Judge: Mark A. Young, Case: 20SMCV01617, Date: 2023-09-26 Tentative Ruling

Case Number: 20SMCV01617    Hearing Date: September 26, 2023    Dept: M

CASE NAME:           Revah, et al., v. National Mortgage Resources, et al.

CASE NO.:                20SMCV01617

MOTION:                  Motion for Attorneys’ Fees

HEARING DATE:   9/14/2023

Legal Standard

With respect to attorney fees and costs, unless they are specifically provided for by statute (e.g., CCP §§ 1032, et seq.), the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties.¿(CCP § 1021.) The prevailing party on a contract, which specifically provides for attorney fees and costs incurred to enforce the agreement, is entitled to reasonable attorney fees in addition to other costs.¿(Civ. Code § 1717(a); CCP §§ 1032, 1033.5(a)(10)(A).)¿The court, upon notice and motion by a party, shall determine the prevailing party and shall fix, as an element of the costs of suit, the reasonable attorney fees.¿(Civ. Code § 1717(a), (b).)¿Any notice of motion to claim attorney fees as an element of costs under shall be served and filed before or at the same time the memorandum of costs is served and filed; if only attorney fees are claimed as costs, the notice of motion shall be served and filed within the time specified in CRC 3.1700 for filing a memorandum of costs.¿(CRC 3.1702; Gunlock Corp. v. Walk on Water, Inc. (1993) 15 Cal.App.4th 1301, 1303, fn. 1.) 

“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. [Citation.]” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623 624.) 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.” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 154.) “[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.” (Margolin v. Reg’l Planning Comm’n (1982) 134 Cal.App.3d 999, 1004.) The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided. (See Serrano v. Priest (1977) 20 Cal.3d 25, 49 [discussing factors relevant to proper attorneys’ fees award].) 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. (Id. at 48, fn. 23.) The factors considered in determining the modification of the lodestar include “(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.” (Mountjoy v. Bank of Am. (2016) 245 Cal.App.4th 266, 271.) 

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.¿(Premier Medical Management Systems, Inc. v. California Ins. Guaranty Assoc. (2008) 163 Cal.App.4th 550, 564.)¿General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice. (Ibid.) 

Analysis

Defendant National Mortgage Resources (NMR) moves for an order of attorneys’ fees incurred in this action pursuant to Civil Code section 1717 and Code of Civil Procedure section 1032. Defendant requests an award of $266,506.50, plus fees associated with filing reply papers. Plaintiff disputes Defendant’s claim that it was a prevailing party in this consolidated action.

The term “Prevailing party” includes 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 against those plaintiffs who do not recover any relief against that defendant. (CCP § 1032(a)(4).) Under section 1717, “the court is given wide discretion in determining which party has prevailed on its cause(s) of action. Such a determination will not be disturbed on appeal absent a clear abuse of discretion.” (Smith v. Krueger (1983) 150 Cal.App.3d 752, 756–757.) However, Code of Civil Procedure section 1717(b)(2) provides in pertinent part: “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.” (Emphasis Added.)

Plaintiffs voluntarily dismissed this action without prejudice. On May 9, 2023, Plaintiffs filed a Request for Dismissal. (Kay Decl. ¶ 24, Ex. 20.) Thus, NMR must demonstrate that it is the prevailing party despite section 1717(b)(2). As set forth below, NMR fails to do so.

NMR argues that Plaintiffs’ dismissal was not truly “voluntary” and thus the exception in subsection (b)(2) does not apply. NMR points to no authority that the Court may determine whether a voluntary dismissal was “truly voluntary.” NMR’s closest authority on point is Calvo Fisher & Jacob LLP v. Lujan (2015) 234 Cal.App.4th 608, 626. In Calvo, the Court of Appeal rejected a complainant’s argument that a voluntary dismissal of an appeal provides statutory immunity under section 1717:

Lujan claims that by voluntarily dismissing the appeal, he voluntarily dismissed the action. The argument is fatuous. As mentioned above, eight of the 10 causes of action in Lujan's cross-complaint were dismissed prior to trial, by demurrer or motion. The remaining two, breach of contract and bad faith, were dismissed on nonsuit. The dismissals hardly qualify as “voluntary.”

(Id. at 626.) Here, unlike Lujan, there was no involuntary dismissal of each and every cause of action. There, the cross-defendant was rightfully the prevailing party since eight of Lujan’s ten causes of action in the cross-complaint were dismissed prior to trial by demurrer or motion, and the remaining two were dismissed on nonsuit. NMR’s other cited authorities are inapposite, as they do not hold that the Court may ignore section 1717(b)(2)’s provision regarding voluntary dismissal. (Blue Mountain Enter., LLC v. Owen (2022) 74 Cal.App.5th 537, 558-59.) In fact, NMR’s cited case of Hsu favorably recognizes immunity. (See Hsu v. Abbara (1995) 9 Cal.4th 863, 872-873 [generally discussing legislative changes to section 1717].)

Therefore, the Court does not have the discretion to ignore section 1717(b)(2)’s command that there is “no prevailing party” in this matter.  The motion is DENIED.