Judge Michael P. Linfield, Case Number: 19STCV41520, Date: 2023-10-16 Tentative Ruling

Judge: Michael P. Linfield, Case: 19STCV41520, Date: 2023-10-16 Tentative Ruling

The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.

Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.

Case Number: 19STCV41520 Hearing Date: March 20, 2024 Dept: 34

SUBJECT: Motion for Award of Attorney’s Fees and Costs Incurred in Enforcing Judgment

Moving Party: Judgment Creditor Westlake Village Property, L.P.

Resp. Party: Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC

SUBJECT: Motion to Issue an Order to Satisfy Judgment and Request for Attorneys Fees

Moving Party: Judgment Debtor Dr. Leevil, LLC

Resp. Party: Judgment Creditor Westlake Village Property, L.P.

SUBJECT: Motion to Strike, or Alternatively, Tax Costs

Moving Party: Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC

Resp. Party: Judgment Creditor Westlake Village Property, L.P.

Judgment Creditor’s Motion for Attorney’s Fees is GRANTED in part.

Fees and costs are AWARDED in favor of Judgment Creditor Westlake Village Property, L.P. and against Judgment Debtors D-Day Capital, LLC, Dr. Leevil, LLC, and Dr. Leevil SPE LLC, jointly and severally, in the total amount of $153,395.99.

Judgment Debtor’s Motion to Satisfy Judgment is DENIED.

Judgment Debtor’s Request for Attorney’s Fees is DENIED.

Judgment Debtors’ Motion to Strike or Tax Costs is DENIED.

BACKGROUND:

On February 15, 2019, Plaintiff filed its Complaint against Defendants Dr. Leevil, LLC and D-Day Capital, LLC on causes of action for breach of written contract, accounting, and money had and received.

On November 19, 2019, this case was transferred from the Superior Court of California, County of Ventura to the Superior Court of California, County of Los Angeles.

On September 29, 2021, pursuant to an oral request made by Plaintiff, the Court dismissed with prejudice Plaintiff’s Complaint. The Court retained jurisdiction to make orders to enforce any and all terms of the settlement, including judgment, pursuant to Code of Civil Procedure section 664.6.

On January 2, 2023, the Court entered Judgment in this matter in favor of Plaintiff (now “Judgment Creditor”) and against Defendants (now “Judgment Debtors”).

On May 11, 2023, by request of Judgment Creditor, the Clerk’s Office issued Judicial Council Form EJ-130, Writ of Execution (Money Judgment) to the Sheriff or Mashal of the County of Los Angeles regarding Judgment Debtor Dr. Leevil, LLC.

On November 7, 2023, by request of Judgment Creditor, the Clerk’s Office issued Judicial Council Form EJ-130, Writ of Execution (Money Judgment) to the Sheriff or Mashal of the County of Alameda regarding Judgment Debtor Dr. Leevil, LLC.

On November 13, 2023, by request of Judgment Creditor, the Clerk’s Office issued Judicial Council Form EJ-130, Writ of Execution (Money Judgment) to the Sheriff or Mashal of the County of Los Angeles regarding Judgment Debtor Dr. Leevil, LLC.

On November 28, 2023, the Court granted in part Judgment Creditor’s Motion to Amend Judgment to Add Alter Ego Defendant as Judgment Debtor, and Identify Alter Ego (“Second Motion to Amend”). The Court granted Judgment Creditor’s request that the Court amend the Judgment to add Dr. Leevil SPE LLC to the Judgment as an alter ego of Judgment Debtor Dr. Leevil, LLC.

On December 18, 2023, Judgment Creditor filed its Motion for Award of Attorney’s Fees and Costs Incurred in Enforcing Judgment (“Judgment Creditor’s Motion for Attorney’s Fees”). Judgment Creditor concurrently filed: (1) Declaration of Duc Le; (2) Declaration of Teri T. Pham; and (3) Proposed Order.

On December 26, 2023, Judgment Debtor Dr. Leevil, LLC filed its Motion to Issue an Order to Satisfy Judgment and Request for Attorneys Fees (“Judgment Debtor’s Motion to Satisfy Judgment”).

On December 27, 2023, Judgment Creditor filed its Judicial Council Form MC-012, Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest.

On January 5, 2024, Judgment Creditor filed its Opposition to Judgment Debtor’s Motion to Satisfy Judgment. Judgment Creditor concurrently filed: (1) Declaration of Neeloufar Mahrouyan; and (2) Declaration of Teri T. Pham.

On January 9, 2024, Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC filed their Motion to Strike, or Alternatively, Tax Costs (“Motion to Strike or Tax Costs”).

On January 10, 2024, Judgment Debtor Dr. Leevil, LLC filed its Reply in support of Judgment Debtor’s Motion to Satisfy Judgment.

On January 12, 2024, Judgment Creditor filed its Notice of Withdrawal of Memorandum of Costs After Judgment.

On February 2, 2024, Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC filed their Opposition to Judgment Creditor’s Motion for Attorney’s Fees.

On February 2, 2024, Judgment Creditor filed its Opposition to Motion to Strike or Tax Costs. Judgment Creditor concurrently filed Declaration of Neeloufar Mahrouyan.

On February 8, 2024, Judgment Creditor filed its Reply in support of Judgment Creditor’s Motion for Attorney’s Fees.

On February 8, 2024, Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC filed their Reply in support of Motion to Strike or Tax Costs.

On February 19, 2024, Judgement Debtor Dr. Leevil, LLC filed its Request for Judicial Notice. On the same day, Judgement Debtor Dr. Leevil SPE LLC filed its request for judicial notice.

ANALYSIS:

I. Judgment Creditor’s Motion for Attorney’s Fees

A. Legal Standard

“This title shall be known and may be cited as the Enforcement of Judgments Law.” (Code Civ. Proc., § 680.010.)

“The judgment creditor may claim under this section the following costs of enforcing a judgment: . . . (6) Attorney’s fees, if allowed by Section 685.040.” (Code Civ. Proc., § 685.070, subd. (a)(6).)

“The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment. Attorney’s fees incurred in enforcing a judgment are not included in costs collectible under this title unless otherwise provided by law. Attorney’s fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” (Code Civ. Proc., § 685.040.)

“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.” (Code Civ. Proc., § 1032, subd. (b).)

“The following items are allowable as costs under Section 1032: . . . Attorney’s fees, when authorized by any of the following: (A) Contract. (B) Statute. (C) Law.” (Code Civ. Proc., § 1033.5, subd. (a)(10).)

B. Judgement Debtor’s Untimely Requests for Judicial Notice and Brief

On February 19, 2024, the day before the hearing, Judgement Debtor Dr. Leevil, LLC filed its Request for Judicial Notice. On the same day, Judgement Debtor Dr. Leevil SPE LLC filed its request for judicial notice. The Court declines to accept the late-filed brief or to take judicial notice of the items requested.

C. The Parties’ Arguments

Judgment Creditor moves the Court for $177,015.78 in attorney’s fees. (Judgment Creditor’s Motion for Attorney’s Fees, p. 9:2–4.)

Judgment Creditor argues: (1) that Judgment Creditor is entitled to recover its attorneys’ fees and costs incurred in collection of the judgment under the Parties’ contract; and (2) that Judgment Creditor is entitled to the full amount of its attorneys’ fees and costs to enforce the judgment. (Judgment Creditor’s Motion for Attorney’s Fees, pp. 5:19–21, 6:12–13.)

Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC disagree, arguing: (1) that a motion for attorneys’ fees and costs for enforcing a judgment must be filed prior to satisfaction of the judgment or it is time-barred; (2) that Judgment Debtor Dr. Leevil, LLC fully satisfied its portion of the judgment prior to Judgment Creditor filing its fee motion; (3) that Judgment Creditor has not apportioned the attorneys’ fees against Judgment Debtors and cannot recover fees incurred against Judgment Debtor Dr. Leevil, LLC; (4) that Judgment Creditor’s requested attorneys’ fees and hours spent are unreasonable; and (5) that Judgment Creditor’s request for costs, other than attorneys’ fees is improper because Judgment Creditor withdrew its memorandum of costs and Judgment Debtors have a motion to strike costs pending. (Opposition to Judgment Creditor’s Motion for Attorney’s Fees, pp. 3:20–21, 5:3–4, 7:17–18, 11:14, 12:14–15.)

In its Reply, Judgment Creditor argues: (1) that the judgment has not been satisfied; (2) that Judgment Debtors are jointly and severally liable to pay the judgment; (3) that Judgment Creditor’s requested attorneys’ fees and hours spent are reasonable; and (4) that Judgment Creditor’s request for costs is not improper. (Reply in support of Judgment Creditor’s Motion for Attorney’s Fees, pp. 3:5, 7:2, 7:15, 8:23.)

D. Prevailing Party

On January 2, 2023, the Court entered Judgment in favor of Judgment Creditor and against Judgment Debtors. Judgment Creditor is the prevailing party in this matter and for enforcement purposes. Notwithstanding other provisions of law, Judgment Creditor is thus entitled to the reasonable and necessary costs incurred for enforcing the Judgment. (Code Civ. Proc., § 685.040.)

E. The Attorney’s Fees Provision

1. Legal Standard

“When a party recovers a judgment for breach of contract, entry of the judgment absolves the defendant of any further contractual obligations, and the judgment for damages replaces the defendant's duty to perform the contract. Upon entry of judgment, all further contractual rights are extinguished, and the plaintiff's rights are thereafter governed by the rights on the judgment, not by any rights which might have been held to have arisen from the contract.” (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1766, 1770, citations omitted.)

“Postjudgment attorney fees are recoverable costs under section 685.040 if the fees were ‘incurred in enforcing a judgment’ that contained an award of attorney fees pursuant to a contract. A judgment creditor may claim such costs via a memorandum of costs filed before the judgment has been ‘fully satisfied but not later than two years after the costs have been incurred.’ (§ 685.070, subds. (a)(6), (b).)” (Globalist Internet Techs., Inc. v. Reda (2008) 167 Cal.App.4th 1267, 1274; see also Nash v. Aprea (2023) 96 Cal.App.5th 21, 29–32.)

2. Discussion

This action was filed in the Superior Court of California, County of Ventura as case number 56-2019-00524976-CU-BC-VTA on February 15, 2019 by Judgment Creditor (then “Plaintiff”) against Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC (then “Defendants”). (Judgment Creditor’s Motion for Attorney’s Fees, Exh. 1.A, p. 1.)

On September 20, 2021, the Parties entered into an agreement, titled “Settlement Agreement and Limited Release.” (Judgment Creditor’s Motion for Attorney’s Fees, Exh. 1, p. 1.) The Settlement Agreement and Limited Release is signed by Judgment Debtor Dr. Leevil, LLC (by its manager, Ronald Richards, on September 24, 2021), Judgment Debtor D-Day Capital, LLC (by its manager, Ronald Richards, on September 24, 2021), and Judgment Creditor (by its general partner, Jeoung Lee, on September 27, 2021). (Id. at p. 5.)

The following are the relevant attorney’s fees provisions.

“Attorneys’ Fees. The Parties shall each bear and be responsible for their own respective attorneys’ fees and costs incurred in connection with the Lawsuit and in the negotiation and execution of this Agreement.” (Judgment Creditor’s Motion for Attorney’s Fees, Exh. 1, ¶ 5.)

“Prevailing Party Attorneys’ Fees. In any action for default, breach or to enforce this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees and costs incurred therein.” (Judgment Creditor’s Motion for Attorney’s Fees, Exh. 1, ¶ 6.)

Pursuant to the underlying contract, but notwithstanding other provisions of law, Judgment Creditor is entitled to attorney’s fees as costs incurred for enforcing the Judgment. (Code Civ. Proc., §§ 685.070, subd. (a)(6); 1032, subd. (b); 1033.5, subd. (a)(10).)

F. Claiming Costs Before Full Satisfaction of the Judgment

1. Legal Standard

“Before the judgment is fully satisfied but not later than two years after the costs have been incurred, the judgment creditor claiming costs under this section shall file a memorandum of costs with the court clerk and serve a copy on the judgment debtor. Service shall be made personally or by mail. The memorandum of costs shall be executed under oath by a person who has knowledge of the facts and shall state that to the person’s best knowledge and belief the costs are correct, are reasonable and necessary, and have not been satisfied.” (Code Civ. Proc., § 685.070, subd. (b).)

“The 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. The costs claimed under this section may include, but are not limited to, costs that may be claimed under Section 685.070 and costs incurred but not approved by the court or referee in a proceeding under Chapter 6 (commencing with Section 708.010) of Division 2.” (Code Civ. Proc., § 685.080, subd. (a).)

“There does not appear to be any dispute concerning [a judgment creditor’s] right to timely seek reasonable attorney fees as costs in efforts to enforce its judgment. That having been said, any motion for such costs must be timely made. To be timely, the motion must be made before the underlying judgment has been fully satisfied and within two years of the fees being incurred. The statutory purpose of requiring that the motion for enforcement costs be brought before the judgment is satisfied in full is to avoid a situation where a judgment debtor has paid off the entirety of what he justifiably believes to be his obligation in the entire case, only to be confronted later with a motion for yet more fees.” (Gray1 CPB, LLC v. SCC Acquisitions, Inc. (2015) 233 Cal.App.4th 882, 891, cleaned up, emphasis in original.)

“A judgment creditor who has yet to file a memorandum of costs (§ 685.070) or cost motion (§ 685.080) is not generally at the mercy of the judgment debtor as to the timing of satisfaction. If the tendered payment is by uncertified check, as it was in this case, the creditor may postpone presenting the check for payment and, in the meantime, file his or her cost memorandum or motion. (See § 724.010, subd. (c) [obligation to acknowledge satisfaction of judgment arises only when check is presented and honored]; Hale v. Bohannon (1952) 38 Cal.2d 458, 467 [241 P.2d 4] [the mere giving of a check does not constitute payment].) Even if payment is by certified check or similar instrument, the acceptance of which arguably constitutes satisfaction (see Cal. U. Com. Code, § 3310, subd. (a)), the judgment creditor retains, at the least, the option of rejecting the certified check and filing the motion or memorandum for enforcement costs and fees.” (Conservatorship of McQueen (2014) 59 Cal.4th 602, 615, emphasis in original.)

2. Discussion

The Parties’ respective filings bring up multiple questions:

(1) whether a wire transfer is the equivalent of cash in this context;

(2) whether Judgment Creditor may file a motion or memorandum for costs (including for attorney’s fees as costs) on the basis of the Judgment not being fully satisfied;

(3) if the Judgment is not satisfied as a whole, which parties can be the subject of motions for and/or memoranda of costs; and

(4) whether Judgment Debtor Dr. Leevil, LLC has actually satisfied its portion of the Judgment. The Court considers each of these issues in turn.

a. Wire Transfers as Cash Equivalents

i. Legal Standard

“Conceivably, a judgment debtor could satisfy the judgment by tendering cash for the full outstanding amount, with interest, before the creditor has sought his or her enforcement costs and fees, though this is likely to be a rarity for sizeable judgments. If the creditor has reason to believe cash may imminently be tendered to pay the judgment, prudence counsels filing a motion or memorandum for the costs and fees accumulated to that point; if the judgment is not then satisfied, any costs or fees accruing later may be sought in a supplemental motion or memorandum. In any event, the possibility that some wily judgment debtor may make a cash payment timed to foreclose a final motion for costs and fees does not provide this court authorization to ignore the explicit, unambiguous language of section 685.080 and substitute a ‘reasonable time’ rule of our own invention.” (Conservatorship of McQueen, supra, 59 Cal.4th at pp. 615–616.)

When a judgment creditor receives a cashier’s check for full satisfaction of the judgment and chooses not to reject it to instead demand payment in cash, “the effect [is] the same as if it had accepted cash.” (Gray1 CPB, LLC, supra, 233 Cal.App.4th at p. 894, citing Com. Code, § 3310, subd. (a).) “Having accepted [the cashier’s check], the judgment was satisfied and [the judgment creditor’s] subsequent motion for attorney fees [is] untimely.” (Id. at p. 895.)

“‘Payment’ for purposes of satisfaction of a money judgment means either (1) the tender of cash or (2) the tender and acceptance of a certified check or similar instrument.” (Wertheim, LLC v. Currency Corp. (2021) 70 Cal.App.5th 327, 337–338, citations omitted.)

“The common meaning of the word ‘cash’ is ‘ready money,’ or ‘money or its equivalent (as a check) paid for good or services at the time of purchase or delivery. (Webster's 10th Collegiate Dict. (1999) p. 177.) Our courts have defined the term ‘cash’ as 'current money in hand or readily available,' and as ‘ready money’ at command, subject to free disposal; not tied up in a fixed state. (Estate of Chamberlain (1941) 46 Cal. App. 2d 16, 20 [115 P.2d 235].) The electronic transfer of funds from one bank to another has been characterized as the equivalent of transferring money. (U.S. v. Goldberg (3d Cir. 1987) 830 F.2d 459, 466.)” (Washington Mut. Bank v. Super. Ct. (2002) 95 Cal.App.4th 606, 623, internal quotation marks omitted, holding that the word “cash” as that term is used in Civil Code section 2948.5 includes a wire or electronic transfer because such transfers are the functional equivalent of cash.)

“These transfers, commonly referred to as wholesale wire transfers, differ from other payment methods in a number of significant respects, a fact which accounts in large measure for their popularity. Funds are moved faster and more efficiently than by traditional payment instruments, such as checks. The transfers are completed at a relatively low cost, which does not vary widely depending on the amount of the transfer, because the price charged reflects primarily the cost of the mechanical aspects of the funds transfer. Most transfers are completed within one day and can cost [very little] to carry out a multimillion dollar transaction.” (Washington Mut. Bank, supra, at p. 624, quoting Banque Worms v. BankAmerica Int’l (1991) 77 N.Y.2d 362, 369–370, other citations omitted.)

ii. Discussion

The Parties disagree about whether a wire transfer must be accepted for the purposes of satisfaction of a judgment.

Judgment Debtor Dr. Leevil, LLC submits evidence to the Court that indicates it made a wire transfer of $640,002.36 to Judgment Creditor on November 30, 2023. (Opposition to Judgment Creditor’s Motion for Attorney’s Fees, Exh. C.) According to Judgment Debtor Dr. Leevil, LLC, this wire transfer “is the equivalent of cash” and must be accepted by Judgment Creditor toward satisfaction of the Judgment. (Id. at p. 4:19–24.)

Judgment Creditor disagrees, arguing that cash and wire transfers are different. (Reply in support of Judgment Creditor’s Motion for Attorney’s Fees, p. 5:14.) Judgment Creditor further claims (without providing declaratory or documentary evidence) that it “unequivocally rejected the wire as payment in full satisfaction of the Judgment within twenty-four hours after receiving notice of receipt of the wire.” (Id. at p. 4:3–4.)

The Court agrees with Judgment Debtors’ arguments.

The California Supreme Court has concluded that the statutory language in the Enforcement of Judgments Law does not allow judgment creditors to refuse immediate cash payments of judgments. (Conservatorship of McQueen, supra, 59 Cal.4th at pp. 615–616.) Furthermore, the Court of Appeal has concluded that, for the purposes of the Enforcement of Judgments Law, acceptance of a cashier’s checks must be treated the same as the acceptance of cash — although cashier’s checks advantage judgment creditors in this situation because they can be rejected when tendered. (Gray1 CPB, LLC, supra, 233 Cal.App.4th at pp. 894–896.)

Here, Judgment Debtor Dr. Leevil, LLC initiated a wire transfer to Judgment Creditor. The wire transfer appears to have been sent nearly immediately from one bank account to another. The money reaching Judgment Creditor’s bank account was the functional equivalent of Judgment Creditor having received the money in cash — meaning the money need only have been tendered to Judgment Creditor, not tendered to and accepted by Judgment Creditor. (Wertheim, LLC, supra, 70 Cal.App.5th at p. 337–338.)

There is no reason why a wire transfer should be treated like a check rather than like cash. When a judgment creditor receives a check, it can choose whether to accept that check and when to deposit that check. But when a judgment creditor receives a wire transfer, it has limited ability to deny acceptance of (i.e., reject) the transfer. Unless a judgment creditor takes specific actions with its bank of choice to limit certain wire transfers — actions that do not appear to have occurred here — that bank will normally accept all wire transfers on an automatic basis. These judgment creditors will have immediate access to the cash, and their judgments will be (at least partially, if not fully) satisfied.

In addition, there is no reason why a judgment creditor should be allowed to refund a wire transfer and avoid satisfaction of the judgment. After all, in the case of both cash and checks, judgment creditors are not allowed to refund accepted payments that fully satisfy judgments — even if doing so would allow them to recover enforcement costs and fees. There is no reason why an accepted wire transfer should be treated any different.

Thus, the Court accepts that Judgment Debtor Dr. Leevil, LLC wired Judgment Creditor $640,002.36 and that, for the purposes of satisfaction of the Judgment, Judgment Creditor was not at liberty to subsequently reject it.

b. Whether Judgment Creditor May File a Motion and/or Memorandum for Costs

i. Legal Standard

“When the Enforcement of Judgments Law refers to a judgment having been fully satisfied, it means an outstanding judgment, not what the judgment would be if postjudgment costs were to be added thereto. No other interpretation is possible. If a judgment were not fully satisfied because of the existence of as yet unawarded attorney fees, the phrase before the judgment is fully satisfied would serve no purpose. Therefore, the only reasonable interpretation is that statutory references to the judgment having been fully satisfied, are to the judgment (including accrued interest) as it existed at the time payment was made.” (Gray 1 CPB, LLC, supra, 233 Cal.App.4th at p. 892, citations omitted, italics in original.)

Anything less than full satisfaction of the Judgment means that recovery of costs (including attorney’s fees as costs) is “not barred by the time limits of section 685.080.” (Lucky United Props. Inv., Inc. v. Lee (2010) 185 Cal.App.4th 125, 142.)

ii. Discussion

On January 2, 2023, the Court entered Judgment in this matter. The Judgment was in favor of Judgment Creditor and against: (1) Judgment Debtor Dr. Leevil, LLC in the amount of $577,643.84; (2) Judgment Debtor D-Day Capital, LLC in the amount of $412,602.74; and (3) both Judgment Debtor Dr. Leevil, LLC and Judgment Debtor D-Day Capital, LLC, jointly and severally, in the amount of $8,998.20.

According to Ronald Richards (who is counsel of record for both Judgment Debtor Dr. Leevil, LLC and Judgment Debtor D-Day Capital, LLC), Judgment Debtor Dr. Leevil, LLC has fully satisfied its portion of the Judgment in this action via a bank wire payment in the amount of $640,002.36 to Judgment Creditor. (Opposition, Decl. Richards, ¶ 3.) This payment ostensibly covers all of the amount of which Judgment Debtor Dr. Leevil, LLC owes, including (1) the principal amount solely against it, (2) the principal amount that it is jointly and severally against it, and (3) post-judgment interest that accrued.

(The Court will discuss below whether Judgment Debtor Dr. Leevil, LLC has actually fully satisfied its portion of the Judgment.)

However, there is no doubt that the Judgment as a whole is not satisfied. After all, the Judgment as entered was for $999,244.78 — yet Judgment Debtor Dr. Leevil, LLC only provides evidence that $640,002.36 has been paid. (Opposition, Exh. C.)

Thus, because the Judgment is not fully satisfied, Judgment Creditor is allowed to file a memorandum and/or a motion for costs, including attorney’s fees as costs.

c. Who is Responsible for Fees and Costs

i. Legal Standard

“A plaintiff is only entitled to a single recovery of full compensatory damages for a single injury. Thus, the rule is full payment of a judgment by one tortfeasor discharges all others who maybe liable for the same injury. This rule is designed to prevent double recovery. However, this is only a partial statement of the rule. It is equally the rule where fewer than all of the joint tortfeasors satisfy less than the entire judgment, such satisfaction will not relieve the remaining tortfeasors of their obligation under the judgment. Stated otherwise, partial satisfaction has the effect of a discharge pro tanto. ‘Pro tanto’ means ‘for so much.’” (McCall v. Four Star Music Co. (1996) 51 Cal.App.4th 1394, 1399, cleaned up.)

“The court shall make an order allowing or disallowing the costs to the extent justified under the circumstances of the case.” (Code Civ. Proc., § 685.080, subd. (c).)

ii. Discussion

At present, this matter involves three judgment debtors: (1) D-Day Capital, LLC; (2) Dr. Leevil, LLC; and (3) Dr. Leevil SPE LLC.

Notably, the Court denied a motion to find that Judgment Debtors D-Day Capital, LLC and Dr. Leevil, LLC are alter egos of each other because it had not been presented with sufficient evidence of their alter ego status. (Minute Order dated November 28, 2023, p. 10.)

However, Dr. Leevil SPE LLC was added to this matter as a judgment debtor on the basis that it is an alter ego of Dr. Leevil, LLC. (Minute Order dated November 28, 2023, p. 13.) The Court denied reconsideration of its Minute Order dated November 28, 2023. (Minute Order dated January 5, 2024, p. 7.)

Given that Judgment Debtor D-Day Capital, LLC has not paid its portion of the Judgment, there is no bar against Judgment Creditor moving for costs and fees against Judgment Debtor D-Day Capital, LLC.

The situation is different, however, as to Judgment Debtor Dr. Leevil, LLC (and, by extension, its alter ego Judgment Debtor Dr. Leevil SPE LLC).

The Enforcement of Judgments Law is not entirely clear on what to do when one judgment debtor has fully satisfied its portion of a judgment but another judgment debtor has not. If one judgment debtor fully satisfied its portion of the judgment (including any portions of the judgment that are jointly and severally incurred) before costs were requested, can both judgment debtors still be liable for costs and fees? A strict reading of the statute would indicate that a judgment debtor who made the earlier payment could still be liable for costs and fees because the judgment has not been “fully satisfied”; a broader reading of the statute would indicate that such a judgment debtor would not be liable because the judgment has been “fully satisfied” as to the judgment debtor who promptly paid their debt. The situation is further complicated by Code of Civil Procedure section 695.210, subdivision (c), which states the “amount required to satisfy a money judgment is the total amount of the judgment as entered or renewed with the following additions and subtractions: . . . The subtraction of the amount of any partial satisfactions of the judgment.” (Code Civ. Proc., § 695.210, subd. (c).)

The Court need not and does not resolve this question of law because the Legislature provided trial courts with a limited amount of discretion in this situation. Specifically: “[t]he court shall make an order allowing or disallowing the costs to the extent justified under the circumstances of the case.” (Code Civ. Proc., § 685.080, subd. (c).) Thus, even if the strict reading of the statute is required in this sort of situation, the Court could still disallow costs as to a specific judgment debtor in a situation justified by that judgment debtor having fully paid its portion of the debt prior to a creditor’s request for costs and fees.

Considering the specific circumstances of this case, if Judgment Debtor Dr. Leevil, LLC did, in fact, fully satisfy its portion of the Judgment before costs and fees were requested, the Court would make an order (1) allowing post-judgment enforcement costs and fees as to Judgment Debtor D-Day Capital, LLC and (2) disallowing post-judgment enforcement costs and fees as to Judgment Debtor Dr. Leevil, LLC (and, by extension, Judgment Debtor Dr. Leevil SPE LLC).

However, if Judgment Debtor Dr. Leevil, LLC did not, in fact, fully satisfy its portion of the Judgment before costs and fees were requested, the Court would make an order allowing post-judgment enforcement costs and fees as to Judgment Debtor Dr. Leevil, LLC, its alter ego (Judgment Debtor Dr. Leevil SPE LLC), and Judgment Debtor D-Day Capital, LLC.

d. Whether Dr. Leevil, LLC has Fully Satisfied its Portion of the Judgment

i. Legal Standard

“Unless the provision or context otherwise requires, the definitions in this chapter govern the construction of this title.” (Code Civ. Proc., § 680.110.)

“‘Principal amount of the judgment’ means the total amount of the judgment as entered or as last renewed, together with the costs thereafter added to the judgment pursuant to Section 685.090, reduced by any partial satisfactions of such amount and costs and by any amounts no longer enforceable.” (Code Civ. Proc., § 680.300.)

“‘Writ’ includes a writ of execution, a writ of possession of personal property, a writ of possession of real property, and a writ of sale.” (Code Civ. Proc., § 680.380.)

“‘Levying officer’ means the sheriff or marshal.” (Code Civ. Proc., § 685.260.)

“The amount required to satisfy a money judgment is the total amount of the judgment as entered or renewed with the following additions and subtractions:

“(a) The addition of costs added to the judgment pursuant to Section 685.090.

“(b) The addition of interest added to the judgment as it accrues pursuant to Sections 685.010 to 685.030, inclusive.

“(c) The subtraction of the amount of any partial satisfactions of the judgment.

“(d) The subtraction of the amount of any portion of the judgment that is no longer enforceable.”

(Code Civ. Proc., § 695.210.)

“Costs are added to and become a part of the judgment:

“(1) Upon the filing of an order allowing the costs pursuant to this chapter.

“(2) If a memorandum of costs is filed pursuant to Section 685.070 and no motion to tax is made, upon the expiration of the time for making the motion.

“(3) As specified in Section 685.095.”

(Code Civ. Proc., § 685.090, subd. (a).)

“When a writ is served by a levying officer or registered process server, the costs for that service, as determined pursuant to Section 1033.5, shall be added to and become part of the judgment.” (Code Civ. Proc., § 685.095.)

“If a writ or earnings withholding order is outstanding at the time the costs are added to the judgment pursuant to this section, the levying officer shall add the amount of those costs to the amount to be collected pursuant to the writ or earnings withholding order if the levying officer receives either of the following before the writ or earnings withholding order is returned:

“(1) A certified copy of the court order allowing the costs.

“(2) A certificate from the clerk of the court that the costs have been added to the judgment where the costs have been added to the judgment after a memorandum of costs has been filed pursuant to Section 685.070 and no motion to tax has been made within the time allowed for making the motion.”

(Code Civ. Proc., § 685.090, subd. (c).)

“The levying officer shall include the costs described in subdivision (c) in the amount of the sale or collection distributed to the judgment creditor only if the levying officer receives the certified copy of the court order or the clerk’s certificate before the distribution is made.” (Code Civ. Proc., § 685.090, subd. (d).)

“The costs added to the judgment pursuant to this section are included in the principal amount of the judgment remaining unsatisfied.” (Code Civ. Proc., § 685.090, subd. (b).)

ii. Discussion

Judgment Debtor Dr. Leevil, LLC submitted evidence that it wired $640,002.36 to Judgment Creditor. (Opposition to Judgment Creditor’s Motion for Attorney’s Fees, Exh. C.)

This amount includes: (1) $577,643.84 in principal damages against Dr. Leevil, LLC; (2) $8,998.20 in attorneys’ fees and costs incurred in obtaining the Judgment against Dr. Leevil, LLC and D-Day Capital, LLC, jointly and severally; and (3) $53,360.32 in interest that accumulated on the total of those damages during the 332 days between January 2, 2023 (the date of entry of Judgment) and November 30, 2023 (the date of the wire payment to Judgment Creditor).

Did the payment of $640,002.36 constitute a full satisfaction of Judgment Debtor Dr. Leevil, LLC’s portion of the Judgment?

The answer is “no.”

Pursuant to the Enforcement of Judgments Law, there are three ways in which costs “are added to and become a part of the judgment.” (Code Civ. Proc., § 685.090, subd. (a).)

The first way occurs “[u]pon the filing of an order allowing the costs pursuant to this chapter.” (Code Civ. Proc., § 685.090, subd. (a)(1).) This avenue is inapplicable here because the Court has not filed a post-judgment order allowing costs, much less an order prior to the payment of $640,002.36.

The second way occurs “upon the expiration of the time for making” a motion to tax costs when “a memorandum of costs is filed pursuant to Section 685.070.” (Code Civ. Proc., § 658.090, subd. (a)(2).) Here, a memorandum of costs was filed on December 27, 2023, however, a motion to tax costs was filed on January 9, 2024 —within the ten-day statutory period in which a motion to tax costs could be filed. (Code Civ. Proc., § 685.070, subd. (c).) Thus, this second avenue is inapplicable. Furthermore, because the memorandum of costs was filed after the payment of $640,002.36, it would also be inapplicable if the Judgment were fully satisfied at the time the memorandum of costs was filed. (Code Civ. Proc., § 685.070, subd. (b).)

The third and final way occurs “[a]s specified in [Code of Civil Procedure] Section 685.095.” (Code Civ. Proc., § 685.090, subd. (a)(3).)

“‘Writ’ includes a writ of execution, a writ of possession of personal property, a writ of possession of real property, and a writ of sale.” (Code Civ. Proc., § 680.380.)

“‘Levying officer’ means the sheriff or marshal.” (Code Civ. Proc., § 685.260.)

Here, four writs of execution appear to have been issued by levying officers.

As can be seen from each of these Writs of Execution, a $40.00 fee for issuance of a writ was listed as a cost for each writ. (See EJ-130s, Item 17.) Furthermore, these $40.00 amounts were added to the total amount due. (See EJ-130s, Item 18.)

In addition, Judgment Creditor repeatedly filed Judicial Council Form POS-020, Proof of Personal Service—Civil. These proofs of service — filed on September 25 and November 2, 2023 — demonstrate that the Writs of Execution were, in fact, served by a registered California process server. (See POS-020s, Item 4.b.)

The statute is explicit: the costs of the Writs of Execution were added to and became part of the Judgment when the writs were served by the levying officer or registered process server. (Code Civ. Proc., § 685.095, italics added.) Because this is an authorized way to add costs, the total of these costs plus the preexisting Judgment amount (including the interest that had accrued on the Judgment) became the “principal amount of the judgment” and was the new amount required to satisfy the Judgment. (Code Civ. Proc., §§ 680.300; 685.090, subd. (a)(3); 695.210, subds. (a)–(b).)

The Court notes that Judgment Creditor appears to have been sloppy with its Writs of Execution. Specifically, all of the Writs of Execution have the same principal numbers, even though the Judgment amount clearly changed between them due to subsequent Writs of Execution (each of which added $40.00 in costs upon service) and the passage of time (which resulted in increased interest on both the original Judgment amount and the writ costs). However, Judgment Creditor’s failures to properly calculate the current Judgment amounts on various writs do not change the fact that the statute explicitly requires addition of the costs of those writs upon service.

Because Judgment Debtor did not pay the $160.00 in costs for the Writs of Execution (plus the interest that had accrued because of those costs as of the respective times of service of the Writs of Execution) when attempting to satisfy the Judgment, Judgment Debtor’s payment of $640,002.36 did not, in fact, constitute a full satisfaction of Judgment Debtor Dr. Leevil, LLC’s portion of the Judgment.

Thus, the Court shall allow costs and fees for enforcement of the Judgment to be assessed against all of the Judgment Debtors.

G. The Request for Attorney’s Fees

Judgment Creditor requests $164,876.25 in attorney’s fees. (Judgment Creditor’s Motion for Attorney’s Fees, p. 9:2–4.) Judgment Creditor further requests $7,750.00 in connection with this motion. (Id. at p. 8:21–25.)

1. The Method for Calculating Recovery of Fees

The Parties do not dispute that the appropriate approach for calculating recovery of attorneys’ fees is the lodestar adjustment method, which involves multiplying the number of hours reasonably expended by the reasonably hourly rate. (Warren v. Kia Motors Am. (2018) 30 Cal.App.5th 24, 36; accord Hanna v. Mercedes-Benz USA, LLC (2019) 36 Cal.App.5th 493, 509–12.)

2. The Reasonableness of the Fees Requests

a. Legal Standard

“Under the lodestar adjustment methodology, the trial court must initially determine the actual time expended and then ascertain whether under all the circumstances¿of the case the amount of actual time expended and the monetary charge being made for the time expended are reasonable. Factors to be considered include, but are not limited to, the complexity of the case and procedural demands, the attorney skill exhibited and the results achieved. The prevailing party and fee applicant bears the burden of showing that the fees incurred were reasonably necessary to¿the conduct of the litigation, and were reasonable in amount. It follows that if the prevailing party fails to meet this burden, and the court finds the time expended or amount charged is not reasonable under the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” (Mikhaeilpoor v. BMW of N. Am., LLC (2020) 48 Cal.App.5th 240, 247 [cleaned up].)

“Code of Civil Procedure section 685.040 has a requirement which Civil Code section 1717 does not: only fees that were necessarily incurred are recoverable.” (Wertheim, LLC, supra, 70 Cal.App.5th at p. 332.)

b. Reasonableness of the Hourly Rates

Judgment Creditor’s Counsel claim the following hourly rates:

(1) $480.00 to $500.00 per hour for Partner Teri T. Pham;

(2) $450.00 to $590.00 per hour for Senior Counsel Matthew W. Rosene;

(3) $350.00 per hour for Associate Scott L. Satkin; and

(4) $450.00 per hour for Associate Neeloufar Mahrouyan.

(Decl. Pham, ¶¶ 1, 15–19.)

Judgment Creditor’s Counsel does not list in the declaration the hourly rates for the various paralegals who worked on this matter. However, the invoices indicate that the paralegals all charged $250.00 per hour in this matter. (Decl. Pham, Exh. 12.)

The Court finds that all of these hourly rates are reasonable in the Los Angeles market.

c. Reasonableness of the Number of Hours

Judgment Creditor’s Counsel does not provide a total number of hours worked in the declaration, nor is there a breakdown of total hours by attorney or paralegal. Adding up all the hours listed in the invoices, it appears that Judgment Creditor’s counsel and paralegals worked a total of 348 hours on this matter from January 2, 2023 (the date of entry of Judgment) to present. (Decl. Pham, Exh. 12.)

During the approximately fourteen months since Judgment was entered, this matter has involved: (1) many applications and orders for appearance and examination (i.e., applications for debtor’s examinations); (2) multiple motions to amend judgment; (3) a motion to quash; (4) a motion for reconsideration; (5) this motion for attorney’s fees; (6) the subsequent motion for an order to satisfy judgment; and (7) the subsequent motion to strike or tax costs.

Some of these motions have been complex and required many hours; others have been more routine.

Furthermore, Judgment Creditor’s Counsel has had a mixed record on the motions, sometimes making relatively simple errors that necessitated refiling the motions in order to succeed on the second go-around. Indeed, it is not at all clear that the number of hours Judgment Creditor’s Counsel claim to have spent led to better results. For example, had Judgment Creditor’s Counsel filed a memorandum of costs or motion for costs earlier, this motion would have been much more straightforward, and it appears that Judgment Creditor is only getting fees and costs as to Judgment Debtor Dr. Leevil, LLC because of a technicality — not due to any particular skill demonstrated by Judgment Creditor’s Counsel.

Here, consideration of the invoices and the circumstances indicates that the amount of hours claimed does appear to be inflated — but not by an outrageous amount.

“When a ‘voluminous fee application’ is made, the court may, as it did here, ‘make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure.’ These percentage cuts to large fee requests are, however, ‘subject to heightened scrutiny and the use of percentages, in any case, neither discharges the district court from its responsibility to set forth a ‘concise but clear’ explanation of its reasons for choosing a given percentage reduction nor from its duty to independently review the applicant's fee request.’” (Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88, 102, quoting Gates v. Deukmejian (9th Cir. 1992) 987 F.2d 1392, 1399.)

The Court adopts that approach here and applies a 15% across-the-board percentage cut to the number of hours claimed. The Court basis this 150% across-the-board reduction on its experiences and observations of what has occurred during this litigation. Thus, the Court will allow 295.8 hours to be claimed.

In addition, the Court will allow an additional $1,000.00 in fees for the work done on the three motions at issue in this Order. While a larger amount of fees would normally be reasonable, Judgment Creditor’s Counsel did not do a stellar job on this motion. Various important statutes were not cited, and Counsel’s memorandum of points and authorities did not properly assess the issues surrounding satisfaction of judgment, all of which made the Court’s work in adjudicating this matter much slower and more arduous.

H. The Request for Costs

Judgment Creditor requests $12,139.53 in costs. (Judgment Creditor’s Motion for Attorney’s Fees, p. 9:2–4.) Judgment Creditor further requests $111.65 in costs for this motion. (Id. at p. 8:21–25.) The Court assesses this request below.

1. Legal Standard

“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.” (Code Civ. Proc., § 1032, subd. (b).)

Prevailing parties seeking to claim costs must comply with California Rules of Court, rule 3.1700(a), and parties seeking to contest costs must comply with California Rules of Court, rule 3.1700(b).

The Court separately considers each category of contested costs, including: (1) whether they are specifically allowable or specifically prohibited; (2) whether they were incurred, whether or not paid; (3) whether they were reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation; and (4) whether they are reasonable in amount. (Code Civ. Proc., §§ 1033.5, subds. (a), (b), and (c)(1)–(3).

“Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.” (Code Civ. Proc., § 1033.5, subd. (c)(4); see also Foothill-De Anza Cmty. Coll. Dist. v. Emerich (2007) 158 Cal.App.4th 11, 30.)

2. Discussion

Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC argue: (1) that the request for costs is improper because Judgment Creditor withdrew its Memorandum of Costs; and (2) that Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC have a pending motion to strike costs. (Opposition to Judgment Creditor’s Motion for Attorney’s Fees, p. 12:14–15.)

The first argument is without merit.

Judgment creditors are allowed to request costs for enforcement of judgments by both motions and memoranda. (Code Civ. Proc., §§ 685.070, subd. (b); 685.080, subd. (a).) The withdrawal of one does not automatically moot the other.

The second argument is also without merit.

The arguments made in Judgment Debtors’ Motion to Tax or Strike Costs are: (1) that Judgment Debtor Dr. Leevil, LLC satisfied its portion of the Judgment prior to Judgment Creditor filing its Memorandum of Costs; and (2) that Judgment Creditor did not provide any itemization or breakdown of the costs between Judgment Debtors Dr. Leevil, LLC and D-Day Capital, LLC.

As discussed above, Judgment Debtor Dr. Leevil, LLC did not, in fact, satisfy its portion of the Judgment prior to Judgment Creditor filings its Memorandum of Costs. Furthermore, all of the attorney’s fees and costs incurred in this matter were so inextricably intertwined that it would not have been reasonable to apportion them between the judgment debtors.

Finally, in certain situations, the costs associated with a motion to amend a judgment to include an alter ego are considered pre-judgment costs rather than post-judgment enforcement costs. (Highland Springs Conference & Training Ctr. v. City of Banning (2019) 42 Cal.App.5th 416, 422–427.) Because the Court is awarding all categories and costs and fees (and not disallowing any of the costs and fees), the Court need not receive further briefing from the Parties as to: (1) whether the costs for the motion to amend judgment (and related motions, such as the motion for reconsideration) in this matter should be considered pre-judgment or post-judgment costs; or (2) which such pre-judgment costs and fees should be allowed.

The Court awards all of the costs requested by Judgment Creditor.

I. Conclusion

It has been noted before that “he who lives by the ipse dixit dies by the ipse dixit.” (Morrison v. Olson (1988) 487 U.S. 654, 726 (dis. opn. of Scalia, J.).)

Judgment Creditor’s Motion for Attorney’s Fees is GRANTED in part.

II. Judgment Debtor’s Motion to Satisfy Judgment

A. Legal Standard

“A money judgment may be satisfied by payment of the full amount required to satisfy the judgment or by acceptance by the judgment creditor of a lesser sum in full satisfaction of the judgment.” (Code Civ. Proc., § 724.010, subd. (a).)

“Where a money judgment is satisfied by payment to the judgment creditor by check or other form of noncash payment that is to be honored upon presentation by the judgment creditor for payment, the obligation of the judgment creditor to give or file an acknowledgment of satisfaction of judgment arises only when the check or other form of noncash payment has actually been honored upon presentation for payment.” (Code Civ. Proc., § 724.010, subd. (c).)

“When a money judgment is satisfied, the judgment creditor immediately shall file with the court an acknowledgment of satisfaction of judgment. This section does not apply where the judgment is satisfied in full pursuant to a writ.” (Code Civ. Proc., § 724.030.)

“If a money judgment has been satisfied, the judgment debtor, the owner of real or personal property subject to a judgment lien created under the judgment, or a person having a security interest in or a lien on personal property subject to a judgment lien created under the judgment may serve personally or by mail on the judgment creditor a demand in writing that the judgment creditor do one or both of the following:

“(1) File an acknowledgment of satisfaction of judgment with the court.

“(2) Execute, acknowledge, and deliver an acknowledgment of satisfaction of judgment to the person who made the demand.”

(Code Civ. Proc., § 724.050, subd. (a).)

“If the judgment has been satisfied, the judgment creditor shall comply with the demand not later than 15 days after actual receipt of the demand.” (Code Civ. Proc., § 724.050, subd. (c).)

“If the judgment creditor does not comply with the demand within the time allowed, the person making the demand may apply to the court on noticed motion for an order requiring the judgment creditor to comply with the demand. The notice of motion shall be served on the judgment creditor. Service shall be made personally or by mail. If the court determines that the judgment has been satisfied and that the judgment creditor has not complied with the demand, the court shall either (1) order the judgment creditor to comply with the demand or (2) order the court clerk to enter satisfaction of the judgment.” (Code Civ. Proc., § 724.050, subd. (d).)

“If the judgment has been satisfied and the judgment creditor fails without just cause to comply with the demand within the time allowed, the judgment creditor is liable to the person who made the demand for all damages sustained by reason of such failure and shall also forfeit one hundred dollars ($100) to such person. Liability under this subdivision may be determined in the proceedings on the motion pursuant to subdivision (d) or in an action.” (Code Civ. Proc., § 724.050, subd. (e).)

“In an action or proceeding maintained pursuant to this chapter, the court shall award reasonable attorney’s fees to the prevailing party.” (Code Civ. Proc., § 724.080.)

“The damages recoverable pursuant to this chapter are not in derogation of any other damages or penalties to which an aggrieved person may be entitled by law.” (Code Civ. Proc., § 724.090.)

B. Discussion

Judgment Debtor Dr. Leevil, LLC moves the Court for an order compelling Judgment Creditor to acknowledge full satisfaction of the Judgment.

However, for the reason discussed above regarding Judgment Creditor’s Motion for Attorney’s fees, Judgment Debtor Dr. Leevil, LLC has not, in fact, fully satisfied the Judgment.

Accordingly, Judgment Debtor Dr. Leevil, LLC is not entitled to an order compelling Judgment Creditor to acknowledge full satisfaction of the Judgment, nor is Judgment Debtor Dr. Leevil, LLC entitled to attorney’s fees.

C. Conclusion

Judgment Debtor’s Motion to Satisfy Judgment is DENIED.

Judgment Debtor’s Request for Attorney’s Fees is DENIED.

III. Judgment Debtor’s Motion to Strike or Tax Costs

A. Legal Standard

“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.” (Code Civ. Proc., § 1032, subd. (b).)

Prevailing parties seeking to claim costs must comply with California Rules of Court, rule 3.1700(a), and parties seeking to contest costs must comply with California Rules of Court, rule 3.1700(b).

B. Discussion

The Court has already considered and rejected the arguments made in Judgment Debtors’ Motion to Strike or Tax Costs.

C. Conclusion

Judgment Debtors’ Motion to Strike or Tax Costs is DENIED.