Judge James C. Chalfant, Case 21STCP02300 2022-10-04 Tentative Ruling

Farhad Nowzari, M.D. v. Torrance Memorial Medical Center Health Care Foundation, et al., 21STCP02300
Tentative decision on motion for attorney’s fees: granted

Respondents Torrance Memorial Medical Center (“Torrance”), erroneously sued as Board of Trustees of Torrance (“Board”); and its Medical Staff, erroneously sued as the Medical Executive Committee of the Medical Staff of Hospital (“MEC”)[1] move for a $71,270.50 award of attorneys’ fees from Petitioner Farhad Nowzari (“Nowzari”).

The court has read and considered the moving papers, opposition,[2] and reply, and renders the following tentative decision.

Petitioner Nowzari commenced this proceeding on July 16, 2021, alleging causes of action for traditional and administrative mandamus and seeking injunctive relief against Board, MEC, Torrance Health Care Foundation (“Hospital”), and Torrance Memorial Integrated Physicians, LLC (“Integrated Physicians”). The verified Petition alleges in pertinent part as follows.

Hospital’s medical staff referred three cases of patient deaths following surgery for peer review to Nowzari’s former partner Dr. Garrett Matsunaga (“Matsunaga”). Matsunaga was the Hospital’s Chief of Urology. Although Matsunaga recognized the appearance of impropriety in reviewing his former partner’s work, he insisted on doing it anyway. Matsunaga reviewed the three cases, consisting of 3000 pages, in only 1.5 hours and concluded that the deaths were due to Nowzari’s negligence and poor judgment. According to Matsunaga, Nowzari suddenly had become a danger to patient safety if allowed to remain on staff.

To avoid the appearance of bias, Matsunaga then selected Dr. Stratton to serve as pro tempore chair of the Urology Surgery Subcommittee (“Urology Subcommittee”, sometimes “Subcommittee”). Timothy Lesser, M.D. (“Lesser”), a doctor who reported Nowzari, and Matsunaga were present at the Urology subcommittee meeting, and they led the interrogation of Nowzari about the three cases without advising him of the issues or giving him an opportunity to prepare.

The medical staff’s lawyer, John Harwell, Esq. (“Harwell”), selected a reviewer, Thomas Rosenthal, M.D. (“Rosenthal”), and informed him of the opinion reached by the Urology subcommittee and its characterization of Nowzari as reckless and dangerous. Rosenthal was provided a select set of records to review, which he used to recommend that the Hospital medical staff suspend Nowzari’s privileges.

The MEC considered the matter on August 22, 2018. At this point, Nowzari hired legal counsel and obtained an outside review from urologist Soroush Ramin, M.D. (“Ramin”) who could not find a credible basis for the criticisms. The MEC withdrew the summary suspension and proposed a complete competency evaluation done by the Physician Assessment and Clinical Education (“PACE”) program at the University of California, San Diego. Nowzari could only assist in surgeries, and hospital consultations would require another practitioner as the primary physician.

On August 24, 2018, the MEC modified the summary suspension of Nowzari’s privileges. MEC restricted Nowzari’s clinical privileges to assisting in surgery and providing inpatient consultations, both of which would require co-management by another urologist. Nowzari was recommended to the PACE program for assessment of competency.

On September 19, 2018, Nowzari demanded a hearing from the MEC decision. James Lahana, Esq. (“Lahana”) was selected as the neutral arbitrator but made no disclosures regarding any past dealings or connections that may invoke a perception of partiality. Lahana’s decision is tainted with the appearance of impropriety.

On February 20, 2019, PACE issued its report to the MEC and not Nowzari, even though he paid half the costs. PACE concluded that Nowzari is competent but observed that Nowzari’s performance on Microcog cognitive screening evaluation indicated a need for further psychological evaluation. PACE issued a category 3 classification of competency.

On March 29, 2019, the MEC accepted PACE’s recommendations. On May 16, 2019, PACE issued an amended report stating that Nowzari met the criteria for a higher competency classification of 2.

In December 2019, Nowzari turned in a neurocognitive/fitness-for-duty assessment from his own professional which stated that he is a competent, skillful, and well-qualified urologist fit to practice his profession. Respondents refused to accept the report.

On March 2, 2021, Lahana issued his decision and found that the MEC’s actions were warranted and necessary. The decision largely adopted the MEC’s position without addressing many of the factual issues or evidence to the contrary.

Nowzari appealed the decision to the Hospital’s Board. On June 16, 2021, the Board issued its decision finding substantial evidence supported the arbitrator’s determination. The decision marginalizes or ignores the compelling facts, evidence, and injustice.

On July 21, 2021, Nowzari served the Petition, summons, and moving papers on Respondent Integrated Physicians by substitute service. He served Respondent Hospital by substitute service on July 26, 2021 and Respondents MEC and Board by substitute service on July 28, 2021.

On September 10, 2021, Respondents Board and MEC filed an Answer. They filed another Answer on November 29, 2021.

On September 30, 2021, Respondents Hospital and Integrated Physicians filed a demurrer with a motion to strike. Respondents Hospital and Integrated Physicians subsequently withdrew the demurrer. On December 9, 2021, Nowzari filed a request for dismissal without prejudice as to Hospital and Integrated Physicians. The court entered dismissal on December 13, 2021.

On May 26, 2022, the court denied the Petition. Judgement was entered on June 10, 2022.

“[A]s a general rule, attorney fees are not recoverable as costs unless they are authorized by statute or agreement.” People ex rel. Dept. of Corporations v. Speedee Oil Change Systems, Inc., (2007) 147 Cal.App.4th 424, 429.

Per Business and Professions Code (“B&P Code”) section 805(b)(2) and (b)(3), the chief of staff of a medical or professional staff or other chief executive officer, medical director, or administrator of any peer review body and the chief executive officer or administrator of any licensed health care facility or clinic shall file a report (“805 report”) with the relevant agency within 15 days after the effective date of (1) the termination or revocation of a licentiate’s membership, staff privileges, or employment; or (2) any new restrictions on staff privileges, membership, or employment for a cumulative total of 30 days or more for any 12-month period, for a medical disciplinary cause or reason. B&P Code §§ 805(b)(2), 805(b)(3).

In any suit brought to challenge an action thereby taken or a restriction thereby imposed, the court shall award to a substantially prevailing party the cost of the suit, including a reasonable attorney’s fee, if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith. B&P Code §809.9. A defendant has not substantially prevailed if the plaintiff obtains an award for damages or permanent injunctive or declaratory relief. Id. A plaintiff has not substantially prevailed if the plaintiff does not obtain such an award. Id. The use of the word “shall” indicates that the award is mandatory. Smith v. Selma Comm. Hosp. (“Smith”) (2010) 188 Cal.App.4th 1, 7, 26.

“Frivolous,” “unreasonable,” “without foundation,” and “bad faith” are separate grounds for an award of fees. Id. at 29-30. There is partial overlap between the terms “without foundation” and “unreasonable” such that a party's litigation conduct may qualify as both. Id. at 33.

“Without foundation” means “baseless, groundless, or without support.” Id. at 30-31. The foundation for an assertion of fact is evidence, whereas the foundation for a contention of law is legal authority. Id. at 31. The record of the proceeding will contain a party's (1) factual assertions and references to the evidence that supports those assertions and (2) legal positions and the authority cited to support those positions. Id. at 31. Based on the nature of the inquiry and the record available, the existence of supporting evidence and authority can be determined as a matter of objective fact. Id. at 31.

To determine if a plaintiff’s conduct was “reasonable” under B&P Code section 809.9, the court should ask whether any reasonable attorney would have thought the claim tenable based on the facts the plaintiff knew when they filed or maintained the action. Id. at 32-33. Whether a party’s conduct in litigating the suit is reasonable depends in part on the positions it took during the litigation. Id. at 26. “[C]onduct in litigating the suit” includes acts taken on specific issues and motions. Id. at 29.

The prevailing party bears the burden of proof as to the reasonableness of any fee claim. CCP §1033.5(c)(5). This burden requires competent evidence as to the nature and value of the services rendered. Martino v. Denevi, (1986) 182 Cal.App.3d 553, 559. “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Id. “‘The reasonable market value of the attorney's services is the measure of a reasonable hourly rate. This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel.’” Center For Biological Diversity v. County of San Bernardino, (2010) 188 Cal.App.4th 603, 619 (citations omitted).

In determining whether the requested attorney’s fees are reasonable, the court’s “first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. The lodestar figure may then be adjusted, based on consideration of facts specific to the case, in order to fix the fee at the fair market value for the legal services provided.” Gorman v. Tassajara Development Corp., (2008) 162 Cal.App.4th 770, 774 (“Gorman”). In adjusting the lodestar figure, the court may consider the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. EnPalm LLC v. Teitler, (2008) 162 Cal.App.4th 770, 774; see also PLCM Group, Inc. v. Drexler, (2000) 22 Cal.4th 1084, 1095.

On September 19, 2018, Nowzari requested a fair hearing from the MEC’s decision. Davenport Decl., ¶2, Ex. A. The parties agreed to arbitration in lieu of a judicial review committee, and the parties exchanged arbitrator candidates. Davenport Decl., ¶2, Ex. A. Nowzari’s attorney, Joel Bryce Douglas, Esq. (“Douglas”), knew Lahana (“Arbitrator”) had served as an arbitrator previously and said that he would be comfortable with him as the Arbitrator. Davenport Decl., ¶2, Ex. A.

During the arbitration hearing on various days from November to December 2020, Douglas observed that Harwell and the Arbitrator’s mouths moved in tandem with each other while both of their microphones were off, as if having a conversation. Davenport Decl., ¶2, Ex. A. He then asserted that this had happened several times earlier when Harwell was off. Davenport Decl., ¶2, Ex. A. Harwell responded that his mouth was not moving except to eat an M&M and that he turned his camera off to look at something else while listening to Nowzari’s answers. Davenport Decl., ¶2, Ex. A. Harwell remarked that Douglas had “a wonderful ability to be casually offensive to suggest that Mr. Lahana and I were talking to each other.” Davenport Decl., ¶2, Ex. A.

On March 3, 2021, Lahana found that the MEC satisfied its burden of proof that Nowzari’s initial summary suspension and subsequent restrictions, including the neuropsychiatric evaluation which he still had not undergone, were reasonable and warranted. Davenport Decl., ¶2, Ex. A.

On March 11, 2021, Nowzari appealed Lahana’s decision to the Board. Davenport Decl., ¶2, Ex. A. Douglas asserted that he had discovered two cases in which Lahana and Harwell had both been involved, including one that was ongoing when Lahana accepted the present assignment. Davenport Decl., ¶2, Ex. A. He also reiterated the allegations of ex parte communication between Lahana and Harwell during the hearing. Davenport Decl., ¶2, Ex. A.

During the appeal hearing, Harwell admitted that he and the Arbitrator have been adversarial or as an advocate and hearing officer four to five times in the last 25 years. Davenport Decl., ¶2, Ex. A. As for the two cases Douglas cited, Lahana had recused himself from one, and the courts had intervened in the other when Lahana and Harwell had agreed to dismiss the case per the hospital’s bylaws. Davenport Decl., ¶2, Ex. A.

On June 16, 2021, the Board issued a decision upholding Lahana’s decision. Davenport Decl., ¶2, Ex. A. As to allegations of bias, it found that California law requires a showing of actual bias and Nowzari never presented evidence that Lahana would be unfair. Davenport Decl., ¶2, Ex. A. The contractual arbitration law cited by Nowzari does not apply to the hospital peer review process, which has its own set of fair procedure laws. Davenport Decl., ¶2, Ex. A. Because any evidence of the professional history between Lahana and Harwell was publicly available before the hearing, Nowzari could not raise the objection on appeal after he failed to seek the information before the hearing. Davenport Decl., ¶2, Ex. A. The Board also found no evidence in the record that Lahana and Harwell engaged in ex parte communications. Davenport Decl., ¶2, Ex. A.

On July 26, 2021, Nowzari filed the Petition. Pedroza Decl., ¶3. The MEC’s counsel, Kenneth Pedroza, Esq. (“Pedroza”), warned Douglas that Integrated Physicians and the Hospital were not proper Respondents. Pedroza Decl., ¶3. When Nowzari refused to dismiss them, Pedroza was compelled to file a demurrer on September 30, 2021. Pedroza Decl., ¶3.

During a case management conference on October 21, 2021, the court ordered that the parties meet and confer as to the proper entities to the suit. Pedroza Decl., ¶4. Nowzari did not dismiss the Petition against Integrated Physicians and the Hospital until after Torrance and the MEC filed an Answer on November 29, 2021. The demurrer remained on calendar until then. Pedroza Decl., ¶5.

In his briefs, Nowzari asserted that (1) he did not receive a fair hearing because the Arbitrator failed to make mandatory arbitrator disclosures and had a symbiotic relationship with Harwell, (2) the Arbitrator had improper ex parte contacts with Harwell during the testimony, and (3) the Board’s and the Arbitrator’s decisions were not supported by substantial evidence. Davenport Decl., ¶2, Ex. A.

On May 26, 2022, the court held the trial on the Petition. Pedroza Decl., ¶9; Davenport Decl., ¶3, Ex. B. The court adopted its tentative decision. Davenport Decl., ¶3, Ex. B. On June 10, 2022, the court entered the judgment. Pedroza Decl., ¶9; Davenport Decl., ¶2, Ex. A.

Cassidy Davenport, Esq. (“Davenport”) has been an appellate specialist since 2014. Davenport Decl., ¶4; Pedroza Decl., ¶13. She billed a reduced rate of $325 per hour for this case. Davenport Decl., ¶4; Pedroza Decl., ¶13.

Pedroza has been an appellate specialist for the past 15 years and has worked on over 100 cases. Pedroza Decl., ¶12. He billed a reduced rate of $360 per hour for this case. Pedroza Decl., ¶12.

Scott Klausner, Esq. (“Klausner”) is an associate that has handled a variety of matters before various courts. Pedroza Decl., ¶14. He billed a reduced rate of $285 per hour for this case. Pedroza Decl., ¶14.

Paralegal Isabel Betran (“Betran”) worked on this case at a reduced rate of $130 per hour. Pedroza Decl., ¶15.

The MEC’s counsel kept daily time records of tasks performed in this case and the time expended thereon to the nearest tenth of an hour, from which the firm prepares monthly billing statements. Davenport Decl., ¶5; Pedroza Decl., ¶¶ 17-19. Counsel has compiled the information from these statements into a single summary table identifying the hours spent on each type of task – 242.7 hours across six categories. Davenport Decl., ¶5; Pedroza Decl., ¶¶ 21-22, Ex. C. Counsel has also calculated the total number of hours each attorney and paralegal spent, which includes: (1) 56.5 hours by Pedroza for a total bill of $20,340; (2) 132.2 hours by Davenport for a total bill of $42,965; (3) 6.1 hours by Klausner for a total bill of $1,738.50; and (4) 47.9 hours by Beltran for a total of $6,227. Pedroza Decl., ¶23, Ex. C. This total fees are $71,270.50. Pedroza Decl., ¶23, Ex. C. The tasks performed, time spent, and hourly rates were reasonable and necessary. Pedroza Decl., ¶25.

When Douglas and Harwell first agreed to an arbitration hearing, Douglas had his concerns about Harwell. Douglas Decl., p. 1.[4] He therefore rejected one of Harwell’s recommendations for arbitrator because she has a close working relationship with Harwell. Douglas Decl., p. 1. In contrast, Douglas had worked with the Arbitrator before, found him fair, and did not know he had any ties to Harwell. Douglas Decl., p. 1. Harwell told Douglas that the Arbitrator was serving as a hearing officer in a non-peer review matter at the time, but neither Harwell nor the Arbitrator disclosed any past relationship. Douglas Decl., p. 1.

Although the Arbitrator allowed Harwell to delay various proceedings and resist discovery during the two years that followed, he was polite and professional; Douglas assumed that he just wanted to foster cooperation between parties. Douglas Decl., p. 1. During the hearing, however, the Arbitrator appeared to help a witness avoid the questions Douglas asked during cross-examination. Douglas Decl., p. 2. The Arbitrator and Harwell made a joke about fairness not being the concern of the hearing, which disturbed Nowzari. Douglas Decl., p. 2.

Douglas then noticed multiple instances of Harwell and the Arbitrator looking at each other on mute and appearing to have ex parte communication, which became the basis for the arguments made in the Petition. Douglas Decl., p. 2. Douglas confronted them, and it stopped. Douglas Decl., p. 2.

After the Arbitrator issued a decision against Nowzari and refused to disclose past relationships, Douglas decided to research the Arbitrator and Harwell. Douglas Decl., p. 2. He discovered the cases he brought to the Board’s attention. Douglas Decl., p. 2.

Nowzari and Douglas advanced all arguments made in their briefs on the Petition with a good faith belief in their merit. Douglas Decl., p. 1.

Respondent MEC moves for an award of $71,270.50 award of attorneys’ fees from Petitioner Nowzari under B&P Code section 809.9.

Nowzari notes that the answer to a complaint shall contain a statement of any new matter constituting a defense to provide fair notice to the plaintiff. CCP §431.30(b). He asserts that the MEC was required to assert its right to attorney’s fees under B&P Code section 809.9 in their Answer and their failure to do so waives an award of attorney’s fees. Opp. at 14.

As the MEC notes (Reply at 7), statutory attorney’s fees need not be pleaded or proved at trial and may properly be awarded after entry of judgment. Faton v. Ahmedo (“Faton”) (2015) 236 Cal. App. 4th 1160, 1169. Because statutory attorney’s fees are a separate issue for which Nowzari did not need notice in the Answer, the MEC did not waive their right to pursue attorney’s fees.

Nowzari asserts that because the court’s decision did not address attorney’s fees and Nowzari has appealed the decision, the court cannot consider the motion for attorney’s fees. Opp. at 14-16.

The general rule is that once a judgment has been entered, the trial court loses its unrestricted power to change that judgment. Craven v. Crout, (1985) 163 Cal. App. 3d 779, 782. The court retains power to correct clerical errors in a judgment which has been entered, but it may not amend such a judgment to substantially modify it or materially alter the rights of the parties under its authority to correct clerical error. Id. at 782. Additionally, the perfecting of an appeal stays trial court proceedings upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order. CCP §916(a). However, the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order. Id. CCP §916(a).

As the MEC notes (Reply at 5), it is well established that the superior court retains jurisdiction to award attorneys’ fees despite the existence of an appeal. Domestic Linen Supply Co., Inc. v. L J T Flowers Inc. (2020) 58 Cal.App.5th 180, 187. The MEC’s motion for attorney’s fees is not affected by Nowzari’s appeal.

The MEC seeks attorney’s fees on the ground that Nowzari’s conduct in litigating the mandamus action was unreasonable and without foundation under B&P section 809.9. The MEC notes that Nowzari raised three issues at trial: (1) he did not receive a fair hearing because the Arbitrator failed to make mandatory arbitrator disclosures and had a symbiotic relationship with the MEC’s counsel; (2) the Arbitrator had improper ex parte contacts with the MEC’s counsel during Nowzari’s testimony; and (3) the Board’s appeal decision was not supported by substantial evidence. Mot. at 7-8.

“Without foundation” means “baseless, groundless, or without support.” Smith, supra, 188 Cal.App.4th at 30-31. The foundation for an assertion of fact is evidence, whereas the foundation for a contention of law is legal authority. Id. at 31. The record of the proceeding will contain a party's (1) factual assertions and references to the evidence that supports those assertions and (2) legal positions and the authority cited to support those positions. Id. at 31. The existence of supporting evidence and authority can be determined as a matter of objective fact. Smith, supra, 188 Cal.App.4th at 31.

To determine if a plaintiff’s conduct was “reasonable” under B&P Code section 809.9, courts ask whether any reasonable attorney would have thought the claim tenable based on the facts the plaintiff knew when they filed or maintained the action. Id. at 32-33. This depends in part on the positions it took during the litigation. Id. at 26. “[C]onduct in litigating the suit” includes acts taken on specific issues. Id. at 29.

The court found that Nowzari only presented CCP section 1286.2(a)(6)(A) for the first time in reply and utterly failed to analyze the mandatory disclosure issue. Dec. at 18. Moreover, the California Arbitration Act (“CAA”) applies to private arbitration and its disclosure requirements do not apply to a peer review arbitrator. Dec. at 19-20. Nowzari presented no legal basis to support his contention that disclosures were required. As a result, this argument lacked legal foundation.

Both the Board and the court found that that California law requires a showing of actual bias and Nowzari failed to present any evidence of actual bias. Dec. at 23. In fact, Nowzari admitted in reply that he had not shown actual bias. Dec. at 23-24. The issue of actual bias lacked factual foundation.

Nowzari’s supporting attorney declaration alleged that the Arbitrator and Harwell communicated ex parte during the hearing. Nowzari argued that the reporter's transcript documents the Arbitrator’s and Harwell’s disturbing behavior of talking to each other off video and that they did not directly deny doing so when they were confronted.

The court found this to be a scurrilous and unsupported accusation. Nowzari’s attorney may have had the right to question what the Arbitrator and Harwell were doing during the hearing, but his argument that there was an ex parte communication between the two is based on conjecture and speculation without supporting evidence. Both the Arbitrator and Harwell denied that they were talking to each other. At the Board appeal hearing, Harwell provided further explanation. Contrary to Nowzari’s contention, Harwell did not admit that he and the Arbitrator may have been talking and nowhere on the cited page did he so state. Nowzari’s accusation against Harwell and the Arbitrator was for serious misconduct and Nowzari had no business making the accusation without a good faith basis and his attorney’s observations on the Zoom video were insufficient to constitute a good faith basis. Whatever his suspicions, they had no business in a brief. Dec. at 26. The claim of ex parte communication completely lacked factual foundation.

Finally, Nowzari’s opening brief argued that the Board’s decision was not supported by substantial evidence in only two sentences. As Nowzari failed to explain what evidence he presented, what evidence the MEC presented, and why his evidence was more substantial, the issue was waived. In any event, the Board’s decision was based on substantial evidence. Dec. at 27. The claim that the Board’s decision lacked substantial evidence lacked legal and factual foundation. All of these claims also were unreasonable because no reasonable attorney would have thought the claims tenable based on the facts known to Nowzari when he filed or maintained the action.

In opposition, Nowzari asserts that the court ignored most of the evidence of the Arbitrator’s partiality in rendering its decision, including his decision to not disclose past dealings with Harwell, his tolerance of Harwell’s attempts to delay proceedings, interference with Douglas’s cross-examination of witnesses, alleged ex parte communication, frustration at Nowzari and Douglas for highlighting it in his decision, and a decision that was overall one-sided. Opp. at 17-18.

Nowzari asserts that there was strong legal basis for the argument that this rendered his hearing unfair. There is no authority that the affirmative duty of a neutral arbitrator under the CAA to voluntarily disclose any history or matter could entertain doubt that he could be impartial in the case does not apply to a neutral arbitrator in a hospital fair hearing. In the absence of precedent, the logical interpretation is that the purpose of such rules is to allow the parties to make an informed decision about the prospective neutral and these disclosures are required. Opp. at 18.

Nowzari alleges that his attorney’s observations during the arbitration hearing had to mean there was some form of ex parte communication between the Arbitrator and Harwell. Opp. at 19; Douglas Decl., p. 2. Finally, the only reason Nowzari cannot show that substantial evidence does not support the Board’s decision is that the Arbitrator ignored all the evidence in Nowzari’s defense. Opp. at 19-20.

These arguments were addressed by the court in its decision. Nowzari not only failed to show that the CAA applies to a neutral arbitrator in a hospital privileges hearing, he failed to even show that the CAA disclosure requirements would have required a disclosure. Actual bias of the Arbitrator must be shown, and Nowzari admitted that he had no evidence of actual bias. Nowzari’s arguments about ex parte communication were fully addressed in the court’s decision; it is one thing to suspect such a communication and another to allege such misconduct without adequate evidence. Finally, Nowzari misstates the substantial evidence issue; it is not what the Arbitrator allegedly ignored that was important but rather what evidence was in the record.

The MEC is entitled to its attorney’s fees because Nowzari’s arguments lacked legal or factual foundation and were unreasonable.

The court employs the lodestar analysis when looking to determine the reasonableness of an attorney’s fee award. The lodestar figure is calculated by multiplying the number of hours reasonably spent by the reasonable market billing rate. Serrano v. Priest, (1977) 20 Cal.3d 25, 48. The petitioner bears the burden of proof as to the reasonableness of any fee claim. CCP §1033.5(c)(5). This burden requires competent evidence as to the nature and value of the services rendered. Martino v. Denevi, (1986) 182 Cal.App.3d 553, 559. “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” Id.

“In challenging attorney 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. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” Lunada Biomedical v. Nunez, (2014) 230 Cal.App.4th 459, 488.

Nowzari asserts that the block billing of 242.70 hours does not provide evidentiary support for the claimed fees. Opp. at 21; see Pedroza Decl., ¶¶ 21-22, Ex. C. He further asserts that if the Petition was baseless, the MEC’s counsel would not have done as much work as claimed. Opp. at 21.

The MEC’s counsel’s block billing summary breaks down the hours claimed into six tasks, and it shows the total amount of work that each attorney or paralegal performed. Pedroza Decl., ¶¶ 21-22, Ex. C. While the MEC could have been more specific, there is nothing wrong with block billing per se. Nowzari does not dispute the number of hours spent on a specific task, the hourly rate for any attorney, or number of hours worked per attorney.

Given the issues of disclosure, bias, and ex parte communication raised by Nowzari, the hours are reasonable. The MEC also points out that Nowzari refused to dismiss the Petition against the wrong parties which forced them to file a demurrer until Nowzari agreed to dismiss the Petition two months later. Pedroza Decl., ¶¶ 3, 5.

The motion for an award of attorneys’ fees of $71,270.50 against Nowzari under B&P Code section 809.9 is granted.

During oral argument, the court concluded that Nowzari had a foundation for his argument that Lahana as a neutral arbitrator had a duty to disclose his past interactions with Harwell under CCP section 1281.9. The question became whether the MEC can recover attorney’s fees in whole or in part when only two of issues raised lacked foundation or were unreasonable.

The parties met and conferred on September 27, 2022 as to whether the MEC can recover attorneys’ fees for a partial victory and for what amount. Davenport Supp. Decl., ¶2. They failed to reach a consensus. Davenport Supp. Decl., ¶2.

As a threshold matter, the MEC attempts to reargue whether Nowzari had a foundation for his arbitrator disclosure issue. The MEC points out that Nowzari’s trial brief only cited two authorities governing private arbitrators as indirect support for his position: CCP §1286.2(a)(6)(A)(vacate award for failure to make mandatory disclosure) and Malek Media Group, LLC v. AXQG Corp., (2020) 58 Cal. App. 5th 817, 828, citing Haworth v. Superior Court, (2010) 50 Cal. 4th 372, 388-90 (neutral arbitrator not required to disclose public censure as a judge under CCP section 1281.9(a) for matters that could cause a person to reasonably entertain a doubt of impartiality). Pet. Op. Br. at 19. The MEC notes that the court found that Nowzari presented no meaningful legal analysis and argues that this means that his argument lacked foundation. MEC Supp. Br. at 1-2.

The court has addressed this issue and reached the opposite conclusion. While Nowzari’s argument lacked analysis, it was not “baseless, groundless, or without support.” See Smith, supra, 188 Cal.App.4th at 30-31.

For his part, Nowzari’s supplemental brief continues to defend his contention that Lahana and Harwell had unlawful ex parte contact. Pet. Supp. Br. at 3-4. This also is a matter which the court has finally decided and need not be further discussed.

The MEC asserts that it is entitled to full attorney’s fees, citing Smith, supra, 188 Cal.App.4th at 36, which held that a party that wins on some positions during the litigation does not prevent a conclusion that it acted in bad faith in bringing the action. Further, because the statute used the phrase “substantially prevailing party,” partial success on some issues should not allow the non-prevailing party to defeat an otherwise valid motion for attorney’s fees. Id. at 36. MEC Supp. Br. at 2-3.

As the MEC anticipates (MEC Supp. Br. at 3) and Nowzari argues (Pet. Supp. Br. at 4-5), Smith is distinguishable as a bad faith case under B&P Code section 809.9. Smith, supra, 188 Cal.App.4^th at 34-36, 42. This court based its award of fees on lack of foundation and unreasonableness. However, Smith expressly stated that “if partial success on some issues was to be a reason for denying a motion under section 809.9, the statute would not have used the term ‘substantially prevailing party.’ The modifier ‘substantially’ indicates that a party can be entitled to fees and costs without prevailing on all of the pointes raised in the litigation.” 188 Cal.App.4^th at 36. MEC Supp. Br. at 3. While Smith is distinguishable, its point about substantially prevailing party is well-taken for any of the four statutory bases for recovery of fees.

Nowzari’s argument that B&P Code section 809.9 only penalizes bad faith conduct and not “un-winning arguments” is incorrect. Smith is clear that the four statutory bases are separate grounds for an award of fees. 188 Cal.App.4th at 30. The three objective standards – unreasonableness, unfoundedness, and frivolity – depend on the positions the losing party took in the litigation. Id. at 37.

Nowzari also argues that any interpretation of B&P Code section 809.9 must avoid a chilling effect on peer review and a practitioner’s right to seek appeal. See In re Marriage of Flaherty, (“Flaherty”) (1982) 31 Cal. 3d 637, 650. Pet. Supp. Br. at 4. The court agrees that this principle must be kept in mind in interpreting the statute.

B&P Code section 809.9 provides that the court shall award attorney’s fees to a substantially prevailing party “if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith.” There is no question that the MEC is the prevailing party and that Nowzari’s conduct in litigating the case lacked foundation and was unreasonable on the principal ground raised (the ex parte issue), as well as on the substantial evidence issue. At most, Nowzari raised the arbitrator disclosure issue without any legal analysis. Nothing in the statute prevents the court from parsing attorney’s fees on issues that lacked foundation from those that had a foundation. Giving Nowzari the benefit of the doubt to avoid a chilling effect, the MEC is awarded two-thirds of the requested $71,270.50, or $47,513.67.

The motion for an award of attorneys’ fees against Nowzari under B&P Code section 809.9 is granted in the amount of $47,513.67.

[1] As the court consistently has referred to the Medical Staff as the MEC, it will continued to do so herein.

[2] Petitioner Nowzari failed to file a courtesy copy of his opposition in violation of the Presiding Judge’s First Amended General Order Re: Mandatory Electronic Filing.

[3] Both parties present evidence concerning the underlying accusation against Nowzari – the MEC uses the summary of facts from its opposition at trial (Mot. at 4-6) and Nowzari relies on an attached Appendix (Opp. at 8, n. 1). The underlying facts are irrelevant to this motion.

[4] Douglas fails to number the paragraphs of his declaration. The declaration also includes more personal attacks and legal arguments than evidence.