Lealao

Appellants Richard U. Lealao and his wife Sese Lealao, who commenced this successful consumer class action, claim that the attorney fees awarded class counsel were unreasonably low. The questions before us are whether, under the circumstances of this case, the trial court had discretion to award a fee based solely on a percentage of the class benefit or, in the alternative, to measure an award calculated under the lodestar methodology by a percentage-of-the-benefit yardstick and to adjust the lodestar upward or downward on that basis. Our answers are no to the first question and yes to the second.

Facts and Procedural History

Appellants filed their class action complaint in the San Francisco Superior Court on October 3, 1995. The complaint claimed that respondent, Beneficial California, Inc., a major lender which then had 130 offices in this state, wrongfully charged a penalty when persons with whom it entered into certain credit line account agreements prepaid their open-end loans, as the imposition of such a penalty was neither provided for in the agreement nor otherwise authorized. For example, in August 1993, appellants opened a credit line account with respondent…