Judge: Layne H. Melzer, Case: 2021-01194619, Date: 2022-12-15 Tentative Ruling
Petitioners Stephen E Samuelian, Robert S Samuelian
Motion for Attorney Fees
The court grants Petitioners Stephen Samuelian and Robert Samuelian’s motion for attorney’s fees and costs against Respondents Life Generations Healthcare, LLC (“LGHC”), Thomas Olds, Jr., Lois Mastrocola, and Fred Smith, jointly and severally, but reduces the amount as set forth below.
A. Petitioners are entitled to attorney’s fees and costs pursuant to Code of Civil Procedure Section 1293.2 and the parties’ Amended and Restated Operating Agreement (AROA).
Award of costs, including attorney fees when authorized by contract, is mandatory in judicial proceeding to confirm, correct, or vacate an arbitration award. (Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group (2005) 129 Cal.App.4th 508, 513.)
Petitioners and Respondents entered into the Amended Restated Operating Agreement dated October 29, 2007 (“AROA.”) The AROA is part of the record at CP1. The AROA contains the following broad attorneys’ fees and cost provision in favor of a prevailing party in any action or dispute arising from the agreement:
“If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it may be entitled.”
(AROA, § 12.6.)
Respondents argue while Petitioners have invoked paragraph 12.6 to seek attorneys’ fees, paragraph 7.10(a) represents a more specific provision than the general fee-shifting provision in paragraph 12.6 with respect to litigation involving derivative claims. Respondents then cite to cases involving distinct statutes. (See e.g., Department of Fair Employment & Housing v. Cathy's Creations, Inc. (2020) 54 Cal.App.5th 404, 409 [“Government Code section 12974’s attorneys’ fee provision conflicts with Code of Civil Procedure section 1021.5, and the two statutes cannot reasonably be harmonized. As section 12974 is the more specific, later-enacted statute, it governs”]; see also Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 638 [“plaintiff's action alleged a violation of the FEHA. As that act itself provides such a mechanism, resort to section 1021.5 is unnecessary”].)
Moreover, Respondents’ claim that Section 7.10 applies has been rejected. Respondents took issue with the Arbitrator’s conclusion that section 7.10(a) applied only to “actions filed by third parties” (3/29/22 Jt. Outline at p. 88), but this Court agreed with that conclusion after extensive briefing and argument (7/22/22 St. of Dec. at pp. 44-45).
Alternatively, Respondents argue that even if Section 12.6 applied, it does not apply to this “special proceeding”. The court again disagrees. (See Code. Civ. Proc. § 1293.2.)
Thus, Petitioners have shown entitlement to costs and here attorney’s fees as a result of the parties’ Agreement.
B. Merits
1. Legal Standard
The court notes that the value of the legal services performed in a case is a matter in which the judge may use his or her own expertise. The judge may determine the value of the services without the necessity for (or contrary to) expert testimony. PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1096). The trial court also “possesses personal expertise in the value of the legal services rendered in the case before it” and is entitled to take into account the quality of the counsel’s work. (E.g., Russell v. Foglio (2008) 160 Cal. App. 4th 653, 661).
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 issue a statement of decision for an attorney's fee award. Hjelm v Prometheus Real Estate Group, Inc. (2016) 3 CA5th 1155, 1178 (ruling on fee motion does not require judicial explanation or statement of decision); Ventura v ABM Indus. Inc. (2012) 212 CA4th 258, 274–275 (record in this case showed that judge considered all relevant pleadings and entire case, made decision based on reason, and articulated those reasons at hearing in awarding fees); Gunther v Alaska Airlines, Inc. (2021) 72 CA5th 334, 361–362 (there is no general rule requiring judges to explain their decisions on motions seeking attorney's fees); Sonoma Land Trust v. Thompson (2021) 63 Cal.App.5th 978, 988–989 citing Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140.)
In awarding fees in a lesser amount than that requested, a judge need not specify each claimed item the judge found was unsupported or unreasonable. (Gorman v Tassajara Dev. Corp. (2009) 178 CA4th 44, 67.) As long as this is not a situation where the award is inscrutable or appears to have been plucked from the air. (See Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 100-101.)
Courts apply a lodestar method to calculate reasonable attorneys’ fees. (Meister v. U.C. Regents (1998) 67 Cal.App.4th 437, 448-449.) The court determines a lodestar figure based on a careful compilation of the time spent and reasonable hourly compensation of each attorney involved. (Serrano v. Priest (1977) 20 Cal.3d 25, 48.) An experienced trial judge is the best judge of the value of professional services rendered in his or her court. (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 998.) The court’s analysis begins with the 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.” (Serrano v. Priest (1977) 20 Cal.3d 25, 48.) “The reasonable hourly rate is that prevailing in the community for similar work.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 [internal citation omitted].) A reasonable hourly rate reflects the skill and experience of the lawyer, including any relevant areas of particular expertise, and the nature of the work performed. (Hensley v. Eckerhart (1983) 461 U.S. 424, 433-434.) The reasonable market value of the attorney’s services is the measure of a reasonable hourly rate. This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represented the client on a straight contingent fee basis, or are in house counsel. (PLCM Group v. Drexler, supra, 22 Cal.4th at p. 1094.)
2. Work Unrelated to Confirming / Vacating the Petitions and this Court Proceeding
The billing entries for Payne & Fears, however, start as of December 1, 2020, reflecting significant work done in connection with the underlying contractual arbitration. (Nix Decl., Ex. B.)
Petitioners cite no case that would permit this court to award fees for work on the underlying arbitration as opposed to this court proceeding. (See Austin v. Allstate Ins. Co. (1993) 16 C.A.4th 1812, 1816, [prevailing plaintiff was entitled only to recover cost of filing motion to confirm]; Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 CA5th 840, 877, [parties who successfully confirmed award were prevailing parties in postarbitration proceedings entitled to attorneys' fees; arbitration agreement included mandatory attorneys' fees provision, and thus award of fees under C.C.P. 1293.2 was mandatory]; Carole Ring & Associates v. Nicastro (2001) 87 C.A.4th 253, 258 [in arbitration resolving breach of real estate listing agreement, although arbitrator exercised right to direct parties to bear their own attorneys' fees and costs, defendant was entitled to postarbitration fees and costs under C.C.P. 1293.2 and court was not bound by arbitrator's award].
For this reason, the cost award requested in the amount of $5,122 is reduced by the amount of $2,183, leaving a total cost award of $2,939. Moreover, as discussed below the fee award will be reduced accordingly.
3. Reasonable Fees
To determine reasonable attorney’s fees, the court should consider the nature of the litigation, its difficulty, the amount involved, the skill required and employed in handling the matter, the attention given, the success of the attorney’s efforts, the intricacies and importance of the litigation, the labor and necessity for skilled legal training and ability in trying the cause, and the time consumed. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 659.) As to the reasonableness of the hours, “trial courts must carefully review attorney documentation of hours expended; ‘padding’ in the form of inefficient or duplicative efforts is not subject to compensation.” (Ketchum v. Moses, supra, 24 Cal.4th at p. 1132.) “[A]ny failure to maintain appropriate time records sufficient to provide a basis for determining how much time was spent on particular claims” properly permits reduction of the award. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320.) “In determining a fee's reasonableness, the court may also consider whether the motion itself is reasonable, both in terms of (1) the amount of fees requested and (2) the credibility of the supporting evidence.” (Guillory v. Hill (2019) 36 Cal.App.5th 802, 811.) The court may make a downward adjustment if the billing entries are vague, “blockbilled,” or unnecessary. (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 441.)
The court nevertheless reduces the reasonable hours spent (and hence the overall fees) based on (1) a significant amount of billing being directly related to the underlying arbitration rather than the petitions adjudicated before this Court and (2) to a more limited extent, due to excessive interoffice meetings, duplicative work, block billing, and other apparent inefficiencies
Petitioners ask for $917,263.65 in attorney’s fees.
Taking all of the above into account, and after reviewing the evidence, including the detailed billing records provided and applying the lodestar approach, the Court finds that the reasonable amount of attorney’s fees to be awarded to Petitioners is $830,103.65 in fees and $2,939 in costs.
Petitioners shall serve notice of this ruling.