Judge: Mel Red Recana, Case: 19STCP01195, Date: 2024-06-07 Tentative Ruling

All rulings shown here are TENTATIVE ONLY, and thus oral argument WILL be heard. All Counsel are still required to attend.

Case Number: 19STCP01195    Hearing Date: June 7, 2024    Dept: 45

Superior Court of California

County of Los Angeles

Hearing Date:             June 7, 2024

Moving Party:             Plaintiff Connie M. Aguilar

Responding Party:       GCA

Motion for Attorneys’ Fees

The court has considered the moving, opposition, and reply papers.

The court DENIES Plaintiff’s motion for attorney’s fees.

Background

On April 5, 2019, Plaintiff Connie M. Aguilar (“Plaintiff”) filed this action against Defendants Taixian Piao (aka Ruth Piao); Yu Wang; and Ivy Bridge Institute, a California Corporation and Does 1 through 50 (collectively “Defendants”) for (1) constructive fraudulent transfer (CACI 4203 and Civil Code §§ 3439 et seq.); (2) successor liability; and (3) declaratory relief.

On December 4, 2020, the Court granted Plaintiff’s Protective Order against Defendants Piao and Wang whereby Plaintiff sought to secure $850,976.48 by attachment for the underlying debt Defendants had failed to pay. Given such failure to pay, the Court ordered Defendants Piao and Wang be enjoined and restrained from transferring, directly or indirectly, any interest in their two properties located at 4421 Rochelle Pl, Encino, CA 91316-3940; and 276 Windsor Blvd, Los Angeles, CA 90004-3820, effective October 23, 2020.

On March 16, 2023, Plaintiff filed her First Amended Complaint (“FAC”), adding the following claims: (1) actual fraud with intent to hinder, delay, or defraud a creditor; (2) violation of whistleblower protection act; and (3) retaliation in violation of FEHA. Plaintiff’s FAC also maintained two of her original claims filed in the original complaint which were for (4) constructive fraudulent transfer; and (5) declaratory relief. However, Plaintiff dropped her claim for successor liability.

The instant case, however, concerns an underlying case (herein “Underlying” lawsuit) filed on January 22, 2016 in the Los Angeles Superior Court (Case No. BC608030), Connie M. Aguilar v. Ivy Bridge Group (West Coast). Plaintiff claimed she began employment with Defendant Ivy Bridge Group (“IBG”) with the job title of District Consultant, commencing in June of 2013 and terminating in August 2014. However, IBG failed to pay Plaintiff’s statutory overtime wages and classified her as an independent contractor, despite Plaintiff not qualifying as one or being an exempt employee. Accordingly, on February 28, 2018, Plaintiff obtained a Judgment by Court After Bench Trial on the Underlying lawsuit whereby Plaintiff was awarded damages for IBG’s failure to pay statutory overtime wages, failure to provide accurate itemized wage statements, and failure to indemnify business-related expenses in the amount payable to plaintiff of $36,895.89, plus interest at 10% from the date of judgment. By March 18, 2019, the amount due and owing to Plaintiff by IBG had accumulated to $499,346.34, which included attorneys’ fees, costs of suit, and also interest.

            In Plaintiff’s FAC which is now the operative complaint, Plaintiff alleges that individual Defendants’ Piao and Wang have a unity of interest and thus, are the alter egos of Ivy Bridge Group (“IBG”). Specifically, Plaintiff asserts that Defendants Piao and Wang loaded IBG with liabilities that did not belong to it; diverted IBG revenues to other entities (including HOMESTAY MATCH DOT COM, INC.); consistently failed to maintain funds adequate to meet payroll obligations; failed to adequately capitalize IBG; failed to abide by legal formalities; and utilized IBG as a mere shell. (FAC ¶ 22.) Furthermore, Plaintiff maintains the foregoing was confirmed by Judge Stern on October 20, 2020. (FAC, Ex. E.) Plaintiff now claims that Defendants Piao and Wang closed IBG by burdening it with such liabilities and redirecting revenues to Homestay Match and did this to make IBG judgment proof. (FAC, ¶ 24.) Thus, Plaintiff claims that Defendants Piao and Wang completely controlled, dominated, managed, and operated IBG for their sole and exclusive benefit and now Defendants Piao and Wang should be jointly and severally liable for IBG’s current and past actions, accordingly. (FAC, ¶ 34.)

            Despite the fact that on January 31, 2024, the Court granted the Motion of Defendants Piao and Wang for Judgment on the Pleadings without leave to amend, Plaintiff filed the instant Motion for Attorneys Fees on April 2, 2024 on the grounds that Defendants refused to pay the judgment in the Underlying lawsuit until the foreclosure proceedings against their residences had commenced. Plaintiff contends that such foreclosure proceedings were only due to Plaintiff’s success in gaining a permanent protective order during the proceedings in this case. In effect, Plaintiff contends that Defendants were forced to finally pay off the judgment in the Underlying case due to prosecuting this instant case.

            As such, Plaintiff’s April 2, 2024 Motion for Attorneys’ Fees is based on the Catalyst Theory, as well as CCP § 1021.5, and Civil Code § 3439.07.

On May 22, 2024, Defendants Piao and Yang filed their Opposition, along with a Request for Judicial Notice.

On May 30, 2024, Plaintiff filed her Reply.

Plaintiff’s Request

Plaintiff requests the Court, in its discretion augment Plaintiff’s Counsel’s lodestar of $316,255.00 by applying a 2.5 multiplier to yield a total fee award in the amount of $790,637.50. Interest shall accrue at the legal rate of 10% from the date of entry of this order, and each of the Defendants shall be jointly and severally liable for the same.

Plaintiff argues that Counsel’s hour rate of $950 is consistent with hourly rates for attorneys in Los Angeles with similar skill and background. In light of numerous factors, including but not limited to the skill demonstrated by Plaintiff’s Counsel, the results he obtained, the risk non-payment and the serious delay in payment, Plaintiff argues the 2.5 multiplier is appropriate.

Evidentiary Matters

Defendant’s Request for Judicial Notice

Defendant requests that pursuant to Evidence Code §§ 451, 452, and/or 453, the Court take Judicial Notice of Exhibits 1-4:

Exhibit 1 is the June 27, 2018 Order from Judge Stern setting Mr. Cullen’s reasonable hourly rate at $440, denying Plaintiff Connie M. Aguilar (“Plaintiff”)’s request for a multiplier and awarding her with $389,345.00 in attorney’s fees.

Exhibit 2 is the fully executed and notarized Acknowledgment of Satisfaction of Judgment from the case Aguilar v. Ivy Bridge Group (West Coast), Inc., Case No. BC608030 that Plaintiff served on the Defendants on or about January 5, 2022.

Exhibit 3 is this Court’s May 20, 2022 Order granting the Defendants’ Motion to Dissolve the Permanent Protective Order.

Exhibit 4 is this Court’s January 31, 2024, Order granting Defendants’ Motion for Judgment on the Pleadings Without Leave to Amend.

The Court grants Defendant’s request to judicially notice Exhibits 1-4.

Legal Standard

General Attorneys’ Fees

“As a general rule, the prevailing party may recover certain statutory costs incurred in the litigation up to and including entry of judgment. [Citations.] These costs may include attorney fees, if authorized by contract, statute . . . or law. [Citation.] . . . attorney fees require a separate noticed motion. [Citations.]” (Lucky United Props. Inv., Inc. v. Lee (2010) 185 Cal.App.4th 125, 137.) This motion may be brought: (1) after judgment or dismissal, for fees incurred “up to and including the rendition of judgment in the trial court--including attorney’s fees on an appeal before the rendition of judgment…”; and (2) on an interim basis, upon remittitur of appeal, of only fees incurred on appeal. (CRC, Rule 3.1702(b)-(c).)

In determining what fees are reasonable, California courts apply the “lodestar” approach. (See, e.g., Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (See PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, the “[t]he 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.” (Id.) Relevant factors 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, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

CCP Section 1021.5

CCP section 1021.5 (“section 1021.5”) codifies the “private attorney general” exception to the general rule that each side bears its own fees unless the parties contracted otherwise.  See CCP §1021.  Section 1021.5 permits a trial court to award fees to a successful party in any action where it has been established that (1) plaintiff’s action has resulted in the enforcement of an important right affecting the public interest, (2) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, and (3) the necessity and financial burden of private enforcement are such as to make the award appropriate.  Conservatorship of Whitley, (2010) 50 Cal.4th 1206, 1214.  The burden is on the party requesting section 1021.5 fees to demonstrate all elements of the statute, including that the litigation costs, transcend his or her personal interest.  Millview County Water Dist. v. State Water Resources Control Bd., (“Millview”) (2016) 4 Cal.App.5th 759, 769.  The issue is committed to the trial court’s discretion.  Ibid.

Courts take a “broad, pragmatic view of what constitutes a ‘successful party’” in order to effectuate the policy underlying section 1021.5.  Graham v. DaimlerChrysler Corp., (“Graham”) (2004) 34 Cal.4th 553, 565.  The party seeking attorney fees need not prevail on all of its alleged claims in order to qualify for an award.  Harbor v. Deukmejian, (“Harbor”) (1987) 43 Cal.3d 1078, 1103; Daniels v. McKinney, (“Daniels”) (1983) 146 Cal.App.3d 42, 55.  The party is considered “successful” under section 1021.5 if the litigation “contributed substantially to remedying the conditions at which it was directed.” Planned Parenthood v. Aakhus, (“Aakhus”) (1993) 14 Cal.App.4th 162, 174.  In other words, the “successful” party under section 1021.5 is the party that succeeds on “any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”  Maria P. v. Riles, (“Maria P.”) (1987) 43 Cal.3d 1281, 1292; see Tipton-Whittingham v. City of Los Angeles, (2004) 34 Cal.4th 604, 610.  Prevailing counsel who qualify for an award under section 1021.5 are entitled to compensation for all hours reasonably spent.  Serrano v. Unruh, (1982) 32 Cal.3d 621, 632–33.

Unlike the separate substantial benefit doctrine, “the ‘significant benefit’ that will justify an attorney fee award need not represent a ‘tangible’ asset or a ‘concrete’ gain but, in some cases, may be recognized simply from the effectuation of a fundamental constitutional or statutory policy.” Woodland Hills Residents Assn., Inc. v. City Council, (“Woodland Hills”) (1979) 23 Cal.3d 917, 939.  “[T]he benefit may be conceptual or doctrinal and need not be actual or concrete; further, the effectuation of a statutory or constitutional purpose may be sufficient.”  Braude v. Automobile Club of Southern Cal., (1986) 178 Cal.App.3d 994, 1011.  Moreover, the extent of the public benefit need not be great to justify an attorney fee award.  See, e.g., Protect Our Water v. County of Merced, (2005) 130 Cal.App.4th 488, 496 (significant public benefit where litigation prompted agency to improve methods of creating and managing its CEQA records). The trial court determines “the significance of the benefit, as well as the size of the class receiving benefit, from a realistic assessment, in light of all the pertinent circumstances, of the gains which have resulted in a particular case.”  Woodland Hills, supra, 23 Cal.3d at 939-40.

The party seeking attorney’s fees must show that the necessity for pursuing the lawsuit placed a burden on the plaintiff “out of proportion to his individual stake in the matter.” Woodland Hills, supra, 23 Cal. 3d at 941.  Although cases refer to this requirement as the “financial burden” criterion, nothing in the language of CCP section 1021.5 limits the consideration of the necessity and financial burden clause to solely financial interests.  Hammond v. Agran, (2002) 99 Cal.App.4th 115, 125.  “The idea is that the litigation for which fees are claimed must transcend one's interests, whether pecuniary or not.”  Id. at 127.  The question is whether advancement of the public interest was merely coincidental to the attainment of the party’s personal goals.  Bowman v. City of Berkeley, (2005) 131 Cal.App.4th 173, 181.  The party seeking attorney fees bears the burden of establishing that its litigation costs transcend its personal interests.  Save Open Space Santa Monica Mountains v. Superior Court, (2000) 84 Cal.App.4th 235, 247.  The trial court's application of the financial burden criterion involves a “realistic and practical comparison of the litigant's personal interest with the cost of suit.” Families Unafraid to Uphold Rural El Dorado County v. Bd. of Supervisors, (2000) 79 Cal.App.4th 505, 515.

Discussion

Plaintiff argues she is entitled to attorneys’ fees for this litigation pursuant to Code of Civ. Proc. (“CCP”) § 1021.5, the Uniform Fraudulent Transfer Act (Civ. Code, § 3439.07), Lab. Code, § 226(g), 1194, and 2802, and/or under the Catalyst Theory as a Private Attorney General.

Catalyst Theory, CCP § 1021.5

Plaintiff argues that even though this Court recently granted Defendants’ Motion for Judgment on the Pleadings, since Plaintiff is no longer a judgment creditor and those claims have been rendered moot, that is a separate matter from whether Plaintiff should be considered the prevailing party in this action.[1] (Motion for Attorneys’ Fees (“Mot. Atty Fees”), pg. 2.) Plaintiff contends that on that point, California law is clear, and this Court’s ruling on the motion for judgment on the pleadings is in accord. “As Plaintiff indicates, she is the prevailing party as to these claims because Defendants satisfied the judgment. (See Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 572 [‘When a creditor sues a debtor to collect a debt, and the debtor pays the debt before a judgment is entered against it, the creditor has been a “successful party” by any conventional understanding of that term.’”].) (January 31, 2024, Order [in this case Granting Defendants’ Motion for Judgment on the Pleadings] at 6-7; Mot. Atty Fees pg. 2.) Plaintiff argues that under California Supreme Court precedent, Plaintiff is the prevailing party here and asserts that in Graham, the court set forth the following:

[A] plaintiff seeking attorney fees under a catalyst theory must first reasonably attempt to settle the matter short of litigation. (See Grimsley v. Board of Supervisors (1985) 169 Cal.App.3d 960, 966–967, 213 Cal.Rptr. 108.) We believe this requirement is fully consistent with the basic objectives behind section 1021.5 and with one of its explicit requirements—the “necessity ... of private enforcement” of the public interest. Awarding attorney fees for litigation when those rights could have been vindicated by reasonable efforts short of litigation does not advance that objective and encourages lawsuits that are more opportunistic than authentically for the public good. (Graham, supra, 34 Cal.4th at p. 576.)

Plaintiff argues that she made the prelitigation demands in accordance with Graham because she verbally requested Defendants pay her judgment after it became clear to her that Defendants were making no arrangements to do so. (Mot. Atty Fees, pg. 3.) Plaintiff also reduced such requests to writings, including in her May 31, 2018 email to Roger Hsu and a December 19, 2018 email to Roger Hsu. (See Cullen Decl. at ¶ 16 and Ex. A and B.)

Secondly, Plaintiff argues she prevailed because the Catalyst Theory requires the Plaintiff to be the successful party and makes clear that such success does not bear on the ultimate manner of a case’s resolution:

In determining whether a plaintiff is a successful party for purposes of section 1021.5, ‘[t]he critical fact is the impact of the action, not the manner of its resolution.’ (Folsom [v. Butte County Assn. of Governments (1982)] 32 Cal.3d at [668], 685 [186 Cal.Rptr. 589, 652 P.2d 437] (Folsom).) [¶¶] The trial court in its discretion ‘must realistically assess the litigation and determine, from a practical perspective, whether or not the action served to vindicate an important right so as to justify an attorney fee award’ under section 1021.5. (Woodland Hills Residents Assn., supra, 23 Cal.3d at p. 938 [154 Cal.Rptr. 503, 593 P.2d 200].)” (Maria P., supra, 43 Cal.3d at pp. 1290–1291, 240 Cal.Rptr. 872, 743 P.2d 932.)

Graham, supra, 34 Cal.4th at p. 566.

“When a creditor sues a debtor to collect a debt, and the debtor pays the debt before a judgment is entered against it, the creditor has been a ‘successful party’ by any conventional understanding of that term.” Graham, supra, 34 Cal.4th at p. 572. Given the Underlying case was closed upon payment, Plaintiff contends there was no opportunity to demonstrate that she was a prevailing party here until payment had actually occurred. (Mot. Atty. Fees, pg. 6.)

Next, Plaintiff argues she vindicated an important right that justifies the attorney fee award under section 1021.5. The California Supreme Court has repeatedly stated that prompt payment of wages is clear California public policy and nonpayment of the same is not condoned. (Mot. Atty. Fees, pg 4-5.)  Thus, Plaintiff argues this case represents a matter of public interest. (Id.)

Here, the Court finds that although the California Supreme Court finds that prompt payment of wages promotes California Public Policy, Plaintiff’s payment of previously unpaid wages does not constitute “a significant benefit, whether pecuniary or nonpecuniary, that has been conferred on the general public or a large class of persons.” The Court notes that the argument can be made that any time justice is administered, the general public benefits. However, in this case, the benefit conferred—Plaintiff’s payment of earned wages—was a benefit conferred on Plaintiff as an individual instead of on the general public or a large class of persons. The law may confer the benefit on the public as the aggregate of individual claims but in this case, Plaintiff was acting as an individual and represented only herself. Plaintiff has not provided case law demonstrating that the legislature intended for 1021.5 to be construed in this way or that any benefit to the public is merely more then incidental in this case.

Furthermore, the Court notes that Plaintiff filed an Acknowledgment of Satisfaction of Judgment on January 10, 2022 in the Underlying case (Case No. BC608030) which Plaintiff served on Defendants on January 5, 2022. Although Plaintiff maintains that she could not request attorneys’ fees until such judgment was satisfied, by such reasoning, Plaintiff had the opportunity to request fees on that basis over two years ago.

As Defendants argue, under CCP § 685.080(a), “[t]he judgment creditor may claim costs authorized by Section 685.040 by noticed motion. The motion shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred.” (Opposition, pg. 8.)  Thus, if Plaintiff wishes to argue that pursuant to section 1021.5, she had no opportunity to demonstrate she was a prevailing party until payment actually occurred, Plaintiff must also argue why she should be exempt from the provision of “no later than two years after the costs have been incurred.” Plaintiff did not file the instant motion prior to the judgment being satisfied in full and did not file the instant motion when Defendants began to make payments in October of 2021. As this Court noted on May 20, 2022, “Plaintiff provides no explanation as to why Plaintiff never sought her attorney's fees prior to the satisfaction of the judgment.” (Opp., Ex. 3, pg. 6.)  Here, the Court again finds Plaintiff has failed to provide any explanation as to why Plaintiff never sought her attorney’s fees prior to the satisfaction of judgment.  Although Plaintiff argues that she seeks fees pursuant to section 1021.5 and not section 685.080(a), Plaintiff has not demonstrated the public benefit requirement of section 1021.5. As such, Plaintiff remains subject to the provisions of section 685.080(a).

Thus, Plaintiff’s request for attorneys’ fees is not supported by the catalyst theory, section 1021.5, nor section 685.080(a).

Civil Code § 3439.07, Uniform Fraudulent Transfer Act (“UFTA”)

Plaintiff next argues that Civ. Code section 3439.07 authorizes equitable relief, which Plaintiff contends, includes attorney fees. Mot. Atty. Fees, pg. 7.)  Specifically, Civ. Cod section 3439.07 states that “(a)) In an action for relief against a transfer or obligation under this chapter, a creditor ... may obtain... (3) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure... (C) Any other relief the circumstances may require.” Civ. Code, § 3439.07 (Italics added).  (Mot. Atty. Fees, pg. 7.)

Additionally, Plaintiff argues that while Defendants are correct in stating that the UFTA does not specifically authorize attorneys’ fees, the court in Cardinale did not rule that the UFTA prohibited granting an attorney fee award as part of the “other relief” that the Court is specifically authorized to grant a successful Plaintiff in an UFTA action as a matter of equity. (Mot. Atty. Fees, pg. 8.) Plaintiff asserts that there is no controlling California case law to the contrary of which Plaintiff is aware. (Mot. Atty. Fees, pgs. 7-8.) Where the circumstances warrant, as here, there is no prohibition to awarding attorney’s fees as part of this other relief.” (Id.) No California case on point that holds otherwise, and the statute authorizes equitable relief, which can include attorney’s fees. (Id.) Furthermore, Plaintiff notes that California case law demonstrates that the concept of “other relief” provided by Civ. Code, § 3439.07 is large enough to allow issuance of a lis pendens remedy, even though that specific remedy is not listed in the Remedies of creditors set forth in Civ. Code, § 3439.07. Kirkeby v. Superior Court (2004) 33 Cal.4th 642. (Id.) Lastly, Plaintiff provides a footnote stating that as a probate court has the equitable power to charge a beneficiary’s share of a trust for frivolous litigation against the trust (see e.g., Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328, 1334), here this Court has the power in equity to impose attorney's fees against these Defendants, because they engaged in fraudulent conduct that is just as deserving of opprobrium as is frivolous litigation. (Id. at pg. 7.)

The Court finds that Plaintiff’s arguments are inapposite because as this Court provided on May 20, 2022, (in which it granted Defendants’ Motion to Dissolve the Permanent Protective Order), the general rule under CCP section 1021 is that attorney's fees must [be] provided for by statute or contract. Thus, here, the absence of a prohibition against attorneys’ fees does not constitute an express provision for attorneys’ fees. This argument contravenes CCP section 1021. Furthermore, this Court also noted in the May 20, 2022, Order to Dissolve, that “Plaintiff cites no authority establishing that she would necessarily be entitled to recover her attorney's fees for her fraudulent conveyance claim.” (Opp., Ex. 3, pg. 6.) In this case and in addressing the instant motion, the Court notes again that Plaintiff has not provided authority expressly providing for attorneys’ fees under such circumstances. Furthermore, the Court finds Plaintiff’s reference to equitable power in the context of a beneficiary’s share highly distinguishable from the case at bar and highly inapplicable. Thus, the Court finds Plaintiff’s request for attorneys’ fees is unsupported for the foregoing reasons.

As such, Plaintiff has not demonstrated grounds to be awarded attorneys’ fees under any of the foregoing provisions. Furthermore, given Plaintiff’s judgment was awarded in the amount of $36,895.89 and Defendants have already paid Plaintiff $720,485.41, the Court finds Plaintiff has been awarded attorneys’ fees. Although Plaintiff argues that those attorney’s fees were for the Underlying action, Plaintiff’s billing records do not differentiate between fees requested for the Underlying action as opposed to the instant one. For example, there are fees being requested starting on May 31, 2018, and the instant case was not filed until April 5, 2019. (Mot. Atty. Fees, Ex. H.) Additionally, Plaintiff was awarded $389,345.00 in attorneys’ fees for that action.

For the aforementioned reasons, the court DENIES Plaintiff’s Motion for Attorneys’ Fees.

The moving party is to give notice.

It is so ordered.

Date:   June 7, 2024

______________________

Mel RED recana

Judge of the Superior Court