Judge: Daniel M. Crowley, Case: 19STCV14497, Date: 2023-06-29 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: 19STCV14497    Hearing Date: June 29, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Larchmont Place, LLC’s and Massco Investments, Inc.’s motion for attorneys’ fees is granted in the reduced total amount of $145,124.90.

Defendants Larchmont Place, LLC (“Larchmont”) and Massco Investments, Inc. (“Massco”) (collectively, “Defendants”) move for an order awarding attorneys’ fees against Plaintiffs Coffee + Food, LLC (“Coffee + Food”) and Art Works Studio & Classroom, LLC (“Art Works”) (collectively, “Plaintiffs”) in the amount of $149,924.90.00 as the prevailing party for attorneys’ fees other than those related to their anti-SLAPP motion.  (Notice of Motion, pgs. 1-2; Civ. Code §1717(a); C.C.P. §1032.)

Background

On April 25, 2019, Plaintiffs filed their initial complaint. On August 12, 2019, Plaintiffs filed the operative first amended complaint (“FAC”), alleging Defendants breached the leases with Plaintiffs at real property located at 5630 Melrose Avenue, Los Angeles, CA 90038 (“Coffee + Food Premises”) and 660 N. Larchmont Boulevard, Los Angeles, CA 90004 (“Art Works Premises”) (collectively, “Property”) by improperly terminating their leases.  (See FAC ¶¶19, 20, 21, 58.)

On October 11, 2019, Defendants filed a special motion to strike portions of the FAC under C.C.P. §425.16 (“anti-SLAPP motion), which the Court granted on February 7, 2020.  Plaintiffs appealed the ruling on the anti-SLAPP motion, and the Court of Appeals deemed the issues on appeal moot, in light of the judgments rendered in Defendants’ separately filed unlawful detainer actions.

On or about October 10, 2019, Defendants filed two separate unlawful detainer actions against Plaintiffs for the commercial premises leased by Plaintiffs. Defendants moved for summary judgment in the Unlawful Detainer Actions, contending the Estoppel Certificates established that Plaintiffs were month-to-month tenants, and that the notices to terminate their leases were proper. The Court granted summary judgment in favor of Defendants on August 20, 2020.  On November 3, 2020, the unlawful detainer court awarded Defendants attorneys’ fees incurred in the Unlawful Detainer Actions, based on the attorneys’ fees provisions in the lease agreements. Plaintiffs never appealed the unlawful detainer rulings.

Following Plaintiffs’ appeal of the order granting Defendants’ anti-SLAPP

motion, on June 30, 2022, Plaintiffs filed requests for dismissal of Defendants, without prejudice.  On August 10, 2022, Defendants filed a motion to set aside/vacate the dismissals entered for Defendants and moved the Court instead for an order dismissing Defendants with prejudice, which the Court granted on or about February 15, 2023.  On or about March 9, 2023, the Court entered filed a judgment of dismissal, ordering Defendants dismissed with prejudice.

On March 9, 2023, this Court granted Defendants’ motion for attorneys’ fees

on appeal in relation to the anti-SLAPP motion.

On May 12, 2023, Defendants filed the instant motion.  On June 15, 2023, Plaintiffs filed their opposition.  On June 22, 2023, Defendants filed their reply.

Motion for Attorneys’ Fees

a.      Civil Code §1717

Civil Code §1717 provides, in part “[i]n any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.”  (Civ. Code §1717(a).)  The “prevailing” party is the party who recovered greater relief in the action on the contract.  (Civ. Code §1717(b)(1).)

Here, Defendants are the prevailing party on the action on a contract.  (Civ. Code §1717.)  Defendants request attorneys’ fees in the total amount of $149,924.90 against Plaintiffs.  However, Defendants are not entitled to attorneys’ fees pursuant to Civil Code §1717 because Defendants voluntarily dismissed themselves from this action.  (D & J, Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1193.)

b.     C.C.P. §1032

Defendants also move for attorneys’ fees pursuant to C.C.P. §1032(b), which provides that “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”  Further, C.C.P. §1033.5(a)(10)(A) provides, “The following items are allowable as costs under Section 1032: [¶] . . . [¶] (10) Attorney’s fees, when authorized by any of the following: [¶] (A) Contract.”  C.C.P. §1032 (a)(4) provides definitions of “prevailing party,” including “the party with a net monetary recovery.” “Courts have consistently held the prevailing party for the award of costs under section 1032 is not necessarily the prevailing party for the award of attorney’s fees in contract actions under section 1717.”  (Sears v. Baccaglio (1998) 60 Cal.App.4th 1136, 1142.)  “The definition of prevailing party under section 1717 thus differs significantly from section 1032.” (Id.; see also Zintel Holdings LLC v. McLean (2012) 209 Cal.App.4th 431, 438; PNEC Corp. v. Meyer (2010) 190 Cal.App.4th 66, 70 n.2 [“We recognize that the “prevailing party” inquiries under Civil Code section 1717 and Code of Civil Procedure section 1032 are distinct.”], overruled in part on other grounds by DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 979; Goodman v. Lozano (2010) 47 Cal.4th 1327, 1335 n.3 [“we reject their contention that we must construe section 1032(a)(4) in light of Civil Code section 1717.”].)  C.C.P. §1032, defines the prevailing party to include “a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.”  (C.C.P. §1032(a)(4).)

Here, Defendants were the prevailing party under C.C.P. §1032(a)(4).  Dismissals were entered in favor of Defendants with prejudice, and Plaintiffs failed to obtain any relief against Defendants. This Court’s judgment of dismissal stated, “Plaintiffs shall take nothing by way of their First Amended Complaint against Larchmont and Massco Defendants . . . .”  (Judgment of Dismissal, pg. 2.)

Defendants do not argue the issue of Defendants’ recovery of attorneys’ fees pursuant to C.C.P. §1032 and therefore concede the issue.

A.   Reasonable Fees

“[T]the fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)  In making this calculation, the reasonable hourly rate is the “prevailing rate for private attorneys in the community” handling litigation of the same type.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.)  The court may then adjust that result by using a multiplier to enhance the total fee to be paid to reflect circumstances specific to the case, such as the novelty of the questions involved, the skill displayed by the attorneys, and the contingent nature of the fee award.  (Id. at pg. 1132; PLCM Group, 22 Cal.4th at pg. 1095.)

Defendants’ counsel declares the following: (1) Ryan D. Kashfian’s hourly rate is $600.00; (2) Nicolas L. Ramirez’s hourly rate was $395.00; (3) Saige C. Shaw’s hourly rate was $350.00; (4) Nareh S. Terzian’s hourly rate was $350.00; (5) Matthew M. Everts’ hourly rate was $185.00; (6) Robert A. Kashfian’s hourly rate is $600; and (7) Eric Wang’s hourly rate is $395.00.  (Decl. of Kashfian ¶¶22-27, 32; Decl. of Wang ¶3.)  Defendants’ counsel attaches a copy of the United States Attorney’s Office Matrix, commonly known as the Laffey Matrix, to his declaration in support of this motion to demonstrate counselors’ hourly rates are well below the reasonable market rate.  (Decl. of Kashfian, Exh. 23.)  Defendants have sufficiently demonstrated counsel’s hourly rates are reasonable in their community of practice.

Defendants’ counsel includes an itemization of hours and costs spent in connection with this matter.  (Decl. of Kashfian, Exh. 24.)  Defendants’ counsel declares the following:  (1) Partners Robert Kashfian and Ryan Kashfian billed 191.12 hours for a total of $114,672.00; (2) Associates Eric W. Wang, Nicholas L. Ramirez billed 19.25 hours for a total of $7,682.75; (3) Associates Saige C. Shaw and Nareh S. Terzian billed 30.21 hours for a total of $10,573.50; and (4) Law Clerk Matthew M. Everts billed 32.5 hours for a total of $6,012.50.  (Decl. of Kashfian, Exh. 24 at pg. 1.)  Defendants request $138,940.75.  Plaintiffs do not challenge Defendants’ billed fees and therefore concede that they are reasonable.

Defendants’ counsel declares it spent 10 hours preparing the instant motion at an hourly rate of $395.00 for a total of $3,950.00.  (Decl. of Wang ¶4.)  Defendants’ counsel declares he anticipates spending an additional 3.5 hours to review the opposition and write a reply and an additional 2 hours preparing and appearing for the instant motion for a total of $2,172.50.  (Decl. of Wang ¶4.)  Defendants’ counsel declares the filing fee incurred on this motion was also $61.65.  (Decl. of Wang ¶4.)  Defendants’ counsel declares it took 8 hours to assemble the declaration to his motion for a total of $4,800.00  (Decl. of Kashfian ¶34.)  Defendants’ counsel declares the total fees and costs incurred on the instant motion is $10,984.15.  The Court regards Defendants’ counsel’s request for attorneys’ fees incurred on this motion to be excessive and duplicative, given it involved two attorneys billing hours, one of whom is a partner.  The Court awards Defendants the reduced amount of $6,184.15 ((15.5 hours x $395) + $61.65).

Final Lodestar Determination

Based on the foregoing, Defendants’ motion for attorneys’ fees is granted in the reduced total amount of $145,124.90.

Dated:  June _____, 2023

Hon. Daniel M. Crowley

Judge of the Superior Court