Judge: Elaine Lu, Case: BC692993, Date: 2023-04-03 Tentative Ruling

Case Number: BC692993    Hearing Date: April 3, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background   

             On February 6, 2018, plaintiff Vatche Papazian (“Plaintiff”) filed the instant derivative action against defendants Stephen, Brown (“Stephen”) Jack Brown (“Jack”), Suzanne Brown (“Suzanne”), OYB Clothing LLC (“OYB”), and nominal defendants Herbal Solutions Pre ICO, LLC (“Herbal”) and Herbal Cooperative Solutions Pre ICO, Inc. alleging violations of duties owed to the nominal defendants. On July 12, 2021, Plaintiff filed a Doe Amendment naming UTR Management, LLC (“UTR”) as Doe 1. 

On November 8, 2021, Plaintiff filed the First Amended Complaint (“FAC”) against Stephen, Jack, Suzanne, Herbal, Herbal Cooperative Solutions Pre ICO, Inc., UTR (“Defendants”) and OYB asserting five causes of action for (1) Breach of Fiduciary Duty to Herbal Solutions Pre ICO LLC, (2) Breach of Fiduciary Duty to Herbal Cooperative Solutions Pre ICO, Inc., (3) Conversion, (4) Accounting, and (5) Alter Ego.   

            On May 4, 2022, Plaintiff filed a notice of settlement of the entire case.  On May 5, 2022, the parties stipulated for the Court to retain Jurisdiction under Code of Civil Procedure section 664.6.  On June 30, 2022, Plaintiff dismissed the entire action subject to the Court’s retention of jurisdiction under Code of Civil Procedure section 664.6.

On June 28, 2022, Plaintiff filed the instant motion to enforce settlement. On January 30, 2023, the Court granted the motion to enforce settlement in part.  (Order 1/30/23.)  The Court Ordered that by March 1, 2023 Defendants were to produce all documents requested by the appraiser and that Defendants are to produce all persons requested by the appraisers for interviews between March 15, 2023 and March 22, 2023.  (Order 1/30/23.)

The Court further ordered Defendants to file a declaration by March 22, 2023 attesting to their compliance or inability to comply.  The Court further ordered that if Defendants had failed to comply in full, Plaintiff may file a supplemental declaration no later than March 27, 2023 identifying the remaining areas of non-compliance and specifying any additional attorney’s fees and costs incurred in furtherance of enforcing the settlement agreement.  The instant motion was then continued to April 3, 2023 as to attorneys fees. 

On March 27, 2023, Plaintiff filed a supplemental declaration.  On March 28, 2023, Defendants filed a supplemental declaration.

Discussion

            By the parties’ supplemental declarations, it is clear that Defendants have complied with the Court’s January 30, 2023 order and produced the requested documents.  As noted in Plaintiff’s Counsel’s declaration filed on March 27, 2023, after the Court Ordered compliance date of March 1, 2023, the appraisers – on March 17, 2023 – requested information regarding to whom a $1,324,657.00 loan and an additional loan of $469,028.00 that appeared on the 5/3/22 balance sheet were made and the purpose of the loans.  (Supp. Winokur Decl. ¶ 3.)  Plaintiff’s Counsel further states that on March 1, 2023, Defendants provided a link to download point of sale documentation for the business which was in limited and in PDF form.  (Supp. Winokur Decl. ¶ 4.)  “Thereafter, Defendant refused to provide the information in its native format, and the appraisers declined to pursue the information, stating that such reviewing this information will not substantially change their analysis.”  (Supp. Winokur Decl. ¶ 4.)

            Thus, the only outstanding information that the appraisers have requested is the information regarding loan, which Plaintiff requested after the Court’s March 1, 2023 order.  Therefore, Defendants are clearly in compliance with the Court’s January 30, 2023 order.  Moreover, as noted by Defendants, Defendants will comply and provide this information within the next week.  (Supp. Burt Decl. ¶ 4.)

            Accordingly, the only remaining issue is with regard to attorney fees incurred in enforcing the settlement agreement.  Under the settlement agreement, if any legal proceeding is brought to enforce the settlement agreement, the prevailing party is entitled to reasonable attorneys’ fees and costs.  (Johnson Decl. ¶ 3, Exh. 2 at § 15(j).)  As previously noted by the Court, Defendants failed to provide documents that the Appraisers first requested approximately six months ago and failed to adequately explain the delay requiring the instant motion be filed.  Therefore, as Defendants were in breach, and Plaintiff is the prevailing party, Plaintiff is entitled to reasonable attorneys’ fees.

            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.)

            Here, in the moving papers, Plaintiff’s Counsel claims that Plaintiffs incurred $8,771.65 in attorneys’ fees and costs.  Consisting of 10.6 hours at $475 an hour and 1.5 hours at $750 an hour in bringing the instant motion and an additional 3 hours at $475 an hour and 1.5 hours at $750 plus costs of $61.65 in filing the instant motion.  (Johnson Decl. ¶ 3.)  Given the simplicity of the instant motion, the Court finds that $2,061.65 more reasonably represents the attorneys’ fees and costs incurred in bringing the instant motion.

CONCLUSIONS AND ORDER

Based on the foregoing, Plaintiff Vatche Papazian’s motion to enforce the settlement agreement and the request for attorneys’ fees is GRANTED AS MODIFIED in amount of $2,061.65 in attorneys’ fees and costs.  Within 10 days, Plaintiff may file and serve a proposed judgment of $2,061.65 of attorneys’ fees and costs.

Plaintiff is to give notice to all parties and file proof of service of such.

DATED: April 3, 2023                                                           ___________________________

                                                                                          Elaine Lu

                                                                                          Judge of the Superior Court