4 (People v. Casa
Blanca Convalescent Homes, Inc. (1984) 159 Cal. App. 3d 509, 525, abrogated on other
grounds in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999)
20 Cal. 4th 163, 184-185.) “Such a detailed evidentiary analysis is not required by law.”
(Casa Blanca Convalescent Homes, Inc., at p. 524; accord Golden Eagle Ins. Co. v.
Foremost Ins. Co. (1993) 20 Cal. App. 4th 1372, 1379-1380 [court was “not required to
respond point by point” to 36 requested issues].)
Even if Virzi‟s request were proper, the statement of decision was adequate.
“The court‟s statement of decision is sufficient if it fairly discloses the court‟s
determination as to the ultimate facts and material issues in the case.” (Golden Eagle Ins.
Co. v. Foremost Ins. Co., supra, 20 Cal.App.4th at p. 1380.) “[A] trial court rendering a
statement of decision under Code of Civil Procedure section 632 is required to state only
ultimate rather than evidentiary facts because findings of ultimate facts necessarily
4
For example, “ISSUE NO. 31” was “Whether the last requisition pursuant
to paragraph 3.d of the two written Residential Construction Loan Agreements (see
Exhibits 46 and 458) submitted by Mr. Studer to Wells Fargo Bank was on July 5, 2006
(Exhibit 261) or July 18, 2006 (Exhibit 272), depending on whether the July 18, 2006
letter is treated as a requisition.” And “ISSUE No. 71” was “As to the category of
damages tentatively awarded as damages by the court in its Notice of Tentative Decision
for the electrical system, whether any evidence was introduced at trial demonstrating that
the electrical system must be replaced and if so, the identity of that evidence.”
13
include findings on all intermediate evidentiary facts necessary to sustain them.” (In re
Cheryl E. (1984) 161 Cal. App. 3d 587, 599.) The statement of decision sufficiently
disclosed ultimate findings that Virzi breached the contract and acted negligently, causing
the specified damages, and that Studer did not breach the contract.
Any one of these four fatal flaws could warrant rejecting Virzi‟s claims at
the outset. Without excusing these missteps, we will address Virzi‟s contentions.
Sufficient Evidence Supports the Judgment Against Virzi on Its Complaint
Virzi raises two main issues in defense of its claims against Studer. First, it
asserts the court wrongly accepted Studer‟s version of the contract. Second, it insists it
substantially performed its contractual duties, with its many code violations excused.
Neither claim is compelling.
First, Virzi contends the court wrongly found the parties entered into the
May 2005 contract. Virzi denies agreeing to it. It asserts Studer conceded Virzi never
accepted the 10 percent markup that was incorporated into the $431,420 fixed price. It
further asserts Studer wrongly signed Charles‟s name to the contract, rendering the
contract an illegal forgery and a fraud on Wells Fargo.5 And Virzi denies Studer agreed
to the May 2005 contract. It asserts Studer conceded he intended to pay a 12 percent
markup to Virzi, not 10 percent. And Studer acknowledged he knew when he signed the
contract that the price would change to accommodate the City‟s extra work.
The simple response is that the court believed Studer. To be sure, Studer
testified he and Charles were negotiating the amount of Virzi‟s markup, and Charles
never expressly told him Virzi would accept 12 percent, let alone 10 percent. But Studer
5
Virzi wrongly presumed it was deputized to protect Wells Fargo‟s interests
in a prior appeal, when it tried to disqualify Studer‟s counsel due to purported conflicts of
interests between Studer and Wells Fargo. (Charles Virzi Const., Inc. v. Studer (Dec. 23,
2010, G042259) [nonpub. opn.].)
14
also testified Charles ultimately agreed that Studer could sign the May 2005 contract on
Virzi‟s behalf, using the budget price of $431,420 — which was based on a 10 percent
markup. That objectively manifested Virzi‟s intent to accept 10 percent. And Studer‟s
private intention to pay 12 percent to Virzi is immaterial. “The mutual intention to which
the courts give effect is determined by objective manifestations of the parties‟ intent,
including the words used in the agreement . . . .” (Morey v. Vannucci (1998) 64
Cal. App. 4th 904, 912.) Mutual consent “is determined under an objective standard
applied to the outward manifestations or expressions of the parties, i.e., the reasonable
meaning of their words and acts, and not their unexpressed intentions or understandings.”
(Alexander v. Codemasters Group Limited (2002) 104 Cal. App. 4th 129, 141, disapproved
on another ground in Reid v. Google, Inc. (2010) 50 Cal. 4th 512, 524.) And the contract,
from what we can tell, contained a provision governing change orders for additional
work. It was sufficiently definite to be enforced.
For all its bluster on contract formation, Virzi fails to show the contract
dispute has any real significance. It conceded at trial its claimed contract damages are the
same under a fixed price contract and a cost plus 12 percent contract. Even more oddly,
Virzi now disclaims any interest in showing the parties agreed to the June 11, 2005
contract that underlies its claim. It refrains from doing so “since the trial court‟s selection
of Trial Exhibit 28 [the May 2005 contract] over Trial Exhibit 50 [the June 11, 2005
contract] was based in part on the trial court‟s exercise of its prerogative to decide certain
issues of fact one way or the other.” Instead, Virzi asserts that on retrial “the next trial
judge should make the determination of „what constitutes the contract‟ without, however,
Trial Exhibit 28 being one of the choices . . . .” What other contract would Virzi have the
court choose, if not the June 11, 2005 version? Its confusing stance aside, Virzi still fails
to show what difference it would make to its contract cause of action if the court accepted
some contract other than the May 2005 contract. Even if the court erred by enforcing the
15
May 2005 contract instead of the June 11, 2005 contract, Virzi fails to show any resulting
prejudice. (See Cal. Const., art. VI, § 13.)
Second — and apparently now relying on the May 2005 contract, but
maybe not — Virzi contends the court wrongly rejected its breach of contract claim.
Virzi asserts it substantially performed the contract, and building inspector Hardesty had
discretion to excuse its deviations from the building code. (See Health & Saf. Code,
§ 17951 (section 17951).)
But “„[w]hat constitutes substantial performance is a question of fact”
(Murray’s Iron Works, Inc. v. Boyce (2008) 158 Cal. App. 4th 1279, 1291), which we
review for substantial evidence (id. at p. 1292). For the doctrine to apply, “„it is essential
that there be no wilful departure from the terms of the contract, and that the defects be
such as may be easily remedied or compensated, so that the promisee may get practically
what the contract calls for.‟” (Id. at p. 1291.) Thus, courts have applied it when the
contractor successfully completes virtually all of the work. (See, e.g., Lowy v. United
Pacific Ins. Co. (1967) 67 Cal. 2d 87, 92-93 [failure to perform only $1,470 worth of
work on $73,500 contract]; Thomas Haverty Co. v. Jones (1921) 185 Cal. 285, 291-292
[approximately $2,200 error on $27,000 contract].) In contrast, courts still “den[y]
contractors the right to recover pursuant to the doctrine of substantial performance where
their performance was not found to meet a reasonable standard.” (Murray’s Iron Works,
at p. 1292.) Here, the record abundantly shows Virzi‟s work was so egregiously deficient
in so many ways that the court could reasonably find no substantial performance.
And code compliance is a red herring. Neither the contract nor the standard
of care allowed Virzi to do no more than meet code. The contract, as far as the record
discloses, required Virzi both to comply with the plans and “perform and complete the
Work in a good and workmanlike manner.” And “„“„[a]ccompanying every contract is a
common-law duty to perform with care, skill, reasonable expedience, and faithfulness the
thing agreed to be done . . . .‟”‟” (El Escorial, supra, 154 Cal.App.4th at p. 1358.)
16
“Contractors must use reasonable skill and judgment” to comply with the standard of
care. (Id. at p. 1357.) Again, the record contains ample evidence Virzi‟s work deviated
from the plans, was neither good nor workmanlike, and reflected a lack of care and skill.
Moreover, building inspector approval does “not insulate contractors from
liability for defective work.” (El Escorial, supra, 154 Cal.App.4th at p. 1358 [inspector
approval “does not change the result” when contractor held negligent because work “fell
below the due care standard”].) Virzi relies heavily on section 17951, which addresses
only the ability of localities to enforce the building code.6 The statute does not speak to a
6
Here is the statute‟s text. “(a) The governing body of any county or city,
including a charter city, may prescribe fees for permits, certificates, or other forms or
documents required or authorized by this part or rules and regulations adopted pursuant
to this part. [¶] (b) The governing body of any county or city, including a charter city, or
fire protection district, may prescribe fees to defray the costs of enforcement required by
this part to be carried out by local enforcement agencies. [¶] (c) The amount of the fees
prescribed pursuant to subdivisions (a) and (b) shall not exceed the amount reasonably
required to administer or process these permits, certificates, or other forms or documents,
or to defray the costs of enforcement required by this part to be carried out by local
enforcement agencies, and shall not be levied for general revenue purposes. The fees
shall be imposed pursuant to Section 66016 of the Government Code. [¶] (d) If the local
enforcement agency fails to conduct an inspection of permitted work for which permit
fees have been charged pursuant to this section within 60 days of receiving notice of the
completion of the permitted work, the permittee shall be entitled to reimbursement of the
permit fees. The local enforcement agency shall disclose in clear language on each
permit or on a document that accompanies the permit that the permittee may be entitled
to reimbursement of permit fees pursuant to this subdivision. [¶] (e)(1) The provisions
of this part are not intended to prevent the use of any manufactured home, mobilehome,
multiunit manufactured home, material, appliance, installation, device, arrangement, or
method of construction not specifically prescribed by the California Building Standards
Code or this part, provided that this alternate has been approved by the building
department. [¶] (2) The building department of any city or county may approve an
alternate material, appliance, installation, device, arrangement, method, or work on a
case-by-case basis if it finds that the proposed design is satisfactory and that each such
material, appliance, installation, device, arrangement, method, or work offered is, for the
purpose intended, at least the equivalent of that prescribed in the California Building
Standards Code or this part in performance, safety, and for the protection of life and
health. [¶] (3) The building department of any city or county shall require evidence that
any material, appliance, installation, device, arrangement, or method of construction
17
contractor‟s standard of care, and says nothing about contractual duties. Virzi cites no
case applying the statute to subvert the longstanding rule that negligent contractors
cannot “exculpate themselves from liability as a matter of law merely by . . . relying upon
the approval of the building inspector.” (Firemen’s Ins. Co. v. Indermill (1960) 182
Cal. App. 2d 339, 343.)
Finally, Virzi‟s other contentions assume its own adequate performance.
Virzi complains the court imposed a punitive forfeiture by finding against it. It asserts on
appeal “the uncontradicted evidence showed that Mr. Studer breached that contract and
underpaid [it] by the sum of $156,997.07” — almost twice what it sought at trial. But
substantial evidence shows Virzi failed to substantially perform its own contractual
duties, excusing Studer‟s performance. “When a party‟s failure to perform a contractual
obligation constitutes a material breach of the contract, the other party may be discharged
from its duty to perform under the contract.” (Brown v. Grimes (2011) 192 Cal. App. 4th
265, 277.) At any rate, the record shows Virzi received over $550,000 from Studer, more
than three times the $150,000 in compensatory damages awarded to Studer. We see
nothing unfairly punitive about that.
Sufficient Evidence Supports the Judgment Against Virzi on the Cross-complaint
By our count, Virzi raises five main challenges to Studer‟s judgment on his
cross-complaint. Virzi asserts (1) Studer‟s tort damages are precluded by contract, (2)
Studer‟s evidence was insufficient to support the judgment, (3) Charles cannot be held
conforms to, or that the proposed alternate is at least equivalent to, the requirements of
this part, building standards published in the California Building Standards Code, or the
other rules and regulations promulgated pursuant to this part and in order to substantiate
claims for alternates, the building department of any city or county may require tests as
proof of compliance to be made at the expense of the owner or the owner‟s agent by an
approved testing agency selected by the owner or the owner‟s agent.” (§ 17951 et seq.)
18
individually liable, (4) Studer may not recover his Stearman costs; and (5) prejudgment
interest could not be recovered. Each claim lacks merit.
First, Virzi wrongly contends Studer could not recover tort damages
because the parties‟ relationship was governed by contract. To be sure, “[a] person may
not ordinarily recover in tort for the breach of duties that merely restate contractual
obligations.” (Aas v. Superior Court (2000) 24 Cal. 4th 627, 643.) But “[a] contractual
obligation may create a legal duty the breach of which will support a tort action.”
(Michaelis v. Benavides (1998) 61 Cal. App. 4th 681, 687.) “„“„Accompanying every
contract is a common-law duty to perform with care, skill, reasonable expedience, and
faithfulness the thing agreed to be done, and a negligent failure to observe any of these
conditions is a tort as well as a breach of the contract.‟”‟” (El Escorial, supra, 154
Cal.App.4th at p. 1358.) “A contract to perform services gives rise to a duty of care
which requires that such services be performed in a competent and reasonable manner. A
negligent failure to do so may be both a breach of contract and a tort. [Citation.] In such
a hybrid circumstance, the plaintiff is entitled to pursue both legal theories until an
occasion for an election of remedies arises.” (North American Chemical Co. v. Superior
Court (1997) 59 Cal. App. 4th 764, 774.)
Here, Studer has no reason to elect a remedy because he obtained no double
recovery. The court found Virzi liable for breach of contract and negligence, but it
properly awarded only one single set of compensatory damages. Those damages are not
duplicative just because they are warranted by two different theories.
Second, the judgment against Virzi is amply supported by the record.
Studer, his experts, and the City‟s senior building inspector testified to dozens of code
violations, plan deviations, and workmanship deficiencies by Virzi. Virzi woefully
misconceives our role on appeal by spending more than 50 pages of its opening brief
purporting to show why the court should have rejected the testimony of Studer‟s
witnesses on each and every item of damages. But we “„do not reweigh evidence or
19
reassess the credibility of witnesses.‟” (In re Marriage of Balcof, supra, 141 Cal.App.4th
at p. 1531.) Nor will we independently “resolve inconsistencies and contradictions, if
any, in the testimony of . . . witnesses.” (Sidney v. Martin Iron Works, supra, 105
Cal.App.2d at p. 298.) It suffices to say Studer‟s experts were qualified and laid
foundation for their opinions.
Moreover, the court saw Virzi‟s shoddy craftsmanship first-hand when it
conducted a site visit. “A view by the court is evidence in the case and may alone
support the findings.” (Sierra Club v. Board of Supervisors (1981) 126 Cal. App. 3d 698,
706.) And Virzi has not provided us with the trial exhibits documenting the construction
work, leaving us no alternative but to presume they sufficiently support the judgment.
(See El Escorial, supra, 154 Cal.App.4th at p. 1357; see also Western Aggregates, Inc. v.
County of Yuba, supra, 101 Cal.App.4th at p. 291.)
Third, judgment was properly entered against Charles individually. It was
Charles who bid the job and oversaw the work. He can be held liable for his own
negligence. (See Michaelis v. Benavides, supra, 61 Cal.App.4th at p. 686 [affirming
judgment against individual at cement contracting firm who “personally bid for
appellants‟ job,” “personally participated in and directed the construction,” and
“personally made the decisions to use cheaper materials and construction methods”].)
Thus, the court could enter judgment against Charles on Studer‟s negligence cause of
action and hold him jointly and severally liable for the approximately $150,000 in
compensatory damages.
The judgment may still be affirmed even though Charles was not party to
the contract between Studer and Virzi. While the court should not have entered judgment
against Charles on Studer‟s contract cause of action, the error is harmless. (Cal. Const.,
art. VI, § 13.) The court imposed the same, single set of compensatory damages against
Charles for breach of contract and negligence. In other words, we can affirm the
judgment against Charles individually for almost $150,000 in compensatory damages on
20
Studer‟s negligence cause of action — and so it is immaterial whether that same
judgment could be affirmed on the contract cause of action. “[T]he judgment must be
affirmed “„if it is correct on any theory . . . .”‟” (El Escorial, supra, 154 Cal.App.4th at
p. 1352.)
Fourth, the court permissibly awarded Stearman costs to Studer. “In
Stearman, the court held that prevailing tort plaintiffs in a construction defect case who
incurred fees for hiring experts are „entitled to be made whole.‟ [Citation.] It ruled that
expert fees incurred for repair or expert investigative services, that were not litigation
costs, may be awarded as part of the tort damages.” (El Escorial, supra, 154 Cal.App.4th
at p. 1361.) Here, Studer sought and obtained almost $35,000 in Stearman costs.
Virzi has waived the bulk of his challenges to the Stearman costs. He
contends Studer should have proved his Stearman costs during trial, where witnesses
could be called and cross-examined, rather than by filing a posttrial motion supported by
declaration. But Virzi did not object when the court proposed these procedures. Quite
the contrary. When Studer tried to testify at trial about what he “paid to have various
experts come out to do an investigation,” Virzi objected on the grounds of relevance.
When Studer‟s counsel explained his intention to prove-up his Stearman costs, the court
ruled, “We‟ll address that after trial.” Virzi stood silent, acquiescing to the court‟s
apparent decision to treat Stearman costs like costs of suit.
“„An appellate court will ordinarily not consider procedural defects or
erroneous rulings . . . where an objection could have been but was not presented to the
lower court by some appropriate method . . . . [T]he explanation is simply that it is unfair
to the trial judge and to the adverse party to take advantage of an error on appeal when it
could easily have been corrected at the trial.‟” (Doers v. Golden Gate Bridge etc. Dist.
(1979) 23 Cal. 3d 180, 184, fn. 1.) “[A]ny other rule would permit a party to trifle with
the courts. The party could deliberately stand by in silence and thereby permit the
proceedings to reach a conclusion in which the party could acquiesce if favorable and
21
avoid if unfavorable.” (In re Lorenzo C. (1997) 54 Cal. App. 4th 1330, 1339.) If Virzi
wanted Studer to prove his Stearman costs during trial through live witnesses, the time to
raise that issue was at trial, when the court “„could easily‟” correct any error. (Doers, at
pp. 184-185, fn. 1.) Instead, Virzi objected. Its later protestations were too little, too late.
Virzi further contends its notice of appeal divested the court of jurisdiction
to award the Stearman costs. Generally, “the perfecting of an appeal stays proceedings in
the trial court upon the judgment or order appealed from or upon the matters embraced
therein or affected thereby . . . .” (Code Civ. Proc., § 916, subd. (a).)
But Virzi‟s notice of appeal was premature. A party may appeal “a
„judgment‟ that is not interlocutory, e.g., a final judgment. A judgment is the final
determination of the rights of the parties [citation] „“„when it terminates the litigation
between the parties on the merits of the case and leaves nothing to be done but to enforce
by execution what has been determined.‟”‟ [Citations.] „“It is not the form of the decree
but the substance and effect of the adjudication which is determinative. As a general
test . . . it may be said that where no issue is left for future consideration except the fact of
compliance or noncompliance with the terms of the first decree, that decree is final, but
where anything further in the nature of judicial action on the part of the court is essential
to a final determination of the rights of the parties, the decree is interlocutory.”‟” (Dana
Point Safe Harbor Collective v. Superior Court (2010) 51 Cal. 4th 1, 5, fn. omitted (Dana
Point).)
Despite its label, the August 2010 “JUDGMENT” from which Virzi
purported to appeal was not final. It did not “„“„terminate[] the litigation between the
parties on the merits of the case and leave[] nothing to be done but to enforce by
execution what has been determined.‟”‟” (Dana Point, supra, 51 Cal.4th at p. 5.) It
instead required “further . . . judicial action on the part of the court” (ibid.) to determine
the parties‟ rights as to the Stearman costs, expressly contemplating a “motion therefor.”
Those rights were finally determined in the May 2011 “AMENDED JUDGMENT,”
22
which was the final, appealable judgment. Thus, Virzi‟s notice of appeal from the May
2010 judgment was premature, did not “perfect[] . . . an appeal,” and imposed no stay.7
(Code Civ. Proc., § 916, subd. (a).)
To wrap up the Stearman issue, we note the record adequately supports the
award. Studer submitted declarations from his experts. They stated they were retained to
investigate the construction defects, rule out other causes of property damage, and
prepare repair cost estimates. Each attached invoice, expressly excluding any charges for
trial preparation or testimony. This evidence sufficiently proves the existence and
amount of the Stearman costs. (See El Escorial, supra, 154 Cal.App.4th at p. 1352.)
Virzi has it backwards when it complains the experts failed to show the connection
between their investigative costs and the trial testimony. The court cannot award
Stearman costs for time spent on trial preparation and testimony. (Ibid.)
Fifth, the court permissibly awarded prejudgment interest to Studer on his
negligence cause of action. “In an action for the breach of an obligation not arising from
contract . . . interest may be given” as damages (Civ. Code, § 3288) “to compensate a
party for the loss of the use of his or her property” (Bullis v. Security Pac. Nat. Bank
(1978) 21 Cal. 3d 801, 815). “[T]he trial court, when acting as the trier of fact, may
award prejudgment interest under this section” (id. at p. 814, fn. 16) and its decision will
“not be overturned unless [it] abused its discretion” (id. at p. 815). Studer‟s loss of use of
the money spent on Virzi‟s defective work sufficiently supports the court‟s exercise of its
discretion to award prejudgment interest. And contrary to Virzi‟s claim, the court could
award prejudgment interest even though the amount of compensatory damages was not
determined until after trial. “Even if plaintiff‟s damages are not liquidated, prejudgment
interest may be awarded” pursuant to Civil Code section 3288. (Bullis, at p. 814.)
7
Even so, we exercise our discretion to save Virzi‟s appeal by deeming its
notice of appeal “„as filed immediately after entry of judgment.‟” (Cal. Rules of Court,
rule 8.104(d)(1); accord Cabral v. Soares (2007) 157 Cal. App. 4th 1234, 1239, fn. 2.)
23
Virzi also contends the court abused its discretion because the amount of
prejudgment interest does not derive from any readily apparent calculation. But Studer
correctly notes the award is less than the amount supported by the record.8 Virzi is not
aggrieved by the error in its favor, and lacks standing to challenge it on appeal. (Code
Civ. Proc., § 902 [only a “party aggrieved may appeal”].)
The Attorney Fee Award May Be Affirmed As Modified
In challenging the award of attorney fees to Studer, Virzi raises three
baseless contentions — and one that has merit.
First, Virzi claims the court lost jurisdiction to award attorney fees after it
appealed. But its appeal from the May 2010 judgment was premature, as already shown.
(See Dana Point, supra, 51 Cal.4th at p. 5.)
Second, Virzi contends the contract required Studer to prove his attorney
fees as damages at trial, not as costs of suit by posttrial motion. But the contract
language does not alter the fundamental nature of attorney fees as costs of suit. 9
8
Studer suggests the court may have reasonably awarded 7 percent annual
interest on $150,765.35 for the period between the filing of the complaint (Jan. 26, 2007)
and the issuing of the statement of decision (Aug. 5, 2010). That is 1,288 days (not
1,104, as Studer asserts), which makes for $37,517.96 in prejudgment interest. The court
awarded $31,929. Studer selected the proper interest rate for his example. (See
Michelson v. Hamada (1994) 29 Cal. App. 4th 1566, 1585 [7 percent prejudgment interest
on tort damages].) But he was overly generous in excluding the Stearman costs from the
equation, and in selecting the date upon which the prejudgment interest begins to run.
“[W]here prejudgment interest is awarded under [Civil Code] section 3288 in order to
compensate respondents fully for their loss, that interest must first be calculated on the
entire judgment . . . from the date of the tortious act proximately causing their damages.”
(Newby v. Vroman (1992) 11 Cal. App. 4th 283, 289.) Studer has not cross-appealed,
though, and there is no prejudice to Virzi.
9
The contract version attached to the attorney fee motion provided that “[i]f
any legal action . . . is brought for the enforcement of this Agreement, or because of an
alleged dispute . . . with any of the provisions of this Agreement, the successful or
24
“While attorney fees awarded under a contract were, at one time,
considered to be an element of contract damages [citation], that view changed with the
enactment of Civil Code section 1717. While intended to ensure the mutuality of any
contractual attorney fees provision [citation], the statute also constituted statutory
authority for the award of contractual fees. Once contractual attorney fees could be
deemed awarded pursuant to section 1717, courts found them analogous to statutory
attorney fees and declared them an element of costs of suit, rather than damages.
[Citations.] The Legislature endorsed this view in 1981 by amending section 1717 to add
language expressly characterizing contractual attorney fees as a cost of suit.” (Walker v.
Ticor Title Co. of California (2012) 204 Cal. App. 4th 363, 372.) “Following the
amendment of section 1717, „“attorney‟s fees were to be seen as allowed by statute,
rather than by contract.”‟” (Ibid.) “Accordingly, while the availability of an award of
contractual attorney fees is created by the contract [citation], the specific language of the
contract does not necessarily govern the award.” (Id. at pp. 372-373.) “Parties to a
contract cannot, for example, enforce a definition of „prevailing party‟ different from that
provided in Civil Code section 1717.” (Id. at p. 373.) Nor, we hold, may the parties
require attorney fees be proved at trial as damages. The statute that allows for contractual
attorney fee awards in the first place provides they are costs of suit. (Civ. Code, § 1717.)
Third, Virzi asserts the court violated a “Mandatory Duty” to allocate
Studer‟s attorney fees between Studer‟s contract and tort claims.10 But a party‟s “joinder
prevailing party . . . shall be entitled to recover as an element of their damages,
reasonable attorneys‟ fees and other costs incurred in that action or proceeding, in
addition to any other relief to which they may be entitled.”
10
Virzi does not contend the court should have allocated liability for Studer‟s
attorney fees between Virzi and Charles. Nor does it assert Charles cannot be
individually liable for them. “It is not our place to construct theories or arguments to
undermine the judgment and defeat the presumption of correctness. When an appellant
fails to raise a point . . . we treat the point as waived.” (Benach v. County of Los Angeles
(2007) 149 Cal. App. 4th 836, 852.)
25
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 Metals Co. v. Alperson (1979) 25 Cal. 3d 124, 129-130.)
Thus, where the issues are “„“inextricably intertwined,”‟” the prevailing
party need not apportion attorney fees and may recover fees for all time reasonably spent.
(Abdallah v. United Savings Bank (1996) 43 Cal. App. 4th 1101, 1111.) The governing
test is whether the “issues are so interrelated that it would have been impossible to
separate them into claims for which attorney fees are properly awarded and claims for
which they are not.” (Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal. App. 4th 1127,
1133.) “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 v. Photon
Dynamics, Inc. (2008) 158 Cal. App. 4th 1582, 1604.)
The record fully supports the court‟s conclusion that allocation was
“impossible.” The “basic set of facts” underlying Studer‟s causes of action was
“interchangeable,” it found — “The construction was negligent, and it was in breach of
the agreement between the parties.” We see no abuse of discretion.
Finally, Virzi challenges the calculation of the attorney fee award.
Certainly, “the trial court has broad authority to determine the amount of a reasonable
fee.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1095.) “„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.” (Ibid.)
The court must “ordinarily begin[] with the „lodestar,‟ i.e., the number of
hours reasonably expended multiplied by the reasonable hourly rate.” (PLCM Group,
26
Inc. v. Drexler, supra, 22 Cal.4th at p. 1095.) “The lodestar figure may then be adjusted,
based on consideration of factors specific to the case, in order to fix the fee at the fair
market value for the legal services provided. [Citation.] Such an approach anchors the
trial court‟s analysis to an objective determination of the value of the attorney‟s services,
ensuring that the amount awarded is not arbitrary.” (Ibid.)
Here, the court‟s lodestar calculation needs adjustment. It awarded Studer
“the sum of $288,182.50 as to the firm of Keathley and Keathley and $43,750 as to the
Williams Law Firm based upon an hourly rate of $350.00 for a total attorney fee award of
$331,932.50.” At the hearing, it stated Keathley and Keathley‟s hourly rate was
reasonable, and a reasonable total award should roughly correspond to the $284,000
charged to Virzi by its counsel. Thus, the court apparently intended to award the full
value of Keathley and Keathley‟s time to Studer, and we see no abuse of discretion in
that.
But Studer never sought to recover $288,182.50 for Keathley and
Keathley‟s time. The declaration of H. James Keathley, Jr. in support of the motion for
fees stated he had devoted 492.75 hours on the matter at the hourly rate of $350,
excluding the time expended on the earlier appeal. The declaration of Katherine D.
Keathley stated she had devoted 228 hours on the matter at the hourly rate of $350, also
excluding the time worked on the earlier appeal. Thus, up to the filing of the fee motion,
the Keathley firm had expended 720.75 hours at $350 per hour amounting to
$252,262.50. In addition, Katherine Keathley anticipated another six hours in preparing a
reply to the motion for fees and a motion to amend the judgment for another $2,100. In
Studer‟s reply to Virzi‟s opposition, the Keathley firm reported an additional 27 hours, or
$9,450, excluding appeal and bankruptcy issues. And in Studer‟s separate motion for
attorney fees incurred on the prior appeal, Katherine Keathley stated she had worked 21
hours on the appeal and requested an additional $7,350.00. Thus, the total requested by
the Keathley firm added up to $271,162.50 — $17,020 less than the award. Nothing in
27
the record suggests any reasonable basis to augment the award by $17,020 or to apply a
multiplier to the lodestar. The attorney fee award must be reduced accordingly. (See
Code Civ. Proc., § 43 [court may modify judgment on appeal].)
DISPOSITION
The judgment is reduced by $17,020 to $549,190.85. As modified, the
judgment is affirmed. In the interest of justice, defendants shall recover their costs on
appeal.
IKOLA, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
THOMPSON, J.
28