Judge: Melvin D. Sandvig, Case: 19CHCV00604, Date: 2023-03-28 Tentative Ruling

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Case Number: 19CHCV00604    Hearing Date: March 28, 2023    Dept: F47

Dept. F-47

Date: 3/28/23                                                             

Case #19CHCV00604

 

MOTION FOR ATTORNEY’S FEES

 

Motions filed on 2/9/23.    

 

MOVING PARTY: Defendants Melvin James Burrell, Regal Services Group and Capital Executive Realty, Inc.

RESPONDING PARTY: Plaintiff Andrew Dow

NOTICE: ok

 

RELIEF REQUESTED: An order awarding Defendants Melvin James Burrell, Regal Services Group and Capital Executive Realty, Inc. reasonable attorney’s fees incurred in this litigation against Plaintiff Andrew Dow in the amount of $289,190.00 and related costs in the amount of $15,342.15 for a total judgment of $304,532.15.

 

RULING: The motion is granted, in part, and denied, in part, as set forth below.    

 

SUMMARY OF FACTS & PROCEDURAL HISTORY

 

This is a real estate disclosure case.  Plaintiff Andrew Dow (Plaintiff) is the purchaser and Defendants Melvin James Burrell, Regal Services Group and Capital Executive Realty, Inc. (collectively, Defendants) are the real estate broker/agent and related businesses.  The First Amended Complaint contained causes of action for: (1) Breach of Written Agreement, (2) Negligence – Breach of Non-Fiduciary Duties, (3) Breach of Fiduciary Duties by Escrow Company, (4) Fraudulent Misrepresentation and Concealment and (5) Unfair and Deceptive Business Practices (Business & Professions Code 17200, 17203).  On 1/3/23, the Court entered Judgment in favor of Defendants.

 

On 1/17/23, Defendants filed and served a Memorandum of Costs setting forth costs in the amount of $13,344.35.  On 2/6/23, Plaintiff filed and served a Motion to Tax Costs which is scheduled for hearing on 5/16/23.  On 2/9/23, Defendants filed and served the instant motion seeking an order awarding Defendants reasonable attorney’s fees incurred in this litigation against Plaintiff in the amount of $289,190.00 and related costs in the amount of $15,342.15 ($13,344.34 pursuant to the memorandum of costs plus $1,997.80 for additional costs) for a total judgment of $304,532.15.  Plaintiff has opposed the motion and Defendants have filed a reply to the opposition.

 

ANALYSIS

 

Defendants’ objections (numbers 1-18) to the declaration of Michael Labrum and exhibits thereto are overruled. 

 

In his First Amended Complaint (the pleading on which the case went to trial), Plaintiff alleged:

 

8.  DEFENDANT WRIGHT, DEFENDANT BURRELL, DEFENDANT REALTY, and DEFENDANT ESCROW, and DOES 1-10 will be collectively referred to as ‘DEFENDANTS’ throughout this complaint. Each Defendant will be referred to as the individual Defendant as referenced above where the allegations only relate to an individual Defendant and not all Defendants collectively. 

 

9.  Plaintiff is informed and believes, and on that basis, alleges, that at all times mentioned in this complaint, defendants were the agents and employees of their codefendants, and in doing the things alleged in this complaint were acting within the course and scope of that agency and employment.

 

. . .

 

11.  At all times material herein, each Defendant was the agent, servant and/or employee of each of the remaining Defendants, and acting within the purpose, scope and course of said agency, service and employment, with the express and/or implied knowledge, permission and consent of the remaining defendants, and each of them, and each of said Defendants ratified and approved the acts of the other Defendants.

 

(See FAC ¶¶8, 9, 11).

   

As such, Plaintiff’s contention that he “did not claim seller was a joint employee of Defendants” and that Defendants make “incomprehensible allegations” in that regard is without merit.  (See Opposition,  p.3:18-19, p.5:4-5). 

 

Additionally, while the First Amended Complaint alleges that Plaintiff and Cecilia Dow entered into an “AGREEMENT,” the Residential Purchase Agreement and Joint Escrow Instructions,” with Defendant Wright to purchase the property, Plaintiff alleges that “DEFENDANTS,” which includes the moving Defendants, breached that agreement.  (See FAC ¶¶15, 19, 27, 35).  Plaintiff points to no specific allegations in the First Amended Complaint to support his contention that he claimed that Defendants breached only the escrow instructions which Plaintiff argues do not contain an attorney fee provision.  (See Opposition, p.3:14-17).  Further, Plaintiff prayed for “attorney fees as allowed by contract and/or statute” against “DEFENDANTS.”  (See FAC p.24:9-11, p.24:15). 

 

The agreement which underlies Plaintiff’s breach of contract cause of action provides that “[i]n any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller ...”  (See Kovalsky Decl., Ex.C ¶25). 

 

Civil Code 1717 provides in relevant part:

 

“(a) In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.”

 

Civil Code 1717 is to be interpreted to provide a reciprocal remedy for a nonsignatory defendant sued on a contract as if the nonsignatory were a party to it, when a plaintiff would be entitled to attorney’s fees if plaintiff prevails in enforcing the contractual obligation against the defendant.  See Reynolds Metals Co. (1979) 25 C3d 124, 128-129.  Additionally, attorney’s fees need not be apportioned when incurred for representation on issues common to a cause of action in which fees are proper and causes of action in which they are not permitted.  Id. at 129-130; Summer Hill Homeowners’ Association (2012) 205 CA4th 999, 1035-1036; Akins (2000) 79 CA4th 1127, 1133; Wysinger (2007) 157 CA4th 413, 431. 

 

Here, if Plaintiff had been successful in establishing that Defendants and Wright were agents, servants and/or employees of each other and that they had collectively, as the “seller,” breached which forms the basis of the breach of contract cause of action, Plaintiff would have been entitled to recover his attorney’s fees as requested in his prayer for relief.  (See FAC ¶¶8, 9, 11,  p.24:9-11, p.24:15).  Also, Plaintiff’s breach of contract, negligence and fraud and concealment causes of action arose out of the same facts  (i.e., Plaintiff’s claim that “DEFENDANTS,” meaning moving Defendants and Wright, failed to disclose material facts and defects affecting the value of the property.).  (See FAC ¶¶29, 37, 56).  Based on the Judgment in their favor, Defendants are the prevailing party for purposes of Civil Code 1717.  See DisputeSuite.com LLC (2017) 2 C5th 968, 973 (a party who obtains an unqualified victory on a contract dispute is entitled to be the prevailing party for purposes of Civil Code 1717); (Judgment entered 1/3/23).    

 

Based on the foregoing, the Court finds that Defendants are entitled to recover their reasonable attorney’s fees as the prevailing party under the agreement/contract.  See Civil Code 1717(a).

 

The determination of a reasonable attorney fee award begins with the “lodestar” method of calculation (the number of hours reasonable expended multiplied by the reasonable hourly rate).  See Karton (2021) 61 CA5th 734, 744; Graciano (2006) 144 CA4th 140, 154; PCLM Group Inc. (2000) 22 C4th 1084, 1095.  The “lodestar” calculation may also be adjusted based on various “multiplier” factors such as: (1) novelty and difficulty of the issues, (2) the skill displayed and results achieved, (3) preclusion of other work and (4) contingency risk   PCLM Group, supra at 1095.  Here, Defendants do not seek an enhancement of the fee award based on any of the multiplier factors.  (See Motion, p.10:1-25).

 

The Court finds that based on his years in practice and experience, the hourly rates charged by Defendant’s counsel ($500/hour from 1/1/19 through 12/31/21 and $550/hour from 1/1/22 to the present) to be reasonable.  (See Kovalsky Decl. ¶¶1, 53).  However, the Court finds that the number of hours expended (172.2 between 2/5/20 and 12/31/21 and 355.4 from 1/1/22 to the filing of this motion) to be excessive, even with the deduction of hours which amounted to an $11,630.00 reduction in fees.  (See Kovalsky Decl. ¶44).  Similarly, the Court finds that the 25 hours claimed for the preparation of this motion, plus an estimated 10 hours “dealing with the opposition, replying and appearing on the motion… [and 12 hours at $150 an hour for paralegal time.]” to be excessive.  Id.   

 

The Court finds that between 2/5/20 and 12/31/21, 130 hours at $500/hour and between 1/1/22 and the entry of judgment, 265 hours were reasonably expended by defense counsel at $550/hour for total of $210,750.00 ((130 hours x $500 = $65,000) + (265 x $550 = $145,750)).  The Court finds that 10 hours were reasonably spent on the preparation of this motion plus an additional 6 hours for the preparation of the reply and for the appearance thereon at $550/hour for an additional $8,800.00 in fees.  Based on the foregoing, Defendants are awarded a total of $219,550.00 in attorney’s fees. 

 

Based on the finding that Defendants are the prevailing party under the contract entitled to an award of attorney’s fees, the Court need not reach the issue of Defendants’ alternative request for an award of attorney’s fees pursuant to CCP 2033.420(b). 

 

In the opposition, Plaintiff contends that the Court did not consider his objections to the proposed Statement of Decision before entering it.  (See Labrum Decl. ¶¶2, 6).  Plaintiff indicates that he has reserved 5/12/23 for a motion for an order amending and/or setting aside the Judgment and/or Statement of Decision.  Id.  However, Plaintiff has yet to file such motion.  If Plaintiff believed that an amendment to the Statement of Decision and/or Judgment was pertinent to the ruling on the instant motion, Plaintiff should have filed such motion and made an ex parte application to have that motion heard before the instant motion.  Regardless, the portions of the  Statement of Decision objected to by Plaintiff did not form the bases for the ruling on the instant motion (i.e., Plaintiff’s First Amended Complaint alleged that Defendants and Wright were agents, servants and/or employees of one another and alleged that they collectively breached the contract which contained the attorney’s fee provision.  The ruling on the motion is not based on cost of proof under CCP 2033.240(b)).  (See Labrum Decl. ¶6).

 

Defendants’ request to add the $13,344.35 in costs sought in Defendants’ memorandum of costs plus an additional $1,997.80 in costs to the Judgment is denied without prejudice.  First, the instant motion does not clearly set forth in its notice that Defendants are seeking an order striking Plaintiff’s motion to tax costs set for 5/16/23.  See CRC 3.1110(a) (“A notice of motion must state in the opening paragraph the nature of the order being sought and the grounds for issuance of the order.”).  Even if proper notice of such relief was given, Plaintiff sets for no authority (i.e., CCP 436(b)) in the motion for striking the motion to tax costs.  (See Motion, p.ii:8-16, p.14:6-p.15:6).  The denial of the request to strike the motion to tax costs is without prejudice to Defendants filing a separate properly noticed and supported motion for such relief or making such arguments in opposition to the motion to tax costs.  Defendants have also failed to provide any authority which would them to add on an additional $1,997.80 in costs via the instant motion for items that appear to have been incurred, at least in part, before the filing of the memorandum of costs.  (See Motion, p.15:4-6; Kovalsky Decl. ¶54, Ex.BB, p.25). 

 

CONCLUSION

 

Defendants are awarded $219,550.00 in attorney’s fees.  Defendants’ request to add costs to the Judgment at this time is denied without prejudice.