Opinion
A132839
01-15-2013
BUILDING INDUSTRY ASSOCIATION OF THE BAY AREA fka HOME BUILDERS ASSOCIATION OF NORTHERN CALIFORNIA, INC., Plaintiff and Respondent, v. CITY OF SANTA ROSA, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Sonoma County
Super.Ct.No.
SCV244441)
The City of Santa Rosa (the City) adopted Ordinance 3902 (the Ordinance) requiring certain applicants for residential development permits to annex their property into a special tax district and pay a tax. The tax was intended to help "close the gap between the revenue generated by new development and the cost of providing [ ] needed public services" for the development.
The Home Builders Association of Northern California, Inc. (the Association) sued the City and others to invalidate the Ordinance. The trial court granted the Association's motion for summary judgment — concluding the Ordinance was unconstitutional — and entered judgment for the Association. The court also awarded the Association $243,417.50 in attorney fees pursuant to Code of Civil Procedure section 1021.5.
Unless otherwise noted, all further statutory references are to the Code of Civil Procedure. Section 1021.5 — the private attorney general statute — provides in pertinent part: "Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any."
The City appeals the order awarding attorney fees. It contends: (1) the court erred by concluding the litigation conferred a "significant benefit . . . on the general public or a large class of persons" under section 1021.5; (2) the court did not conduct the "financial burden" analysis required by section 1021.5; (3) the amount of fees awarded was excessive; and (4) the court abused its discretion by denying the City's request for discovery.
We agree with the City the award of attorney fees for unexplained attorney travel time to file the complaint was an abuse of discretion, and we modify the court's order to reduce the fee award by $1,800. In all other respects we affirm the order.
FACTUAL AND PROCEDURAL BACKGROUND
The City Adopts the Ordinance
In a 2006 resolution, property owners in two areas of the City voted to establish a special tax district and to levy special taxes on the properties in the district to "fund public services." In addition, the resolution established a future annexation area covering other parts of the City; it allowed the City to annex property to the future annexation area and to levy special taxes on that property "'subject to the [u]nanimous [a]pproval of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed.'"
Later, the City identified a "gap between . . . revenues generated by residential development" in the City and "costs associated with providing the services to such developments. It was determined that the inclusion of new developments into the [s]pecial [t]ax [d]istrict would provide revenues to partially finance the needed public services, thereby reducing the impact of these developments." In December 2008, City enacted the Ordinance. It required new residential developments to become part of the special tax district to eliminate the gap between revenue and costs. With certain exceptions, the Ordinance provided "[t]he real property of all new residential units for which any discretionary permit or approval is needed from the City is required to be annexed into [the] City . . . Special Tax District . . . and, as applicable, pay its annual STD-Wide Special Tax."
The Litigation
The Association is "comprised of hundreds of home builders, developers, property owners, contractors, subcontractors, building trades, suppliers, engineers and design professionals . . . involved in the business of providing housing in . . . Sonoma County." The Association's mission includes, among other things, "legal representation of the interests of its members . . . and enforcement of California law governing housing and residential development." The Association sued the City and others to invalidate the Ordinance. It contended the Ordinance: (1) impaired the Association's members' voting rights under California law; (2) violated the Association's federal equal protection rights; and (3) violated the California Mello-Roos Community Facilities Act of 1982 (Mello-Roos Act). The complaint sought declaratory and injunctive relief and a writ of mandate. The Association claimed the City's actions "directly affect and impair the interests of [Association] and its members, and the public interest in providing housing opportunities consistently with State law."
The Association proceeded with the lawsuit as a reverse validation action pursuant to the procedures set forth in section 860, et seq. because the Ordinance seemed to compel a vote. The Association failed to timely publish the summons pursuant to section 863 and moved, ex parte, for an extension of time to publish the summons. The City opposed the ex parte application and the court denied it. The parties engaged in discovery. The City originally took the position that the Ordinance contemplated a vote on annexation and special taxation; later, however, the City conceded the Ordinance forced affected applicants to waive their right to vote. At that point, the Association admitted the lawsuit was not a reverse validation action.
The parties filed cross summary judgment motions. After several hearings and extensive briefing, the court granted the Association's motion, denied the City's cross-motion, and entered judgment for the Association. The court determined the Ordinance violated the equal protection rights of property owners "in a geographically-defined electoral unit" because it was a "legislative effort to induce certain property owners to cast a vote in favor of the government's position on the subject of special taxation . . . it unfairly tampers with the elective process." The court explained the Ordinance was "invalid because it inevitably denie[d] some local voters their right to equal protection under the law." The court also concluded the Ordinance was "not supported by the Mello-Roos Act."
The Order Awarding Section 1021.5 Attorney Fees
The Association moved for $226,737.50 in attorney fees pursuant to section 1021.5. The Association argued it was entitled to attorney fees because the litigation vindicated important rights affecting the public interest and a large class of persons and because it had no financial interest in the litigation. The Association supported the motion with numerous declarations from local attorneys averring the fees incurred were reasonable and the hourly rates charged by the Association's attorneys were appropriate. The Association's attorneys and its paralegal submitted declarations describing their qualifications and attaching their timesheets.
In its reply, the Association sought approximately $48,000 in attorney fees incurred in prosecuting the fee motion and opposing the City's motion to tax costs.
The City opposed the motion, claiming the Association was not entitled to fees because it had a financial interest in the litigation and because the litigation did not result in a substantial public benefit. The City also argued the amount of fees sought was "unreasonable and excessive." An attorney for the City submitted a declaration in support of the opposition claiming the Association tried to "sandbag" the City by waiting "until the last day on which [the City] could have appealed the court's judgment before filing the [ ] motion for attorneys fees." Counsel for the City also stated the case was not complex and involved minimal discovery. At the hearing, the City moved to continue the hearing so it could conduct "limited discovery" on whether the Association had a financial interest in the litigation. The court declined to continue the hearing, concluding the request for discovery was untimely and that discovery would increase litigation costs without altering the court's determination that the Association did not have a financial interest in the litigation.
The City moved to tax the Association's travel charges totaling $961.30. The court granted the motion to tax.
Following the hearing, the court granted the Association's motion for attorney fees. In a detailed written order, the court determined the Association was "completely successful" because it "won a facial challenge to a municipal land use ordinance. The ordinance was unconstitutional because it coerced an election in favor of special taxation, through an existing district, as a direct exchange for the municipal issuance of desirable, discretionary building permits, effectively denying a free election to impacted voters, as well as the equal protection of the law. Also, the revenue scheme called into question the very fairness and sanctity of the process for deciding special taxation issues inside the entire annexation zone."
The court concluded private enforcement was necessary because the City refused to rescind the Ordinance and determined the Association's "successful enforcement of fair and free voting rights in [the City] vindicated important constitutional rights that affect the public interest." In addition, the court found the litigation conferred a substantial benefit on the general public "that was both conceptual and doctrinal. The . . . declaration of voting rights benefited not just association members who own developable property inside the annexation zone but also nonmembers who might wish to obtain discretionary building permits, all current residents of the same zone, [and] future homeowners who would be subject to a special taxation pass-through. . . ."
Next, the court concluded the financial burden of private enforcement of voting rights warranted subsidizing the Association's attorneys. The court noted the Association did not receive monetary damages and did "not have a financial incentive to wage this battle. Any future financial benefit that might be derived by association members owning local real property is relatively small in comparison to the cost of this litigation. [¶] The necessity for pursuing this case placed a burden on the [A]ssociation out of proportion with any financial interest it had in the lawsuit."
Finally, the court determined the fees were reasonable. The court explained "[t]he legal issues were quite complicated[,]" the work performed by counsel was "outstanding," and "[t]he results were excellent, benefiting not only the client, but the general public as well." The court rejected the City's "largely generalized" and "ineffectual" attack on the amount of fees. According to the court, there "was . . . nothing . . . in the opposition [to the motion] that would have triggered deletion of specific areas of the billing." The court, however, reduced the hourly billing rate of three of the Association's attorneys and denied the Association's request for fees related to the ex parte application. The court awarded fees of $243,417.50.
DISCUSSION
A successful party may recover attorney fees pursuant to section 1021.5 when the action "'(1) . . . "has resulted in the enforcement of an important right affecting the public interest," (2) "a significant benefit, whether pecuniary or nonpecuniary has been conferred on the general public or a large class of persons" and (3) "the necessity and financial burden of private enforcement are such as to make the award appropriate.'" (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214 (Whitley), quoting Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 935.)
"'The trial court is to assess the litigation realistically and determine from a practical perspective whether [the statutory] criteria have been met.' [Citation.] Rulings under section 1021.5 are reviewed for abuse of discretion. [Citation.] The questions are whether the court applied the proper legal standards under section 1021.5 and, if so, whether the result was within the range of the court's discretion [citation], i.e., whether there was a reasonable basis for the decision [citation].' [Citation.]" (Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1344.)
The Court Did Not Abuse Its Discretion by Determining the Litigation
Conferred a Significant Benefit on the General
Public or a Large Class of Persons
As stated above, the court determined the litigation conferred a substantial benefit on the general public that was "conceptual and doctrinal." The court explained, "[t]he . . . declaration of voting rights benefited not just association members who own developable property inside the annexation zone, but also nonmembers who might wish to obtain discretionary building permits, all current residents of the same zone, [and] future homeowners who would be subject to a special taxation pass-through, and everyone who lives in the City. . . ." The City claims this conclusion was erroneous because the decision "impacted only developers of residential projects within the City" and "established no benefit to the general public outside those proposing property development."
"The extent of the public benefit 'need not be great' to justify an attorney fee award. . . ." (Environmental Protection Information Center v. Department of Forestry & Fire Protection (2010) 190 Cal.App.4th 217, 234, citation omitted (EPIC).) "'[T]he "significant benefit" that will justify an attorney fee award need not represent a "tangible" asset or a "concrete" gain but, in some cases, may be recognized simply from the effectuation of a fundamental constitutional or statutory policy.'" [Citation.] The benefit may be conceptual or doctrinal [citation], and the California Supreme Court has recognized that 'the litigation underlying the section 1021.5 award can involve rights or benefits that are somewhat intangible. . . .' [Citation.]" (Id. at p. 233.)
We conclude the court did not abuse its discretion by determining the litigation resulted in a "significant benefit" within the meaning of section 1021.5. The court invalidated an ordinance requiring certain property owners to waive their right to vote on the imposition of special taxes to obtain a development permit. The declaration of voting rights benefitted all who would seek a specified development permit in the City; in addition, the "general public benefitted from the enforcement of [a] fundamental constitutional right[ ]. . . ." (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 319 (Press).) We reject the City's claim — unsupported by authority — that the court was required to determine "the number of persons benefitted by [the Association's] success in this action." The court found the litigation benefited members of the Association "who own developable property inside the annexation zone, but also nonmembers who might wish to obtain discretionary building permits, all current residents of the same zone, [and] future homeowners who would be subject to a special taxation pass-through, and everyone who lives in the City. . . ." The court was not required to calculate the exact number of people affected by the litigation where, as here, the litigation vindicated a constitutional right. (Id. at p. 319.)
The City claims the Association admitted the litigation's limited applicability by stating in its motion for summary judgment that the Ordinance "required a small subset of applicants for non-exempt residential building permits in the City to waive their constitutional right to vote on the imposition of special taxes, by agreeing to annex their properties into a Special Tax District and submitting to the payment of those taxes." The City cites no authority to support this argument and, therefore, has not established the Association made a judicial admission in its motion for summary judgment.
The City relies on two cases, Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158 (Pacific Legal Foundation)and Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629 (Flannery)to support its argument that any benefit conferred by the litigation to the public was "incidental to the achieving the personal business goals of the litigation." In Pacific Legal Foundation, the California Supreme Court determined the plaintiffs were not entitled to section 1021.5 attorney fees because their lawsuit — while based on the constitutional right to be free from the arbitrary deprivation of private property — vindicated plaintiffs' own personal rights and economic interests. (Pacific Legal Foundation, supra, at p. 167.)
The litigation in Pacific Legal Foundation is distinguishable. That case validated a permit condition on the plaintiffs' property. (Pacific Legal Foundation, supra, 33 Cal.3d at p. 167.) As our high court explained, "the grant of administrative mandamus under the limited factual circumstances shown here did not result in conferring a 'significant benefit' on a 'large class of persons.' The decision vindicated only the rights of the owners of a single parcel of property. It in no way represents, for example, a ringing declaration of the rights of all or most landowners in the coastal zone. . . ." (Ibid.) Here and in contrast to Pacific Legal Foundation, the declaration of voting rights applied to a large group: Association members who might own developable property inside the annexation zone, nonmembers who may apply for the building permits at issue, and current and future homeowners inside the annexation zone. The court's ruling benefited more than the owners of a single parcel of land. (Ibid.)
In Flannery, the plaintiff sued the California Highway Patrol and others alleging harassment, wrongful termination, and retaliation. The jury returned a verdict for the plaintiff and the trial court awarded her attorney fees pursuant to section 1021.5. (Flannery, supra, 61 Cal.App.4th at p. 632.) The appellate court reversed the award of fees and held, "[w]hile plaintiff's lawsuit was based on the important right to be free from unlawful discrimination, its primary effect was the vindication of her own personal right and economic interest." (Id. at p. 637.) Flannery is inapposite because the right at issue in that lawsuit — to be free from unlawful discrimination — was particular to the plaintiff in that case and not to a large group as is the case here.
We also reject the City's claim that the litigation did not confer a significant public benefit because it was "summarily resolved at the trial court level without any appellate decision." "[A]n action need not create new law to satisfy the significant benefit criterion of section 1021.5." (EPIC, supra, 190 Cal.App.4th at p. 234.)
The court correctly viewed the invalidation of the Ordinance as having a wide effect in the City and properly concluded the Association's action conferred a significant benefit on the general public or large class of persons.
The Court Properly Evaluated Section 1021.5's
"Financial Burden" Criterion
Next, the City claims the court erred by concluding the Association did not have a financial interest in the litigation. It also claims the court failed to apply the "specific 'financial burden' formula" required under Whitley, supra, 50 Cal.4th at page 1215.
To place the issues in context, we discuss Whitley. In that case, the California Supreme Court "adopted a specific method for evaluating the financial burdens and incentives involved in pursuing a lawsuit—namely, a cost-benefit analysis in which the expenses of the litigation are compared with the 'financial benefits that the litigation yields or reasonably could have been expected to yield.' [Citation.] The high court illustrated how the costs and benefits should be determined . . . [¶] The benefits side of the equation contains two components, which are multiplied by one another. First, the court must determine the monetary value of the benefits obtained by the successful party. This determination is based on 'the gains actually attained' and not on the gains sought. [Citation.] Second, the court must estimate 'the probability of success at the time the vital litigation decisions were made. . . .' [Citation.] The monetary value of the benefits obtained is discounted by the estimated probability of success to produce the estimated value of the case at the time the vital litigation decisions were being made. This discounted monetary value represents the benefit in the cost-benefit comparison. [Citation.]" (Robinson v. City of Chowchilla (2011) 202 Cal.App.4th 382, 401-402, fn. omitted (Chowchilla).)
"The costs side of the cost-benefit analysis is based on the actual costs of the litigation, which include attorney fees, deposition costs, expert witness fees, and other expenses required to bring the case to fruition. [Citation.] [¶] The final step in the cost-benefit analysis is to compare the estimated value of the case to the actual cost and make a value judgment whether it is desirable to encourage litigation of that sort by providing a bounty. [Citation.] A bounty (i.e., an award of fees) is 'appropriate except where the expected value of the litigant's own monetary reward exceeds by a substantial margin the actual litigation costs.' [Citation.]' [Citation.]" (Chowchilla, supra, 202 Cal.App.4th at p. 402.)
There are several problems with the City's argument. First, the City did not urge the court to apply the cost-benefit analysis in Whitley. It did not cite Whitley or any related cases in its opposition to the motion for attorney fees or at the hearing on the motion. The City cannot complain the trial court failed make a "detailed, fact-based inquiry specifically required under Whitley" when it never urged the court to do so in the first place. Second, the court did undertake a cost-benefit analysis notwithstanding the City's failure to mention Whitley. On the benefits side, the court noted the Association did not receive monetary damages and determined the litigation vindicated the constitutional right to vote. The court was aware of the value of the case because the Association asserted it incurred approximately $270,000 in attorney fees. The court then made "a value judgment whether it is desirable to encourage litigation of that sort" by awarding fees. (Chowchilla, supra, 202 Cal.App.4th at p. 402.) Though the court may not have made the precise calculations the City now urges should have been made, the court's conclusion was not an abuse of discretion.
The City's reliance on the result reached in Chowchilla is misplaced. In that case, the trial court's one page written order denying section 1021.5 attorney fees did "not state how the court applied any of the criteria contained in section 1021.5. It simply state[d] 'that the motion . . . for an award of attorneys fees shall be . . . denied.'" (Chowchilla, supra, 202 Cal.App.4th at p. 392.) Here and in contrast to Chowchilla, the court issued a detailed written order applying the section 1021.5 criteria and performing a cost-benefit analysis.
"The necessity and financial burden requirement encompasses two issues: '"'whether private enforcement was necessary and whether the financial burden of private enforcement warrants subsidizing the successful party's attorneys.'" [Citation.]'" Collins v. City of Los Angeles (2012) 205 Cal.App.4th 140, 154 (Collins), quoting Whitley, supra, 50 Cal.4th at pp. 1214-1215.) "The financial burden of private enforcement concerns not only the costs of litigation, but also the financial benefits reasonably expected by the successful party. [Citation.] The appropriate inquiry is whether the financial burden of the plaintiff's legal victory outweighs the plaintiff's personal financial interest. [Citations.] An attorney fee award under section 1021.5 is proper unless the plaintiff's reasonably expected financial benefits exceed by a substantial margin the plaintiff's actual litigation costs. [Citation.] The focus in this regard is on the plaintiff's incentive to litigate absent a statutory attorney fee award. '[S]ection 1021.5 is intended to provide an incentive for private plaintiffs to bring public interest suits when their personal stake in the outcome is insufficient to warrant incurring the costs of litigation.' [Citations.]" (Collins, supra, at p. 154.)
Here, the court focused on the Association's incentive to litigate absent a statutory attorney fee award and concluded the Association's financial benefits did not exceed its litigation costs. To be sure, the Association did have some incentive to litigate, as at least three of its members were ready to develop homes in the City and would have been subjected to the Ordinance. But the court did not abuse its discretion by rejecting the City's claim that the case was "clearly based on the private financial interests of its members in not incurring additional costs of development" and concluding instead that it concerned voting rights.
This case is not, as the City contends, like California Licensed Foresters Assn. v. State Bd. of Forestry (California Licensed Foresters)30 Cal.App.4th 562, 570. In California Licensed Foresters, a foresters association claimed it had no personal motivation for bringing the action because it was separate from its members and had "no financial stake in the outcome" of the litigation. (Id. at p. 570.) The appellate court rejected this claim and determined the association "had a financial stake in pursuing this matter to the same extent as its members" because the association's "existence depends upon the economic vitality of its members and any benefit or burden derived by [the organization] from this lawsuit ultimately redounds to the membership." (Ibid.)The association's declarations established the regulation, if not set aside, would cause the association and its members to go out of business. (Id. at pp. 570-571.) Here, the Ordinance would not have such a major effect on the finances of the Association or its members.
With the Exception of $1,800, the Amount of the Fee Award
Was Not an Abuse of Discretion
"An attorney fee award should include compensation for all hours reasonably spent. [Citation.] 'Reasonably spent' means 'padding' in the form of inefficient or duplicative efforts is not subject to compensation.' [Citation.] A plaintiff is not automatically entitled to all hours claimed in the fee request. Rather, the plaintiff must prove the hours sought were reasonable and necessary. [Citation.]" (Rey v. Madera Unified School Dist. (2012) 203 Cal.App.4th 1223, 1243-1244 (Rey).)
The City claims the court erred by "summarily rejecting" its claims "regarding excessive, duplicative and unnecessary hours claimed by counsel for" the Association. The City initially contends the court "failed to apply the proper legal standard" when awarding fees: it argues the court did not determine whether the Association's fees were duplicative or padded. Later, however, the City claims the court "simply brushed aside the City's claims concerning the unreasonableness of the claimed hours. . . ." There is no merit to the City's claim that the court "failed to apply the proper legal standard" or failed to determine whether the Association's fees were reasonable. The court considered the City's arguments and rejected them: it determined the City's objections to the amount of fees were "largely generalized," "vague[,]" "unsubstantiated[,]" and ineffectual.
On appeal, the City reprises its argument that spending 134 hours preparing the memorandum of points and authorities in support of a motion for summary judgment was unreasonable because memorandum was only 15 pages and involved stipulated facts. The City seems to suggest the number of hours was unwarranted because the memorandum of points and authorities was relatively short. But the "length of the document is no gauge of the time needed to prepare it. The pithy pleadings that are most effective usually require more time to prepare than the endlessly discursive and digressive documents judges often receive." (Children's Hospital & Medical Center v. Bontá (2002) 97 Cal.App.4th 740, 783 (Bontá).)
The Association presented the court with time records listing the services performed and hours spent on various litigation tasks. (Rey, supra, 203 Cal.App.4th at pp. 1243-1244.) The services consisted of tasks typically involved in preparing a motion for summary judgment: researching legal issues and drafting the moving papers. As the court observed, the hours spent preparing the summary judgment motion and litigating the motion were not excessive: "[t]hat was where the case got decided. The law and motion matter was briefed at least twice. It was complex. Both sides fought vigorously on constitutional issues, statutory issues, bringing cases to the court's attention, and making good points. So there's no evidence that the time spent in the summary judg[] ment phase, which is where the case got decided, was somehow unreasonable, representing some type of excessive activity by lawyers on either side."
Counsel for the City "point[ed] out that 134 hours . . . was only for the opening brief, [not] the totality of the brief."
"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.' [Citations.]" (Serrano v. Priest (1977) 20 Cal.3d 25, 49 (Serrano III).)Here, the judge who awarded fees also decided the motion for summary judgment and was familiar with the quality of services performed by the Association's counsel and the amount of time counsel devoted to the case. The court "carefully looked at the claimed hours of case work" and determined the amount of fees requested was reasonable. The court did not rubber-stamp the fee request. Instead, it reduced the billing rate for all three of the Association's attorneys and did not award attorney fees for time the Association spent pursuing a "fruitless" ex parte motion. The court's conclusion regarding the hours spent on the motion for summary judgment was not "clearly wrong," particularly where the City did not suggest how many hours would have been reasonable or offer any evidence demonstrating the amount of time the Association spent on the summary judgment motion was unreasonable. We conclude there was a reasonable basis for the court to conclude the hours spent litigating the summary judgment motion were reasonably spent. (See, e.g., Federation of Fly Fishers v. Daley (N.D. Cal. 2002) 200 F.Supp.2d 1181, 1190-1191 [200 hours to prepare 71-page summary judgment motion based on voluminous administrative record was reasonable].)
The City also complains the court should not have awarded $1,800 in fees for the four hours the Association's general counsel spent driving to the court to file the complaint. According to the City, counsel should have used a cheaper method of filing the complaint such as a messenger or a filing service. In the absence of any explanation, we agree. There may be situations where counsel must personally file a complaint rather than sending a messenger or using a filing service, but this does not appear to be one of those situations. Here, the Association did not explain why it was reasonably necessary for its counsel to drive to Santa Rosa to file the complaint. As a result, we conclude the fees incurred for personally filing the complaint were not reasonably incurred and the court abused its discretion by awarding those fees.
Next, the City contends the time spent by the three attorneys for Association on "moot court" to prepare for the hearing on the motion for summary judgment was not necessary or compensable. The City does not identify the number of hours spent on this task. We need not discuss this contention because the City does not support it with any substantive legal argument supported by citations to the record and legal authorities. (Cal. Rules of Court, rules 8.204(a)(1)(B) & (C); Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 799-801.) We note, however, that courts have held time spent preparing for hearings or trial is compensable. (See Citizens Against Rent Control v. City of Berkeley (1986) 181 Cal.App.3d 213, 233-234 (Citizens)[preparing for argument before the United States Supreme Court]; United Steelworkers v. Phelps Dodge Corp. (9th Cir. 1990) 896 F.2d 403, 407 ["[w]e see no reason why" hours spent on moot court trial preparation "cannot be included in a fee award as long as the number of hours spent was reasonable"]; Democratic Party of Washington State v. Reed (9th Cir. 2004) 388 F.3d 1281, 1286 ["[a] moot court to prepare for argument in a case as important as this one is not unreasonable"].)
We reject the City's claim that an "unreasonable number of lawyers" worked on behalf of the Association because the City did not raise this argument in the trial court and has not supported it on appeal with any authority holding fees should not be awarded under section 1021.5 where multiple attorneys litigate a case. The court concluded the issues in the case were complex and the work of the Association's attorneys was outstanding. As we have stated, the experienced trial judge is in the best position to evaluate "the value of the legal services rendered in his or her court," and the City has not demonstrated the amount of fees awarded here was "manifestly excessive in the circumstances." (Bontá, supra, 97 Cal.App.4th at p. 782.)
The City also claims the court erred by awarding unspecified fees for the time the Association spent litigating the case as a reverse validation action. According to the City, two of the causes of action in the Association's complaint "were plead [sic] as reverse validation actions pursuant to . . . section 863" and the Association failed to prevail on "half . . . of its . . . valid causes of action." The City contends the court determined the case was not a reverse validation action and, as a result, it should have considered the Association's "degrees of success when ruling on [the] motion for attorney fees."
The court denied fees for an ex parte application the Association filed to comply with the publication requirements in the reverse validation statutes.
We disagree. In its opposition to the motion for fees, the City urged the court to "consider in determining the reasonableness of the fees that [the Association] initially drafted this action as a validation action, failed to comply with the validation procedures . . . unsuccessfully sought an ex parte application to cure the failure and then argued that the case was not subject to the requirements of a validation action. A significant amount of time was spen[t] arguing the validation issues as set forth in [the Association's] itemization." The City did not identify the amount of time the Association spent on the reverse validation aspect of the litigation, nor did it cite any authority to support its argument. In the trial court, the City did not demonstrate why, under Hensley v. Eckerhart (1983) 461 U.S. 424, 434, the court should reduce the fees awarded based on the Association's purported limited success in the litigation. (See EPIC, supra, 190 Cal.App.4th at p. 238 [discussing two-part inquiry used in "cases of limited success"].) The City's "conclusory" and "unsubstantiated" objections to the fee request "were simply inadequate to rebut the presumption [that the Association's] fees were reasonably and necessarily incurred" and the trial court did not abuse its discretion by declining to reduce the Association's fees by some unspecified number. (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 684.)
The City's last contention is the court erred by failing to consider the City's "extremely dire financial condition, and that the ultimate costs of the fee award will be paid by . . . taxpayers." The City claims the court was required to consider the City's financial condition before awarding fees pursuant to section 1021.5. We are not persuaded. As an initial matter, the City did not raise this argument in the trial court. In one sentence at the end of its opposition to the Association's motion for attorney fees, the City stated "the court may consider in determining an award of attorney fees that the ultimate cost of attorney fees will be paid by the taxpayer." The City did not urge the court to consider its financial condition, nor did the City offer any evidence suggesting it suffered financial hardship. The City may not raise the "financial condition" argument for the first time on appeal: it cannot claim the trial court erred by "failing to even consider a reduction in the amount of the fee award" based on its financial condition when it never urged the court to reduce the fee award on that basis. (Hansen v. Board of Registered Nursing (2012) 208 Cal.App.4th 664, 672 ["we generally do not consider on appeal a claim that could have been but was not raised in the trial court . . ."].)
The City also mentioned the taxpayer factor in one sentence at the hearing on the attorney fee motion.
We deny the City's request for judicial notice of various city council resolutions declaring a fiscal emergency in 2009 and 2010 because these documents were not before the trial court. (Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325, [reviewing court need not take judicial notice of matters not before the trial court].) We deny the request for judicial notice filed by amicus curiae American Civil Liberties Union of Northern California as irrelevant to our determination of this issue. (See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 544, fn. 4.)
Second — and assuming for the sake of argument the City preserved this issue for appeal — we would reject it. In Serrano III, supra, 20 Cal.3d at page 49, our high court held a trial court could consider — along with other factors — whether an award of attorney fees "against the state would ultimately fall upon the taxpayers" when awarding attorney fees pursuant to section 1021.5. The Serrano III court did not, however, require a trial court to reduce a section 1021.5 fee award because such an award would be paid by taxpayers, nor did it require the court to reduce a section 1021.5 fee award because the public entity is in "dire financial condition." More importantly, our high court did not hold "that a public entity should not fully compensate plaintiffs' attorneys when litigation has been necessary" to vindicate an important right. (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 400 [relying on defendant's public-entity status "to completely deny an enhancement multiplier . . . was an abuse of discretion"].) Serrano III simply held, without discussing the taxpayer issue, that the fee award in that case was not an abuse of discretion. (Serrano III, 20 Cal.3d at p. 49.)
Several courts have held that the payment of fees by a public entity does not, by itself, justify a reduction in the amount of fees awarded. (See Citizens, supra, 181 Cal.App.3d at p. 231; see also Schmid v. Lovette (1984) 154 Cal.App.3d 466, 475-476 [no "'special circumstance'" exempting appellant from attorney fees awarded under federal statute; "[t]he fact that the fee award must be paid from the limited budget of the district and that the financial burden will therefore fall upon the taxpayers also does not constitute a special circumstance rendering the fee unjust"].)
--------
The City relies on Garcia v. Santana (2009) 174 Cal.App.4th 464, 476-477 (Garcia)to support its argument that the court was obligated to consider the City's financial condition before awarding attorney fees pursuant to section 1021.5. In Garcia, defendants and prevailing parties in a landlord-tenant dispute moved for attorney fees under Civil Code section 1354, subdivision (c), which provides "'[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney's fees and costs.'" (Id. at p. 469.) The trial court declined to award attorney fees against a pro se plaintiff "in light of [the plaintiff's] financial condition" and the defendant landlords appealed. (Id. at p. 468.)
The Garcia court rejected the landlord's argument that the trial court was precluded from considering the tenant's financial condition when awarding fees and explained, "[i]n determining the amount of fees to be awarded to the prevailing party where the statute, as here, requires that the fee be reasonable, the trial court must therefore consider the other circumstances in the case in performing the lodestar analysis. Those other circumstances will include, as appropriate, the financial circumstances of the losing party and the impact of the award on that party." (Garcia, supra, 174 Cal.App.4th at pp. 476-477.) The Garcia court determined the trial court did not abuse its discretion by considering the plaintiff's financial condition but remanded the case for the court to consider "all of the other circumstances in setting the amount of fees." (Id. at pp. 470, 477.)
Garcia is distinguishable because it did not concern an award of attorney fees pursuant to section 1021.5. Garcia does not require trial courts to consider a public entity's financial condition before awarding attorney fees pursuant to section 1021.5. We conclude the City has not established the court abused its discretion by declining to reduce the section 1021.5 attorney fee award because "taxpayers would be on the hook for the large fee award."
The Denial of the City's Request for Discovery
Was Not an Abuse of Discretion
At the hearing on the attorney fee motion, the City asked the court for a continuance to allow the City "to conduct discovery to bring further evidence to the Court regarding the [Association's] financial incentive" in the litigation. The City did not specify what discovery it intended to conduct, nor what evidence it sought to discover. The Association opposed the request, arguing it was untimely and would "serve no purpose" because the Association had demonstrated it did not have a financial incentive to bring the lawsuit. In response, the City explained it had no reason to conduct discovery before the hearing because it did not think the Association would seek attorney fees. Later, however, the City claimed "the need for the discovery did not become evident until the Court's tentative ruling, which completely ignored the evidence in the record."
The court denied the request to continue the hearing to allow the City to conduct discovery. It acknowledged discovery was "a possibility in regard to a motion for fees," but determined "the timing" of the City's request was "not right" and that conducting discovery would increase the litigation costs. Finally, the court determined discovery would not alter the court's conclusion with respect to the Association's lack of financial incentive because the litigation involved "setting aside . . . an unconstitutional ordinance which impaired voting rights . . . and clearly there was no incentive for this association to take on a complex case of this magnitude to obtain that result."
The City contends the court abused its discretion by denying its request to "conduct limited discovery on the financial burden issue." It is well settled that "[m]anagement of discovery lies within the sound discretion of the trial court. Consequently, appellate review of discovery rulings is governed by the abuse of discretion standard. [Citation.] Where there is a basis for the trial court's ruling and the evidence supports it, a reviewing court will not substitute its opinion for that of the trial court. [Citation.] The trial court's determination will be set aside only when it has been established that there was no legal justification for the order granting or denying the discovery in question. [Citation.]" (Save Open Space Santa Monica Mountains v. Superior Court (2000) 84 Cal.App.4th 235, 245-246 (Save Open Space), quoting Johnson v. Superior Court (2000) 80 Cal.App.4th 1050, 1060-1061 (Johnson).)
According to the City, "under Save Open Space . . . the [t]rial [c]ourt had limited discretion to refuse the City's requested discovery." In Save Open Space, a nonprofit organization obtained a writ of mandate requiring real parties in interest to vacate a decision approving time extensions to maps for two land divisions on undeveloped land in the Santa Monica Mountains. (Save Open Space, supra, 84 Cal.App.4th at p. 240.) The nonprofit organization moved for attorney fees pursuant to section 1021.5. Then, "[s]eeking evidence to oppose the motion for attorney fees," (id. at p. 241) real parties in interest sought discovery on "whether the Stokes Canyon litigation is essentially a suit prosecuted by neighboring property owners" and "whether the purpose of the Stokes Canyon litigation was to advance those property owners' economic or noneconomic interests." (Id. at p. 246.) Real parties in interest argued the information was directly relevant to "whether 'the necessity and financial burden of private enforcement . . . are such as to make the award appropriate.'" The nonprofit organization moved for a protective order and for sanctions. (Id. at p. 246.) The trial court denied the motion for a protective order and for sanctions and denied the nonprofit's motion to quash various other deposition notices and subpoenas. (Id. at p. 245.)
On petition for a writ of mandate, the Save Open Space court considered whether "the trial court abused its discretion in allowing real parties to discover information relevant to the issue of whether [the nonprofit organization], a public interest organization, litigated the Stokes Canyon litigation for and at the direction of a specific group of individuals — individuals real parties claim have a substantial private interest in the outcome of the litigation." (Save Open Space, supra, 84 Cal.App.4th at p. 245.) The court concluded, "where, as here, the party opposing a section 1021.5 attorney fee award has produced evidence suggesting that a public interest organization is litigating an action primarily for the benefit of nonlitigants, the court should, in order to resolve the issue, allow the opposing party to conduct limited discovery. What kinds of discovery will be permissible is to be decided on a case-by-case basis. We caution, however, that before a trial court orders such discovery it must first determine whether the discovery ordered impermissibly infringes upon important associational privacy rights of third parties." (Id. at p. 250.)
Save Open Space does not assist the City because it does not stand for the proposition that discovery is mandated whenever a party opposing a section 1021.5 fee request claims the prevailing party has a strong financial interest in the litigation. In Save Open Space, the real parties in interest sought discovery — in the form of depositions of persons most knowledgeable and requests for production — before opposing the attorney fee motion. Here, the City opposed the attorney fee motion but waited until the hearing on the motion almost two months later to request "discovery" without specifying the type of discovery and what it would prove. The City's varying reasons for not seeking discovery before opposing the motion — or even before the hearing on the motion — were unconvincing. The City admitted counsel for the Association routinely files these types of motions; as a result, the City should have anticipated the Association would file a motion for attorney fees in this case. Moreover, it was simply not prudent for the City to wait to see the court's tentative ruling before requesting discovery.
Save Open Space did not require the court to grant the City's untimely request for discovery. In that case, the real parties in interest provided evidence suggesting the nonprofit organization was litigating the case primarily for the benefit of nonlitigant property owners in the area: they pointed to evidence of one property owner's role in coordinating the action, the billing statements [the nonprofit organization] had provided, and the references to "'a fee agreement with the Stokes Canyon residents to finance at least part of the lawsuit,' made by counsel for [the nonprofit organization]." (Save Open Space, supra, 84 Cal.App.4th at p. 241.) Here, the City pointed to no such evidence. It merely referred to evidence the Association produced to in connection with its motion for summary judgment to establish standing, specifically that some of its members intended to seek residential permits and were concerned about the Ordinance. In contrast to Save Open Space, the City did not provide any evidence suggesting a nonlitigant was financing or coordinating the litigation.
The court denied the City's request for discovery because it was untimely and would increase the costs associated with the litigation. The court also declined to permit the City to conduct discovery because the City did not demonstrate what information it sought to discover and how that information would be relevant. Substantial evidence supports the court's rationale. The City has not demonstrated there was "no legal justification" for the court's denial of the City's belated request to conduct discovery of the Association's financial condition. (Johnson, supra, 80 Cal.App.4th at p. 1061.)
DISPOSITION
The June 20, 2011 order granting the Association's motion for attorney fees and awarding $243,417.50 in fees is modified to reduce the award by $1,800. The order is affirmed in all other respects. Each party shall bear its own costs on appeal.
_________________
Jones, P.J.
We concur: _________________
Simons, J.
_________________
Needham, J.