Judge: Anne Richardson, Case: 23STCP03648, Date: 2024-01-25 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 23STCP03648    Hearing Date: January 25, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Petition to Vacate Arbitration Award

On April 7, 2023, Claudette Selvin and Zachary Selvin (the Selvins) filed an action (LASC No. 23STCP01081) to vacate or correct an arbitration award against them and in favor of Roberto Luo-Wen (Mr. Luo-Wen). The Petition was assigned to Department 40 at the Stanley Mosk Courthouse (the Court) for all purposes.

On September 13, 2023, the Court set a hearing on the Petition for October 24, 2023.

Later that day, the Selvins amended their Petition (Amended Petition to Vacate).

The Selvins also noticed the Amended Petition for hearing on October 24, 2023.

On September 26, 2023, Mr. Luo-Wen opposed the Amended Petition to Vacate, arguing that it should be denied in its entirety and that the arbitration award should be confirmed.

Petition to Confirm Arbitration Award

On October 5, 2023, Mr. Luo-Wen filed a separate action (LASC No. 23STCP03648) to confirm the arbitration award. The action was assigned to Department 34 at the Stanley Mosk Courthouse for all purposes.

On October 10, 2023, Mr. Luo-Wen amended his petition to confirm (Amended Petition to Confirm).

Orders Relating Petitions

On October 12, 2023, Mr. Luo-Wen filed a notice of related case in Department 40 and in Department 34, which sought to relate this action (LASC No. 23STCP01081) with the higher numbered action (LASC No. 23STCP03648).

On October 17, 2023, the Selvins replied to the September 26th opposition.

On October 20, 2023, Department 40 and Department 34 issued identical minute orders, in which the two actions were related and assigned to Department 40 (the Court) for all purposes.

Order on Amended Petition to Vacate

On October 24, 2023, the Court heard arguments on the Selvins’ Amended Petition to Vacate in LASC No. 23STCP01081. The Court denied the Amended Petition to Vacate while confirming the arbitration award pursuant to Code of Civil Procedure section 1285.2.

That same day, the Court issued minutes in LASC No. 23STCP03648 indicating that the arbitration award was confirmed and that the Amended Petition to Confirm was completed.

On December 20, 2023, Mr. Luo-Wen filed a notice of lodging a proposed judgment in LASC No. 23STCP03648.

Motion Before the Court

On December 22, 2023, Mr. Luo-Wen filed a motion for an award of costs and attorney’s fees in LASC No. 23STCP03648.

On January 11, 2024, the Selvins opposed the motion.

On January 18, 2024, Mr. Luo-Wen replied to the opposition.

Mr. Luo-Wen’s motion is now before the Court in LASC No. 23STCP03648.

Motion for Award of Costs and Attorney’s Fees

I.

Order Granting Fees: GRANTED, in part.

A.

Legal Standard

A prevailing party is entitled to recover costs as a matter of right. (Code Civ. Proc., § 1032, subds. (a)(4), (b).) Attorney’s fees are also recoverable as costs when authorized by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) Attorney’s fees and costs may be awarded where a contract between the parties at issue specifically provides for such fees and costs and one party prevails over the other on the contract. (See Civ. Code, § 1717, subd. (a).)

The Court begins this inquiry “with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, the “lodestar figure may then be adjusted [according to a multiplier enhancement] based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Ibid.) Relevant multiplier factors include “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

No specific findings reflecting the court’s calculations for attorney’s fees are required; the record need only show that the attorney’s fees were awarded according to the “lodestar” or “touchstone” approach. (Rebney v. Wells Fargo Bank (1991) 232 Cal.App.3d 1344, 1349, disagreed with on other grounds in In re Marriage of Demblewski (1994) 26 Cal.App.4th 232, 236, fn. 7 [disagreement as to statement of decision requirements].) The Court has broad discretion to determine the amount of a reasonable attorney’s fee award, which will not be overturned absent a “manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence.” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393-1394.)

B.

Discussion

In his motion, Mr. Luo-Wen argues that he is entitled to attorney’s fees pursuant to clauses for this relief in the August 5, 2019 Common Stock Purchase Agreement (CSPA) and August 5, 2019 Shareholders Agreement. Mr. Luo-Wen also briefly argues that the fees sought are reasonable based on the Selvin’s fierce and ongoing opposition to the awards in favor of Mr. Luo-Wen and based on the evidence attached to the motion, showing hours spent, rates charged, and other information necessary to make a determination on fees. (Mot., pp. 3-4.)

The motion attaches copies of the CSPA and the Shareholders Agreement. (Mot., Angwin Decl., ¶¶ 4-5, Exs. A-B.)

The motion also attaches a declaration from counsel, which summarizes the academic and professional background of Edward Angwin, Esq. and attaches verified if heavily redacted time records. The declaration clarifies that “[c]ertain work on this matter was also performed by other attorneys and support staff employed by the law firm of Katchko, Vitiello & Karikomi, PC.” (Mot., Angwin Decl. re Fees and Costs, ¶¶ 1-23, Ex. A.)

In opposition, the Selvins argue that the motion should be denied outright because (1) Mr. Luo-Wen failed to submit proper billing records, i.e., the redactions in the billing records are so severe as to inhibit the discernment of meaningful information about the nature of the work performed in the billing entries and (2) the Amended Petition to Confirm was never actually confirmed. In the alternative, the Selvins argue that fees should be limited to no more than $13,750 and that: (1) all fees related to filing the Amended Petition to Confirm should be denied as duplicative; (2) the case was overstaffed by unnecessary timekeepers who performed unrelated, menial, and duplicative work, the time entries for which are also heavily redacted as to render the entries incomprehensible (e.g., GianDominic Vitiello and Patrick Babajanian billing entries); (3) Mr. Luo-Wen seeks contradictory fee rates for counsel, with Patrick Babajanian’s rate increasing from $185 to $225 per hour on December 21, 2023 and Edward Angwin’s rate increasing from $400 to $550 per hour in other entries (the same rate as partner Vitiello). The Selvins argue these deficiencies merit a reduction of $17,525.47, in addition to a further reduction of $14,345.82 based on block billing through heavy redactions. (Opp’n, pp. 4-11.)

In reply, Mr. Luo-Wen argues that he need not have but did submit verified time records, which “show[] the nature of the work which was performed and the time spent on each task.” Mr. Luo-Wen argues that all hours in the billing records are recoverable because they were based on the hours expended on confirming or opposing petitions to vacate the arbitration award, thus distinguishing case law cited by the opposition. Mr. Luo-Wen otherwise argues that there was no duplicative or unnecessary work because the filing of the Petition to Confirm was necessary in case the Petition to Vacate was dismissed, that the staffing in this case was appropriate, and that the award is supported by the zealous litigation of the arbitration award and the need to respond to the petitions to vacate the arbitration award. Last, Mr. Luo-Wen argues (1) that there was no block billing because Mr. Luo Wen is entitled to recover all fees for time expended confirming the arbitration award, (2) block billing is not automatically a ground for fee reduction, and (3) there is sufficient information in these entries to allow the Court to determine whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended. (Reply, pp. 3-7.)

The Court finds that fees are merited, but in a reduced amount.

The Court finds that the fee rates sought for counsel are reasonable in light of each attorney’s experience and background.

The Court also finds that recovery is permissible for both actions. Mr. Luo-Wen is allowed to enforce his rights. He chose to file a petition to confirm the arbitration award and then amended that petition. The Court cannot fault such conduct as duplicative and unnecessary work.

Moreover, the Court notes that on October 24, 2023, the Court (1) denied the Amended Petition to Vacate in LASC No. 23STCP01081 and confirmed the arbitration award and (2) in essence granted the Amended Petition to Confirm in LASC No. 23STCP03648 by “confirm[ing]” the arbitration award and stating, “this matter shall be deemed completed.” (See 10/24/23 Orders.)

However, the Court does agree with the Selvins that redactions in the billing records are so severe as to result in block billing and merit reductions. Fees are sought for work expended by Mr. Luo-Wen’s counsel between June 5, 2023 and December 22, 2023—i.e., between the filing of the Petition to Vacate on April 7, 2023 and the filing of this motion on December 22nd—which totals $55,056.67 in attorneys’ fees. (Mot., Angwin Decl. re Fees and Costs, Ex. A.) Those time entries are so heavily redacted that it is impossible to determine the nature of the task performed in each specific time entry. (See ibid; for example, at page 1: “Draft [redacted]. Review [redacted] in connection with [redacted].) Nor did counsel’s declaration specify how much time was spent on which task or otherwise describe the work done.

This lack of clarity merits a reduction in recovery because the Court is unable to determine whether the amount of time expended on each individual task is reasonable when compared to the nature of the task itself. Moreover, the redactions are so severe that the billing records constitute “[s]ubstantial evidence … [of a] fee request with” overly redacted and perhaps overinclusive, unculled, redundant, and padded billing entries, thereby “destroying the credibility of the submission and … justifying a severe reduction.” (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1318-1319.) On the other hand, the Court rejects the Selvins’ proposal as being an inadequate sum for the substantial work expended in confirming the arbitration award.

The Court GRANTS fees, in part, but reduces the requested fee award by one third to $36,704.45 (2/3 of $55,056.67), which the Court deems a reasonable lodestar based on its experience and considering the totality of the circumstances in this case.

II. Costs

Order Granting Costs: DENIED, without prejudice.

A.

Discussion

In his motion, Mr. Luo-Wen seeks costs of $1,508.01 but does not justify those costs other than to reference the verified time records. (Mot., pp. 3, 5; Mot., Angwin Decl. re Fees and Costs, ¶ 23, Ex. A [costs on pp. 2 [$17.15], 7, 8 [same], 9 [$17.15 plus $452.15], 10 [$216.92], 11 [$452.15], 12 [$313.06], 14 [$5.13].)

In opposition, the Selvins argue that Mr. Luo-Wen improperly failed to submit a memorandum of costs, which has deprived the Selvins of the ability to file a motion to strike or tax costs pursuant to California Rules of Court, rule 3.1700. (Opp’n, p. 11.)

The reply fails to address costs.

The Court finds in favor of the Selvins.

Rule 3.1700 is triggered by a judgment in the action. There is no judgment in this action or in the lead case. As a result, if anything, the request for costs is premature.

Moreover, the Selvins are correct in arguing that a memorandum of costs must be filed when seeking an award of costs. Ordinarily, a party to arbitration is entitled to an award of certain costs as a right. (Code Civ. Proc., §§ 1033.5, 1293.2; see Austin v. Allstate Ins. Co. (1993) 16 Cal.App.4th 1812, 1815-1816.) However, the timely filing of a costs bill is mandatory. (See Cal. Rules of Court, rule 3.1700 (a); see also Russell v. Trans Pacific Group (1993) 19 Cal.App.4th 1717, 1725-1726 [procedural requirements for obtaining costs are mandatory; trial court lacks discretion to disregard such statutory mandates].)

The request for costs is thus DENIED, without prejudice.

The Court notes that because judgment has not been entered and because this motion was denied without prejudice as to costs, no prohibitions—either ordered by the court or set by statute, e.g., timeliness—currently exist as to the filing of a costs memo pursuant to California Rules of Court, rule 3.1700, subdivision (a)(1). 

Conclusion

Petitioners Robert Luo-Wen’s Motion for Award of Costs and Attorney’s Fees is GRANTED, in part, and DENIED, in part, as follows:

(1) GRANTED, in part, as to fees, in the amount of $36,704.45; and

(2) DENIED as to costs, without prejudice.