EC061283
MITCHELL C. MOORE et al v. ANTONIA STAUDER, et al
Motion for Attorneys Fees
Motion for Payment of Costs of Partition/Distribution

This is a partition action in which the Plaintiffs requested an adjudication that quiets title and declares the rights of the parties regarding the title to real property at 408 and 408 1/2 South Electric Avenue, Alhambra, CA. The dispute arose because Isabel Sierra died intestate and had four surviving children who each became an owner of a 25% interest in the property.
The case was resolved by stipulation on March 20, 2014 and the Court issued an interlocutory judgment that the property would be sold and the proceeds distributed in the following manner:

1) 25% to Mitchell Moore, as administrator of the Estate of Theodore Sierra;
2) 25% to Gloria Moore, Trustee of the Moore Family Trust;
3) 25% to Pauline Moore; and
4) 25% to Antonia Stoulder.

The Court also appointed a referee, Harry Hull, who is a licensed real estate broker, to sell the property. The property was sold and the referee is holding $432,579.51 from the close of escrow that occurred on July 3, 2014 (see Referee’s Report filed on July 22, 2014 regarding pending motion for attorney’s fees). The final judgment will determine the amount distributed to each party.

This hearing concerns the Plaintiffs’ motion for an order awarding them attorney’s fees under CCP sections 874.010 and 874.020. These sections are part of the statutory scheme for partition actions that is enacted at CCP sections 872.010 to 874.240. 
CCP section 874.010 states that the costs of partition include:

a) Reasonable attorney’s fees incurred or paid by a party for the common benefit.
b) The fee and expenses of the referee.
c) The compensation provided by contract for services of a surveyor or other person employed by the referee in the action.
d) The reasonable costs of a title report procured pursuant to Section 872.220 with interest thereon at the legal rate from the time of payment or, if paid before commencement of the action, from the time of commencement of the action.
e) Other disbursements or expenses determined by the court to
have been incurred or paid for the common benefit.

Section 874.020 states that the costs of partition include reasonable expenses, including attorney’s fees, necessarily incurred by a party for the common benefit in prosecuting or defending other actions or other proceedings for the protection, confirmation, or perfection of title, setting the boundaries, or making a survey of the property, with interest thereon at the legal rate from the time of making the expenditures.

The purpose of CCP section 874.010 is to divide the cost of the legal services among the parties benefited by the result of the proceeding. Stutz v. Davis (1981) 122 Cal. App. 3d 1, 4. CCP section 874.040 states that Court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable. 

The costs, including the attorney’s fees, awarded under CCP section 874.010 may be apportioned only when they were expended for the common benefit. Stutz, 122 Cal. App. 3d 1, 5 to 6. There must be evidence that the attorney’s fees were incurred for the common benefit. Id. This includes attorney’s fees incurred to determine the litigant’s interests in the property so that the proceeds may be distributed to the litigants. The presence and litigation of controversial issues between all the parties does not preclude the allowance of attorney’s fees for services connected with such issues where such services are found to be for the common benefit of the parties. Regalado v. Regalado (1961) 198 Cal. App. 2d 549, 551.

In the pending case, the Plaintiffs’ attorney, Theodore Anderson, provided legal services to ascertain the interests of each party and to obtain a sale and distribution of the proceeds pursuant to each party’s interests. These legal services were for the common benefit of both the Plaintiffs and the Defendants because they were performed to resolve a dispute about the ownership interests in the property so that the property could be partitioned. Accordingly, there are grounds under CCP section 874.010 to authorize the Plaintiffs to recover the portion of attorney’s fees that Mr. Anderson charged to ascertain the interests of each party, obtain a sale, and distribute the proceeds. 
However, a review of the Plaintiffs’ Complaint in this action revealed that it was not solely a partition action. The fourth cause of action seeks damages for wrongful dispossession. The fifth cause of action sought an injunction to prevent interference with the Plaintiffs. The sixth cause of action sought damages for conversion. Since these causes of action seek damages and remedies solely for the Plaintiffs, they are not in the common interest of the Plaintiffs and the Defendant. Accordingly, the Plaintiffs cannot recover the attorney’s fees incurred on these issues.
In the moving papers, the Plaintiff’s attorney, Theodore Anderson, did not apportion his legal services to identify the amount he incurred on legal services for the common interest of the parties. Further, the Plaintiffs’ attorney provided services under an agreement that would entitle him to a contingency fee. A copy of the retainer agreement is attached as exhibit 3 to the motion. This agreement provides that the Plaintiffs would pay attorney’s fees on the following basis:

1) if the property sold within 3 years of the date of the agreement, which was August 8, 2013, then the Plaintiffs would pay 17.5 percent of the gross sale price of the property;
2) if the property was sold after 3 years of August 8, 2013, then the contingency agreement would expire and the Plaintiffs would pay hourly rates for the legal services billed to them.

In the pending case, the referee is holding $432,579.51 from the sale of the property. Since this occurred within three years of August 8, 2013, Theodore Anderson will by paid under the contingency fee agreement. Under the contingency fee agreement, this will result in attorney’s fees of $75,701.41 (17.5 percent of $432,579.51). Since this is a contingency fee, it is impossible to identify the attorney’s fees that were incurred for the common interest of the parties. 

The matter was originally set for August 1, 2014. The Court continued the matter so that the Plaintiffs’ counsel could file an additional declaration regarding his attorney’s fees. 

On August 4, 2014, the Plaintiff’s attorney, Theodore Anderson, submitted a supplemental declaration in which he states that the attorney’s fees incurred for the common interest are $43,437.50 and that the costs are $3,889.58. 
The amount of attorney’s fees is reduced by the following amounts:

1) $5,410 in attorney’s fees plus $60 in costs for the motion for a preference. This amount is based on 2.7 hours billed at $450 per hour for an attorney, 6.5 hours billed at $275 for associate counsel, 10.70 hours billed at $225 for a paralegal to prepare a motion for a preference in setting the matter for trial under CCP section 36. In addition, there was a $60 filing fee for the motion. This motion for a preference was brought because the Plaintiffs sought an early trial date based on their age and health issues. The motion for a preference was for the benefit of the Plaintiffs, i.e., to obtain a quick trial based on their age and health issues. Since it was not a fee incurred for the public interest of the parties, it will not be included. 
2) $5,265 in attorney’s fees and $58 in costs relating to recording the notice of pending action. This amount is based on 2.1 hours billed at $450 per hour for an attorney, 13.50 hours billed at $275 per hour for associate counsel, 2.7 hours billed at $225 per hour for a paralegal, and $58 for the fees associated with the lis pendens. These fees and costs were incurred to record a notice on the property that the Plaintiffs had filed a complaint that included a real property claim that could affect title to the property. The notice and withdrawal of the notice were for the benefit of the Plaintiffs, i.e., to ensure that any potential buyer had notice of their Complaint. Since it was not a fee incurred for the public interest of the parties, it will not be included. 

The total amount of these reductions is $10,675 in attorney’s fees and $118 in costs. This would reduce the amount to $32,762.50 ($43,437.50 minus $10,675) for attorney’s fees and $3,771.58 ($3,889.58 minus $118) for costs.

These fees and costs will be apportioned 25% to each party. This 25% apportionment would be $8,190.62 in attorney’s fees (25% of $32,762.50) and $942.90 in costs (25% of $3,771.58). The total amount per owner would be $9,133.52.

However, the costs of partition do not involve solely the attorney’s fees incurred by the Plaintiffs. The Defendant filed opposition papers in which she noted that she also hired an attorney, Mark O’Brien, and that her attorney provided legal services to resolve the disputes regarding the partition of the property. Under CCP section 872.010 and 872.020, the Defendant may recover legal fees as costs if they were incurred for the common interest of the parties. 
The Defendant’s attorney, Mark O’Brien, offered a copy of his billing and a declaration to demonstrate that he charged a total of $5,963 for his legal services to resolve the dispute by ascertaining the interests of each party, obtain a sale, and distribute the proceeds. It is worth noting that Mr. O’Brien charged a substantially lower amount that the fees charged by the Plaintiffs’ attorney, i.e., Mr. O’Brien’s fees are approximately 10% of the amount charged by the Plaintiffs’ attorney. 
A review of Mr. O’Brien’s billing reveals that he billed for services to review the pleadings, correspond with opposing counsel, complete discovery, communication with the client, and resolve the disputes needed for the partition of the property in this case. Since these legal fees were incurred in the common interest of resolving this partition action, Mr. O’Brien’s fees are also costs of the partition under CCP section 872.010. These fees are also to be apportioned 25% for each owner. ($1490.75 each) Since the Defendant incurred these fees to resolve this dispute, her share of fees and costs for plaintiff’s counsel is reduced/offset by the 75% of defendant’s counsel fees owed to her ($4472.25).

Finally, the Plaintiffs requested that the Court apportion a greater share of the costs of partition to the Defendant. The Plaintiffs suggest that the Court should increase the Defendant’s share from 25% up to 60%. The Court stated on August 1, 2014 that it was declining to apportion a greater share to the Defendant (see August 1, 2014 minute order, page 12).