Judge Cherol J. Nellon, Case Number: 19STCV05221, Date: 2025-02-04 Tentative Ruling

Judge: Cherol J. Nellon, Case: 19STCV05221, Date: 2025-02-04 Tentative Ruling

Case Number: 19STCV05221 Hearing Date: February 4, 2025 Dept: 14

Case Background

This case arises from a dispute over the sale and attempted importation of 16 Japanese sports cars (more precisely, 16 Nissan Skyline GT-Rs). Plaintiff alleges that Defendants told him they were experts in vehicle importation and could deliver these specific vehicles to him with a minimum of fuss. Plaintiff further alleges that he paid nearly $4 million for the vehicles, only to discover that Defendants did not own them, could not own them, and had no way to deliver them as promised. Defendants in turn allege that they delivered at least one car, and Plaintiff refused to pay for it.

On February 15, 2019, Plaintiff Edwin Hammond Meredith (“Meredith” or “Plaintiff”) filed his Complaint for (1) Fraud; (2) Violation of the Consumer Legal Remedies Act; (3) Violation of Civil Code §§ 1790 et seq; (4) Fraud – Violation of Penal Code § 470(d); (5) Breach of Contract; (6) Breach of the Covenant of Good Faith and Fair Dealing; (7) Negligence Per Se; and (8) Negligence against Defendants Franz Gerald Tissera (“Franz”); Phase9MotorSports, Inc. (“Phase 9”); and DOES 1-20. On March 13, 2019, Defendants Franz and Phase 9 filed their Answer.

On May 13, 2019 Plaintiff filed two “Amendments to Complaint,” substituting Defendants Angela J. Chisholm (“Chisholm”) and Frederick Tissera (“Frederick”) in lieu of DOES 1-2, respectively. On October 31, 2019, this court sustained the demurrer of Defendants Chisholm and Frederick, with leave to amend.

On November 21, 2019 Plaintiff filed his First Amended Complaint (“FAC”) for (1) Fraud; (2) Violation of the Consumer Legal Remedies Act; (3) Violation of Civil Code §§ 1790 et seq; (4) Negligence Per Se; (5) Negligence; (6)-(21) Breach of Contract; and (22) Conversion against Defendants Franz, Chisholm, Frederick, Phase 9, and DOES 1-20. The 1^st cause of action is asserted against Defendants Franz, Chisholm, and Frederick only; the 2^nd, 3^rd, and 6^th-21^st causes of action are asserted against Phase 9 only. On May 5, 2021, Defendants Franz, Chisholm, Frederick, and Phase 9 filed their joint First Amended Answer.

On November 18, 2019, Defendants Franz and Phase 9 Filed their Third Amended Cross-Complaint (“TAXC”) for (1) Breach of Contract; (2) Breach of the Implied Covenant; and (3) Quantum Meruit against Plaintiff/Cross-Defendant Meredith and ROES 1-20. On February 18, 2020, Plaintiff/Cross-Defendant Meredith filed his Answer.

On April 26, 2024, the first phase of jury trial concluded. The jury found in favor of Plaintiff and against Defendants.

On October 7, 2024, the second phase of trial concluded. The Court found that that Franz Tissera was an alter ego of Defendant Phase9MotorSports, Inc.

On October 31, 2024, the Court entered judgment in favor of Plaintiff.

On December 4, 2024, Plaintiff filed a memorandum of costs.

On December 13, 2024, Defendants filed their motion to tax costs.

On December 17, 2024, Plaintiff filed a motion for attorney fees.

On January 17, 2025, Defendants filed an opposition to the motion for attorney fees.

On January 21, 2025, Plaintiff filed a reply in support of his motion for attorney fees.

Instant Pleading

Plaintiff moves for attorney fees.

Defendants move to tax costs from Plaintiff’s memorandum of costs.

Decision

The motions for attorney fees and to tax costs are CONTINUED to April 16, 2025. Plaintiff is ordered to file and serve its supplemental briefing by March 28, 2025. Defendants may file their opposition by April 3, 2024. Plaintiff is to file a reply by April 9, 2025.

Discussion

A prevailing party is entitled to recover its attorneys’ fees when authorized by contract, statute, or law. (See Code civ. Proc., section 1033.5(a)(10); Cal. Civ. Code § 1717(a).) “To ‘incur’ a fee, of course, is to “become liable” for it [citation omitted], i.e., to become obligated to pay it.” (Trope v. Katz (1995) 11 Cal.4th 274, 280.)

Courts begin with an independent review of the evidence to determine the reasonableness of the hours actually spent litigating the matter and to assess whether there was padding, overstaffing, duplication, or marked inefficiency. (Donahue v. Donahue (2010) 182 Cal.App.4th 259, 272.) The prevailing party who seeks fees and costs bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. (Cristian Research v. Alnor (2008) 165 Cal.App.4th 1315, 1320.) To that end the Court may require a party to produce records sufficient to provide a proper basis for determining how much time was spent on particular claims. (Id.) The evidence should allow the Court to consider whether the case was overstaffed, how much time attorneys spent on particular claims, and whether the hours were reasonably expended. (Id.) The Court has discretion to award fees based on the attorney’s declaration describing the work they have done and based on the judge’s own view of the number of hours reasonably spent. (Syers Props. III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 698.)

Here, the parties’ contract states the prevailing party is entitled to reasonable attorneys’ fees and costs. (Yourist Decl., ¶8.) Although Plaintiff did not include detailed time records, the motion is accompanied by a declaration from his counsel summarizing the services rendered in this action and which states three attorneys worked on this matter with hourly rates of $852.35, $869.59, and $644.38. The three attorneys spent 1,277.23, 692.41, and 228.10 hours on this action for a total of 2,197.74 hours since their firm was retained in 2018. Plaintiff also requests fees for work performed by paralegals in this action.

In opposition, Defendants argue that Plaintiff failed to meet his burden of proof by failing to provide detailed time records. Additionally, Defendants argue that Plaintiff’s demand for fees is inflated because Plaintiff’s counsel inflated their hourly rates and the time spent on this case. Defendants also argue that they did not have the opportunity to examine the billing records to determine whether the time spent on this action was reasonable.

Defendants also argue that the individual Defendant, Franz Tissera, should not be liable for attorney fees because he was not a party to the contract. However, the Court found that Franz Tissera was an alter ego of Phase9MotorSports and would thus be liable for its obligations under the contract, including the obligation to pay attorneys fees.

Although Plaintiff is correct that he was not required to provide detailed time records, the Court may, in its discretion, require the production of more detailed records. The Court finds more detailed records are necessary to determine whether the time billed by Plaintiffs’ attorneys was reasonable. Additionally, the Court agrees that Plaintiff’s counsel’s hourly rates are unreasonable.

In assessing the reasonableness of hourly billing rates,¿“the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees [citation], the difficulty or complexity of the litigation to which that skill was applied [citations], and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases.” (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc.¿(2016) 6 Cal.App.5th 426, 437; see¿Mountjoy v. Bank of America, N.A.¿(2016) 245 Cal.App.4th 266, 272 [“a reasonable hourly rate is the product of a multiplicity of factors . . . [including] the level of skill necessary, time limitations, the amount to be obtained in the litigation, the attorney’s reputation, and the undesirability of the case”].)¿

Here, Plaintiff’s counsel provided a declaration stating he arrived at the following hourly rates requested using the Fitzpatrick Matrix: (1) Yourist $852.35 per hour, (2) Hanna $644.38 per hour, and (3) Nangano $869.59 per hour. (Yourist Decl., ¶10.) However, these rates are significantly higher than fees typically charged by attorneys with the same experience in Los Angeles. Based on the Court’s experience with these matters, the complexity of this case, the quality of the services performed in this case, and the experience of Plaintiffs’ attorneys, the Court finds the requested rates are unreasonably high.

Additionally, even with the age and complexity of this case, it appears unreasonable that Plaintiff’s counsel billed over 2,000 hours on this case. The lack of more detailed records makes the Court’s task here more difficult. Without billing records, the Court cannot evaluate whether the time spent on this case was reasonable.

The Court continues the motions for attorney fees and to tax costs to April 16, 2025 to allow Plaintiff to provide more detailed billing records reflecting the time each attorney and paralegals spent on this matter. Plaintiff is ordered to calculate fees according to the following rates: (1) $500 per hour for Yourist, (2) $475 per hour for Hanna, and (3) $550 per hour for Nagano.

Conclusion