                                                                           FILED
                           NOT FOR PUBLICATION                              JUN 03 2011

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



EDWARD ALVARADO,                                 No. 10-15057

              Plaintiff,                         D.C. No. 3:04-cv-00098-SI

  and
                                                 MEMORANDUM *
WAUKEEN Q. MCCOY,

              Appellant,

  v.

CARLENE YOUNG; et al.,

              Appellees,

  and

FEDEX CORPORATION, a Delaware
corporation, DBA Fedex Express,

              Defendant.



EDWARD ALVARADO,                                 No. 10-15137

              Plaintiff,                         D.C. Nos.    3:04-cv-00098-SI
                                                              3:04-cv-00099-SI

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
  and

KAY MCKENZIE PARKER,

             Appellant,

  v.

WAUKEEN Q. MCCOY,

             Appellee,

  and

FEDEX CORPORATION, a Delaware
corporation, DBA Fedex Express,

             Defendant,

  and

CARLENE YOUNG; et al.



                   Appeal from the United States District Court
                     for the Northern District of California
                     Susan Illston, District Judge, Presiding

                       Argued and Submitted May 12, 2011
                            San Francisco, California

Before: W. FLETCHER and N.R. SMITH, Circuit Judges, and JONES, Chief
District Judge.**


        **
             The Honorable Robert Clive Jones, Chief District Judge for the U.S.
District Court for Nevada, Reno, sitting by designation.

                                        2
      We have jurisdiction under 28 U.S.C. § 1291 and we affirm in part, reverse

in part, and remand, the district court’s award of costs and fees in the interpleader

action.

1.    The district court did not abuse its discretion in exercising supplemental

jurisdiction over the interpleader action concerning the attorney’s fee dispute. It is

well-established that courts have jurisdiction over “fee disputes arising from

litigation pending before a district court.” Curry v. Del Priore, 941 F.2d 730, 731

(9th Cir. 1991).

2.    The district court did not err in dividing the attorney’s fees between McCoy

and Parker even though there was no fee splitting agreement. Parker was entitled

to claim her fees in quantum meruit. Huskinson & Brown, LLP v. Wolf, 84 P.3d

379, 381-82 & n.2 (Cal. 2004).

3.    The district court’s procedures for submitting evidence regarding the claims

for contingent attorney’s fees was not a due process violation. McCoy was

afforded notice and opportunity to respond to Parker’s, Young’s, and Alioto’s

claims at a hearing and through written submissions. See Mathews v. Eldridge,

424 U.S. 319, 333 (1976). McCoy’s unwillingness to comply with those

procedures does not create a constitutional violation.


                                           3
4.    The district court did not abuse its discretion in awarding Parker 25% of the

contingent fee and awarding McCoy the remaining 75%. The explanation given by

the court is sufficient to afford meaningful review. Gates v. Deukmejian, 987 F.2d

1392, 1398 (9th Cir. 1992). The district court based Parker’s award of quantum

meruit fees on the relative value of her legal services to the client. The “district

judge is in the best position to judge the reasonableness of the fee award . . . .” Id.

at 1399. Here, although McCoy did not submit a fee application, the district court

was familiar with both his and Parker’s work during the entire case. While it

acknowledged that Parker had done significant work to keep the case going, it also

noted that Parker’s deficient work resulted in plaintiffs’ losing claims on summary

judgment (citing an example) and that McCoy’s success at trial was the impetus for

the successful settlements. The “nature of the litigation,” “the skill employed, the

attention given, [and] the success or failure of the attorney’s efforts” are all proper

considerations in a quantum meruit action. Mardirossian & Assocs., Inc. v. Ersoff,

62 Cal. Rptr. 3d 665, 677 (Ct. App. 2007).

5.    The district court did not abuse its discretion denying Parker’s claims for

contract labor and establishing a new residence and office in San Francisco.

“Determination of [the] amount of fees and costs is within the sound discretion of

the trial court.” Salton Bay Marina, Inc. v. Imperial Irrigation Dist., 172 Cal. App.


                                           4
3d 914, 950 (1985). Here, unlike Salton Bay, Parker is claiming costs, not

attorney’s fees. See id. at 951. Moreover, Parker has not shown that it is

customary to bill separately for legal assistants or office staff. See Trustees of

Constr. Indus. and Laborers Health and Welfare Trust v. Redland, 460 F.3d 1253,

1257 (9th Cir. 2006).

      The district court similarly did not abuse its discretion in holding that

establishing a new office and residence was an overhead expense and not “travel”

as contemplated by the parties to the agreement.

      The court did not abuse its discretion in requiring Parker to pay part of Dr.

Young’s fee. Although it held that expert fees were recoverable, it explained that

the attorneys should pay Dr. Young’s fee, because the plaintiffs did not benefit

from Dr. Young’s work as a consequence of the attorneys’ failure to timely

disclose Dr. Young as an expert.

6.    The district court abused its discretion by finding that the remaining costs

were recoverable, yet including them in Parker’s award of contingent attorney’s

fees without explanation. The contract clearly provides that “You [the plaintiffs]

also agree to pay all costs and expenses incurred . . . .” By including the costs in

Parker’s share of the quantum meruit fees, the court effectively caused Parker to

pay the costs, contrary to its finding that they were recoverable from the plaintiffs.


                                           5
There is no legal basis in California law for finding costs recoverable, yet

including those costs in an attorney’s fee award, when the contract provides that

costs are recoverable in addition to the contingent fee. We reverse the inclusion of

the remaining $48,731.45 in costs in Parker’s fee award.

      Parties will bear their own costs on appeal.

      AFFIRMED in part, REVERSED in part.




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