Judge: Layne H. Melzer, Case: 14-00756302, Date: 2022-07-28 Tentative Ruling

Pltfs. Vision En Analisis Y Estrategia, S.A. De C.V., Capitaliza-T, Sociedad De Responsabilidad Limitada De Capita
Motion for Attorney Fees

The court grants Plaintiffs/Judgment Creditors Vision En Analisis y Estrategia, S.A. De C.V., Capitaliza-T, Sociedad De Responsabilidad Limitada De Capita’s motion for attorney’s fees and costs.

Linda Budd, ALIR Settlements, LLC (ALIR), and Alynmnt Dev I, Inc. (Alynmnt) (collectively “Objecting Parties”) are ordered to pay Judgment Creditors $36,000 in attorney’s fees and $533.20 in costs.

Request for Judicial Notice 

Plaintiffs request for judicial notice is denied as irrelevant.

Facts

The final Judgment in this case was entered on 9/20/19 after a lengthy trial and post-trial motions. (ROA 1163). The Court of Appeal affirmed the Judgment in all respects. (ROA 1922).

While the appeal was pending, Judgment Creditors engaged in efforts to enforce the Judgment. Objecting Parties inserted themselves into this action by objecting to the production of subpoenaed documents. On September 21, 2020, the trial court issued a sanction award against Objecting Parties in the amount of $6,750.00 in grating Plaintiffs’ motion to compel documents.(ROA 1741) Objecting Parties appealed this sanctions Order. (ROA 1817.)

On 2/17/22, the Court of Appeal concluded that the Objecting Parties’ position was without support and affirmed the sanctions Order. (ROA 1975) Remittitur issued on 4/21/22. (Id.)

In its Opinion, the Court of Appeal ordered that Objecting Parties reimburse Judgment Creditors for their appellate fees and costs. (Id.)

Section 1987.2, subdivision (a), grants trial courts the discretion to "award the amount of the reasonable expenses incurred in making ... [a] motion [under section 1987.1], including reasonable attorney's fees, if the court finds the motion was ... opposed in bad faith or without substantial justification."

The Court of Appeal held that ‘“[a] statute authorizing an attorney fee award at the trial level includes appellate attorney fees unless the statute specifically provides otherwise.”’ (ROA 1975 at pp. 7-8, quoting Roe v. Halbig (2018) 29 Cal.App.5th 286, 313.)

Since Section 1987.2(a) does not preclude appellate attorney fees, the Court of Appeal ordered the trial court to “determine [Judgment Creditors’] appellate fees and costs in the first instance.” (Id. at p. 8.)

Merits

The lodestar method for calculating attorney's fees applies to any statutory attorney's fee award, unless the statute authorizing the award provides for another method of calculation. (Glaviano v Sacramento City Unified Sch. Dist. (2018) 22 CA5th 744, 750–751 (lodestar method is primary method for establishing amount of recoverable fees in statutory fee-shifting cases, in which prevailing party is statutorily authorized to recover his or her attorney's fees from losing party); K.I. v Wagner (2014) 225 CA4th 1412, 1425, (lodestar method is generally presumed to be starting point in analyzing appropriate amount of statutory attorney's fees).

Here, both sides utilize the lodestar method.

Under the lodestar method, the judge must first determine the lodestar figure—the reasonable hours spent multiplied by the reasonable hourly rate—based on a careful compilation of the time spent and reasonable hourly compensation of each attorney who was involved in presenting the case. (Glaviano v Sacramento City Unified Sch. Dist., supra, 22 CA5th at 751). The judge may then adjust the lodestar, based on various factors, to fix the fee at the fair market value for the legal services provided. (Sonoma Land Trust v Thompson (2021) 63 CA5th 978, 983.)

A judge may rely on personal knowledge and familiarity with the legal market in setting a reasonable hourly rate. (Heritage Pac. Fin., LLC v Monroy (2013) 215 CA4th 972, 1009.). A judge is not required to rely on expert testimony. (Marshall v. Webster (2020) 54 CA5th 275, 287.)

A judge may reasonably reduce an attorney's requested rate if the judge finds that the matter was not complex, that it did not go to trial but was settled, that the attorney was a named partner who was doing work that could have been done by a lower billing attorney in the firm, or that the attorney did work that could have been done by a paralegal. (Morris v Hyundai Motor Am. (2019) 41 CA5th 24, 41.)

A request for fees that appears unreasonably inflated is a special circumstance that permits a judge to reduce the fee award or to deny a fee award altogether. (Guillory v Hill (2019) 36 CA5th 802, 806, 811 (judge properly denied plaintiffs' fee request for more than $3.7 million in attorneys' fees when the total amount of their recovery was $5400); Chavez v City of Los Angeles (2010) 47 C4th 970, 990–991 (judge was justified in denying fees altogether because fee request was grossly inflated, when considered in light of single claim on which plaintiff prevailed, minimal damages awarded on that claim, and relatively small amount of time attorney might reasonably expect to spend in litigating this claim); Marriage of Nassimi (2016) 3 CA5th 667, 696 (when fee claim is inflated with numerous time entries devoted to matters other than reimbursable fees, claimant's credibility is undermined and judge is justified in taking skeptical view of fee request).)

A judge may not rubberstamp a request for attorney's fees but must determine the number of hours reasonably expended. (Morris v Hyundai Motor Am., supra, 41 CA5th at 38; Donahue v Donahue (2010) 182 CA4th 259, 271).

In evaluating whether a fee request is reasonable, a judge should consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended. Reasonable compensation does not include fees for “padding” in the form of inefficient or duplicative efforts, and a reduced fee award may be fully justified by a general observation that an attorney submitted a padded bill. (Morris v Hyundai Motor Am., supra, 41 CA5th at 38). It is entirely appropriate for a judge to reduce a fee award based on the judge's reasonable determination that a routine, noncomplex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted. (Id. at 39). Cutting all hours billed by specified attorneys is a permissible way of reducing inflated bills that resulted from having too many attorneys working on the case. (Id at 40).

Here, Creditors provide testimony of Neil M. Soltman, Esq., one of the two attorney’s who handled this appeal. (See ROA 1997.) Neil Soltman’s standard hourly rate is $1,200; Mr. Hendy’s standard hourly rate was $925 up to and including June 30, 2021 and $995 per hour thereafter. (Soltman Decl., ¶18.)

The Court finds the use of two attorneys unnecessarily duplicative given the nature of this appeal and the experience of each counsel. The court also finds that the time spent on various tasks to be unreasonable. (Soltman Decl., ¶17.) For example, it is not clear what needed almost 10 hours of research for this small sanctions order at a firm with a large, well-known and highly respected appellate practice, which used the same law as the underling motion. (See e.g. Soltman Decl., ¶14.) It is not clear why over 3 hours of “client contact and general correspondence” was needed. 

The Court finds the use of a summary to be permissible as time records are not required under California law so there is no required level of detail that counsel must achieve. (See, e.g., PLCM Group, supra, 22 Cal.4th at p. 1098.)  Nevertheless, the summary in this case does fail to convey the detail necessary for the Court to accept the overall time expended as reasonable. 

Based on the court’s own knowledge, the nature of the work performed in this case, and the evidence provided by the parties, the court finds that counsels’ hourly rates are not reasonable under the circumstances—regarding this appeal of a $6,750.00 sanctions order.

The court find this was a fairly simple appeal over a singular and narrow issue involving discovery sanctions.  The work could have been performed by qualified, less senior lawyers with lower rates.  The case did not warrant two senior lawyers billing at their stated rates.  The Court does not doubt that Messrs. Soltman and Hendy frequently bill and collect at their stated billing rates.  But in the context of a fee motion the Court does not find it appropriate to effectively charge the opposing party at these premium rates for the legal work at issue. 

The court finds a collective rate of $600 per hour reasonable under the circumstances and finds 60 hours as reasonably expended (rather than the 73.1 hours claimed). 

Consequently, the Court awards a total of 36,000 in fees and $533.20 in costs.