Judge: Jon R. Takasugi, Case: 21STCV17667, Date: 2024-02-07 Tentative Ruling

Case Number: 21STCV17667    Hearing Date: April 2, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

            Plaintiffs Michael Horner and Thomas Horner, as Co-Trustees of the Horner Family Trust’s Motion for Attorneys’ Fees is STAYED pending disposition of the appeal.

            On May 11, 2021, Plaintiffs Michael Horner and Thomas Horner, as Co-Trustees of the Horner Family Trust (Plaintiffs) filed this suit against Defendants Strong Wealth Management LLC; George G. Strong III (Defendants); and DOES 1-10, inclusive, alleging (1) fraud; (2) breach of fiduciary duty; (3) negligence; (4) breach of contract; and (5) financial elder abuse.

            Plaintiffs move for an award of reasonable attorneys’ fees against Defendants in the sum of $672,036.50 plus costs shown in the Memorandum of Costs filed on December 12, 2023.

Legal Standard

Pursuant to Welfare & Institutions Code Section 15657.5(a), “Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs. The term “costs” includes, but is not limited to, reasonable fees for the services of a conservator, if any, devoted to the litigation of a claim brought under this article.” (Wel. & Inst. Code § 15657.5(a).)

“ ‘Financial abuse’ of an elder or dependent adult occurs when a person or entity does any of the following: (1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both […] (2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both […][or] (3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 15610.70.” (Wel. & Inst. Code § 15610.30(a).)

Discussion

            This motion is made on the grounds that Plaintiffs’ are entitled to recover reasonable attorneys’ fees and costs incurred in connection with this lawsuit and enforcement of the judgment ordered because the Court entered judgment in favor of Plaintiffs based on a finding of financial elder abuse as defined in Welfare & Institutions Code Section 15657.5(a).

            The parties dispute whether or not Plaintiffs’ are entitled to recover reasonable attorneys’ fees as under Welfare & Institutions Code Section 15657.5(a).

Rate

Michael C. Lieb claims $600, $625, and $665 an hour for the years 2021, 2022, and 2023. Mr. Lieb joined the State Bar in 1986, and specializes in complex business litigation dispute involving contract disputes, claims for breach of fiduciary duty, claims alleging fraud or other misconduct in the sales of securities.

For Andrew Peterson, Mr. Lieb claims $450 and $495 an hour for the years 2021 and 2022. Mr. Peterson joined the State Bar in 2013 and was an associate at ECJ who worked on this matter with Mr. Lieb in 2021 and 2022.

For Zoe Vallier, Mr. Lieb claims $430 and $450 an hour for the years 2022 and 2023. Ms. Vallier joined the State Bar in 2018 and was an associate at ECJ who worked on this matter with Mr. Lieb in 2022 and 2023.

For Byron Moldo, Mr. Lieb claims $890 and $950 an hour for the years 2022 and 2023. Mr. Moldo joined the State Bar in 1983 and acted as lead bankruptcy counsel for Plaintiff.

For Sonia Singh, Mr. Lieb claims $475 and $500 an hour for the years 2022 and 2023. Ms. Singh joined the State Bar in 2016 and was an associate at ECJ who worked on the bankruptcy matter with Mr. Moldo in 2022 and 2023.

Mr. Lieb claims the ECJ paralegals who worked on the case in 2022 and 2023 have an hourly rate ranging between $235 and $310.

Hours

Mr. Lieb claims ECJ attorneys spent approximately 1,250 hours to litigate this case.

Costs

Mr. Lieb claims a total of $15,568.70 in costs consisting of: (1) $435 for filing and motion fees; (2) $14,558.70 for deposition costs; and (3) $575.00 for court reporter fees.

In justification for these hourly rates, Mr. Lieb provides the 2024 Judiciary Salary Plan and Laffey Matrix. Mr. Lieb claims these documents indicate ECJ’s rates in this case are consistently below what can be reasonably charged for work by attorneys and staff with similar background and experience in the Los Angeles Area. In their motion, Plaintiffs’ argue this matter was initially scheduled to go to trial on June 6, 2022 but was postponed given two Chapter 13 filings by Defendant Strong. Plaintiffs further argue their counsel quickly challenged these filings by filing a Motion for Relief from Stay in order to proceed to trial in state court on their claims against Defendants and Motion to Dismiss. Moreover, Plaintiffs contend they had to prepare motions in limine, trial briefs, witness lists, exhibits and exhibits lists in preparation of the trial. Similarly, Plaintiffs assert they were in trial for five days.

In opposition, Defendants argue they have challenged this Court’s finding of elder abuse and that issue will be subject to appeal. Alternatively, Defendants contend the Court should apportion the fees attributable to that cause of action and Plaintiffs’ four other causes of action for fraud, breach of contract, breach of fiduciary duty, and negligence, and award only those attributable to the elder abuse claim. Defendants further contend Plaintiffs were not successful on all of their causes of action because the Court denied their fraud claim. Thus, Defendants argue it would be improper for the Court to award the fees and costs that Plaintiffs incurred pursuing this failed cause of action and are not available for either party in a fraud claim. Moreover, Defendants asserts the elder abuse cause of action is entirely distinct from Plaintiffs’ three other successful claims. Defendants contend the contract did not provide for attorneys’ fees, so awarding fees that were incurred on the other causes of action would exceed the scope of that agreement the Court has enforced. Defendants also assert Plaintiffs have failed to demonstrate that the award they seek is warranted by any of the other relevant factors as Defendant Strong is bankrupt and the Court already has entered a seven-figure judgment against Defendant Strong including double damages for elder abuse. Additionally, Defendants argue Plaintiffs may not recover attorneys’ fees in the bankruptcy case unless and until they prevail there. Specifically, Defendants assert the bankruptcy case is still pending and seeks to preclude the discharge of this Court’s judgment.

In reply, Plaintiffs argue fees need not be apportioned because each of the causes of action on which judgment was granted in their favor is directly tied to Defendants’ financial abuse of Michael Horner. Further, Plaintiffs argue Defendants’ financial condition does not support reducing fees. Plaintiffs also argue the bankruptcy judge recently denied confirmation of Defendant Strong’s proposed Chapter 13 Plan of Reorganization on the ground of Strong’s bad faith and converted the bankruptcy to a Chapter 7. As this is new information being introduced on reply, the Court cannot consider it.

Pursuant to Code of Civil Procedure Section 916 (a), “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” (Code Civ. Proc., § 916(a).) 

The Court finds that this matter should be stayed pending the disposition of the appeal. This instant motion is based on this Court’s judgment in favor of Plaintiffs on the financial elder abuse claim. However, Defendants have filed an appeal regarding that exact ruling. Thus, ruling on this motion would be premature absent the disposition of the appeal as there is a possibility the appeal may render this present motion moot.

In light of the foregoing, the motion for attorneys’ fees is STAYED.

Dated:  April 2, 2024

Hon. Jon R. Takasugi

Judge of the Superior Court