Judge: Douglas W. Stern, Case: BC647909, Date: 2023-01-17 Tentative Ruling

Case Number: BC647909    Hearing Date: January 17, 2023    Dept: 68

Plaintiff’s motion for attorneys’ fees and costs is GRANTED in part.

BACKGROUND

Defendant, essentially a self-insured pooling program, approved a $38 million assessment against its participating governmental members. Plaintiff, assessed a $2 million assessment, disputed the validity of that assessment claiming that it was not done in compliance with the governing bylaws as it was prepared without the required actuarial report. (Motion at p. 1.) Plaintiff filed this action, requesting that the Court find that the assessment was in violation of Defendant’s Bylaws. In the Court’s Final Statement of Decision, Judge Mooney found for the Plaintiff and awarded cost and fees in an amount to be determined upon a subsequent motion. (10-07-2022 Minute Order at p. 5.)

On November 3, 2022, Plaintiff filed the instant motion for attorney’s fees and costs. Plaintiff’s initial request is for $364,152.44 for attorney’s fees and $112,866.39 for costs. Plaintiff asserts its attorneys’ hourly rates and time billed are reasonable. Defendant filed opposition papers on January 4, 2023.  Plaintiff filed reply papers on January 9, 2023.

EVIDENTIARY OBJECTIONS

The Court desires an explanation of the objections.  The Declaration attests that the documents are true and correct copies of Plaintiff’s trial exhibits.  Since this bench officer was not the trial bench officer, and lacks any information on that, the Court seeks to know if the documents are copies of the Plaintiff’s trial exhibits and if so, what the basis for the objection is.

ANALYSIS

I. Attorneys’ Fees

The Bylaws that apply to this case constitutes a contractual provision granting the prevailing party recovery of attorney’s fees. A prevailing party in entitled to recover costs, including attorneys’ fees (when provided for by statute or contract), as a matter of right. (CCP §§ 1032(a)(4), 1032(b), 1033.5.)

The fee setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  A computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.  The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)  Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary.  (Id. at 48, n.23.)  After the trial court has performed the lodestar calculations, it shall consider whether the hourly rate is reasonable, and then the lodestar figure may be adjusted, in order to fix the fee at the fair market value for legal services provided. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)

Plaintiff seeks $364,152.44 in attorney’s fees for 1,734.1 hours of work. (Feldhake Decl., ¶ 5.) Plaintiff seeks an additional $2,407.00 in fees for the work on this motion, including reviewing the opposition and preparing the reply paper (3.1 hours of work at $325.00 per hour and 7 hours of work at $200.00 per hour). (Supp. Feldhake Decl., ¶ 5.)

Defendant does not object to either the hours or the rates, and they appear to the Court to be reasonable.

Defendant’s sole argument against Plaintiff’s requested amount is that Plaintiff was not truly the prevailing party in the action. (Opposition at pp. 5-8.) However, this directly contradicts Judge Mooney’s Final Statement of Decision, which states that “The court determines plaintiff to be the prevailing party and awards cost and fees in an amount to be determined on subsequent motion.” (10-07-2022 Minute Order at p. 5.)

Defendant contends that Judge Mooney’s statement identifying Plaintiff as the prevailing party should not bind the Court as it was not the product of any analysis or an issue that was addressed by the parties. Assuming that this bench officer is free to make his own determination, it is the view of this bench officer that Plaintiff was the prevailing party. No doubt, these parties appear likely to pursue further litigation on the issue of the assessments.  However, Plaintiff prevailed in this litigation is having it determined that the assessment failed to comply with the Bylaws and forestall its ultimate liability.  This Court is not concerned in this litigation if, in the end, Plaintiff may find itself assessed an amount that is not material less than that which it chose to attack.

The Court GRANTS Plaintiffs Motion for an Award of Attorney’s Fees in the requested amount of $364,152.44 plus $2,407.00, for a total of $366,559.44.

II. Costs

Plaintiff has requested $112,866.39 in costs. (Feldhake Decl., ¶ 6.) A breakdown of these costs is in the Memorandum of Costs included with Plaintiff’s Reply. (Supp. Feldhake Decl., ¶ 3, Ex. A.) Defendant objects to these costs on the basis that they include unauthorized expert costs. (Opposition at pp. 9-11.)

The costs awardable under C.C.P. § 1033.5 are set forth in the statute.  Expert witness fees are expressly precluded by § 1033.5(b)(1).  “(b) The following items are not allowable as costs, except when expressly authorized by law: (1) Fees of experts not ordered by the court.” Plaintiff’s response to this is that Defendant’s Bylaws entitle Plaintiff, as the non-defaulting party, to recover “other expenses so incurred.” (Reply at p. 8.) Plaintiff argues that these “other expenses” may include expert fees. If expenses other than awardable costs authorized by § 1033.5 are sought, they may not be sought under the procedure set forth for recovering C.C.P. § 1033.5 “costs.”  Such expenses must be pleaded and proven as part of the trial, not as a post-trial “cost.”

Also, there is nothing that explicitly states that expert fees are included in these other expenses. Additionally, Defendant objects to the expert fees because Judge Mooney did not rely on the expert witness testimony in his Final Statement of Decision. (10-07-2022 Minute Order at p. 1.). The Court shall not allow the recovery of the expert witness fees.

According to the Memorandum of Costs, witness fees account for $96,602.25 of Plaintiff’s requested $112,866.39. (Supp. Feldhake Decl., ¶ 3, Ex. A.) To the extent that these witness fees include the expert fees, the Court agrees that the requested amount should be reduced to exclude the expert witness fees.  The Court requests that the parties calculate the Costs excluding the disallowed expert witness fees and advise the Court of that amount.