Judge Gail Killefer, Case 22STCV10274 2022-08-30 Tentative Ruling

TENTATIVE: Defendant’s motion is granted in part. Defendant is awarded attorney’s fees and costs in the amount of $6,294.15.

TENTATIVE: Defendant’s demurrer to the FAC is sustained in its entirety without leave to amend. Defendant is to give notice.

The following factual background is common to all motions and will only be stated once.

This is an action arising out of R2B Autobank Corp, aka Autobank/Citi RTC (“R2B”) and its CEO Parker Park’s (“Park”) (collectively “Plaintiffs”) business ventures with Defendant, DWWCT LLC dba Claremont Toyota (“Claremont”) regarding the sale of a 2021 Toyota Sienna minivan (“Vehicle”) to a third-party purchaser.

Plaintiffs’ Complaint alleges that on July 30, 2021, a third-party consumer purchased the 2021 Toyota Sienna minivan from Claremont with a check that was later dishonored by the bank. On August 28, 2021, Plaintiffs provided a Promissory note to the third-party consumer with title to the Vehicle as collateral, and Plaintiffs were issued a Lienholder title to the Vehicle. Plaintiffs intended to use the Vehicle as a rental car. On October 22, 2021, Claremont confirmed with the bank that the check given to Claremont for purchase of the Vehicle was fraudulent. On the same day, Defendant filed a Police Report stating the Vehicle was stolen. On October 25, 2021, Defendant ran a title search of the Vehicle and found Plaintiffs to be the lienholder. On January 11, 2022, Plaintiffs eventually returned to the Vehicle to Defendant.

Plaintiffs’ initial Complaint alleged causes of action for: (1) Negligence; and (2) Defamation. On April 29, 2022, Defendant filed a Special Motion to Strike (“Anti-SLAPP”) as to the second cause of action. In response, Plaintiffs filed a First Amended Complaint (“FAC”) alleging two causes of action for: (1) gross negligence; and (2) negligence.

1. Motion for Attorney Fees as the prevailing party to the Special Motion to Strike (“Anti-SLAPP”); and

Defendant requests that the court take judicial notice of the following in support of its motion:

1. Exhibit 1: Notice of Motion and Special Motion to Strike; Memorandum of Points and Authorities and Declaration of Ryan Crenshaw in Support Thereof, filed with the Court on April 29, 2022 (this Court).

Defendant’s request is granted. The existence and legal significance of these documents are proper matters for judicial notice. (Evidence Code § 452 (d), (h).)

CCP § 425.16(c)(1) provides in relevant part: “[A] prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.”¿ The fee-shifting provision is mandatory, and it is a mechanism intended to promote the policy underlying the anti-SLAPP statute generally—namely, to discourage SLAPP suits brought to chill the valid exercise of the constitutional rights of free speech and petition for the redress of grievances.¿¿(Ketchum v. Moses¿(2001) 24 Cal.4th 1122, 1131 (Ketchum).)¿¿¿

The prevailing party may only recover the attorney fees incurred in connection with the special motion to strike, not the action as a whole.¿ (See, e.g.,¿Lafayette Morehouse, Inc. v. Chronicle¿Publ’g¿Co.¿(1995) 39 Cal.App.4th 1379, 1383 [“the Legislature intended that a prevailing defendant on a motion to strike be allowed to recover attorney fees and costs only on the motion to strike, not the entire suit”];¿S.B. Beach Properties v.¿Berti¿(2006) 39 Cal.4th 374, 381 [“the fee ‘provision applies only to the motion to strike, and not to the entire action’ ”];¿City of Industry v. City of Fillmore¿(2011) 198 Cal.App.4th 191, 218 [“The defendant can recover only its fees and costs in¿connection with the motion, not the entire action.”]¿(City of Industry).)¿¿¿

The court’s objective is to award a fee at the fair market value for the particular action.¿ (Ketchum,¿supra,¿24 Cal.4th at p. 1132.)¿ The analysis generally begins with the lodestar figure—i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.¿ (Id.¿at pp. 1131-1132.)¿ The lodestar is the basic fee for comparable legal services in the community.¿ (Id.¿at p. 1132.)¿ The court may then adjust the lodestar to arrive at the fair market value of the legal services provided.¿

In adjusting the lodestar, the court considers factors including (1) the contingent nature of the fee award, (2) the novelty and difficulty of the questions involved, (3) the skill displayed in presenting them, and (4) the extent to which the nature of the litigation precluded other employment by the attorneys.¿ (Ibid.)¿ Here, Defendant correctly cites Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1054-1055, as supporting authority for its contention that Plaintiffs’ removal of the defamation cause of action does not help to avoid liability but rather shows Defendant to be the prevailing party under CCP § 425.16(c). (Motion, 4-6.)

“The reasonable hourly rate is that prevailing in the community for similar work.”¿ (PLCM¿Group v. Drexler¿(2000) 22 Cal.4th 1084, 1095.)¿ “The experienced trial judge is the best judge of the value of professional services rendered in his court.”¿ (Ibid.)¿¿The Court “need not simply award the sum requested.¿ To the contrary, ascertaining the fee amount is left to the trial court's sound discretion.”¿ (Christian Research Institute v.¿Alnor¿(2008) 165 Cal.App.4th 1315, 1321¿(Christian).)¿¿“The basis for the trial court’s calculation must be the actual hours counsel has devoted to the case, less those that result from inefficient or duplicative use of time.”¿ (Horsford¿v. Board of Trustees of California State University¿(2005) 132 Cal.App.4th 359, 395.)¿ “The law is clear, however, that an award of attorney fees may be based on counsel’s declarations, without production of detailed time records.¿ (Raining Data Corp. v.¿Barrenechea¿(2009) 175 Cal.App.4th 1363, 1375.)¿

Defendant submits declarations from its counsel, Betty J. Levine (“Levine”) and Grant Hallstrom (“Hallstrom”) in support of its motion. Counsel both attest they have 36 years and 20 years of experience practicing law respectively. (Motion, 7-8; Levine Decl. ¶3; Hallstrom Decl. ¶3.) Counsel both attest they billed Defendant at an hourly rate of $290 per hour. (Levine Decl. ¶6; Hallstrom Decl. ¶5.) However, counsel both attest that the rates billed to their client “are a discounted rate well below the billable rates of attorneys of similar skill and experience” in the market. (Levine Decl. ¶7.) Defendant thus requests an hourly rate of $550 per hour for both counsel and an hourly rate of $150 per hour for Paralegal Michelle Blair. (Motion, 8.) Defendant and counsel do not explain, however, why the so-called discounted rate they have billed their clients are not reasonable for their services, as counsel themselves have set those rates in their transactions with their clients. Pointing to prevalent rates in the market does little to sway this court’s analysis in light of the evidence showing counsel’s clients to have paid an hourly rate counsel themselves have set. (Levine Decl. Exh. A.)

Plaintiffs do not object to the¿reasonableness of the¿hourly rates,¿and the court finds¿that the billed hourly rates of $290 and $150 per hour are¿reasonable.¿¿

“A defendant need not succeed in striking every challenged claim to be considered a prevailing defendant entitled to recover attorney fees and costs under the statute. Instead, a defendant is entitled to recover fees and costs in connection with a partially successful motion, unless the results obtained are insignificant and of no practical benefit to the defendant.¿ [Citation.]¿¿A court awarding fees to the prevailing defendant on a partially successful special motion to strike must exercise its discretion in determining the amount of fees and costs to award in light of the defendant's relative success in achieving its litigation objectives.¿ [Citations.]”¿ (City of¿Industry,¿supra,¿198 Cal.App.4th¿at p.¿218.)¿¿“The fees awarded should include services for all proceedings, including discovery initiated by the opposing party pursuant to section 425.16, subdivision (g),¿directly¿related to the special motion to strike.”¿ (Jackson v.¿Yarbray¿(2009) 179 Cal.App.4th 75, 92¿(Jackson).)¿ Furthermore, the statute is “broadly construed so as to effectuate the legislative purpose of reimbursing the prevailing defendant for expenses incurred in extricating herself from a baseless lawsuit.”¿ (Id.¿at p. 93, citing¿Wilkerson v. Sullivan¿(2002) 99 Cal.App.4th 443, 446.)¿¿¿

Defendant contends that the hours expended by its counsel in this action are reasonable. (Motion, 9.) Curiously, Counsel includes billing entries and first states it spent 18.5 hours on the anti-SLAPP motion. (Motion, 8.) Then, counsel requests an award consisting of “25.7 hours of attorney time.” (Motion, 9.) But the attached billing statement amounts to 18.5 hours of attorney time, not 25.7 hours, billed to Defendant. (Hallstrom Decl. Exh. A.)

The court has reviewed the billing records submitted as Exhibit A to the Hallstrom Declaration. Plaintiffs did not file an opposition and do not challenge the reasonableness of Defendant’s requested fees.

Based on the court’s review of the submitted billing records, Defendant’s requested fees are reasonable in part. Thus, Defendant’s motion is granted, in part, as to its request for fees, in the amount of $7,453.00. (18.5 hours x $290 = $5,365 + (3.1 hours x $150 = $465) = $5,830.

Defendant requests costs in the amount of $464.15. (Motion, 8.) Exhibit A to the Hallstrom Declaration is a chart summarizing the costs Defendant contends it has reasonably incurred in connection with this action.

Plaintiffs did not file an opposition and do not challenge the reasonableness of Defendant’s requested costs.

The court has reviewed Exhibit A and finds the requested costs reasonable. Thus, Defendant’s motion is granted with respect to its request for costs.

Defendant’s motion is granted in part. Defendant is awarded attorney’s fees and costs in the amount of $6,294.15.

Defendant demurrers to each cause of action of the FAC on the grounds that each fails to plead facts sufficient to state a cause of action.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848, fn. 3 (Mahan), citing Lickiss v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some respects uncertain, courts strictly construe a demurrer for uncertainty “because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Generally, it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

The elements of a¿negligence¿cause of action are the existence of a legal duty of care, breach of that duty, and proximate cause resulting in injury. (McIntyre v. The Colonies-Pacific, LLC¿(2014) 228 Cal.App.4th 664.)¿

“‘Gross negligence is pleaded by alleging the traditional elements of negligence: duty, breach, causation, and damages. [Citation.] However, to set forth a claim for ‘gross negligence’ the plaintiff must’ also allege conduct by the defendant involving either ‘want of even scant care’ or ‘an extreme departure from the ordinary standard of conduct.’” (Chavez v. 24 Hour Fitness USA, Inc. (2015) 238 Cal.App.4th 632, 640 (quoting Rosencrans v. Dover Images, Ltd. (2011) 192 Cal.App.4th 1072, 1082) (internal quotation marks omitted).)

Defendant contends that the first and second causes of action are insufficiently pled because the FAC does not allege and cannot allege facts showing Claremont owed a duty to Plaintiffs, and that the FAC does not allege sufficient facts to state a valid cause of action for gross negligence. (Demurrer, 3-4.)

“Plaintiffs have not alleged any legal duty between Claremont and Plaintiffs...The purported wrongful conduct Plaintiffs allege against Claremont is that Claremont allegedly failed to verify whether a check it received for the purchase of a vehicle... was fraudulent... Plaintiffs have not alleged that Claremont owed a duty to Plaintiffs to verify the check...” (Motion, 4; citing FAC ¶¶ 2-4, 9-12.)

Liberally construing the FAC in favor of Plaintiffs, the court agrees with Defendant and finds the first and second causes of action of the FAC insufficiently pled. As Defendant correctly contends, Plaintiffs have not alleged sufficient facts to show Claremont owed a duty to Plaintiffs as necessary to support causes of action for negligence and gross negligence. Similarly, the FAC has not alleged sufficient facts to show an extreme departure from ordinary conduct as required to show a claim for gross negligence.

For these reasons, Defendant’s demurrer to the first and second causes of action is sustained.

Defendant’s demurrer to the FAC is sustained in its entirety without leave to amend. Defendant is to give notice.

[1] Defendant submits the declaration of its attorney, Betty J. Levine (“Levine”), to demonstrate that it has fulfilled his meet and confer obligations pursuant to CCP § 430.41 prior to filing the instant demurrer. Levine attests that on June 23, 2022, counsel met and conferred telephonically with Plaintiffs’ counsel Burton C. Jacobson regarding the issues raised in this demurrer but that the parties were not able to reach an agreement. (Levine Decl. ¶¶ 2-3.) The Levine Declaration is sufficient for purposes of CCP § 430.41.