Judge: Holly J. Fujie, Case: 20STCP04290, Date: 2022-09-29 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

Case Number: 20STCP04290    Hearing Date: September 29, 2022    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

AND RELATED CROSS-ACTION

MOVING PARTY: Defendants Brian Kennedy and Regency Outdoor Advertising, Inc. (collectively, “Moving Defendants”)

RESPONDING PARTY: Plaintiff

            The Court has considered the moving, opposition and reply papers. 

BACKGROUND

            This action arises out of a business relationship and alleged wrongdoing related to the termination of the business relationship.  Plaintiff initiated this action on December 31, 2020 by filing a complaint and petition for writ of mandate (the “Complaint”) alleging: (1) writ of mandate pursuant to Corporations Code section 17704.10 and California Code of Civil Procedure (“CCP”) section 1085; and (2) declaratory relief.  On August 10, 2021, Plaintiff filed a second amended complaint (the “SAC”) alleging: (1) breach of written contract; (2) breach of contract; (3) breach of fiduciary duty; (4) false promise; (5) fraud – concealment; (6) breach of duty of good faith and fair dealing; (7) fraudulent transfer; (8) intentional interference with contract; (9) accounting; (10) declaratory relief; (11) declaratory relief; (12) unjust enrichment; (13) conversion; and (14) unfair business practices pursuant to Business and Professions Code section 17200.[1]

            On September 10, 2021, Moving Defendants filed a special motion to strike portions of the SAC (the “anti-SLAPP Motion”).  The anti-SLAPP Motion targeted allegations concerning the first, third, fourth, and fifth causes of action in the SAC.  On December 2, 2021, the Honorable Richard J. Burdge Jr. granted the anti-SLAPP Motion to paragraphs 63, 79, and 135-136 of the SAC and the allegations at pages 39:5-8, 39:10-12, 39:12-14 of the SAC, all of which concerned the fifth cause of action for fraudulent concealment.  Judge Burdge denied the anti-SLAPP Motion as to the remainder of the targeted allegations.  In addition, Judge Burdge rejected Plaintiff’s argument that Moving Defendants were judicially estopped from filing the anti-SLAPP Motion. 

            On January 31, 2022, Moving Defendants filed a motion to recover attorney’s fees and costs pursuant to CCP section 425.16, subdivision (c) (the “Motion”).  Moving Defendants seek a total amount of $26,577.18, which represents: (1) fees in the amount of $14,650 for work performed by attorneys in connection to the anti-SLAPP Motion; (2) fees in the amount of $10,850 in fees for work performed by attorneys in connection to the Motion; and (3) costs related to both the anti-SLAPP Motion and instant Motion in the amount of $1,015.53.

DISCUSSION

            Under CCP section 425.16, subdivision (c)(1), a prevailing defendant on an anti-SLAPP motion shall be entitled to recover his or her attorney’s fees and costs.  (CCP § 425.16, subd. (c)(1).)  The reasonableness of an award of attorney’s fees sought by a defendant prevailing on an anti-SLAPP motion is within the sound discretion of the trial judge.  (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 659.)  In the anti-SLAPP context, an award of fees may include not only the fees incurred with respect to the underlying claim, but also the fees incurred in enforcing the right to mandatory fees under CCP section 425.16.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1141.) 

Prevailing Party

The term “prevailing party” must be interpreted broadly to favor an award of attorney’s fees to a partially successful defendant.  (Lin v. City of Pleasanton (2009) 176 Cal.App.4th 408, 425-26.)  A party who partially prevails on an anti-SLAPP motion must generally be considered a prevailing party unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion.  (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 340 (“Mann”).)  The determination whether a party prevailed on an anti-SLAPP motion lies within the broad discretion of a trial court.  (Id.)  The relevant test to evaluate the import of the benefit gained by a defendant as the result of a partially successful anti-SLAPP motion is not whether the defendant¿gained the most important benefit; rather, it is whether the defendant obtained a practical benefit.  (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 783.)  A prevailing defendant is only entitled to recover the attorney’s fees and costs related to the special motion to strike, not the entire action.  (Jackson v. Yarbray (2009) 179 Cal.App.4th 75, 92.) 

It is undisputed that Moving Defendants’ anti-SLAPP Motion was granted in part.  Plaintiff’s opposition (the “Opposition”) argues that Moving Defendants should not be deemed prevailing defendants, notwithstanding the partial success of the anti-SLAPP Motion, because the scope of the anti-SLAPP Motion’s success is inconsequential to this litigation as a whole.  In support of this position, the Opposition cites to Moran v. Endres (2006) 135 Cal.App.4th 952 (“Moran”).

In Moran, the plaintiffs brought suit against the defendants on numerous different tort causes of action.  (Moran, supra, 135 Cal.App.4th at 953.)  The defendants brought a special motion to strike the entire complaint but only succeeded in striking a cause of action for civil conspiracy.  (Id. at 954.)  After the trial court denied the defendants’ ensuing request for attorney’s fees and costs, the defendants appealed.  (Id.)  The court of appeal affirmed the trial court’s decision on the basis that the defendants’ anti-SLAPP motion resulted in “only the most illusory victory.”  (Id.)  The Moran court reasoned that the defendants gained no real benefit from their special motion to strike because the factual allegations they faced were not changed when the conspiracy cause of action was stricken since that cause of action incorporated the factual allegations made in the remaining causes of action and that as a legal matter, the conspiracy claim added little or nothing to the plaintiff’s case.  (Id.)  Since the defendants had to defend against the same allegations regardless of the viability of the conspiracy claim, “the case was essentially the same after the ruling on the special motion to strike as it was before” and the motion’s results were “minimal and insignificant,” which justified the denial of fees.  (Id. at 955.)  

The Court finds that Moran is distinguishable.  Here, while Defendants did not succeed on the entirety of the anti-SLAPP Motion, they successfully challenged allegations concerning the fraudulent concealment cause of action, which was an independent basis for relief.  Furthermore, the anti-SLAPP Motion successfully targeted allegations central to the fraudulent concealment claim.^[2]  As a result, Moving Defendants successfully narrowed the scope of the lawsuit, limited discovery, reduced potential recoverable damages, and altered the settlement posture of the case.  (See Mann, supra, 139 Cal.App.4th at 340.)  The Court therefore finds that Moving Defendants prevailed on the anti-SLAPP Motion and are entitled to recover fees and costs they incurred in connection to their challenges to the allegations that the anti-SLAPP Motion successfully targeted.  (See Jackson v. Yarbray (2009) 179 Cal.App.4th 75, 92.) 

Reasonableness of Moving Defendants’ Fees

It is well established that the amount of an attorney’s fee award under the anti-SLAPP statute is computed by the trial court in accordance with the lodestar method.  (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 432.)  Under the lodestar method, the court tabulates the attorney’s fee touchstone, or lodestar, by multiplying the number of hours reasonably expended by the reasonable hourly rate prevailing in the community for similar work.  (Id.)  The lodestar may be adjusted based on factors such as: (1) the novelty and difficulty of the questions involved; (2) the skill displayed in presenting them; (3) the extent to which the nature of the litigation precluded other employment by the attorneys; and (4) the contingent nature of the fee award.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)  In determining the lodestar amount, a prevailing party generally may not recover for work on causes of action on which the party was unsuccessful.  (Mann, supra, 139 Cal.App.4th at 342.)  The court should first determine the lodestar amount for the hours expended on the successful claims, and, if the work on the successful and unsuccessful causes of action was overlapping, the court should then consider the defendant's relative success on the motion in achieving his or her objective and reduce the amount if appropriate.  (Id. at 344-45.)

The party seeking fees has the burden of documenting the appropriate hours expended and hourly rates.  (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 784.)  A defendant can carry its burden of establishing its entitlement to attorney’s fees by submitting a declaration from counsel instead of billing records or invoices.  (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 487-88; City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 785.)  In challenging attorney’s fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence.  (Id. at 488.)

 If an attorney has been awarded attorney’s fees for comparable work at comparable hourly rates in other actions, the hourly rate will be deemed reasonable.  (Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th 462, 473-74.)  Where an opposing party does not produce evidence contradicting the reasonableness of the moving party’s counsel’s hourly rates, the court will deem an attorney’s hourly rate reasonable.  (Id. at 473.) 

            Attorneys Nannina L. Angioni (“Angioni”) and Sarah A. Swanson (“Swanson”) billed time for work performed on behalf of Moving Defendants in connection to both the anti-SLAPP Motion and the instant Motion.  Moving Defendants present evidence that Angioni spent at least 42.2 hours working on the anti-SLAPP Motion, eight of which were spent on work related to the fraudulent concealment cause of action.  (Declaration of Nannina L. Angioni (“Angioni Decl.”) ¶ 2.)  Angioni’s hourly rate is $687 per hour.  (Angioni Decl. ¶ 6.) 

Swanson spent approximately 140.6 hours working on the anti-SLAPP Motion, 23 of which were spent on work related to the fraudulent concealment cause of action.  (See Declaration of Sarah A. Swanson (“Swanson Decl.”) ¶¶ 2-25.)  Swanson’s hourly rate is $398 per hour.  (Swanson Decl. ¶ 27.) 

In addition, Moving Defendants request fees in connection to the present Motion for 10 hours of work performed by Angioni, which represents: (1) approximately four hours in connection to the moving papers; (2) an anticipated 3 hours working on the reply papers; and (3) an anticipated 3 hours preparing for and attending the hearing.  (Angioni Decl. ¶ 3.)  Moving Defendants also seek fees in connection to the present Motion for 10 hours of work performed by Swanson, which represents: (1) five hours preparing the moving papers; and (2) an anticipated five hours preparing the reply papers.  (Swanson Decl. ¶¶ 24, 28.)^[3] 

Moving Defendants provide further evidence that they incurred $1,077.18 in costs in connection to the anti-SLAPP Motion and the present Motion, which represents: (1) $26.20 for the anti-SLAPP Motion filing fee; (2) $61.65 for the anti-SLAPP Motion hearing reservation; (3) $927.68 for the court reporter fee for the hearing of the anti-SLAPP Motion; and (4) a $61.65 filing fee for the Motion.  (See Swanson Decl. ¶ 29, Exhibits G-H.) 

Plaintiff does not contest the reasonableness of the hourly rates of Moving Defendants’ counsel or challenge any of the claimed costs.  Rather, Plaintiff argues that Moving Defendants’ fee recovery should be reduced because of the limited success of the anti-SLAPP Motion and because Moving Defendants seek fees for duplicative work.  The Court is not persuaded by these arguments because while the Angioni and Swanson Declarations account for the total amount of time expended on the anti-SLAPP Motion, both isolate the work performed in connection to the fraudulent concealment cause of action.  Further, Moving Defendants do not seek fees in connection for the work Plaintiff argues is redundant.  (See Opposition 5:6-11.)  

The Court therefore GRANTS the Motion and awards Moving Defendants fees in the reasonable amount of $19,388, which represents: (1) $5,496 for eight hours of work performed by Angioni in connection to the anti-SLAPP Motion at an hourly rate of $687 per hour; (2) $9,154 for 23 hours of work performed by Swanson in connection to the anti-SLAPP Motion at an hourly rate of $398 per hour; (3) $2,748 for four hours of work performed by Angioni in connection to the present Motion at an hourly rate of $687 per hour; and (4) $1,990 for five hours of work performed by Swanson in connection to the Motion at an hourly rate of $398 per hour.  The Court further finds that Moving Defendants are entitled to the full amount of the costs claimed in the Motion.  

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

         Dated this 29th day of September 2022

Ruling:

DAVID SEYDE,                         Plaintiff,             vs.   BRIAN KENNEDY, et al.,                         Defendants.

CASE NO.: 20STCP04290   [TENTATIVE] ORDER RE: DEMURRER/ MOTION TO STRIKE TO THIRD AMENDED COMPLAINT BY DEFNDANTS NTGS ACQUISITION, LLC; NEW TRADITION MEDIA, LLC; GAW CAPITAL ADVISORS, LLC; SPECTRUM FINANCIAL SERVICES, INC.; AND BRYAN MARTIN   Date:  September 29, 2022 Time: 8:30 a.m. Dept. 56

MOVING PARTY: Defendants NTGS Acquisition, LLC; New Tradition Media, LLC; Gaw Capital Advisors, LLC; Spectrum Financial Services, Inc.; and Bryan Martin (“NTGS Defendants”)

RESPONDING PARTY: Plaintiff, David Seyde (“Plaintiff”)

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

On December 31, 2020, Plaintiff filed this action. On August 10, 2021, Plaintiff filed a Second Amended Complaint (“SAC”), naming NTGS Defendants. NTGS Defendants filed a demurrer as to the SAC. In lieu of opposition to this demurrer, Plaintiff filed the operative Third

Amended Complaint (“TAC”) on March 8, 2022. The TAC alleges, in relevant part, intentional interference with contract against Defendants. (TAC ¶¶ 138-147.)

Following meet and confer efforts, Defendants filed this Motion to Demurrer, concurrently with a Motion to Strike, on May 12, 2022. Defendants demur as to the intentional interference of contract cause of action on the grounds that it fails to state facts sufficient to state a claim and is uncertain.

On September 1, 2022, Plaintiff moved for leave to amend TAC and file Fourth Amended Complaint (“4AC”). NTGS Defendants objected to this motion.

Significantly, Plaintiff’s proposed 4AC eliminates all claims against New Tradition, GAW, Spectrum, and Bryan Martin. (See Wilson Decl. in Support of Motion, Ex. A.) The proposed 4AC also adds to the TAC’s intentional interference of contract cause of action that Defendants demur to. (See id. at Ex. A. ¶¶111-116.)

When a plaintiff files an amended complaint after a demurrer is filed, but before it is decided, the demurrer must be overruled as moot. (JKC3H8 v. Colton (2013) 221 Cal.App.4th 468, 477.) Because this Court has granted Plaintiff’s motion for leave to amend the TAC and file the 4AC, Defendant’s motion for demurrer and concurrent motion to strike as to the TAC is MOOT.

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated on this 29th day of September 2022

___________________________

Hon. Holly J. Fujie

Judge of the Superior Court

Ruling:

DAVID SEYDE,                         Plaintiff,             vs.   BRIAN KENNEDY, et al.,                         Defendants.

CASE NO.: 20STCP04290   [TENTATIVE] ORDER RE: MOTION FOR LEAVE TO AMEND THIRD AMENDED COMPLAINT AND FILE FOURTH AMENDED COMPLAINT   Date:  September 29, 2022 Time: 8:30 a.m. Dept. 56 MOVING PARTY: Plaintiff, David Seyde RESPONDING PARTY: Defendants NTGS Acquisition, LLC; New Tradition Media, LLC; Gaw Capital Advisors, LLC; Spectrum Financial Services, Inc.; and Bryan Martin (“NTGS Defendants”); Defendants Brian Kennedy; Regency Outdoor Advertising, Inc.; Skyline Outdoor Media, LLC; Corona Outdoor Advertising, Inc.; West Hollywood Properties, LLC; Westminster Outdoor, Inc.; and KBS Holdco, LLC (“Kennedy Defendants”). The Court has considered the moving, opposition, and reply papers. BACKGROUND On December 31, 2020, Plaintiff filed this action. On August 10, 2021, Plaintiff filed a Second Amended Complaint (“SAC”). On March 8, 2022, Plaintiff filed the Third Amended Complaint (“TAC”). NTGS Defendants filed a Motion to Demurrer and Motion to Strike as to the TAC. On September 1, 2022, Plaintiff moved for leave to amend TAC and file Fourth Amended Complaint (“4AC”.) Defendants have filed an opposition, and Plaintiff has filed a reply. The Court notes that Plaintiff’s counsel circulated the proposed 4AC to all defendants and sought a stipulation to file the 4AC. (Wilson Decl. ¶ 26, Ex. U.) DISCUSSION “The court may, in its discretion and after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading.” (Cal. Code Civ. Pro. § 473(a)(1).) As judicial policy favors resolution of all disputed matters between the parties, leave to amend is generally liberally granted. (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 412.) The court may deny the plaintiff’s leave to amend if there is prejudice to the opposing party, such as delay in trial, loss of critical evidence, or added costs of preparation. (Id.) Procedural Considerations A motion to amend a pleading before trial must (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph and line number, the deleted allegations are located; and (3) state what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located. (Cal. Rules of Court, rule 3.1324(a).) A separate supporting declaration must accompany this motion specifying (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reason why the request for amendment was not made earlier must accompany the motion. (Id., rule 3.1324(b).) Plaintiff’s motion and accompanying declaration has met the requirements under California Rules of Court Rule 3.1324. Plaintiff’s declaration includes (1) a copy of the proposed amended complaint (Wilson Decl. Ex. A) and (2) a copy of redline comparing the differences between TAC and 4AC (Wilson Decl. Ex. B). In addition, Plaintiff’s declaration explains the effect of the amendment: “[t]he proposed 4AC adds and expands causes of action … increase efficiency and decrease motion practice because it eliminates numerous defendants, removes multiple causes of action, and moots several pending motions.” (Wilson Decl. ¶ 32.) Plaintiff’s counsel asserts that the proposed 4AC is “necessary and proper… to allow Plaintiff to assert meritorious causes of action against Defendants.” (Id.) Additionally, Plaintiff asserts that the Plaintiff did not seek proposed amendments earlier because Plaintiff’s counsel was substituted into the case in July and, after review of the case file, determined that a 4AC was necessary. (Id. at ¶ 33.) Opposing Defendants assert that the motion is procedurally defective because Plaintiff does not “adequately outline when the…facts became known and why they are now being presented in a manner different from earlier versions,” (NTGS Opp. 7:3-14), and that Plaintiff “failed to explain what the ‘new facts’ even are, let alone when they were discovered.” (Kennedy Opp. 9:15-27.) However, California Rules of Court Rule 3.1324 does not require this explanation of the new facts, only when they were discovered and why the amendment was not made earlier. Plaintiff meets this requirement by asserting that the facts were discovered in July when new counsel was substituted in and reviewed the case file. Substantive Considerations Motions for leave to amend will normally be granted, unless the party seeking to amend has been dilatory in bringing the proposed amendment before the court and the delay in seeking leave to amend will cause prejudice to the opposing party. (See Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 759-761.) Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, or increased burden of discovery. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.) Plaintiff asserts that the motion for leave to amend is timely because it will not cause a trial delay because no trial date has been set, no parties have filed an answer, only one defendant has just recently filed a cross-complaint, no party has produced discovery, and there are pending demurrers and motions to strike the TAC. (Motion 13:22-14:19; Reply 3:13-18.) Defendants assert that the motion is untimely, and they will be prejudiced if Plaintiff was granted leave to amend. NTGS Defendants state that they are prejudiced because it has been 18 months and it is Plaintiff’s fifth amended complaint, forcing Defendants to incur hours of attorney time and fees. (NTGS Opp. 11:7-14.) Additionally, NTGS Defendants state that New Tradition, GAW, Spectrum, and Mr. Martin (members of NTGS Defendants) will be prejudiced because they will be dismissed without prejudice, allowing them to be haled into court later. (Id. at 11:15-19.) Kennedy Defendants also assert that they will be prejudiced if Plaintiff is granted leave to amend because (1) Plaintiff’s new fraud cause of action is improper and previously dismissed, and (2) the First Cause of Action for Breach of Contract and Third Cause of Action for Breach of Fiduciary Duty interject new legal theories that the court has previously ruled on and will subject the 4AC to another anti-SLAPP motion. (Kennedy Opp. 10-13.) Defendants’ facts are insufficient to show prejudice resulting from a delay in filing the 4AC. The fact that a pleading has already been amended “is not, by itself, sufficient grounds for denying further leave to amend.” (Douglas v. Superior Court (1989) 215 Cal. App. 3d 155, 158.) Additionally, the fact that the amendment involves a change in legal theory is not the kind of prejudice the court will consider. (Hirsa, supra, 118 Cal.App.3d at 490.) The Court also finds no prejudice resulting in defendants being eliminated from the 4AC, and Defendants cite to no case law to assert this position. Further, leave to amend was not requested near trial because there is no trial date scheduled, and there are no assertions by defendants that the amendment will lead to increased burdens of discovery or a loss of evidence. Therefore, the Court finds Defendants will not be prejudiced if Plaintiff’s request for leave to amend is granted. Plaintiff’s motion for leave to amend the TAC and file 4AC is GRANTED. Moving Party is ordered to give notice of this ruling. Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. Dated on this 29th day of September 2022 ___________________________ Hon. Holly J. Fujie Judge of the Superior Court