Judge: Maurice A. Leiter, Case: BC706996, Date: 2023-02-07 Tentative Ruling

Case Number: BC706996    Hearing Date: February 7, 2023    Dept: 54

Hearing Date: February 7, 2023

Department 54, Judge Maurice A. Leiter

Motion for Attorney’s Fees;

Motion for Sanctions;

Motion to Tax Costs

T/R:     DEFENDANT’S MOTION FOR ATTORNEY’S FEES IS DENIED.

DEFENDANT’S MOTION FOR SANCTIONS IS DENIED.

PLAINTIFF’S MOTION TO TAX COSTS IS DENIED.

DEFENDANT 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, opposition, and reply.[1]

BACKGROUND

On May 24, 2018, Plaintiffs Standard General L.P., Standard General Master Fund, L.P., P Standard General LTD filed the operative first amended complaint against Defendants Dov Charney, Los Angeles Apparel Inc., Art Commerce and Manufacturing Solutions, LLC, Apex Real Estate Management LLC, Keith Fink and Apex Property Management Inc.  In 2018, the Court denied Charney’s and Fink’s anti-SLAPP motions and overruled their demurrers. Charney and Fink appealed the denial of the anti-SLAPP motions and Fink appealed the overruling of his demurrer. On May 4, 2020, the Court of Appeal affirmed these rulings and the stay relating to causes of action against Fink was lifted. (Standard General, L.P. v. Charney (2020) 2020 WL 2122713)

Plaintiffs assert six causes of action for actual and constructive fraudulent transfer and seek a permanent injunction. Plaintiffs are Defendant Charney’s judgment creditors. Plaintiffs allege that Charney fraudulently transferred title and interests in his residence to other Defendants, including his attorney Defendant Fink, to avoid paying his judgment creditors.

On November 18, 2022, the Court granted Fink’s motion for summary adjudication.

ANALYSIS

A. Defendant Fink’s Motion for Attorney’s Fees

            Defendant Fink now moves for an award of attorney’s fees under CCP § 2033.420, which provides,

(a)  If a party fails to admit the genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admission may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney’s fees.

(b) The court shall make this order unless it finds any of the following:

(1) An objection to the request was sustained or a response to it was waived under Section 2033.290.

(2) The admission sought was of no substantial importance.

(3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter.

(4) There was other good reason for the failure to admit.

            Fink argues Plaintiff failed to admit the following RFAs:

1. ADMIT THAT YOU…suffered no damages arising from the JANUARY 2016 DEED TO FINK…naming FINK (“FINK” shall refer to KEITH A. FINK) as both Trustee and Beneficiary on the RESIDENTIAL PROPERTY (“RESIDENTIAL PROPERTY” shall refer to the real property located at 1809 Apex Avenue, Los Angeles, California 90026), recorded on January 11, 2016, under Instrument No. 20160031160) prior to its recordation.

2. ADMIT THAT YOU suffered no damages arising from the FEBRUARY 2016 DEED TO FINK (“FEBRUARY 2016 DEED TO FINK” shall refer to the February 24, 2016 Deed of Trust and Assignment of Rents by CHARNEY naming FINK as both Trustee and Beneficiary on the RESIDENTIAL PROPERTY, recorded on March 1, 2016, under Instrument No. 20160224669) prior to its recordation.

18. ADMIT THAT FINK had no intention to prevent PLAINTIFFS from reaching rent and other interests relating to the RESIDENTIAL PROPERTY in order to satisfy their claims against CHARNEY.

19. ADMIT THAT FINK did not actually intend to hinder, delay, or defraud PLAINTIFFS by and through the JANUARY 2016 DEED TO FINK.

20. ADMIT THAT FINK did not actually intend to hinder, delay, or defraud PLAINTIFFS by and through the FEBRUARY 2016 DEED TO FINK.

            Fink asserts that Plaintiffs should have admitted that Fink did not cause them any damages. In support, Fink points to his summary adjudication motion, in which Fink presented evidence showing the liens on the subject property exceeded the fair market value of the property at the time of transfer. Under the UVTA law, if the liens exceed the value of the subject property it is not an “asset.” Plaintiffs did not present evidence showing the value of the property exceeded the liens at the time of the transfer.

            In opposition, Plaintiffs assert that at the time they responded to the RFAs they had reasonable ground to believe they would prevail. Plaintiffs emphasize that this Court and the Court of Appeal both found in previous motions that Plaintiffs had shown a probability of success on the merits. Plaintiffs represent that it was not clear whether the property had value at the time of transfer if Fink’s deeds were voided. This is sufficient to establish Plaintiffs had reasonable ground to believe they would prevail.

            Fink’s motion for attorney’s fees is DENIED.

B. Defendant Fink’s Motion for Sanctions

CCP § 128.7(b) provides that by signing and filing a pleading, an attorney “is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met: (1) [i]t is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation[;] (2) [t]he claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law[;] (3) [t]he allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery[;] (4) [t]he denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.” CCP § 128.7 authorizes the court to impose appropriate sanctions upon attorneys or parties that have violated subsection (b). (CCP § 128.7(c).) 

CCP § 128.5 provides that “[a] trial court may order a party, the party’s attorney, or both, to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of actions or tactics, made in bad faith, that are frivolous or solely intended to cause unnecessary delay.”  (CCP § 128.5(a).)  “‘Actions or tactics’ include, but are not limited to, the making or opposing of motions or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading.”  (CCP § 128.5(b)(1).)  “‘Frivolous’ means totally and completely without merit or for the sole purpose of harassing an opposing party.”  (CCP § 128.5(b)(2).) 

Fink moves for sanctions against Plaintiffs and their counsel under CCP §§ 128.5 and 128.7. Fink asserts Plaintiffs did not have evidence showing Fink would be liable under the UVTA. As discussed, Plaintiffs presented evidence showing a probability of prevailing both before this Court and the Court of Appeal. Plaintiffs’ action against Fink was not frivolous.

Fink’s motion for sanctions is DENIED.

C. 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.)

            Plaintiffs move to strike Fink’s memoranda of costs filed on December 1 and 8, 2022. Plaintiffs assert Fink is not a prevailing party and their costs were not reasonably necessary. The Court disagrees. Fink has prevailed on the causes of action asserted against him. Fink is a prevailing party for the purposes of costs. Fink’s filing fees and deposition costs are recoverable.

            Plaintiffs’ motion to tax costs is DENIED.