N.W. CHA. SCH. v. L.A. UNI. SCH

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Docket Number

No. B215777.

Attorney(S)

Procopio, Cory, Hargreaves Savitch, John C. Lemmo, Gregory V. Moser; Middleton, Young Minney and Paul C. Minney for Plaintiff and Appellant. Latham Watkins, James L. Arnone and Winston P. Stromberg for California Charter Schools Association as Amicus Curiae on behalf of Plaintiff and Appellant. Strumwasser Woocher, Gregory G. Luke, Aimee Dudovitz, Beverly Grossman Palmer; David R. Holmquist and Mark S. Fall for Defendants and Respondents.

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NEW WEST CHARTER MIDDLE SCHOOL, Plaintiff and Appellant, v. LOS ANGELES UNIFIED SCHOOL DISTRICT et al., Defendants and Respondents.

ORDER

RYA ZOBEL, District Judge

Plaintiff F/V Misty Dawn, Inc. ("Misty Dawn"), was sued by a former employee in 2008 and found liable, after a jury trial, for $2,307,690 in damages for injuries he had sustained while working on plaintiff's fishing vessel, Sea Watcher I. Misty Dawn's first excess insurer refused a pre-verdict settlement demand of $650,000, an amount within the first excess policy limit. Misty Dawn and three of the company's corporate officers now sue both the first and second layer of excess insurers, alleging that the first excess insurer breached a duty to use fair settlement practices and that the second layer excess insurers wrongfully refused coverage and proceeded under a reservation of rights. The insurers have filed multiple cross claims, most of which are centered on the alleged failure to use fair settlement practices. Pending before the court are the insurers' motions to determine which law governs the insurance contract between the plaintiffs and the first excess insurer.

I. Plaintiffs' Casualty Insurance and the Bielunas Litigation

In 2006, Wojciech Bielunas, a Massachusetts resident, was injured while working aboard the F/V Sea Watcher, a ship operating out of Massachusetts. In 2008, he sued his employer and the owner of the vessel, the plaintiff and New Jersey citizen F/V Misty Dawn, Inc., in the United States District Court for the District of Massachusetts.

Misty Dawn held three layers of casualty insurance coverage. The $250,000 primary policy was exhausted by the costs of defending the Bielunas suit and providing Bielunas with maintenance and cure benefits, and the primary insurer is not a party to this action. The first layer of excess insurance for $750,000 was underwritten by defendant Certain Underwriters at Lloyds, represented by their agent the defendant Osprey Underwriting Agency Limited (collectively the "First Excess"), both operating out of London, England. The First Excess assumed the defense of the Bielunas suit. Misty Dawn carried a second layer of excess insurance for $9,000,000 underwritten severally but not jointly by defendants XL Specialty Insurance Company, a resident of Delaware and New York, and Federal Insurance Company, a resident of Indiana and New York (collectively the "Second Excess"). Second Excess played a limited role in the defense of the Bielunas action while reserving the right to deny coverage for various alleged breaches of the policy.

The Bieulnas suit proceeded to trial in parallel with settlement talks. At the start of the trial Bielunas' demanded $650,000 and refused to accept First Excess' counteroffer of $575,000. After the close of evidence but prior to the jury verdict the insured and the Second Excess demanded that First Excess accept the $650,000 settlement offer, an amount which was within the First Excess policy limit. First Excess did not do so. The jury returned a verdict in Bielunas' favor for $2,775,000, reduced by his contributory negligence to $2,307,690.

After the verdict Bielunas filed an in rem action against the F/V Sea Watcher to protect his interests in light of the Second Excess' reservation of rights. First Excess thereafter paid the premium for a surety bond to secure the judgment in the Bielunas action. The surety required both First Excess and Second Excess to issue counter-indemnity letters for their respective portion of the surety's potential obligation. Plaintiffs nonetheless remain exposed to potential liability because Second Excess has stated that it may seek recovery from Misty Dawn for any payments made pursuant to the counter-indemnity letter.

II. The Instant Lawsuit

Misty Dawn and co-plaintiffs Leroy Truex, Martin Truex, and James Meyers, all Florida residents, officers in Misty Dawn, and insureds under the policies at issue, brought this suit against First Excess and Second Excess as well as their insurance adjustor, the Virginia Corporation Flagship Maritime Adjusters, Inc., their insurance broker, the Virginia corporation Flagship Group, Ltd., and the parent company to the broker and adjuster, the Florida corporation Brown Brown, Inc. First Excess' rejection of the $650,000 settlement offer is alleged to have violated a duty owed to plaintiffs to use fair settlement practices, and the Second Excess is alleged to have wrongfully refused coverage and reserved rights. The claims against the insurance broker and adjuster concern the possible failure to notify Second Excess of the claim in accordance with policy requirements.

First Excess and Second Excess filed multiple cross-claims, the majority of which center on the alleged failure to use fair settlement practices. They dispute whether First Excess' settlement obligation under the insurance policy is defined by Massachusetts or New Jersey law. This distinction may matter because Second Excess' cross-claims are premised on a direct duty owed from First Excess to Second Excess rather than an equitable subrogation theory, a duty that, according to the insurers, is recognized by several New Jersey courts but no Massachusetts court. New Jersey and Massachusetts also use different terminology to describe an insurer's good faith settlement obligation, although counsel for the insurers were unable at the motion hearing to articulate any substantive difference.

III. Analysis

First and Second Excess agree that the claims at issue fall within the court's admiralty jurisdiction and, because no substantive rule of maritime law defines the good faith duty of settlement, the court applies federal choice of law rules as articulated in the Restatement (Second) of Conflict of Laws to determine which state's substantive law applies. The Restatement identifies five factors that a court should consider when selecting the applicable law: (1) achieving a result acceptable to all interested states; (2) the policy of the forum and other interested states; (3) the protection of justified expectations; (4) the basic policies underlying the particular field of law; and (5) ease in the determination and application of the law. Restatement (Second) of Conflict of Laws § 6 (1971); id. at § 145 cmt. b. The relative importance of each factor varies depending on the area of law at issue, e.g., contract, tort, or property.

Second Excess argues, in the alternative, that these claims arise under diversity jurisdiction and the court should apply the Restatement (Second) because it is the approach used by Massachusetts courts.

The First Excess argues that this is a tort action, while the Second Excess asserts that it sounds in contract. The contract provision of the Restatement is the better match with this insurance dispute. Any obligation from First Excess to Second Excess arises out of the insurance contract, whether a direct duty or a subrogation claim. It was not created by the Bielunas tort.

The Restatement does specifically address casualty insurance, but that provision does not apply where the insured risk is mobile and frequently travels. Id. at § 193 cmt. a.

The basic policy underlying contract choice of law is to protect the expectations of the parties. If the parties choose a governing law, that choice is given effect. Id. at § 187. If they do not, the court attempts to ascertain the law with the most significant relationship to the litigation by looking at certain contacts between the litigation and the interested states. Id. at § 188.

When parties to a contract choose the governing law they typically do so in the contract. No choice of law clause appears in the First Excess policy and the insurers have briefed a contacts analysis. They point to a multitude of contacts, sometimes premised on disputed facts, in support of their preferred law. Some contacts, such as the domicile of Misty Dawn, do point to NJ, but the majority point elsewhere, such as the negotiation and signing of the contract in London, and the residence of the other three plaintiffs in Florida. Both Massachusetts and New Jersey have an interest in regulating First Excess' settlement conduct, because the settlement negotiations directly impacted both Bielunas, a Massachusetts resident, and Misty Dawn, a New Jersey corporation. Under these circumstances, there is little to distinguish the interests of any of the states, and a decision to label one as having the "most significant relationship" would border on the arbitrary.

Fortunately, a contacts analysis is unnecessary. The parties bound by the first excess policy — Plaintiffs and First Excess — did chose the governing law; they did so during the Bielunas litigation rather than in the policy itself. The plaintiffs threatened to bring a claim under Massachusetts law against First Excess for unfair claim settlement practices if First Excess did not accept Bielunas' settlement demand. (June 18, 2009 Correspondence, Docket #1 Ex. 4.) Second Excess received a copy of this communication (id.) and voiced no objection to the application of Massachusetts law. First Excess thereafter conducted settlement negotiations under the assumption that any settlement obligation was defined by Massachusetts law. (Declaration of Lev Osman § V, Docket # 39 Ex. C.) It would be inequitable to evaluate First Excess' settlement conduct under the standard of a different law when they relied on plaintiffs' express citation to Massachusetts law and Second Excess voiced no contemporaneous objection.

The application of Massachusetts law does not offend the policies of New Jersey. Counsel at the motion hearing was unable to substantively distinguish the two states' good faith standards. New Jersey law may differ from Massachusetts law in that it recognizes a direct duty owed from First Excess to Second Excess to engage in fair settlement practices, but as no excess insurer resides in New Jersey, no state interest is implicated in the resolution of the dispute between the insurers.

IV. Conclusion

Massachusetts law will govern resolution of these disputes. Accordingly, First Excess' motion for a ruling regarding choice of law (Docket # 39) is ALLOWED. Second Excess' motion for a ruling regarding choice of law (Docket # 37) is DENIED. First Excess' motion for leave to file a reply (Docket # 44) is ALLOWED.

September 8, 2010

DATE

The difference is actually $172,630.72. Neither party noticed the error.

The hearing on damages revealed the trial court's rationale which led to its choice of this somewhat unusual measure of damages. The court indicated that it would have preferred to award out-of-pocket damages, but that calculation would involve subtracting from the costs spent at Pico the costs that would have been spent at Fairfax, including MO, and would have resulted in virtually no award for New West. New West argued that it would have performed its own MO at Fairfax and that LAUSD was not permitted to charge it for these amounts. The court replied that even if New West paid for its own MO, there would still be a cost associated with it, and New West provided no evidence of this cost. As the record stood, there was a total absence of evidence that New West could have performed its own MO at Fairfax for free, and the court doubted that New West could have presented such evidence. The LAUSD's evidence of MO costs was the only evidence in the record and, despite New West's general arguments that those costs were unreasonable on their face, the court did not reject LAUSD's valuation. Similarly, the court agreed that MO expenses at Pico should also be included in an out-of-pocket calculation, yet there was no evidence of those expenses provided. Given the state of the record, an out-of-pocket award would be nominal. The court stated that its tentative ruling attempted to award New West some measure of damages for LAUSD's wrongdoing. The court adopted its tentative, and awarded New West $175,630.72 in damages.

The trial court acknowledged that the measure was "probably wrong," and implied that it was attempting to do equity under the circumstances.

The court rejected New West's 11th-hour request to submit evidence of its costs to provide its own MO at Fairfax.

9. New West Seeks Private Attorney General Attorney Fees

At the same time the parties were briefing damages, they were also briefing New West's motion for private attorney general attorney fees. New West sought its attorney fees in the amount of $266,372.30 times a multiplier of two. New West argued that this case provided a benefit "to thousands of school children, parents, and charter schools throughout the LAUSD and the rest of the state, and the general public" by requiring LAUSD to fulfill its statutory obligations under Education Code section 47614. New West argued that the award of damages in this case benefits all charter school students in California as it "makes school districts aware of the potential consequences when they shirk their statutory duties to fairly share school facilities among all district students, including those that attend charter schools."

The trial court denied the motion, stating, "New West successfully pursued its unique claim against LAUSD — that LAUSD improperly withdrew its facilities offer of space at Fairfax High School. That New West relied on Education Code section 47614, which is based on a public interest in sharing of facilities between school districts and charter schools, to enforce its rights does not change the fact that the benefit conferred was solely the provision of a school facility for New West. This action did not test the validity of section 47614, the merits of the charter school program, or provide any benefit to the charter schools to which LAUSD failed to provide space." The court also concluded that, as New West had sought over $1 million in damages, its attorney fees were not out of proportion to its stake in the litigation, so the burden of the litigation did not render an award of attorney fees appropriate.

10. Appeals

New West filed a timely notice of appeal from the rulings on damages and attorney fees. LAUSD timely cross-appealed the ruling on damages. However, LAUSD has since abandoned its cross-appeal, leaving only New West's appeal.

ISSUES ON APPEAL

The issues on appeal raise the question of the proper measure of damages and whether private attorney general attorney fees are justified in this case. As to damages, we conclude that the proper measure in this case is the contract standard of benefit of the bargain. As to attorney fees, we conclude the trial court did not err in denying New West attorney fees under the private attorney general statute as the criteria set out in Code of Civil Procedure section 1021.5 have not been satisfied. We will therefore modify the judgment to award damages to New West under the proper standard and otherwise affirm.

DISCUSSION

1. Damages

In considering damages, we first consider the legal measure of damages to be awarded. We then turn to the proper way to determine the value of the elements considered in that measure.

a. Measure of Damages

The parties disagree on the standard of review to be applied to the trial court's ruling that the appropriate measure of damages is the difference between the rental values of the promised school (Fairfax) and the school received (Pico). New West argues that the trial court's choice of a particular measure of damages is subject to de novo review, while LAUSD argues that the choice of a particular measure of damages is a matter of trial court discretion, reviewable only for an abuse of discretion. Both parties are correct. The trial court's choice among several legally permissible measures of damages, under the specific circumstances of the case, is a matter of discretion. ( GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 873 [ 274 Cal.Rptr. 168].) However, whether a certain measure of damages is permissible given the legal right the defendant has breached, is a matter of law, subject to de novo review. ( Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 691 [ 21 Cal.Rptr.3d 732].)

In this case, the court chose to calculate damages on a breach of contract measure. This did not constitute an abuse of discretion. Indeed, when the trial court granted the writ of mandate, it did so because it expressly found LAUSD's withdrawal of the Fairfax offer constituted a breach of contract as well as a breach of its statutory duty to provide facilities. The proper measure of damages for a breach of contract "is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom." (Civ. Code, § 3300.)

Contract damages compensate a plaintiff for its lost expectation interest. This is described as the benefit of the bargain that full performance would have brought. ( Akin v. Certain Underwriters at Lloyd's London (2006) 140 Cal.App.4th 291, 298 [ 44 Cal.Rptr.3d 284].) Contract damages "awarded should, insofar as possible, place plaintiff in the same position he would have been had the contract been performed, but he should not be awarded more than the benefit which he would have received had the promissor performed." ( Glendale Fed. Sav. Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 123 [ 135 Cal.Rptr. 802].) (3) In the specific context of a lessor failing to deliver the promised premises, the proper measure of damages "is the difference between the agreed rent and the rental value of the premises during the term of the lease." ( Foreman Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 884 [ 92 Cal.Rptr. 162, 479 P.2d 362].)

Out-of-pocket loss may also be a proper measure of contract damages, when the buyer has obtained cover. (Cf. Cal. U. Com. Code, § 2712.) The trial court's decision to not use this measure of damages, given New West's failure of proof and the court's determination that Pico was inferior to Fairfax, does not constitute an abuse of discretion.

In this case, if LAUSD had performed the contract, New West would have colocated at Fairfax. New West would have received the value of colocating at Fairfax, but would have paid all expenses associated with colocating at Fairfax. Thus, the difference between the value of colocating at Fairfax and the costs of colocating at Fairfax constitutes the proper measure of damages.

Arguably, the value of colocating at Fairfax in particular, less the costs associated with colocating at Fairfax in particular, is the amount of damages to which New West is entitled for the breach of the Fairfax contract, while the breach of LAUSD's statutory duty would be calculated by the value of colocating at a reasonably equivalent facility less the costs associated with colocating at a reasonably equivalent facility. However, both parties performed their damages calculations on Fairfax or a hypothetical equivalent to Fairfax itself. In other words, by the time damages were at issue, New West had abandoned any suggestion that the Fairfax offer had not satisfied LAUSD's statutory duty to provide its students reasonably equivalent facilities.

b. Value of One-year Colocation at Fairfax

The trial court concluded, based on Pike's evaluation, that the value of one year of colocation at Fairfax is $470,000. New West contends that this value is erroneous and that the trial court was required to calculate the value of colocation at Fairfax under Evidence Code section 824.

The contention is easily rejected. The Evidence Code provides "special rules of evidence applicable to any action in which the value of property is to be ascertained." (Evid. Code, § 810, subd. (a).) This applies to determinations of the market value of any interest in real property. (Evid. Code, § 811, subd. (a).) The Evidence Code permits consideration of, for example, rentals of comparable properties, in determining the value of a leasehold interest. (Evid. Code, § 818.) It provides that, when there "is no relevant, comparable market," the value "may be determined by any method of valuation that is just and equitable." (Evid. Code, § 823.)

The trial court rejected the contention on procedural grounds, in that New West did not argue that Evidence Code section 824 applied in its opening brief on damages. While this was not error, we prefer to address the contention on its merits.

It is in this framework that Evidence Code section 824 appears. It provides that "a just and equitable method of determining the value of nonprofit, special use property, as defined by Section 1235.155 of the Code of Civil Procedure, for which there is no relevant, comparable market, is the cost of purchasing land and the reasonable cost of making it suitable for the conduct of the same nonprofit, special use, together with the cost of constructing similar improvements." (Evid. Code, § 824, subd. (a).) Depreciation is not to be considered in the cost of improvements. (Evid. Code, § 824, subd. (b).)

There are at least three reasons why Evidence Code section 824 does not govern the valuation of colocation at Fairfax. First, by its express terms, Evidence Code section 824 applies only to nonprofit, special use properties as defined in Code of Civil Procedure section 1235.155. That section defines nonprofit special use property to mean "property which is operated for a special nonprofit, tax-exempt use such as a school, church, cemetery, hospital, or similar property. `Nonprofit, special use property' does not include property owned by a public entity." (Italics added.) As Fairfax, and, indeed, any district facilities to which New West would be entitled under Education Code section 47614, are owned by a public entity, Evidence Code section 824 does not apply.

Second, Evidence Code section 824 applies only to nonprofit, special use properties "for which there is no relevant, comparable market." New West's opening brief on damages was based on Pike's report which determined a value, based on a market analysis, for facilities similar to that of Fairfax. New West cannot be heard to argue that there is no relevant, comparable market for school facilities when it submitted an entire expert report which conducted such a market analysis.

Third, Evidence Code section 824 excludes depreciation from its calculation. In other words, an Evidence Code section 824 valuation determines the cost of constructing a brand-new middle school, with all necessary facilities. But, under Education Code section 47614, subdivision (b), charter school students are to be accommodated in facilities "reasonably equivalent to those in which the students would be accommodated if they were attending other public schools of the district." New West would not be entitled to damages based on the value of a new middle school unless its students would have been accommodated in new middle schools had they attended public school in the district. New West produced no such evidence. There is no basis for an award of damages which would compensate New West for the loss of better facilities than those to which its students were statutorily entitled.

Having disposed of New West's Evidence Code section 824 argument, we turn to the appropriate rental value of Fairfax. The trial court accepted Pike's figure of $470,000. This is clearly supported by the evidence. On appeal, in apparent pursuit of its Evidence Code section 824 argument, New West asserts that there is no evidence in the record that the market cost of renting a hypothetical Fairfax facility was $470,000. New West is mistaken; Pike's initial report made precisely that determination. Indeed, in its opening trial court brief on damages, New West specifically represented that $470,000 was "the likely market rent of what New West would have paid as of the valuation date for similar facilities and amenities to Fairfax in the commercial market-place." Now that the trial court has adopted this valuation, New West cannot disclaim it.

New West's real complaint is that the trial court omitted any further damages for the intangible value of an integrated campus. The trial court rejected, as wholly speculative, New West's theory that the value of an integrated campus can be based on the differential cost of private school tuition. We agree. (See fn. 4, ante.) Speculative damages may not be recovered (Civ. Code, § 3301; see, e.g., Toscano v. Greene Music, supra, 124 Cal.App.4th at p. 694), and New West's determination that the value of an integrated campus exceeds $460,000 is unsupported.

We also note that while the value of an integrated campus has some intangible value, there is a, perhaps offsetting, intangible value to being in one's own school, rather than colocating in facilities with students of another school and, indeed, different grade levels.

c. Costs of Colocating at Fairfax

It is undisputed that the cost of colocating at Fairfax would include, at a minimum, the pro rata share of $6,378. The main dispute in this case is whether the colocation costs should also include MO costs.

This much is undisputed: When a charter school is provided district facilities, the charter school is responsible for ongoing MO. (Cal. Code Regs., tit. 5, § 11969.4.) New West argues that, since it is responsible for the MO, it would not be required to pay LAUSD any amount for MO. New West presented no evidence regarding who it would hire to perform MO if it were colocated at Fairfax, nor did it present evidence of any MO costs it would incur.

In contrast, LAUSD provided evidence of its method for calculating a charter school's share of MO expenses at a colocation, which resulted in a total of $276,266 in connection with colocation at Fairfax. LAUSD also offered evidence that an association of charter schools, the California Charter Schools Association (CCSA), agreed that, in cases of colocation, the LAUSD would provide MO and the CCSA member charter school would pay its share of the MO expenses.

CCSA is an amicus curiae in this case. New West is not a member of CCSA.

LAUSD also argued persuasively that, at least with respect to shared facilities, there is no way for the MO services themselves to be provided by both the charter school and the LAUSD. New West, for example, had no response to the hypothetical question of how one could repair a fraction of a broken window. We similarly ask how New West could clean only New West's students' footprints from a shared hallway, provide pest control service for only those days when it uses the school gym, remove only its students' trash from the cafeteria bins, or pay only for the lighting and water its students use. It is apparent that MO for any part of the school not used exclusively by New West must be performed by either New West or the LAUSD, and since the LAUSD would be using the lion's share of the space and accepting the lion's share of the charges, it is certainly reasonable for LAUSD to perform the MO and obtain partial reimbursement from New West. This is particularly true when New West offered no counterproposal.

According to the Fairfax offer, New West would have used 10.4 percent of the classrooms at Fairfax; it was therefore assumed that its use of the nonclassroom space at Fairfax would also be 10.4 percent (this is true even though it would be granted use of shared facilities on a 50/50 time-share basis). LAUSD calculated MO costs on a square footage basis; New West's obligation under the Use Agreement would have been for its exclusive use classroom square footage plus 10.4 percent of the nonclassroom space at Fairfax.

New West argued, in general terms, that LAUSD's MO fees were too high, but challenged no particular line item of MO as unfairly calculated, or incorporating charges for which LAUSD should alone be responsible. In short, LAUSD provided persuasive evidence of its calculation of MO expenses, while New West provided no evidence to the contrary. The trial court's comments at the hearing indicate that it accepted LAUSD's calculation of MO expenses. On this record, there was no error.

We again note that the MO expenses included charges for utilities. New West's argument that it should not be required to pay a penny for MO implies that New West believes LAUSD should keep the lights on for free in the classrooms allocated to New West's exclusive use.

Thus, New West's damages are the value of colocation at Fairfax ($470,000) less the costs of colocation ($6,378 + $276,266), for a total damage calculation of $187,356. We will modify the judgment accordingly.

New West argues that it should also be awarded its costs associated with "renting, furnishing, and improving" Pico, as it would not have incurred these costs had LAUSD not breached its statutory duty. We disagree. New West seeks the benefit of its Fairfax bargain plus the costs it expended on Pico. New West is not permitted to obtain damages that would put it in a better position than had LAUSD performed. New West was entitled to $470,000 worth of facilities from LAUSD for the price of $282,644, nothing more. Our modification of the damages award gives New West the benefit of this bargain. Under no circumstances would New West be entitled to $470,000 worth of facilities from LAUSD for the price of $282,644, plus the free use of Pico.
Amicus curiae CCSA argues that "the slap on the wrist that the trial court gave LAUSD in this case has not motivated LAUSD to change its ways," as part of an implicit argument that a greater damages award is necessary to motivate statutory compliance on the part of LAUSD. In the absence of any statutory provision setting forth a punitive measure of damages for a school district's failure to comply with Education Code section 47614, there is no legal basis for an increased award of damages under the facts presented in this case.

2. Private Attorney General Attorney Fees

"Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any." (Code Civ. Proc., § 1021.5.)

Thus, in order to award attorney fees to a prevailing party, courts consider whether (1) the litigation resulted in the enforcement of an important right affecting the public interest; (2) a significant benefit has been conferred on the general public or a large class of individuals; and (3) the necessity and financial burden of private enforcement renders the award appropriate. ( Adoption of Joshua S. (2008) 42 Cal.4th 945, 951-952 [ 70 Cal.Rptr.3d 372, 174 P.3d 192].) Each of the three elements must be established in order to justify a fee award. ( Los Angeles Police Protective League v. City of Los Angeles (1986) 188 Cal.App.3d 1, 6 [ 232 Cal.Rptr. 697].) "The decision whether the claimant has met his burden of proving each of these prerequisites and is thus entitled to an award of attorney fees under [Code of Civil Procedure] section 1021.5 rests within the sound discretion of the trial court and that discretion shall not be disturbed on appeal absent a clear abuse." ( Ryan v. California Interscholastic Federation (2001) 94 Cal.App.4th 1033, 1044 [ 114 Cal.Rptr.2d 787].)

In Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 427 [253 Cal.Rptr.426, 764 P.2d 278], the Supreme Court held that, when an appellate court publishes an opinion, the Court of Appeal may be in a better position than the trial court to determine whether an award of fees is appropriate, and may therefore make the determination in the first instance. While we perform an abuse of discretion analysis in this case, our result would be the same if de novo review applied.

In determining whether a significant benefit has been conferred on the general public or a large class, courts must perform "a realistic assessment of all the relevant surrounding circumstances." ( Ryan v. California Interscholastic Federation, supra, 94 Cal.App.4th at p. 1044.) In this case, the trial court determined that New West pursued only its unique claim based on the withdrawal of the Fairfax offer. The court determined that the benefit conferred in this litigation was only damages for the failure to provide a facility to New West alone. The court stated, "This action did not test the validity of section 47614, the merits of the charter school program, or provide any benefit to the charter schools to which LAUSD failed to provide space."

The trial court was indisputably correct. On appeal, New West argues that its "victory in this case enforced charter schools' and their students' right to occupy school district facilities." It states that the trial court's issuance of the writ and order for the payment of damages "in effect forced LAUSD to cease its practice of refusing to provide campuses to charter schools under Proposition 39, and established a charter school's right to enforce such orders and secure damages for a failure to equitably share public school facilities." It further states that the trial court's orders "forced LAUSD to modify its long-standing practice of denying campuses to charter schools, a practice that would not have changed had New West not pursued this lawsuit." Finally, New West states that this case "began as a simple writ petition seeking an order to provide New West's students with public school facilities, and evolved into a test case regarding whether Education Code Section 47614 can ever be effectively enforced."

New West greatly overstates the significance of its victory. It established that LAUSD should not have withdrawn its offer of colocation at Fairfax under both contract principles and Education Code section 47614. New West also received damages for LAUSD's breach. The writ and damages in this case do not enforce charter school students' rights to district facilities in general. Those rights are established by Education Code section 47614, the implementing regulations, and existing case law. (See, e.g., Ridgecrest Charter School v. Sierra Sands Unified School Dist. (2005) 130 Cal.App.4th 986 [ 30 Cal.Rptr.3d 648]; Sequoia Union High School Dist. v. Aurora Charter High School (2003) 112 Cal.App.4th 185 [ 5 Cal.Rptr.3d 86].) This case was not a "test case" regarding whether Education Code section 47614 could be enforced. Both appellate cases cited above impliedly confirmed the right to writ relief to enforce school districts' obligations under Education Code section 47614. ( Ridgecrest Charter School v. Sierra Sands Unified School Dist., supra, 130 Cal.App.4th at pp. 991-992; Sequoia Union High School Dist. v. Aurora Charter High School, supra, 112 Cal.App.4th at p. 195.) Indeed, LAUSD never challenged writ relief as an appropriate procedure, nor did it contest the trial court's ability to award damages to New West under Code of Civil Procedure section 1095. Nor did this case "force[] LAUSD to modify its long-standing practice of denying campuses to charter schools." Indeed, there was no ruling regarding the existence or permissibility of such an alleged practice. This case was simply about whether LAUSD was permitted to withdraw the Fairfax offer and, if it was not, the damages New West suffered. There was no benefit to the general public or a large class.

The trial court also did not abuse its discretion in determining that the necessity and financial burden of private enforcement did not render an award of attorney fees appropriate. In considering this element, an award of fees "is appropriate where the cost of the legal victory transcends the claimant's personal interest; in other words, where the burden of pursuing the litigation is out of proportion to the plaintiff's individual stake in the matter." ( Ryan v. California Interscholastic Federation, supra, 94 Cal.App.4th at p. 1044.) In this case, New West claims to have incurred some $266,000 in attorney fees, and had sought a recovery in excess of $1 million. The court did not err in concluding that New West's expense was not disproportionate to its stake in the case.

New West did not actually incur the fees.

DISPOSITION

The judgment is modified to reflect a damages award of $187,356. As modified, the judgment is affirmed. The order denying attorney fees is affirmed. Each party shall bear its own costs on appeal.

Klein, P. J., and Aldrich, J., concurred.

Petitions for a rehearing were denied September 8, 2010, and on September 1, 2010, and September 8, 2010, the opinion was modified to read as printed above.

NEW WEST CHARTER MIDDLE SCHOOL, Plaintiff and Appellant, v. LOS ANGELES UNIFIED SCHOOL DISTRICT et al., Defendants and Respondents.

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