Judge: Armen Tamzarian, Case: BC691362, Date: 2023-02-27 Tentative Ruling

Case Number: BC691362    Hearing Date: February 27, 2023    Dept: 52

Defendants’ Motion for Attorney Fees

Defendants Phillip T. Thong, Andrea L. Thong, Ly Hua, Wendy Lam, Newport Seafood Restaurant, Inc., Newport Seafood Group, Inc., Hua Culinary Group, Inc., and Heng Henry Hua move for $250,412 in attorney fees from plaintiff Unified Real Estate Investments, LLC. 

Background

Plaintiff brought this action for breach of contract and conversion against nine defendants: the eight moving defendants and the first named defendant, New Port@Beverly Hills, Inc.  The court held a bench trial in July 2019.  After trial, the court entered judgment for plaintiff against New Port@Beverly Hills, Inc. only, and in favor of the eight moving defendants.  In November 2019, the court awarded defendants $239,962.50 in attorney fees.

Plaintiff appealed the judgment.  The Court of Appeal affirmed the judgment, with one exception—it reversed the judgment as to plaintiff’s cause of action for conversion against defendant Heng Henry Hua.  The Court of Appeal remanded the case to determine plaintiff’s damages against Heng Henry Hua and vacated the trial court’s order of attorney fees. 

The case is set for jury trial on April 12, 2023, regarding the amount of damages for conversion against Heng Henry Hua.

Timeliness

            Plaintiff contends the motion was untimely.  Strict compliance with procedural rules on costs and fees is not required, particularly when any deviation from the rules does not prejudice the opposing party.  (See Gunlock Corp. v. Walk on Water, Inc. (1993) 15 Cal.App.4th 1301, 1305 [affirming award of attorney fees claimed via memorandum of costs instead of noticed motion].)   Courts have “substantial latitude in allowing fees to be awarded without strict compliance with statutory temporal and procedural limitations.”  (Ibid.)

Plaintiff claims no prejudice.  To the contrary, plaintiff does not argue that the initial motion filed in 2019 was untimely.  The present motion primarily concerns by how much the court should reduce the $239,962.50 in fees awarded pursuant to that motion.  In its opinion vacating the attorney fee award, the Court of Appeal stated, “The parties may seek fees and costs anew in the trial court.”  (Opinion, p. 49.)  It was no surprise that the moving defendants again wanted to recover attorney fees.  As to the $239.962.50 in fees incurred before trial, the parties are fighting over whether those fees were reasonably incurred and over how much should be apportioned.

Aside from reducing fees previously incurred and formerly awarded (in an order now vacated), defendants’ only new fees are those incurred on the appeal and in making this motion—which amount to about 10% of the total fees claimed.  The court, in its discretion, shall consider the motion on the merits instead of finding the moving defendants forfeited their right to any fees.

Specific Reductions

In calculating the lodestar, the court must determine whether the tasks performed by an attorney were necessary and whether the amount of time billed for each task was reasonable.  (Baxter v. Bock (2016) 247 Cal.App.4th 775, 793.) 

Plaintiff argues for various reductions for vague entries or block billing.  (Opp., pp. 9-14.)  For two reasons, the court finds those reductions (with one exception) are not warranted.  First, the present motion starts by using the fees of $239,962.50 (607.5 hours at $395 hourly) as awarded by the court, Judge Susan Bryant-Deason presiding, on November 13, 2019 (Wong Decl., ¶ 14, Ex. D) and later vacated by the Court of Appeal.  That award already reduced defendants’ lodestar from 625 hours (id., p. 2) to 607.5 hours (id., p. 3).  Some of plaintiff’s proposed reductions would be duplicative.

Second, after reviewing the billing records, the court finds only one entry was not reasonably incurred.  As the court stated in its now-vacated order, “[W]hile Defendants’ counsel could have been more descriptive in its billing entries,” they are sufficient.  The hours spent were reasonable for the tasks described.  The court will reduce the lodestar by 0.3 for an entry for “scanning company documents” on July 20, 2018.  (Wong Decl., Ex. B, p. 16.)  “[P]urely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them.”  (Missouri v. Jenkins by Agyei (1989) 491 U.S. 274, 288, fn. 10.)

Apportionment

“In determining the lodestar amount, a prevailing party generally may not recover for work on causes of action on which the party was unsuccessful.”  (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 342.)  However, “attorney’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, internal quotes and alterations omitted.)  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.)

Defendants propose reducing the lodestar by 5.6% because Hua’s testimony regarding the conversion claim amounted to 19 of 342 pages of the trial testimony.  Plaintiff’s opposition proposes reducing the lodestar by 11% (aside from other reductions) because 40 of 342 pages of trial testimony were devoted to the conversion claim. 

Plaintiff’s argument relies on the premise that defendants can only recover fees for work done on the cause of action for breach of contract, but not conversion.  The conversion claims, however, were intertwined with the cause of action for breach of contract.  Plaintiff alleged defendants “removed 33 items from the Premises belonging to” plaintiff.  (Comp., ¶ 29.)  They contended doing so breached the lease: “New Port was also required not to remove property, including business and trade fixtures, furniture or personal property, from the Premises while in default.”  (Id., ¶ 41.)  “New Port breached the terms of the Lease Agreement by, among other things, … removing property belonging to Unified.”  (Id., ¶ 42.)  Plaintiff’s cause of action for conversion was for removal of the 33 items.  (Id., ¶ 50.) 

Seven of eight moving defendants prevailed on the entire action against them.  Only fees incurred for Heng Henry Hua’s unsuccessful defense of the conversion claim should be apportioned—so long as doing so is practicable.  The court finds that, for the bulk of the fees incurred, it is impracticable to determine which fees are recoverable (i.e., for defending the other seven defendants or defending Heng Henry Hua on breach of contract) and which are not (i.e., those incurred only for defending Heng Henry Hua on conversion).  The court finds the moving defendants’ proposed apportionment of 5.6% is reasonable.  Plaintiff’s argument for 11% apportionment is not persuasive. 

Adjusted Lodestar

As discussed above, the court adjusts defendants’ lodestar of 607.5 hours by 0.3 hours.  The result is a total of $239,844 (607.2 hours at $395 hourly).  Defendants shall also recover the $20,000 incurred on the appeal.  This results in a subtotal of $259,844, which the court will reduce by 5.6% to apportion the fees incurred for the unsuccessful defense of Heng Henry Hua to the conversion claim.  Finally, defendants shall recover the $4,999.50 in fees incurred for this motion.  Their recoverable fees therefore total $250,292.24.   

Disposition

Defendants Phillip T. Thong, Andrea L. Thong, Ly Hua, Wendy Lam, Newport Seafood Restaurant, Inc., Newport Seafood Group, Inc., Hua Culinary Group, Inc., and Heng Henry Hua’s motion for attorney fees is granted in part.

Defendants Phillip T. Thong, Andrea L. Thong, Ly Hua, Wendy Lam, Newport Seafood Restaurant, Inc., Newport Seafood Group, Inc., Hua Culinary Group, Inc., and Heng Henry Hua shall recover $250,292.24 in attorney fees from plaintiff Unified Real Estate Investments, LLC.