Judge: Michael P. Linfield, Case: 20STCV11118, Date: 2023-08-15 Tentative Ruling

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Case Number: 20STCV11118    Hearing Date: August 15, 2023    Dept: 34

SUBJECT:         Motion for Attorneys’ Fees, Costs, and Expenses

Moving Party:  Defendant Elizabeth Yang

Resp. Party:    Plaintiff Juan Carlos Morales II

The Motion is GRANTED in part. Attorneys’ fees, costs, and expenses are AWARDED in favor of Defendant Elizabeth Yang and against Plaintiff Juan Carlos Morales II in the total amount of $12,605.31.

BACKGROUND:

        On March 20, 2020, Plaintiff Juan Carlos Morales II filed his Verified Complaint against Defendant Elizabeth Yang on causes of action that allegedly arose during Plaintiff’s employment.

        On September 22, 2020, Plaintiff filed his Verified Amended Complaint.

        On January 27, 2021, the Court found related cases 20STCV11118 and 20STCV45280 and designated 20STCV11118 as the lead case.

        On April 27, 2021, Defendant filed her Motion to Compel Arbitration and Dismiss or Stay Proceedings.

        On June 3, 2021, the Court granted Defendant’s Motion to Compel Arbitration and Dismiss or Stay Proceedings. The Court stayed the case pending binding arbitration as to the entire action.

        On May 4, 2023, the Arbitrator, the Honorable Elizabeth A. White (retired), issued a final award in this matter.

        On June 23, 2023, the Court granted Defendant’s Petition to Confirm Contractual Arbitration Award.

        On July 20, 2023, Defendant filed her Motion for Attorneys’ Fees, Costs, and Expenses (“Motion”). In support of her Motion, Defendant concurrently filed: 91) Declaration of Karin L. Bohmholdt; and (2) Proposed Order.

        On August 2, 2023, Plaintiff filed his Opposition to the Motion.

        On August 7, 2023, Defendant filed her MC-010, Memorandum of Costs.

        On August 8, 2023, Defendant filed her Reply regarding the Motion.

ANALYSIS:

I.           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 party’ includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.” (Code Civ. Proc., § 1032, subd. (a)(4).)

Attorneys’ fees are allowed as costs when authorized by contract, statute, or law. (Code Civ. Proc, § 1033.5, subd. (a)(10)(B).)

“The court shall award costs upon any judicial proceeding under this title as provided in Chapter 6 (commencing with Section 1021) of Title 14 of Part 2 of this code.” (Code Civ. Proc., § 1293.2.)

II.        Discussion

A.      The Parties’ Arguments

Defendant moves the Court for $52,937.30 in attorneys’ fees and costs. (Motion, p. 12:2–6.) Defendant argues that these fees and costs are appropriate because: (1) the Arbitrator already determined that Defendant is entitled to recover reasonable attorneys’ fees; (2) attorney’s fees are further recoverable here; and (3) the rates charged and time incurred were reasonable. (Id. at pp. 8:22–24, 10:21.)

Plaintiff opposes the Motion, arguing: (1) that attorneys’ fees are not available here; and (2) that this request for attorneys’ fees is unreasonable. (Opposition, p. 1:15, 1:26.)

Defendant reiterates her arguments in her Reply.

B.      The Arbitration Award

On May 4, 2023, the Arbitrator, the Honorable Elizabeth A. White (retired), awarded attorneys’ fees for Honey Science Corporation, Honey Science LLC, PayPal, Inc., and Defendant Elizabeth Yang (“Respondents”), and against Plaintiff, after having previously granted on March 3, 2023 the motion for summary disposition filed by Respondents. (Petition to Confirm Contractual Arbitration Award, Exh. 8(c), p. 5.)

The total amount of the final award was $317,653.83. The Arbitrator denied JAMS fees and costs.

The award did not include any consideration of the Petition to Confirm Contractual Arbitration Award (filed May 15, 2023), the Petition to Vacate Contractual Arbitration Award (filed May 24, 2023), or the Motion at hand (filed July 20, 2023).

C.      Attorneys’ Fees and Costs for the Petitions and this Motion

Pursuant to Code of Civil Procedure section 1032, subdivision (a)(4), Defendant is the prevailing party here.

Thus, pursuant to Code of Civil Procedure sections 1293.2 and 1032, subdivision (b), Defendant is entitled to recover costs.

In addition, the underlying settlement agreement that is the basis for this dispute contains the following clause: “If it is necessary to for [sic] either party to file suit to enforce this Agreement, the prevailing party shall recover its reasonable costs of enforcement, including costs and reasonable attorneys’ fees.” (Decl. Bohmholdt, Exh. 1, ¶ 12.) Therefore, pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(B), Defendant is also entitled to recover attorneys’ fees.

The Court lacks jurisdiction to grant additional attorneys’ fees and costs regarding items that were incurred prior to the Arbitrator issuing the award in this matter. (See, e.g., Cinel v. Christopher (2012) 203 Cal.App.4th 759, fn. 5.)

However, any attorneys’ fees and costs reasonably incurred after the Arbitrator’s final award as part of judicial proceedings — including the Parties’ respective Petitions and this Motion — are allowable. (Code Civ. Proc., §§ 1032, 1033.5, 1293.2; see also Marcus & Millichap Real Estate Inv. Brokerage Co. v. Woodman Inv. Group (2005) 129 Cal.App.4th 508, 513.)

D.     Method for Calculating Recovery

1.       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].)

2.       Discussion

The Parties do not dispute that the appropriate approach for calculating recovery of attorneys’ fees is the lodestar adjustment method. The Court uses the lodestar method here. 

E.     Reasonableness of the Fees, Costs, and Expenses

1.       Reasonableness of the Attorneys’ Fees

a.       The Hourly Rates

Defense Counsel declares: (1) that Counsel Karin Bohmholdt, who is a shareholder in their firm, customarily charges $1,190.00 per hour but in this matter charged $773.00 per hour; (2) that Counsel Ryan Bykerk, who is a shareholder in their firm, customarily charges $880.00 per hour but in this matter charged $623.00 per hour; (3) that Counsel Andrea Carmona, who is an associate in their firm, customarily charges $685.00 but in this matter charged $442.00 per hour; and (4) that Paralegal Marian Mackey customarily charges $540.00 per hour but in this matter charged $263.00 per hour. (Decl. Bohmholdt, ¶¶ 10–11.)

The Court has reviewed the documentation provided in support of these hourly rates. Based upon the documentation submitted and the Court’s assessment of the prevailing rate for attorneys (and paralegals) of comparable skill and experience in the relevant community, the Court finds that the hourly rates charged by Counsel Bohmholdt is reasonable but that the hourly rates charged by Counsel Bykerk (for whom no additional documentation was provided), Counsel Carmona (who is an entry-level attorney), and Paralegal Mackey (for whom no additional documentation was provided) are excessive and unreasonable.

The Court will allow hourly rates of $773.00 for Counsel Bohmholdt, $575.00 for Counsel Bykerk, $350.00 for Counsel Carmona, and $175.00 for Paralegal Mackey.

b.       The Number of Hours

Defense Counsel declares: (1) that Counsel Bohmholdt incurred 25 hours of work on the relevant items; (2) that Counsel Bykerk incurred 2 hours of work on the relevant items; (3) that Counsel Carmona incurred 35 hours of work on the relevant items; and (4) that Paralegal Mackey incurred 15.1 hours of work on the relevant items. (Decl. Bohmholdt, ¶ 9.) This sums out to 77.1 hours.

Defense Counsel did not provide the Court with an itemized list that would allow the Court to precisely consider what was actually billed and in what amount. Defense Counsel only provides a non-comprehensive list, without exact hours listed, for various items done. (Decl. Bohmholdt, ¶ 13.)

        Plaintiff decries this practice, and the Court agrees. (Opposition, pp. 1–3.) Without an itemized list, the Court is unable to ascertain with any level of accuracy whether the number of hours incurred was reasonable.   It is true that contemporaneous records are not required to support a motion for attorney fees. (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1375; Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) However, without such time records or billing statements, a motion for attorney fees must be supported by declarations explaining, “in more than general terms, the extent of services rendered to the client.” (Martino v. Denevi, supra, at pp. 559-560.)  Further, “the trial court ... is not bound by the itemization claimed in the attorney’s affidavit.”  (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 40, quoting Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 625.)

        “An attorney fee award should include compensation for all hours reasonably spent. (Ketchum [v. Moses (2001) 24 Cal.4th 1122], 1136.) “Reasonably spent” means “‘padding’ in the form of inefficient or duplicative efforts is not subject to compensation.” (Id. at p. 1132.) A plaintiff is not automatically entitled to all hours claimed in the fee request. Rather, the plaintiff must prove the hours sought were reasonable and necessary.” (Rey v. Madera Unified Sch. Dist. (2012) 203 Cal.App.4th 1223, 1243–44.)

        “A trial court may not rubber stamp a request for attorney fees, but must determine the number of hours reasonably expended.” (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 38, quoting Donahue v. Donahue (2010) 182 Cal.App.4th 259, 271.)

        Based on the Court’s assessment of the work done across the two Petitions (which address the same matter) and this Motion, it appears to the Court that the number of hours incurred is excessive and unreasonable.

“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. The Court applies a 30% across-the-board percentage cut to the final lodestar figure. The reason for this is two-fold: (1) the number of hours spent on the two Petitions (which address the same matter) and this Motion appear to be excessive and unreasonable; and (2) without an itemized list that shows exactly what was worked on, the Court is unable to make a more accurate cut (if any).

        Finally, the Court notes that the hours in this case (Case No. 20STCV11118) were ostensibly separate from the related case (Case No. 20STCV45280). But in reality, the Petitions and all the related filings in both cases were nearly identical, and this Motion and all of its related filings were also nearly identical. The number of hours allowed above represents the work reasonably done in both cases.

        Therefore, the Court will allow half the hours requested in this matter and half the hours requested in the related matter.

2.       Reasonableness of the Costs and Expenses

Defendant moves for $12,925.00 in costs. (Motion, p. 12:2–6.)

In neither the Motion or the supporting Declaration of Karin Bohmholdt was there any evidence (or even argument) for the proposition that such costs were incurred. Even if such evidence had been submitted — which is not the case — such an exorbitant amount of costs for a couple of petitions and a motion — none of which required any additional evidentiary work — would be unreasonable on its face.

On August 7, 2023, Defendant filed her MC-010, Memorandum of Costs. Defense Counsel declares that $228.68 in costs were incurred, all of which were filing and motion fees. (MC-010, Memorandum of Costs.)

The Court finds that these $228.68 in costs were reasonably incurred and will award that amount.

III.     Conclusion

The Motion is GRANTED in part. Attorneys’ fees, costs, and expenses are AWARDED in favor of Defendant Elizabeth Yang and against Plaintiff Juan Carlos Morales II in the total amount of $12,605.31 as indicated in the spreadsheet below.