Judge: Daniel S. Murphy, Case: BC654392, Date: 2025-03-05 Tentative Ruling

Case Number: BC654392    Hearing Date: March 5, 2025    Dept: 32

BACKGROUND

            Plaintiff Drink Tank ventures initiated this action back in March 2017, alleging causes of action for: (1) breach of contract; (2) breach of good faith and fair dealing; (3) interference with economic relations; (4) interference with prospective business advantage; (5) breach of nondisclosure; and (6) interference with contractual relations.

            The matter was tried in January 2019 on the sole cause of action for intentional interference with prospective economic advantage. On January 17, 2019, the jury returned a verdict in favor of Plaintiff against Defendants Real Soda and Daniel Ginsburg. On July 5, 2019, the court also granted Plaintiff’s motion for attorneys’ fees. The verdict and fee award were overturned on appeal in Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd. (2021) 71 Cal.App.5th 528 (Drink Tank I). The Court of Appeal ordered Plaintiff’s complaint dismissed in its entirety. The Court of Appeal denied Plaintiff’s motion for rehearing, and the Supreme Court denied review. On March 29, 2022, the trial court vacated all judgments in Plaintiff’s favor.

            On December 19, 2022, Defendants filed a motion for attorneys’ fees on the grounds that they are the prevailing parties after appeal. This Court agreed and granted Defendants’ motion on February 21, 2023.

            Plaintiff appealed the Court’s February 21, 2023 order granting attorney’s fees. In a decision dated September 26, 2024, the Court of Appeal affirmed this Court’s decision and held that “Real Soda is entitled to its costs on appeal.” 

            On February 3, 2025, Real Soda filed the instant motion for attorney’s fees. Plaintiff filed its opposition on February 20, 2025. Real Soda filed its reply on February 26, 2025.   

LEGAL STANDARD

“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (Code Civ. Proc., § 1032(b).) Attorney’s fees are recoverable as costs under section 1032 when authorized by contract, statute, or law. (Id., § 1033.5(a)(10).) “Thus, recoverable litigation costs do include attorney fees, but only when the party entitled to costs has a legal basis, independent of the cost statutes and grounded in an agreement, statute, or other law, upon which to claim recovery of attorney fees.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 606.) “If a contractual attorney fee provision is phrased broadly enough, . . . it may support an award of attorney fees to the prevailing party in an action alleging both contract and tort claims.” (Id. at p. 608.)

Additionally, “[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).) “Section 1717 was enacted to establish mutuality of remedy where contractual provision makes recovery of attorney's fees available for only one party.” (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128.) Thus, the statute awards attorney’s fees to the prevailing party “whenever that party would have been liable under the contract for attorney fees had the other party prevailed.” (Hsu v. Abbara (1995) 9 Cal.4th 863, 871.) “[A] party is entitled to attorney fees under section 1717 ‘even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other party would have been entitled to attorney's fees had it prevailed.’” (Id. at p. 870, quoting Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 842.)

DISCUSSION           

I.               REAL SODA IS ENTITLED TO ATTORNEY FEES.

Real Soda is entitled to attorney’s fees for the same reasons articulated in this Court’s September 26, 2024 ruling, which was affirmed on appeal. Namely, Plaintiff’s claims were based “on a contract,” the Nondisclosure Agreement (NDA), containing an attorney’s fees clause. Thus, the reciprocity provision of Civil Code section 1717 applies, meaning Real Soda is entitled to attorney’s fees because it prevailed. (See Drink Tank Ventures, LLC v. Real Soda in Real Bottles, LTD. (Sep. 26, 2024, No. B328365) 2024 Cal. App. Unpub. LEXIS 6127 (Drink Tank II); Hom v. Petrou (2021) 67 Cal.App.5th 459, 465.) 

            “When a contract or a statute authorizes the prevailing party to recover attorney fees, that party is entitled to attorney fees incurred at trial and on appeal.” (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 250.) The Court of Appeal in Drink Tank II explicitly held that “Real Soda is entitled to its costs on appeal.” (Drink Tank II, supra, 2024 Cal. App. Unpub. LEXIS 6127, at *14.) Thus, Real Soda is entitled to recover the attorney’s fees incurred in the appeal.

            Plaintiff argues that Real Soda is not entitled to attorney’s fees because Real Soda invited the error in relation to the jury instructions. The Court of Appeal expressly rejected this argument:

“Second, Drink Tank argues that it never narrowed its claim for intentional interference with a prospective economic advantage to rest solely on the breach of the NDA; instead, Drink Tank asserts, it was Real Soda who proposed the jury instruction that the trial court ultimately used to define the ‘wrongful conduct’ underlying that claim, such that Real Soda ‘invited’ the error and cannot profit from its own invitation through an award of attorney fees. To begin with, this argument is a collateral attack on our prior appellate opinion, where we held that ‘there is no question that Drink Tank opted to rest its claim solely on violations of the NDA.’ (Drink Tank I, supra, 71 Cal.App.5th at p. 536, fn. 4.) Such collateral attacks are impermissible.”

(Drink Tank II, supra, 2024 Cal. App. Unpub. LEXIS 6127, at *11.)

            Plaintiff’s repeated argument on invited error is simply another collateral attack on the Court of Appeal decisions. The decisions in Drink Tank I and II constitute the “law of the case,” and this Court is without authority to rule otherwise. (See Leider v. Lewis (2017) 2 Cal.5th 1121, 1127.) Because the Court of Appeal has rejected Plaintiff’s invited error argument and held that “Real Soda is entitled to its costs on appeal,” Real Soda is entitled to recover attorney’s fees.

II.             Reasonable Amount

Real Soda claims attorney fees in the amount of $46,625.00.

1. Reasonable Hourly Rates

The hourly rates claimed by Real Soda’s attorney is between $700.00 per hour and $750.00 per hour.

Drink Tank does not dispute Real Soda’s attorney’s hourly rate.

“In determining hourly rates, the court must look to the ‘prevailing market rates in the relevant community.’”  (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 100.)  In making this determination, “[t]he court may rely on its own knowledge and familiarity with the legal market.”  (Ibid.) 

The Court finds that $700.00 per hour is the reasonable hourly rate in this case. 

2. Hours Reasonably Expended

The total number of billable hours claimed by Real Soda’s attorneys are 66 hours.    

Drink Tank does not dispute the number of hours billed. 

The Court finds that the reasonable hours spent by Real Soda’s attorneys in this matter are 66 hours.

In making this determination, the court found that plaintiff’s counsel inappropriately billed for some clerical tasks and that some of the billing was excessive, especially for attorneys as experienced as plaintiff’s counsel.   

D. Conclusion

Based on the foregoing reasons, Real Soda’s motion for attorney fees is GRANTED.  The Court awards $46,200.00 in attorney fees.