Judge Katherine Chilton, Case 19STCV15678 2023-05-15 Tentative Ruling

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Defendant Sony Choi’s Motion for Attorney’s Fees is GRANTED in the amount of $50,000.00.

On May 6, 2019, Plaintiff Major Motor Cars Inc. (“Plaintiff”) filed an action against Defendant Sony Choi (“Defendant”) for breach of contract, fraud, negligent misrepresentation, and declaratory relief arising out of a retail installment sale contract.

On February 26, 2021, the Court noted that the parties stipulated “that this case is not an unlimited jurisdiction matter and should be transferred to limited jurisdiction.” (2-26-21 Minute Order.) The case was ordered transferred to Department 1 for reassignment and subsequently, reclassified. (Ibid.; 3-1-21 Notice of Reclassification.)

On June 30, 2022, after a Jury Trial, judgment was entered in favor of Defendant and against Plaintiff on the causes of action for breach of contract and negligent misrepresentation. (6-20-22 Judgment; 6-30-22 Notice of Entry of Judgment.) Plaintiff’s claims for fraud and declaratory relief had been dismissed prior to trial. The Court determined that Plaintiff “is to receive nothing from Defendant” and costs are to be awarded in favor of Defendant and against Plaintiff per a memorandum of costs filed by Defendant.” (Ibid.)

On July 8, 2022, Defendant filed a Memorandum of Costs. On July 29, 2022, Defendant filed the instant Motion for Attorney’s Fees (“Motion”). Plaintiff filed an Opposition on March 8, 2023. Defendant filed a Reply on March 14, 2023.

On March 21, 2023, the hearing on the Motion was continued to May 15, 2023. (3-21-23 Minute Order.) Defendant filed an amended Notice on March 22, 2023, regarding the continued hearing on the Motion.

Civil Code § 1717 states in pertinent part: “[i]n 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.” (Civ. Code, § 1717(a)).

A prevailing party in a lawsuit includes “the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.” (Code of Civ. Proc. § 1032(a)(4).)

A prevailing party in entitled to recover costs, including attorney’s fees, as a matter of right. (See Code Civ. Proc. §§ 1032(a)(4), 1032(b), 1033.5.) Furthermore, attorney’s fees are allowable as costs when authorized by contract, statute, or law. (Code Civ. Proc. § 1033.5(a)(10).)

“A notice of motion to claim attorney's fees for services up to and including the rendition of judgment in the trial court . . . must be served and filed within the time for filing a notice of appeal under . . . rules 8.822 and 8.823 in a limited civil case.” (Cal. Rules of Court, rule 3.1702(b)(1).) In a limited civil case, a notice of appeal must be filed on or before the earliest of 30 days after service of a document entitled “Notice of Entry” of judgment or 90 days after the entry of judgment. (Cal. Rules of Court, rule 8.822(a)(1).)

The calculation of attorney’s fees in California begins with the “lodestar” method – multiplying the number of hours reasonably expended 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 attorneys’ 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.) 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. (Ibid. at p. 48, fn. 23.) After the trial court has performed the lodestar calculations, it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-1096.)

“[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award. [Citation.] The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services. . . . This 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.” [Internal citations and internal quotation marks omitted.]

((2006) 144 Cal.App.4th 140, 154.) “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. [Citations.] The value of legal services performed in a case is a matter in which the trial court has its own expertise. . . . 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. [Citations.]” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623-624.)

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. (Ibid.; Serrano, 20 Cal.3d 25 at 49.)

On July 29, 2022, Defendant filed the instant Motion for Attorney’s Fees, requesting attorney’s fees in the amount of $63,430.00, to be paid by Plaintiff. (Mot. p. 1.)

Defendant argues that the Motion was filed timely as the Notice of Entry of Judgment was served on July 1, 2022, and the Motion was filed within 30 days of July 1, 2022. (Mot. p. 4.)

Defendant argues that he is entitled to an award of attorney’s fees and costs because he was the prevailing party in the case and the action is “on a contract” as set forth in Civil Code § 1717(a). (Ibid.) Moreover, the Retail Installment Sale Contract entered into by Plaintiff and Defendant allows for attorney’s fees. (Ibid. at pp. 4-6; Ryu Decl. ¶ 9, Ex. B.)

Defendant also argues that the amount of fees sought is “both reasonable and proper” as the case lasted over three years and was resolved through extensive litigation and a jury trial. (Mot. p. 7.) Thus, the 176.80 hours spent by defense counsel “in successfully defending Plaintiff’s claims here should be compensable.” (Ibid.) Defense counsel Ryu has about 31 years of experience in civil litigation. (Ryu Decl. ¶ 2.) Defense counsel Ryu billed at a discounted hourly rate of $500[1] per hour and his associate, counsel Yun billed at a discounted hourly rate of $350 per hour. (Ibid. at ¶ 3.) These rates are “lower than or consistent with the rates of other litigation attorneys in the Los Angeles area.” (Ibid. at ¶ 4.) Counsel has submitted a detailed invoice demonstrating the time billed for the case. (Ibid. at ¶ 5, Ex. A.) Attorney Ryu expects to spend an additional three (3) hours and Attorney Yun expects to spend an additional six (6) hours reviewing Plaintiff’s Opposition, preparing a Reply, and appearing and arguing at the hearing. (Ibid. at ¶ 7.) The total amount requested of attorney’s fees requested is $63,430. (Ibid. at ¶ 8.)

On March 8, 2023, Plaintiff filed an Opposition to the Motion. Plaintiff argues that “Defendant failed to establish that he actually paid or is liable to pay the requested fees, which constitutes ‘incurred’ fees’” or that there is an agreement whereby Defendant agreed to compensate his counsel regardless of the outcome of the case. (Oppos. pp. 2-3.) The inconsistency between the $500 per hour rate listed in Counsel Ryu’s declaration and actual billing entries at $350 per hour “suggests that perhaps there was no agreement for Defendant to in fact, ‘incur’ any of these legal fees.” (Ibid. at p. 3.) Plaintiff speculates about a possible familial relationship between Defendant and his counsel and the scope of a retainer agreement between them. (Ibid. at pp. 3-5.)

Moreover, Plaintiff also argues that Paragraph 3(c) of the Retail Installment Sale Contract is not a fee provision, but rather “an express itemization of ‘reasonable costs to collect’, that did not require Plaintiff to prevail on any action based on contract.” (Ibid.) It does not expressly entitle the prevailing party to attorney’s fees but rather includes attorney’s fess as part of Plaintiff’s “‘reasonable costs to collect.’” (Ibid. at pp. 5-7.)

If the Court does grant Defendant’s motion, Plaintiff requests that the amount be “reduced for duplicative, ineffective, and unreasonable amounts” and apportioned because Defendant is only entitled for claims based on the contract, not the other causes of action. (Ibid. at pp. 2-3, 8.) Plaintiff requests an 8.3-hour reduction in Counsel Ryu’s billing and a 30.5 hour reduction in Counsel Yun’s billing, for a total reduction of $13,580. (Ibid. at p. 8.) Plaintiff also requests a 4.5-hour reduction for the time spent by defense attorneys on a reply to the Opposition and attendance the hearing on the Motion. (Ibid.)

Finally, Plaintiff argues that its second cause of action for fraud and fourth cause of action for declaratory relief have been dismissed, as such there is no prevailing party for these claims. (Ibid. at pp. 8-9, Civ. Code § 1717(b)(2).) Moreover, the tort claim for negligent misrepresentation does not arise out of the contract and does not entitle Defendant to attorney’s fees. (Ibid. at p. 9.)

Accordingly, the Court must reduce the fees requested by three-fourths to be apportioned based on the causes of action and Defendant should only be granted attorney’s fees in the amount of $12,050. (Ibid. at pp. 9-10.) Plaintiff’s Counsel Kim has filed a declaration in support of the Opposition, listing itemized objections to defense counsel’s billing entries. (Kim Decl. ¶¶ 3, 5-8.)

In its Reply, Defendant argues that the case on which Plaintiff heavily relies, Hart v. Clear Recon Corp. (2018) 27 Cal.App.5th 322 is distinguishable as the instant case is not a security agreement and does not involve a mortgage. (Reply pp. 2-3.) In Hart, the Court “dealt with a completely different contract involving a security and a provision that allows fees and costs to be converted into additional debt” thus, the holding does not apply here. (Ibid.) Defendant argues that the another case, Reyes v. Beneficial State Bank (2022) 76 Cal.App.5th 596 is applicable here as it involves an identical attorney’s fees provision. (Ibid. at p. 3.) The Court in Reyes found that although the attorney’s fees provision is one-sided, § 1717(a) made the provision mutually applicable to the buyer. (Ibid. at pp. 3-4.)

Defendant also argues that Plaintiff misinterprets § 1717(a), which states that the “provision shall be construed as applying to the entire contract, unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract.” (Ibid. at p. 4.) There is no evidence that Defendant was represented by counsel during the negotiation and execution of the contract and thus, section 1717(a) applies and extends the attorney’s fees provision to the entirety of the contract. (Ibid.)

Moreover, Defendant argues that Plaintiff’s discussion and distinction between its causes of action “may not be significant at all” as “attorney’s fees need not be apportioned between distinct causes of action where plaintiff’s various claims involve a common core of facts or are based on related legal theories.” (Ibid. at pp. 5-6; citing to Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 159.)

Regarding the amount requested, Defendant argues that the attorney’s fees request “is not duplicative, inefficient, or otherwise disallowable.” (Ibid. at pp. 5-6.) Defense counsel has submitted his declaration addressing Plaintiff’s objections to certain billing entries. (See Yun Decl.) However, Defendant does concede that one entry is duplicative, and another entry is inefficient and agrees to subtract 3.7 hours, in the amount of $1,295, from its request for attorney’s fees. (Mot. p. 6; Yun Decl. ¶ 5.) Defense counsel has also had to spend a total of twelve (12) hours to respond to Plaintiff’s Opposition, billed at a rate or $350 per hour and totaling $4,200 in fees. (Mot. p. 7; Yun Decl. ¶¶ 6-10.)

Defendant argues that the billing records filed by defense counsel’s office are sufficient to demonstrate Defendant’s obligation to pay the attorney’s fees. (Mot. p. 7.) In its Opposition, “Plaintiff baselessly throws out random allegations” and speculates whether “the entries were created just for this motion’s sake or that entries were marked for accounting purposes only.” (Ibid. at p. 7.) Defense counsel concedes to erroneously billing at a rate of $350 per hour; however, he states that this merely demonstrates an error in entering his rate in the billing software, not a possible “familial, professional, or other personal relationship between Defendant and his counsel which enabled him to obtain legal services for free” as speculated by Plaintiff. (Ibid. at p. 8.)

Finally, Defendant argues that in the alternative, the Court should grant Defendant’s Motion pursuant to Civil Code § 2983.4, which allows for attorney’s fees and costs arising out of an action on a contract or purchase order subject to the Automobile Sales Finance Act. (Ibid. at pp. 8-9.) However, new arguments are not permitted in a Reply brief and the Court does not address this argument. (In re Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1468.)

On May 2, 2023, Plaintiff filed an amended Opposition. The amended Opposition was filed after Defendant’s Reply and resembles a sur-response, which is not authorized without the Court’s permission.

Having reviewed the moving papers, Plaintiff’s Opposition, and Defendant’s Reply, the Court makes the following findings.

Second, the Court has found Defendant to be the prevailing party in the instant case for the causes of action for breach of contract and negligent misrepresentation, claims that arise out of the same set of facts. (6-20-23 Judgment.) The Court has also found that “[c]osts are awarded in favor of Defendant Sony Choi and against Plaintiff Major Motor Cars, Inc.” (Ibid.)

Third, Defendant is entitled to attorney’s fees and costs pursuant to the Retail Installment Contract. The Contract states that “[Defendant] will pay our reasonable costs to collect what [he] owe[s], including attorney fees, court costs, collection agency fees, and fees paid for other reasonable collection efforts.” (Ryu Decl. , Ex. B – ¶ 3(c).) Although the contract unilaterally provides for attorney’s fees to be awarded to Plaintiff, according to Civil Code § 1717(a), “[i]n 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.” (Brown v. Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 818 – interpreting § 1717 to extend a unilateral attorney’s fees provision to apply to both parties.) Thus, the Court finds that the provision in the Retail Installment Contract is reciprocal and allows Defendant to recover attorney’s fees and costs.

Fourth, the Court finds Plaintiff’s argument that Defendant failed to prove that the attorney’s fees were actually incurred unsubstantiated. Defense counsel has submitted its billing records to support its request for attorney’s fees. There is no requirement for Defendant to provide additional evidence that the fees were actually incurred, and Plaintiff has not cited to any legal authority to demonstrate such a requirement. Plaintiff’s speculations about a possible familial relationship between Defendant and his counsel are unfounded and irrelevant.

Fifth, “‘[a]ttorneys fees need not be apportioned between distinct causes of action where plaintiff's various claims involve a common core of facts or are based on related legal theories.'" Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 159.

For these reasons, the Court finds that Defendant is the prevailing party and is entitled to attorney’s fees and costs.

However, having reviewed the billing records submitted by Defendant and considered Plaintiff’s objections and Defendant’s responses to these objections, the Court finds Defendant’s request for $63,430.00 to be excessive. For example, the Court finds six (6) hours billed on July 16 and 22, 2019, to draft responses to initial discovery requests to be excessive. Similarly, 6.5 hours spent drafting discovery requests is also excessive. Moreover, certain entries are duplicative, such as two entries in the amount of $1,050 billed for appearing at trial on December 1, 2021. The Court also finds twelve (12) hours billed in reviewing Plaintiff’s opposition and filing a reply highly excessive. (Reply - Yun Decl. ¶ 10.) The Court finds $50,000, including attorney’s fees billed for the instant Motion, to be reasonable.

For these reasons, the Court grants Defendant’s Motion for Attorney’s Fees in the amount of $50,000.00.

Defendant Sony Choi’s Motion for Attorney’s Fees is GRANTED in the amount of $50,000.00.

[1] In Defendant’s Reply, Counsel acknowledges that he incorrectly entered a billing rate of $350 per hour in the billing software and thus, the amounts requested are based on a rate of $350 per hour.