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AB-1125 Attorney’s fees.(2013-2014)

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CALIFORNIA LEGISLATURE— 2013–2014 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   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.