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CHAPMAN v. << (2021)

United States Court of Appeals, Ninth Circuit.2021-01-21No. No. 19-16732

Summary

Holding. The court affirmed the district court's award of attorney's fees, concluding that Chapman was a prevailing party under 42 U.S.C. § 12205 because the legally enforceable settlement agreement materially altered the parties' legal relationship, and the fee award was reasonable and not an abuse of discretion.

Chapman reached a legally enforceable settlement agreement with the defendants (NJ Properties and the Panchals) that required them to take actions they would not otherwise be obligated to undertake. The district court retained jurisdiction over the matter and awarded Chapman's attorney $42,545 in fees, $2,048.42 in litigation expenses, and $419.50 in costs. The defendants appealed, arguing Chapman was not a "prevailing party" entitled to recover attorney's fees under federal law and that the fee award was unreasonable.

The court found that Chapman qualified as a prevailing party because the settlement agreement materially altered the legal relationship between the parties by imposing new obligations on the defendants, and because the district court maintained jurisdiction over fee matters. The court rejected the defendants' challenges to the fee calculation, noting that Chapman's attorney provided detailed time records in standard billing increments, and the district court properly compared the hourly rates to community standards rather than measuring the total award against other comparable cases. The court determined the award was reasonable and not subject to reduction based on case simplicity or settlement amount.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a private settlement agreement can confer prevailing party status for attorney's fee purposes
  • Standard for determining material alteration of legal relationship between parties
  • Reasonableness of attorney's fee award based on hourly rates and community standards

Procedural posture

The defendants appealed the district court's order granting the prevailing party's request for attorney's fees and litigation costs following a settlement agreement.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

MEMORANDUM **

Appellants Rakesh S. Panchal, Manisah R. Panchal, and NJ Properties, Inc. (collectively, “NJ”) appeal the district courts order granting Appellee Chapmans counsel $42,545 in attorneys fees, $2,048.42 in litigation expenses, and $419.50 in litigation costs. Because we find that Chapman was a “prevailing party” under 42 U.S.C. § 12205 and that the district courts award was reasonable, we affirm.

1

1. The district court did not err in concluding that Chapman was the “prevailing party” under 42 U.S.C. § 12205. A party prevails when the legal relationship between the parties is materially altered. Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1118 (9th Cir. 2000); see also Farrar v. Hobby, 506 U.S. 103, 111, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). “[A] material alteration of the legal relationship occurs [when] the plaintiff becomes entitled to enforce a judgment, consent decree, or settlement against the defendant.” Fischer, 214 F.3d at 1118 (second alteration in original). “A settlement agreement,” in particular, “meaningfully alters the legal relationship between parties if it allows one party to require the other party ‘to do something it otherwise would not be required to do.’ ” Jankey v. Poop Deck, 537 F.3d 1122, 1130 (9th Cir. 2008) (quoting Fischer, 214 F.3d at 1118). Thus, for purposes of attorneys fees “a plaintiff ‘prevails’ when he or she enters into a legally enforceable settlement agreement against the defendant.” Barrios, 277 F.3d at 1134.

2

A district courts decision to “retain jurisdiction over the issue of attorneys’ fees” is also dispositive. Id. at 1134 n.5; Richard S. v. Dept of Developmental Servs. of Cal., 317 F.3d 1080, 1087 (9th Cir. 2003). Here, the parties’ settlement agreement is enforceable in the event of default,

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which requires NJ “to do something it otherwise would not be required to do.” See Jankey, 537 F.3d at 1130 (quoting Fischer, 214 F.3d at 1118). Furthermore, the district court expressly retained jurisdiction over the attorneys fee issue. Thus, the settlement agreement created a “material alteration of the [parties’] legal relationship,” see Fischer, 214 F.3d at 1118, making Chapman the “prevailing party” under 42 U.S.C. § 12205.

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2. The district courts award was not unreasonable. Regardless of whether NJ challenged the fee request or hours billed below, NJ provides no arguments as to why the district courts award was an abuse of discretion. Contrary to NJs assertion otherwise, Chapmans attorney provided twelve pages that detailed his time spent on legal services in one-tenth hour increments, and the district court relied on these logs when making its determinations. Further, the district court properly considered whether “the requested rates are in line with those prevailing in the community” for similar services, see Hiken v. Dept of Def., 836 F.3d 1037, 1044 (9th Cir. 2016) (emphasis added), not, as NJ contends, whether the overall fee is comparable to similar cases. Nor should the district court have denied the award request based on the simplicity of the case or the settlement amount. A “prevailing party ․ should ordinarily recover an attorneys fee unless special circumstances would render such an award unjust,” Barrios, 277 F.3d at 1134, such as when the victory is “purely technical or de minimis,” id. at 1135. This case presents no such circumstances, nor does the record contain anything suggesting the district courts findings were clearly erroneous.

AFFIRMED.

FOOTNOTES

1

.   We have jurisdiction under 28 U.S.C. § 1291 and assume familiarity with the facts, procedural history, and issues on appeal. We review the district courts order granting attorneys fees for an abuse of discretion, its legal analysis de novo, and its factual findings for clear error. See Barrios v. Cal. Interscholastic Fedn, 277 F.3d 1128, 1133 (9th Cir. 2002).

2

.   NJ is incorrect that Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001) forecloses the district courts conclusion that a private settlement could give rise to prevailing party status. Buckhannon does seem to limit “prevailing party” status to situations where a party receives a “judgment on the merits” or enters into a “settlement agreement[ ] enforced through a consent decree.” Id. at 603–04, 121 S.Ct. 1835; see also id. at 604 n.7, 121 S.Ct. 1835 (noting that private settlement agreements would not fall into either delineated situation). This court has repeatedly not followed what it considers dictum from Buckhannon, instead holding that a party can prevail so long as a private settlement agreement is legally enforceable. See, e.g., Jankey, 537 F.3d at 1129–30; Richard, 317 F.3d at 1086; Skaff v. Meridien North America Beverly Hills, LLC, 506 F.3d 832, 844 (9th Cir. 2007) (per curiam); Barrios, 277 F.3d at 1134, 1134 n.5. We are bound by these cases interpreting Buckhannon. See Koerner v. Grigas, 328 F.3d 1039, 1050 (9th Cir. 2003).

3

.   The record is unclear whether NJs promise to make architectural changes is also enforceable under the settlement agreement, though the district court seemed to think it was. The answer to this question is likely irrelevant, however, as NJ has already satisfied its equitable promises, leaving the remaining monetary aspect of the agreement enforceable in the event of default.

4

.   NJs arguments to the contrary are unpersuasive. “The touchstone of the prevailing party inquiry must be the material alteration of the legal relationship of the parties.” Tex. State Teachers Assn v. Garland Independent School Dist., 489 U.S. 782, 792–93, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989). The touchstone is not, as NJ claims, whether the $20,000 payment was a “payment for damages” or a “settlement payment only,” whether NJ admitted liability, whether the court signed the agreement, whether the district court made a merits determination, or whether the case was dismissed with prejudice. “Through [Chapmans] legally enforceable settlement agreement and the district courts retention of jurisdiction, [Chapman] obtained a ‘judicial imprimatur’ that alters the legal relationship of the parties․” See Richard, 317 F.3d at 1088.