Judge Gail Killefer, Case Number: 22STCV13109, Date: 2024-07-15 Tentative Ruling

MOVING PARTY: Defendants Cubic Air Conditioning, Electric & Solar, Inc. and Albert Macias

TENTATIVE: Defendants’ motion to file satisfaction of judgment and tax costs is denied. Plaintiff is awarded $11,025 in costs, plus $2,625 in attorney’s fees. Defendants to give notice.

This action arises in connection with a contract between Johnstone Supply (“Plaintiff”) and Cubic Air Conditioning, Electric & Solar, Inc. (“Cubic”). Plaintiff also alleges Defendant Albert Macias (“Macias”), and Cubic are alter egos and/or successors of one another, and asks this court to pierce the corporate veil. Plaintiff alleges that, on or about February 17, 2020, Defendants breached their contract by failing to pay $124,273.73 of the total invoice for goods provided.

Plaintiff’s Complaint alleges two causes of action: (1) breach of contract and (2) common counts. On June 13, 2022, the court entered a default against Defendants. On August 31, 2022, the court granted default judgment against Defendants. On February 24, 2023, the court granted Defendants’ motion to vacate the default but only as to Defendant Macias.

On August 11, 2023, the court entered judgment pursuant to a stipulation in favor of Plaintiff and against Defendants jointly and severally.

On April 19, 2024, Plaintiff filed a memorandum of costs after judgment in the sum of $18,530.00. On Aril 25, 2024, Defendants moved to tax costs and for an order requiring the Plaintiff (the “Judgment Creditor”) to file a satisfaction of judgment of the case pursuant to CCP § 725.050(d).

motion to file satisfaction of judgment and tax costs

(a) A money judgment may be satisfied by payment of the full amount required to satisfy the judgment or by acceptance by the judgment creditor of a lesser sum in full satisfaction of the judgment.

(b) Where a money judgment is satisfied by levy, the obligation of the judgment creditor to give or file an acknowledgment of satisfaction arises only when the judgment creditor has received the full amount required to satisfy the judgment from the levying officer.

(c) Where a money judgment is satisfied by payment to the judgment creditor by check or other form of noncash payment that is to be honored upon presentation by the judgment creditor for payment, the obligation of the judgment creditor to give or file an acknowledgment of satisfaction of judgment arises only when the check or other form of noncash payment has actually been honored upon presentation for payment.

(a) If a money judgment has been satisfied, the judgment debtor, the owner of real or personal property subject to a judgment lien created under the judgment, or a person having a security interest in or a lien on personal property subject to a judgment lien created under the judgment may serve personally or by mail on the judgment creditor a demand in writing that the judgment creditor do one or both of the following:

(2) Execute, acknowledge, and deliver an acknowledgment of satisfaction of judgment to the person who made the demand.

In an action or proceeding maintained pursuant to this chapter, the court shall award reasonable attorney’s fees to the prevailing party. (CCP § 724.080.)

CCP § 1033.5 sets forth the costs recoverable by the prevailing party. To recover a cost, it must be reasonably necessary to the litigation and reasonable in amount. (Perko’s Enterprises, Inc. v. RRNS Enterprises (l992) 4 Cal.App.4th 238, 244.) “If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-74.) “On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.” (Id.)¿¿

Defendants as the judgment debtors assert that since January 2024 it has tried to obtain information about the full judgment owned. (Campbell Decl. ¶ 4-7.) On April 18, 2024, Defendants went to the Los Angeles Sheriff’s office to ascertain the payoff amount and paid $58,929.00 in satisfaction of the Judgment on April 19, 2024. (Campbell Decl. ¶¶ 8, 9, Ex. 4; Macias Decl. ¶ 2.)

On April 22, 2024, Plaintiff’s counsel informed defense counsel via email that the judgment had not been satisfied in full and that $18,530 was still due. (Campbell Decl. ¶ 11.) Defendants responded by asserting that the $18,530 memorandum of costs was defective because it was filed after the judgment and a demand to file a satisfaction of judgment had been made. (Id. ¶ 12, Ex. 6.) Plaintiff refused.

Defendants request that the entire memorandum of costs after judgment be stricken and pursuant to CCP § 724.080, Plaintiff be ordered to pay Defendants reasonable attorney’s fees and $100 to Defendants.

Plaintiff asserts that including the interest, Defendants paid $58,929.00 but that $58,973.80 was owed, therefore Defendants were short $44.80, and the payment has not been fully satisfied. (Opposition, at p. 3:1-23.) The court notes that the return of attachment/execution by the Los Angeles Sheriff’s Department reflects that Defendants have paid in full and money is owed. Plaintiff further asserts that Defendants intended to pay off the debt to cut-off Plaintiff’s right to seek attorney’s fees and costs. (Opposition, at p. 4:16-18.)

Most importantly, Plaintiff asserts that the memorandum of costs after judgment is timely because Plaintiff has not yet been paid as the Los Angeles Sheriff’s department has not yet disbursed the funds. (Biggins Decl. ¶ 5, Ex. C.) “A judgment is not satisfied for purposes of postjudgment motions until the judgment creditor has been paid.” (Wertheim, LLC v. Currency Corp. (2019) 35 Cal.App.5th 1124, 1134.) “Like Gray1, if they have not yet filed a motion for postjudgment costs at the time the judgment debtor tenders a cashier's check in full payment of the outstanding judgment, they are free to reject the payment and to file a motion for postjudgment costs.” (Gray1 CPB, LLC v. SCC Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 896.) Accordingly, because Plaintiff maintains it has not yet been paid by the Sheriff’s department, it has the right to reject Defendants’ tender of payment and seek post-judgment costs.

The court finds that pursuant to Gray1 CPB, LLC v. SCC Acquisitions, Inc. (2015), Plaintiff may reject Defendants’ tender of payment and file a postjudgment memorandum of costs, as Plaintiff has done here. Accordingly, the memorandum of costs is timely and should not be stricken.

The court further finds that Lines 1 to 5 seeking costs totaling $2,780 are allowable costs and necessary to the litigation and supported by the evidence. (Biggins Decl. ¶¶ 9-12, Ex. A, D.) “A verified memorandum of costs is prima facie evidence of the propriety of the items listed on it, and the burden is on the party challenging these costs to demonstrate that they were not reasonable or necessary.” (Bender v. County of Los Angeles¿(2013) 217 Cal.App.4th 968, 989.)

However, Plaintiff is not entitled to additional interest on the judgment because Plaintiff’s made full payment to “the levying officer,” the Sheriff’s department. (See CCP § 685.030^{^[1]}.) “Section 685.030 enables a judgment debtor to limit its liability for postjudgment interest by tendering satisfaction of the judgment, whether or not the creditor chooses to accept the tender.” (Wertheim, supra, 35 Cal.App.5th at p. 1134.) “The Legislature has declared interest on a judgment ceases to accumulate on the date a check in the amount of the judgment and accumulated interest is delivered to the judgment creditor, notwithstanding the fact that the honoring of the check may take a period of days. (§ 685.030, subd. (d)(2).)” (Gray1 CPB, LLC, supra, 233 Cal.App.4th at p. 896.)

Accordingly, no additional interest accrues on the judgment but Defendants are still liable for postjudgment costs.

Plaintiff asserts it is entitled to attorney’s fees because the judgment expressly awarded attorney’s fees. “‘Attorney's fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney's fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.’” (Rosen v. LegacyQuest (2014) 225 Cal.App.4th 375, 381 citing CCP § 685.040.) The court notes that CCP § 1033.5(a)(10)(A) only permits attorney’s fees when authorized by contract. Although Exhibit A of the Complaint includes a series of invoices, the court found no express provision permitting attorney’s fees. Yet when the parties entered a stipulated judgment, attorney’s fees in the amount of $3,300 were awarded. Moreover, Defendants do not deny that the contract and the judgment permitted plaintiffs to recover attorney’s fees as the prevailing party.

Therefore, the court finds that Plaintiff is entitled to attorney’s fees incurred in trying to collect on the judgment.

Plaintiff’s counsel and Defense counsel both have an hourly rate of $750 per hour. (Biggins Decl. ¶ 7; Campell Decl., ¶ 14.) Based upon the skill required in this case and what the Court has observed, the Court finds $750/hour excessive and reduces the hourly rate to $450/hour.

Plaintiff’s counsel provides an invoice showing fees incurred for time spent communicating with the Defendants who were trying to negotiate payment of a lower amount than what they previously agreed to. (Biggins Decl. ¶ 13, Ex. E.) The invoice shows entries for time spent researching tax liens. (Id.) Accordingly, the 21 hours spent after the judgment was entered, from August 12, 2023, to March 19, 2024, trying to enforce the judgment was reasonably spent. Had Defendants paid the judgment sooner rather than try to negotiate a lesser amount, Plaintiff’s counsel would have incurred fewer fees.

Therefore, no deductions will be made to time spent and the Court awards $9,450.00 in attorney’s fees sought as costs.

Plaintiff’s counsel additionally requests $7,500 in attorney’s fees for opposing this Motion, for 10 hours of work billed at a rate of $750 per hour. (Biggins Decl. ¶ 6.)

The court finds that 10 hours spent on this motion is excessive and finds that opposing Defendant’s motion and preparing for the hearing should have taken about 3.5 hours or $1,575.

The court finds that Plaintiff’s counsel is entitled to $11,025 in costs plus $2,625 in attorney’s fees for costs incurred in trying to enforce the judgment.

Only after payment of the above costs will the court enter an order for satisfaction of the judgment. Moreover, Defendants’ request for attorney’s fees is denied.

Defendants’ motion to file satisfaction of judgment and tax costs is denied. Plaintiff is awarded $11,025 in costs, plus $2,625 in attorney’s fees. Defendants to give notice.

[1] CCP § 685.030 states: “(a) If a money judgment is satisfied in full pursuant to a writ under this title, interest ceases to accrue on the judgment: (1) If the proceeds of collection are paid in a lump sum, on the date of levy. (2) If the money judgment is satisfied pursuant to an earnings withholding order, on the date and in the manner provided in Section 706.024 or Section 706.028. (3) In any other case, on the date the proceeds of sale or collection are actually received by the levying officer. (b) If a money judgment is satisfied in full other than pursuant to a writ under this title, interest ceases to accrue on the date the judgment is satisfied in full.”