Thursday, October 30, 2014

And I Get Upset when My Broadband Is Slow ....

Holguin v. Dish Network, No. D059983 (D4d1 Sept. 22, 2014)

A technician drilled through a sewer pipe while installing satellite television in plaintiffs’ home. He didn’t realize it. By the time the mistake was uncovered more than a year later, plaintiffs’ house has become a mold mine. Defendants (various AT&T-owned companies) agreed to pay for the remediation. But that didn’t go very well, and the matter winds up in litigation. A jury awarded plaintiffs $109,000. The court followed by awarding $180,000 in attorneys’ fees,
about a third of what plaintiffs’ asked for. Defendants appeal on three somewhat related issues, plus in the court’s award of legal fees. Plaintiffs cross-appeal on the amount of the fee.

Defendants first say that the trial court erroneously instructed the jury on plaintiffs’ contract claims. The evidence showed that there were a series of different form agreements between the plaintiffs and the various defendant entities, signed by plaintiffs at various stages of the installation process. The instructions, however, all referred to “contract,” in the singular. The court here rejects the argument. First, defendants didn’t propose any instruction that used the plural, so the argument was forfeited. And even if it weren’t, the evidence showed that each of the agreements was part of single transaction—the plaintiffs’ signing up telecommunications services. The agreements were replete with cross-references. Under the circumstances, there was no error in treating the various instruments as a series of contracts that “are to be taken together” under Civil Code § 1642, and thus effectively treated as a single contract.

Second, defendants appeal the court’s instruction that the contracts contained an implied term requiring Defendants to properly install the equipment they were providing. They argue that because the contract didn’t contain any such term, it was error for the trial court to tell the jury to imply it. But that argument runs into the law. Every contract includes an implied duty to perform with reasonable care. If you contract to do X, and you do X negligently, you have breached the contract.

Third, defendants appeal the superior court's denials of JNOV and new trial motions that raised the above points as well as the insufficiency of the evidence. The contract points fail for the same reason as above. And as to the adequacy of the evidence, defendants failed to carry their burden on appeal of showing that there was no substantial evidence in favor of the verdict.

Finally, defendants appeal, and Plaintiffs cross-appeal, on the attorneys’ fee award. Defendants first claim that fees aren’t awardable under Civil Code § 1717 because the jury verdict appeared to award damages on negligence, not contract claims.  The court first clarifies that the standard of review is that applicable to determining the prevailing party (abuse of discretion) as opposed to the standard that applies to a determination of the legal basis of an award (de novo). Deciding whether the fee award sufficiently arose from the contract, as opposed to tort, claims was a determination of prevailing party (and claim) status. On the merits, the trial court did not abuse its discretion.  Although the verdict form did not specifically award contract damages, it found that the four elements of breach of contract had been proven and the part of the special verdict that calculated damages was separate from the individual counts on which the jury was polled.

As to the amount of fees, when it calculated the lodestar, the trial court did not abuse its discretion in declining to include about 150 hours of duplicative work a replacement attorney had to do when their first lawyer fell ill. The court’s authority to award reasonable fees permitted it to disallow this time.  Nor did the court err in apportioning fees between contract and tort claims—most of which were nonsuited.  The court employed a reasonable methodology to accomplish the apportionment so it did not abuse its discretion.  Finally, the trial court also did not abuse its discretion in declining to apply an enhancement.  The lodestar itself was a reasonable fee.  Particularly when compared to what the attorneys would obtain under their retainer agreement had there been no § 1717 provision—less than $40 grand—the un-enhanced $180,000 awarded by the court was within the realm of reason.


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