Judge Elaine Lu, Case BC705031 2022-08-04 Tentative Ruling

On April 15, 2019, BTO, Gordon, Wilson-Gordon, and Halpern filed a cross-complaint against Entin, Isodiol, ISO, World Holdings, Inc. (“WHI”). The Cross-Complaint asserted nineteen causes of action for: (1) breach of contract against Entin; (2) breach of contract against Isodiol and ISO; (3) breach of contract against Isodiol and ISO; (4) intentional interference with contract against Entin; (5) negligent interference with contract against Entin; (6) intentional interference with prospective business advantage against Entin; (7) negligent interference with prospective business advantage against Entin; (8) breach of fiduciary duty against Entin; (9) breach of fiduciary duty against Isodiol and ISO; (10) fraud against Isodiol and ISO; (11) negligent misrepresentation against Isodiol and ISO; (12) unfair competition against Isodiol, ISO, and WHI; (13) misappropriation of trade secrets against all cross-defendants; (14) implied indemnity against all cross-defendants; (15) comparative indemnity against all cross-defendants; (16) equitable indemnity and contribution against all cross-defendants; (17) unjust enrichment against all cross-defendants; (18) injunctive relief against all cross-defendants; and (19) conversion against Isodiol, ISO, and WHI.

On May 28, 2019, Cross-Defendant Entin filed a special motion (anti-SLAPP) to strike the first, and fourth through eighth causes of action of the Cross-Complaint. On November 1, 2021, the Court granted Cross-Defendant Entin’s special motion to strike. (Order 11/1/21.)

On December 1, 2021, Cross-Defendant Entin filed the instant motion for attorneys’ fees and costs. On July 20, 2022, Cross-Complainant Halpern filed an opposition. On July 28, 2022, Cross-Defendant Entin 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.)

Code of Civil Procedure section 425.16, subdivision (c)(1), provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” (Id.) “[U]nder Code of Civil Procedure section 425.16, subdivision (c), any SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.)

As the prevailing Cross-Defendant on a special motion to strike, Entin is entitled to mandatory attorney fees in connection with his anti-SLAPP motion. Moreover, Halpern concedes that Entin is entitled to reasonable attorneys’ fees for prevailing on the anti-SLAPP motion.

Entin moves for an award of attorneys’ fees and costs totaling $62,080.59 against Cross-Complainants BTO, Gordon, Wilson-Gordon, and Halpern.

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.)

Attorney David P. Beitchman is the managing partner at Plaintiff’s Counsel – Beitchman & Zekian, PC – and bills at an hourly rate of $450. (Tokar Decl. ¶¶ 6, 8.) Beitchman has extensive trial experience and has represented parties through numerous trials, including a five-week trial in April of 2019 in Orange County Superior Court. (Tokar Decl. ¶ 6.) Beitchman has earned several awards including being recently named a “Super Lawyer” by Super Lawyers (Southern California) in 2020. (Tokar Decl. ¶ 6.) Beitchman has written and published multiple articles regarding Life Settlements, in which Beitchman specializes. (Tokar Decl. ¶ 6.) Beitchman has been practicing law since 1998. (Tokar Decl. ¶ 6.)

Attorney Paul Tokar has been an attorney practicing law in California since 2015 and bills at an hourly rate of $350. (Tokar Decl. ¶¶ 7-8.) Tokar has substantial experience in civil litigation acting as lead trial counsel, arguing before the California Court of Appeal, and acting as second-chair with Beitchman during the five-week jury trial in the Orange County Superior Court. (Tokar Decl. ¶ 7.) In addition, Tokar has been named a “Rising Star” in Super Lawyers (Southern California). (Tokar Decl. ¶ 7.)

In opposition, Cross-Complainant Halpern contends that Attorney Tokar’s hourly rate should be reduced to $250. However, Halpern cites no evidence of prevailing attorney rates or similar experienced attorneys showing that the hourly rate he proposes instead is reasonable. Rather, Halpern cites to 569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426 where the trial court reduced the attorney’s hourly rate from $750 to $275 per hour and was affirmed on appeal. (Id. at p.431.) However, the reasoning for this was that “the court was cognizant that the rate charged by a very seasoned attorney from the relevant community (San Diego), who represented [co-defendant] in this same litigation and whose anti-SLAPP motion successfully extricated her from the multiple and complex claims pleaded against her, was $275 per hour.” (Id. at p.437.)

In contrast, the relevant community here is the legal community in Los Angeles between 2019 and 2021. The prevailing hourly rates are clearly different. Halpern fails to point to any evidence of a well-seasoned attorney working on anti-SLAPP motions at the significantly lower rate Halpern proposes. Attorney Tokar began working on the anti-SLAPP in 2019 with four years of experience and had six years of experience when the anti-SLAPP was finally heard. Based on the Court’s own experience with the hourly rates of attorneys in the Los Angeles Community, an hourly rate of $350 for attorneys with four to six years of experience is reasonable.

Attorney Beitchman claims to have spent 22.5 hours working on matters related to the anti-SLAPP. (Tokar Decl. ¶ 2, Exh. A.) Attorney Tokar claims to have spent a total 137.75 hours on matters related to the anti-SLAPP motion. (Tokar Decl. ¶ 2, Exh. A.) Attorney Tokar states that he spent time “a. Reviewing the Cross-Complaint and the accompanying Arbitration Agreement attached as Exhibit A; [¶] b. Researching the applicable case law concerning the litigation privilege and its application to Cross-Complainants arising from alleged breach of an arbitration agreement; [¶] c. Finding and retained an expert who would analyze Entin’s signature on the Arbitration Agreement to use in support of Entin’s Anti-SLAPP Motion; [¶] d. Drafting the Anti-SLAPP Motion itself; [¶] e. Attending and opposing no less than three (3) Ex Parte Application hearings wherein Cross-Complainants attempted to lift the discovery stay pursuant to Section 425.16(g); [¶] f. Reviewing Cross-Complainants’ Opposition, their expert declarations, and drafting Entin’s Reply to the Anti-SLAPP Motion; [¶] g. Opposing Cross-Complainants’ attempt to file a Sur-Reply and oppose Cross-Complainants’ Ex Parte Application For Leave to File a Sur-Reply; [¶] h. Attending and preparing for at least three (3) “would be” hearings on the Anti-SLAPP Motion which were continued each time as a result of Cross-Complaints[‘] two Motions To Compel Arbitration and the subsequent Appeal; [¶] i. Drafting oppositions to not one, but two Motions To Compel Arbitration and Stay The Action; [¶] j. Drafting oppositions to and attending hearings on Cross-Complainants’ Ex Parte Applications To Shorten Time For Hearing on the two Motions To Compel Arbitration and Stay The Action; [¶] k. Preparing for and attending an in-person evidentiary hearing on October 7, 2019 in which three witnesses were subject of direct and cross-examination in open Court; and [¶] l. Defending against the frivolous Appeal from Cross-Complainants’ Motion to Compel Arbitration, and likewise, the frivolous bankruptcy filed by Be Tru Organics, Inc.” (Tokar Decl. ¶ 3.) Attorney Tokar further claims that he will spend approximately eight hours in conjunction with preparing the instant motion, reviewing the opposition, preparing a reply, and appearing at the hearing. (Tokar Decl. ¶ 8.)

“An award of attorney fees to a prevailing defendant on an anti-SLAPP motion properly includes attorney fees incurred to litigate the special motion to strike (the merits fees) plus the fees incurred in connection with litigating the fee award itself (the fees on fees). [Citation.] However, a fee award under the anti-SLAPP statute may not include matters unrelated to the anti-SLAPP motion, such as . . . ‘attending the trial court’s mandatory case management conference[,]’ because such fees ‘would have been incurred whether or not [the defendant] filed the motion to strike.’” (569 East, supra, 6 Cal.App.5th at p.433.) “In short, the award of fees is designed to ‘ “reimburs[e] the prevailing defendant for expenses incurred in extracting herself from a baseless lawsuit” ’ [Citation] rather than to reimburse the defendant for all expenses incurred in the baseless lawsuit.” (Ibid.)

Here, only the attorneys’ fees related to the anti-SLAPP motion are recoverable. Though the motions to compel arbitration, the appeal of the motion to compel arbitration, and the bankruptcy of BTO may have raised some potentially related issues, litigation of those matters were all separate, and those attorneys’ fees would have been incurred regardless whether Entin filed an anti-SLAPP motion. (569 East, supra, 6 Cal.App.5th at p.433 [excluding matters “such as [hours spent] ‘attacking service of process, preparing and revising an answer to the complaint, [or] summary judgment research’ ” from the award of attorneys’ fees for an anti-SLAPP motion.)

Accordingly, a reduction of the time not spent on the anti-SLAPP or related matters is warranted – i.e., the time spent litigating the motion to compel arbitration, the appeal of the denial of arbitration, and the BTO bankruptcy proceeding. Therefore, the Court reduces the time claimed by Attorney Tokar by 57.45 hours and the time spent by Attorney Beitchman by 14 hours.

As to the further reductions sought by Halpern, the Court disagrees that the entirety of the fees sought by Beitchman should be eliminated. Halpern provides no reasoning as to why it is unreasonable for two attorneys to work on a relatively complicated anti-SLAPP motion with numerous ex parte motions that took place over three years.

However, the Court does agree that the time claimed is excessive. First, given the simplicity of the instant motion, eight hours on the instant motion – given the experience of Attorney Tokar – is not reasonable. Accordingly, a reduction of two hours is warranted to represent the reasonable time spent. The time claimed drafting the instant motion is also somewhat excessive warranting a further reduction of three hours. In addition, Tokar combined time on the billing sheet time for preparing for the anti-SLAPP hearing and time preparing for the motion to compel arbitration hearing. (Tokar Decl. 2, Exh. A.) Accordingly, a slight reduction of 1.3 hours is warranted. Finally, as to Attorney Beitchman, given the claimed experience, spending seven hours reviewing the anti-SLAPP drafts is slightly excessive. Accordingly, a reduction of one hour is warranted.

Accordingly, utilizing a lodestar approach, and in view of the totality of the circumstances, the court finds that the total and reasonable amount of attorney’s fees incurred is $31,970.00.

As noted above, only costs associated with and related to the anti-SLAPP are recoverable. (569 East, supra, 6 Cal.App.5th at p.433.) Accordingly, of the claimed $3,848.09 in costs the Court finds that $2,302.04 was reasonably incurred in connection with the anti-SLAPP motion.

Based on the foregoing, Cross-Defendant Sean Entin’s motion for attorney fees and costs against Cross-Complainants BTO, Gordon, Wilson-Gordon, and Halpern is GRANTED in the total amount of $34,272.04, consisting of $31,970.00 of attorney’s fees and $2,302.04 of costs.

Moving party Cross-Defendant Sean Entin is to give notice to all parties and file proof of service of such.

[1] On December 19, 2018, Plaintiff Entin dismissed Isodiol and ISO without prejudice pursuant to a stipulation. On December 20, 2021, Entin dismissed Isodiol and ISO without prejudice with the Court to retain jurisdiction under Code of Civil Procedure section 664.6.

[2] On November 16, 2021, the Court sustained Defendants Wilson-Gordon and Halpern’s demurrer to the second cause of action of the FAC without leave to amend. (Order 11/16/21.)

County of Los Angeles

Department 26