Judge: Jon R. Takasugi, Case: 19STCV43458, Date: 2022-09-28 Tentative Ruling

Case Number: 19STCV43458    Hearing Date: September 28, 2022    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

            The Changs’ motion for attorney fees is CONTINUED to allow them to address the deficiencies identified herein.

On 1/17/2020, Plaintiff filed a first amended complaint (FAC) against Lah-Eaton, LLC, Joel H. Chang, Chieko Dan, Suretec Insurance Company, and One Ventures, LL, alleging: (1) breach of contract; (2) action on mechanics lien release bond; (3) enforcement of mechanics liens; and (4) common counts

            On 4/20/2022, the Court granted an order to expunge Plaintiff’s mechanics lien.

            On 6/15/2022, the Court granted the Changs motion for judgment on the pleadings.

            Now, the Changs move for attorney fees totaling $22,000.

Legal Standard 

The party claiming attorneys’ fees must establish entitlement to such fees and the reasonableness of the fees claimed.  (Civic Western Corporation v. Zila Industries, Inc. (1977) 66 Cal.App.3d 1, 16.) “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties[.]” (CCP § 1021.)

“It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court, whose decision cannot be reversed in the absence of an abuse of discretion.”  (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623.)  In exercising its discretion, the court should consider a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in handling the matter, the attention given, the success or failure, and the resulting judgment.  (Ibid.)

In determining what constitutes a reasonable compensation for an attorney who has rendered services in connection with a legal proceeding, the court may and should consider the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorneys’ efforts, their learning, their age, and their experience in the particular type of work demanded the intricacies and importance of the litigation, the labor and necessity for skilled legal training and ability in trying the cause, and the time consumed. (Stokus v. Marsh (1990) 217 Cal.App.3d 647, 657 (Stokus).)

In determining the proper amount of fees to award, courts use the lodestar method.  The lodestar figure is calculated by multiplying the total number of reasonable hours expended by the reasonable hourly rate.  “Fundamental to its determination … [is] a careful compilation of the time spent and reasonable hourly compensation of each attorney … in the presentation of the case.”  (Serrano v. Priest (1977) 20 Cal.3d 25, 48 (Serrano III).)  A reasonable hourly rate must reflect the skill and experience of the attorney.  (Id. at 49.)  “Prevailing parties are compensated for hours reasonably spent on fee-related issues.  A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.”  (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 (Serrano IV); see also Weber v. Langholz (1995) 39 Cal.App.4th 1578, 1587 (“The trial court could make its own evaluation of the reasonable worth of the work done in light of the nature of the case, and of the credibility of counsel’s declaration unsubstantiated by time records and billing statements.”)

Reasonable attorney fees should be based on an objective standard of reasonableness, i.e., the market value of services rendered, not on some notion of cost incurred. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1090.)  The value of legal services performed in a case is a matter in which the trial court has its own expertise.  (Id. at 1096.)  The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony.  (Ibid.)  The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.  (Ibid.)

Discussion

            The Changs contend that they are entitled to recover $22,000 in reasonable attorney fees as the prevailing party in the mechanic’s lien action brought against them, and pursuant to the attorney fees provision in the contract for sale of real property between the Changs and Defendant LAH.

            The Court agrees that the Changs are the prevailing in the mechanics lien claim brought by Plaintiff. “The prevailing party on a petition to release property from lien . . . shall be entitled to attorneys’ fees….” (Koudmani v. Ogle Enterprises, Inc. (1996) 47 Cal. App.4th 1650, 1660.)

            However, in their motion, the Changs also argue that the attorney fees should be paid, jointly and severally, in equal halves of $11,000 by Plaintiff TNT and Defendant LAH. The Changs are not a prevailing party against Defendant LAH, and there has been no determination that Defendant LAH and Plaintiff are joint-tortfeasors.

The Changs argue that “[s]ince the claims brought in this action by Plaintiff TNT against Defendants Changs clearly arose out of the Changs’ written purchase agreement with Defendant LAH, which clearly contained a prevailing party attorney fees provision, the Changs, as prevailing party, are entitled to an award of reasonable attorneys’ fees from Defendant LAH under Cal. Civ. Code §1717 and Cal. Code Civ. Proc. §1021.” (Motion, 7: 13-18.)

However, the only support provided to show that this provision can be used to require Defendant LAH to cover attorney fees incurred by another defendant was Lerner v. Ward (1993) 13 Cal.App.4th 155. That case stands for the proposition that a party can recover under a contractual attorney fees provision for a fraud cause of action. (“The parties' purchase agreement contained a provision for attorney fees to the prevailing party “in any action or proceeding arising out of this agreement,” and the court held that this provision for fees was applicable to an action for fraud.”) As such, that case does not in any way indicate that the Changs are entitled to recover attorney fees from Defendant LAH as a result of Plaintiff’s suit against Defendant TNT.

There are logical reasons why the Changs’ argument cannot stand. First, to hold Defendant LAH responsible for half of the attorney fees here would allow Plaintiff TNT to pass off the consequences of the judgment against it onto a party which was itself a Defendant in this action. Second, and perhaps most importantly, if the Court were accept the Changs’ interpretation of the attorney fees provision, co-Defendants could be on the hook for half of any attorney fees without any way to control those costs. For instance, Plaintiff TNT here could have adopted a scorch-earth litigation strategy, requiring the Changs to extensively litigate this matter. Despite having no way to control Plaintiff’s or the Changs’ litigation expenses, Defendant LAH would still be on the hook for a portion of those costs. Such a result flies in the face of public policy and equity interests.

In reply, the Changs do not attempt to argue that they are, as a matter of fact, the prevailing party against Defendant LAH. Rather, they argue, somewhat strangely, that they didn’t want to waste this court’s time by adjudicating the “obvious” issue of Defendant LAH’s breach of contract, and they “understood and believed that Defendant LAH would ultimately make them whole.” (Reply, 2: 17-22.) However, as to the former point, it goes without saying that a belief that you would readily prevail on a cause of action does not make you a prevailing party under any standard. As to the latter point, Plaintiffs do not identify any agreement or extrinsic basis for their belief that Defendant LAH would “make them whole” other than their subjective belief that it would. For all of these reasons, the Changs have not established a legitimate basis to recover attorney fees from Defendant LAH.

Based on the foregoing, the Court finds no basis for recovering reasonable attorney fees from Defendant LAH.

This leaves only the issue of attorney fees owed by Defendant TNT.

Rates

            ChaHee Lee Olson claims a rate of $285.00 an hour for herself and $235.00/hr for her associate. She has been a member of the California Bar for over 20 years. Ms. Olson was retained as new defense counsel in late November 2021. However, in November 2021, the Changs submitted a claim to their title company (Chicago Title) requesting coverage for Plaintiff’s lawsuit. Thereafter, in December 2021, Chicago Title appointed Peter Veiguela of Fidelity National Law Group as lead co-counsel for Defendants Changs in this case. Accordingly, Ms. Olson served as non-lead co-counsel.

            ChaHee Lee Olson also claims, on behalf of an unnamed associate, a rate of $235.00/hr. Given that no information is provided to justify this rate, the Court cannot determine the reasonableness of this rate.

            Finally, ChaHee Lee also seeks to recover Plaintiff’s attorney fees incurred while they were represented by Mark O’Brien. In support, Plaintiff offers no information about O’Brien, and the billing records do not indicate the hourly rate, as such the Court has no basis for concluding whether or not the rate claimed is reasonable.

Hours

            In light of the insufficient evidence to justify the rates claimed, the Court cannot reach the issue of whether or not the hours claimed are reasonable.

However, the Court notes that at first glance, the hours claimed indicate padding. Olsen was retained in November 2021 and in December 2021, Mr. Veiguela—who does not seek to recover via this motion—was appointed lead co-counsel. By Ms. Olsen’s own admission, “since the appointment of Mr. Veiguela as lead co-counsel in mid-December 2021, Nagashima Lee P.C. has been providing supplemental legal services to the Changs at their request, on a minimal basis, primarily for the purpose of protecting their interests and liaising with lead co-counsel on their behalf.” (Olson Decl. ¶ 6, emphasis added.) As such, the dispositive motions in this case were prepared and argued by Mr. Veigeula, not Ms. Olson (or her unnamed associate). This is reflected in the billing records, the vast majority of which are for unspecified “review” and correspondence. For example, there are at least three separate billings simply to review a substitution of attorney form. There are a great many vague billings for “Associate Work: Further review and analysis of documents provided by client and emails from client.”

            The Changs will be provided an opportunity to address the deficiencies identified herein. More specifically, counsel must set forth adequate information about Ms. Olsen’s associates and Mr. O’Brien to allow the Court to determine the reasonableness of the rates claimed. Counsel will also have an opportunity to either justify the at-first-glance vague or excessive hours claimed, or to remove them from their requested recovery.

It is so ordered.

Dated:  September    , 2022

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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