Filed 3/18/14 Gerard v. BHC Alhambra Hospital CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SEVEN ANDREW L. GERARD, B248197 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. SC110387) v. BHC ALHAMBRA HOSPITAL, INC., Defendant and Appellant. APPEAL from a judgment of the Superior Court of Los Angeles County, Bobbi Tillmon, Judge. Affirmed as modified. Cole Pedroza, Curtis A. Cole and Matthew S. Levinson for Defendant and Appellant. Bernard & Bernard, Stephan Bernard; Smith & McGinty, Daniel U. Smith and Valerie T. McGinty for Plaintff and Respondent. ____________________ INTRODUCTION Defendant BHC Alhambra Hospital, Inc. appeals an order awarding plaintiff Andrew L. Gerard statutory attorneys’ fees under Welfare and Institutions Code section 15657, subdivision (a), on Gerard’s successful claim for dependent adult abuse. Alhambra Hospital argues that a “high/low” stipulation the parties entered into during trial precluded Gerard from seeking attorneys’ fees, and that the trial court abused its discretion in awarding Gerard $333,727.56 in attorneys’ fees. We conclude that Gerard is entitled to an award of attorneys’ fees and that the trial court did not abuse its discretion in calculating his reasonable attorneys’ fees, but that the cost award must be reduced. Therefore, we modify the award of costs and affirm as modified. FACTUAL AND PROCEDURAL BACKGROUND A. The Claims Gerard filed this action against Alhambra Hospital alleging that while he was a patient there he was a “Dependent adult” (Welf. & Inst. Code, § 15610.23),1 and that Alhambra Hospital was a “Care custodian” (§ 15610.17) within the meaning of the “Elder Abuse and Dependent Adult Civil Protection Act” (§ 15600 et seq., the “Act”). Gerard alleged that UCLA Neuropsychiatric Hospital, several hours after admitting him and placing him on a 72-hour suicide watch, transferred him to Alhambra Hospital. Alhambra Hospital placed him in a room with a patient who “had numerous prior commitments to psychiatric facilities, and was suffering from a serious psychiatric illness manifesting in violent behavior . . . .” Gerard alleged that Alhambra Hospital placed him in an unsafe and hazardous environment with a psychiatric patient that the hospital “knew or should have known exhibited dangerous and violent propensities . . . .” Within 1 Unless otherwise stated, all further section references are to the Welfare and Institutions Code. 2 minutes, the patient “brutally attacked” Gerard and struck him in the head, causing “numerous skull fractures, [a] mandible facture, eye occipital fractures, and subdural hemorrhage with traumatic brain injury.” Gerard was in a coma for several days, was placed on life support, and suffered a “severe and debilitating infection.” Gerard asserted causes of action for medical negligence; dependent adult abuse under section 15610.07; violation of patient’s rights under Health and Safety Code section 1430, subdivision (b), and California Code of Regulations, title 22, section 72527, subdivision (a); and willful misconduct. In his cause of action for dependent adult abuse, Gerard sought punitive damages and the enhanced remedies of section 15657, including reasonable attorneys’ fees and costs. B. The Stipulation The case proceeded to a 10-day jury trial on Gerard’s causes of action for negligence and dependent adult abuse. At the beginning of the jury’s deliberations, the parties reached what they refer to as a “high/low” agreement, the terms of which counsel put on the record with the trial court just before the jurors went into the jury room to deliberate. The transcript of this oral stipulation, the interpretation of which is the main issue in this appeal, reads as follows: “[Counsel for Alhambra Hospital]: All right. So for the record, the parties have reached a stipulation on a number of issues. The parties have agreed [to] the high/low limits of [$]2,250,000 for the high and [$]250,000 for the low. All parties have agreed to waive their appeal rights. The defense waives its right to periodisize. The high/low numbers will be based on the gross verdict by the jury. And just for point of clarification, if there is any jury verdict in excess of $2,250,000, what this agreement means is that the defense will only have a responsibility to pay $2,250,000. Is that your understanding? “[Counsel for Gerard]: That’s correct. . . . The gross verdict will be the economic and non-economic damages totalled. There will be no reduction of those numbers, other than if the numbers exceed the high. “The Court: And if that happens? 3 “[Counsel for Gerard]: Then the court will cause the verdict to reflect the high number, which is $2,250,000. “[Counsel for Alhambra Hospital]: Fair enough. And that if the jury’s verdict is anywhere between [$]250,000 and [$]2,250,000, that will be the number. “The Court: The number that the jurors select? “[Counsel for Alhambra Hospital]: Yes. “The Court: Okay. “[Counsel for Gerard]: Actually, yeah. The court doesn’t reduce the verdict. The verdict stands, however — “The Court: If it goes over the [$]2.250, then whatever the figure, it is no more than [$]2.250 — “[Counsel for Alhambra Hospital]: Correct. “The Court: Is that your understanding? “[Counsel for Gerard]: Yes. “[Counsel for Alhambra Hospital]: Correct. And if there is a defense verdict, the defense will agree to pay [$]250,000 to the plaintiff. “[Counsel for Gerard]: Correct. “[Counsel for Gerard]: Or if there is a verdict of not more than [$]250,000, then, again, it will be a [$]250,000 payment. “[Counsel for Alhambra Hospital]: Also correct. “The Court: I think that’s what you just said, but okay. “[Counsel for Alhambra Hospital]: Further clarification, but I’m okay with it. “The Court: As long as everyone understands and there’s a record of it. “[Counsel for Gerard]: So whether there’s a defense verdict or any number awarded to plaintiff of less than [$]250,[000] then [$]250[,000] will be paid. “[Counsel for Alhambra Hospital]: Correct. And we’ve also agreed that this will be reduced to writing at a later date. There is a statutory lien, and the statutory lien will be dealt with as a part of a settlement. My agreement with counsel is that if the statutory lien comes into play, we will set aside x dollars for the statutory lien, and then counsel 4 will attempt to deal with the statutory lien and will advise us of what we are to pay. [¶] . . . [¶] “[Counsel for Gerard]: And then with regard . . . to payment . . . there will be a payment one way or the other. “The Court: But they’re already waiving periodisizing. “[Counsel for Gerard]: Well, we’ve waived that. “[Counsel for Alhambra Hospital]: We’ve waived that. “The Court: Okay. But anything else, you worked that out? “[Counsel for Gerard]: I’m just saying that when can we expect payment? Can we say within 20 days? “[Counsel for Alhambra Hospital]: Payment would traditionally be within 30 days. This company is fairly prompt, so it may well be before that. “[Counsel for Gerard]: Okay. “The Court: Anything else that needs to be a part of the record prior to the jurors beginning their deliberation? “[Counsel for Gerard]: No. “[Counsel for Alhambra Hospital]: I don’t believe so, your honor.” C. The Verdict On November 13, 2012 the jury found that Alhambra Hospital was negligent in the care of Gerard and that Alhambra Hospital had not proven that the act of the patient who attacked Gerard was a superseding cause. The jury also found that Gerard was a dependent adult while he was in the care and custody of Alhambra Hospital, and that Gerard had proven by clear and convincing evidence that Alhambra Hospital had recklessly failed to protect Gerard from health and safety hazards. The jury awarded Gerard $163,000 in past lost earnings, $288,689 in past medical expenses, $1,237,230 in future lost earnings, $1,301,850 in future medical expenses, $750,000 in past noneconomic damages, and $2,250,000 in future noneconomic damages, for a total verdict of $5,990,769. 5 After the trial court excused the jury, the court asked counsel to submit a judgment pursuant to the parties’ stipulation. In response to an inquiry from the court, one of the attorneys for Gerard stated, “I’m in another world right now. I’m sorry.” Another attorney for Gerard stated, “I didn’t hear any of this either.” The court set a “control date” to review submission of the stipulation. D. The Ex Parte Application The parties did not agree on a written form of their oral agreement. On November 27, 2012 Gerard filed an ex parte application for an order “enforcing the stipulation of the Parties regarding the high-low agreement on the jury verdict” and seeking “payment within 30 days of the verdict” because Alhambra Hospital had “expressed that payment may not be forthcoming.” As part of this application, Gerard stated that he “requires clarification as to whether he is able to pursue an award of the enhanced remedies under the” Act. Gerard reported that the parties had been unable to “reduce the Stipulation to a writing” and that he intended to ask the court for an award of attorneys’ fees and costs. Gerard stated that Alhambra Hospital had “made it clear . . . that it will be opposing said motion based upon [its] erroneous interpretation of the Stipulation of the Parties . . . .” Gerard’s ex parte application sought an order that he was “entitled to motion [the court] for an award of attorney’s fees and costs arising out of the Dependent Adult Neglect cause of action,” and that Alhambra Hospital had “to render payment of the ‘high’ number of $2,250,000” by December 13, 2012. On December 7, 2012 the trial court ruled on the ex parte application. “The Court finds that the jurors were not called upon to determine the attorney’s fees based upon the [A]ct. There was no evidence of attorney’s fees presented to the jury. The court finds [that Gerard] may petition the court for attorney’s fees under the Act.” The court stated that there was “no evidence that the stipulation included or contemplated attorney fees in the stipulation that was read on the record before the court.” The court also stated that the jurors “were not called upon to determine whether or not attorney fees should issue in this case,” but instead “were called upon to determine if they found reckless behavior 6 based on the testimony that they heard, and they did so.” The court ruled that the parties had agreed that Alhambra Hospital would pay the “high/low amount” within 30 days and ordered payment by December 13, 2012. On January 25, 2013 the trial court entered judgment in favor of Gerard and against Alhambra Hospital, pursuant to the jury’s verdict and the parties’ stipulation, in the amount of $2,250,000. E. The Motion for Attorneys’ Fees On January 15, 2013 Gerard filed his motion for attorneys’ fees. Gerard argued that he was entitled to attorneys’ fees under section 15657, subdivision (a), because the jury found by clear and convincing evidence that Alhambra Hospital had been reckless in its care of him. In support of their lodestar calculation, counsel for Gerard submitted a 24-page “Itemized Statement of Services Rendered,” which set forth in considerable detail the legal services performed by counsel by date, description, category,2 attorney, hours, billing rate, and amount. Counsel asked for a lodestar multiplier of 1.5 to 2.0, “for a total fee award of $1,042,898.62 to $1,390,531.50.” Gerard also sought recovery of costs and expert fees of $116,860.65. In opposition to the motion, Alhambra Hospital argued that the high/low stipulation precluded Gerard from seeking attorneys’ fees and costs in any amount above $2,250,000, and that the Itemized Statement contained mathematical errors, improper block and double billing entries, excessive time, and quarter-hour increments. Alhambra Hospital also challenged the reasonableness of counsel for Gerard’s claimed hourly rates of $600 and $375 and opposed the application of any multiplier. Finally, Alhambra 2 Although counsel for Gerard did not submit actual time sheets, the information in the “Itemized Statement” in some ways was more detailed than most attorney time sheets. For example, in addition to a description of the work performed, the Itemized Statement includes a column entitled “Category,” which describes whether the work was “Communication & Correspondence,” “Discovery & Investigation,” “Law & Motion,” “Pleadings,” “Trial & Trial Prep,” or “Post-Trial.” 7 Hospital argued that because Gerard was “not entitled to statutory fees . . . for his medical malpractice claims,” and because “[a]t its heart, this was a medical malpractice case,” the court should allocate only 10 percent of the fees to the dependent adult abuse claim. (Underscoring omitted.) Alhambra Hospital also submitted the declaration of Melissa Nunnelee, a claims attorney with the third party administrator and claims adjustor for Alhambra Hospital’s insurer, who negotiated the “high-low agreement of $2,250,000-$250,000.” Nunnelee stated that in her final conversation regarding the agreement, counsel for Gerard “brought up the subject of his costs and fees in the event he was successful in obtaining a finding of Dependent Adult Abuse . . . . [Counsel for Gerard] asked me, to the effect: ‘But if my maximum is $2,250,000, what happens to my extra costs and fees if the jury finds recklessness — finds for me on the Dependant Adult Abuse?’ I responded, ‘You get $2,250,000, max. You don’t get anything over $2,250,000. That’s the maximum we’re going to pay — regardless.’ [Counsel for Gerard] replied, ‘OK. I understand.’” Nunnelee also attached a contemporaneous email she sent to counsel for Alhambra Hospital explaining the agreement she had reached with counsel for Gerard and stating, “They get no costs and fees, we get no cap.” An email from counsel for Alhambra Hospital to Nunnelee, however, stated that the “high low numbers will be based on the gross verdict.” F. The Trial Court’s Ruling The trial court ruled that Gerard’s motion was “denied as to the attorney’s fees requested. [Gerard] is instead awarded $450,588.21 in attorney fees and costs.”3 The court stated in its February 28, 2013 ruling that on December 7, 2012 the court had “found that [Gerard] may petition for attorney fees under the [Act]. Thus, this issue will not be revisited . . . .” The court stated at the hearing that it was not addressing the issue 3 Thus the trial court actually granted the motion, but awarded Gerard less in attorneys’ fees than he had requested. 8 of whether payment of the $2,250,000 precluded an award of attorneys’ fees, stating, “And if you notice, the court didn’t address that. And the reason is, if it’s going to be appealed, let the appellate court decide how to interpret it.”4 On the amount of reasonable attorneys’ fees, the trial court stated, “An examination of the billing records shows excessive, inefficient billings as well as block billing. Some examples are pointed out by [Alhambra Hospital] such as the billing for ‘05/30/12 - 06/08/12’ . . . where counsels [sic] claim 42.5 total hours for multiple tasks spanning a stretch of 9 days without specifying which attorney spent show [sic] much time on each task. The billing statement for ‘03/27/12 - 03/28/12’ also shows multiple tasks and 76 hours claimed in a two-day period. . . . Counsels [sic] also inexplicably claim over $23,000 for 8.5 hours of total attorney time from ‘05/25/12-06/08/12.’” The court also found that the hourly rate for counsel for Gerard was “excessive given that the action did not involve novel or difficult questions of law or fact or a specialized skill in presenting them. Further, [Gerard’s] counsel appears to seek attorney fees for all hours claimed in the litigation, rather than limiting fees to the [Act] claim. This is also improper as attorney fees for the medical negligence claim is [sic] not recoverable. While the claims may be similar and involve some overlap in preparation, it does not justify recovery of the full amount of time expended in the litigation.” The court concluded that “under the Lodestar” method Gerard was “entitled to $333,727.56 in attorney fees,” which was “a reduction of 52% or $361,538.19.” The court denied a lodestar multiplier and awarded costs in the amount of $116,860.65. 4 There are several things wrong with this ruling, none of which affects our de novo review of this issue and decision in this appeal. First, the trial court did not actually rule as part of the ex parte application that Gerard was entitled to attorneys’ fees under the stipulation, but ruled only that Gerard had the right to file a motion seeking an order that he was entitled to reasonable attorneys’ fees. Second, the fact that appellate review of a trial court’s interpretation of a contract is de novo does not relieve the trial court of its obligation to interpret a contract if called upon to do so. 9 On March 14, 2013 the court entered a judgment awarding Gerard $333,727.56 in attorneys’ fees and $118,229.80 in costs, for a total of $451,957.36.5 Alhambra Hospital appeals. DISCUSSION A. Standard of Review “The issue of a party’s entitlement to attorney fees is a legal issue subject to de novo review.” (Apex LLC v. Korusfood.com (2013) 222 Cal.App.4th 1010, 1016; see Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.) We review the trial court’s calculation of the amount of attorneys’ fees awarded, however, for abuse of discretion. (Dzwonkowski v. Spinella (2011) 200 Cal.App.4th 930, 934; see Northwest Energetic Services, LLC v. California Franchise Tax Bd. (2008) 159 Cal.App.4th 841, 879.) B. Gerard Is Entitled To Recover His Reasonable Attorneys’ Fees Alhambra Hospital argues that the stipulation placed on the record “precluded an award of costs and attorney’s fees.” Alhambra Hospital argues that “the legal principles which apply to contracts generally apply to settlement contracts,” and the “plain meaning” of the settlement agreement here precludes an award of attorneys’ fees because Alhambra Hospital’s “complete and ‘only’ responsibility [was] to tender the high amount of $2,250,000.” Alhambra Hospital focuses on the words in the transcript “what the agreement means is that the defense will only have a responsibility to pay $2,250,000” and the high/low amount “will be paid.” Alhambra Hospital’s argument, however, ignores both the applicable law and the rest of the language in, and the context of, the stipulation. 5 The trial court’s February 28, 2013 order awarded Gerard $116,860.65 in costs. The court’s March 14, 2013 judgment awarded Gerard $118,229.80 in costs. 10