$425,000 Fee Request Plus 1.5 Multiplier Nixed on Appeal.
In Holquin v. Dish Network LLC, Case No. D059983 (4th Dist., Div. 1 Sept. 22, 2014) (published), plaintiffs won a combined economic/noneconomic verdict against DISH Network and others in a satellite T.V. dispute. However, the rub was an attorney’s fees clause in the Residential Customer Agreement, to which the lower court was attuned throughout the proceedings. Plaintiffs, on mixed contract/tort claims, won a jury verdict of $109,000. They then moved for attorney’s fees based on Civil Code section 1717 for $425,000 plus a 1.5 positive enhancement. The lower court awarded plaintiffs fees of $180,648 (rejecting any positive multiplier), prompting an appeal on the merits decision by DISH (a merits appeal which was unsuccessful) and Plaintiffs’ appeal claiming the fee award was too low (no different result, as we explain).
The appellate court had no problem determining Plaintiffs were entitled to fees under Civil Code section 1717 or determining Plaintiff was the prevailing party. The amount of fees being claimed was the real issue.
So, was the $180,648 fee award an abuse of discretion? Hardly. The first reduction involved a prior attorney’s fees even though he had to step out of the case—the reductions were just fine. The next set of reductions involved apportionment between contractual and tort claims. The lower court basically adopted this formula based on the peculiar circumstances of the case: full fees for 20% of the work on liability issues (which spanned everything) and 80% of the damages apportioned to reduce for work on noneconomic damages relating to tort claims (which tried to reach a reasonable estimation of the contractual fee work). The reviewing court sustained this formula, especially reminding all fee claimants that contingency fee agreements will not be ignored in this context–$180,648 was a lot more than the possible contingency awards of $16,200 or $38,200, so the award was reasonable and no multiplier was justified.
There is a good case to show how California state reviewing courts will use a contingency agreement to “cross-check” the reasonableness of a fee award. (See Vella v. Hudgins, 151 Cal.App.3d 515, 520 (1984).)