Calculations of Prevailing Attorney Fees May Rely on Rates Exceeding the Actual Rate Charged

Author: Robert Tyson

The First District in Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691 addressed the computation of attorney fees awards for the prevailing party in a legal malpractice action, holding that the trial court’s determination of the “reasonable rate” in its calculation could exceed the actual rate charged to the insurance company.

Background
In Syers, the defendant attorneys prevailed in the legal malpractice action against them, and subsequently sought attorney fees as the prevailing parties pursuant to Civil Code section 1717 and the attorney-client fee agreement. In support of the fee request, defense counsel provided attorney declarations indicating the amount of hours spent in various categories of work. Defense counsel also submitted the declaration of a 20-year defense attorney and the Laffey Matrix, an official source of rates for attorneys, to demonstrate the “reasonable rates” for the attorneys based on their education, experience, and the complexity of the work performed. The motion did not include the actual attorney rates charged or the billing records. The trial court awarded defendants $843,245.27, finding the requested rates and computation of hours were reasonable.

Holding
The appellate court held the trial court did not abuse its discretion in its award of attorney fees. Specifically, the court confirmed that detailed time records were not required to determine the computation of hours, and that trial courts have discretion to rely on declarations alone to determine the reasonable number of hours spent.

The court also held that the trial court did not abuse its discretion in adopting rates that exceeded the actual rates billed by the attorneys, stating, “[t]here is no requirement that the reasonable market rate mirror the actual rate billed,” and that “the trial court is in the best position to value the services rendered by the attorneys in his or her courtroom.”

Effects of Ruling
When submitting attorney fees motions, attorneys should consider including declarations indicating the reasonable market rate for services provided even where these rates exceed the actual rates charged.

ABOUT THE AUTHOR: Mina Miserlis is senior counsel at Tyson & Mendes LLP. She specializes in personal injury and high net worth insurance issues. Contact Mina at 858.263.4108 or mmiserlis@tysonmendes.com.

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