Thursday, October 23, 2014
High Court Denies Review of Ruling That Overturned Jury’s $5,000-an-Hour Attorney Fee Award
By a MetNews Staff Writer
The California Supreme Court yesterday left standing a ruling by this district’s Court of Appeal that prominent litigator Hillel Chodos isn’t entitled to $5,000 per hour for representing the ex-wife of a wealthy businessman in her divorce and related matters.
The justices, at their weekly conference in San Francisco yesterday, left standing the ruling of Div. Five, in Chodos v. Borman (2014) 227 Cal. App. 4th 76.
A Los Angeles Superior Court jury had awarded Chodos $7.8 million in his suit against Navabeh Borman. But the Court of Appeal ordered that the award be cut to $1.8 million, which the court said represented a reasonable hourly rate of $1,000 for the 1,800 hours the jury found Chodos put in on the case.
A defense expert testified that Chodos didn’t need to spend more than 500 hours representing Navabeh Borman, and that his services to her weren’t worth much more than $300,000.
Chodos and Hugh John Gibson had represented Borman between 2007 and 2009. During that time, she sought a divorce from her husband, Burton Borman, changed her mind and dismissed the action, brought a second divorce action, and sued under Marvin v. Marvin for an interest in a Malibu beach house and other property that Burton Borman owned before they were married.
Burton Borman, who was CEO of PennCorp Financial and later of Todd Shipyards, died in 2012 at the age of 84. He and Navabeh Borman lived together beginning in 1983 and married in 1998.
Chodos, who did not have a statutorily required written fee agreement, sued in quantum meruit. He contended that he had obtained excellent results for his client, obtaining a settlement worth $26 million, and deserved a multiplier of his usual $1,000-per-hour fee.
Family law specialist Dennis Wasser, who has handled a number of big-dollar divorce cases, testified that Chodos’ efforts, and the results he obtained in the case justified a multiplier of six, for a fee of over $9 million. The defense scoffed at the testimony, citing Wasser’s acknowledgment that his own usual billing rate was $900 an hour, and pointing out that Chodos—although one of the state’s most highly-regarded business litigators—is not a family law specialist and had very little experience with palimony actions.
Los Angeles Superior Court Judge Barbara Ann Meiers told the jury that, in addition to determining a reasonable hourly rate for Chodos’ services, it could grant a fee multiplier based on the traditional lodestar factors such as skill, risk, effort, results, impairment of other employment opportunities, novelty of legal issues presented, and time limitations.
Jurors concluded that Chodos was entitled to $1,000 per hour for 300 hours he worked on the first divorce case before it was dismissed, and $1,000 per hour, times five, for 1,500 hours he worked on the second divorce and the Marvin action.
But Justice Richard Mosk, writing for the Court of Appeal, said the judge should not have allowed the jury to consider a multiplier.
“We hold that under the circumstances of this case, there was no legal or equitable justification for applying a multiplier to the lodestar amount of attorney fees found by the jury,” Mosk wrote. “Such multipliers generally are appropriate when, from the outset of an action, an attorney voluntarily assumes the contingent risk of nonpayment for his services—a risk not present here.”
Mosk also called the judgment “excessive and inequitable” and “contrary to public policy,” since it would reward Chodos for not complying with the State Bar Act’s requirement of a written fee agreement.
In other conference action, the justices:
•Denied review of a July 8 ruling of the First District’s Div. Four that found San Francisco’s environmental impact report for a proposed $1.5 billion development in the middle of San Francisco Bay sufficient under the California Environmental Quality Act.
The court held in Citizens for a Sustainable Treasure Island v. City and County of San Francisco (Treasure Island Community Development, LLC) (2014) 227 Cal. App. 4th 1036 that the EIR provided sufficient detail about the city’s plan to develop the 404-acre island on which a naval base formerly sat.
Treasure Island was built on fill in San Francisco Bay to accommodate the 1939 Golden Gate International Exposition. The island and the adjacent Yerba Buena Island were taken over by the Navy in 1941.
The Navy ended its operations there in 1997, and has promised to clean up the site, which all parties acknowledged to have significant hazardous waste, before transferring it to the development authority established by the city.
The citizens group that challenged the EIR said it lacked adequate information about the cleanup, but Superior Court Judge Teri Jackson and the Court of Appeal both disagreed.
•Left standing the State Bar Court’s denial of a reinstatement petition by disbarred Pacific Palisades attorney Joseph L. Shalant. Shalant, a State Bar member for 40 years, was disbarred in 2006 for his conduct in connection with a medical malpractice suit.
The State Bar Court found that Shalant had originally agreed, orally, to represent the client on a contingency basis, but later insisted on, and received, a $25,000 non-refundable fee, to be credited against the contingency if a recovery was obtained, after threatening to quit the case.
This constituted a violation of the Medical Injury Compensation Reform Act’s limitation on attorney fees in medical malpractice cases, as well as conduct involving moral turpitude, dishonesty or corruption, the State Bar Court found.
•Denied a habeas corpus petition by Mary Ellen Samuels, dubbed the “Green Widow” by police and prosecutors. Samuels, a San Fernando Valley resident, is awaiting execution for the murders of her husband and the man who allegedly helped her hire the actual killer.
Prosecutors said Samuels killed her husband for money, including $240,000 in insurance proceeds, $70,000 from the Subway sandwich shop that they continued to co-own, even though they had been in divorce proceedings for 26 months before Robert Samuels was killed, and $160,000 as a result of refinancing the family home.
Samuels acquired her moniker after she spent virtually all of that money in less than a year. A photograph introduced in evidence, taken by a male companion sometime after the killings, showed Samuels in bed covered with nothing but currency.
In denying her petition yesterday, the high court, which upheld the death sentences in 2005, said all of her claims were untimely or had been raised before.
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