Judge: Kerry Bensinger, Case: 24STCV12297, Date: 2024-10-21 Tentative Ruling
Case Number: 24STCV12297 Hearing Date: October 21, 2024 Dept: 31
Tentative Ruling
Judge Kerry Bensinger, Department 31
HEARING DATE: October 21, 2024 TRIAL DATE: Not set
CASE: Mariel Cartwright, et al.¿v. Lab Zero Games, Inc.
CASE NO.: 21STCV12297
PLAINTIFFS AND CROSS-DEFENDANTS’ MOTION FOR ATTORNEYS’ FEES AND COSTS
I. INTRODUCTION
On April 1, 2021, plaintiffs Mariel Cartwright (Cartwright) and Francesca Esquenazi (Esquenazi) (collectively, Plaintiffs) filed their Complaint against Defendant Lab Zero, Inc. (Lab Zero) for (1) retaliation in violation of FEHA and (2) wrongful termination in violation of public policy.¿
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Plaintiffs allege that Lab Zero’s shareholder, Mike Zaimont (Zaimont), engaged in “a pattern of rampant sexual harassment” against Lab Zero employees, including Plaintiffs. When confronted, Zaimont retaliated against Plaintiffs by, among other things, terminating them and failing to distribute their equity.¿¿
Lab Zero’s Cross-Complaint
On May 20, 2021, Lab Zero filed a Cross-Complaint against Cartwright, Esquenazi, and Future Club, Inc. (Future Club). On June 30, 2021, Lab Zero filed the operative First Amended Cross-Complaint (FACC) against Cross-Defendants for (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) breach of fiduciary duties, including the duties of loyalty and care, (4) misappropriation of trade secrets under Civil Code § 3426, et seq., (5) misappropriation of trade secrets under 18 U.S.C. § 1836, et seq., (6) conversion in violation of Labor Code § 2860, (7) conversion, (8) intentional interference with contractual relations, (9) intentional interference with prospective economic relations, (10) defamation, and (11) unfair business practices or acts in violation of Business and Professions Code § 17200 et seq.¿
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Lab Zero alleges that, throughout their employment, Cartwright and Esquenazi engaged in and welcomed conversations with Zaimont about sex and related topics and later publicly mischaracterized those conversations as harassment to manipulate Zaimont into leaving Lab Zero, dismantle Lab Zero, and begin their own, competing business. In January 2021, Cartwright and Esquenazi registered their business, Future Club in the state of Colorado. Cartwright and Esquenazi have attempted to recruit Lab Zero employees to transfer to Future Club and to take over Lab Zero’s connections and business interests. Due to Cartwright and Esquenazi’s actions, Lab Zero perished.
On August 26, 2021, Cartwright and Esquenazi (together with Cross-Defendant Future Club) each filed a special motion to strike as to the eighth, ninth, tenth, and eleventh causes of action of the FACC.¿¿
On March 1, 2022, the court denied Plaintiffs’ anti-SLAPP motions. The court held that Lab Zero's eighth and ninth causes of action for intentional interference with contractual relations and prospective economic relations, and eleventh cause of action for unfair business practices, did not arise from protected activity. As to Lab Zero's tenth cause of action for defamation, the court denied the motions based on the determination that Cartwright’s Twitter post and Plaintiffs’ statement to coworkers about Zaimont’s sexual harassment were not connected to an issue of public interest.
Cartwright, Esquenazi, and Future Club appealed. On June 13, 2023, the Court of Appeal reversed and remanded the matter to this court to determine whether Lab Zero can demonstrate its claims have at least minimal merit.
On October 4, 2024, the court issued a ruling (1) granting Cross-Defendants’ special motion to strike the ninth and tenth causes of action from the FACC, and (2) denying the motion as to the eighth and eleventh causes of action.
The Instant Motion
On August 20, 2024, Cross-Defendants filed this Motion for Attorneys’ Fees and Costs as the prevailing party of their special motion to strike.
On September 3, 2024, Lab Zero filed an opposition.
On September 16, 2024, Cross-Defendants replied.
II. LEGAL STANDARD
“[A]ny SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees.” (Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1131) “A defendant that successfully moves to strike a plaintiff's cause of action, whether on merits or nonmerits grounds, has ‘prevailed’ on the motion, and therefore is entitled to attorney's fees and costs.” (Area 51 Prods., Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 604-05 (Area 51).) “A ‘prevailing defendant’ within the meaning of [the statute] includes a defendant whose anti-SLAPP motion was granted as to some causes of action but not others.” (Id. at p. 605 (internal quotation marks omitted).) “A statute authorizing an attorney fee award at the trial court level includes appellate attorney fees unless the statute specifically provides otherwise.” (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman (1996) 47 Cal.App.4th 777, 785 (internal quotation marks omitted).) “Since section 425.16, subdivision (c) provides for an award of attorney fees and costs to a prevailing defendant on a special motion to strike, and does not preclude recovery of appellate attorney fees by a prevailing defendant-respondent, those fees are recoverable.” (Id.) However, “a partially prevailing party is not necessarily entitled to all incurred fees even where the work on the successful and unsuccessful claims was overlapping.” (Mann v. Quality Old Time Serv., Inc. (2006) 139 Cal.App.4th 328, 344 (Mann), overruled on other grounds¿by Baral v. Schnitt (2016) 1 Cal. 5th 376 (Baral).)
III. DISCUSSION
As an initial matter, Lab Zero argues Cross-Defendants are not prevailing parties and should not be awarded any attorney’s fees and costs. In support, Lab Zero cites Moran v. Endres (2006) 135 Cal.App.4th 952. In Moran, the defendants filed a special motion to strike all the claims asserted, which include defamation, false light, intrusion, assault, battery, civil conspiracy, and intentional infliction of emotional distress. Defendants succeeded only in striking the civil conspiracy claim. The trial court concluded the defendant was not a prevailing party and declined to award fees. The court of appeal affirmed, stating that defendants’ victory was illusory as they succeeded only in dismissing a claim that did not add any factual allegations. (Moran, supra, at pp. 954-55.) Moran is not this case.
Unlike Moran, Cross-Defendants did not seek to strike all of Lab Zero’s claims and further, succeeded in dismissing Lab Zero’s claims for defamation and intentional interference with prospective economic relations. These claims are distinct from Lab Zero’s remaining causes of action which include misappropriation, conversion, and breach of contract, among others.
Because Cross-Defendants succeeded in dismissing two of four causes of action, Cross-Defendants are prevailing parties. “A ‘prevailing defendant’ within the meaning of [the statute] includes a defendant whose anti-SLAPP motion was granted as to some causes of action but not others.” (Area 51, supra, 20 Cal.App.5th at p. 605 (internal quotation marks omitted).) Accordingly, Cross-Defendants are entitled to an award of fees and costs.
A. Attorney Fees
Plaintiff seeks attorneys’ fees in the sum of $144,867.50.¿ This amount consists of multiplying counsels’ hourly rates ($700) and paralegals’ hourly rates ($200) by the time spent in connection with the special motion to strike (237.4 hours).
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“The California Supreme Court has upheld the lodestar method for determining the appropriate amount of attorney fees for a prevailing defendant on an anti-SLAPP motion…Under this method, a court assesses attorney fees by first determining the time spent and the reasonable hourly compensation of each attorney. The court next determines whether that lodestar figure should be adjusted based on various relevant factors.” (Mann, supra, 139 Cal.App.4th at p. 342; see also Frym v. 601 Main Street LLC (2022) 82 Cal.App.5th 613, 620 (“It is well settled that the trial courts are to use the lodestar method when determining an award of attorney fees under the anti-SLAPP statute.”).)¿¿¿
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“A trial court assessing attorney fees begins with a touchstone or lodestar figure, based on the ‘careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.” (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1321.) The court “need not simply award the sum requested. To the contrary, ascertaining the fee amount is left to the trial court's sound discretion.” (Ibid.) “The reasonableness of attorney fees is within the discretion of the trial court, to be determined from a consideration of such factors as the nature of the litigation, the complexity of the issues, the experience and expertise of counsel and the amount of time involved. The court may also consider whether the amount requested is based upon unnecessary or duplicative work.” (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448.) “The basis for the trial court's calculation must be the actual hours counsel has devoted to the case, less those that result from inefficient or duplicative use of time.” (Horsford v. Board Of Trustees Of California State University (2005) 132 Cal.App.4th 359, 395 (Horsford).) “The law is clear, however, that an award of attorney fees may be based on counsel's declarations, without production of detailed time records.” (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1375.) “[T]he verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” (Horsford, 132 Cal.App.4th at p. 396; City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 785 (same).)¿¿¿
“The fees awarded to a defendant who was only partially successful on an anti-SLAPP motion should be commensurate with the extent to which the motion changed the nature and character of the lawsuit in a practical way.” (Mann, supra, 139 Cal.App.4th at p. 345.)
Reasonable Hourly Rate¿¿¿¿
Cross-Defendants retained King & Siegel LLP for this matter which involved work by attorneys Robert King and Elliot Siegel, whose hourly rates were $700. (King Decl., Ex. C.)¿ Additionally, paralegals Josue Avila and Marisol Contreras billed at $200.¿
Lab Zero argues the hourly billing rates for Cross-Defendants’ attorneys and non-attorneys are unreasonable.¿ Lab Zero requests a reduction of $600 for attorney work and $30 for paralegal work.
Based upon general prevailing rates in the Los Angeles area for this type of litigation, the court finds Cross-Defendants’ counsels’ hourly rate of $700 is reasonable. The court declines to reduce the rate. The court further finds the support staff billing rate of $200.00 is reasonable.¿ This determination considers the complexity of the case, the quality of services provided, and the attorneys’ experience.¿¿¿
Lab Zero correctly points out that while Cross-Defendants request an hourly rate of $200 for paralegal work, Cross-Defendants’ billing entries reflect an hourly rate of $250 for paralegal work. The court will therefore reduce the requested award to reflect paralegal work billed at $200 per hour.
Number of Hours Reasonably Expended¿¿¿
Cross-Defendants’ counsel’s records reflect a total of 237.4 billable hours spent litigating this matter. ¿(King Decl., Ex. C.)¿ This figure is comprised of 73 hours billed by paralegals. Lab Zero argues the hours billed is excessive because: (1) Cross-Defendants were only partially successfully, (2) the motion did not implicate novel or complex issues; (3) Cross-Defendants’ counsel improperly seek recovery for clerical work and items unrelated to the special motions to strike.¿¿For this reason, Lab Zero requests that the billable hours be reduced by 75%, or roughly, 59.35 hours. ¿
The court agrees with Lab Zero that some reduction is warranted. Cross-Defendants were successful only in striking two of four causes of action. Cross-Defendants are not entitled for all the time billed simply because some of the work overlapped between causes of action which were struck or survived the special motion to strike. However, with the exception of one request (see below), Lab Zero has not identified specific billing entries that are objectionable for any of the reasons identified. “[I]t is the burden of the challenging party to point to the specific items challenged [within the moving party’s verified billing invoice], with a sufficient argument and citations to evidence.¿ General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.”¿ (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 488.) Further, while the court generally agrees some reduction is warranted, the court does not agree that Lab Zero’s requested reduction of 75% is “commensurate with the extent to which the motion changed the nature and character of the lawsuit in a practical way.” (Mann, supra, 139 Cal.App.4th at p. 345.) Moreover, the court appreciates that these special motions to strike were heard several times over by the trial court and endured the appeal process. Accordingly, the court reduces the requested sum as described below.
Lab Zero challenges the 15 hours Cross-Defendants’ counsel seeks to recover in connection to the supplemental briefing with the eleventh cause of action for violation of the UCL. (See King Decl., ¶ 16.) Because Cross-Defendants were not successful in striking that claim, the court will reduce the request for attorney fees by $10,500 (15 hours x $700). The court will also reduce the amount billed by paralegals by $2,940 (applying $200 hourly rate to 58.8 hours billed by paralegals; see King Decl., ¶¶ 12, 15). After reductions, the court determines the lodestar to be $131,427.50.1
Costs
Cross-Defendants seeks costs of $10,093.05.¿ Lab Zero challenges the costs because Cross-Defendants counsel’s chart describing the costs reflects a total of only $1,149.80. The court agrees with Lab Zero. Costs only in the sum of $1,149.80 are reflected in the chart. (See Motion, p. 15; see also King Decl., ¶ 29). Cross-Defendants do not explain how they arrive at the requested sum.¿ Accordingly, the court will award costs in the sum of $1,149.80 only.¿
C. Request for Stay of Enforcement
Lab Zero requests that the court stay enforcement of the award pending completion of the remainder of the litigation. Code of Civil Procedure section 918.5, subdivision (a), states that “[t]he trial court may, in its discretion, stay the enforcement of a judgment or order if the judgment debtor has another action pending on a disputed claim against the judgment creditor.” There are three factors for the trial court to consider in exercising this discretion: “(1) The likelihood of the judgment debtor prevailing in the other action; (2) The amount of the judgment of the judgment creditor as compared to the amount of the probable recovery of the judgment debtor in the action on the disputed claim; (3) The financial ability of the judgment creditor to satisfy the judgment if a judgment is rendered against the judgment creditor in the action on the disputed claim.” (Code Civ. Proc., § 918.5, subd. (b).)
The court declines to stay enforcement of the order awarding Cross-Defendants’ fees and costs.
IV. CONCLSUION
Cross-Defendants’ Motion for Attorneys’ Fees is GRANTED. Cross-Defendants are awarded $131,427.50 in attorneys’ fees and $1,149.80 in costs for a total award of $132,577.30.
Moving party to give notice.
Dated: October 21, 2024
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¿ | ¿ Kerry Bensinger¿¿ ¿ Judge of the Superior Court¿ |