Judge: Brian F. Gasdia, Case: VC064308, Date: 2022-09-01 Tentative Ruling
Case Number: VC064308 Hearing Date: September 1, 2022 Dept: R
LA MIRADA RESTAURANT GROUP, INC. v. CHA LA MIRADA LLC
CASE NO.: VC064308
HEARING: 09/01/22
TENTATIVE ORDER
Cross-Complainant CHA LA MIRADA’s Motion for Limited New Trial is DENIED.
Opposing Party to give Notice.
The request to strike Red Robin’s untimely Opposition is DENIED. (CCP §659(a).) The Court read the untimely Opposition. However, the arguments raised therein were not taken into consideration by the Court in reaching its ruling.
Cross-Complainant CHA LA MIRADA (“CHA”) moves for limited new trial on the following statutory grounds: (1) Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial; (2) Excessive or inadequate damages; (3) Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law; and (4) Error in law, occurring at the trial and expected to by the party making the application.” (CCP §657.) CHA argues that it was awarded inadequate damages wherein the Court erred in declining to make an award CHA’s additional damage claims.
In Opposition, Cross-Defendant RED ROBIN INTERNATIONAL, INC. (“Red Robin”) argues that the Motion should be denied because CHA is simply seeking to retry claims already argued at trial, in post-trial briefs, and in response to this Court’s tentative statements of decision.
Lost Profits
There is no evidence in the record to support a finding that CHA can recover lost hotel profits. As Dr. Luna testified, the hotel’s revenues and profits actually increased every year from 2014 through 2016, until 2017. Moreover, the RevPAR analysis relied on by CHA’s expert, Mr. Bass, does not constitute a proper method for computing profitability and does not establish lost profits. While RevPAR is an indicator for how a hotel performs against other comparative hotels in the area, it is not capable of calculating an individual hotel’s profitability.
Moreover, as the Court noted in its Final Statement of Decision, CHA is largely responsible for any purported lost profits. CHA evicted its own tenant who held the liquor license that Holiday Inn and Red Robin requires.
Lastly, there is no evidence to support a finding that hotel revenues would be a foreseeable element of damage at the time the 1998 contracts were entered into.
Remodeling Interest
There is no evidence in the record to support a finding that CHA can recover it’s claimed damages in the form of four years of interest on the money used to pay for remodeling. These special damages, which are comprised of “four years of interest thereon that would have been earned on [the remodeling expenses] had CHA not been forced to incur it four years early” were not foreseeable at the time the contracts were entered into in 1998. (Motion 8:28-9:2.) Additionally, CHA would have had to remodel the restaurant whether or not it was awarded the franchise for the full remaining term. The evidence establishes that CHA would have had to incur remodeling damages to comply with Red Robin’s “brand transformation initiative.”
Prejudgment Interest
“Damages are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage. [Citations.] Thus, the test for recovery of prejudgment interest under [Civil Code] section 3287, subdivision (a) is whether defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount. [Citations.]” (State Compensation Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 441, fn. 13.)
There is no evidence in the record to support a finding that prejudgment interest damages are certain or could be made certain by calculation. This issue was hotly disputed by the parties. Indeed, the record supports the finding that prejudgment interest could not be made certain without the aid of a forensic accountant and/or by way of litigation. Simply stated, prejudgment interest could, in no way, be gleaned from the fixed terms of a contract or by reference to reasonably available information.
As with any Motion for a new trial, the moving party must establish the existence of one of the statutory grounds for granting the new trial motion. (See CCP §657.) CHA has failed to establish its asserted grounds for the new trial motion, as neither an irregularity in the proceedings, insufficiency of the evidence, inadequate damages, nor an error in law has been demonstrated.
The Motion for New Trial is DENIED.
RESTAURANT GROUP, INC. v. CHA LA MIRADA LLC
CASE NO.: VC064308
HEARING: 09/01/22
TENTATIVE ORDER
RED ROBIN INTERNATIONAL, INC.’s Motion for Attorney’s Fees as Prevailing
Party Pursuant to Lease Contract is GRANTED
in the amount of $110,267.50.
Moving Party to give Notice.
Absent a statutory or contractual
right to an award of fees in favor of a litigant, California follows the
“American Rule,” under which each party to a lawsuit ordinarily must pay his or
her own attorney fees. (CCP §1021; Musaelian v. Adams (2009) 45 Cal.4th
512, 516.) In order to prevail on a motion for attorney’s fees, the moving
party must establish an entitlement to fees and also support the specific
amount of fees claimed. (ComputerXpress, Inc. v. Jackson (2001) 93
Cal.App.4th 933, 1020.)
RED ROBIN INTERNATION, INC. (“Red Robin”) moves for an award
of reasonable attorney’s fees pursuant to contract in the total amount of
$124,646.00 against CHA LA MIRADA, LLC. (“CHA”). Red Robin argues that it is
entitled to attorney’s fees as the prevailing party in this action on CHA’s
cause of action against Red Robin for Breach of Restaurant Lease. The Court’s
Judgment, entered on July 19, 2022, states: “Judgement is hereby entered in
favor of Red Robin International, Inc. and against CHA LA Mirada, LLC, on the…
sixth cause of action (breach of lease) … of CHA La Mirada, LLC’s First Amended
Cross-Complaint. (Judgment at 2:18-22.)
In Opposition, CHA argues that Red Robin is not entitled to
attorney’s fees because Red Robin is not a prevailing party. “In its July 5,
2022 Final Statement of Decision and Judgment entered thereon, this Court
expressly found CHA LA Mirada LLC… to be the prevailing party by virtue of
having obtained a net monetary recovery of nearly $3,000,000 and thus entitled
as a matter of right to recover its fees and costs from Red Robin International,
Inc.” (Opp. 2:1-4.)
Entitlement to Attorney’s Fees
The Court finds that Red Robin has established an
entitlement to attorney’s fees.
First, Red Robin’s Motion is not barred by its failure to
file a Memorandum of Costs. “Unless the court orders otherwise, an award of
costs neither includes attorney’s fees on appeal nor precludes a party from
seeking them under rule 3.1702.” (CRC Rule 8.278(d)(2).) Red Robin’s Motion is
brought under Rule 3.1702 which applies to attorney’s fees provided for by
contract. Red Robin does not seek fees under Rule 3.1700 which applies to
costs.
Second, Red Robin is a “prevailing party” on the Breach of
Lease cause of action. The determination of “prevailing party” status differs
depending on the legal basis for the award. In particular, the concept is
treated differently for free awards in actions based on contract under Cal.
Civ. Code §1717. “The court, upon notice and motion by a party, shall determine
who is the party prevailing on the contract for purposes of this section,
whether or not the suit proceeds to final judgment…. [T]he party prevailing on
the contract shall be the party who recovered a greater relief in the action on
the contract. The court may also determine that there is no party prevailing on
the contract for purposes of this section. (Cal. Civ. Code §1717(b)(1).) “In an
action which seeks relief in addition to that based on a contract, if the party
prevailing on the contract has damages awarded against it on causes of action
not on the contract, the amounts awarded to the party prevailing on the
contract under this section shall be deducted from any damages awarded in favor
of the party who did not prevail on the contract. If the amount awarded under
this section exceeds the amount of damages awarded the party not prevailing on
the contract, the net amount shall be awarded the party prevailing on the
contract and judgment may be entered in favor of the party prevailing on the
contract for that net amount.” (Cal. Civ. Code §1717(c).) The “prevailing
party” requirements of CCP §1032 and Cal. Civ. Code §1717 are not identical.
The definition of “prevailing party” for the purpose of attorney’s fees under
Cal. Civ. Code §1717 is different than it is for costs under CCP §1032. (Sears
v. Baccaglio (1998) 60 Cal.App.4th 1136, 1142.)
Here, it is undisputed that the Restaurant Lease contains an
attorney fee provision, which states: “In the event either party to this Lease
brings any action… to enforce, declare or defend any right or remedy under this
Lease… then the prevailing party in such action or proceeding… will be entitled
to recover all costs… including reasonable attorney’s fees….” (Amberg Decl.,
Ex. 2.) It is further undisputed that
Judgment was entered in favor of Red Robin on the Breach of Lease cause of
action. Pursuant to Cal. Civ. Code §1717, Red Robin is the prevailing party on
the breach of contract cause of action and is entitled to an award of
attorney’s fees.
Amount of Attorney’s Fees
Consequently, the issue remaining before the Court is to
determine the amount of fees that Red Robin is entitled to. As indicated above,
Red Robin moves for an award of reasonable attorney’s fees pursuant to contract
in the total amount of $124,646.00.
In Opposition, CHA argues that Red Robin’s Declaration in
support of the amount of fees sought is inadequate, “as it contains no
information whatsoever that identifies Red Robin’s so-called defense to the
sixth cause of action apart from its efforts upon which it lost this case. It
is Red Robin’s burden to justify the amount sought, a burden it has completely
failed to meet.” (Opp. 4:4-7.)
The matter of
reasonableness of a party’s attorney fees is within the sound discretion of the
trial court. (Bruckman v. Parliament Escrow Co. (1989) 190 Cal.App.3d
1051, 1062.) When
assessing the amount of any attorney’s fee award, courts typically determine
what is reasonable through the application of the “lodestar” method. Under the
lodestar method, a base amount is calculated from a compilation of (1)
time reasonably spent and (2) the reasonable hourly
compensation of each attorney. (Serrano v. Priest (“Serrano
III”) (1977) 20 Cal.3d 25, 48); (See also Meister v. Regents of
University of California (1998) 67 Cal.App.4th 437, 448-449 holding
that the lodestar method applies to statutory attorney fees award unless the
underlying statute provides for another method of calculation). Normally,
a “reasonable” hourly rate is the prevailing rate charged by attorneys of similar
skill and experience in the relevant community. (PLCM Group, Inc. v. Drexler (2000)
22 Cal.4th 1084, 1095.) That amount may then be adjusted through the
consideration of various factors, including “(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.)
The Court is vested with discretion to determine which claimed hours were
reasonably spent, and what an attorney’s reasonable hourly rate is. (Dover
Mobile Estates v. Fiber Form Products, Inc. (1990) 220 Cal.App.3d
1494, 1501); (See also Flannery v. California Highway Patrol (1987) 61
Cal.App.4th 629, 644.) [“We readily acknowledge the discretion of the trial
judge to determine the value of professional services rendered in his or her
court.”].
The Court finds counsel’s hourly rates at
$795/$540 and $830/$550 are reasonable given his experience, skills, and the
type of litigation involved. A review of the summarized billing statement also
demonstrates that the hours billed are generally reasonable. (Amberg Decl., Ex.
9.) The Court finds Red Robin’s efforts
to recover fees incurred on the sixth cause of action reasonable.
However, the Court finds that some of the
fees sought are unreasonable. Consequently, Red Robin has established an
entitlement to reasonable fees in the amount of $110,267.50. The Court’s determination
is undertaken in the exercise of its discretion to determine whether or not
rates or hours are reasonable. (Dover Mobile Estates v. Fiber Form
Products, Inc. (1990) 220 Cal.App.3d 1494, 1501.) The Court reduces Red
Robin’s sought fees by $14,378.50—fees incurred for work on the appeal.
Accordingly, the Motion for Attorney’s Fees is GRANTED in
the reduced, but reasonable amount of $110,267.50.
However, as CHA notes in Opposition, any fees awarded to Red
Robin must be treated solely as a set-off against the fees awarded in favor of
CHA. (See Cal. Civ. Code §1717(c).)