Filed 5/12/20 Alshamlan v. Arabian Restaurants 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

MESHAL ALSHAMLAN,

Plaintiff and Appellant,

v.

ARABIAN RESTAURANTS, INC. et al.,

Defendants and Respondents.

G057543

(Super. Ct. No. 30-2018-01004049)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Richard Y. Lee, Judge. Reversed and remanded with directions.

Metz & Harrison, Jeff A. Harrison, and Sara Pezeshkpour for Plaintiff and Appellant.

No appearance for Defendants and Respondents.

* * *

This case comes to us after the trial court entered a default judgment in favor of plaintiff Meshal Alshamlan against defendants Arabian Restaurants, Inc., dba Olive Tree Restaurant, and Alan Abdo (Arabian’s alleged owner). The court awarded Alshamlan $5,000 in statutory damages based on a single incident that violated his rights under both the Unruh Civil Rights Act (Civ. Code, § 51 et seq.) and the Disabled Persons Act (Civ. Code, § 54 et seq.), plus $1,800 in attorney fees and $631.33 in costs, jointly and severally against Arabian and Abdo. Alshamlan appealed, claiming the trial court abused its discretion by awarding inadequate attorney fees.

We invited Alshamlan to provide us with supplemental briefing on the issue of whether the default judgment appealed from is void because it includes an award of damages in excess of the amount set forth in the complaint. He did so, acknowledging the damage award in his judgment was flawed, but urging us to nonetheless address the merits of his attorney fee argument, in the interests of judicial efficiency.

We must decline to do so. The judgment in this case is not just flawed; it is void. The complaint seeks no particular amount of damages, and thus supports no award of damages in case of a default. Because Alshamlan’s claim for damages arose out a personal injury he allegedly suffered as a consequence of defendants’ discriminatory actions, he was required to serve a notice of damages on the defendants before their default could be entered. There is no indication in the record before us he did so. And because none of Alshamlan’s statutory causes of action were alleged against Abdo, it does not appear the court had authority to issue an injunction against Abdo personally, or that Alshamlan substantiated the entry of any judgment for damages against Abdo at the default prove-up. In light of these flaws, we must reverse the judgment and remand the case to the trial court for further proceedings.

Given that posture, the merits of the trial court’s initial attorney fee award become moot. On remand, in connection with the entry of any subsequent judgment, Alshamlan may renew his request for an award of attorney fees. At that time, the trial court may again exercise its broad discretion to determine a reasonable amount of fees under the lodestar method, assessing not only the reasonableness of the hours and hourly billing rate claimed as a basis for calculating that initial lodestar amount, but also considering any additional factors which may justify a departure up or down from that initial calculation.

FACTS

Alshamlan filed his complaint in July 2018, alleging he has Blounts Disease, a condition that has caused his left tibia to curve inward, and results in his having substantial difficulty with balance, standing and walking. As a consequence of his disease, Alshamlan allegedly qualifies as a person with a disability under applicable state and federal law.

In March 2018, Alshamlan allegedly visited defendants’ restaurant for lunch, accompanied by Geo, a qualified service dog who was wearing a leash identifying him as such. Employees of the restaurant allegedly refused to serve Alshamlan on the patio, yelled at him, and insisted he leave the premises because he was accompanied by a dog—despite his attempts to explain that his dog was a trained service dog.

When Alshamlan asked to speak to a manager, he was allegedly confronted by Abdo, who “pushed [him] forcibly on his chest.” Although Alshamlan tried to explain to Abdo that Geo was a trained service dog who assists him with his disability, Abdo allegedly yelled and cursed at him. When Alshamlan told Abdo that both federal and state law required the restaurant to permit Geo to accompany him, Abdo allegedly replied that he “did not care about the law,” made derogatory remarks relating to Alshamlan’s perceived ethnicity, and told him he was not welcome in the restaurant. After Abdo allegedly continued to berate him, and threatened to call the police, Alshamlan left the restaurant.

Alshamlan alleged he was extremely embarrassed and upset by the way he was treated by the restaurant and its staff.

Based on those facts, Alshamlan stated four causes of action alleging statutory violations against Arabian, including (1) violation of the Unruh Civil Rights Act (UCRA), identified as Civil Code section 51 et seq., (2) violation of the Disabled Persons Act (DPA), identified as Civil Code section 54.1 et seq., (3) violation of the Americans with Disabilities Act (ADA), identified as 42 U.S.C. section 12181 et seq., and (4) violation of the unfair competition law, identified as Business and Professions Code section 17200 et seq. As against Abdo, Alshamlan stated two causes of action, for assault and battery.

Alshamlan’s complaint did not allege he suffered any particular measure or amount of damages; instead, his prayer for relief sought an injunction ordering defendants to make their facilities accessible to people with disabilities, plus specified types of damages, including “general, compensatory, and statutory damages pursuant to Civil Code § 51 et seq. and/or Civil Code § 54.1 et seq., in an amount within the jurisdiction of this Court, and that these damages be trebled according to statute.” Alshamlan also prayed for an award of attorney fees pursuant to statute.

Neither Arabian nor Abdo responded to the complaint in a timely fashion, and in September 2018, Alshamlan filed a request to enter their defaults.

In December 2018, Alshamlan filed his request for entry of a default judgment by the court, supported by evidence. He requested that the court issue a permanent injunction against both defendants requiring them to “modify their policies, practices, and procedures to ensure that disabled patrons who use a service animal are afforded full and equal access to the Restaurant’s facilities, goods, and services.” He also sought a monetary judgment in the amount of $40,311.33, against both defendants jointly and severally, comprised of $25,000 in damages, plus $14,680 in attorney fees and $631.33 in costs.

Alshamlan supported his request with points and authorities arguing for the entry of a judgment based solely on his statutory causes of action for violations of the UCRA, the DPA and the ADA. Specifically, Alshamlan based his request for an injunction on his cause of action alleging a violation for the ADA, noting that an injunction “is the only relief available under Title III of the ADA.” He then based his claim for damages on his causes of action alleging violations of the UCRA and the DPA. He asserted he was entitled to a minimum award of $4,000 under the UCRA, which he asked to have assessed against Arabian, and a minimum award of $1,000 under the DPA, which he asked to have assessed against Abdo. Alshamlan also argued that the court should exercise its discretion under both statutory schemes to award a significantly higher amount of damages, and urged that the higher amount be a combined $25,000, awarded jointly and severally against Arabian and Abdo.

Alshamlan expressly “relinquish[ed]” his cause of action for assault, but argued he had submitted sufficient evidence (by way of his declaration) to support a claim for damages arising out of battery. However, he stated he “does not seek actual damages for the battery,” preferring instead to ask the court “to view the battery as an aggravating factor weighing in favor of increasing his minimum statutory damages under Civil Codes §51 et seq. and §54.1 et seq.”

Alshamlan supported his claim for attorney fees by referencing the same three statutory causes of action he relied upon to justify his requested judgment. He pointed out that “[t]he Unruh Act and the Disabled Persons Act make an award of attorneys’ fees mandatory, not discretionary, where there is a finding of liability.” He argued that the proper way to determine the amount of fees to award was by application of the lodestar method, and provided the court with declarations from both attorneys who worked on the case, establishing the hours spent on the case, and their claimed hourly rates. Both attorneys identified cases in which other courts had awarded them fees, at the rates requested. Alshamlan argued that because defendants had failed to engage in the litigation, the court should assume Alshamlan’s counsel would be required to devote an extraordinary amount of effort to ensure defendants complied with any injunction issued and to collect any damages awarded. Based on that reasoning, Alshamlan sought total fees of $14,680.

At the prove-up hearing, the court refused to award the $25,000 in damages Alshamlan requested because the complaint did not allege any specific amount of damages. The court concluded, however, that the complaint “did give notice of the statutory minimum damages” which were “$4,000.00 pursuant to Civil Code §52(a) and $1,000 pursuant to Civil Code §54.3.” Consequently, the court reasoned that “from a notice to a defaulted defendants’ perspective, . . . $5,000 in damages was appropriate.”

The court also declined to issue the proposed injunction requested by Alshamlan, characterizing it as “overbroad, unlawful and . . . either unenforceable or hard to enforce.” Instead, the court enjoined Arabian and Abdo, and their employees, from “denying reasonable accommodations to persons with disabilities pursuant to Civil Code section 52(c)(3) and Business & Professions Code section 17200 et seq.”

The court rejected Alshamlan’s request for over $14,000 in attorney fees and directed counsel to Superior Court of Orange County, Local Rules, rule 366, which provides a schedule for reasonable attorney fees applied to the amount of a default damage award of $5,000 or less to be “10% with a minimum of $400.” The court noted, however, that the rule also specified “where an attorney claims to be entitled to a fee in excess of [the scheduled amount], the attorney may apply to the Court and present proof to support a higher award. The Court will determine the reasonable fee amount according to proof.” (Superior Court of Orange County, Local Rules, rule 366.)

Alshamlan’s counsel responded by arguing a higher fee was proper based on the evidence submitted. Counsel claimed the time spent and hourly fees charged were reasonable; the court expressed its skepticism. Among other things, the court inquired whether there were other courts, besides the ones mentioned in Alshamlan’s prove-up evidence, that had found counsel’s hourly rates too high, or had reduced the fee amounts requested, and counsel conceded there were. The court recognized it had broad discretion to award reasonable fees in whatever amount was supported by the evidence submitted, and took the matter under submission. After further considering the evidence submitted and counsel’s arguments, the court exercised its discretion and awarded $1,800 in attorney fees.

DISCUSSION

1. Limits on Default Judgments

It is well-settled that the amount of damages awarded in a default judgment cannot exceed the amount requested in the complaint. (Code Civ. Proc., § 580.) “Section 580 exists to insure that a defaulting defendant has adequate notice of the judgment that might (and probably will) be entered against him, and to permit an enlightened decision about whether to appear and defend or to give up that right “‘in exchange for the certainty that he cannot be held liable for more than a known amount.’”” (Janssen v. Luu (1997) 57 Cal.App.4th 272, 275.) Consequently, “the amount of damages communicated to the defaulting defendant sets the ceiling on the plaintiff’s recovery, and that a default judgment in excess of that amount is void.” (Ibid.)

Moreover, in cases where the plaintiff seeks recovery based on personal injury, the complaint—or a notice of damages filed pursuant to Code of Civil Procedure section 425.11—must impart actual notice of the amounts of special and general damages sought before the default can be entered; constructive notice is not sufficient. (Schwab v. Rondel Homes, Inc. (1991) 53 Cal.3d 428, 435 (Schwab) [“A defendant is entitled to actual notice of the liability to which he or she may be subjected, a reasonable period of time before default may be entered”].)

In Schwab, the plaintiffs alleged a statutory claim based on housing discrimination and sought an award of damages under Civil Code section 54.3—just as Alshamlan has done in this case. The plaintiffs’ complaint sought damages “for mental and emotional distress and for ‘further monetary and pecuniary losses and damages’ in amounts according to proof, treble statutory damages also in amounts according to proof ‘but in a sum no less than $250,’ attorney fees, and punitive damages of $500,000.” (Id at p. 430.) The Supreme Court reasoned that because the statutory damage claim was based on the plaintiffs’ alleged emotional injury, it was subject to Code of Civil Procedure section 425.11, and the court could not allow a default to be entered without the required notice.

This case is governed by Schwab. The only damages alluded to in Alshamlan’s complaint were personal injury damages; he alleged he was “extremely embarrassed and upset” by defendants’ discriminatory action against him, and as a result he had suffered emotional distress. His only two causes of action alleged against Abdo were classic personal injury claims—assault and battery. Moreover, in his default prove up, Alshamlan explicitly relied on the damages he claimed would otherwise have been awardable under his battery cause of action as support for an increased statutory damage award. He asked the court “to view the battery as an aggravating factor weighing in favor of increasing his minimum statutory damages under Civil Codes §51 et seq. and §54.1 et seq.” He made no claim that he suffered any other damages as a consequence of defendants’ wrongful conduct.

Under these circumstances, Schwab required Alshamlan to file a notice of damages in compliance with Code of Civil Procedure section 425.11 before he requested entry of either Arabian’s or Abdo’s defaults. In the absence of evidence that he did so, the court erred by entering the defaults. (See, Schwab, supra 53 Cal.3d. at p. 435 [“We cannot allow a default judgment to be entered against defendants without proper notice to them of the amount of damages sought. . . . The trial court in this case properly vacated the default entered against defendants”].)

Even if the trial court had properly entered the defendants’ defaults, we would conclude the judgment entered following Alshamlan’s prove-up was void, for several reasons. First, the court’s award of damages was based on defendants’ constructive knowledge of the minimum damage amounts authorized by the UCRA and the DPA. As noted above, constructive knowledge is an insufficient basis for awarding statutory damages that are based on personal injury.

And even if the damages Alshamlan sought did not arise from personal injury, we would have difficulty concluding that the complaint in this case imparted sufficient constructive knowledge of the minimum damages a defendant was at risk of having to pay in the event of default on the statutory claims. While Alshamlan’s complaint does cite the general statutory schemes upon which his UCRA and DPA claims are based, it does not specifically identify the statutes authorizing damages, let alone explain how those statutory damage provisions would operate in this case. Indeed, neither provision is entirely free from ambiguity.

Under both Civil Code section 52 (the damage statute contained in the UCRA) and Civil Code section 54.3 (the damage statute contained in the DPA), the plaintiff is entitled to recover both “actual damages” and a separate amount, determined by the trier of fact, that is “up to a maximum of three times the amount of actual damage but in no case less than [$4,000 under the UCRA and $1,000 under the DPA].” (Civ. Code, §§ 52, subd. (a), 54.3, subd. (a).) In Alshamlan’s view (and apparently the trial court’s as well) these statutes guarantee that a plaintiff who has established a violation of both statutes will be awarded at least $4,000 in damages under the UCRA, plus at least $1,000 in damages under the DPA, without regard to proof of actual damages. However, a reasonable layperson reading those provisions might conclude they allow a plaintiff to recover only actual damages plus an additional award that is derived from a multiplier of actual damages. Under the latter interpretation, the reasonable layperson could conclude that in the absence of an allegation that the plaintiff suffered some amount of actual damages, no damages would be awarded.

As this case demonstrates, even legal professionals can be confused about how to calculate damages under these statutes. In what Alshamlan concedes was a “flaw,” the court’s judgment improperly held both defendants liable, jointly and severally, for the combined statutory damages recoverable under the UCRA and the DPA, when the law allows only one measure or the other to be assessed against a defendant. (Civ. Code, § 54.3, subd. (c) [“A person may not be held liable for damages pursuant to both this section and Section 52 for the same act or failure to act”]; Flowers v. Prasad (2015) 238 Cal.App.4th 930, 939.)

Further, Alshamlan appears to be confused about how damages are calculated under each of the statutes. He claims that a prevailing plaintiff would be entitled to the “minimum” statutory award—$4,000 under the UCRA or $1,000 under the DPA—and to have those minimum amounts trebled. That is not so. What the statutes allow is an award of “actual damages” plus an additional amount of up to three times those actual damages, with the latter amount being a minimum of $4,000 or $1000 in the respective statutes. If the plaintiff’s actual damages were below the $4,000 or $1,000 minimum amounts, or were nonexistent, there would be no basis for trebling those statutory amounts.

Given the complexity of analyzing the damages available under these overlapping statutory schemes, and the confusion that analysis appears to generate even among those trained in the law, we are dubious that a complaint’s passing reference to the schemes would provide the named defendants, who are apparently not lawyers, with sufficient information about their potential damage exposure under either, or both, statutory schemes to allow those defendants to make a reasoned decision about whether to default.

There is another flaw as well which Alshamlan recognizes in his supplemental brief. As we have already noted, Alshamlan’s complaint alleges no causes of action jointly against both Arabian (the corporate entity which owns the restaurant) and Abdo. The causes of action alleging statutory violations are stated against Arabian only, while Abdo is named only in the causes of action for assault and battery. What that means is that Abdo cannot be held liable for any relief awarded based on the statutory causes of action—either equitable or legal. (See Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 865 [defaulting parties may not be held jointly and severally liable for damages alleged only against a codefendant].) In this case, that was everything. In fact, based on the prove-up made by Alshamlan—which abandoned his cause of action for assault, and asked for no damages on the cause of action for battery—Abdo would be entitled to entry of a judgment in his favor.

However, because we have already concluded that the trial court apparently erred by entering Arabian’s and Abdo’s defaults in the first place, it would be premature to order the entry of any judgment in favor of any party. Since the defaults may be vacated entirely due to the absence of a statement of damages under Code of Civil Procedure section 425.11, Alshamlan will have various options available to him, including a request to amend his complaint to cure at least some of the flaws we have identified.

2. Attorney Fees

In light of our determination that the judgment in this case is void, and that the case must be remanded to the trial court to determine, at a minimum, whether the defendants’ defaults will be vacated for lack of a required notice of damages, we also conclude the propriety of the attorney fee award included in the judgment is moot. Nonetheless, since we believe the fee issue is likely to arise again on remand, we include these observations.

Under California law, “a court assessing attorney fees begins with a touchstone or lodestar figure, based on the ‘careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.’” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131-1132 (Ketchum).) The court looks at “prevailing hourly rates” to determine the attorney’s reasonable hourly compensation, and “must carefully review attorney documentation of hours expended [because] ‘padding’ in the form of inefficient or duplicative efforts is not subject to compensation.” (Id. at p. 1132.) Once the court has ascertained that lodestar amount, it may adjust the award based on various factors, including: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award.” (Ibid.)

“[A]scertaining the fee amount is left to the trial court’s sole discretion. [Citations.] Trial judges are entrusted with this discretionary determination because they are in the best position to assess the value of the professional services rendered in their courts.” (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1321.) Significantly, “[t]o the extent a trial court is concerned that a particular award is excessive, it has broad discretion to adjust the fee downward or deny an unreasonable fee altogether.” (Ketchum, supra, 24 Cal.4th at p. 1138.) As the Ketchum court explained, “[a] fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Id. at p. 1137.)

Alshamlan argues in his appellate brief that he “obtained via entry of default judgment all of the relief he sought in his complaint,” thus suggesting he achieved a complete victory via his default judgment. The record does not support such a claim. Alshamlan sought $25,000 in damages on his complaint, as well as an injunction which the trial court characterized as much broader than the one it agreed to issue. The court’s initial judgment awarded Alshamlan only $5,000, and the more limited injunction. That is not “all the relief” he sought. Limited success is also a factor the court can consider in departing downward in a fee award.

The trial court should consider these factors, or any others that are proper, in evaluating any future fee requests in this case. We express no opinion on the weight to be given to any of them.

DISPOSITION

The judgment is reversed, and the case is remanded to the trial court with directions to determine whether a notice of damages was filed pursuant to Code of Civil Procedure section 425.11. If no such notice was filed, the court is directed to vacate the default judgment entered against the defendants. If that notice was filed, the court is directed to reconsider the default judgment in accordance with its terms. No costs are awarded.

GOETHALS, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.