Judge: Kevin C. Brazile, Case: BC630725, Date: 2022-10-13 Tentative Ruling

Case Number: BC630725    Hearing Date: October 13, 2022    Dept: 20

Tentative Ruling

Judge Kevin C. Brazile

Hearing Date:                         Thursday, October 13, 2022

Case Name:                             Inner City Skyline, Inc. v. Renita James, et al.

Case No.:                                BC630725

Motion:                                   Motion for Prompt Payment of Penalties or, alternatively, for Contractual Interest; and Attorney Fees Pursuant to Statute

Moving Party:                         Plaintiff Inner City Skyline, Inc.

Responding Party:                   None

Notice:                                    OK

Ruling:                                    The Motion for Prompt Payment of Penalties or, alternatively, for Contractual Interest; and Attorney Fees Pursuant to Statute is GRANTED. Plaintiff is awarded $71,523.36 in prompt penalties fees and $39,169.55 in reduced attorney fees pursuant to Civil Code § 8800(c). The Court declines to address the requests made in the alternative.

Plaintiff to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

BACKGROUND

            On August 17, 2016, Plaintiff filed a Complaint against Defendant Renita James (“Defendant”), stating causes of action for breach of contract, foreclosure of mechanic’s lien, quantum meruit, and account stated.

            On April 23, 2018, Defendant filed a Cross-Complaint against Plaintiff stating cross-claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, rescission, and unfair business practices.

            On July 29, 2022, a special verdict was entered in favor of Plaintiff’s breach of contract claim, and the jury awarded Plaintiff to recover $49,669 under the contract less the reasonable costs of any work that needed to be corrected. (See July 29, 2022 Special Verdict.) Additionally, the Court found in favor of the Plaintiff with regarding to the remaining claims as follows: (1) as to Plaintiff’s quantum meruit claim, an amount of $46,670 was awarded; and (2) as to the open book account claims, an amount of $46,670 was awarded. (See July 29, 2022 Minute order at pg. 1.)

            On August 10, 2022, Plaintiff filed the instant motion for prompt payment of penalties pursuant to Civil Code § 8800 or, alternatively, for contractual interest. Plaintiff also seeks to recovery attorney fees pursuant to Civil Code § 8800(c) or alternatively based on Civil Code § 1717.5. No opposition has been filed.

DISCUSSION

Applicable Law

            Pursuant to Civil Code § 8800, it states:

(a) Except as otherwise agreed in writing by the owner and direct contractor, the owner shall pay the direct contractor, within 30 days after notice demanding payment pursuant to the contract is given, any progress payment due as to which there is no good faith dispute between them. The notice given shall comply with the requirements of Chapter 2 (commencing with Section 8100) of Title 1. 

(b) If there is a good faith dispute between the owner and direct contractor as to a progress payment due, the owner may withhold from the progress payment an amount not in excess of 150 percent of the disputed amount. 

(c) An owner that violates this section is liable to the direct contractor for a penalty of 2 percent per month on the amount wrongfully withheld, in place of any interest otherwise due. In an action for collection of the amount wrongfully withheld, the prevailing party is entitled to costs and a reasonable attorney's fee. 

Application to Facts

A.    Prompt Payment Penalties

Here, based on the findings made after trial, it was determined that Defendant breached her contract with Plaintiff and wrongfully withheld $49,699 from Plaintiff, and Plaintiff provided notice demanding payment more than 30 days prior to filing this action. (Motion at pg. 4.) Thus, for simplicity, Plaintiff states that 72 months have elapsed between August 17, 2016, when the complaint was filed, and July 29, 2022, when the special verdict was made. Therefore, penalties pursuant to Civil Code § 8800 equate to $993 per month or for a total of $71,523.36. It is noted that Defendant has not filed an opposition to this request.

Because notice was provided and Defendant wrongfully withheld payment that was due, the Court grants Plaintiff’s request and awards Plaintiff $71,523.36 in penalties pursuant to Civil Code § 8800(c).

B.     Attorney Fees

Plaintiff additional seeks to recover attorney fees pursuant to Civil Code § 8800(c) in the amount of $55,994. Because Defendant wrongfully withheld payment, Plaintiff is entitled to attorney fees under Civil Code § 8800(c).

                                            i.            Hourly Rate

The reasonableness of attorney fees lies within the discretion of the trial court. (PLCM Group v. Dexler (2000) 22 Cal.4th 1084, 1096.)The court makes it determination based on the 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.) The court should apply an objective standard of reasonableness. (Id. at p. 1098.) “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.) 

Here, Counsel Bruce Rudman indicates that his hourly rate is $395 for this matter, and the hourly rate of his partner, Counsel Sharice Marootian, is $325. (Motion at pg. 4; Rudman Decl. ¶¶ 4-5.) The Court finds these rates reasonable based on the counsels’ overall experience. (PLCM Group, supra, 22 Cal.4th 1084, 1096.)

                                          ii.            Hours Worked

Recovery of attorney fees is limited to those fees necessarily incurred in prevailing on the claim. (Civil Code § 1717; Santisas v. Goodin (1998) 17 Cal.4th 599, 622 [“a court may base its attorney fees decision on a pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise”].) Although detailed time records are not required, California Courts have expressed a preference for contemporaneous billing and an explanation of work. (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4^th 1363, 1375.) “Of course, the attorney’s testimony must be based on the attorney’s personal knowledge of the time spent and fees incurred. (Evid.Code, § 702, subd. (a) [‘the testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter’].) Still, precise calculations are not required; fair approximations based on personal knowledge will suffice.” (Mardirossian & Associates, Inc. v. Ersoff (2007) 153 Cal.App.4^th 257, 269.)

Here, while a detail time record was not submitted to the Court, Counsel Rudman attests that he billed a total of 132.2 hours on this matter, and Counsel Marootian billed a total of 11.5 hours. (Rudman Decl. ¶¶ 5-6.)  The tasks include preparing necessary court filings, conducting discovery, performing trial work, communicating with Plaintiff, appearing for court hearings, and attending to post-trial matters. (Id.) In total for these tasks, Plaintiff was billed $55,944. (Id.) Considering that this case spanned six years and a detailed time record has not been produced, the Court questions the accuracy of Counsel Rudman’s approximation of the hours spent on this matter. Therefore, the Court reduces the claimed hours by 30%. As a result, Counsel Rudman’s hours are reduced to 92.54 hours at a hourly rate of $395, and Counsel Marootian’s hours are reduced to 8.05 hours at a hourly rate of $325. Consequently, the requested attorney fees are reduced from $55,994 to $39,169.55.

            Accordingly, the Court awards Plaintiff attorney fees in the reduced amount of $39,169.55.

CONCLUSION

            The Motion for Prompt Payment of Penalties or, alternatively, for Contractual Interest; and Attorney Fees Pursuant to Statute is GRANTED. Plaintiff is awarded $71,523.36 in prompt penalties fees and $39,169.55 in reduced attorney fees pursuant to Civil Code § 8800(c). The Court declines to address the requests made in the alternative.

            Plaintiff to give notice.

            If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.