Judge: Joseph Lipner, Case: 23STCV29882, Date: 2024-12-31 Tentative Ruling

Case Number: 23STCV29882    Hearing Date: December 31, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Plaintiffs Cynthia Ross (“Ross”) and Carla Monroe (“Monroe”) (together, “Plaintiffs”) move for an award of attorney’s fees and costs related to terminated arbitration proceedings against Defendant Clare | Matrix, Inc. (“Defendant”) in the total amount of $11,918.91, including (1) $8,250.00 in attorney fees and costs, (2) $68.91 in arbitration related costs, and (3) $3,600.00 in attorney’s fees related to the current motion. (Notice of Motion, pp. i-ii; Civ. Code § 1281.99.)

The Court GRANTS Plaintiffs’ motion for attorney’s fees in the requested amount of $11,918.91. Defendant shall pay this amount to Plaintiff within 60 days.

Background

            Plaintiffs Ross and Monroe allege they were employed by Defendant as licensed vocational nurses. (Complaint, ¶¶ 16, 26.) Counsel for Defendant declares that Defendant

is a non-profit organization offering community alcohol and substance rehabilitation services. (Declaration of Victoria J. Ramirez (“Decl. of Ramirez”), ¶ 2.) Ross’s employment term with Defendant was between June 2020 and May 2023. (Complaint, ¶ 16.) Ross alleges that she was placed on FMLA leave for a disability between April 2022 and September 2022, and Defendant wrongfully terminated her employment without engaging in the interactive process. (id. ¶ 23-25.) Monroe’s employment term with Defendant was from November 2021 to May 2023. (id., ¶ 26.) Monroe alleges that she reported job-incurred back and hip injuries to Defendant, and Defendant wrongfully terminating her after not providing medical attention or engaging in the interactive process. (id., ¶¶ 28-31.)  

            On December 7, 2023, Plaintiffs filed a complaint against Defendant asserting seven (7) causes of action against Defendant: (1) discrimination (Gov. Code, §12940 et seq.), (2) retaliation (Gov. Code, §12940 et seq.), (3) failure to prevent discrimination and retaliation (Gov. Code, §12940(k)), (4) failure to provide reasonable accommodation (Gov. Code, §12940 et seq.), (5) failure to engage in good faith interactive process (Gov. Code, §12940 et seq.), (6) declaratory judgment, and (7) wrongful termination, in violation of public policy. (Declaration of Diana Karapetyan (“Decl. of Karapetyan”), ¶ 2.)

            On April 15, 2024, the Court granted the parties’ Joint Stipulation to Stay Action and Arbitrate Plaintiffs’ Claims. (4/15/2024 Min. Order.)

On May 1, 2024, Plaintiffs’ demand for arbitration was submitted to Signature Resolution. (Decl. of Karapetyan ¶ 4.) The parties proceeded to arbitration with Signature Resolution with Judge Richard Stone (Retired) as arbitrator.  (Declaration of Victoria J. Ramirez (“Decl. of Ramirez”), ¶ 6, Exh. D.)  On May 21, 2024 Defendant timely paid Signature Resolution the one-time administrative fee. (Decl. of Ramirez, ¶ 5, Exh. C.) Signature Resolution required the payment of initial arbitration fees by June 27, 2024. (Decl. of Karapetyan, ¶ 5.) Plaintiffs contend that by July 16, 2024, Defendant had not paid those fees, delaying the initial arbitration management conference. (ibid., ¶ 6.) On August 7, 2024, counsel for Plaintiffs informed counsel for Defendant of their intention to file a motion to terminate arbitration and request attorney fees with the Court pursuant to § 1281.97. (id., ¶¶ 8-9.)

On September 19, 2024, the Court granted Plaintiffs’ motion to terminate arbitration. (see 9/19/24 Min. Order RE: Motion to Terminate Order to Arbitrate and Proceed in State Court pursuant to Civ. Code § 1281.97.)

On October 24, 2024, Plaintiffs filed this motion to award attorney fees and costs. Defendant filed an opposition on December 17, 2024. On December 20, 2024, Plaintiffs filed a reply brief. The motion hearing is set for December 31, 2024.

Legal Standard

            Attorney’s fees may be recovered as costs when authorized by contract, statute, or law.  (Civ. Code § 1033.5(a)(10).) 

Under Code of Civil Procedure¿section 1281.97, subdivision (a), where a consumer arbitration requires the drafting party to pay certain fees and costs before the arbitration can proceed, and the fees or costs to initiate an arbitration¿proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration¿agreement and waives the right to compel arbitration.  If the drafting party materially breaches the agreement by not paying the requisite fees, the consumer “may do either of the following: (1) [w]ithdraw¿the claim from arbitration¿and proceed¿in a court of appropriate jurisdiction” or (2) “[c]ompel arbitration in which the drafting party shall pay reasonable attorney’s fees and costs related to the arbitration.”¿¿(Civ. Code §¿1281.97(b)(l)-(2).)

If the “consumer proceeds with an action in a court of appropriate jurisdiction, the court shall impose sanctions on the drafting party in accordance with Section 1281.99.”¿¿(Civ, Code §¿1281.97(d).)¿¿Section 1281.99¿provides:¿¿ 

¿ 

“(a) The court shall impose a monetary sanction against a drafting party that materially breaches an arbitration agreement pursuant to subdivision (a) of Section 1281.97 or subdivision (a) of Section 1281.98, by ordering the drafting party to pay the reasonable expenses, including attorney's fees and costs, incurred by the employee or consumer as a result of the material breach.”¿ 

“In an employment… arbitration that requires… that the drafting party pay certain fees and costs during the pendency of an arbitration proceeding, if the fees or costs required to continue the arbitration proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee… to proceed with that arbitration as a result of the material breach.” (Civ. Code §1281.98(a)(1) (emphasis added).)

“If the drafting party materially breaches the arbitration agreement and is in default…, the employee… may unilaterally elect to… [w]ithdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.” (Civ. Code §1281.98(b)(1) (emphasis added).)

“If the employee… withdraws the claim from arbitration and proceeds in a court of appropriate jurisdiction pursuant to [Section 1281.98(b)(1)]… [t]he employee or consumer may bring a motion, or a separate action, to recover all attorney’s fees and all costs associated with the abandoned arbitration proceeding [where] recovery of arbitration fees, interest, and related attorney’s fees shall be without regard to any findings on the merits in the underlying action or arbitration [and] [t]he court shall impose sanctions on the drafting party in accordance with Section 1281.99.” (C.C.P. §1281.98(c)(1),(2) (emphasis added).)

“The court shall impose a monetary sanction against a drafting party that materially breaches an arbitration agreement pursuant to [Section 1281.98(a)], by ordering the drafting party to pay the reasonable expenses, including attorney’s fees and costs, incurred by the employee… as a result of the material breach.” (Civ. Code §1281.99(a).)

Discussion

A.    Entitlement to Fees and Costs

            Plaintiffs move the Court for attorney’s fees and costs from Defendant on the grounds that Plaintiffs prevailed in their motion to terminate arbitration. (Motion, p. 1.) Plaintiffs contend that despite stipulating to arbitration, Defendant’s failure to pay the initial arbitration filing fees pursuant to Civ. Code section 12981.97, entitles them to an award of attorney fees and costs incurred in bringing such motions. (Decl. of Karapetyan, ¶¶ 8-9.)

            Defendant concedes to its material breach of the arbitration agreement as of July 26, 2024, when it missed the deadline to pay the initial arbitration fees. (Opposition, p. 2.) Counsel for Defendant represents that it missed the 30-day payment deadline because Defendant is a non-profit organization that could not afford to pay the arbitrator’s retainer fee in a single payment. (Decl. of Ramirez, ¶ 2, Exh. E; Civ. Code § 1281.98(a)(1).) Defendant requested to enter a payment plan for the arbitration fees to Signature Resolution, and Signature Resolution instructed them to reach an agreement with counsel for Plaintiffs. (id., at ¶¶ 7-8, Exh. F.) Defendant submitted this request to Plaintiffs’ counsel and claims that Plaintiffs did not respond to this request. (Opposition, p. 1.) On August 7, Plaintiffs informed counsel for Defendant of their intention to file the instant motion. (Decl. of Karapetyan, ¶¶ 8-9.)

Defendants do not dispute that as a general matter Plaintiffs are entitled to recover fees and costs.  As a matter of law, Defendant’s failure to pay arbitration costs constituted a material breach of the arbitration agreement, placed Defendant in default of the arbitration, and waived Defendant’s right to compel Plaintiffs to proceed with the arbitration. (Civ. Code § 1281.92(a).) Further, as a matter of law, Plaintiffs had the statutory right to withdraw their claims from arbitration, proceed with their claims in court, bring a motion to recover all attorney’s fees and all costs associated with the abandoned arbitration proceeding, and obtain a court order imposing monetary sanctions on Defendant.  (Civ. Code § 1281.98(b)(1), (c)(1)-(2).)  Defendant’s attempts to settle payment pursuant to a payment plan do not excuse Defendant’s failure to pay the arbitration fees and did not prohibit Plaintiff from terminating arbitration proceedings.

Accordingly, Plaintiffs are entitled to recover the reasonable expenses, including attorney’s fees and costs from Defendant’s material breach.

B.     Reasonableness

Plaintiffs seek attorney’s fees from the inception of the case including the joint stipulation to arbitration, the Court’s grant of Plaintiffs’ motion to terminate arbitration, through the filing of the instant motion. (Motion, p. 4.) Specifically, Plaintiffs seek to recover a total amount of $11,918.91, including (1) $8,250.00 in attorney fees and costs, (2) $68.91 in arbitration related costs, and (3) $3,600.00 in attorney’s fees related to the instant motion. (Notice of Motion, pp. i-ii.)

The fee setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  A computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorney’s fee award.  The lodestar figure may then be adjusted, based on factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.  (Serrano v. Priest (1977) 20 Cal.3d 25, 49

No specific findings reflecting the court’s calculations are required.  The record need only show that the attorney fees were awarded according to the “lodestar” or “touchstone” approach.  The court’s focus in evaluating the facts should be to provide a fee award reasonably designed to completely compensate attorneys for the services provided.  The starting point for this determination is the attorney’s time records.  (Horsford v. Board of Trustees of Calif. State Univ. (2005) 132¿Cal.App.4th 359, 395-397 [verified time records entitled to credence absent clear indication they are erroneous].)  However, California case law permits fee awards in the absence of detailed time sheets.  (Sommers v. Erb (1992) 2 Cal.App.4th 1644, 1651; Dunk v. Ford Motor Co. (1996) 48¿Cal.App.4th 1794, 1810; Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99, 103.)  An experienced trial judge is in a position to assess the value of the professional services rendered in his or her court.  (Id.; Serrano v. Priest (1977) 20 Cal.3d 25, 49; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255.)

Counsel for Plaintiffs allege that 21.5 hours were incurred working on this case. (Evidence Package, Exhibit B.) The hourly rates are summarized for Plaintiffs’ counsel as follows: (i) Ramin R, Younessi has been practicing in specialized litigation for 30 years and as of January 2024, his hourly rate is $1,300 (Declaration of Younessi (“Decl. of Younessi”), ¶¶ 3, 7), (ii) Heather N. Phillips, the lead attorney in this case, bills at an hourly rate of $600 (Declaration of Phillips (“Decl. of Phillips”), ¶¶ 11, 13), (iii) Diana Karapetyan and (iv) Charles Casado bill at an hourly rate of $400.00 (Decl. of Karapetyan, ¶ 16; Motion, p. 5), and (iv) the paralegal(s), legal assistant(s) and law clerk(s) in this case bill at a rate of $250 per hour. (Motion, p. 5.) Plaintiffs include a history of court approvals and argue that the hourly rates are reasonable in the community. (Motion, p. 5.)  

Defendant do not challenge the hourly rates, but argue that the fees are unreasonable for several other reasons.  First, Defendant argues that it is improper for Plaintiff requests $5,305 in attorney’s fees incurred prior to its breach of the arbitration agreement. (Opposition, p. 2.)  However, that represents fee amounts that were spent by Plaintiff at the early stage of the arbitration that were entirely wasted because of Defendant’s breach.  Defendant’s breach therefore can be said to have caused the requested fees.  Moreover, the statute specifically allows Plaintiff to bring a motion “to recover all attorney’s fees and all costs associated with the abandoned arbitration proceeding.” (C.C.P. §1281.98(c)(1),(2) (emphasis added).) 

Next, Defendant complains about Plaintiffs’ block-billing, asserting for example that Plaintiffs fail to describe how the time billed by administrative staff was “reasonably spent” or “necessary.” (Opposition, p. 4.)  The Court has reviewed the billing statements and finds them adequate in the context of this case.  In addition, the Court considers the fees to be reasonable.

For these reasons, the Court grants the motion.