Judge: Maurice A. Leiter, Case: 19STCV32342, Date: 2025-04-08 Tentative Ruling

Case Number: 19STCV32342    Hearing Date: April 8, 2025    Dept: 54

Hearing Date: April 8, 2025

Department 54, Judge Maurice A. Leiter

Motion for Attorney’s Fees;

Motion to Tax Costs;

T/R:      DEFENDANT’S MOTION FOR ATTORNEY’S FEES IS GRANTED IN THE AMOUNT OF $4,820,053.00.

PLAINTIFFS’ MOTION TO TAX COSTS IS GRANTED IN PART. DEFENDANT’S COSTS ARE TAXED IN THE AMOUNT OF $76,584.09.

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, oppositions, and replies.

BACKGROUND

On September 11, 2019, Plaintiffs Carolina Beverage Corporation, Dixie Riverside, Inc. and Alligator Beverage, LLC sued Defendant Fiji Water Company, LLC, asserting causes of action for breach of contract, breach of the covenant of good faith and fair dealing, and fraud (concealment and false promise). The action arises out of beverage distribution agreements between Plaintiffs and Defendant. Plaintiffs distributed Defendant’s products to retailers in North Carolina, South Carolina, and Georgia for several years. Defendant then moved to a new distribution model, in which Defendant would distribute its products directly. Plaintiffs allege Defendant breached the distribution agreements by secretly offering lower prices to Plaintiffs’ customers, to persuade them to buy directly from Defendant. Plaintiffs allege Defendant did not disclose their new distribution model to Plaintiffs and instead assured them that it was business as usual.

On April 29, 2022, the jury found in favor of Plaintiffs on the contract causes of action and in favor of Defendant on the tort causes of action. Plaintiffs were awarded $1,993,670.00 damages.

On May 30, 2024, the Court of Appeal reversed the judgment and ordered judgment in favor of Defendant on the contract causes of action.

ANALYSIS

A. Defendant’s Motion for Attorney’s Fees

The prevailing party in “any action on a contract” shall be awarded reasonable attorney’s fees incurred to enforce that contract where the contract specifically provides for attorney’s fees.  (Cal. Civ. Code § 1717(a).) 

“The verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.”  (Horsford v. Board Of Trustees Of California State University (2005) 132 Cal. App. 4th 359, 396.)  If the motion is supported by evidence, the opposing party must respond with specific evidence showing that the fees are unreasonable.  (Premier Med. Mgmt. Sys. v. California Ins. Guarantee Ass’n (2008) 163 Cal. App. 4th 550, 560–63.)  The Court has discretion to reduce fees that result from inefficient or duplicative use of time.  (Horsford, supra at 395.) 

Defendant moves for an award of attorney’s fees in the amount of $4,820,053.00. Counsel’s hourly rates range from $595 to $1,200 for partner level attorneys, $665 to $865 for associate-level attorneys and $225 to $675 for paralegals and $150 to $250 for other professional staff. Counsel spent more than 4694 hours defending this action.

In opposition, Plaintiffs argue that counsel’s hourly rates are excessive. Plaintiffs also assert that counsel’s billing entries show work that was never completed or show work done by attorneys that should have been done by paralegals.

The Court does not take issue with Counsel’s hourly rates or billing entries. As stated in the Court’s ruling on Plaintiffs’ motion for fees, this action was hard fought with extensive motion work, discovery, trial, and appeal. Counsel’s fees are reasonable.

Defendant’s motion for attorney’s fees is GRANTED in the amount of $4,820,053.00.

B. Plaintiffs’ Motion to Tax Costs

Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”  (CCP § 1032(b).)  “Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.”  (CCP § 1033.5(c)(2).)  “If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary.”  (Ladas v. California State Auto. Assn. (1993) 19 Cal. App. 4th 761, 774.)  “On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.”  (Ibid.)

On December 5, 2024, Defendant filed a memorandum of costs seeking reimbursement in the amount of $455,181.71. Plaintiffs move to strike certain filing and motion fees, deposition costs, court report fees, model fees, electronic filing fees, messenger services, expert fees, and consulting fees. In opposition, Defendant agrees to withdraw: fees relating to William Hensley totaling $29,347.50; Filing and motion fees totaling (Item No. 1): $475.58; Court reporter fees (Item 11): $35,390.07; Models, enlargements, photocopies (Item 12): $2,576; Electronic filing, service fees (Item 14): $2,279.20; and Attorney, messenger, courier services (Item 16a): $6,515,74.

Defendant seeks recovery of expert costs in the amount $272,026.45 (less fees relating to William Hensley) under CCP § 998(c)(1), which provides, “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover their postoffer costs and shall pay the defendant's costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.”

Defendant made two 998 offers in 2020 and 2021. Plaintiffs do not dispute that they recovered less than the amount of the offers. Instead, Plaintiffs assert that the offers were vague, ambiguous, and unreasonable. The Court disagrees. The offers were straightforward and reasonable, providing a clear settlement amount. Defendant is entitled to expert fees.

Plaintiffs request that the Court reduce the consulting fees from $81,757.50 to $35,690 because the consultants spent excessive time consulting for trial. The Court declines to reduce these fees.

Plaintiffs’ motion is GRANTED in part. Defendant’s costs are taxed in the amount of $76,584.09.