Judge: Glenn R. Salter, Case: 19-1065287, Date: 2022-10-06 Tentative Ruling

Defendant The Masters Building, LLC, filed a motion for attorney fees.

As part of the settlement of this matter, the parties agreed that defendant could seek reasonable attorney fees as the prevailing party.  Thus, the only issue is the reasonableness of the fees sought.

In assessing a motion for attorney fees, the court must first determine the number of hours spent and the reasonable hourly rate of the attorneys providing those services.  “The reasonable hourly rate is that prevailing in the community for similar work.”  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)

The trial court is given broad discretion in valuing the professional services rendered in a particular case.  “In making its calculation, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees . . . the difficulty or complexity of the litigation to which the skill was applied . . . and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases.”  (569 E. County Boulevard, LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 436-437.)

The defendant seeks attorney fees in the amount of $198,987.00.  This is comprised of fees throughout the case in the amount of $188,231.00 as well as $10,756.00 for fees incurred in preparing and arguing the motion.

The court notes that the plaintiffs filed and served untimely objections to the declaration of Christopher Bitzer.  However, the court will exercise its discretion to consider those objections on the merits.  Objection Nos. 1 and 6 are SUSTAINED because of the mediation privilege.  Objection Nos. 2-5 and 7-32 are OVERRULED.

The court further notes that the opposition is 19 pages, or four pages over the page limit set forth in Rule 3.1113(d) of the Rules of Court.  However, the court will exercise its discretion to consider the entire opposition.

The Nature of the Case

This is a dispute over a commercial lease.  The facts listed here are a distilled version of what appears in the court’s file.

The defendant leased the premises to the plaintiff.  But when the plaintiff discovered it would need a conditional use permit from the city because of parking issues, the plaintiff backed out and filed a complaint against the defendant for breach of contract, breach of the covenant of good faith and fair dealing, rescission, fraud-concealment, professional negligence, and breach of fiduciary duty.  The claim was that the defendant and the broker altered the description of plaintiff’s business in order to bypass city ordinance parking space requirements.

The defendant filed a cross-complaint for breach of the written lease, breach of the written guaranty, and declaratory relief.  In essence, it sought the rent it claimed was owing.

The case was prepared for trial in accordance with Orange County Local Rule 317.  The case trailed and was later continued.  Following several mediation attempts, the matter settled with the plaintiff agreeing to pay a large sum of money.  The parties stipulated defendant was the prevailing party and that it could file a motion for contractual attorney fees.

Hourly Rates

The defendant was represented here by the first-tier Orange County law firm of Callahan & Blaine.

Most of the work on the case was done by Brett Bitzer, a 12-year litigator who graduated Order of the Coif.  His hourly rates were $495 when the case started and $560 from March 2021 onwards.

Other work was done by Joseph Klatt, another 12-year litigator who graduated at the top of his class.  His hourly rate was $560.

The senior partner in charge was Edward Susolik, a 32-year litigator who graduated Order of the Coif.  His hourly rate was $795 when the case started and $875 from March 2021 onward.

The plaintiff argues that the hourly rates are far above the prevailing rates in the Orange County market for this type of straight-forward commercial lease dispute.  And, the plaintiff frequently quotes a comment from defendant’s counsel that this was a “straight-forward case” and thus a request for $200,000 in attorney fees is outrageous.  What the plaintiff fails to acknowledge, however, is that the comment was made in reference to the cross-complaint, which was a straight-forward request for rent.  It was not a comment on the complaint that accused the defendants of fraudulent concealment and breach of fiduciary duties among other very serious allegations.  The complaint was neither simple nor straight-forward.

The plaintiff cites to Natural-Immunogenics Corp. v. Newport Trial Group (C.D.Cal. Oct. 19, 2017) 2017 WL 10574254, as evidence that the hourly rates here are excessive for the local legal community.  The plaintiff also cites to Snow Joe, LLC v. Linemart, Inc. (C.D.Cal. Aug. 16, 2022) 2022 WL 3446032 which found $525 to be a reasonable hourly rate for a partner with more than 20 years of experience in intellectual property litigation.

However, the mere fact that lower hourly rates have been found to be reasonable in other cases does not preclude the court from finding the rates charged here reasonable under the circumstances.  Rates similar to these have been found reasonable in other cases.  (See, e.g., Tee Turtle, LLC v. Abmask (C.D.Cal., Jul. 8, 2021) 2021 WL 4812947 [$755 hourly rate for a partner with 20 years of experience reasonable]; Rolex Watch USA, Inc. v. Zeotec Diamonds, Inc. (C.D.Cal., Aug. 24, 2021) 2021 WL 4786889 [$552.50 hourly rate for a 5-year associate reasonable].)

The plaintiff makes other arguments on various minor issues.  The court rejects them.

The court finds the defendant has presented sufficient evidence to establish the reasonableness of the hourly rates charged here.  Thus, the rates are found reasonable for a first-tier law firm in the local legal community for the nature of the work performed in this type of case.

Number of Hours

The defendant claims the law firm spent a total of 380.7 hours on this matter.  Included within the papers are billing statements from February 2021 to August 2022 when the case settled.

The court has reviewed the billing statements and finds that, for the most part, the entries are appropriate and are therefore approved.

However, the court agrees with the plaintiff that the following billing entries are improper and should not be allowed.

The following are overlapping and redundant.  On March 1, 2021, there are two entries for attorney Bitzer for 0.10 each for drafting an e-mail to Ignacio Lazo enclosing a substitution of attorney form to be signed and returned.  On May 13, 2021, there are two entries from attorney Susolik for 0.50 hours each for telephonic conferences with the team regarding trial strategy, trial preparation, issues conference, witness and expert lists.  And on May 28, 2021, there are two entries for Bitzer for 2.10 hours each for reviewing, revising, and editing cross-examination of Dr. Qazi.

The court strikes the following task-based billings.  On March 11, 2021, there are three entries by Bitzer for 0.10 hours each for drafting e-mails to opposing counsel regarding the court’s order granting a trial continuance.  On December 2, 2021, there are three entries by Bitzer for 0.10 hours each for reviewing tentative ruling and e-mailing with counsel regarding same.  On August 5, 2022, there are two entries by Bitzer for 0.10 hours each for e-mailing with counsel regarding defendant’s counter demand and preparation for trial.

The court also strikes the fees related to the voluntary dismissal of cross-defendant Jazzar.  On February 19, 2021, there is an entry by Bitzer for 0.90 hours for reviewing Jazzar’s mediation briefs and exhibits.  On March 2, 2021, there is an entry by Bitzer for 0.50 hours for reviewing Jazzar’s motion for judgment on the pleadings.  On March 11, 2021, there are entries by Bitzer for a total of 1.00 hours for drafting a proposed settlement agreement with Jazzar, reviewing edits and response from opposing counsel.  On March 16, 2021, there is an entry by Bitzer for 0.10 hours for e-mailing Jazzar’s counsel regarding settlement agreement.  On March 17, 2021, there are entries by Bitzer for a total of 0.40 hours regarding settlement agreement with Jazzar.  On March 23, 2021, there are entries by Bitzer for a total of 0.40 hours regarding notice of settlement with Jazzar and withdrawal of Jazzar’s motion for judgment on the pleadings.  On March 26, 2021, there are entries by Bitzer for a total of 0.30 hours for drafting request for dismissal of Jazzar and settlement check.  On April 8, 2021, there are three entries by Bitzer for a total of 0.30 hours for correspondence with counsel for Jazzar.

Based on the above, the court finds that the amount of fees requested must be reduced as follows:  (1) striking a total of 6.60 hours from the Bitzer total (at $560 per hour), bringing the total number of hours down to 164.80 from 171.40 and the fee down to $92,288.00 from $95,984.00; and (2) striking a total of 0.50 hours from Susolik (at the rate of $875 per hour), bringing the total number of hours down to 24.50 from 25.00 and the fee down to $21,437.50 from $21,875.00.

The plaintiffs argue that the paralegal fees billed are not recoverable or, in the alternative, the hourly rate and number of hours should be reduced.  However, they cite no authority in support of the claim paralegal fees are not recoverable.

The plaintiffs correctly argue the billing invoices show the paralegal’s hourly rate was $195 up to June 2021, and not $265 referenced in the motion and Bitzer’s declaration in support.  The billing records show that 64.30 hours were billed by Eggleston at the $195 per hour rate and 44.40 were billed at the $265.00 per hour rate.  Thus, the court finds that the total amount in fees incurred by the paralegal must be reduced to $24,304.50 from the claimed $28,752.50.

Finally, the plaintiffs argue the $412.50 fees incurred by the legal secretary should not be allowed because there is no evidence that this legal secretary meets the requirements of Business and Professions Code section 6450.  However, the plaintiffs do not cite any authority that fees incurred by a legal secretary cannot be included, or may only be charged if the secretary is also a paralegal.

Attorney Fees Award

Based on the above, the defendant’s motion for attorney fees is GRANTED in the total amount of $190,405.50.

Notice

The defendant shall give notice.