NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

BEDSWORTH, ACTING P. J.

This appeal is from a default judgment for breach of contract and fraud entered against an attorney, Gerald Wolfe, and his related business entities. According to the complaint — which Wolfe did not defend on the merits — he utilized his status as an attorney, and the fiduciary duties of trust and confidence which that status imposes upon him, as a means of inducing Liu (and perhaps others) to invest money with him based upon false representations. Wolfe is not the appellant. Instead, he is apparently satisfied with an outcome which he believes holds him liable for $236,000 in compensatory damages, plus costs and attorney fees, but not liable for punitive damages. He should be.

Instead, it is Liu who appeals, arguing the court erred in refusing to award punitive damages on this record, and in reducing the amount of attorney fees awarded, from the $62,400 sought, to $20,000. We conclude that while the judgment makes it fairly clear the court did not intend to award the amount of punitive damages suggested by Liu, it is not clear that the court intended to award no punitive damages at all. To the contrary, attachment B to the judgment explicitly provides that the court is awarding punitive damages against Wolfe, and three of his related entities, based upon findings of fraudulent conduct and their intent to injure Liu. We cannot reconcile that portion of the judgment with the court's failure to specify any amount of such damages. We thus remand the case for clarification of the issue.

On the other hand, we agree the court abused its discretion in awarding Liu less than one-third of the attorney fees he incurred in this case. The record clearly demonstrates this was no run-of-the-mill default. Wolfe waged a hard procedural fight, including a demurrer to the original complaint, and an unsuccessful opposition to Liu's request for a writ of attachment, and then either ignored or obstructed Liu's efforts at discovery, necessitating several motions and court appearances by Liu's counsel prior to the entry of default. There is nothing in the record to suggest the fees incurred by Liu weren't warranted in these particular circumstances, and it is clear they could have been largely avoided by Wolfe's reasonable cooperation in the process; if he intended no defense on the merits, Wolfe could have negotiated a settlement or stipulated to liability. It is Wolfe, and not Liu, who should bear the cost of his intransigence.

The judgment is reversed, and the case remanded with directions to include therein the full amount of fees requested by Liu in his request for court judgment, and to consider an additional request for attorney fees incurred by Liu in connection with this appeal. The trial court should also clarify its intent with regard to punitive damages.

FACTS

Liu's first amended complaint alleges Wolfe is both an attorney and a licensed investment advisor. He has several related entities through which he conducts his investment business, including respondents Juris Wealth Management (Juris Wealth), Real Equity Pursuit, LLC (REP), and Juris Wealth Management, P.C. (Juris Wealth P.C.) In October of 2006, Liu attended an investment seminar conducted by Wolfe and Juris Wealth, and was given promotional literature which claimed, among other things, that "[w]hat makes us unique in our market is that we provide services and expertise through the power of a law firm. We provide our clients the full benefits of attorney-client privilege, fiduciary protection, tax intelligence, legal competence and professionalism that financial planning firms and mortgage brokerages cannot."

Liu thereafter met with Wolfe to obtain investment advice, and Wolfe allegedly encouraged him to borrow $150,000 against the equity in his home, and invest that money through Wolfe and Juris Wealth in what he claimed was a "safe" option — described as constituting part of a larger sum loaned to a man named Roger Pawson, who was described as the president of "Cal-Bay International, Inc. (Cal-Bay.) Wolfe allegedly told Liu that the investment would be fully secured by first trust deeds on valuable real property in Utah. Wolfe also allegedly told Liu his investment would be "short-term," approximately 12 months in duration, and would yield a return of 2.5 percent per month. Wolfe represented that he had significant experience and expertise with this type of investment.

However, Wolfe allegedly failed to perform due diligence about Cal-Bay, and did not disclose to Liu that Cal-Bay was a Nevada corporation which, although it had registered to do business in California, was not in good standing with the California Secretary of State, and thus had forfeited its right to do business in California. He did not disclose that Juris Wealth or Juris Wealth, P.C. would receive a large payment from Pawson and Cal-Bay as compensation for arranging the loan of Liu's money. Wolfe also failed to disclose that he intended to release Liu's money to Pawson prior to the recording of any trust deeds to secure the investment, and without determining that the properties to be encumbered by the promised first trust deeds were not already encumbered.

Based upon Wolfe's representations, Liu decided to make the recommended investment. However, at the last moment, Wolfe instructed Liu to make his investment directly to REP, rather than to himself or Juris Wealth, allegedly in an effort to limit his own liability for the investment funds, and without informing Liu that REP was not qualified to do business in California, and that it had no assets other than the funds to be invested. Wolfe also presented Liu with a "collateral assignment agreement" through which he purported to further restrict liability for any damages suffered by Liu in the event the borrowers defaulted.

Approximately one year after his investment, Wolfe informed Liu that the borrowers were in default, and Wolfe would work to recover his investment. A few months thereafter, in about May or June of 2008, Wolfe disclosed to Liu that another lender had foreclosed on the properties which had secured his investment, his security interests were worthless, and that Pawson could not be located. Wolfe told Liu he intended to take legal action.

Around the same time Wolfe informed Liu that his security was worthless and Pawson was gone, Liu also learned, for the first time, that many of the representations made to him by Wolfe, including those about Wolfe's own investment experience and expertise, and the safety of the Liu's investment, were not true. Liu allegedly lost his entire investment, and while he demanded that Wolfe return his funds, Wolfe failed to do so.

Based upon those facts, Liu sought recovery on theories of negligence, legal malpractice, securities fraud, intentional misrepresentation, fraudulent concealment, breach of fiduciary duty and breach of contract.

Although Wolfe, who represented himself in the case, demurred to Liu's initial complaint, and unsuccessfully opposed Liu's request for a writ of attachment, he failed to respond at all to the first amended complaint. He also failed to respond to any discovery, appear at scheduled depositions, or otherwise cooperate in the litigation in any way. As Liu's counsel explained, Wolfe's intransigence required he expend substantial time and thus that Liu incur substantial attorney fees, pursuing motions to compel responses to discovery, and later motions to deem matters at issue in the case to be admitted.

As set forth in a declaration by Liu's counsel: "On several occasions, both in person and by phone, fax and/or e-mail, I requested that [d]efendant Wolfe, who was both a party defendant and the attorney for the other [d]efendants, spare [Liu] the expense associated with further litigation stipulating to entry of judgment if [d]efendants were not going to defend on the merits. Each time, however, [d]efendant Wolfe refused. [We] also had to seek and obtain a writ of execution, which [d]efendants ignored. When [we] served additional written discovery, [d]efendants ignored it. [We] therefore filed motions to compel, which the [c]ourt granted. When [d]efendants ignored the [c]ourt's order compelling them to respond, [we] had to file a motion for issue/evidence sanctions, which the [c]ourt granted. [We] also had to file a motion permitting him to serve financial condition discovery to obtain evidence regarding the net worth of [d]efendants, which the [c]ourt granted. When [d]efendants failed and refused to respond to [our] net worth discovery, [we] had to file a motion to compel, which the [c]ourt granted. When [d]efendants failed and refused to respond despite the [c]ourt's order compelling them to do so, [we] had to file a motion for evidence sanctions. Defendants did the same thing with their depositions, i.e., [we] noticed them, but [d]efendants failed to appear without telling [us] until the last possible minute. [We] therefore filed a motion to compel the depositions, which the [c]ourt granted. Once again, however, [d]efendants ignored the [c]ourt's order, so [we] had to file a motion for issue/evidence sanctions. All of these tactics by [d]efendants and their attorneys needlessly increased the cost of this litigation exponentially, both directly (including the cost of preparing discovery, motions to compel and motions for issue/evidence sanctions) and indirectly (including the cost of making multiple appearances to obtain extensions/continuances of the trial and related dates because it was taking so long to get issue/evidence sanctions against [d]efendants for ignoring multiple court orders."

Finally, after obtaining the information necessary to proceed with a default judgment,1 and formally notifying Wolfe that Liu intended to seek punitive damages of $500,000, Liu sought entry of default, and asked for entry of a default judgment by the court. However, as Liu's counsel noted, even this was complicated by Wolfe's conduct in the case: "The actions/tactics of [d]efendants also made the default prove-up packet considerably more expensive to prepare because, among other things, [we] had to rely on/attach/integrate the various discovery orders and related evidence pertaining to multipledefendants. Defendants engaged in the foregoing tactics for one reason, i.e., to make it as difficult and expensive as possible for [Liu] to obtain a judgment against them in the hope that [he] simply would give up."

Liu did not give up, however, and the evidence submitted with his request for a default judgment supported the allegations of Wolfe's misconduct alleged in the complaint. The materials submitted, including the evidence of attorney fees incurred, covered 160 pages. The proposed judgment itself provided for an award of compensatory damages, consisting of $150,000 (the amount Liu initially invested with Wolfe), plus $86,250 in prejudgment interest, against Wolfe and his related entities. The proposed judgment also included an award of $500,000 in punitive damages, referencing an "Attachment B" to the proposed judgment. That attachment B provided that while Juris Wealth, P.C., is not liable for punitive damages, punitive damages are awarded against Wolfe, Juris Wealth and REP, based upon a finding of fraudulent conduct and an intent to injure Liu.

Finally, Liu proposed an award of $62,402.50 in attorney fees, plus court costs.

The court did not enter the judgment exactly as proposed by Liu. Although the court did award the full amount of compensatory damages sought, it deleted the amount of attorney fees sought, and substituted the number "$20,000" in its place. The court also deleted the $500,000 number proposed for punitive damages, but did not substitute any other number. Yet the court did not strike either the reference to attachment B, or attachment B itself. Thus, the judgment, as rendered, did not specify any amount for punitive damages, while at the same time retaining the finding that punitive damages "are awarded based on the Court's findings that Defendants Gerald Wolfe, Juris Wealth Management and Real Equity Pursuit, LLC engaged in fraudulent conduct, intended to injure Plaintiff and acted without just cause or excuse."

I

"Substantively, `[t]he judgment by default is said to "confess" the material facts alleged by the plaintiff, i.e., the defendant's failure to answer has the same effect as an express admission of the matters well pleaded in the complaint." (Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 823, quoting 6 Witkin, Cal. Procedure (4th ed. 1997) Proceedings Without Trial, § 153; Brown v. Brown (1915) 170 Cal. 1, 5, ["The judgment which follows upon this sort of admission is, in contemplation of law, a complete adjudication of all the rights of the parties embraced in the prayer for relief and arising from the facts stated in the complaint . . . . The defendant here is presumed to have acceded to the proposition embraced in the complaint and to have consented that plaintiff should obtain the relief therein prayed for, upon the conditions and facts set forth in the complaint."].)

In this case, Wolfe's default "confessed" to some pretty egregious conduct. He utilized his state bar membership as a way to gain Liu's trust and induce him to take out a large loan for investment,2 and then (1) misrepresented significant facts about the purportedly "safe" investment he was recommending to Liu; and (2) failed to disclose that he and his companies would reap a fee of $20,000-$30,000 from the borrower as compensation for obtaining the investment funds.3 Despite holding himself out as a "fiduciary" to potential investment clients like Liu, whom he implied would be treated in accordance with the same high ethical standards required in more traditional dealings between an attorney and his clients, Wolfe seems to have acted in a manner which is utterly inconsistent with that role. Instead, the evidence here suggests Wolfe treated his investment "clients" as little more than bait — the means to securing the significant (and undisclosed) fees that a shady borrower like Pawson was willing to pay to obtain capital. This is the scenario that Wolfe did not bother to contest.

Liu contends it was error to deny punitive damages under these circumstances, and thus asks us to reverse the judgment and remand the case to the trial court with directions that an award of punitive damages be included. The idea is tempting, but we are unable to do so.

In this default proceeding, the trial court fulfills the role of trier of fact. Although Code of Civil Procedure section 585, the statute governing default judgments, specifically provides that "[i]f the action is for the recovery of damages, in whole or in part, the court may order the damages to be assessed by a jury" (id., subd. (b)), no such jury was impaneled in this case. Consequently, as the trier of fact, the court is empowered to decide whether punitive damages should be imposed. "Whether to award punitive damages if the requirements of Civil Code section 3294, subdivision (a) are satisfied and the amount of such an award are questions committed to the trier of fact." (Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 923-924.)

And if the trier of fact — be that a judge or jury — chooses not to impose punitive damages, there is simply no mechanism by which the appellate court can require that it do so. As Justice Traynor explained in Brewer v. Second Baptist Church (1948) 32 Cal.2d. 791, a plaintiff is never entitled to such an award, no matter how egregious the facts. In Brewer, the jury had been instructed that if it found the defendant had acted with the intentions necessary to justify an award of punitive damages, then the plaintiff was entitled to such an award. In reversing the resulting judgment, the Supreme Court explained that such an instruction was error, because "`it tells the jury that, upon finding malice in fact, the plaintiff is entitled, as of right, to an award of punitive damages.'" (Id. at p. 801.) The court went on to emphasize that "`even after establishing a case where punitive damages are permissible, [the plaintiff] is never entitled to them. The granting or withholding of the award of punitive damages is wholly within the control of the jury, and may not legally be influenced by any direction of the court that in any case a plaintiff is entitled to them. Upon the clearest proof of malice in fact, it is still the exclusive province of the jury to say whether or not punitive damages shall be awarded. A plaintiff is entitled to such damages only after the jury, in the exercise of its untrammeled discretion, has made the award.'" (Id. at p. 801, quoting Lewis v. Hayes (1913) 165 Cal. 527, 533.)

Brewer was followed in Sumpter v. Matteson (2008) 158 Cal.App.4th 928, a case in which a jury had declined to make any award of punitive damages despite clear evidence that the defendant had acted with a conscious disregard for the rights and safety of others, and was thus subject to the imposition of punitive damages under Civil Code section 3294, subdivision (c)(1). On appeal, the Sumpter court explained "it was the jury's exclusive prerogative, after being duly instructed, to . . . decline to award punitive damages." (Id. at p. 936.) Similarly, in Haines v. Parra (1987) 193 Cal.App.3d 1553, the court explained that an award of punitive damages can never be made by the court on summary judgment, even though the defendant had already been criminally convicted of fraud based upon the conduct at issue in the civil case. Even though the egregiousness of defendant's conduct was beyond dispute, this court has no power to simply decree an award of such damages.

We are being asked, in effect, to do just that — to decree that an attorney such as Wolfe must be subjected to punitive damages for the misconduct he concededly committed. We cannot. It is the job of the trial court, after examining the evidence submitted by Liu, to make a determination as to whether such an award is proper.

In this case, however, we simply cannot tell what the trial court intended to do. While it is fairly clear it did not intend to award the amount of punitive damages suggested by Liu, the court's retention of attachment B in the judgment it signed suggests it did intend to include some award of punitive damages. Additionally, it left checked the box marked "punitive damages" in the judgment, but deleted the amount. Whether it was the court's intention to insert an amount different than the $500,000 requested by Liu, and if so whether that amount was higher or lower, we cannot say. On remand, the trial court will have to reassess the issue, and make a clear ruling.4

II

Liu next contends the court abused its discretion by awarding him only $20,000 in attorney fees, despite the fact he incurred over $62,000 in fees pursuing this judgment against Wolfe and his related entities. "A trial court's determination of reasonable attorney fees is reviewed under the abuse of discretion standard. [Citation.] `The scope of discretion always resides in the particular law being applied, i.e., in the "legal principles governing the subject of [the] action. . . ." Action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an "abuse" of discretion.' [Citation.]" (Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 25.)

Here, the promissory note signed by Wolfe entitled Liu to all "reasonable attorney's fees costs and expenses" incurred in the collection and enforcement of the note, and the "collateral assignment agreement" entered into between Liu and REP entitled the prevailing party in any action "relating to" the agreement to an award of "reasonable attorneys fees, costs and disbursements." The question we face here, then, is whether the court erred by implicitly concluding that the bulk of the fees incurred by Liu in this case were not "reasonable." In our view, it did.

As Liu acknowledges, the Orange County Superior Court Local Rule 366 sets forth a schedule of recommended amounts of attorney fees to be awarded in default cases. But as Liu also points out, this was hardly a typical default, and rule 366 provides that the court is free to award a higher fee, according to proof submitted, where circumstances warrant it.

Here, while the court was agreeable to departing from the default fee schedule — the $20,000 awarded was generous in comparison to the amounts provided for in that schedule5 — it was apparently unwilling to depart to the extent Liu requested. But our own review of the record suggests there was no basis for rejecting the bulk of the fees incurred by Liu in this case. While the fees were high — certainly cases have been litigated though trial on the merits for less — there is nothing to suggest Liu was responsible for running those fees up unnecessarily.

Indeed, even Wolfe, who filed a respondent's brief on his own behalf, makes no claim that any action taken by Liu in pursuit of this judgment was unreasonable or unwarranted in the circumstances. Nor does he suggest the hours claimed by Liu's counsel were inflated, or that the hourly rates charged by that counsel were unreasonably high.6 Indeed, Wolfe does not contest the assertion — made by Liu's counsel in support of the fee claim — that much of the expense of this case was necessitated by Wolfe's own obstreperous conduct and refusal to comply with discovery obligations. Moreover, Liu's counsel explained that he requested, on more than one occasion, that Wolfe stipulate to liability if he did not intend to defend the case on the merits. Wolfe would not do so. It seems that Wolfe made a decision that if Liu wanted to obtain a judgment against him, he'd have to pay dearly for it. He did, and now Wolfe should have to as well.

To be clear, we share what we perceive to be the trial court's discomfort with the expense of litigating this case. It should cost a lot less to litigate, and the high cost of doing so is why a defendant's refusal to cooperate can be an effective deterrent — as Wolfe apparently understands. But the measure of a "reasonable" attorney fee is not the amount we think it ought to cost to litigate, but the amount it actually costs, given the fees charged by real lawyers in the community and the time they are required to expend in taking reasonable steps to advance or defend their client's interests. In the absence of some evidence that the hourly fees charged to Liu in this case were unreasonably high, or that the actions taken and time spent by his attorney were unwarranted or inflated, there is no basis to conclude the actual fees Liu incurred — and paid — to litigate this case, were not "reasonable." And we find none. Liu was entitled to recover all of the fees he incurred.

DISPOSITION

The judgment is reversed, and the case is remanded to the trial court with directions to modify its judgment to include a clear ruling on the issue of punitive damages, and to include therein the total amount of attorney fees sought by Liu in his request for court judgment. Additionally, the court is directed to entertain a motion by Liu for additional attorney fees incurred on appeal. Liu is to recover his costs on appeal.

The clerk of this court is directed to forward a copy of this opinion to the State Bar.

WE CONCUR:

MOORE, J.

ARONSON, J.