Trial Court's Calculation of Lodestar Is Affirmed

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In Syers Properties III, Inc. v. Rankin the California Court of Appeal for the First Appellate District affirmed the trial court’s grant of an award of attorney fees. The appellant contended that the trial court should not have awarded attorney fees for two reasons: (1) the court relied upon inadequate documentation in determining the reasonableness of the number of hours billed, and (2) the court’s calculation of the reasonable rate was incorrect.

Two attorneys represented a company in a complex construction defect case. The company subsequently sued counsel alleging legal malpractice. The attorneys moved for nonsuit on the first day of trial, and after the trial court granted the motion, the attorneys sought to recover attorney fees as the prevailing parties under California Civil Code Section 1717. In support of the recovery, the attorneys submitted declarations from attorneys who performed work on the case. The trial court granted the motion finding that the rates and hours requested were reasonable.

The court of appeal affirmed the trial court’s ruling holding that “the lodestar is the basic fee for comparable legal services in the community and that it may be adjusted by the court . . . to fix a fee at the fair market value.” It also stated that the trial judge is best able to evaluate whether the hours billed were reasonable given the complexity of the case.

The court of appeal rejected the appellant’s argument that the reasonable market rate is required to mirror the actual rate billed. It stated that the trial court was not required to adopt the market rate as the actual rate, but has discretion in determining what a reasonable attorney fee would be based on the evidence presented.

Mark Chuang, who also contributed to this article, is a summer associate in Barger & Wolen’s San Francisco office.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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