Lyons v. Chinese Hosp. Ass'n

• Decision Date: 06 February 2006
• Docket Number: No. A107461.,A107461.
• Citation: 39 Cal.Rptr.3d 550,136 Cal.App.4th 1331
• Court: California Court of Appeals Court of Appeals
• Parties: Daniel LYONS, Plaintiff and Appellant, v. CHINESE HOSPITAL ASSOCIATION et al., Defendants and Respondents.

39 Cal.Rptr.3d 550

136 Cal.App.4th 1331

Daniel LYONS, Plaintiff and Appellant, v. CHINESE HOSPITAL ASSOCIATION et al., Defendants and Respondents.

No. A107461.

Court of Appeal, First District, Division 2.

February 6, 2006.

Richard Joseph Nelson, Sideman and Bancroft LLP, Jeffrey Charles Hallam, Sideman & Bancroft, San Francisco, CA, for Plaintiff and Appellant.

Sameh Nader Dawood, Davis Wright Tremaine, San Francisco, CA, for Defendants and Respondents.

KLINE, P.J.

Introduction

Plaintiff Daniel Lyons (Lyons) appeals from a postjudgment order of the San Francisco County Superior Court denying his motion for attorney fees pursuant to Code of Civil Procedure section 1021.5¹ following entry of a stipulated judgment and permanent injunction in Lyons's lawsuit against defendant Chinese Hospital Association (CHA). By this judgment, CHA was "permanently enjoined" from violating specific asbestos laws concerning notification, training and surveying at CHA-owned buildings, including the Chinese Hospital, a medical office building and six other specified buildings. The injunction also required CHA to retain and pay North Tower Environmental, a certified asbestos consulting firm, to monitor CHA's compliance with the asbestos laws, reporting annually to the court regarding CHA's compliance for a period of three years.

The trial court denied the fee request on the grounds that Lyons was not a successful party under the statute; that Lyons failed to demonstrate that a fee award was appropriate because of the necessity and financial burden of private enforcement; that the district attorney instituted a parallel prosecution of defendant, also obtaining a stipulated injunction; and that Lyons failed to establish that the "interests of justice" required defendant to pay his fees.

Lyons contends that the trial court abused its discretion in refusing to award him fees and costs. We shall conclude the trial court abused its discretion in denying attorney fees to Lyons.²

Facts³ and Procedural Background

A. Underlying Action

In late 1998, CHA and Daniel Lyons doing business as Daniel Lyons Builders entered a contract under which the latter agreed to remodel certain portions of the first floor of the Chinese Hospital building. The remodeling required some demolition work, including removal of floor tile. At a pre-bid meeting on December 14, 1998, and again at a pre-construction meeting on February 24, 1999, a question was asked about the presence of asbestos-containing material in the construction area. CHA Chief Engineer Sam English and a representative of the project architect, Gordon H. Chong and Partners, informed Lyons that an asbestos survey of the hospital had been performed and that the construction area was free of asbestos-containing material. After seven months of demolition and construction, Lyons saw material that he suspected contained asbestos and asked English to show him the asbestos survey. When English did not produce the survey, Lyons took samples of the materials and had them tested himself. The results showed that asbestos was present throughout the construction site, in the vinyl floor tile, floor mastic, insulation wrap on HVAC boxes, and the core of doors. Appellant Daniel Lyons and his brother Morgan (plaintiffs) had personally removed floor tile manually by chipping and prying it with large demolition bars and scraper blades. The arbitrator found that demolition of the floor tile exposed the pair to airborne asbestos. Lyons produced evidence that the release of asbestos occurred directly adjacent to the hospital lobby, in which CHA employees worked and members of the general public congregated, and through which patients, employees and members of the public walked on a daily basis. However there was no finding that employees, patients or the public were actually exposed to asbestos. Upon receiving the test results, Lyons immediately shut down the construction, refusing to return until CHA conducted a thorough and complete asbestos survey of the construction area. Lyons also demanded that CHA notify state authorities about the disturbance of asbestos in the hospital, citing to various regulations CHA had violated in misleading him about having a survey.

It is undisputed that Lyons spoke with "two or three . . . asbestos lawyers" to try to find a lawyer to pursue the hospital. They each refused to take the case because plaintiffs would not know for at least 20 years whether they would become sick as a result of the asbestos exposure. The lawyers told Lyons "the case was just too complex to bring, particularly with uncertain damages." In late spring of 2000, attorney Richard Nelson, who had recently left the U.S. Attorney's Office, agreed to represent Lyons. Nelson knew that the costs of litigation would be high, and that there was only a "slight chance of a significant monetary recovery" by Lyons. Nelson convinced his law firm to take the case on a contingency fee, with the main focus of the representation being an effort to encourage the government to prosecute CHA. Nelson enlisted Jeff Hallam as cocounsel.

During the spring and summer of 2000, counsel and Lyons contacted federal and state authorities. The case was initially presented to federal prosecutors and the Environmental Protection Agency (EPA). The EPA ultimately referred Lyons to the San Francisco District Attorney's Office. In August 2000, counsel and Lyons met with Assistant District Attorney Ross Mirkarimi. However, when Mirkarimi did not respond to follow-up messages and in light of the statute of limitations on some of the personal injury causes of action, plaintiffs filed the civil action herein against CHA, English and others (collectively "defendants") on November 1, 2000.⁴

The complaint contained five causes of action seeking tort damages for exposure to asbestos,⁵ one cause of action seeking declaratory relief for indemnity against future liability the plaintiffs might incur related to demolition and removal of asbestos-containing material from the hospital, and one cause of action for unfair business practices (Bus. & Prof.Code, § 17200) seeking injunctive relief to require CHA to comply with specified asbestos laws and regulations and for attorney fees pursuant to section 1021.5.

During discovery, it was disclosed that CHA was not in compliance with many asbestos regulations, including requirements regarding notice to employees and employee asbestos awareness training. On March 29, 2001, the hospital's director of human resources provided a declaration that no asbestos notice had ever been given to its employees, despite the October 2000 receipt by hospital department heads of an e-mail from English concerning the presence of asbestos-containing materials in the hospital. Nor had the hospital provided any asbestos awareness training materials to its employees.

On April 9, 2001, Lyons filed a motion for a preliminary injunction before the Honorable A. James Robertson II, to require CHA to provide the required notice and training. On April 12, 2001, CHA filed opposition, arguing Lyons lacked standing, that he had unclean hands and that the motion was moot because CHA was scheduling asbestos awareness training for hospital engineers and housekeepers to be completed within 60 days and because it planned to send within the week a written notice to each employee informing the employee of the presence of asbestos-containing materials in the hospital and medical office building.⁶

On April 23, 2001, the day before the hearing on the preliminary injunction, Judge Robertson issued a tentative ruling, continuing the hearing to May 15, 2001, to permit CHA to comply with its asbestos notification and training obligations and stating that the court would issue an order granting the motion if CHA did not provide the required notification and training by May 15. Thereafter, CHA filed declarations stating that employees and tenants of the hospital and medical office building were notified about the presence of asbestos in those buildings on April 17 and 19, 2001, and that asbestos awareness training had been provided to custodial and engineering staff on May 1-3, 2001. Based upon these declarations, the court denied the preliminary injunction motion as moot.

However, CHA had distributed the written notices to its employees only in English. Depositions of Chow Ming Cheung and Kwok Sun Wong, two CHA housekeepers who cleaned asbestos-containing materials such as floor tiles as part of their duties, disclosed that neither read English. Both required a Cantonese interpreter for their depositions. Cheung testified that he did not recognize the notice and Wong testified that he received only an English version that required translation by his son. On August 23, 2001, Lyons again moved for a temporary restraining order and an order to show cause as to why a preliminary injunction should not issue requiring CHA to provide the asbestos notice in a language readily understandable to all CHA employees, as required by law. CHA opposed the motion, arguing that the law did not require notice to foreign-speaking employees in their native languages and that it had provided its hospital supervisors with Cantonese translations of the notice to distribute to those employees they believed did not speak English well enough to understand. After Judge Robertson issued an order to show cause and set the preliminary injunction for hearing on September 10, 2001, CHA delivered a copy of the asbestos notice translated into Cantonese to all of its employees. Judge Robertson denied the motion for preliminary injunction without prejudice to bring it again should plaintiffs find other employees requiring foreign language notice in a language other than English or Cantonese.

B. District Attorney Becomes Involved

In September 2001, after CHA served a subpoena on the district attorney in connection with plaintiffs' action, Lyons's counsel contacted June Cravett,...