Tuesday, March 1, 2016
C.A. Rejects Ruling That Slashed Fee Award 70 Percent
By KENNETH OFGANG, Staff Writer
A trial judge abused his discretion by awarding the prevailing plaintiff’s lawyers in a wrongful foreclosure case only 30 percent of their requested attorney fees without a persuasive explanation as to why, the Third District Court of Appeal ruled yesterday.
The justices sent Sacramento Superior Court Judge David I. Brown’s ruling back to that court for reconsideration.
Calvin and Tracy Mountjoy engaged attorney Dennise Henderson in 2011 after their Elk Grove home was foreclosed upon. Henderson tried to keep them in the house by filing a bankruptcy petition and fighting the buyer’s efforts at eviction, and eventually filed a wrongful foreclosure suit against Bank of America, Mortgage Electronic Registration Systems, Inc., and others.
After the defendants’ demurrers were overruled and their summary judgment motions denied, the case settled for $395,000, plus costs and attorney fees to be determined by the court.
Henderson and her co-counsel Tonya Nygren sought more than $308,000 in fees for over 760 hours of work reflected in a 41-page printout. The request valued Henderson’s time at $450 hourly and Nygren’s at $350 per hour since her admission to the State Bar and $200 per hour for work she did assisting Henderson prior to being admitted.
The defendants responded that the amount sought was “outrageous,” noting that their own attorneys had billed a little over $50,000 for less than 230 hours of work on the case, and calling the hourly rates excessive.
Brown largely agreed. He said the plaintiffs’ lawyers were entitled to $260 per hour for 30 percent of the hours they claimed, cutting the award to less than $60,000.
Justice Ronald Robie, writing for the Court of Appeal, said the trial judge had the discretion to eliminate excessive hours and cut the billing rates, and that he could reasonably consider the billings of opposing counsel as a cross-check on the reasonableness of plaintiffs’ counsel’s claims.
But the way Brown determined that a 70 percent cut in the claimed hours was appropriate was questionable, the justice said.
“Even assuming the trial court was correct in finding that well over 70 percent of the time entries underlying the fee request were flawed in one manner or another, there is no reasonable basis for concluding that the time entries the court found were flawed actually included 70 percent of the total time for which the Mountjoys sought compensation,” the justice wrote. “Thus, the trial court’s reduction in compensable hours was arbitrary and may have swept too broadly, denying the Mountjoys compensation for time claimed in billing entries that were not flawed.”
Robie emphasized that the judge was not required to specify which items in the billing statements were excessive and how much each specific entry should be reduced by. The plaintiffs’ lawyers, he said, were obligated to “prune” their request by making comprehensible and specific entries.
But the case law, the jurist continued, does not permit the trial court to simply cut the claimed hours “across-the-board” and “without respect to the number of hours that were actually included in the flawed entries.”
The case is Mountjoy v. Bank of America, N.A., 16 S.O.S. 1161.
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