Judge: Melvin D. Sandvig, Case: 21CHCV00349, Date: 2023-10-27 Tentative Ruling

Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assisant in North Valley Department F47, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2247.  Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and specially pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org. All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies).

Case Number: 21CHCV00349    Hearing Date: February 8, 2024    Dept: F47

Dept. F47

Date: 2/8/24

Case #21CHCV00349

 

MOTION FOR ATTORNEY FEES

 

Motion filed on 10/13/23.

 

MOVING PARTY: Plaintiff Vaping360 GMBH

RESPONDING PARTY: Defendant Newhere, Inc. dba CBDFX

NOTICE: ok

 

RELIEF REQUESTED: An order requiring Defendant Newhere, Inc. dba CBDFX.com aka Newhere Products aka Newhere Brands to pay reasonable attorney’s fees and costs incurred pursuant to CCP 2033.420.

 

RULING: The motion is granted as set forth below. 

 

SUMMARY OF FACTS & PROCEDURAL HISTORY

 

This action arose out of the alleged breach of a contract between Plaintiff Vaping360 GMBH (Plaintiff) and Defendant Newhere, Inc. dba CBDFX.Com (Defendant) for use of Plaintiff’s website hyperlinks to promote and sell Defendant’s products.  Plaintiff contended that the contract stipulated that Plaintiff would receive commission based on the use of the hyperlinks from Plaintiff’s website to Defendant’s website to purchase Defendant’s products.

 

On 8/15/22, Plaintiff served Defendant with Requests for Admissions, Set 1.  (Ross Decl., Ex.A).  Defendant first served responses to the Requests for Admissions, Set 1, on 10/3/22.  (Ross Decl., Ex.B).  On 11/7/22, Defendant served further responses to some of the Requests.  (Ross Decl., Ex.C).  On 12/5/22, Plaintiff filed a motion to compel further responses to the remainder of the Requests.  (Ross Decl., Ex.D).  Before the hearing on the motion, Defendant served unverified further responses which were not code-compliant.  (Ross Decl., Ex.E).  On 1/3/23, the Court granted Plaintiff’s motion.  (Ross Decl., Ex.F).  After Plaintiff filed a motion for terminating sanctions, Defendant served the further responses ordered by the Court. (Ross Decl., Ex.G).   Defendant failed to admit several of the Requests.

 

On 7/5/23 and 7/6/23, a court trial of the action was held after which judgment was entered for Plaintiff against Defendant on the complaint for the principal and total amount of $821,040.59.  (See 7/5/23 and 7/6/23 Minute Orders).  The Judgment and a Statement of Decision were signed and filed on 8/3/23.  On 8/14/23, Plaintiff filed and served Notice of Entry of Judgment. 

 

On 10/13/23, Plaintiff filed and served the instant motion seeking an order requiring Defendant Newhere, Inc. dba CBDFX.com aka Newhere Products aka Newhere Brands to pay reasonable attorney’s fees and costs incurred pursuant to CCP 2033.420.  The motion is made on the grounds that Defendant unreasonably failed to admit the truth of the following matters when requested to do so in Requests for Admissions propounded on 8/15/22, which required Plaintiff to incur fees and costs to prove such matters:

(1) That Plaintiff and Defendant entered into a contract in or about December 2017. (Plaintiff’s Request for Admission, Set One, No. 1)

 

(2) That under the Agreement Plaintiff would market and review Defendant’s products on the website and provide hyperlinks for users to purchase Defendant’s products. (Plaintiff’s Request for Admission, Set One, No. 2).

 

(3) That pursuant to the Agreement Post Affiliate Pro was to be the affiliate portal. (Plaintiff’s Request for Admission, Set One, No. 3)

 

(4) That pursuant to the Agreement Defendant was to pay Plaintiff 50% Costs Per Action (“Commission”) on all retail products that were sold as a result of a customer buying Defendant’s products through Plaintiff’s marketing and reviews. (Plaintiff’s Request for Admission, Set One, No. 7)

 

(5) That pursuant to the Agreement Commissions were to be paid monthly. (Plaintiff’s Request for Admission, Set One, No. 9)

 

(6) That pursuant to the Agreement cookie days were to be infinite. (Plaintiff’s Request for Admission, Set One, No. 10)

 

(7) That having infinite cookie days in the Agreement meant that Plaintiff was to be paid Commissions on all re-purchases. (Plaintiff’s Request for Admission, Set One, No. 11).

 

(8) That Defendant was aware that infinite cookies were part of the Agreement. (Plaintiff’s Request for Admission, Set One, No. 12)

 

(9) That the Agreement did not terminate until Plaintiff’s affiliate account was terminated. (Plaintiff’s Request for Admission, Set One, No. 13)

 

(10) That Ali Esmaili was on emails where the 50% Commission was discussed. (Plaintiff’s Request for Admission, Set One, No. 18)

 

(11) That Ali Esmaili was on emails where the 50% Commission was agreed to. 

 

(12) That Ali Esmaili was on emails where infinite cookies were discussed. (Plaintiff’s Request for Admission, Set One, No. 20)

 

(13) That Ali Esmaili was on emails where infinite cookies were agreed to. (Plaintiff’s Request for Admission, Set One, No. 21)

 

(14) That Christian Graversen was an employee of Newhere in December 2017. (Plaintiff’s Request for Admission, Set One, No. 22)

 

(15) That Christian Graversen was on emails where the 50% Commission was discussed. (Plaintiff’s Request for Admission, Set One, No. 23)

 

(16) That Christian Graversen was on emails where the 50% Commission was agreed to. (Plaintiff’s Request for Admission, Set One, No. 24)

 

(17) That Christian Graversen was on emails where infinite cookies were discussed. (Plaintiff’s Request for Admission, Set One, No. 25)

 

(18) That Christian Graversen was on emails where infinite cookies were agreed to. (Plaintiff’s Request for Admission, Set One, No. 26)

 

(19) That Emin Andreasian was on emails where infinite cookies were discussed. (Plaintiff’s Request for Admission, Set One, No. 30)

 

(20) That Emin Andreasian was on emails where infinite cookies were agreed to. (Plaintiff’s Request for Admission, Set One, No. 31)

 

(21) That Defendant has not paid Plaintiff all amounts under the Agreement. (Plaintiff’s Request for Admission, Set One, No. 32)

 

(22) That Defendant failed to pay Plaintiff over $600,000.00 in Commissions due under the Agreement. (Plaintiff’s Request for Admission, Set One, No. 33)

 

(See Ross Decl., Ex.A).

 

Defendant has opposed the motion and Plaintiff has filed a reply to the opposition.

 

ANALYSIS

 

The purpose of Requests for Admissions is to narrow discovery, eliminate disputed issues, shift the cost of proving certain matters and expedite trial.  City of Glendale (2015) 235 CA4th 344, 353-354; Bloxham (2014) 228 CA4th 729, 752.  Requests for Admissions are not limited to matters within the personal knowledge of the responding party; therefore, that party must make a reasonable investigation of the facts before answering requests that do not fall within the party’s personal knowledge.  Wimberly (1997) 56 CA4th 618. 

 

CCP 2033.420 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.”

 

The party seeking to benefit from an exception listed in CCP 2033.420(b) has the burden to establish the exception.  See Spahn (2021) 72 CA5th 208, 216; Samsky (2019) 37 CA5th 517, 523.  Defendant has failed to establish that any of the exceptions apply.

 

There is no evidence that an objection to any of the subject Requests was sustained or a response to the Requests was waived under CCP 2033.290.

 

In response to the subject Requests, Defendant denied that there was any contract or agreement between the parties and denied that the principal of Defendant, who signed the verifications, and other employees/agents of Defendant were on numerous emails discussing and agreeing to the terms of the agreement.  At trial, Plaintiff proved that there was a written agreement between the parties for Plaintiff to use hyperlinks to promote and sell Defendant’s products (Requests Nos. 1 and 2), and that the terms of the agreement included the following terms: 50% Commission to Plaintiff (Requests Nos. 7, 18, 19, 23, 24); infinite cookie days (Requests Nos. 10, 11, 12, 20, 21, 25, 26, 30, 31); Commissions to be paid monthly based upon sales information tracked through third party affiliate platform Post Affiliate Pro (Requests Nos. 3, 9); and that the agreement did not terminate until Plaintiff’s affiliate account was terminated (Requests No. 13).  Plaintiff also proved that Defendant breached the agreement by not paying Plaintiff Commissions owed totaling $821,040.59 (Requests Nos. 32 and 33).  (See Ross Decl. ¶13, Ex. H).  Ultimately, Plaintiff obtained a judgment against Defendant in the amount of $821,040.59.  Id.

 

The subject Requests were directly related to Plaintiff’s breach of contract claim.  As such, they were of substantial importance.  See Brooks (1986) 179 CA3d 500, 509; Doe (2019) 37 CA5th 675, 690.  At trial, the Court found that each of the facts Plaintiff requested Defendant admit was true (i.e., a contract existed that Defendant through its principal, employees and agents agreed to; the terms of the contract; the terms of the contract were ratified when signing up with the terms on Post Affiliate Pro).

 

Defendant did not have good reason to deny Requests Nos. 1-3, 7, 9-13, 18-26, and 30-33 as there is no evidence that Defendant had reasonable grounds to believe that it would prevail on the matters which were the subject these Requests.  See Laabs (2008) 163 CA4th 1242, 1276; Brooks, supra at 511; Grace (2015) 240 CA4th 523, 530.  Defendant’s denials of these matters was unreasonable, especially considering that Defendant’s principal, employees, and agents were on emails that discussed the terms of the agreement (a fact that was itself denied), and the emails were in Defendant’s custody, possession, and control at the time these denials were made.  See Orange County Water District (2018) 31 CA5th 96, 118.  If Defendant had admitted these facts, it would have substantially reduced the time and resources required to litigate these issues and, possibly, could have even eliminated the need for a trial at all. 

 

Based on the foregoing, the Court finds that Plaintiff is entitled to recover from Defendant the reasonable expenses incurred in proving the subject Requests, including reasonable attorney's fees.  CCP 2033.420(a).  The Court finds that the hourly rates of $450/hour and $375/hour for the attorneys and the hourly rate of $175/hour for paralegals that worked on this matter to be reasonable.  (See Ellrod Decl.; Ross Decl.) 

 

Plaintiff’s attorneys contend that 291.70 hours were expended by their firm since the subject Requests were propounded on 8/15/22.  (Ross Decl. ¶15).  The Court finds that the subject Requests relate to the ultimate issues decided by the Court.  (See 8/3/24 Statement of Decision).  As such, it does not appear that Plaintiff is attempting to recover fees for issues that “were completely outside the scope of the requests for admissions.”  See Garcia (1994) 28 CA4th 724, 736-737. 

 

However, the Court finds that Plaintiff’s recovery should be limited to the fees incurred after Defendant’s initial responses to the Requests on 10/3/22, which included some of the denials and began Plaintiff’s quest to obtain further/final code-compliant responses which include denials of the other subject Requests.  As noted in the reply, Plaintiff’s counsel claimed to have expended 282 hours from 10/3/22 to the end of July 2023 which totals $108,837.50 in claimed fees.  From that amount, $5,805.00 was deducted for fees already paid as sanctions leaving $103,032.50 remaining in claimed fees.  (See Ross Reply Decl.).  Plaintiff also seeks to recover for an additional 32 hours related to the instant motion for an additional $12,000.00, plus $60.00 filing fee.

 

The Court finds that the amount of time claimed by Plaintiff’s counsel to have been spent between 10/3/22 and the end of July 2023 as well as in relation to the instant motion to be excessive.  Since Plaintiff has not provided information as to how much time was spent by each attorney (at different hourly rates) and paralegals to come to the 282 total, the Court reduces the dollar amount by one quarter based on its evaluation that 24 hours, rather than the 32 hours claimed, was reasonably spent in relation to the instant motion. 

 

As such, Plaintiff is awarded a total of $86,274.38 in fees, including fees incurred in relation to this motion, plus the $60.00 filing fee for this motion for a total award of $86,334.38. 

 

CONCLUSION

 

The motion is granted.