Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Plaintiff Dakota Financial LLC 

 

RESPONDING PARTY: Defendants Nelson Hauling LLC and Christopher Gralon Nelson  

 

BACKGROUND 

This action arises from a dispute over a leased truck.  Plaintiff Dakota Financial, LLC (“Lessor”) leased a truck to Defendant Nelson Hauling LLC (“Lessee”) under a lease agreement (“Lease”).  Defendant Christopher Gralon Nelson (“Guarantor”) executed a Guaranty, guaranteeing payments by Lessee under the Lease, together with costs and attorneys’ fees incurred in the enforcement of the Lease and Guaranty.  Lessor alleges Lessee never made any payments under the Lease, which payments now total $40,403.94 plus late charges and accrued interest at the rate of 18% per annum from May 24, 2022.  Lessor further alleges Guarantor has failed to pay amounts owed by the Lessee.  The operative complaint alleges claims for (1) breach of lease, (2) breach of guaranty, (3) possession (claim and delivery) and (4) willful and malicious conversion.  

Lessor and Guarantor filed motions to quash service of summons and to set aside default judgment.  Lessor prevailed on its motion, but Guarantor’s motion was denied as the Court did not credit Guarantor’s claims that the address where the complaint was served (the “Service Address”) was no longer his address.  Guarantor submitted a rental agreement for his alleged new address but failed to disclose that the rental agreement was with his mother, and his purported new address was the residential home run by his parents.  Guarantor failed to submit any canceled checks showing he paid rent to his parents or a declaration from his former landlord stating that he was no longer living at the Service Address.  Given Guarantor’s specious claims, the Court denied Guarantor’s motions to quash and to set aside default judgment, and the Court also invited Plaintiff to file a motion for attorneys’ fees.      

This hearing is on that invited motion.  Plaintiff seeks all fees incurred in connection with both Lessee and Guarantor’s motions, even though only one of the motions was denied.  Plaintiff seeks total fees and costs of $3,340.    

LEGAL STANDARD 

CCP section 128.5 provides that “[a] trial court may order a party, the party's attorney, or both, to pay the reasonable expenses, including attorney's fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.” (Code Civ. Proc 128.5 subd. (a).)  “Actions or tactics” include, but are not limited to, the “making of motions.” (Id., § 128.5, subd. (b)(1).) “Frivolous” means “totally and completely without merit or for the sole purpose of harassing an opposing party.” (Id., § 128.5(b)(2).)  Section 128.5 states that sanctions may be awarded on “the court's own motion, after notice and opportunity to be heard.”  (Code. Civ. Proc., § 128.5, subd. (c).)   

DISCUSSION 

The Court concludes that Guarantor’s motion to quash service of summons and to set aside default judgment was made in bad faith, was frivolous and was solely intended to cause unnecessary delay.  Guarantor’s motion was based on a false declaration that the Service Address was no longer his address.   

Guarantor submitted a rental agreement for his purported new address but failed to disclose that the rental agreement was with his mother, and his purported new address was actually a residential home run by his parents.  Moreover, in his reply to the motion to set aside default, Guarantor never submitted evidence that he was paying rent to his parents, as claimed in the rental agreement.  Guarantor claims he was never asked for such proof prior to Plaintiff’s opposition to the motion to set aside.  But that doesn’t explain why Guarantor did not submit such evidence in his reply once the issue was raised in Plaintiff’s opposition.  While Guarantor now attaches supposed “receipts” for the rent payments, he fails to submit canceled checks which would show he actually made the rental payments.  Further, as of the time service was attempted and as recently as January 9, 2023, the secretary of state shows the principal and mailing address for Guarantor’s business is the Service Address.  The statement of information for Lessee filed with the secretary of state also identifies Guarantor’s address as the Service Address.  Guarantor never explains why the secretary of state continues to show the mailing address for Guarantor’s business as the Service Address.  Accordingly, because Guarantor submitted a false declaration, sanctions are warranted under §128.5.   

In determining the appropriate amount of sanctions, the Court starts with the lodestar, which is the reasonable hourly rate multiplied by the reasonable amount of hours expended.  Counsel’s hourly rates of $250 - $300 are reasonable given the experience of counsel and the prevailing legal rates in the Southern California market.  However, the Court concludes that the hours expended is excessive as it includes hours spent on opposing Lessee’s motion to quash and to set aside default judgment, on which Lessee prevailed.  Plaintiff argues that its opposition was “primarily focused on [Guarantor’s] fraudulent claims that he was not served,” and “[a]ny discussion of service as against [Lessee] was minimal, at best.”  (Ferns Decl. 28.)  Even if true, some discount is warranted given Lessee prevailed on its motion.  Accordingly, the Court reduces the amount of requested fees and costs by 25%, and awards Plaintiff a total of $2,505.     

CONCLUSION 

Based on the foregoing, the Court GRANTS Plaintiff’s motion for attorneys’ fees.  Defendant Christopher Gralon Nelson is directed to pay $2,505 to Plaintiff, within 30 days of this Order.      

 

IT IS SO ORDERED. 

 

DATED: May 4, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court