Judge Elaine Lu, Case 20STCV07474 2023-01-18 Tentative Ruling

On February 24, 2020, Plaintiff California Joint Powers Insurance Authority (“Plaintiff”) filed the instant breach of contract action against Defendant LEBA, Inc. (“Defendant”). The complaint asserted two causes of action for (1) Breach of Written Contract, Failure to Indemnify, and (2) Breach of Written Contract, Failure to Maintain Adequate Insurance Coverage.

On May 11, 2022, the Court granted Plaintiff’s motion for summary adjudication of the first cause of action in the amount of $824,170.24. (Order 5/11/22.) On June 3, 2022, Plaintiff dismissed the second cause of action without prejudice.

On June 6, 2022, Plaintiff filed the instant motion for attorneys’ fees. On December 19, 2022, Defendant filed an opposition. On December 22, 2022, the Court continued the instant hearing from January 5, 2023 to January 18, 2023. On December 28, 2022, Plaintiff filed a reply.

Pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(A), attorney fees when authorized by contract or statute are allowable as costs and may be awarded upon a noticed motion pursuant to Code of Civil Procedure section 1033.5, subdivision (c)(5).

In determining what fees are reasonable, California courts apply the “lodestar” approach. (See, e.g., Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (See PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, the “[t]he 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.” (Ibid.) Relevant factors include: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Plaintiff asserts that it is the prevailing party and therefore entitled to attorneys’ fees pursuant to the Concession Agreement between the parties. Defendant contends that Plaintiff is not entitled to attorneys’ fees because Plaintiff did not prevail on the second cause of action for breach of contract.

“In 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 court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment.” (Civ. Code, § 1717(b)(1).) However, “[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” (Civ. Code, § 1717(b)(2).)

“‘When a party obtains a simple, unqualified victory by completely prevailing on or defeating all contract claims in the action and the contract contains a provision for attorney fees, section 1717 entitles the successful party to recover reasonable attorney fees incurred in prosecution or defense of those claims. [Citation.]. If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees.’ [Citation.]” (de la Cuesta v. Benham (2011) 193 Cal.App.4th 1287, 1294.) “[I]n deciding whether there is a ‘party prevailing on the contract,’ the trial court is to compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims and only by ‘a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.’ [Citation.]” (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.)

Here, the Concession Agreement provides in relevant part that “[i]n the event either party commences legal proceedings for the enforcement of this Agreement, the prevailing party shall be entitled to recover its reasonable court costs and attorney's fees incurred in the action brought thereon.” (Bagnaschi Decl. ¶ 2, Exh. 1.) Thus, a prevailing party for claims based on the Concession Agreement would be entitled to attorneys’ fees and costs.

Though Plaintiff did not obtain a complete victory on all of the contract claims of the complaint, Plaintiff is nonetheless the prevailing party. The complaint asserted two causes of action for (1) Breach of Written Contract, Failure to Indemnify, and (2) Breach of Written Contract, Failure to Maintain Adequate Insurance Coverage. Both claims are based upon contract. The second cause of action was for breach of contract for failure to maintain adequate insurance coverage under the Concession agreement. The first cause of action was for contractual indemnity under the Concession Agreement.[1]

As noted above, on May 11, 2022, the Court granted Plaintiff’s motion for summary adjudication of the first cause of action in the amount of $824,170.24 but denied summary judgment of the second cause of action. (Order 5/11/22.) On June 3, 2022, Plaintiff dismissed the second cause of action without prejudice. Thus, Plaintiff did not obtain a simple “unqualified victory by completely prevailing on … all contract claims in the action”. (de la Cuesta, supra, 193 Cal.App.4th at p.1294.) However, Plaintiff clearly is the prevailing party. The relief sought by both causes of action were identical. (See Complaint at p.9.) In essence, the first and second causes of action were merely alternative legal reasons as to why Defendant was required to indemnify Plaintiff for the cost of the underlying action. (Complaint ¶¶ 16-31.)

Accordingly, as Plaintiff is the prevailing party, Plaintiff is entitled to attorneys’ fees.

The trial court has broad authority to determine the amount of a reasonable fee. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) The party bears the burden of proof as to “reasonableness” of any fee claim. (Code Civ. Proc., § 1033.5, subd. (c)(5).) The party seeking fees has the burden of documenting the appropriate hours expended and hourly rates. (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 784.) This burden requires competent evidence as to the nature and value of the services rendered. (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.)

An attorney's testimony as to the number of hours worked is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records or billing statements, and there is no requirement that such records or statements be offered in evidence. (Steiny & Co., Inc. v. California Electric Supply Co. (2000) 79 Cal.App.4th 285, 293.) Ascertaining the fee amount is left to the trial court’s sound discretion. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) Moreover, “[t]here is ‘no mathematical rule requiring proportionality between compensatory damages and attorney's fees awards’, [Citation], and courts have awarded attorney's fees where plaintiffs recovered only nominal or minimal damages.” (Harman v. City and County of San Francisco (2007) 158 Cal.App.4th 407, 421.)

Here, the late Scott Haith had been an attorney in California since the late 1970s, was a member of ABOTA, and was a partner for Plaintiff’s Counsel, HAITH | BAGNASCHI, LLP. (Bagnaschi Decl. ¶ 6.) Attorney Christopher Bagnachi has been an attorney since 1991, has litigated 20 jury trials and is a partner for Plaintiff’s Counsel, HAITH | BAGNASCHI, LLP. (Bagnaschi Decl. ¶ 6.) Both Scott Haith and Christopher Bagnachi billed at an hourly rate of $205 that increased to $215 in 2021. (Bagnaschi Decl. ¶ 6, Exh. 2.) Based on the attached time sheet, Plaintiff’s Counsel spent approximately 155 hours on the instant action. (Bagnaschi Decl. ¶ 6, Exh. 2.) Plaintiff’s Counsel further claims that the time preparing the instant motion, reviewing and opposing the opposition, and preparing for and attending the hearing for the instant motion will be approximately 8 hours. (Bagnaschi Decl. ¶ 7.)

In opposition, Defendant only challenges the nine hours spent on litigation between December 12, 2019 and February 26, 2020 before the complaint was filed on the grounds that the attorneys’ fees included in the Concession Agreement does not include prior litigation. Defendant cites no authority for this proposition. As noted above, the Concession Agreement provides in relevant part that “[i]n the event either party commences legal proceedings for the enforcement of this Agreement, the prevailing party shall be entitled to recover its reasonable court costs and attorney's fees incurred in the action brought thereon.” (Bagnaschi Decl. ¶ 2, Exh. 1.) Here, the nine hours included reviewing an email regarding the status of the complaint, reviewing various documents including the Concession Agreement, preparing and revising a draft of the complaint, and emailing Plaintiff regarding filing and serving the complaint. (Bagnaschi Decl. ¶ 6, Exh. 2.) This time was clearly incurred pursuing Plaintiff’s contract claims in the instant action.

Here, given Plaintiff’s Counsel’s claimed hourly rate, experience level, and the two years of litigation for the instant action, under the totality of the circumstances the claimed $35,231.00 in attorney fees is reasonable.

Based on the foregoing, Plaintiff California Joint Powers Insurance Authority’s motion for attorneys’ fees is GRANTED in the amount of $35,231.00.

[1] “[I]ndemnity refers to ‘the obligation resting on one party to make good a loss or damage another party has incurred.’” (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1157.) “There are two basic types of indemnity: express indemnity, which relies on an express contract term providing for indemnification, and equitable indemnity, which embraces ‘traditional equitable indemnity’ and implied contractual indemnity.” (Jocer Enterprises, Inc. v. Price (2010) 183 Cal.App.4th 559, 573.)

Superior Court of California

County of Los Angeles

Department 26