California Legislature—2013–14 Regular Session

Assembly Bill No. 1125

Introduced by Assembly Member Wagner

February 22, 2013

An act to add Section 1032.5 to the Code of Civil Procedure, relating to attorney’s fees.

LEGISLATIVE COUNSEL’S DIGEST

AB 1125, as introduced, Wagner. Attorney’s fees.

Under existing law, parties to actions or proceedings are entitled to their costs, as specified. Except to the extent attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties. Existing law provides that a prevailing party is entitled, as a matter of right, to recover costs in any action or proceeding, including attorney’s fees, except as otherwise expressly provided by statute.

This bill would require the court, in setting the amount of an award of attorney’s fees to a prevailing party, to determine a lodestar, as defined, and an adjustment pursuant to specified procedures.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1032.5 is added to the Code of Civil
Procedure, to read:

1032.5.  

(a) It is the intent of the Legislature to provide a
uniform process and market-based standards for court awards of
attorney’s fees when a party has a legal right as a prevailing party
to recover attorney’s fees from an opposing party. To the extent
this section is inconsistent with any other law or case law precedent
that applies to awards of attorney’s fees to a prevailing party, the
process and standards for both trial and appellate courts set forth
in this section shall control. It is also the intent of the Legislature
that this section shall not apply if the basis for an award of
attorney’s fees is any ground other than entitlement as a prevailing
party to recover attorney’s fees from an opposing party. The
grounds for court awards of attorney’s fees on grounds other than
entitlement as a prevailing party include, but are not limited to,
Section 1021.5 of this code and Sections 274, 916, 1101, 2030,
2031, 2107, 2255, 3557, 3652, 4002, 4063, 4303, 4403, 4919,
4927, 17512, and 17803 of the Family Code.

(b) (1) This section applies to the award of attorney’s fees by
a court under the following circumstances:

(A) If the prevailing party is entitled to attorney’s fees as a
matter of contract.

(B) If the prevailing party is entitled to attorney’s fees pursuant
to statute.

(C) If the court, pursuant to statute, has discretion to award
attorney’s fees to the prevailing party.

(2) This section does not apply:

(A) To sanctions or penalties that may be measured in whole
or in part by attorney’s fees.

(B) If the ground for an award of attorney’s fees is different
from, or in addition to, prevailing party status.

(C) To attorney’s fees awarded as damages.

(c) The following definitions shall apply for purposes of this
section:

(1) “Adjustment” means an amount determined by the court by
which the lodestar is increased or reduced.

(2) “Appropriate market” means the competitive legal services
market in which reasonable clients with comparable legal services
needs would seek counsel for matters similar to the matter before
the court. If a reasonable client would engage more than one
attorney, there may be more than one appropriate market. A market
may be, but is not necessarily, defined by geography.

(3) “Legal services” includes services of paralegals and other
support personnel to the extent a reasonable client would pay for
those services in the appropriate market.

(4) “Lodestar” is an amount determined by the court, as provided
in this section, to be within the range of fees that a reasonable
client would pay for the legal services in the appropriate market.
There is a rebuttable presumption going to the burden of proof that
the appropriate market is the county in which the court is situated.

(5) “Timekeeper” includes any attorney or support personnel
whose services are billed at an hourly rate.

(d) To set the amount of an award of attorney’s fees, the court
shall determine a lodestar and an adjustment. An adjustment may
be zero, and there is a rebuttable presumption going to the burden
of proof that the adjustment should be zero. If no party requests
an adjustment, the adjustment shall be zero. If the adjustment is
zero, the award shall be the lodestar.

(e) (1) The court shall determine the lodestar by finding all of
the following:

(A) The actual hourly rate charged or otherwise recorded at the
time the services were performed by each timekeeper who
performed legal services for which the award is requested.

(B) Whether the actual hourly rate for each timekeeper is within
the range of rates reasonably charged at the time the services were
performed for comparable work by timekeepers in the appropriate
market.

(C) The actual amount of time correctly recorded by each
timekeeper for the legal services for which the award is requested.

(D) Whether the actual amount of time is reasonable for the
legal services performed.

(E) The amount, if any, the prevailing party has agreed in writing
to pay for the legal services. If that agreed amount is equal to, or
less than, the amount the court determines to be reasonable under
this subdivision, the court shall determine that the agreed amount
is the lodestar.

(2) In its discretion in the particular case, the court may appoint
a referee pursuant to subdivision (a) of Section 639 for
determination of the lodestar. On the timely request of any party
after that appointment, the court shall make all findings de novo.

(3) The amount of the lodestar is a factual finding. If the lodestar
is reviewed on appeal, review shall be under the substantial
evidence standard. There is no presumption that a judge of the
superior court has any inherent or personal knowledge of the
reasonableness of the lodestar or its elements.

(f) (1) If any party requests an adjustment to the lodestar, the
court may adjust the lodestar upward or downward.

(2) To determine an adjustment, if any, the court shall consider
all of the following:

(A) The contingent risk, if any, of not recovering a fee incurred
by any of the prevailing party’s attorneys.

(B) Any agreed or inherent delay in recovering a fee incurred
by any of the prevailing party’s attorneys.

(C) Any other circumstances that make it just and reasonable
to increase or reduce the lodestar.

(3) An adjustment is a matter of the superior court’s discretion
and, if reviewed on appeal, shall be subject to an abuse of discretion
standard. The Court of Appeal shall base its review on the record
and the superior court’s memorandum decision, if one is requested
under subdivision (i), and shall not presume that a judge of the
superior court has any inherent or personal knowledge of the
reasonableness of attorney’s fees in the appropriate market.

(g) If requested, the court shall award interest at the prejudgment
rate on that portion of the lodestar actually paid by the prevailing
party, from the date of each payment until the date of entry of the
award. If awarded under this subdivision, interest shall be included
in the lodestar for all further purposes under this section. Interest
shall not be awarded on the difference between the lodestar and
an upwardly adjusted award, but the court may consider the time
value of money in setting the adjustment.

(h) The applicant shall present admissible evidence sufficient
for the court to make the findings required by subdivision (e) and
to support any requested upward adjustment. A party opposing an
award of attorney’s fees, other than as a matter of law, shall include
admissible evidence to support each ground of opposition. Any
direct or indirect interest of an attorney in a fee award shall not be
a ground for excluding that attorney’s opinion evidence, if the
evidence would otherwise be admissible, but may be taken into
account in the weight given to that evidence.

(i) (1) If the prevailing party requests a total award exceeding
twenty-five thousand dollars ($25,000), any party may request a
memorandum decision at any time before the court declares the
attorney’s fee matter submitted. If a party requests a memorandum
decision, the court shall provide a statement sufficient for an
appellate court to understand all of the following:

(A) The basis for the court’s findings under subdivision (e).

(B) The factors the court considered in making any decision
concerning an adjustment.

(C) How the court applied the factors it considered in making
its decision concerning an adjustment.

(2) If a party requests a memorandum decision, the court also
shall make findings either on the record or in the decision on each
evidentiary objection made by each party. Failure to decide an
evidentiary objection shall not be a ground to reverse or remand
the award, but an appellate court shall consider each unresolved
objection to be resolved as follows:

(A) In favor of receiving evidence that supports any finding.

(B) To exclude evidence on a point as to which the court made
no finding.

(C) To exclude evidence contrary to any finding.