Unpublished Disposition, 924 F.2d 1062 (9th Cir. 1988)

MEMORANDUM^* 

Sylvester Graves appeals the district court's award of attorneys' fees to prevailing defendant Theodore Hamilton. Graves contends that there is no basis in law for awarding attorneys' fees, and, alternatively, that the amount of the award is excessive. We conclude that state law provides a basis for the district court's award of fees and that the amount awarded is reasonable. We affirm.

DISCUSSION

Federal courts in diversity actions must follow state law to determine whether the allowance of attorneys' fees is proper. Montserrat Overseas Holdings, S.A. v. Larsen, 709 F.2d 22, 24 (9th Cir. 1983). Hawaii law provides for a fee award to a prevailing party "in all actions in the nature of assumpsit...." Haw.Rev.Stat. Sec. 607-14 (1985). "Assumpsit is a common law form of action which allows for the recovery of damages for the nonperformance of a contract, either express or implied, written or verbal, as well as quasi contractual obligations." Schulz v. Honsador, Inc., 67 Haw. 433, 690 P.2d 279, 281 (1984). Hawaii law is sufficiently developed to allow us to decide this case without certifying questions of law to the Hawaii Supreme Court. See id. at 281-82 (describing the standard for determining if an action is in the nature of assumpsit).

We conclude that Graves' claims for breach of warranties clearly are in the nature of assumpsit. See id. at 282. Graves nevertheless argues that he did not intend to allege warranty theories against Hamilton. He claims that his pleadings, conduct, and arguments before the trial court belie that court's conclusion that Hamilton was included in the warranty counts. Graves' complaint, however, charges each defendant with negligence, strict liability, and breach of warranties. Moreover, Hamilton moved for summary judgment, raising and discussing the warranty claims. Graves never informed Hamilton or the court that the warranty claims were not intended to include Hamilton. Consequently, Hamilton's attorney argued the warranty theories and the district court addressed and disposed of them in granting summary judgment.

Graves nevertheless contends that the absence of a prayer for specific monetary relief in his complaint shows that he intended the action to be one of tort and not assumpsit. See Haw.Rev.Stat. Sec. 663-1.3 (Supp.1989) (specific prayer for damages is prohibited in an action based on personal injury). The burden, however, is on the party opposing the taxation of fees under section 607-14 to show that the assumpsit claims were not actually litigated. Schulz, 690 P.2d at 282. The record in this case shows that the warranty claims were litigated by the parties and resolved by the court. Accordingly, we conclude that the district court properly determined that this action was in the nature of assumpsit. See Healy-Tibbitts Const. Co. v. Hawaiian Ind. Refinery, Inc., 673 F.2d 284, 286 (9th Cir. 1982) (establishing presumption in favor of conclusion that an action is in the nature of assumpsit). An award of fees was thus appropriate.

Graves contends that, even if fees are available, the award of $9,820.18 for fees and costs is arbitrary, unreasonable, and unrelated to actual attorneys' expenses. Specifically, he argues that the district court erred by (1) referring to a prior settlement offer as a guideline in setting the amount of fees; (2) not requiring counsel to fully substantiate the fee request; and (3) awarding an excessive amount.

We initially note that there can be no dispute over costs. See Azer v. Meyers, 71 Haw. 507, 795 P.2d 853, 857 (1990) (costs should be viewed separately from the issue of attorneys' fees). Hamilton, as a prevailing party, is entitled to recover his costs. Id. Moreover, the issue of costs should be considered separately because, " [a]s a general proposition, the award of costs is governed by federal law...." In re Merill Lynch Relocation Management, Inc., 812 F.2d 1116, 1120 n. 2 (9th Cir. 1987). We conclude that the district court did not abuse its discretion in awarding costs pursuant to Federal Rule Civil Procedure 54(d). See Maxwell v. Hapag-Lloyd Aktiengesellschaft, 862 F.2d 767, 770 (9th Cir. 1988) (applying abuse of discretion standard).

a. Settlement Offer

Section 607-14 specifically limits the award of attorneys' fees to varying percentages of either the amount recovered if plaintiff prevails or "the amount sued for if the defendant obtains judgment." Haw.Rev.Stat. Sec. 607-14. Here, plaintiff did not sue for any specific amount. In discussing this problem, the district court noted that Graves offered at one point to settle the case for $395,000, and that the court's award of $7,793.25 was well below the fees allowed under the statute for such an amount. Graves argues that reliance on the settlement demand was inappropriate because (1) Federal Rule of Evidence 408 prohibits subsequent use of a settlement offer; and (2) the settlement figure is misleading in that an offer was later extended to dismiss Hamilton from the case without prejudice.

Both of those arguments would be persuasive had the district court actually based its award of fees on the settlement figure. Rather, it was only after the court set the amount of fees that it commented on the settlement offer. We conclude that the court did not use the settlement offer in making the award.

b. Substantiation of Fee Request

Graves contends that Hamilton's attorney failed to adequately substantiate his fees. See Smothers v. Renander, 2 Haw.App. 400, 633 P.2d 556, 563 (1981) (party has burden of showing the reasonableness of its requested fee). The district court awarded fees in this case by taking counsel's fee application and awarding one-half of the amount requested. The court did so at the urging of Hamilton's counsel who represented to the court that he could not accurately provide an hourly breakdown between assumpsit and non-assumpsit claims. The fact that counsel is unable to provide such a breakdown is not grounds for reversal, however, as long as the amount of the award is otherwise reasonable. See id.

We agree with the district court that an award of one half the requested fees is "the most reasonable and equitable solution" in this case. Graves' complaint contains claims based on breach of warranties, strict liability in tort, and negligence. Hamilton's memorandum in support of summary judgment devoted eight of sixteen pages of legal argument to the warranty claims. Hamilton's counsel spent significant time addressing the warranty claims at oral argument on the motion. See Transcript, September 12, 1988 at 2-7. Under the circumstances, we conclude that the district court acted well within its discretion in deciding to award one half of the fees requested. See Paul, Johnson, Alston & Hunt v. Graulty, 886 F.2d 268, 270 (9th Cir. 1989) (amount of fee award is reviewed for an abuse of discretion).

c. Excessive Fee Request

Graves contends that the award should be reduced because counsel (1) copied legal analysis nearly verbatim from a memorandum in support of summary judgment prepared by another attorney on behalf of another defendant; and (2) claimed fees for work performed by co-counsel. We reject the latter argument because there is no challenge to the actual hours expended but only to the reasonableness of more than one attorney working on the case. The former argument is more compelling. Nevertheless, counsel's time sheets do contain legitimate entries for hours spent revising the memorandum in support of summary judgment, preparing affidavits in support of summary judgment, and conducting conferences and telephone calls with both Hamilton and other defendants' attorneys. We conclude that there is support in the record for the district court's fee award. The amount of the award is reasonable.

AFFIRMED.