Judge: David A. Hoffer, Case: 30-2022-01243790, Date: 2023-07-24 Tentative Ruling

Defendants Christopher A. Cole, individually and as trustee of the Cole Family Trust, and Joan L. McGarry, individually and as trustee of the Cole Family Trust (“Defendants” together) Motion for Attorney Fees (“Motion”) is GRANTED.

Defendants were the prevailing party on their prior Motion to Expunge (“MTE”) a lis pendens filed by plaintiff Pasha Mirhadi (“Plaintiff”).  (ROA ## 79, 81.)  As such, Defendants are entitled to attorney fees pursuant to Civ. Proc. Code § 405.38.  (Mash & Barrel, LLC v. Superior Ct. of Fresno Cnty. (2022) 74 Cal. App. 5th 1, 42-43.)

“The purpose underlying section 405.38 is to curtail misuse of the lis pendens procedure.”  (J&A Mash & Barrel, LLC v. Superior Ct. of Fresno Cnty. (2022) 74 Cal. App. 5th 1, 42.)  “The term prevailing party was not defined in the statute and, as a result, courts determine the prevailing party by taking a practical approach that analyzes “the extent to which each party has realized its litigation objectives.” (Id., at 42-43.)  Here, Defendants successfully defended themselves in this action and nothing was awarded to Plaintiff from Defendants.

Plaintiff argues attorney fees should not be awarded to Defendants as Plaintiff believes there was substantial justification in filing the lis pendens.  The burden of showing substantial justification or other circumstances prohibiting recovery of attorney fees falls to Plaintiff as the party that filed the Notice of Lis Pendens.  (Kihagi v. Umpqua Bank, No. CV1904284CJCMRWX, 2019 WL 6175023, at *7 (C.D. Cal. Aug. 15, 2019).)

Plaintiff points to the ruling of the arbitrator and states that, as the arbitrator found both sides had not complied with their obligations under the residential purchase agreement,  there was substantial justification for Plaintiff’s lis pendens.  However, the lis pendens was based on the potential for specific performance of the contract and the arbitrator, like the court in the original MTE, found that specific performance was unavailable as the plaintiff did not have required funding at the time of closing.  Thus, while the arbitrator also faulted the defendants, he did not find a basis for specific performance and did not provide a basis for the court to find that the lis pendens, which the court expunged, was substantially justified.     

The court does not find that Plaintiff acted with the requisite substantial justification nor is there a showing of other circumstances that make imposition of attorney’s fees and costs unjust.  The Motion is granted.

The court, however, does agree the requested (amended) amount of attorney fees and costs totaling $74,550.31 is overstated and must be reduced pursuant to the lodestar method.  (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095-96.)

In reviewing the hours and costs billed in conjunction with the MTE (and/or the ex parte application to advance the MTE), the court finds at least 16.9 hours billed not to be related to the MTE and at least $991.39 of costs that appear to be improperly billed to the MTE.  The remaining 62.8 hours, while high, are not unreasonable given the large amount of attorney work product produced on the MTE (approximately 120 pages not including evidence).  The court does find the requested $650 per hour billing rate to be excessive, despite defense counsel’s experience and expert testimony.  The court is inclined to reduce the hourly billing rate by 20% pursuant to the lodestar method for a more reasonable billing rate.  The amount awarded on the MTE is:

62.8 hrs. x ($650/hr. x .8) + $2,873.92 in costs = $35,529.92

As for the present Motion, the hours billed are more or less reasonable, but the hourly rate is again high and will be reduced by 20% as well.  The amount awarded on this Motion is:

19.4 hrs. x ($650/hr. x .8) + $3,670 in costs = $13,758

Defendants are awarded a total of $49,287.92 in attorney fees and costs against Plaintiff.

Defendants are ordered to give notice of this ruling.