Judge: Cherol J. Nellon, Case: 19STCV12537, Date: 2024-03-26 Tentative Ruling
Case Number: 19STCV12537 Hearing Date: March 26, 2024 Dept: 14
Perrera v Moine
Case Background
Plaintiffs bought a 3.27-acre commercial
property in Compton from Defendant. The property had been previously used for
various purposes by various successive owners. Those uses included the
manufacture of carpet, the manufacture of aircraft, beverage canning, and
chemical processing. As a result, the soil became contaminated with
trichloroethylene (“TCE”) and the property came under the regulatory
jurisdiction of the Los Angeles Regional Water Quality Control Board (“Board”).
According to Plaintiffs, Defendant
made an agreement with the Board which specified that Defendant would be the
“Responsible Party” charged with cleaning up the TCE. But instead of doing
this, Defendant sold the property to the Plaintiffs for $6.6 million. Defendant
promised to get a letter from the board absolving Plaintiffs of responsibility
for cleaning up the TCE. Defendant failed to get that letter, and Plaintiffs
have now been forced to incur clean-up costs themselves.
Complaint
On April 10,
2019, Plaintiffs filed their Complaint for (1) Breach of Contract; (2) Unjust
Enrichment; (3) Fraud; and (4) Declaratory Relief against Defendants Charles A.
Moine (“Moine”) and DOES 1-100.
On June 14, 2019, Defendant Moine
filed his Answer.
On July 13,
2021, Plaintiffs filed a First Amended Complaint (“FAC”) which removed the fraud
cause of action but otherwise left the case unchanged. The court and parties treated
this as a voluntary dismissal of the fraud claim.
Cross-Complaint
On August
2, 2021, this court granted Defendant Moine leave to file a Cross-Complaint for
Common Counts against Plaintiffs and ROES 1-10.
The cross-complaint was not
formally filed until August 13, 2021, but it was available to both sides before
that and formed a significant part of the trial.
Trial and Judgment
Bench Trial commenced in this case
on August 2, 2021, and proceeded until August 9, 2021.
On August 16, 2021, this court
entered its statement of decision. On September 16, 2021, this court heard and
overruled counsel’s objections and adopted its statement of decision as the
official ruling in this case.
On October 26, 2021, this court entered
judgment in favor of Plaintiffs on the Complaint in the amount of $750,700.16,
and in favor of Defendant Moine on the Cross-Complaint in the amount of $61,000.00.
On October 26, 2021, Plaintiffs
gave Notice of Entry of Judgment.
On December 23, 2021, Defendant
Moine filed his Notice of Appeal from the judgment.
On January 10, 2022, Plaintiffs
filed their Notice of Cross-Appeal from the judgment.
On February 25, 2022, this court
issued its written order awarding Plaintiffs $388,541.00.
On March 15, 2022, Defendant Moine
filed his Notice of Appeal from the fee award.
On April 1, 2022, Plaintiffs filed
their Notice of Cross-Appeal from the fee award.
Remittitur
On November
27, 2023, the Court of Appeal issued a remittitur on the appeal of the
judgment, reversing this court’s finding in favor of Defendant Moine on the
Cross-Complaint. Plaintiffs were awarded their costs on appeal.
On the same
date, the Court of Appeal also issued a remittitur on the appeal of the fee
award, directing this court to reconsider its fee decision in light of the result
on the other appeal. Plaintiffs were again awarded their costs on appeal.
(1) Appeal From
Judgment
Plaintiffs now move this court,
pursuant to Civil Code § 1717, Code of Civil Procedure §§ 1032 and
1033.5, and California Rules of Court Rule 8.278, for $152,133.62 in attorney’s
fees incurred in the appeal from the judgment.
Decision
The motion is GRANTED, in part.
Plaintiffs are awarded $134,475.06 in attorney’s fees incurred in the appeal
from the judgment.
Governing
Standard
“In determining the amount of
reasonable attorney fees to be awarded under a statutory attorney fees
provision, the trial court begins by calculating the ‘lodestar’ amount…[t]he
‘lodestar’ is ‘the number of hours reasonably expended multiplied by the
reasonable hourly rate.’ (Citation.) To determine the reasonable hourly rate, the court looks to
the ‘hourly rate prevailing in the community for similar work.’ (Citation.)
Using the lodestar as the basis for the attorney fee award ‘anchors the trial
court's analysis to an objective determination of the value of an attorney's
services, ensuring that the amount awarded is not arbitrary. (Citation.)’” Bernardi
v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393-1394.
“Some federal courts require that an
attorney maintain and submit ‘contemporaneous, complete and standardized time
records which accurately reflect the work done by each attorney’ in support of
an application for attorney fees…[i]n California, an attorney need not submit
contemporaneous time records in order to recover attorney fees…[t]estimony of
an attorney as to the number of hours worked on a particular case is sufficient
evidence to support an award of attorney fees, even in the absence of detailed
time records.” Martino v. Denevi (1986) 182 Cal.App.3d 553, 559. “[A]n
award of attorney fees may be based on counsel's declarations, without
production of detailed time records.” Raining Data Corp. v. Barrenechea
(2009) 175 Cal.App.4th 1363, 1375. “‘“[P]adding’ in the form of inefficient
or duplicative efforts is not subject to compensation.’” Premier Medical
Management Systems, Inc. v. California Insurance Guarantee Association
(2008) 163 Cal.App.4th 550, 556.
Discussion
Plaintiffs
have submitted a detailed billing statement as Exhibit 12 to the Declaration of
Jeffrey B. Ellis. That statement indicates that Mr. Ellis and another attorney,
Mr. Marc Epstein, spent 374.8 hours of attorney time on this appeal, at an
hourly rate that never exceeded $450 per hour. Their legal assistant billed for
an additional 9.5 hours at $135 per hour. Defense does not challenge the
propriety of the rates, as indeed they hardly could. They challenge only the
number of hours.
In their
reply, Plaintiffs concede the validity of one challenge: the request for 6.5
hours of time, billed at a total of $2,762.50, for preparing and recording an
abstract of the court’s judgment. The remaining objections raised by Defense
are addressed in turn.
Block Billing
The classic
case of block billing is when counsel identifies a huge portion of time as
spent on a single, generic task, leaving the court and the opponent with no way
to tell what was actually done with the time. See e.g. Christian Research
Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1325 (“20
entries described the trial-level work for which counsel sought fees as merely ‘further
handling’”). That didn’t happen here. Instead, Defense complains that Plaintiff’s
counsel combined multiple tasks into single billing items, makes it much harder
for anyone to tell if an appropriate amount of time was spent on each task. See
Id. But it isn’t clear that that happened here either.
Review of
the bills presented shows that an overwhelming majority of the entries are for
single tasks. Occasionally there are two tasks in one entry, but when that
happens, the tasks are clearly related, and the combination does not hinder the
court from making a rational evaluation of how much time was spent.
Conferencing
It is true
that counsel can and must frequently consult with each other in the preparation
of a client’s case. It would be pointless to have an associate you never talk
with. As the Court of Appeal has put it: “[c]ollaboration does not necessarily
amount to duplication.” Premier Medical Management Systems, Inc. v.
California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 562.
However, it is equally true that the
clients feel their ox unjustly gored when two lawyers both bill for the
same meeting, and there is no one else in the room or on the call. And the
process of determining attorney’s fees on motion is the process of determining
what a client would pay for.
An appropriate compromise is to
allow one attorney to bill for an internal conference. That person would be
lead trial counsel (in this case, Mr. Ellis) because they are the person best
positioned to determine what the case needs and to terminate the conference if
it becomes unhelpful.
Under this analysis, the following
items will be cut from the Plaintiffs’ bill: .5 hours billed by Mr. Epstein on
July 12, 2022 ($212.50), 1.7 hours billed by Mr. Epstein on January 6, 2023
(722.50), 2.5 hours billed by Mr. Epstein on February 2, 2023 ($956.25), 1.4
hours billed by Mr. Epstein on February 10, 2023 ($535.50), 1.9 hours billed by
Mr. Epstein on February 15, 2023 ($726.75), 1 hour billed by Mr. Epstein on
February 18, 2023 ($382.50), 1 hour billed by Mr. Epstein on February 20, 2023
($382.50), and 1 hour billed by Mr. Epstein on February 24, 2023 ($382.50).
This amounts to a reduction of $4,301.00.
General Reasonableness
Defense
divides Plaintiffs hours into 10 categories and attacks them in detail. However,
the court finds the billing excessive in only one instance: the expenditure of
40 hours checking the propriety of Defendant’s appellate bond.
Plaintiffs
explain this expense chiefly by two things: (1) Defendant used a Personal
Surety Bond rather than the more common Admitted Surety Bond or cash deposit, and
(2) this required Plaintiff’s counsel to investigate whether the persons who
signed the bond had sufficient assets to cover the amount. While the court
understands that this anomaly required some investigation, 40 hours (or an
entire work week for one person) is an excessive amount of time, especially in
light of the fact that most of the practical research involved verifying
documents supplied by Defense counsel.
A more
reasonable amount of time would be 16 hours, at the rate of $450/hour. It
should have taken counsel something less than one day’s worth of time to do the
necessary legal research on the manner of bond, and something more than a day’s
worth of time to obtain and verify documents supplied by Defense counsel. An
award of two days time, rather than a whole week, is appropriate. This results
in a fee reduction of $10,595.06.
One other point
calls for comment. In footnote 7 of the remittitur on the appeal of the
previous fee award, the Court of Appeal contrasted this court’s written order
on trial fees with some verbal comments it made at two hearings, without giving
any indication of what import their observation might have. (Remittitur on
Appellate Case No. B319315, filed September 18, 2023, p. 8 fn.7). Defense has gently
questioned the panel’s observation and urges this court to now apply the
statements made in the trial fee order to the appellate fees. Plaintiffs take
this as a hint that their case is more complex than the prior written orders
would suggest.
Review of
the case file suggests a simple way to reconcile the court’s written order with
its verbal comments. The presentation of the facts was simple and
straightforward, but an unusual legal issue – use of the implied
covenant of good faith and fair dealing as a defense – cropped up during the
trial. In their opening trial brief, Plaintiffs themselves described this
litigation as “a simple breach of contract case.” (Trial Brief filed July 19,
2021 p. 1:23). As the facts were presented, the court spotted a potential
breach of the implied covenant on the part of Plaintiffs and pointed the issue
out to counsel so that they would have a chance to brief it. In contrast to
their pleadings and opening briefs, which contain no mention of the implied
covenant, the closing trial briefs by both counsel addressed the issue, and the
court’s statement of decision discussed the matter in detail.
When this
court ruled that, for trial fee purposes, the case was “a relatively
straightforward breach of contract case” it was referring to the conduct of the
entire case up to trial and the factual presentation at trial. When this court
commented at hearings on issues of “first impression” that would be “interesting
appellate issues” it was referring to the breach of implied covenant defense
which had been raised by the court during trial and had been briefed only once.
This court evidently did not feel that the insertion of a peculiar legal wrinkle
at the last minute, by the court, was sufficient to change the tenor of the
entire case for fee purposes.
All of this
means that, for present purposes, Plaintiffs have the right reading of the
court’s prior order. The court did believe that, even though it was not a
complex trial, this case would present a complex appeal.
Conclusion
After the
reductions mentioned above, Plaintiffs’ counsel have spent 333.3 of compensable
attorney time and 9.5 hours of compensable legal assistant time, for a total of
342.8 hours, on this appeal. That is an entirely reasonable amount of time to
spend on an appeal that lasted roughly two years, required inspection of an
entire court file and trial transcript, involved a unique legal issue, and included
both parties appealing different parts of the verdict. At the rates requested,
counsel’s fee award comes to $134,475.06. This is an eminently reasonable
amount. Therefore, the motion is GRANTED, in part. Plaintiffs are
awarded fees of $134,475.06.
(2) Appeal
From Fee Award
Plaintiffs now move this court,
pursuant to Civil Code § 1717, Code of Civil Procedure §§ 1032 and
1033.5, and California Rules of Court Rule 8.278, for $40,338.87 in attorney’s
fees incurred in the appeal from the fee award.
Decision
The motion is TAKEN OFF-CALENDAR by
stipulation of the parties.
Defense argues that this motion is
premature – that Plaintiffs cannot be the prevailing parties on this appeal
because the result was merely a remand to re-examine the fee award in light of
the result in the appeal on the judgment. In their reply, Plaintiffs expressly concede
the merits of this argument and request that the motion be taken off-calendar,
pending the reconsideration of the award on trial fees.