Filed 8/14/18 Pacific Asian Enterprises v. Conconi CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

PACIFIC ASIAN ENTERPRISES, INC.,

Plaintiff, Cross-defendant and
Respondent,

v.

ROBERT CONCONI et al.,

Defendants, Cross-complainants and
Appellants;

DANLL STREECH et al.,

Cross-defendants and Respondents.

G053910
(consol. with G054124)

(Super. Ct. No. 30-2014-00738802)

O P I N I O N

Appeals from a judgment and a postjudgment order of the Superior Court of Orange County, Peter J. Wilson, Judge. Judgment reversed on the amount of damages, with directions. Postjudgment order. Affirmed.

Godes & Preis, Joseph M. Preis and Oliver B. Dreger for Defendants, Cross-complainants and Appellants.

Wordes, Wilshin & Conner and Frank A. Conner for Plaintiffs, Cross defendants and Respondents.

* * *

INTRODUCTION

Robert Conconi and Diane Conconi (the Conconis) bought a custom built yacht for $16 million from Pacific Asian Enterprises, Inc. (PAE). A dispute arose as to the final amount owed to PAE by the Conconis for the yacht. A jury awarded PAE $722,161 in damages on its breach of contract claim against the Conconis.

On appeal, we conclude there was no evidence supporting one element of PAE’s damages claim. Therefore, the trial court erred by denying the Conconis’ motion for a new trial as to damages. We reverse the judgment and remand with directions to conduct a new trial on damages, unless PAE timely consents to a modified judgment with a total damages award of $615,314. (Code Civ. Proc., § 662.5, subd. (a)(2); Cal. Rules of Court, rule 8.264(d).)

The Conconis raise a number of challenges to the trial court’s evidentiary rulings and assert misconduct of counsel. As to each, we conclude the court did not err, or any error was harmless. We also affirm the order granting PAE’s motion for attorney fees.

STATEMENT OF FACTS

PAE designs, sells, and builds Nordhavn power yachts. In November 2009, the Conconis signed a written contract (the purchase contract) to buy a custom made, 120 foot Nordhavn yacht (the Vessel) from PAE for $16 million. The total payment by the Conconis included a trade-in of their existing 86 foot yacht, valued at $5.5 million, and cash payments totaling $10.5 million, to be made when certain milestones in the building and transfer of the Vessel were met. In June 2013, the Conconis assigned the purchase contract to Alberta Service Bureau, Inc.; the Conconis remained “fully, directly, and primarily liable” as guarantors on the purchase contract. Alberta Service Bureau was to eventually convey the Vessel back to the Conconis, although this had not happened as of the time of trial in this case. The Conconis also transferred their trade-in yacht to PAE through Alberta Service Bureau. For both transactions, Alberta Service Bureau was used as an intermediary to lessen the Conconis’ tax burden. The Conconis have no ownership interest in or other connection to Alberta Service Bureau.

The Vessel was completed in the summer of 2013, and sailed from Xiamen, China to Hong Kong, where it underwent an insurance survey. Once cleared, the Vessel sailed to its final delivery point—Vancouver, British Columbia, Canada. James Leishman and Jeffrey Leishman, two of PAE’s co-owners, served as co-captains for the trip from Hong Kong. The Conconis and a crew of about one dozen were also aboard. The Vessel travelled to Adak, Alaska, where the Conconis disembarked. The Leishmans continued as co-captains to Vancouver.

When the Vessel arrived in Vancouver in late August 2013, James Leishman told customs agents from the Canadian Border Services Agency (CBSA) that Robert Conconi, rather than Alberta Service Bureau, was the owner of the Vessel. The Canadian authorities began an investigation relating to the actual value of the Vessel to determine the amount of taxes owed.

Beginning in August 2013, the Conconis discovered and reported to PAE defects, system failures, and nonconformities in the Vessel. The Conconis demanded that PAE repair the defects and bring the Vessel into compliance with the terms of the purchase contract and warranties. The Conconis took possession of the Vessel so they could insure it, but refused to make a final acceptance.

In February 2014, PAE sent the Conconis a delivery invoice for the Vessel, showing a balance due of $768,256. Adjustments to the invoice made at trial reduced PAE’s total claim to $722,161. The Conconis refused to consider paying the balance reflected in the invoice until the CBSA action was resolved.

PROCEDURAL HISTORY

In August 2014, PAE filed a lawsuit against the Conconis and Alberta Service Bureau for breach of the purchase contract. The Conconis responded with a cross-complaint against PAE and its owners, Danll Streech, James Leishman, and Jeffrey Leishman for breach of contract, intentional misrepresentation, concealment, false promise, negligent misrepresentation, breach of express warranty, breach of the implied warranty of merchantability, violations of Business and Professions Code section 17200 et seq., specific performance, and violation of the Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq.).

After a jury trial, the jury found in favor of PAE on its breach of contract claim and awarded PAE $722,161. The jury found in favor of PAE and the individual cross-defendants, and against the Conconis, on the entirety of the cross complaint. Judgment was entered.

The Conconis filed a timely motion for a new trial on the ground the damages awarded were excessive. (Code Civ. Proc., § 657, subd. (5).) The trial court denied the motion. The Conconis filed a notice of appeal from the judgment.

PAE moved for an award of attorney fees pursuant to an attorney fees provision in the purchase contract. The trial court awarded PAE attorney fees in the amount of $531,655. The Conconis filed a notice of appeal from the attorney fees award. We granted PAE’s unopposed motion to consolidate the appeals for purposes of briefing, oral argument, and decision.

DISCUSSION

I.

MOTION FOR NEW TRIAL

The Conconis contend that a new trial should have been granted because the damages awarded were excessive. (Code Civ. Proc., § 657, subd. (5).) We can reverse the denial of a motion for a new trial based on excessive damages “‘only if there is no substantial conflict in the evidence and the evidence compels the conclusion that the motion should have been granted.’” (Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1415-1416.)

The Conconis claim the damages should have been reduced by $106,847 because there was no evidence supporting those damages. That amount was listed as a line item on page 2 of trial exhibit No. 42, the preliminary delivery invoice, next to the notation “Invoice #8602-002.”

Dan Streech, PAE’s president, testified that the balance due on trial exhibit No. 42 was the amount the Conconis owed PAE. Streech explained why the additions and credits were listed on the invoice. Streech did not provide any testimony specific to the $106,847 line item identified as “Invoice #8602-002.”

The exhibit backing up the $106,847 line item on trial exhibit No. 42, which itself was marked as trial exhibit No. 41, was apparently an invoice from PAE to the Conconis requesting the amount of money PAE expended to get the Conconis’ trade in vessel up to its $5 million trade-in value. Exhibit No. 41 was never admitted at trial, as PAE was unable to establish a foundation for it. The testimony of Streech, Trever Smith (PAE’s project manager), and Jessica Morrow (an assistant to the project manager) with regard to exhibit No. 41 was stricken by the court after the witnesses failed to authenticate the exhibit.

In denying the motion for a new trial, the court stated: “The jury heard the testimony of Mr. Streech. They credited the testimony of Mr. Streech, who spoke to all of the items in the invoice. There was a direct connection between the other vessel and adjustments concerning the other vessel. There was testimony about why based upon the initial agreed price there were adjustments made by reason of the delay in actually getting that vessel, because of delays in delivery of the main vessel. [¶] The long and short of this is whether I could conclude based on all of the evidence that there was simply no basis, or using the words of the statute, that the jury[’s verdict] was in any respect unsupported by substantial evidence. [¶] I can make no such finding on this record. The jury was entitled to credit Mr. Streech’s testimony, and as demonstrated in the ultimate verdict, they did so. Defendants . . . have moved for [a] new trial on the single ground that plaintiff . . . was awarded excessive damages. [¶] . . . After weighing the evidence, I am not convinced from the entire record, including reasonable inferences therefrom, that the jury clearly should have reached a different verdict. That’s based on C.C.P. section 657. [¶] I also do not find that the verdict is in any respect unsupported by substantial evidence. Defendants’ motion for new trial is accordingly denied.”

However, as explained ante, Streech never testified about the $106,847 line item. His testimony that the entirety of trial exhibit No. 42 was the amount owed by the Conconis was not sufficient to support PAE’s claim to the $106,847 in damages connected to Invoice #8602-002. All testimony as to that claim was stricken and the documentary backup for it was not admitted in evidence. Consequently, there was no evidence supporting PAE’s claim to $106,847 in damages for Invoice #8602-002. The trial court therefore erred in denying the motion for a new trial on the ground of excessive damages.

When a new trial is granted only as to the issue of damages, the court may conditionally order the new trial unless the affected party accepts a modified damages award. “In any civil action where after trial by jury an order granting a new trial limited to the issue of damages would be proper, the trial court may in its discretion: [¶] . . . [¶] . . . If the ground for granting a new trial is excessive damages, issue a conditional order granting the new trial unless the party in whose favor the verdict has been rendered consents to the reduction of so much thereof as the court in its independent judgment determines from the evidence to be fair and reasonable.” (Code Civ. Proc., § 662.5, subd. (a)(2).) We will direct the trial court to conduct a new trial on the issue of damages only, unless PAE timely consents to a modified judgment with a total damages award of $615,314.

II.

EVIDENTIARY ISSUES

The Conconis argue the trial court erred in admitting certain items of evidence and certain testimony. We review these claims for abuse of discretion and consider whether any error was prejudicial. (Casella v. SouthWest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1146.)

A. Motion in Limine No. 1 to Preclude PAE from Characterizing the Conconis’ Canadian Tax Dispute as Illegal, Unlawful, Wrongful, or Untruthful.

In motion in limine No. 1, the Conconis moved the court for an order precluding PAE from characterizing the Conconis’ Canadian tax dispute as illegal, unlawful, wrongful, or untruthful, and from commenting on Mr. Conconi’s invocation of his Fifth Amendment privilege at his deposition. The Conconis argued any such evidence should be excluded because it was not relevant to any issue at trial and would be extremely prejudicial.

The trial court ruled as follows: “Let me be as clear as I can be in this ruling. That there was an issue with Canadian customs and that Canadian customs might have been investigating this as a possible criminal violation. Stated differently, that Mr. Conconi might have been concerned about a criminal investigation relating to the tax reporting issues. That is relevant and can be referenced in the trial. [¶] There is to be no argument or evidence to determine whether the conduct at issue was in fact illegal. That is simply irrelevant. It’s no part of the issues in this trial whether the reporting was ultimately accurate or in compliance or constituted criminal or other wrongful conduct. And to be clear, that is to be presented neither through witnesses in evidence, nor through documents, nor through the arguments of counsel. [¶] So what the concerns were can be discussed whether or not who had the correct side of the argument, whether it was the taxing authorities, Mr. Conconi, or anyone else is simply not relevant and is not to be inquired into or referred to.”

In the cross-complaint, the Conconis alleged: “[W]hen the Vessel arrived in Vancouver, Canada on or about August 29, 2013, Customs agents from the [CBSA] inquired of James Leishman as to the ownership of the Vessel, who for reasons better known to himself, mis-reported that Mr. Conconi, as opposed to ASB, was the owner, creating financial injury and other liability for Mr. Conconi.” In correspondence with Dan Streech dated January 5, 2014, Robert Conconi explained that he would not pay the remaining amounts owed on the Vessel because of the continuing investigation by the CBSA. “Here, I have no choice but to continue my objection to the findings that CBSA made predicated on the Jim L[eishman] statements to them. . . . [T]hey are considering criminal proceedings against myself again because of the statements by Jim L[eishman]. [¶] . . . [¶] Aurora was seized as a consequence of Jim’s statements and these will all be proven as made in error. Further Jim was the party that denied all knowledge but then provided the incorrect bill of costs for CBSA to cancel the seizure and create the tax and penalty liability. [¶] . . . [¶] I don’t want and can’t have a criminal record over this.” In e mail correspondence with PAE project manager Trever Smith on February 28, 2014, Robert Conconi stated: “The CBSA review deadline for submission is today, I have not hear[d] from the lawyers. Until I am satisfied, there will be no further payments from me.”

The trial court did not err in concluding the CBSA investigation of a potential criminal violation was relevant, given the Conconis’ allegations in their cross complaint, as well as Robert Conconi’s statements to PAE explaining his refusal to pay the full price of the Vessel, in part, because of the CBSA investigation.

The Conconis also argue that specific questions posed by and the arguments of PAE’s counsel during trial violated the trial court’s ruling on the motion in limine or were so prejudicial that the judgment must be reversed. Even if the Conconis were correct, the trial court specifically instructed the jury about the limited nature of how such evidence and argument could be considered. The court instructed the jury: “Ladies and gentlemen, the issue about Canadian Customs and what should have been paid, what was paid, what decisions Canadian Customs made in connection with the importation of the yacht are not matters that you need to decide, not matters that you are required to decide, and are irrelevant to these proceedings. They are relevant in a different context, which is the argument by [PAE] that what happened changed the relationship between the parties. [¶] Only with respect to that issue is what happened with Canadian Customs relevant to any issue in the case, and I accordingly will not have the attorneys going into greater detail about who said what to whom, who should have paid what with respect to Canadian Customs; those details do not matter. [¶] What happened at Canadian Customs . . . is relevant only to whether it was a reason for a fundamental change in the relationship with behavior that followed that change. That argument is permissible. Further argument as to the rights and wrongs of Canadian Customs is not permissible and you are to disregard it.”

Even if the trial court erred by allowing testimony and argument regarding the existence of the tax issue, the instruction to the jury avoided any prejudice the Conconis might otherwise have suffered.

B. Motion in Limine No. 2 Regarding Documents Not Produced in Discovery

In motion in limine No. 2, the Conconis sought an order excluding from trial any documents not produced by PAE in discovery. The trial court granted the motion in part and denied it in part. On appeal, the Conconis challenge the denial of the motion in limine as to three documents. The first is trial exhibit No. 56, which the Conconis refer to as a PAE marketing video, and which PAE refers to as a documentary showing the final testing and delivery of the Vessel. The second and third are trial exhibit Nos. 59 and 60, which are insurance-related survey reports.

1. Trial Exhibit No. 56, Video

The Conconis argued in the trial court that the video of the Vessel was subject to discovery requests served on PAE, but had never been produced, and was first mentioned in PAE’s trial exhibit list. The Conconis’ motion in limine failed, however, to identify a discovery request to which the video was responsive. The motion argued several documents produced by PAE shortly before trial should be excluded because they were “responsive to [the Conconis’] previous requests for production, including requests asking for documents to support PAE’s contentions.” Several of the Conconis’ requests for production, copies of which were attached to the motion in limine, sought documents identified in responses to special interrogatories supporting specific contentions in PAE’s complaint. Neither in the trial court nor on appeal do the Conconis identify to which request for production the video would have been responsive.

The trial court denied the motion in limine as to documents produced after the discovery cut-off date because “no prejudice has been established sufficient to have me override the explanations given for why there was a late production. The [Conconis] are entitled, should they wish to, to depose a representative of [PAE] able to authenticate and speak to the late-produced documents.”

During trial, the Conconis objected to the admission of the video on ground of lack of foundation. The court and counsel discussed the matter in chambers, off the record. The court then overruled the objection.

We conclude the trial court did not err in allowing the video to be received in evidence. There was not sufficient evidence that the video had been requested in discovery, or that its admission would prejudice the Conconis.

2. Insurance-related Survey Reports, Trial Exhibit Nos. 59 and 60

Trial exhibit No. 59 is a pre-delivery trip survey prepared by a marine consulting and engineering company at the request of PAE’s insurance brokers to help the brokers decide whether to insure the Vessel’s voyage from Hong Kong to Vancouver. The survey concludes the Vessel and crew were “suitable to embark on the delivery voyage from Hong Kong to Canada.” Trial exhibit No. 60 consists of the appendices to exhibit No. 59.

Trial exhibit Nos. 59 and 60 were requested in discovery, but were not produced by PAE until two and a half weeks before trial. PAE responded to the motion in limine by advising the trial court that the survey had been filed with insurance documents, and not with documents relating to the Vessel, and therefore was overlooked when PAE provided its discovery responses to the Conconis. After the documents were discovered, they were produced to the Conconis. The trial court determined that the Conconis had not suffered any prejudice as a result of the late discovery, and, therefore, denied the motion in limine. The court ruled that during trial the Conconis could depose a PAE representative regarding those documents. The appellate record does not indicate whether such a deposition occurred.

During trial, the Conconis objected to trial exhibit No. 59 for lack of foundation. The trial court overruled the objection. The Conconis also renewed their motion in limine regarding trial exhibit No. 59. This matter was heard in chambers, off the record. The trial court did not change its decision to receive trial exhibit No. 59 in evidence. Trial exhibit No. 60 was received in evidence without objection.

We conclude the trial court did not err in admitting trial exhibit Nos. 59 and 60 at trial. The trial court was entitled to credit PAE’s explanation of why the documents were not produced until the eve of trial.

C. Motion in Limine No. 4 to Exclude Expert Testimony from
Jeff Sanson for Failure to Properly Designate Sanson as a Supplemental Expert.

Jeff Sanson was designated by PAE as a supplemental expert, pursuant to Code of Civil Procedure section 2034.280, to testify regarding “the reasonable budget for crewing and maintaining the N120 along with rebuttal to the opinions expressed in the survey of Kells Christian.” The Conconis’ motion in limine No. 4 sought to exclude the expert testimony of Sanson (as well as other supplemental experts) because (1) PAE had not previously properly designated an expert witness on the topic of the cost of crewing and maintaining the Vessel and (2) to the extent PAE’s original expert designation could be read to include that topic of expert testimony, Sanson’s testimony would be cumulative.

The trial court denied motion in limine No. 4, despite PAE’s failure to comply with the rules regarding expert designations, on the ground Sanson’s testimony would not cause any prejudice to the Conconis: “This issue is a close-call for me because as I have probably indicated by my comments, I find the original designation by plaintiff in questionable compliance with the rules. [¶] The matter having proceeded forward such that the defendants have taken the depositions of the late-designated experts, I am not going to preclude the calling of those witnesses. I will make a general rule or establish a general rule that cumulative testimony will not be permitted on any subject in the case, including experts, and I will sustain objections that if subsequent witnesses called, whether designated as percipient or expert, are asked the same questions as asked of previous witnesses. [¶] . . . [¶] So subject to that qualification, I’m going to permit the witnesses identified in plaintiff’s supplemental designation to testify. I will not on any subject in this case permit cumulative testimony. And if questions are asked that are cumulative, appropriate objections are to be made. [¶] With respect to motion in limine 4 of 6, that motion is accordingly denied.”

During trial, the Conconis again objected to Sanson’s testimony as duplicative and not within the scope of rebuttal. The court ruled as follows: “I have previously made the ruling that duplication would not be permitted. What I’m hearing presently does not fall into duplication and seems to be squarely within the issues presented by the respective cases being presented on both sides. [¶] The cross complainants’ position is duly noted for the record. The court will not at this time make any orders precluding Mr. Sanson’s testimony or any aspects thereof. Once questioning starts, if there are particular questions to which an objection is taken, I will rule on the objections.”

During Sanson’s testimony, PAE’s counsel asked whether Sanson had experience with the Conconis’ previous yacht; the trial court sustained an objection that such testimony was beyond the scope of the expert designation.

PAE’s supplemental designation of Sanson as an expert witness was improper under Code of Civil Procedure section 2034.280 because PAE failed to comply with the requirements of section 2034.260, in that it did not provide the required information in its initial expert designation. We cannot say that the trial court erred, however, in denying the motion in limine because the guidelines established by the court ensured the Conconis would not suffer any prejudice if Sanson were permitted to testify.

D. Motion in Limine No. 7 to Exclude Expert Witness Steve D’Antonio’s Modified Report.

The Conconis’ motion in limine No. 7 sought to exclude a modified report from expert witness Steve D’Antonio. After inspecting the Vessel in December 2013, D’Antonio prepared an inspection report containing his findings, opinions, and recommendations regarding defects in and repairs to the Vessel. D’Antonio provided his report to Mr. Conconi, who provided it to PAE; both parties produced the report during discovery and it was an exhibit in depositions.

On February 5, 2016, PAE designated D’Antonio as an expert witness. The expert witness designation identified D’Antonio as one of the persons “expected to give expert opinions that they have already expressed in their depositions already taken in this action as well as opinions developed after inspection of the N120-01 on September 28, 2015 and after review of the reports and testimony of [the Conconis’] experts[.] [¶] . . . [¶] . . . The opinions developed after the inspection of the N120-01 include opinions about the condition of the vessel, the ease of repair of any problems with the vessel woodwork, the general market conditions for the sale of the vessel, and other opinions that are the normal and natural part of their business in the yacht sales and brokerage business. [¶] . . . Their opinions will also include testimony that the issues with the N120-01 corrected in 2013, 2014, 2015 and into 2016 include normal maintenance and repair associated with the operation of the vessel. [¶] . . . Their testimony also is expected to include rebuttal to opinions of the [Conconis’] experts, but since those opinions are not yet known, we cannot know what opinions will be expressed.” The expert designation did not provide any more specificity regarding the expert opinions to be provided, much less which of the seven listed expert witnesses would provide testimony on which topics.

D’Antonio was deposed as an expert witness on February 22, 2016. At the deposition, he was asked about his December 2013 inspection report of the Vessel. D’Antonio testified that he would not change any of the opinions or conclusions in the report, and that he had no opinions about the Vessel that were not contained within the inspection report.

On March 30, 2016, five days before the trial date, at the deposition of another of PAE’s expert witnesses, James Leishman, the Conconis were provided with a modified version of D’Antonio’s inspection report. The revised inspection report added the cost of materials and the number of hours of labor to repair some of the items that had originally been listed on the inspection report. No additional items were listed. Leishman testified he had received a copy of the revised report three weeks earlier.

In motion in limine No. 7, the Conconis argued that PAE had pressured D’Antonio into modifying his inspection report under threat that PAE would take business away from him and prevent him from entering its factory.

PAE’s counsel responded that, after receiving a damages calculation from one of the Conconis’ expert witnesses, PAE learned for the first time that an element of the Conconis’ damages claim was the cost to repair deficiencies in the Vessel. Therefore, PAE’s counsel asked D’Antonio to add the costs of repairs to the report he had prepared in December 2013. After confirming that the items for which D’Antonio provided repair estimates were also addressed by the repair estimates of the Conconis’ expert witness, the trial court denied motion in limine No. 7 “[b]ased on the explanation given for why the items would have been identified and amplified as late as they were.” The modified report was admitted as trial exhibit No. 69. A separate document that pulled out the repair costs from the amended report and placed them into a single spreadsheet was admitted as trial exhibit No. 70.

We conclude the trial court did not err in admitting trial exhibit Nos. 69 and 70. D’Antonio provided the repair costs for the items of the Vessel requiring repair shortly after the Conconis’ own expert witness on damages provided his own repair estimate and testified at his expert deposition.

III.

ASSERTED ATTORNEY MISCONDUCT

The Conconis argue PAE’s counsel’s references to the CBSA investigation and potential criminal proceedings constituted attorney misconduct that resulted in prejudice. Misconduct is an “[i]rregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.” (Code Civ. Proc., § 657, subd. 1; see City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 870 [misconduct of counsel is an irregularity in proceedings].) Attorney misconduct justifies a new trial only if it is reasonably probable the party moving for a new trial would have achieved a more favorable result absent the misconduct. (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 802.)

As explained ante, PAE’s counsel’s questions and argument regarding the CBSA investigation and potential criminal proceedings were permissible and did not prejudice the Conconis. For the same reasons, the Conconis cannot support their claim of attorney misconduct.

IV.

ATTORNEY FEES

The Conconis argue that the attorney fees awarded by the trial court were unreasonable because they were greater than the amount actually incurred. “‘On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.’” (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175.)

California cases consistently hold that determination of an award of attorney fees starts with the lodestar, which is the number of hours reasonably expended multiplied by the reasonable hourly rate. (E.g., PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) “The reasonable hourly rate is that prevailing in the community for similar work.” (Ibid.) The reasonable hourly rate is not necessarily the hourly rate charged in the case. “There is no requirement that the reasonable market rate mirror the actual rate billed. As we stated in Chacon v. Litke [2010] 181 Cal.App.4th 1234: ‘“The reasonable market value of the attorney’s services is the measure of a reasonable hourly rate. [Citations.] This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel.”’” (Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 700-701.)

PAE’s motion for attorney fees was supported by a declaration from its lead trial counsel that he had billed his time at a lower rate than was reasonable in the community, due to his law firm’s long-term relationship with PAE as a client. The motion also identified the reasonable hourly rate as $450 for an attorney in the community with the education and experience of PAE’s lead trial attorney. The trial court’s minute order identified the reasonable hours and the reasonable hourly rates for all legal professionals working for PAE. The trial court specifically noted that it was disallowing 21.75 hours claimed by PAE’s counsel “because there were motions that were less well brought than others.”

The Conconis argue that because the purchase contract permits recovery of attorney fees incurred, PAE is only entitled to recover the actual amounts billed by PAE’s counsel, not counsel’s nondiscounted rates, regardless of the reasonableness of the fees. Neither in the trial court nor on appeal do the Conconis develop this argument any further.

The trial court did not abuse its discretion in its award of attorney fees to PAE. In view of the extent and nature of the parties’ competing claims in this litigation, we conclude the attorney fees are reasonable even in light of the reduction of damages permitted by this opinion.

DISPOSITION

The judgment is reversed solely as to the amount of damages. The trial court is directed to hold a new trial on the issue of damages, unless Pacific Asian Enterprises files a timely consent to reduce the damages from $722,161 to $615,314, in accordance with rule 8.264(d) of the California Rules of Court. In all other respects, the judgment is affirmed. The order granting PAE’s motion for attorney fees is affirmed. Because each side prevailed in part, each side is to bear its own costs, including attorney fees, on appeal.

FYBEL, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

ARONSON, J.