Judge: Curtis A. Kin, Case: 18STCP02482, Date: 2023-02-02 Tentative Ruling
Case Number: 18STCP02482 Hearing Date: February 2, 2023 Dept: 72
DEFENDANT’S MOTION TO TAX COSTS
PLAINTIFF’S MOTION FOR ATTORNEY FEES
Date: 2/2/23
(8:30 AM)
Case: Sergio Larios v. Specialized
Loan Servicing LLC et al. (18STCP02482)
TENTATIVE
RULING:
Defendant Specialized Loan Servicing LLC’s Motion to Tax
Costs is GRANTED IN PART.
Plaintiff Sergio Larios’ Motion to Amend Judgment is DENIED.
Plaintiff Sergio Larios’ Motion for Attorney Fees is GRANTED
IN PART.
I.
DEFENDANT SPECIALIZED LOAN SERVICING LLC’S
MOTION TO TAX COSTS
Defendant Specialized Loan Service LLC moves to tax the
$58,920.55 claimed by plaintiff Sergio Larios in the amount of $43,337.60,
including $36,476.25 in expert fees and $6,861.35 for other costs.
As a preliminary matter, plaintiff is entitled to claim
costs as the party with a net monetary recovery. (CCP §§ 1032(a)(4), (b).) On
December 15, 2022, the Court entered an Amended Judgment in favor of plaintiff
in the amount of $2,105,000.
With respect to $36,476.25 claimed as expert fees, under CCP
§ 1033.5(b)(1), “[f]ees of experts not ordered by the court” are disallowed. It
is undisputed that the Court did not order any experts. Plaintiff maintains
that the expert fees are recoverable because defendant rejected a CCP § 998
offer and plaintiff obtained a judgment that was more favorable. (See CCP
§ 998(c)(1); Grant Decl. ¶ 3 & Ex. 1; Brennan Decl. ¶ 2 & Ex. B.)
The Court finds that the CCP § 998 offer presented by
plaintiff to defendant on June 2, 2021 was invalid. CCP § 998(a) states: “The
written offer shall include a statement of the offer, containing the terms and
conditions of the judgment or award, and a provision that allows the accepting
party to indicate acceptance of the offer by signing a statement that the offer
is accepted.”
While the CCP § 998 offer contained the terms and conditions
of the proposed judgment, there was no acceptance provision. After setting
forth the terms and conditions of the offer, plaintiff concluded the offer with
the statement: “Please review C.C.P. Section 998 with respect to your rights
and obligations with respect to this offer.”
This was insufficient.
In Mostafavi Law Group, APC v. Larry Rabineau, APC
(2021) 61 Cal.App.5th 614, 619, the CCP § 998 offer at issue did not have an
acceptance provision. The Court thus
found the judgment entered pursuant to the signed CCP § 998 offer was invalid,
even though the offeree had handwritten the following on the offer: “Plaintiff
Mostafavi Law Group, APC accepts the offer.” (Mostafavi, 61 Cal.App.5th
at 619.) In so concluding, the Court
explained: “[P]urported acceptance of such a defective [CCP § 998] offer
likewise cannot trigger the consequences in subdivision (b)(1) and give rise to
an enforceable judgment. This is so because where a section 998 offer is
invalid based on its failure to satisfy all of the ‘statutorily required
elements[,] ... there is nothing for the receiving party to accept’ in the
first place.” (Id. at 623.)
Here, recognizing that “to be valid a section 998 offer must
include some indication of how to accept the offer” (Perez v. Torres
(2012) 206 Cal.App.4th 418, 426, fn. 6, citing Puerta v. Torres (2011)
195 Cal.App.4th 1267, 1273), plaintiff argues that the concluding sentence of
his offer specified how defendant could accept the offer. That is simply not so. Plaintiff’s offer ends with the statement:
“Please review C.C.P. Section 998 with respect to your rights and obligations
with respect to this offer.” (Brennan
Decl. ¶ 2 & Ex. B at 4.) The law is
clear that “[a] mere reference to the code section cannot supply an acceptance
provision that would otherwise be entirely missing….” (Finlan v. Chase
(2021) 68 Cal.App.5th 934, 941-942 [noting “at a minimum, the offer’s
acceptance provision simply must specify the manner in which the offer is to be
accepted].) Thus, in Mostafavi,
the Court deemed the offer invalid where the offer clearly referred to CCP §
998 but contained no acceptance provision.
(Mostafavi, 61 Cal.App.5th at 619 [finding invalid offer that
stated “Pursuant to California Code of Procedure § 998 . . . PLEASE TAKE NOTICE
that if this Offer to Compromise is not accepted within the time specified by § 998
[sic] of the Code of Civil Procedure and Plaintiff fails to obtain a more
favorable judgment, Plaintiff is not entitled to recover court costs (despite
being a ‘prevailing party’) and must pay the offering defendants’ costs from
the time of the offer”].)
Because plaintiff’s offer was invalid, the cost provisions of
CCP § 998(c)(1) do not support plaintiff’s claim for expert fees. Accordingly, plaintiff’s claim of $36,476.25
for expert fees shall be taxed.
With respect to $6,861.35 in other costs, defendant argued in
the motion that there was insufficient documentation to support the other costs
for “Remote appearance fees, Zoom, Document Fee, Travel” in item 16 of the
memorandum of costs. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258,
1267 [“Only if the costs have been put in issue via a motion to tax costs must
supporting documentation be submitted”].) In the opposition, plaintiff reduced
his claim to $5,234.35, comprised of travel, lodging, and transportation costs
that attorney Stephanie R. Tatar incurred for the final status conference and
trial, and provided supporting documentation. (Tatar Decl. ¶ 10 & Ex. A;
Brennan Decl. ¶ 4.) Travel expenses to append depositions are the only travel
expenses explicitly allowed under CCP § 1033.5(a). However, travel fees to attend any other
proceedings are not expressly disallowed under CCP § 1033.5(b), which means
such travel costs may be allowed or denied in the Court’s discretion, pursuant
to CCP § 1033.5(c)(4).
Here, the Court finds that $5,234.35 of the $6,861.35
claimed by plaintiff for other costs was “reasonably necessary to the conduct
of the litigation.” (CCP § 1033.5(c)(2), (c)(3).) Counsel Tatar’s presence in court for the
final status conference and trial meaningfully assisted in plaintiff’s
successful prosecution of his case and ability to prevail at trial. Thus, only the difference of $1,627.00
is taxed based on the failure to support these expenses with documentation.
The motion is GRANTED IN PART. Plaintiff Sergio Larios’
claim for $58,920.55 is taxed in the amount of $38,103.25 (i.e.,
$36,476.25 expert fees + $1,627.00 other costs).
II.
PLAINTIFF SERGIO LARIOS’ MOTION TO AMEND
JUDGMENT
Plaintiff Sergio Larios moves for an order amending the
judgment to exclude the payment of accrued interest, late fees, and penalties
unless defendant Specialized Loan Servicing LLC (“SLS”) prevails on appeal. The
Court already stated during the trial on equitable issues that it lacked the authority
to reform the home equity loan agreement providing for the accrual of interest,
late fees, and penalties. Further, the
Court stated that, even if it had authority to rewrite the terms of the
contract pursuant to the Court’s equitable powers, it would not do so.
Simply put, plaintiff agreed to interest, late fees, and
penalties when entering into the loan. Per
that agreement, those amounts shall continue to accrue so long as plaintiff
does not pay off the loan. So long as
SLS decides not to satisfy the monetary judgment in an amount sufficient to
permit plaintiff to pay off the loan, statutory post-judgment interest will
continue to accrue on that amount, which is sufficient to offset (indeed,
likely exceeds) any accruing interest, late fees, and penalties. The Court explained this to the parties when
rendering its decision on plaintiff’s request for equitable relief, and the
resulting Judgment and Amended Judgment accurately reflect the Court’s decision
and intent.
The motion is DENIED.
III.
PLAINTIFF SERGIO LARIOS’ MOTION FOR ATTORNEY
FEES
Plaintiff Sergio Larios moves for attorney fees in the
amount of $2,144,658. This request is based on $826,534 incurred by the Law
Offices of Robert F. Brennan, A P.C. (“Brennan firm”) and $245,795 incurred by
Tatar Law Firm, APC (“Tater firm”). Plaintiff also seeks to apply a 2.0
multiplier on the total fees of $1,072,329 incurred by both law firms.
In addition to the fee request in the moving papers,
plaintiff seeks an additional $180,127 for work done after the moving papers
were filed. This additional request is based on $66,688.50 incurred by the
Brennan firm, $23,375 incurred by the Tater firm, and the application of a 2.0
multiple on the total fees of $90,063.50 incurred by both law firms.
As a preliminary matter, it is undisputed that plaintiff may
recover reasonable attorney fees under Civil Code § 1785.31(d) for prevailing
on his California Consumer Credit Reporting Agencies Act claim.
The Court finds that the attorney hourly rates of $695 for
Robert F. Brennan and $550 for Stephanie Tatar are reasonable. (Brennan Decl.
¶¶ 29-31; Tatar Decl. ¶¶ 6-18.) The Court also finds that the paralegal hourly
rates of $225 for Robert Bichler, $225 for Rachel Garrison, $175 for Lilli
Baur, and $225 for Samantha Jones are reasonable. (Brennan Decl. ¶ 34; Brennan
Reply Decl. ¶ 11(c-d).)
With respect to attorney Stephen Crilly, the Court finds
that his hourly rate of $475 is unwarranted given that he is not licensed in California.
(Brennan Decl. ¶ 32.) Crilly performed legal research and prepared legal briefs
for Brennan. (Brennan Decl. ¶ 32; Crilly Decl. ¶ 2.) “No one may recover
compensation for services as an attorney at law in California unless that
person was a member of the State Bar at the time those services were
performed.” (Golba v. Dick's Sporting Goods, Inc. (2015) 238 Cal.App.4th
1251, 1261; see also Bus. & Prof. Code § 6125 [“No person shall
practice law in California unless the person is an active licensee of the State
Bar”].) However, “[i]t is lawful for an attorney to employ any person to take
charge of the management of the work to be done in his office to the extent of
drawing pleadings and papers necessary to be drawn by such attorney in his
practice....” (Johnson v. Davidson (1921) 54 Cal.App. 251, 257,
overruled on other grounds by Crawford v. State Bar of Cal. (1960) 54
Cal.2d 659.) Accordingly, while Crilly may not be compensated as an attorney
with a corresponding hourly rate, he may be compensated as a law clerk or
paralegal. Accordingly, the Court reduces his hourly rate from $475 to $225.
With respect to Juan Sanchez, the Court finds that his
hourly rate of $200 is excessive. Sanchez was a law student. (Brennan Reply
Decl. ¶ 11.) Sanchez did not have and was not working toward a paralegal
certificate. (Cf. Brennan Reply Decl. ¶ 11(b) [Lilli Baur working toward
a paralegal certificate.) Nor did Sanchez have decades of paralegal experience
like Bichler or Garrison. (Cf. Brennan Decl. ¶ 34.) Accordingly, the
$200 hourly rate of Sanchez is reduced to $95.
With respect to the
reasonableness of the billing entries, “[i]n challenging attorney fees as
excessive because too many hours of work are claimed, it is the burden of the
challenging party to point to the specific items challenged, with a sufficient
argument and citations to the evidence. General arguments that fees claimed are
excessive, duplicative, or unrelated do not suffice.” (Premier Medical
Management. Systems, Inc. v. California Insurance Guarantee Association
(2008) 163 Cal.App.4th 550, 564.) The Court has reviewed the billing entries
from counsel for plaintiff and finds that the number of hours work is largely
reasonable. (Brennan Decl. ¶ 35 & Ex. A; Tatar Decl. ¶ 18 & Ex, A.)
However, based on the
excessive hourly rate for Crilly and Sanchez, there have been some excessive
billings for certain matters. Accordingly, the Court makes the following
reductions:
With respect to Crilly, defendant Specialized Loan Servicing
LLC contends that Crilly billed a total of 457.3 hours. (Opp. at 6:28-7:1.)
Plaintiff does not challenge defendant’s assertion. The lodestar for 457.3
hours based on the requested hourly rate of $475 would be $217,217.50. Based on
the reduced hourly rate of $225, the lodestar would be $102,892.50. Plaintiff’s
fee request is reduced in the amount of the difference between $217,217.50 and
$102,892.50, or $114,325.
With respect to Sanchez, Sanchez billed one hour for
traveling to the recorder’s office to record a notice of pendency of action on
4/11/19 and two hours on 8/24/21 for preparing an exhibit list for trial and
arranging all exhibits. The lodestar for three hours based on the requested
hourly rate of $200 is $600. Based on the reduced hourly rate of $95, the
lodestar should be $285. Plaintiff’s fee request is reduced in the amount of
the difference between $600 and $285, or $315.
With respect to Bichler, defendant contends that he spent
excessive time on certain tasks. In response, plaintiff reduced the request for
his fees by 12 hours in the reply. (Reply at 2:26-28.) This reduction is
reasonable. Based on an hourly rate of $225, plaintiff’s fee request is reduced
by $2,700.
While Baur, the junior paralegal, billed 4.3 hours at an
hourly rate of $175 for copying and hole punching exhibits and creating binders
for trial, it cannot be said that this was a purely administrative task, as the
preparation of work could involve the retrieval and sorting of relevant
documents, akin to the assistance with document production that is compensable
at a paralegal rate. (See Missouri v. Jenkins by Agyei (1989) 491 U.S.
274, 288, fn. 10.) Defendant does not identify any other billing entries that
may constitute purely administrative tasks. (Cf. Opp. at 11:12-14
[“Moreover, counsel’s billing records contain many time entries for purely
administrative tasks such as copying, scheduling, and coordinating travel
arrangements”].) Therefore, defendant does not meet its burden to demonstrate
that such billing entries are excessive.
Defendant also contends that plaintiff should not be
compensated for two attorneys performing the same task. Duplication is not
necessarily unreasonable. (Margolin v. Regional Planning Com. (1982) 134
Cal.App.3d 999, 1007.) Considering that both law firms’ work were necessary in
prevailing at trial, it was not unreasonable for both firms to incur fees for
the initial review of the case. (Opp. at 8:28-9:8.) Similarly, both firms’
review of Crilly’s drafts of oppositions and replies was reasonable. (Opp. at
9:9-9:18.) Further, the Court notes that defendant also used the services of
more than one attorney at trial and with respect to pre-trial proceedings. Defendant does not specifically identify any
other billing entries which may be duplicative. Accordingly, defendant does not
meet its burden to demonstrate plaintiff’s billing entries are duplicative.
It is reasonable for counsel for plaintiff to spend more
time summarizing the deposition transcript than to take the corresponding
deposition, as typing and analyzing the deposition are time intensive.
To the extent that plaintiff was not wholly successful on
any particular motion, this is not a bar to recovery of corresponding fees. “Attorneys
generally must pursue all available legal avenues and theories in pursuit of
their clients’ objectives; it is impossible, as a practical matter, for an
attorney to know in advance whether or not his or her work on a potentially
meritorious legal theory will ultimately prevail.” (Greene
v. Dillingham Construction, N.A., Inc. (2002) 101 Cal.App.4th 418, 424,
quoting Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 250.)
A multiplier is not
warranted. This is a was a reasonably
straightforward credit reporting case that did not present overly complex
issues. (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128,
1176.) Rather, the relatively high amount of fees was largely necessitated by
defendants’ abundantly aggressive litigation strategy throughout case,
including through and after trial on issues large and small. As discussed above, the Court finds plaintiff
is entitled to recover for the relatively high number of hours plaintiff’s
attorneys were forced to expend as reasonably necessary to resist defendant’s tactics. A further multiplier is therefore not
necessary. Lastly, although the Court
recognizes counsel apparently represents plaintiff on a contingency basis, the
Court finds that the lodestar awarded as set forth herein sufficiently
compensates counsel for their efforts. (Id.)
In the reply, plaintiff seeks for fees associated with work
performed after the filing of the instant motion, including defendant’s motion
to tax costs, motion for new trial, and motion for judgment notwithstanding
judgment on the verdict, as well as work performed in preparation of the reply.
The Court declines to include such fees in an award because defendant did not
have the opportunity to review and oppose the billing entries. Considering the
additional $90,063.50 sought in reply, the Court reserves the reasonableness of
those fees for any future motion that plaintiff may file.
For the foregoing reasons, the motion is GRANTED IN PART. Using
the appropriate lodestar approach, and based on the foregoing findings and in
view of the totality of the circumstances, the Court finds that the total and
reasonable amount of attorney fees incurred for the work performed in
connection with prevailing at trial and preparing the instant fee motion is
$954,989.00 ($1,072,329 - $114,325 Crilly - $315
Sanchez - $2,700 Bichler). Such fees are awarded to plaintiff Sergio
Larios against defendant Specialized Loan Servicing, LLC.