Judge: Mark A. Young, Case: 21SMCV01474, Date: 2024-09-25 Tentative Ruling

Case Number: 21SMCV01474    Hearing Date: September 25, 2024    Dept: M

CASE NAME:           Hay v. 1012 2nd St. Homeowners’ Association, et al.

CASE NO.:                21SMCV01474

MOTION:                  Motions for Attorneys’ Fees

HEARING DATE:   9/25/2024

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

This hearing regards competing motions for attorneys’ fees. Plaintiff Lani Hay moves for an award of attorney’s fees and costs in the amount of $293,762.50, as the “prevailing party” under Civil Code § 5975(c) and Article XIV, Section 3, of the Declarations of Covenants, Conditions and Restrictions for 1012 2nd Street Homeowners’ Association (“CC&Rs”). Defendants Saeed Babaeean and 1012 2nd Street, LLC, move for an award of attorneys’ fees and costs in the amount of $40,755.33.

Plaintiff owns real property located at 1012 2nd Street, Unit 1, Santa Monica, CA 90403 (the “Property”). The Property is part of a common interest development governed by the 1012 2nd Street Homeowners Association (the “HOA”), which was developed by Defendant 1012 2nd Street LLC. Defendants Soheil Mehrabanian (“Mehrabanian”) and Saeed Babaeean (“Babaeean”) are members of the LLC. Mehrabanian and Babaeean governed the HOA prior to the formation of a Board of Directors and then served as board members of the HOA.

Civil Code section 5975 provides: “In an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney fees and costs.” Plaintiff insists that she is the prevailing party because she forced the defendants to organize the HOA Board, among other nonmonetary relief. For this reason, Plaintiff believes that she is the prevailing party for practical purposes. (CCP §1032(a)(4) [“[i]f any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties…]; see Friends of Spring Street v. Nevada City (2019) 33 Cal.App.5th 1092, 1104 [“the trial court determines whether the party succeeded at a practical level by realizing its litigation objectives”].) Plaintiff explains that she brought this action to force the Developer Defendants to form a Board of Directors, enforce members’ voting rights, hold and notice proper meetings, maintain the common areas, and abate ongoing noxious activities. Plaintiff argues she achieved her litigation objective, as a Board of Directors was formed, annual meetings were held, members were able to vote, and she accepted the HOA’s statutory offer to settle with payment to her. If true, on a practical level, Plaintiff appears to have achieved non-monetary success against the HOA.

The Court, however, is not convinced.  First, Plaintiff does not explain against whom the attorneys’ fees award should be granted. Plaintiff only claims that she should be awarded the fees as the prevailing party, without referencing which defendants have to pay these fees. The action has not resolved in Plaintiff’s favor against any defendant. The action is currently pending between Plaintiff and the HOA, the only defendant that apparently settled. Plaintiff does not present a settlement agreement between herself and the HOA to show how it would apply to the other defendants. Even if she prevailed on a practical level against the HOA, Plaintiff does not show that she settled with the dismissed defendants, including opposing defendants Saeed Babaeean and 1012 2nd Street, LLC. Plaintiff apparently dismissed the defendants without obtaining any relief against them, settlement or otherwise. Plaintiff alleges that the LLC, Mehrabanian and Babaeean were alter egos of the HOA, and thus should be responsible for fees in this suit to enforce member rights against the HOA. Plaintiff does not present any evidence or briefing on whether defendants meet the alter ego criteria. Plaintiff solely relies on the allegations of the complaint that a unity of interest and ownership exists between the HOA, the LLC, Mehrabanian, and Babaeean, but provides no evidentiary support. (Compl., ¶ 9.) As there is no evidence that Plaintiff prevailed against the LLC or the individual defendants, any award against Babaeean and the LLC would be improper.

Babaeean and the LLC, however, demonstrate that they are prevailing parties in this action. Civil Code § 1032(a)(4) defines a “prevailing party” to include “a defendant in whose favor a dismissal is entered[.]” Plaintiff dismissed the action against Babaeean and the LLC without obtaining any monetary or non-monetary relief against them. As noted, Plaintiff describes achieving practical relief against the HOA alone, without involvement from the moving defendants.

Defendants show that their counsel’s hourly rate and time spent are reasonable. Mr. Watson spent 82.78 hours of time at $500/hr. on this case. Thus, Defendants are entitled to a lodestar in the noticed amount of $40,755.33.

Accordingly, Plaintiff’s motion for fees is DENIED. Defendants’ motion for fees is GRANTED in the noticed amount.