Judge: Armen Tamzarian, Case: 21STCV04596, Date: 2023-02-22 Tentative Ruling

Case Number: 21STCV04596    Hearing Date: February 22, 2023    Dept: 52

Plaintiff O’Gara Coach Company, LLC’s Motion for Attorney Fees

Plaintiff O’Gara Coach Company, LLC (O’Gara) moves for $73,692.50 in attorney fees under the parties’ contract and Civil Code section 1717.

Reconsideration

Defendant Viken Chelebian argues the court should deny this motion because it duplicates plaintiff’s prior fee motion and there are no new facts or circumstances that warrant reconsideration.  (Opp., p. 5.)  Though the court denied plaintiff’s prior motion for attorney fees, the circumstances have changed.  The court explained it denied that motion because other causes of action on the same contract had not been resolved.  The court stated, “O’Gara is not currently the ‘party prevailing on the contract’—though it may be after trial.”  (Oct. 10, 2022 Minute Order, p. 2.)  “Because the second and fifth causes of action are ‘on the contract’ and have not reached ‘final resolution,’ the court cannot yet determine the prevailing party under Civil Code section 1717.”  (Id., p. 3.)

The court’s reason for denying the prior motion no longer applies.  After the court denied that motion, plaintiff dismissed the second through fifth causes of action.  The court had already granted summary adjudication for plaintiff on its first cause of action.  Dismissing the remaining causes of action meant that all causes of action had reached final resolution.  Now, the court can decide the issue of attorney fees under Civil Code section 1717.

Prevailing Party

Plaintiff is entitled to recover attorney fees under the parties’ contract.  When a contract provides for recovery of attorney’s fees and costs, “the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract.”  (Civ. Code, § 1717(b)(1).)  “[A] plaintiff who obtains all relief requested on the only contract claim in the action must be regarded as the party prevailing on the contract for purposes of attorney fees under section 1717.”  (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.) 

The parties’ contract provides that the prevailing party will recover its attorney fees.  The severance and release agreement between plaintiff and defendant Viken Chelebian provides, “[T]he Parties agree that in the event litigation is initiated by any Party to enforce this Agreement, the prevailing party will be entitled to recover its costs and reasonable attorneys’ fees incurred in conjunction with the litigation, in addition to any other relief granted.”  (Runge Decl. dated Aug. 25, 2022, Ex. A, ¶ 15, p. 5.)  This action constitutes litigation brought to enforce the agreement.

It is undisputed that plaintiff prevailed on the first cause of action.  (Opp., p. 7 [“The Plaintiff is the ‘prevailing party’ on the first cause of action”].)  The court granted summary adjudication for plaintiff on the first cause of action.  Plaintiff prevailed on it.

Despite plaintiff’s success on its first cause of action, defendant argues plaintiff cannot recover any fees because it voluntarily dismissed the second through fifth causes of action.  (Opp., p. 8.)   “Where an action has been voluntarily dismissed … ,  there shall be no prevailing party for purposes of this section.”  (Civ. Code, § 1717(b)(2).)  Plaintiff, however, did not voluntarily dismiss the “action.”  Plaintiff voluntarily dismissed only four of five causes of action.  When the plaintiff dismisses only part of its complaint, Civil Code section 1717 applies to the remaining causes of action on a contract.  (CDF Firefighters v. Maldonado (2011) 200 Cal.App.4th 158, 167.)

Double Recovery

            Defendant argues plaintiff seeks to recover duplicative fees because the court already awarded $12,206.56 in attorney fees when granting summary adjudication on the first cause of action.  “There is a difference, however, between attorney fees sought qua damages and attorney fees sought qua costs of suit.”  (Copenbarger v. Morris Cerullo World Evangelism, Inc. (2018) 29 Cal.App.5th 1, 9.)  “[A]ttorney fees qua damages are recoverable as damages, and not as costs of suit” in some causes of action for breach of contract.  (Id. at p. 10.)  Where a breach of contract causes the nonbreaching party to incur attorney fees in a prior action, that party may recover those fees as damages in the latter action for breach of contract. (Ibid.)  

            As the court ruled in granting summary adjudication, the $12,206.56 in attorney fees constituted fees as damages, not as costs of suit.  They were not incurred in this case.  Plaintiff incurred those fees in the prior action between O’Gara Coach Company, LLC and Darren Richie.

Apportionment

            Defendant also argues that, because plaintiff did not prevail on its second through fifth causes of action, the court can only award plaintiff’s fees incurred in bringing the first cause of action.  “ ‘[A]ttorney’s fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed.’ ”  (Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111.)  Courts have discretion not to apportion fees where the claims are “inextricably intertwined,” such that it is “impracticable, if not impossible, to separate the multitude of conjoined activities into compensable or noncompensable time units.”  (Ibid., internal quotes omitted.)

All claims were intertwined such that apportionment is impracticable or impossible.  The second cause of action for breach of the implied covenant of good faith and fair dealing and the fifth cause of action for declaratory relief were so intertwined with the first cause of action that they might be characterized as duplicative.  The third and fourth causes of action for intentional and negligent misrepresentation also arose from the contract.  Both alleged defendant made false promises in the parties’ severance agreement itself.  (Comp., ¶¶ 34-40.) 

Moreover, defendant did not specify which fees should be apportioned.  Plaintiff’s counsel’s billing entries do not indicate any fees were incurred solely for the second through fifth causes of action.

Defendant argues it cannot specify which fees should be apportioned because the bills are redacted for attorney-client privilege.  Defendant contends that “[s]ince this case is no longer in active litigation, there is no basis to support an assertion that attorney client privilege” applies.  (Opp., p. 10.)  Defendant cites no authority that the privilege ends when a case ends.  To the contrary, “[n]othing in the statutes controlling the privilege suggests it is to be limited or diminished in importance as a function of the continuance of the relationship that existed at the time of the confidential communications herein sought.”  (Littlefield v. Superior Court (1982) 136 Cal.App.3d 477, 482.)  The attorney-client privilege can even extend beyond the client’s death, at least temporarily.  (HLC Properties, Ltd. v. Superior Court (2005) 35 Cal.4th 54, 65.)

Reasonableness of Fees

            Plaintiff’s lodestar of $73,692.50 is reasonable.  “ ‘It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court…  The value of legal services performed in a case is a matter in which the trial court has its own expertise.  The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony.  The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.’ ”  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1096, citations omitted.)       

Plaintiff’s counsel litigated this case efficiently, skillfully, and successfully.  They filed their successful motion for summary adjudication on April 7, 2022, only 14 months after filing the complaint.  Plaintiff’s counsel conducted narrow, appropriately targeted discovery.  They deposed only one witness, defendant Viken Chelebian.  They charged modest hourly rates of $350 and $375.  Under all the relevant circumstances, $73,692.50 is a reasonable fee for plaintiff’s counsel’s legal services. 

Disposition

            Plaintiff O’Gara Coach Company, LLC’s motion for attorney fees is granted.  Plaintiff O’Gara Coach Company, LLC shall recover $73,692.50 in attorney fees from defendant Viken Chelebian.

Order to Show Cause Re: Entry of Judgment

            All causes of action have now been adjudicated, but no judgment has been entered.  Plaintiff is ordered to file a proposed judgment for the court’s signature within 10 days. 

The court hereby sets an order to show cause re: entry of judgment for March 20, 2023, at 8:30 a.m.