Smith v. Dan Gamel, Inc.

Filed 8/24/07 Smith v. Dan Gamel, Inc. CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Stanislaus County. Marie Silveira, Judge.

Sellar, Hazard, Manning, Ficenec & Lai, William E. Manning and James J. Ficenec, for Defendants and Appellants.

William M. Krieg & Associates, William M. Krieg and Eric M. Kapigian, for Plaintiffs and Respondents.

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INTRODUCTION

This appeal originally concerned the issue of whether the fee shifting provision of the Song-Beverly Consumer Warranty Act (Song-Beverly Act), California Civil Code section 179, subdivision (d),^[1]permits the use of a multiplier under the lodestar adjustment method for determining attorneys fees. While this appeal was pending, this court resolved that issue in the affirmative. (See Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, review den. Feb. 7, 2007, S148905 (Robertson).) Thus, the issue on appeal is whether the appellants are precluded from relitigating this issue under the doctrine of collateral estoppel. For the following reasons, we conclude that one of the appellants is not precluded from relitigating this issue by Robertson. However, Robertson is controlling, and appellants have not challenged the reasonableness of the fee award outside of the issue of the use of a multiplier. Thus, we affirm the trial courts order granting the attorneys fees.

PROCEDURAL AND FACTUAL HISTORY

This case involves respondents, Thomas and Sharon Smiths (the Smiths), purchase and subsequent problems with their new 1996 Fleetwood brand motor home that they purchased in August 1997. The motor home was manufactured and warranted by Fleetwood Enterprises, Inc., the parent corporation, and its wholly owned subsidiary, Fleetwood Motor Homes of California, Inc. (jointly Fleetwood), and sold by Fleetwoods authorized dealer, Dan Gamel, Inc. (Gamel).

On June 9, 2000, respondents filed a complaint against appellants Fleetwood and Gamel for breach of express and implied warranties under the Song-Beverly Act. At the subsequent trial, the jury returned a unanimous verdict in favor of the Smiths on all counts, awarding the Smiths full restitution and imposing the maximum civil penalty against Fleetwood.

Following trial, on July 20, 2004, plaintiffs counsel, William M. Krieg, filed a motion seeking attorneys fees and costs under section 1794, subdivision (d), including a 1.5 multiplier. In support of the motion, Mr. Krieg declared that: My Attorneys Fee Agreement with Plaintiffs herein is based on an hourly billing rate, contingent on prevailing in the case. My billing rate for this case as the senior attorney was $210 per hour through October 2001, and $250 per hour from October 2001 to the present. The billing rate of my associate attorney, Kimberly L. Mayhew, who assisted on this case, was $170 per hour through October 2001, and $200 per hour from October 2001 to the present. Charges are $90 for law clerk and paralegal time. No secretarial, typist or other staff time is billed. Under our Fee Agreement, my client is obligated to pay all attorneys fees at the agreed hourly rate, plus actual costs. Plaintiffs paid an initial retainer of $700. The actual fee arrangement was never submitted.

In opposition, defendants asserted, in relevant part, that [n]o multiplier is warranted insofar as counsels default hourly rate already takes into account a contingency risk factor.

Because appellants had already filed a notice of appeal from the underlying judgment, the trial court believed that it might not have jurisdiction to rule on the motion for fees and costs. However, at the requests of plaintiffs counsel, the trial court tentatively granted the fees, but held off on issuing an order pending a final determination of the appeal of the underlying judgment. This court affirmed the underlying judgment in an unpublished opinion, Smith v. Dan Gamel, Inc., F046445 (December 19, 2005), and remanded the case.

Upon remand, the Smiths filed motions requesting fees pursuant to section 1794, subdivision (d). One sought an order approving the fees requested in the first motion, excluding certain fees, with a 1.5 multiplier. The other sought attorneys fees and costs associated with the appeal, with a 1.25 multiplier.

In opposition, defendants filed a memorandum that argued that Civil Code section 1794(d), does not provide for a fee enhancement of any nature. In the same brief, defendants explained their legal argument: [D]efendants oppose the use of any form or level of multiplier as to any actually incurred fees because such an enhancement is contrary to the Legislatures express language contained in Civil Code section 1794(d) and the limited case law applicable to Song-Beverly fee awards. In further support, defendants relied upon Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807 (Levy), and Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99 (Nightingale).

The trial court issued two orders: one granting the Smiths request for fees and costs for trial; the other, granting their fees and costs on appeal.

On August 15, 2006, appellants filed a Notice of Appeal which provided: Defendants [Fleetwood and Gamel] appeal from the Order Granting Plaintiffs Motion for Attorneys Fees and Costs entered on July 7, 2006. A true and correct copy of the Order is attached hereto as Exhibit A. Attached as Exhibit A was the trial courts order granting the fees and costs related to the trial work.

In their opening brief on appeal, appellants contended that the trial court abused its discretion when it utilized a multiplier because the Song-Beverly Act did not permit the use of multipliers. Appellants did not challenge the trial courts factual findings or contend that the trial court abused its discretion in any other manner.

While the appeal was pending, on November 7, 2006, this court issued its opinion in Robertson, in which we held that the Song-Beverly Act did not preclude the use of the lodestar adjustment method or the use of a multiplier. (Robertson, supra, 144 Cal.App.4th at pp. 817-822) Robertson distinguished Levy on the basis that Levy was a case that predated Ketchum v. Moses (2001) 24 Cal.4th 1122, in which our Supreme Court held that the lodestar adjustment method is the prevailing rule for statutory attorney fee awards to be applied in the absence of clear legislative intent to the contrary. (Robertson, supra, 144 Cal.App.4th at pp. 818, 822.) Nightingale and Levy were also distinguished on the ground that both cases did not involve contingent fee arrangements. (Robertson, supra, 144 Cal.App.4th at pp. 818, 822.)

In respondents brief, the Smiths argue that appellants were precluded under the doctrine of collateral estoppel from relitigating the issue of the use of a multiplier for fee awards under section 1794, subdivision (d).^[2]

In their reply brief, appellants argue that collateral estoppel does not apply in this case because [t]he facts in this case are not the same as the facts in Robertson. Specifically, in this case, Respondents counsel had an express agreement with Respondents as to the amount of fees to which Respondents counsel would be entitled in the event that Respondents prevailed.

DISCUSSION

I.

Scope of Appeal

As an initial matter, we must determine whether appellants are appealing the use of a multiplier for the fee awards for trial work and appellate work, or just the use of the fee multiplier for fees for trial work. The Smiths argue that appellants are only appealing the use of a multiplier for fees incurred for trial work. We agree.

An appellate court has no jurisdiction to consider an order of the trial court that was not appealed. (Sole Energy Co. v. Petrominerals Corp. (2005) 128 Cal.App.4th 212, 239.) [W]here several judgments and/or orders occurring close in time are separately appealable (e.g., judgment and order awarding attorney fees), each appealable judgment and order must be expressly specified in either a single notice of appeal or multiple notices of appeal in order to be reviewable on appeal. (DeZerega v. Meggs (2000) 83 Cal.App.4th 28, 43.)

Here, appellants appeal from the Order Granting Plaintiffs Motion for Attorneys Fees and Costs entered on July 7, 2006. They attached only one order to the notice of appeal. That order granted the fees and costs relating to the trial work. Appellants made no mention of any other order from which they were appealing, and did not refer to or incorporate the trial courts second order awarding fees on appeal as part of the record.

Thus, this court does not have jurisdiction to review the trial courts award of fees and costs on appeal. We turn to the order that is the basis for this appeal: the trial courts July 7, 2006, order awarding fees and costs for trial work.

II.

Attorney Fees under Section 1794, Subdivision (d)

With respect to attorneys fees, section 1794, subdivision (d) provides in relevant part: If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorneys fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.

The Smiths prevailed on the Song-Beverly claims, and thus are entitled to recover their attorneys fess under section 1794, subdivision (d). Appellants, however, contend that the trial court abused its discretion in applying a 1.5 multiplier when determining the fee award using the lodestar method, in violation of the Song-Beverly Act. Generally, we review such claims under an abuse of discretion standard. (See PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095-1096.)

In Robertson, supra, however, this court conclude[d] that the use of a multiplier is authorized in awarding attorney fees under the Song-Beverly Act in cases involving contingent fee arrangement. (Robertson, supra, 144 Cal.App.4th at p. 822). As in Robertson, [w]e therefore reject Fleetwoods contention that the court abused its discretion by applying a lodestar fee multiplier. (Id. at p. 821.)

III.

Collateral Estoppel

In light of Robertson, supra, the Smiths contend that appellants are barred under the doctrine of collateral estoppel from relitigating the issue of whether a fee multiplier is permissible under the Song-Beverly Act. We disagree that all appellants are so barred.

In general, collateral estoppel precludes a party from relitigating issues litigated and decided in a prior proceeding. [Citations.] Traditionally, we have applied the doctrine only if several threshold requirements are fulfilled. First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. [Citation.] (Gikas v. Zolin (1993) 6 Cal.4th 841, 848-849 (Gikas).) Furthermore, [e]ven if these threshold requirements are satisfied, the doctrine will not be applied if such application would not serve its underlying fundamental principles. [Citation.] (Id. at p. 849.)

Here, respondents have not shown that the fifth element that the party in the present case be the same or in privity with the party in the former proceeding applies to appellant Gamel. There is no contention that Gamel is a corporate sibling of the appellants in Robertson. Thus, we must proceed to the merits of the appeal with respect to appellant Gamels claims. We need not reach Fleetwoods argument that collateral estoppel does not apply to it because the operative facts in the present case are different from the operative facts in Robertson, since our conclusion on Gamels claims apply equally to Fleetwoods claims.

IV.

Robertson Controls This Present Case

Gamel and Fleetwood contend that the Song-Beverly Act does not permit a trial court to utilize a fee multiplier. We held otherwise in Robertson, and nothing in the record of this case persuades us otherwise. (Robertson, supra, 144 Cal.App.4th 785.)

Appellants apparently contend that even if Robertson is correct in the abstract, Robertson is inapplicable in cases where an express agreement exists between plaintiffs and their attorney setting the formula for attorney compensation. We disagree for two reasons.

First, we believe that appellants have waived this argument as it was raised for the first time in their reply brief. (Cf. Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 761, fn.4 [concluding that appellants waived argument that insurance exclusion was ambiguous as applied where the argument was first raised in the reply brief].) Appellants have never argued in the trial court, and did not argue in its opening brief, that the use of a multiplier was invalid under the Song-Beverly Act where there is an express agreement setting forth the formula for attorney compensation. Rather, appellants have consistently argued that the Song-Beverly Act does not permit the use of fee multipliers in any and all cases because plaintiffs do not incur attorneys fees that are inflated by a multiplier.

Second, we disagree that Nightingale, supra, the sole case relied upon by appellants on this point, is controlling because, in that case, there was an express noncontingent fee agreement. However, it is uncontested that the fee agreement in this case is a contingent fee agreement. Nightingale specifically noted that its holding does not apply to contingent fee agreements. (Nightingale, supra, 31 Cal.App.4th at p. 105, fn. 6.)

As appellants challenge only the use of a multiplier in general, and we reaffirm our holding in Robertson that a trial court may use a multiplier subject to review for abuse of discretion, we affirm the award of attorneys fees.

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs on appeal.

_____________________

HILL, J.

WE CONCUR:

_____________________

WISEMAN, Acting P.J.

_____________________

CORNELL, J.

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^[1]All further section citations are to the Civil Code, unless otherwise indicated.

^[2] Respondents also filed a request for judicial notice of certain documents related to the Robertson case. After reviewing appellants response to the request for judicial notice, we granted the motion on March 21, 2007.