Mandel v. Lackner

• Decision Date: 04 May 1979
• Citation: 92 Cal.App.3d 747,155 Cal.Rptr. 269
• Court: California Court of Appeals Court of Appeals
• Parties: Shelley MANDEL, Plaintiff and Respondent, v. Jerome LACKNER, as Director, etc., et al., Defendants and Appellants. Civ. 42070.

Page 269

155 Cal.Rptr. 269

92 Cal.App.3d 747

Shelley MANDEL, Plaintiff and Respondent, v. Jerome LACKNER, as Director, etc., et al., Defendants and Appellants.

Civ. 42070.

Court of Appeal, First District, Division 4, California.

May 4, 1979.

As Modified May 31, 1979.

Hearing Denied Aug. 27, 1979.

John J. Klee, Jr., Asst. Atty. Gen., Charlton G. Holland, III, Edward P. Hill, Deputy Attys. Gen., San Francisco, for defendants and appellants.

Richard M. Kaplan, Ephraim Margolin, Nicholas Arguimbau, San Francisco, for plaintiff and respondent.

Antonio Rossmann, San Francisco, for amicus curiae Woodland Hills Residents Association.

John E. McDermott, Robert T. Olmos, Patricia M. Tenoso, Richard A. Rothschild, Western Center on Law & Poverty, Los Angeles, for amici curiae John Serrano, Jr. and John Anthony Serrano.

RATTIGAN, Acting Presiding Justice.

This is the second appeal taken by the captioned State officers in this action. The first one was from a judgment in favor of respondent which we affirmed on its merits. (Mandel v. Hodges (1976) 54 Cal.App.3d 596, 127 Cal.Rptr. 244.) ¹ Among other things, that judgment (1) enjoined the Governor from continuing the practice of ordering the closure of State offices on the religious holyday of Good Friday, between noon and 3 p. m., upon the ground that the practice violated constitutional proscriptions involving the treatment of religion by government (U.S.Const., 1st Amend., clause 1; Id., 14th Amend.; Cal.Const., art. I, § 4); (2) enjoined the Controller, on the same ground, from paying State employees for time taken off from work during the three-hour period mentioned; and (3) awarded respondent $25,000 as compensation for the services rendered by her attorneys prior to the entry of the judgment. (Mandel I, supra, at pp. 610-624, 127 Cal.Rptr. 244.)

Acting upon respondent's application to this court for an award of attorneys' fees on that appeal, we deferred to the trial court and vested it with jurisdiction to hear and act upon her application in subsequent proceedings. (Mandel I, supra, 54 Cal.App.3d at p. 624, 127 Cal.Rptr. 244.) When the remittitur had been filed, she made the application by an appropriate motion in that court. In proceedings to be described, the court granted her motion and entered a judgment awarding her $75,000, payable by the State, as attorneys' fees on the first appeal.

The present appeal is from the $75,000 judgment. We decided it once, but granted petitions for rehearing filed by both sides. Matters considered on rehearing will be discussed in sequence.

The questions presented require that the proceedings conducted on respondent's post-remand motion be described in some detail. Her attorneys in the action, whose compensation on the first appeal is at issue here, are Richard M. Kaplan and Ephraim Margolin. Sworn declarations by both, with exhibits, were filed in support of the motion. Both gave oral depositions in discovery proceedings which followed, and both testified at a hearing on the motion. In addition, each side responded in writing to interrogatories propounded by the other. All of these sources were received in evidence on the motion. ²

The trial court made a minute order stating its intention to award $75,000 on the motion. Appellants requested formal findings of fact and conclusions of law pursuant to Code of Civil Procedure section 632 and Rule 232(b), California Rules of Court. Respondent submitted proposed findings and conclusions, and a proposed judgment, to which appellants filed written objections. Findings were settled at a hearing, after which the court signed and filed new findings and conclusions prepared by respondent. The $75,000 judgment for attorneys' fees was entered accordingly.

The Findings

As pertinent here, the trial court first made a finding (no. 7) that "it is proper for it to award attorney's fees" on the former appeal. This finding was substantially reiterated in conclusion of law no. 7, ³ where the court stated that "Plaintiff's attorneys, Richard M. Kaplan and Ephraim Margolin, are entitled to be compensated by Defendants for said attorneys' efforts in resisting the appeal." These passages (of which the second is cited in the judgment) amount to a finding that respondent is entitled to An award, a determination which had been left entirely open by this court. (Mandel I, supra, 54 Cal.App.3d 596 at p. 624, 127 Cal.Rptr. 244.)

The amount of the award is covered at great length in successive findings which are to be summarized as briefly as possible. In no. 8, the court found that "(t)he nature of the litigation in the (former) appeal was complex, novel and virtually unique" in establishing (1) the constitutional violations involved in the closure of State offices on a religious holyday and (2) that attorneys' fees may be awarded "in an action against the State of California or its officers and agencies, in which a class or group of citizens of the State receives a substantial benefit . . .." Finding no. 10 stated in pertinent part that "(t)he difficulty of the appeal was very substantial on substantive grounds" as to each of the issues enumerated above and others, among which "the interplay of the various sections of the Government Code . . . and the effect upon them of the constitutional requirements . . . required resourcefulness by Plaintiff's attorneys to meet and to overcome." ⁴

Finding no. 11 referred to the monetary "amount involved" in Mandel I as "very substantial, amounting to a wrongful expenditure of State funds of at least $2,000,000.00 annually, which amount is now saved annually" as the result of respondent's "success" on that appeal and the efforts of her attorneys. (See Mandel I, supra, 54 Cal.App.3d 596 at p. 622, fn. 16, 127 Cal.Rptr. 244.)

The court further found that the attorneys had demonstrated a high degree of skill and "unusual legal talent, experience, ingenuity and innovation in the conduct of the appeal" (finding no. 12); that the success of their efforts had been "total," and that they had "achieved for Plaintiff and her class a legal and constitutional victory and vindication of very high magnitude" (no. 14); and that their work had attained for them "the highest possible stature in their legal community" and "the approval of their colleagues in the Bar." (No. 15).

Concerning the Time spent by the attorneys on the appeal, the court found in effect that much of it was attributed to tactical obduracy by the Attorney General which amounted to outright bad faith. ⁵ The only finding expressly made on the subject of Time spent as such (no. 13) includes this language: "The attention given to the case by Plaintiff's attorneys was considerable. Not only did they expend a very Substantial amount of time in defending the Judgment on appeal, but they were exceptionally well prepared and diligent at all stages. . . . In addition to The hours spent on the appeal As shown in the record, additional hours have been spent, and are being spent, in this matter. The Amount of time spent by Plaintiff's attorneys was Substantial. . . . While The hours spent are only one criterion, and not the sole criterion, for determining the amount of fees on appeal, they may be used in conjunction with other elements in determining the propriety of the amount awarded, and the Court has done so. . . ." (Emphasis added.)

In a perorative finding stated as a conclusion of law (see fn. 3, Ante ), the court pronounced that the "reasonable value" of the attorneys' services was $75,000. This finding summed up several of the factors found as recited above, but it did not refer to the time actually spent by either attorney on the appeal. The court made no finding as to the value of the services rendered by either attorney severally, nor did it evaluate their joint or several services on a per-hour or other unit-of-time basis. The judgment consequently awards her a flat "$75,000.00 as and for attorneys' fees" on the first appeal.

Review

The trial court's determination that respondent is entitled to An award of attorneys' fees on the first appeal is not disputed by the present appellants. We therefore affirm the judgment to the extent that it awards attorneys' fees as such. For the reasons next appearing, we reverse it as to the amount awarded.

The controlling law is to be examined first. The three equitable theories upon which a successful litigant's attorney may be compensated, from the fruits of the litigation or by the other side in a particular case warranting departure from the general rule to the contrary, are the "common fund doctrine," the "substantial benefit rule," and the "private attorney general concept." (Serrano v. Priest (1977) 20 Cal.3d 25, 31-32, 34-48, 141 Cal.Rptr. 315, 569 P.2d 1303 ("Serrano III ").) In Mandel I, we cited all three theories in reviewing the $25,000 award made to respondent as compensation for the services rendered by Messrs. Kaplan and Margolin before that appeal had been taken. (Mandel I, supra, 54 Cal.App.3d 596 at pp. 619-622, 127 Cal.Rptr. 244.) We declined to apply the "private attorney general concept" for lack of California precedent at the time, but we pointed out that a court of this State might validly award attorneys' fees under either of the other two theories. (Id., at pp. 620-621, 127 Cal.Rptr. 244.) We thereupon affirmed the $25,000 award on the basis of the "substantial benefit rule." (Id., at pp. 621-623, 127 Cal.Rptr. 244; Serrano III, supra, 20 Cal.3d at p. 39, 141 Cal.Rptr. 315, 569 P.2d 1303.)

Serrano III discussed all three equitable theories as indicated above, but it was decided two years after Mandel I. (See Serrano III, supra, 20 Cal.3d 25 at p. 39, 141 Cal.Rptr. 315, 569 P.2d 1303 (citing Mandel I as authority for the "substantial benefit" theory).) It has very recently been followed by another decision which retraces some of the same ground. (Woodland Hills Residents Assn., Inc. v. City Council of Los Angeles (1979) 23...