Judge: Gary Y. Tanaka, Case: 20TRCV00504, Date: 2022-08-30 Tentative Ruling

Case Number: 20TRCV00504    Hearing Date: August 30, 2022    Dept: B

PROCEEDINGS

1300 Highland Shops and Work Lofts Association v. BWMB, LLC, et al.

20TRCV00504

1. BWMB, LLC’s Motion for Attorneys’ Fees and Costs   

    

    

   TENTATIVE RULING

   
   

               BWMB, LLC’s Motion for Attorneys’ Fees and Costs is granted, in part.

    

               Background

    

               Plaintiff 300 Highland Shops and Work Lofts Association (“Highland”) filed its Complaint on July 23, 2020.  Plaintiff alleges the following facts.  Defendants commenced construction of a coffee shop and made unauthorized modifications to the common areas, which violate the Conditions, Covenants and Restrictions (CC&Rs) which govern the subject property.  Plaintiff seeks to enjoin Defendants from continuing with any construction, modifications or improvements to Unit 109 and the common areas of 1300 Highland.  Plaintiff seeks to require Defendants to restore all unapproved completed modifications to the common area of 1300 Highland to their original condition.  Plaintiff seeks to enjoin Good Boy Bob, Inc. from operating a coffee shop in Unit 109 which violates the CC&Rs.  Plaintiff set forth causes of action for: (1) Breach of CC&Rs; (2) TRO/Preliminary Injunction; (3) Declaratory Relief. The parties proceeded to arbitration and a final arbitration award was made on July 15, 2021. Defendant’s petition to confirm the arbitration award was granted on January 7, 2021.

    

               Motion for Attorneys’ Fees

    

               Civ. Code, § 1717(a) states, in relevant part: “In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.  . . . Reasonable attorney's fees shall be fixed by the court, and shall be an element of the costs of suit.”

    

               The Court determines the prevailing party on contract claims “upon final resolution of the contract claims and only by a comparison of the extent to which each party ha[s] succeeded and failed to succeed in its contentions.” Hsu v. Abbara (1995) 9 Cal.4th 863, 876 (internal quotations omitted). When a party obtains an unqualified victory by prevailing on or defeating a contract claim, that party is entitled to attorneys’ fees. Scott Co. of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109. Other non-contract claims that are joined in the action are disregarded for purposes of analyzing contract based attorneys’ fees motions. Thus, even if a party may have been successful on a non-contract claim, the party who prevailed on the contract is entitled to attorneys’ fees pursuant to Section 1717. Santisas v. Goodin (1998) 17 Cal.4th 599, 615; Korech v. Hornwood (1997) 58 Cal.App.4th 1412, 1419-22.

    

               Defendant moves for attorneys’ fees and costs pursuant to Section 8 of Article XXXIV of the CC&Rs which states: “Any judgment rendered in any action or proceeding pursuant to this Declaration shall include a sum for attorneys’ fees in such amount as the Court ... may deem reasonable in favor of the prevailing party plus costs.” (Motion, page 4, lines 18-20).  Defendant also moves for attorneys’ fees expended in “defeating the injunctions that Plaintiff obtained and sought.” (Motion, page 3, line 3).

    

               “The trial court has “broad authority” to determine the amount of a reasonable attorneys’ fees.  PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.  “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.”  Id. [“California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award.”].  “The experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.”  Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 (internal quotation omitted.) 

    

               Thus, Defendant is entitled to attorneys’ fees under the lodestar method based on the reasonable amount of time the attorney spent multiplied by a reasonable rate.  Defendant requests the following: $111,777.00 for attorneys’ fees and $3,644.03 in costs; $20,000 as damages for attorneys’ fees expended in defeating the injunction.

    

               As to the $3,644.03 in costs, the request to grant costs with this motion is rejected and denied.  Costs are recoverable via a timely filed memorandum of costs, which can then be subject to challenge with a timely filed motion to tax costs.

    

               As to the $20,000.00 in damages related to attorneys’ fees expended to defeat the injunction, this request is also rejected and denied.  “It is now well settled that reasonable counsel fees and expenses incurred in successfully procuring a final decision dissolving the injunction are recoverable as ‘damages' within the meaning of the language of the undertaking, to the extent that those fees are for services that relate to such dissolution. Thus, a successful appeal from an order granting an injunction, after notice and hearing, gives rise to liability on the bond for damages in the amount of the attorney's fees incurred in prosecuting that appeal. If the preliminary injunction is valid and regular on its face, requiring the defendant to defend against the main action in order to demonstrate that the injunction was wrongfully issued, the prevailing defendant may recover that portion of his attorney's fees attributable to defending against those causes of action on which the issuance of the preliminary injunction had been based.” Abba Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 15–16 (internal citations and quotations omitted).  It cannot be disputed that Defendant prevailed at arbitration which resulted in the vacating of the preliminary injunction.  This was one of the consequences of the arbitration proceeding and one of the findings and orders of the arbitrator.  However, the fees attributable to defeating the injunction were already included in the arbitrator’s award of reasonable attorneys’ fees of $61,992.12.  Requesting an additional $20,000 would result in a windfall as the attorneys’ fees in defeating the injunction were already encompassed in the arbitration award.

    

               As to the request for attorneys’ fees expended in this action, the motion is granted in part.  The Court begins the analysis with noting that Defendant requested $42,532.50 in attorneys’ fees with its petition to confirm arbitration filed on July 28, 2021.  It is difficult to conceive how Defendant could incur nearly an additional $70,000 in attorneys’ fees since that date.  The Court will begin the analysis utilizing the originally sought fee of $42,532.50.  From that amount the Court deducts $17,569.50 (22.1 hours at $795.00) for charges that are deemed unnecessary, excessive, and/or which were actually incurred to defend the arbitration proceeding.  The Court deducts certain fees related to the arbitration in the sum of $4,425.00 for arbitration.  The Court deducts fees for depositions of $3,480.00 which should have been sought pursuant to a memorandum of costs.  Thus, this leaves the following amount for the amount incurred at the time the petition to confirm arbitration being filed: $17,058.00. The Court determines that a reasonable amount of attorneys’ fees incurred following the petition is $19,080 which constitutes 24 hours at $795.00 per hour.

    

               Therefore, Defendant’s motion for attorneys’ fees is granted, in part.  The amount of reasonable attorneys’ fees is fixed in the sum of $36,138.00.

    

               Defendant is ordered to give notice of this ruling.