                            NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                         FILED
                            FOR THE NINTH CIRCUIT                           MAR 29 2013

                                                                        MOLLY C. DWYER, CLERK
                                                                         U .S. C O U R T OF APPE ALS

STONEBRAE L.P., a Delaware limited               No. 11-16161
partnership,
                                                 D.C. No. 3:08-cv-00221-EMC
              Plaintiff - Appellant,

  v.                                             MEMORANDUM *

TOLL BROS., INC., a Pennsylvania
corporation; TOLL BROTHERS, INC., a
Delaware corporation,

              Defendants - Appellees.



STONEBRAE L.P., a Delaware limited               No. 11-16274
partnership,
                                                 D.C. No. 3:08-cv-00221-EMC
              Plaintiff - Appellee,

  v.

TOLL BROS., INC., a Pennsylvania
corporation; TOLL BROTHERS, INC., a
Delaware corporation,

              Defendants - Appellants.




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                   Appeal from the United States District Court
                      for the Northern District of California
                   Edward M. Chen, Magistrate Judge, Presiding

                     Argued and Submitted February 13, 2013
                            San Francisco, California

Before: SCHROEDER, HAWKINS and MURGUIA, Circuit Judges.

      Plaintiff-Appellant Stonebrae L.P. appeals the district court’s denial of its

motions for prejudgment interest and litigation expenses, after it accepted a Fed. R.

Civ. P. 68 offer from Defendant-Appellee Toll Bros., Inc. Toll cross appeals to

challenge the amount of attorneys’ fees awarded to Stonebrae. We affirm.

      The usual rules of contract construction apply to Rule 68 offers. Guerrero v.

Cummings, 70 F.3d 1111, 1113 (9th Cir. 1995) (citing Herrington v. County of

Sonoma, 12 F.3d 901, 907 (9th Cir. 1993)). Extrinsic evidence may be considered

to resolve ambiguities in a Rule 68 offer, and unresolved ambiguities are construed

against the offeror. Herrington, 12 F.3d at 907. The offer stated that Toll would

pay to Stonebrae “[p]rejudgment interest as determined by the Court pursuant to

California Civil Code section 3287.”

      The district court appropriately resolved any ambiguity by considering

extrinsic evidence. All of the relevant extrinsic evidence, including unchallenged

in-court statements by Toll’s attorney, confirmed that the Rule 68 offer left the



                                          2
award of prejudgment interest to the discretion of the judge. Stonebrae moved for

prejudgment interest under only § 3287(a). Under that statute, a party may recover

prejudgment interest where she “is entitled to recover damages certain, or capable

of being made certain by calculation . . . .” Cal. Civ. Code § 3287(a).

      California courts have reduced the issue of “certainty” under § 3287(a) to

two questions: “(1) whether the debtor knows the amount owed or (2) whether the

debtor would be able to compute the damages.” Fireman’s Fund Ins. Co. v.

Allstate Ins. Co., 234 Cal. App. 3d 1154, 1173 (Ct. App. 1991); see also

Chesapeake Indus., Inc. v. Togova Enters., Inc., 149 Cal. App. 3d 901, 907 (Ct.

App. 1983). In this case, damages were not certain because the damages Stonebrae

sought required resolving factual disputes. Where the damages amount depends on

the resolution of conflicting evidence, prejudgment interest is inappropriate.

Polster, Inc. v. Swing, 164 Cal. App. 3d 427, 434 (Ct. App. 1985).

      Stonebrae also contends that the Rule 68 offer entitled it to litigation

expenses that are not awardable under Cal. Civ. Proc. Code § 1033.5. This

contention lacks merit. Stonebrae points to the offer language that included an

award of “[c]osts incurred by plaintiffs through the date of this offer.” Nothing in

the language of the offer suggests that the parties intended to diverge from the

costs allowed by § 1033.5. Moreover, any ambiguity is resolved by extrinsic


                                          3
evidence because, although the original contract contemplated both “costs” and

“litigation expenses,” the Rule 68 offer only included “costs.” Stonebrae is not

entitled to litigation expenses.

      In its calculation of the attorneys’ fees award, the district court did not abuse

its discretion in refusing to deduct or reduce the hours that Stonebrae’s attorneys

devoted to invalidating the liquidated damages provision. Courts use the

“lodestar” method to calculate reasonable attorneys’ fees. PLCM Group v.

Drexler, 22 Cal. 4th 1084, 1095 (2000). Hours expended on an unrelated and

unsuccessful claim may not be included in the lodestar calculation. Hensley v.

Eckerhart, 461 U.S. 424, 434–35 (1983). Claims that arise from the same course

of conduct are related. Schwarz v. Sec’y of Health & Human Servs., 73 F.3d 895,

903 (9th Cir. 1995).

      Stonebrae brought two alternative claims: one for the liquidated damages

amount, and one for actual damages. Toll contends that the claim for actual

damages was unrelated and unsuccessful because Stonebrae accepted the Rule 68

offer of the liquidated damages amount. This contention fails. The claim for

actual damages was related to the claim for liquidated damages because they arose

from the same course of conduct. See Schwarz, 73 F.3d at 903; Webb v. Sloan, 330




                                           4
F.3d 1158, 1168–69 (9th Cir. 2003). The hours expended on the actual damages

claim, therefore, may not be deducted.

      Toll contends that even if the actual damages claim was related, it was

unsuccessful because Stonebrae accepted the liquidated damages amount. The

district court correctly concluded otherwise. Stonebrae achieved a speedy

settlement for $4,774,944, which constituted all of the relief initially sought by

Stonebrae. Where, as here, a party achieves an excellent result, the court should

refuse to reduce the lodestar amount. See Hensley, 461 U.S. at 435.

      Last, the district court did not abuse its discretion in calculating the market

rate based on rates for complex litigation. The market for complex litigation is an

appropriate reference even where a more specific sub-market may be identifiable.

See Prison Legal News v. Schwarzenegger, 608 F.3d 446, 455 (9th Cir. 2010).

      AFFIRMED.




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