California Landmark Cases on Attorney's Fees Award
The California Supreme Court has provided ample guidance to trial courts for determining awards of attorney fees.
For example, in Ketchum v. Moses (2001) 24 Cal.4th 1122, the court explained its earlier decision in Serrano v. Priest (1977) 20 Cal.3d 25 (Serrano III) as follows at pages 1131-1132.
"Under Serrano III, a court assessing attorney fees begins with a touchstone or lodestar figure, based on the 'careful compilation of the time spent and reasonable hourly compensation of each attorney ... involved in the presentation of the case.' (Serrano III, supra, 20 Cal.3d at p. 48.)
The Court expressly approved the use of prevailing hourly rates as a basis for the lodestar, noting that anchoring the calculation of attorney fees to the lodestar adjustment method '"is the only way of approaching the problem that can claim objectivity, a claim which is obviously vital to the prestige of the bar and the courts."' (Id. at p. 48, fn. 23.)
In referring to 'reasonable' compensation, we indicated that trial courts must carefully review attorney documentation of hours expended; 'padding' in the form of inefficient or duplicative efforts is not subject to compensation. (See id. at p. 48.)
"Under Serrano III, the lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including:
(1) the novelty and difficulty of the questions involved;
(2) the skill displayed in presenting them;
(3) the extent to which the nature of the litigation precluded other employment by the attorneys;
(4) the contingent nature of the fee award. (Serrano III, supra, 20 Cal.3d at p. 49.)
The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services. 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."' (Ibid.)"
Ketchum proceeded to review how the Supreme Court, after Serrano III, has repeatedly emphasized the importance of using the lodestar calculation in its decisions in Serrano IV, supra, 32 Cal.3d 621, 624, 639, Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322 193 Cal. Rptr. 900, 667 P.2d 704, Maria P., supra, 43 Cal.3d 1281, 1294-1295, and PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 95 Cal. Rptr. 2d 198, 997 P.2d 511 (PLCM). (Ketchum, supra, 24 Cal.4th at pp. 1133-1134.)
PLCM, supra, 22 Cal.4th 1084, concluded, among other things, as to fees awarded under Civil Code section 1717 pursuant to a contractual agreement, "that the lodestar method, as applied to the calculation of attorney fees for in-house counsel is presumably reasonable, although in exceptional circumstances, the trial court is not precluded from using other methodologies." (22 Cal.4th at p. 1097.)