Judge John J. Kralik, Case EC065007 2023-05-05 Tentative Ruling

Plaintiffs Secret Recipes, Inc., Hovik Grigorian, and Andreh H. Koygani filed the Second Amended Complaint (“SAC”) on November 28, 2016 against Defendants Felix Lopez, Luis Rodriguez, and Oak Escrow Inc., alleging causes of action for: (1) specific performance; (2) breach of contract; (3) conversion; (4) constructive trust; (5) fraud; (6) breach of fiduciary duty; (7) negligence; (8) IIED; (9) money had and received; (10) rescission of contract; and (11) declaratory relief.

On February 23, 2021, Cross-Complainants Felix Lopez and Luis Rodriguez (“Cross-Complainants”) filed the Third Amended Cross-Complaint (“TAXC”) against Cross-Defendants Secret Recipes, Grigorian, and Koygani, alleging causes of action for: (1) defamation; (2) slander; (3) statutory unfair competition (Bus. & Profs. Code, §17200); (4) successor-in-interest liability; (5) creditor’s suit; (6) preliminary and permanent injunctive relief; (7) action against guarantor on guaranty; and (8) declaratory relief. The 1^st, 2^nd, 3^rd, and 6^th, and 8^th causes of action were against all Cross-Defendants. The 4^th, 5^th, and 7^th causes of action were against Koygani and Grigorian.

On April 18, 2022, the Court held a hearing regarding the status of representation of Secret Recipes, Inc. (“SRI”). The Court struck the SAC filed on November 28, 2016 as to SRI only, as well as all pleadings filed on behalf of SRI only. On May 4, 2022, the default of SRI was entered “per Court’s order dated April 18, 2022.”

On July 15, 2022, the Court granted Lopez and Rodriguez’s motion to dismiss this action based on the Five-Year Rule. The Court ordered Lopez, Rodriguez, and Loracast, Inc. in the SAC filed by Grigorian et al. on November 28, 2016 to be dismissed without prejudice. The Court noted that the Fifth[1] Amended Cross-Complaint (filed February 23, 2021) was still pending in the action.

On September 12, 2022, Defendants Lopez and Rodriguez moved for $172,932.50 in attorney’s fees pursuant to the Court’s July 15, 2022 order dismissing Plaintiffs SRI, Grigorian, and Koygani’s complaint. The Court granted the motion for attorney’s fees on December 9, 2022 in the total amount of $143,135.50.

The matter came for a non-jury trial on December 12, 2022. At the trial, Cross-Complainants Lopez and Rodriguez orally moved to dismiss the 1^st, 2^nd, 3^rd, 4^th, 5^th, 6^th, and 8^th causes of action with prejudice. (The Court notes that the minute order incorrectly notes that “Plaintiff” orally moved to dismiss these causes of action.) As such, the only remaining cause of action in Cross-Complainants’ TAXC was the 7^th cause of action.

On January 3, 2023, the Court entered the Judgment After Trial by Court. The Judgment stated in relevant part on page 4:

Defendants/Cross-Complainants Felix Lopez and Luis Rodrigues [sic] are entitled to judgment against Hovik Grigorian and Andreh Koygani and Secret Recipes jointly and severally in the amount of $211,703.40 on the seventh cause of action for enforcement of guaranty.

Per Court’s order dated December 9, [20]22, Defendants and Cross-Complainants were awarded $143,135.00 in Attorney’s fees incurred for defense of the complaint. Per the Court’s direction those amounts are included herein:

On February 8, 2023, Defendants Lopez and Rodriguez filed a motion for attorney’s fees in the amount of $72,885 pursuant to the Judgment entered on January 9, 2023, arguing that they are the prevailing parties as to their cross-action. (See Notice of Motion at p. ii; Mot. at p. 4.)

(a) 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.

(b)(1) The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.

(2) Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.

(Civ. Code, §1717(a).) “When a contract or a statute authorizes the prevailing party to recover attorney fees, that party is entitled to attorney fees incurred at trial and on appeal.” (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 250.)

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.)
The 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. (Id.) The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. (Id.) Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary. (Id.) No specific findings reflecting the Court’s calculations are required. (Wershba v. Apple Computer, Inc. (2001) 91 Cal. App. 4th 224, 254-255.) The record need only show that the attorney fees were awarded according to the ‘lodestar' approach. (Id.)

Defendants move for attorney’s fees pursuant to the Judgment entered on January 9, 2023, wherein they argue they were the prevailing parties on their cross-complaint.

Plaintiff moves for attorney’s fees on appeal pursuant to CCP §§ 1021 and 1717.

The Agreement to Purchase Assets, ABC and Building Lease entered between Rodriguez sand SRI states:

15. Attorneys Fee. If either party files a [sic] action or bring [sic] any proceedings against the other arising from this agreement, … the prevailing party shall be entitle [sic] to recover as an element of its costs of suit, and not as damages, reasonable attorney fee [sic] to be fixed by the court.

The Sublease entered between Grigorian and Koygani (buyers) and Lopez (seller) also states:

11. Attorney’s fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights thereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred….

In addition, the AIR CRE – Guaranty of Lease entered between Rodriguez (lessor), SRI (lessee), and Grigorian and Koygani (guarantors) includes a provision as follows:

In the event any action be brought by said Lessor against Guarantors hereunder to enforce the obligation of Guarantors hereunder, the unsuccessful party in such action shall pay to the prevailing party therein a reasonable attorney’s fee. The attorneys’ fee award shall not be computed in accordance with any court fee schedule but shall be such as to fully reimburse all attorneys’ fees reasonably incurred.

Defendants argue that based on these contract provisions, they have shown that they are entitled to attorney’s fees for work performed on the cross-complaint. They argue that they have prevailed on their 7^th cause of action for action against guarantor on the guaranty in the cross-complaint. According to the Guaranty agreement, the unsuccessful party (i.e., Koygani and Grigorian) shall pay to the prevailing party (Lopez and Rodriguez) reasonable attorney’s fees. As judgment was entered in favor of Cross-Complainants Lopez and Rodriguez on the 7^th cause of action for the amount of $211,703.40, the Court finds that they are the prevailing party on their cross-complaint. (See Civ. Code, § 1717.)

Here, the Court finds that Defendants have established their entitlement to attorney’s fees against Plaintiffs.

Defendants move for attorney’s fees in the amount of $72,885, or an anticipated $75,760. (Mot. at p.4; Abramson Decl., ¶14.)

Mr. Abramson states that his billing rate is $375/hour and that associate billing is at $100/hour. (Abramson Decl., ¶12.) He provides his billing records in Exhibit E. (Id., ¶14, Ex. E.) He states that he omitted billing entries for work performed on the main action that was already awarded pursuant to the December 9, 2022 attorney’s fees award and omitted billing for work performed on various appeals, unless such tasks were necessarily and integrally related to the prosecution of the cross-action. (Id.) He states that he expended 115 hours prosecuting the cross-action, which is reasonable for the time he spent since April 28, 2017 (or $43,125). (Id., ¶15.) He states that his associates billed 297.6 hours over the course of the action (or $29,760). (Id.) Mr. Abramson states that the billing records account for the requested $72,885 amount, but that he seeks an additional $1,000 (10 hours x $100/hour for associate billing for drafting this motion), and an additional $1,875 for the anticipated time to review the opposition, draft a reply brief, and attend the hearing (5 hours x $375/hour). In total, he seeks $75,760. (Id., ¶¶14-15.)

The Court finds the hourly rates to be reasonable and will award fees at the rates requested.

The Court has also reviewed the billing records and finds that the time billed by Mr. Abramson and his associates is reasonable for the work performed on the cross-complaint. However, the Court will reduce the anticipated time spent by Mr. Abramson on reviewing the opposition/drafting a reply brief as the motion is not opposed. Thus, the Court declines to award 4 additional hours as requested by Mr. Abramson.

Thus, the Court will allow the following attorney’s fees: (1) 115 hours of work billed by Mr. Abramson at $375/hour, or $43,125; (2) 296.7 hours of work billed by his associates at $100/hour, or $29,760; (3) 10 hours to draft this motion by his associates at $100/hour, or $1,000; and (4) 1 hour to attend the hearing by Mr. Abramson at $375/hour, or $375. This totals $74,260.

Defendants/Cross-Complainants Felix Lopez and Luis Rodriguez’s motion for attorney’s fees is granted in the amount of $74,260.

[1] Although the minute order states that the Fifth Amended Cross-Complaint is still pending, the cross-complaint filed by Lopez and Rodriguez on February 23, 2021 is titled “Third Amended Cross-Complaint.”

Superior Court of California

County of Los Angeles

Department B