Judge: John J. Kralik, Case: 23PDUD04099, Date: 2025-04-11 Tentative Ruling

Case Number: 23PDUD04099    Hearing Date: April 11, 2025    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff V&S Complete Auto Repairs, Inc. (“Plaintiff”) filed the First Amended Complaint for unlawful detainer against Defendants Ara Ohanjanyan and Arman Arutyunyan (“Defendants”) on December 13, 2023.  The property at issue is located at 7139 Foothill Blvd., Tujunga, CA 91042.  Plaintiff alleges that the parties entered into a written lease agreement on July 27, 2017.  Plaintiff alleges that it served a 3-day notice to pay rent or quit, and the period for Defendants to comply expired on November 17, 2023.  Plaintiff seeks possession of the premises, costs incurred in the proceeding, past due rent of $11,000, reasonable attorney’s fees, forfeiture of the agreement, and damages at the rate of $366.67 per day beginning December 1, 2023. 

B.     Motion on Calendar

On February 10, 2025, Defendants Ara Ohanjanyan and Arman Arutyunyan filed a motion for attorney’s fees in the amount of $34,385.00. 

On March 28, 2025, Plaintiff V&S Complete Auto Repairs, Inc. filed an opposition brief.

On April 3, 2025, Defendants filed a reply brief.

LEGAL STANDARD

            Civil Code, § 1717 states that a party may recover attorney’s fees when the party prevails in an action based on a contract that provides for the prevailing party to recover attorney’s fees.  The court, upon notice and motion by a party, shall determine who is the prevailing party on the contract for purposes of section 1717, whether or not the suit proceeds to final judgment.  (Civ. Code, § 1717(b)(1).) 

The trial court has broad authority to determine the amount of a reasonable fee.  (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)  The award of attorney fees under section 1717 is governed by equitable principles.  (Id.)  The experienced trial judge is the best judge of the value of professional services rendered and the trial judge’s decision will not be disturbed unless the appellate court is convinced that it is clearly wrong, i.e., that it abused its discretion.  (Id.) 

DISCUSSION

A.    Timeliness of Motion

California Rules of Court, Rule 3.1702 states, in relevant part:

(b) Attorney’s fees before trial court judgment

            (1) Time for motion

A notice of motion to claim attorney's fees for services up to and including the rendition of judgment in the trial court--including attorney's fees on an appeal before the rendition of judgment in the trial court--must be served and filed within the time for filing a notice of appeal under rules 8.104 and 8.108 in an unlimited civil case or under rules 8.822 and 8.823 in a limited civil case.

(CRC Rule 3.1702(b)(1).)  Pursuant to CRC Rule 8.822, a notice of appeal must be filed on or before the earliest of: (A) 30 days after the trial court clerk serves the party filing the notice of appeal a document entitled “Notice of Entry” of judgment or a filed-endorsed copy of the judgment, showing the date it was served; (B) 30 days after the party filing the notice of appeal serves or is served by a party with a document entitled “Notice of Entry” of judgment or a filed-endorsed copy of the judgment, accompanied by proof of service; or (C) 90 days after the entry of judgment. 

In opposition, Plaintiff argues that this motion is untimely and, therefore, must be denied.  Plaintiff argues that Defendants were required to file the motion within 30 days from the issuance of the Court’s summary judgment order, as damages were excluded from the case, or by February 7, 2025.  Defendants filed this motion on February 10, 2025. 

The Court held a hearing on the motion for summary judgment on December 27, 2024 and took the matter under submission.  On January 8, 2025, it ruled on the submitted matter and mailed the minute order to defense counsel on January 8, 2025. 

Here, while the Court entered and caused to be served the order granting Defendants’ motion for summary judgment, it did not cause a “Notice of Entry” of judgment or a filed-endorsed copy of the judgment to be served.  As such, the time limitations under subsections (A) and (B) do not apply.  Even under the alternative 90-day time limitation, the filing of the motion on February 10, 2025 would be timely, as it would have been field 33 days after the January 8, 2025 order on the motion for summary judgment.  There is no issue with timeliness. 

The Court will consider the substantive merits of the motion.  

B.     Entitlement to Attorney’s Fees

Defendants argue that they are entitled to attorney’s fees pursuant to Civil Code, § 1717.  They argue that under the terms of the Lease Agreement, they are entitled to fees. 

Exhibit B of the motion includes the Commercial Lease Agreement, which states on page 3 under “LEGAL FEES”:

All parties to this agreement hereby acknowledge to have received advice of their respective attorney before signing this contract.  In the event of any legal action by the parties arising out of this Sublease, the prevailing party shall be entitled to all reasonable attorney’s fees and costs in addition to all other relief.

(Mot., Ex. B [emphasis in original].)  The agreement is signed by V&S Complete Auto Repairs, Inc. (through Vigan Sardariani, president) and Defendants. 

On January 8, 2025, the Court granted Defendants’ motion for summary judgment (unlawful detainer).  The Court ruled only as to the matter of possession and monetary issues between the parties were subject to determination in the related proceedings.  Thus, Defendants are the prevailing party in this action. 

In opposition, Plaintiff argues that Defendants’ entitlement to fees is premised upon a sublease agreement that Defendants argued and the Court effectively concluded was illegal and therefore unenforceable, such that Plaintiff was not lawfully in possession of the premises.  Plaintiff argues that Defendants cannot argue that they were not bound by the sublease and yet seek to recover attorney’s fees based on it.  Plaintiff relies on Yuba Cypress Housing Partners, Ltd. v. Area Developers (2002) 98 Cal.App.4th 1077, 1081–1082.  In the Yuba case, the Court of Appeal stated:

Ordinarily, in an action on a contract providing for an award of attorney fees, Civil Code section 1717 entitles the prevailing party to attorney fees, even when the party prevails on the ground that the contract is inapplicable, invalid, unenforceable, or nonexistent, if the other party would have been entitled to attorney fees had it prevailed. (Hsu v. Abbara (1995) 9 Cal.4th 863, 870 [39 Cal.Rptr.2d 824, 891 P.2d 804].) This general rule “serves to effectuate the purpose underlying section 1717,” which was enacted to establish mutuality of remedy where a contractual attorney fee clause makes recovery of fees available for only one party. (Ibid.)

However, as noted in Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832 [247 Cal.Rptr. 340] (hereafter Bovard) and Geffen v. Moss (1975) 53 Cal.App.3d 215 [125 Cal.Rptr. 687, 79 A.L.R.3d 1232] (hereafter Geffen), “a different rule applies where a contract is held unenforceable because of illegality.” (Bovard, supra, 201 Cal.App.3d at p. 843; Geffen, supra, 53 Cal.App.3d at p. 227.) “A party to a contract who successfully argues its illegality stands on different ground than a party who prevails in an action on a contract by convincing the court the contract is inapplicable, invalid, nonexistent or unenforceable for reasons other than illegality.” (Bovard, supra, 201 Cal.App.3d at p. 843.) Because courts generally will not enforce an illegal contract, there is no need for a mutual right to attorney fees since neither party can enforce the agreement. (Id. at pp. 838, 843.)

(Yuba, supra, 98 Cal.App.4th at 1081–1082.)  “A party to a contract who successfully argues its illegality stands on different ground than a party who prevails in an action on a contract by convincing the court the contract is inapplicable, invalid, nonexistent or unenforceable for reasons other than illegality.”  (Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 843.)  A contract is “unlawful” where it is contrary to an express provision of the law, contrary to the policy of express law, or otherwise contrary to good morals.  (Civ. Code, § 1667.)

            Here, the Court did not find that the agreement was “illegal” or contrary to public policy or the law.  Rather, the Court found that Defendants upheld their burden in showing that Plaintiff lacked an ongoing possessory interest in the property.   (See 1/8/25 Order at 4:1-3.)  The Court made no statements that the lease agreement was “illegal.”  As such, attorney’s fees may be sought and recovered by Defendants pursuant to the lease terms. 

C.     Reasonableness of Attorney’s Fees

Defendants seek $34,385.00 in attorney’s fees. 

            In support of the motion, Defendants provide the declaration of their counsel Raymond Zakari.  Mr. Zakari states that he bills at an hourly rate of $650/hour, which he believes is reasonable and within the industry standard for attorneys of his experience and expertise.  (Zakari Decl., ¶5.)  He states that he bills in units of 0.2 increments.  (Id., ¶6.)  He provides the dates and times he billed for this action, which amounts to 52.9 hours for a total of $34,385.00.  (Id., ¶7.)  He states that he deleted time spent that was unproductive or not directly related to this action.  (Id., ¶8.) 

            In opposition, Plaintiff argues that the attorney’s fees sought include time related to more than this UD action and that the $650 hourly rate is “outrageous.”

The Court will reduce the hourly rate from $650 to $500/hour, which the Court finds reasonable for the work performed in this UD action.

a motion to strike, discovery and depositions, attending hearings, meet and confer efforts, and for filing this motion.  The Court finds that the tasks performed were reasonable in time.  However, some of the time billed may become duplicative to other fees sought (such as depositions conducted).  At this time, the Court will allow the recovery of fees for discovery and depositions conducted but may reduce fees in the future if Defendants are deemed the prevailing parties in the other related actions so that they do not doubly recover fees for time already accounted for by way of this motion.

Thus, the total amount of fees awarded shall be $26,450.00 (= $500/hour x 52.9 hours). 

CONCLUSION AND ORDER

Defendants Ara Ohanjanyan and Arman Arutyunyan’s motion for attorney’s fees is granted in the amount of $26,450.00.

Defendants shall provide notice of this order. 

DATED: April 11, 2025                                                         ___________________________

                                                                                          John Kralik

                                                                                          Judge of the Superior Court