Judge: Lynette Gridiron Winston, Case: 19PSCV01059, Date: 2025-05-05 Tentative Ruling
Case Number: 19PSCV01059 Hearing Date: May 5, 2025 Dept: 6
CASE NAME: All Pro Communication Technologies, Inc. v. Hrach Rostami, et al.
Plaintiff and Cross-Defendants’ Motion for Attorneys’ Fees
TENTATIVE RULING
The Court GRANTS Plaintiff All Pro Communication Technologies, Inc.’s request for attorney fees in the reduced amount of $160,043.00. This fee award is only against Defendant Rostami.
Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order.
BACKGROUND
This is a contractual fraud action. On November 25, 2019, plaintiff All Pro Communication Technologies, Inc. (Plaintiff) filed this action against defendants Hrach Rostami (Rostami), Hart Consulting Group, Inc., HR Consulting Group, Nurbeh Boghozian, Noble Data Technologies, Inc., Narbeh Iranosian, Rafik Tsaturyan, Tomik Gaprielian (collectively, Defendants) and Does 1 through 20. Plaintiff filed the operative Fourth Amended Complaint on April 18, 2022 against Defendants, alleging causes of action for breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, civil conspiracy, accounting, embezzlement, conversion, fraud and concealment, unfair business practices, computer crimes (Cal. Penal Code § 502), aiding and abetting computer crimes, and conspiracy to commit computer crimes.
On June 14, 2021, Defendant Hrach Rostami filed the operative cross-complaint against All Pro Communication Technologies, Inc., Alex Acuna (Acuna), and Roes 1 through 20, alleging causes of action for declaratory relief, accounting, breach of contract, fraud and deceit – constructive fraud/embezzlement, conversion, money had and received, breach of fiduciary duty, and fraud and deceit – promise without intent to perform.
On July 9, 10, 11, 12, 15, and 17, 2024, a non-jury trial was held. On January 16, 2025, the Court issued a Statement of Decision. On January 30, 2025, the Court entered judgment in favor of Plaintiff on the complaint and cross-complaint and deemed Plaintiff the prevailing party for purposes of recovering costs and attorney fees.
On April 4, 2025, Plaintiff moved for attorney fees. On April 22, 2025, Rostami, Hart Consulting Group, and HR Consulting Group (collectively, Opposing Parties) opposed the motion. On April 28, 2025, Plaintiff replied.
LEGAL STANDARD
“In any action brought pursuant to this subdivision the court may award reasonable attorney's fees.” (Penal Code, § 502, subd. (e)(2).) Generally, a prevailing party is one who obtained a net judgment in his or her favor. (See Smith v. Rae-Venter Law Group (2002) 29 Cal.4th 345, 365, 370, superseded by statute on other grounds as stated in Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, fn. 6 (J. Chin, concur. and dissent. opn.).) But, the determination is ultimately based on whether the party seeking attorney fees has achieved its main litigation objective. (Hsu v. Abbara (1995) 9 Cal.4th 863, 877.) The Court also looks to who prevailed on a practical level. (Heather Farms Homeowners Ass’n, Inc. v. Robinson (1994) 21 Cal.App.4th 1568, 1574.)
The party seeking fees and costs bears the burden to show "the fees incurred were allowable, were reasonably necessary to the conduct of the litigation, and were reasonable in amount." (Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99, 104.) To satisfy this burden, evidence and descriptions of billable tasks must be presented in sufficient detail, enabling the court to evaluate whether the case was overstaffed, the time attorneys spent on specific claims, and the reasonableness of the hours expended. (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 486-487.)
“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 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. [Citation.] The court may also consider whether the amount requested is based upon unnecessary or duplicative work. [Citation.]” (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448.)
“The courts repeatedly have stated that the trial court is in the best position to value the services rendered by the attorneys in his or her courtroom [citation], and this includes the determination of the hourly rate that will be used in the lodestar calculus.[Citation.]” (569 E. Cnty. Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 436-437.)
DISCUSSION
Summary of Arguments
Plaintiff contends it is entitled to an award of reasonable attorney fees under Penal Code section 502, subdivision (e), since it prevailed on this cause of action at trial. Plaintiff concedes that this is the only cause of action upon which Plaintiff prevailed that provides for recovery of attorney fees, but contends that the time spent on work that is common to both fee-shifting and non-fee-shifting claims is fully compensable without reduction or adjustment, citing Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124 (Reynolds Metals). Plaintiff contends that while it seeks an award of fees for work that was spent only on pursuing the Penal Code section 502 cause of action, this claim was interrelated with the others insofar that Defendant Rostami improperly used his access to Plaintiff’s computer system to delete emails that would otherwise reveal the improper and tortious conduct and to improperly acquire knowledge to undercut Plaintiff’s bids.
Plaintiff contends the number of hours spent are reasonable, as it is not seeking fees for work expended before August 2021 when Rostami’s illicit scheme began. Plaintiff indicates that its counsel hired a forensic computer expert and conduct third-party discovery to determine Rostami’s illegal computer access and the extent of Rostami’s illicit scheme. Plaintiff indicates that after adding this Penal Code section 502 cause of action to the operative Fourth Amended Complaint, it conducted further discovery on this. Plaintiff also contends its counsel had to prepare this matter for trial multiple times before ultimately securing a judgment in Plaintiff’s favor. Plaintiff indicates its counsel staffed the case efficiently and utilized lower-priced non-lawyers to perform significant parts of the work to keep costs reasonable.
In opposition, Opposing Parties contend that the amount of fees requested is unreasonable, as Plaintiff initially brought 13 causes of action but only prevailed on four of them. Opposing Parties contend the Court’s determination to award attorney fees is totally discretionary, and that the amount of fees requested is approximately 50% of the total outstanding judgment. Opposing Parties contend Plaintiff was not awarded allowable damages under Penal Code section 502 because Plaintiff did not request any compensatory damages under that code section. Opposing Parties contend the applicable statute does not support Plaintiff’s claim for fees because Plaintiff’s judgment resulted primarily from other causes of action, arguing that Plaintiff is improperly attempting to increase attorney fees by joining causes of action for which fees are not recoverable, citing Reynolds Metals. Opposing Parties contend Plaintiff’s success on this cause of action resulted from its expert’s failure to locate three emails which have no bearing on Plaintiff’s success as to its other causes of action. Opposing Parties contend that Plaintiff’s likelihood of prevailing on the other causes of action would not have been impacted if Plaintiff had failed to prove its Penal Code section 502 claim.
Opposing Parties then contend that the Court should account for any duplicative or unnecessary work attributable to issues not entwined with Penal Code section 502 or the Labor Code cross-claims. Opposing Parties contend the Court should deny Plaintiff’s request because Plaintiff submitted vague block billed entries. Opposing Parties alternatively argue the Court should dramatically reduce the award to exclude fees to which Plaintiff is not entitled, including those claims that have been settled or voluntarily dismissed, which Plaintiff improperly includes in its request here. Opposing Parties contend Plaintiff only has at most a claim against Rostami, and that Plaintiff has not provided any authority to suggest it prevailed while at the same time also voluntarily dismissing claims against defendants on the eve of trial. Opposing Parties finally contend the Court has discretion to allocate attorney fees based on its determination of the reasonable value of services attributed to the cause of action for which attorney fees are allowed.
Analysis
The Court finds that Plaintiff is the prevailing party for purposes of recovering attorney fees under Penal Code section 502, subdivision (e). Plaintiff prevailed on this cause of action at trial and was awarded $10,000.00 in damages, and thereby obtained its litigation objective on this cause of action. (Statement of Decision (1/14/25); Judgment (1/30/25); Olive v. Gen. Nutrition Centers, Inc. (2018) 30 Cal.App.5th 804, 824 [extent to which party realized its litigation objective is a factor for determining whether the party is a prevailing party].) The judgment also explicitly provides that Plaintiff is a prevailing party and that Plaintiff could seek a recovery of attorney fees. (Judgment (1/30/25).) The fact that Plaintiff initially brought more causes of action than were actually litigated at trial is irrelevant. (See Bowman v. City of Berkeley (2005) 131 Cal.App.4th 173, 177 [party may still be a prevailing party while prevailing on some but not all causes of action, but that can be factored in when determining the amount of the award].)
The Court also finds Opposing Parties’ argument that Plaintiff did not request or recover any compensatory damages under Penal Code section 502 to be unavailing. Penal Code section 502, subdivision (e)(1), provides compensatory damages “for any expenditure reasonably and necessarily incurred…” (Penal Code, § 502, subd. (e)(1).) Plaintiff presented evidence at trial showing it had incurred $10,000.00 in damages to verify that Rostami accessed Plaintiff’s computer system and deleted data, the Court admitted and accepted that evidence, and the Court explicitly found that Plaintiff had reasonably and necessarily incurred such damages based on that evidence. (Statement of Decision (1/14/25).)
The Court further finds that Plaintiff’s Penal Code section 502 cause of action contains common issues of fact with the other causes of action for which attorney fees are not recoverable, and does not find that Plaintiff is attempting to improperly increase attorney fees by joining the Penal Code section 502 claim with the otherwise nonrecoverable claims. Thus, no allocation is required. (Reynolds Metals, supra, 25 Cal.3d at pp. 129-130; see also Akins v. Enter. Rent-A-Car Co. of San Francisco (2000) 79 Cal.App.4th 1127, 1133 (Akins) [“When the liability issues are so interrelated that it would have been impossible to separate them into claims for which attorney fees are properly awarded and claims for which they are not, then allocation is not required. [Citation.]”].) Rostami’s improper access of Plaintiff’s computers and deletion of data arises from the same general scheme of Rostami using Plaintiff’s computer system and data without permission to prepare lower bids for Noble Data. (Statement of Decision (1/16/25).) Whether the likelihood of prevailing on the other causes of action would have been impacted if Plaintiff failed to prove its Penal Code section 502 claim does not mean these causes of action do not contain common issues of fact. Further, Plaintiff’s fee request seems to include work related to the computer crimes and exclude fees for unrelated work to the extent possible. (Pisano Decl., ¶ 2 and Ex. 2.)
Also, Penal Code section 502, subdivision (e)(1), does not provide a minimum requirement of the amount of emails that need to be deleted before it applies. (Penal Code, § 502, subd. (e)(1).) In fact, that code section specifically provides for recovery of compensatory damages for expenses reasonably and necessarily incurred to verify that a computer system, computer program, or data was or was not altered or damaged by the improper access. (Id., italics added.) Plaintiff presented evidence that Rostami improperly accessed Plaintiff’s computers and deleted data, and therefore prevailed on this cause of action. (Statement of Decision (1/16/25).)
Accordingly, the Court finds Plaintiff is entitled to attorney fees as the prevailing party here per Penal Code section 502, subdivision (e)(2). The Court will now address the amount requested.
Plaintiff submitted a verified fee bill, which is prima facie evidence that the costs, expenses, and services listed were reasonable. (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682; Pisano Decl., Ex. 2.) The Court notes that Opposing Parties’ opposition does not identify or dispute any specific entries. “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice. Failure to raise specific challenges in the trial court forfeits the claim on appeal.” (Premier Medical Management Systems, Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 564 (Premier Medical); see also D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 728, fn. 4 [where nonmoving party fails to oppose a ground for a motion, "it is assumed that [nonmoving party] concedes" that ground].)
The Court does agree with Opposing Parties, however, that there is block billing contained throughout Plaintiff’s counsel’s fee bill that is problematic, much of it from associate attorney Mariah Witt. (See, e.g., Pisano Decl., Ex. 2, pp. 11-12, 18, 31-32, 34.) But, other entries indicate within their descriptions the amount of time spent on each subtask. (See, e.g., Pisano Decl., Ex. 2, pp. 37, 40-41, 44, 71.) Nevertheless, the Court does find the use of block billing problematic here. Plaintiff indicates having only requested recovery of fees for work associated with its Penal Code section 502 claim, but the block billing makes it difficult in some places to determine whether the work was performed for that claim. Accordingly, after reviewing the fee bills, the Court exercises its discretion to reduce Plaintiff’s overall fee request by $2,910.00, for the improper block billing. “Trial courts retain discretion to penalize block billing when the practice prevents them from discerning which tasks are compensable and which are not. [Citation.]” (Heritage Pac. Fin., LLC v. Monroy (2013) 215 Cal.App.4th 972, 1010.)
The Court also notes that Opposing Parties did not dispute the hourly rates requested for Plaintiff’s counsel. (See Premier Medical, supra, 163 Cal.App.4th at p. 564; see also D.I. Chadbourne, Inc. v. Superior Court, supra, 60 Cal.2d at p. 728, fn. 4.)
The Court further notes that this award of attorney fees applies only to Rostami since the Court only found Rostami liable for violation of Penal Code section 502. (Statement of Decision (1/16/25); Judgment (1/30/25), ¶ 2.) Thus, contrary to Opposing Parties’ assertion, Plaintiff is not improperly including fees for claims that have been dismissed or settled.
Having reviewed the verified bill for legal services and the declaration of counsel, the Court finds that the reduced amount of $154,768.00 in attorney fees for a claim that was litigated over the past three years and went to trial is reasonable. (See 569 E. Cnty. Boulevard LLC v. Backcountry Against the Dump, Inc., supra, 6 Cal.App.5th at pp. 436-437 [trial court is in the best position to determine the value of the services rendered in its courtroom].)
As for the time expended on this motion, the Court finds the time spent by Mr. Pisano is reasonable but will reduce the time spent by Ms. Gamba to 5 hours. (Pisano Decl., ¶ 9.) Thus, the time awarded for this motion will be 6 hours for Mr. Pisano, multiplied by the hourly rate of $650.00 ($3,900.00) and 5 hours for Ms. Gamba, multiplied by the hourly rate of $275.00 ($1,375.00), for a total of $5,275.00.
Based on the foregoing, the Court GRANTS Plaintiff’s request for attorney fees in the reduced amount of $160,043.00. This fee award is only against Defendant Rostami.
CONCLUSION
The Court GRANTS Plaintiff All Pro Communication Technologies, Inc.’s request for attorney fees in the reduced amount of $160,043.00. This fee award is only against Defendant Rostami.
Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order.