Judge: Latrice A. G. Byrdsong, Case: 22STLC03513, Date: 2023-12-21 Tentative Ruling

*** Please Note that the Judicial Officer Presiding in Department 25 is Commissioner Latrice A. G. Byrdsong ***
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Case Number: 22STLC03513    Hearing Date: January 29, 2024    Dept: 25

Hearing Date:                         Monday, January 29, 2024

Case Name:                             MOHSEN SADOOGHI, dba PARS AUTO SERVICE & SALES v. TPE CONCEPTS, LLC dba The Engine Forge.

Case No.:                                22STLC03513

Motion:                                   Motion for Attorney’s Fees from Plaintiff

Moving Party:                         Defendant TPE Concepts, LLC

Responding Party:                   Plaintiff Mohsen Sadooghi

Notice:                                    OK

Tentative Ruling:                    Defendant TPE Concepts, LLC’s Motion for Attorney’s Fees from Plaintiff is DENIED.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300)                      OK

[X] Correct Address (CCP §§ 1013, 1013a)                                      OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b))                       OK 

OPPOSITION:          Filed as of December 07, 2023                       [   ] Late          [   ] None 

REPLY:                     Filed as of December 11, 2023                       [   ] Late          [   ] None 

BACKGROUND

On May 24, 2022, Plaintiff Mohsen Sadooghi dba Pars Auto Service & Sales (“Plaintiff”) filed an action against Defendant TPE Concepts, LLC dba The Engine Forge (“Defendant”) for breach of contract and fraud.

Defendant filed an Answer to the Complaint on January 27, 2023.

On May 16, 2023, the Court denied Defendant’s discovery motions, filed on April 11, 2023, because Defendant’s 41 discovery requests exceeded the permissible number of discovery requests a party can make in a limited jurisdiction case, pursuant to Code of Civil Procedure § 94(a).

On May 17, 2023, Defendant filed two discovery motions under the following:

(1)   Motion to Compel Plaintiff to Provide Verified Responses, Without Objections, to Defendant’s Form Interrogatories, Set One, and Request for Monetary Sanctions (“MTC – Form”); and

(2)   Motion to Compel Plaintiff to Provide Verified Responses, Without Objections, and Documents to Defendant’s Demand to Identify and Produce Documents, Set One, and Request for Monetary Sanctions (“MTC Demand”).

The Court granted both motions and awarded monetary sanctions in the amount of $610.00, for each motion, in Defendant’s favor.

On September 27, 2023, Plaintiff requested dismissal of the action with prejudice. The Court granted Plaintiff’s request on September 28, 2023.

On October 05, 2023, Defendant filed the instant Motion for Attorney’s Fees from Plaintiff.

On December 13, 2023, the Court on its own motion Continued the hearing to January 29, 2024. Plaintiff replies in opposition. Defendant replies in support of its motion.

MOVING PARTY POSITION

             Defendant prays for the Court to issue an award of $9,827.50 in attorney’s fees based on the terms of the written lease agreement executed by the parties. Defendant makes its motion under Civil Code § 1717(a) and CCP § 1033.5(a)(10)(A), arguing that it is the prevailing party in this action since he collected on the Court’s order for sanctions issued against Plaintiff, and Plaintiff dismissed with prejudice the underlying action. Defendant additionally argues that the agreement between the parties provides for an award of attorney’s fee to the prevailing party. 

OPPOSITION

            In opposition, Plaintiff argues that since it voluntarily dismissed the case on September 26, 2023, under Civil Code § 1717(b)(2), the Court must find that there is no prevailing party and deny Defendant’s motion. Plaintiff argues that the net monetary recovery is irrelevant in the instant case as it arises in the context of a lawsuit settlement and not in the resolution of discovery motions.  

REPLY

            In response, Defendant continues to assert that it is the prevailing party and thus is entitled to attorney’s fees under Civil Code § 1717. Defendant also alleges that the service of Plaintiff’s opposition is defective as Plaintiff’s opposition papers were served electronically and not by mail as indicated on the proof of service.

ANALYSIS

I.          Legal Standard

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

In a breach of contract action, attorney’s fees shall be awarded when a contract provides that one of the parties or the prevailing party shall be awarded attorney’s fees in an action on that contract.  (See Civ. Code § 1717.)  A prevailing party is “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).)  However, “[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of [Civil Code section 1717].”  (Civ. Code § 1717(b)(2); see Shapira v. Lifetech Resources, LLC (2018) 22 Cal.App.5th 429, 441 (“A trial court lacks discretion to award fees under section 1717(b)(2) where a case has been voluntarily dismissed.”); see also Santisas v. Goodin (1998) 17¿Cal.4th 599, 615.) 

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 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.) 

As explained in Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 154: 

“[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.] 

(Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140.) “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, 623624.)   

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 v. Priest (1977) 20 Cal.3d 25, 49; Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 255.) 

II.        Discussion

As a general matter, the Court will not entertain Defendant’s argument of defective service since Defendant provided the Court with its reply on December 11, 2023. Thus, the Court will discuss the merits of the motion below.

Defendant is requesting $9,872.50 in attorneys’ fees to defend this action, plus an additional $2,261.50 for attorney’s fees and costs of bringing this motion. (Mot. p. 6, Steven Horn Decl. ¶ 6, 7.) In its moving papers, Defendant argues that the written contract between Plaintiff and Defendant provides the following,

Should any payment not be made within 30 days of the date billed or invoiced under these Terms and Conditions, you agree to pay all of our reasonable attorney’s fees and cost involved in the collection of any and all sums due hereunder even if such collection does not require judicial process or intervention. Additionally, the prevailing party in any legal action brought by one party against the other shall be entitled to reimbursement for its actual expenses incurred thereby, including reasonable attorney’s fees.

(emphasis added) (Paul Redicks Decl. ¶ 3, Ex. 1.)  Defendant relies on Code of Civil Procedure § 1032(a)(4), which states that a prevailing party includes “the party with a net monetary recovery.” (Mot. p. 5.) Defendant additionally relies on Code of Civil Procedure § 1033.5(a)(10)(A), which provides that attorney’s fees authorized by contract are allowable as a cost under CCP § 1032. (Id. p. 4.) Given that Plaintiff voluntarily dismissed the case and was ordered to pay monetary sanctions, Defendant argues that it is entitled to attorney’s fees. (Id., p. Horn Decl. ¶ 5.) 

In opposition, Plaintiff argues that Defendant is precluded from awarding attorney’s fees based on California Code of Civil Procedure § 1717(b)(2), which states that no prevailing party can be found in a contract case voluntarily dismissed. (Opp. pp. 2-4.) 

The Court finds that California Code of Civil Procedure §§ 1717(b)(2) and 1032(b) are controlling in the instant case.  Plaintiff correctly points out the relevant text of CCP § 1032(b) which provides that “Except as otherwise expressly provided by statute…” (Code. Civ. Proc. § 1032(b).) Civil Code § 1717(b)(2) provides, “Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” (Code. Civ. Proc. § 1717(b)(2).) Here, Plaintiff voluntarily dismissed the action against Defendant on September 27, 2023, which the Court granted the following day. (09/27/23 Request for Dismissal).

Defendant, in its moving papers, relies on Santisas v. Goodin in which the court held that where,

…plaintiffs voluntarily dismissed this action with prejudice, the seller defendants are defendants in whose favor a dismissal has been entered. Accordingly, they are “prevailing parties” within the meaning of Code of Civil Procedure section 1032, subdivision (b), and are “entitled as a matter of right to recover costs” unless another statute expressly provides otherwise.

(Santisas v. Goodin (1998) 17 Cal.4th 599, 605.) However, the Santisas court held that “[I]n voluntary pretrial dismissal cases, Civil Code section 1717 bars recovery of attorney fees incurred in defending contract claims” (Id. at 602.) The Santisas court further held that § 1717 does not bar recovery of attorney’s fees incurred in defending a tort or other noncontract claim. However, it declined to extend its opinion as it related to attorney’s fees incurred to litigate issues common to contract and tort claims. (Id. at p. 623, fn. 10.) Here, the Court is inclined to do the same.

Thus, under Civil Code § 1717(b)(2), the Court finds Defendant not to be the prevailing party in this matter because Plaintiff voluntarily dismissed its complaint. Therefore, the Court finds that since there is no prevailing party in this matter, Defendant is not entitled to attorney’s fees under the statute.

Accordingly, the Court DENIES the Motion for Attorney’s Fees.

III.       Conclusion

            Defendant’s Motion for Attorney’s Fees from Plaintiff is DENIED.

Moving party is ordered to give notice.