Judge: Gail Killefer, Case: BC682875, Date: 2023-01-09 Tentative Ruling
Case Number: BC682875 Hearing Date: January 9, 2023 Dept: 37
HEARING DATE: January 9, 2023
CASE NUMBER: BC682875
CASE NAME: Ambulnz Health, LLC v. AmeriCare MedServices, Inc., et al.
MOVING PARTIES: Defendants AmeriCare
MedServices, Inc. and Michael S. Summers
OPPOSING PARTY: Plaintiff, Ambulnz Health,
LLC
TRIAL DATE: Not set.
PROOF OF SERVICE: OK
MOTION: Supplemental Briefing Regarding
Attorney Fees and Costs
OPPOSITION: December 30, 2022
REPLY: January 6, 2023
TENTATIVE: The court grants
Defendant Summers’ motion and awards $2,624.00 in attorney fees and costs.
Defendant Summers is to give notice.
This action arises in connection with an alleged Asset
Purchase Agreement (the "APA") between Plaintiff Ambulnz
("Ambulnz") as Buyer, Defendant AmeriCare Medservices, Inc.
("AmeriCare") as Seller and Defendant Michael S. Summers
("Summers") as the Owner of AmeriCare on September 29, 2016.
Plaintiff alleges that it purchased AmeriCare's business and assets and began
operating the business after paying a $1 million down-payment. Plaintiff
further alleges that on or about April 4, 2017, the parties entered into a
Management Services Agreement ("MSA"), pursuant to which Plaintiff
was entitled to operate the business while Plaintiff worked toward obtaining
certain permits and licenses in its own name.
According to Plaintiff, it subsequently discovered that many
of AmeriCare's representations and warranties in the APA were false when made
and that the business was worth far less than the price to which the parties
had agreed. Plaintiff further alleges that Defendants repeatedly interfered
with its ability to operate the business for which it had paid, including by
preventing Plaintiff from accessing mission critical data contained on
AmeriCare's IT systems and through a systematic campaign by Summers to try and
destroy the value of the business that Plaintiff acquired. AmeriCare allegedly
had a business bank account with Defendant California Bank and Trust
("CBT"). Plaintiff further alleges that CBT wrongfully assisted
Summers in obtaining signatory control over the bank account and AmeriCare's
assets.
In the First Amended Complaint ("FAC"), Plaintiff
alleges 6 causes of action for: (1) declaratory relief against all Defendants;
(2) injunction against all Defendants; (3) breach of fiduciary duty against
Summers and CBT; (4) conversion against Summers and CBT; (5) accounting/request
for constructive trust against CBT; and (6) intentional interference with
contractual relations against Summers.
On June 22, 2018, the court granted Defendants’ motion to
compel arbitration and compelled Plaintiff’s claims against both Americare and
Summers to arbitration. The action against CBT was stayed pending the
completion of arbitration.
On August 11, 2020, the court entered judgment in favor of
Ambulnz by confirming the arbitration award.
On March 10, 2022, the 2nd District Courts of Appeal,
Division 7, Case No. B307874, reversed this court’s decision to grant the
motion to compel arbitration as to Summers, and further reversed the
arbitration award as to Summers, finding Summers should not have been compelled
to arbitrate his claims. (“Appeal Order”)
On September 1, 2020, Plaintiff and Americare commenced the
second arbitration proceedings as between the two parties only (“Second
Arbitration”). Plaintiff dismissed Summers from the Second Arbitration.
On November 4, 2022, the court granted Plaintiff’s motion
for a stay in arbitration, pending completion of the instant action between
Plaintiff and Defendant Summers. The court also granted Defendants’ motion for
restitution pursuant to CCP § 908 of $93,000.00 and awarded attorney fees and
interest to Defendants as well. (“November 4 Order”)
In the November 4 Order, the court also instructed the
parties to provide further briefing regarding specifically the $3,624.00 in
attorney fees and costs requested by Defendants. The court now addresses the
supplemental briefings of both parties.
SUPPLEMENTAL BRIEFINGS
RE: ATTORNEY FEES & COSTS
In the November 4 Order, this court concluded:
“Defendant Summers has provided sufficient basis to show
Defendant sent monies to Plaintiff to satisfy a judgment and an arbitration
award which was reversed on appeal. Plaintiff’s conclusory claims do not
persuade this court that granting restitution would lead to unjust enrichment
for Summers. Rather, based on the evidence presented, allowing Plaintiff to
maintain dominion over monies belonging to Summers would lead to unjust
enrichment pending the outcome of this instant litigation. Plaintiff provides little
support for its requests regarding a stay of execution or to deposit the monies
with the court, as Plaintiff has failed to show why it would fail to collect
judgment against Summers depending on the outcome of this litigation. As such,
the prejudice to Summers outweighs any potential benefits in allowing Plaintiff
to maintain control over these monies.
Therefore, the court grants Defendant Summers’ motion for
restitution and awards attorneys fees.” (November 4 Order, 6-7.)
CCP § 908 states in relevant part:
When the
judgment or order is reversed or modified, the reviewing court may direct that
the parties be returned so far as possible to the positions they occupied
before the enforcement of or execution on the judgment or order. In doing so,
the reviewing court may order restitution on reasonable terms and conditions of
all property and rights lost by the erroneous judgment or order, so far as such
restitution is consistent with rights of third parties and may direct the entry
of a money judgment sufficient to compensate for property or rights not
restored. The reviewing court may take evidence and make findings concerning
such matters or may, by order, refer such matters to the trial court for
determination.
Here, Defendants’ supplemental brief first contends the “$3,624.00
fees requested in the initial Motion for Restitution did not represent the
total amount of fees and costs incurred by Summers to date pertaining to this
Motion,” and instead requests $6,044.50 in attorney fees and costs. (Supp.
Brief, 3-4; Burrows Supp. Decl. ¶¶10-11.) However, such a tally of hours spent
contradicts earlier declarations and representations filed before this court.
Namely, in a declaration filed August 24, 2022, regarding Defendants’ motion
for restitution, counsel Lee E. Burrows (“Burrows”) stated:
“[b]ased
on the foregoing, Summers has incurred or will incur $3,624.00 ($2,325.00 +
$1,239.00 + $60.00) in fees and costs as a result of having to bring the
instant motion for the Court’s determination.”
(Declaration of Lee E. Burrows, Esq. in Support of Defendant
Michael S. Summers’s Motion for Restitution, August 24, 2022, ¶¶11-13.)
Burrows’
Supplemental Declaration filed with this briefing adds an additional .2 hours
to his billing and 7.9 hours to the billing of his senior associate Alexander
Janvelian for work already completed by the August 24, 2022, declaration.
(Burrows Supp. Decl. ¶¶ 5-7.) This court instructed the parties to submit
additional briefing due to the sparse explanation of the requested fee award in
the initial briefing by Defendants and Defendants’ counsel; their failure to
show sufficient entitlement does not justify enrichment. Therefore, any
briefing regarding additional amounts beyond the originally requested $3,624.00
are moot and disregarded by this court. Further, neither Defendants’
Supplemental brief nor the supplemental declaration of Defendants’ counsel provide
further explanation as to the fees and hours requested. Defendants’ brief provides
further analysis of section 908 and justifies an entitlement to attorney fees,
even though this court has already awarded entitlement to attorney fees for
Defendants.
In
opposition, Plaintiff correctly contends Defendants’ supplemental briefing is
untimely as it was submitted on December 1, 2022, and this court’s November 4
Order instructed Defendants “Defendant Summers is to provide further briefing
regarding the $3,624.00 in attorney fees and costs by November 30...” (Opp.
Supp. Brief, 1; November 4 Order, 7.) Further, Plaintiff correctly points out,
“rather
than further briefing the proposed award of attorney’s fees and costs as
directed by the Court, the untimely Supplemental Papers simply repeat, almost
verbatim, the same statement of attorney’s fees and costs already provided in
Summers’ underlying Motion for Restitution, while simultaneously proposing to
increase those costs from $3,624.00 to $6,044.50 for additional time allegedly
billed in connection to the Motion.”
(Opp. Supp. Brief, 1-2.)
However, Plaintiff seeks to have this court reconsider its
November 4 Order and its award of attorney fees by requesting a denial of
attorney fees, prejudgment interest, and a striking of the supplemental papers.
(Opp. Supp. Brief, 2.) Plaintiff also argues that the five-day deadline for any
objections to a proposed order under CRC Rule 3.1312(a) does not apply here as
Plaintiff contends this court’s November 4 Order “supersedes” the deadline
“imposed by statute” and orders briefing by December 30, 2022. (Opp. Supp.
Brief, 2-3.) However, this argument fails as the court’s November 4 Order
provided deadlines for supplemental briefing regarding attorney fees and costs
only, not for any objections made to a proposed order which Defendants were
responsible for submitting. As such, Plaintiff’s objections to the proposed
order filed by Defendants on November 18, 2022, are untimely and further
arguments by Plaintiff are disregarded by this court.
In addressing the requested issue, Plaintiff contends that
both the initial and supplemental briefings of Defendants only “offer a
conclusory explanation of the fees and costs allegedly incurred...” (Opp. Supp.
Brief, 4.) Plaintiff also correctly contends Defendants and their counsel fail
to provide support for the reasonableness of their requested hours and fees.
(Opp. Supp. Brief, 4-6.)
In reply, Summers correctly contends contemporaneous time
records are not required to show the reasonableness of fee awards, citing Wershba
v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255. (Resp. Supp. Brief,
9-10.) Defendant also contends it is Plaintiff’s burden to challenge the
reasonableness of the hours and rates requested. (Id.) However,
Defendants fail to provide further justification as to why such hours were
spent on preparing the original motion, and whether the requested rates are
reasonable given counsel’s experience and skill. Although Defendants cite Mardirossian
v. Ersoff, 153 Cal.App.4th 257 (2007) (“Mardirossian”) for their
contentions, the circumstances in Mardirossian can be distinguished.
Namely, in Mardirossian, the court found:
“each attorney in the instant case had personal knowledge of
the legal services he or she had performed for Ersoff. Notwithstanding the
absence of billing records, each testified at length concerning the work he or
she performed, the complexity of the issues and the extent of the work that was
required.” (Mardirossian, supra, 153 Cal.App.4th at 270-71.)
Burrows’ initial and supplemental declarations do not delve
into such detail.
Thus, the court exercises its discretion under Civil Code § 1717
and reduces the requested fee award by $1,000 to a more reasonable amount. Therefore,
the court grants awards Defendant Summers the amount of $2,624.00 in attorney
fees and costs.
Conclusion
The court grants Defendant Summers’ motion and awards $2,624.00
in attorney fees and costs. Defendant Summers is to give notice.