Judge: Michael P. Linfield, Case: 21STCV10856, Date: 2023-12-15 Tentative Ruling

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Case Number: 21STCV10856    Hearing Date: January 17, 2024    Dept: 34

SUBJECT:        Motion to Amend the Judgment to Add an Additional Defendant

Moving Party: Plaintiff Linkun Investment, Inc.

Resp. Party:    Defendants Salvatore Anthony DiMaria, ADD Enterprises, Inc., Manning’s Beef LLC, Charlie DiMaria & Son, Inc., and Manning Land Co., LLC

SUBJECT:        Motion for Attorney Fees

Moving Party: Plaintiff Linkun Investment, Inc.

Resp. Party:    Defendants Salvatore Anthony DiMaria, ADD Enterprises, Inc., Manning’s Beef LLC, Charlie DiMaria & Son, Inc., and Manning Land Co., LLC

SUBJECT:        Motion to Tax Costs

Moving Party: Defendants Salvatore Anthony DiMaria, ADD Enterprises, Inc., Manning’s Beef LLC, Charlie DiMaria & Son, Inc., and Manning Land Co., LLC

Resp. Party:    Plaintiff Linkun Investment, Inc.

The Motion to Amend Judgment is GRANTED. The judgment shall be amended to add RNCK, Inc. as a defendant, with joint and several liability for the judgment.

The Motion for Attorney Fees is GRANTED in part.

        The Motion to Tax Costs is GRANTED in part.

        Fees and costs are AWARDED in favor of Plaintiff and against Defendants in the total amount of $1,569,562.20.

.

BACKGROUND:

On March 19, 2021, Plaintiff Linkun Investment, Inc. filed its Complaint against Defendants Salvatore Anthony DiMaria, Shing “Jacky” Lo, ADD Enterprises, Inc., Manning’s Beef LLC, Charlie DiMaria & Son Inc., and Manning Land Company, LLC on causes of action arising from the Parties’ business interactions.

On November 29, 2022, Plaintiff amended its Complaint to substitute Doe 1 with RNCK, Inc.

On June 30, 2023, by request of Plaintiff, the Clerk’s Office dismissed without prejudice Defendant Shing “Jacky” Lo from the Complaint.

From July 31 to August 4, 2023, the Court held a jury trial in this matter.

On August 4, 2023, the Jury found:

(1)       in favor of Plaintiff and against Defendant ADD on Plaintiff’s cause of action for breach of contract pursuant to the “Joint Venture Agreement”;

(2)       in favor of Defendant DiMaria and against Plaintiff on Plaintiff’s cause of action for breach of contract pursuant to a personal guaranty;

(3)       in favor of Plaintiff and against Defendants DiMaria, ADD Enterprises, Manning’s Beef LLC, Charlie DiMaria & Son, Inc., and Manning Land Co. on Plaintiff’s cause of action for fraud;

(4)       in favor of Plaintiff and against Defendants DiMaria and ADD Enterprises on Plaintiff’s cause of action for breach of fiduciary duty;

(5)       in favor of Plaintiff and against Defendants DiMaria and Charlie DiMaria & Son, Inc. on Plaintiff’s cause of action for conversion;

(6)       in favor of Plaintiff and against Defendants DiMaria, ADD Enterprises, Manning’s Beef LLC, Charlie DiMaria & Son, Inc., and Manning Land Co. on causes of action for violation of Penal Code section 496;

(7)       $1,784,887.00 in damages for Plaintiff for its “investment and profit share,” which was asked of the Jury regarding all six causes of action;

(8)       $480,000.00 in damages for Plaintiff for its “benefit of the bargain,” which was asked of the Jury regarding the causes of action for fraud and breach of fiduciary duty;

(9)       $33,600.00 in prejudgment interest for Plaintiff, which was asked of the Jury regarding the causes of action for fraud and breach of fiduciary duty;

(10)    $3,400,000.00 in punitive damages for Plaintiff, which was asked of the Jury regarding the causes of action for fraud, breach of fiduciary duty, and conversion. 

The Jury found that Plaintiff’s total damages amounted to $5,698,487.00.

On October 17, 2023, the Court entered an Amended Judgment in this matter. The Amended Judgment was in favor of Plaintiff and against Defendants, jointly and severally, in the amount of $9,268,261.00. The Amended Judgment was also in favor of Plaintiff and against Defendant ADD Enterprises, Inc. for contractual prejudgment interest in the amount of $747,220.00, with interest to accrue at the rate of $489.01 per day until paid in full.

On November 7, 2023, Plaintiff filed its Motion to Amend the Judgment to Add an Additional Defendant (“Motion to Amend Judgment”). Plaintiff concurrently filed its Declaration of Gary K. Brucker, Jr.

On November 7, 2023, Plaintiff filed its Motion for Attorney Fees. Plaintiff concurrently filed: (1) Memorandum of Points and Authorities; and (2) Declaration of Craig Holden.

On November 9, 2023, Plaintiff filed its Judicial Council Form MC-010, Memorandum of Costs (Summary).

On November 21, 2023, Defendants filed their Opposition to Motion to Amend Judgment. Defendant concurrently filed Declaration of Samuel C. Jeon.

On November 21, 2023, Defendants filed their Opposition to Motion for Attorney Fees. Defendants concurrently filed Declaration of Samuel C. Jeon.

On November 28, 2023, Defendants filed their Motion to Tax Costs. Defendants concurrently filed: (1) Declaration of Samuel C. Jeon; and (2) Proof of Service.

On November 29, 2023, Plaintiff filed its Reply regarding the Motion to Amend Judgment. Plaintiff concurrently filed Supplemental Declaration of Gary K. Brucker, Jr.

On November 29, 2023, Plaintiff filed its Reply regarding the Motion for Attorney Fees. Plaintiff concurrently filed Declaration of Gary K. Brucker, Jr.

On December 11, 2023, Plaintiff filed its Opposition to Motion to Tax Costs. Plaintiff concurrently filed Declaration of Gary K. Brucker, Jr.

On December 15, 2023, the Court granted in part Defendants’ Motion for New Trial, conditionally ordering a remittitur unless Plaintiff consented to a specified reduction in damages. At the hearing on December 15, 2023, Plaintiff consented to the reduction of damages.

On December 22, 2023, Defendants filed their Reply regarding the Motion to Tax Costs.

ANALYSIS:

I.          Motion to Amend Judgment

A.      Legal Standard

“When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” (Code Civ. Proc., § 187.)

“That a court may at any time amend its judgment so that the latter will properly designate the real defendants is not open to question. . . . Where there is such a unity of interest and ownership that the separateness of the corporations has ceased and the facts are such that an adherence to the fiction of separate existence of the corporation would under the particular circumstances sanction a fraud or promote an injustice, separate identity will be disregarded. Thus it has been held that where a corporation was but the instrumentality through which an individual for convenience transacted his business, all of the authorities, not only equity but the law itself, would hold such a corporation bound as the owner of the corporation might be bound, or conversely, hold the owner bound by acts which bound his corporation.” (Mirabito v. San Francisco Dairy Co. (1935) 8 Cal.App.2d 54, 57, 59, citations omitted.)

“We hold that Code of Civil Procedure section 187 authorizes a trial court to amend a judgment to add a judgment debtor who is found to be an alter ego of a corporate defendant. The alter ego doctrine does not require proof of fraud, and can be satisfied by evidence that adherence to the fiction of the separate existence of the corporation would promote injustice. Finally, a plaintiff's failure to allege the alter ego doctrine in the underlying lawsuit does not preclude a motion to amend the judgment.” (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1069.)

“To prevail in a motion to add judgment debtors, [the moving party] must show that (1) the parties to be added as judgment debtors had control of the underlying litigation and were virtually represented in that proceeding; (2) there is such a unity of interest and ownership that the separate personalities of the entity and the owners no longer exist; and (3) an inequitable result will follow if the acts are treated as those of the entity alone.” (Triya Hospitality Mgmt., LLC v. WSI (II)—HWP, LLC (2020) 57 Cal.App.5th 636, 641, citations omitted.)

“The alter ego doctrine was extended to LLCs by Corporations Code section 17703.04, subdivision (b) [‘A member of a limited liability company shall be subject to liability under the common law governing alter ego liability’].” (Blizzard Energy, Inc. v. Schaefers (2021) 71 Cal.App.5th 832, 846.)

“The greatest liberality is to be encouraged in the allowance of such amendments in order to see that justice is done.” (Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 508 [quotation and internal quotation marks omitted].)

        However, “when plaintiffs ‘summarily add’ individuals to a previously entered default judgment against a corporation, those individuals are denied due process.” (Lopez v. Escamilla (2022) 79 Cal.App.5th 646, 652, quoting Motores de Mexicali, S. A. v. Super. Ct. of Los Angeles County (1958) 51 Cal.2d 172, 176.)

B.      Discussion

Plaintiff moves the Court to amend judgment to add RNCK, Inc. as a defendant. (Motion to Amend Judgment, p. 4:27–28.)

Defendants oppose the motion, arguing that Plaintiff does not satisfy the requirements of alter ego to add RNCK, Inc. to the judgment. (Opposition, p. 2:22–23.)

Plaintiff replies: (1) that it submitted substantial evidence supporting an alter ego finding; (2) that case law favors a finding of alter ego liability; (3) that Plaintiff acted diligently; and (4) that RNCK, Inc. would not be prejudiced by being added to the judgment. (Reply regarding Motion to Amend Judgment, p. 1:21, 2:7, 2:26.)

        Plaintiff has the better of the arguments.

        Among other things, Plaintiff submits the following evidence:

(1)       portions of the deposition of Defendant Salvatore Anthony DiMaria, including this question and answer:

Q: Is it fair to say that ADD, Manning Beef, Manning Land, Charlie DiMaria and Co. and RNCK operate as one business?

MR. JEON: Objection. Legal Conclusion.

THE WITNESS: They are fully integrated. So to answer your question, ultimately it’s one company. I had partners in all those other companies up until a couple of years ago and the answer to your question, ultimately it’s one company.

(2)       a letter titled “Independent Accounts’ Review Report” from Genske, Mulder & Co., LLP (a certified public accounting company), which states, among other things, that “RNCK is 100% owned by the managing member and 100% owner of the Company.”

(Decl. Brucker in support of Motion to Amend Judgment, Exhs. 1, 2.)

        The evidence submitted by Defendants, which includes portions of the deposition of Defendant Salvatore Anthony DiMaria, does not defeat Plaintiff’s evidence. Indeed, while Defendant DiMaria declares that “each of these companies keep separate books and records,” he also admits that “I’m the sole owner of all companies.” (Decl. Jeon in support of Opposition to Motion to Amend Judgment, Exh. 1.)

        Given the evidence produced at trial and the judgment that Defendants engaged in fraud, there is ample evidence in favor of Plaintiff’s argument that an inequitable result will follow if RNCK, Inc. is not treated as a defendant in the judgment. 

        Plaintiff has shown: (1) that there is such a unity of interest and ownership between RNCK, Inc. and all other Defendants that the separate personalities of RNCK, Inc. and the other Defendants no longer exist; (2) that RNCK, Inc., as an alter ego of the other Defendants, had control of the underling litigation and were virtually represented in that proceeding; and (3) that an inequitable result will follow if the acts are treated as those of the existing Defendants alone. (Triya Hospitality Mgmt., LLC, supra, 57 Cal.App.5th at p. 641.)

C.      Conclusion

The Motion to Amend Judgment is GRANTED. The judgment shall be amended to add RNCK, Inc. as a defendant, with joint and several liability for the judgment.

II.       Motions for Attorneys Fees and to 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).)

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

1.      The Parties’ Requests and Arguments

Plaintiff moves the Court to award Plaintiff $1,991,565.00 in attorneys’ fees (consisting of $1,957,750.00 in fees as of November 7, 2023 and an additional $33,815.00 in fees as of November 29, 2023). (Memorandum for Motion for Attorney Fees, p. 6:16–19; Reply regarding Motion for Attorney Fees, p. 4:16–19.) According to information provided by Plaintiff’s Counsel, the vast majority of this work was done by two partners, two associates, and two paralegals, with a minor amount of work done by eleven others (a mix of partners, associates, and paralegals). (Decl. Holden in support of Motion for Attorney Fees, pp. 2–3.)

Plaintiff also requests $319,579.80 in costs, which includes:

(1)       $2,022.40 in filing and motion fees;

(2)       $747.92 in jury fees;

(3)       $25,980.15 in deposition costs;

(4)       $5,677.90 in service of process costs;

(5)       $3,640.00 in witness fees;

(6)       $5,150.60 in court reporter fees;

(7)       $9.00 in models, enlargements, and photocopies of exhibits costs;

(8)       $12,180.64 in interpreter fees;

(9)       $6,181.69 in electronic filing or service fees;

(10)    $15,469.39 in electronic document hosting fees; and

(11)    $242,520.11 in “other” fees.

(MC-010, p. 1.)

        Defendants oppose the Motion for Attorney Fees, arguing: (1) that the rates sought are not supported by a showing of reasonable rates in the community; and (2) that Plaintiff does not provide competent evidence in support of the amount of hours reasonably incurred in the prosecution of the action. (Opposition to Motion for Attorney Fees, pp. 3:25–26, 4:20–22, 5:9–12.)

        Defendants also move the Court to tax: (1) the expedited transcript costs; (2) the investigation costs; (3) the expert witness deposition fees; (4) the court reporter fees and transcript fees for hearings; (5) the court interpreter fees; (6) the electronic document hosting fees; and (7) all “other” fees. (Motion to Tax Costs, pp. 3:14, 4:1, 4:9, 4:15–16, 5:1, 5:12–13, 6:1.)

        As to attorneys’ fees, Plaintiff argues: (1) that Defendants misrepresent market rates in Los Angeles; (2) that Plaintiff’s Counsel is entitled to market rates, not discounted rates; and (3) that Plaintiff’s Counsel’s hours are sufficiently supported. (Reply regarding Motion for Attorney Fees, p. 3:2, 3:14, 3:25.)

        As to costs, Plaintiff argues: (1) that the accounting referee’s fees are expressly authorized; (2) that Plaintiff is entitled to recover travel expenses; (3) that the expedited deposition transcripts were necessary; (4) that appearance fees incurred because of continuances are recoverable; (5) that reporter fees and real-time trial transcripts are recoverable; (6) that interpreter fees are recoverable; and (7) electronic discovery fees are recoverable. (Opposition to Motion to Tax Costs, pp. 2:16, 3:1, 3:17, 4:7, 4:14, 4:25, 5:4.)

        As to costs, Defendants reply: (1) that the accounting referee’s fees were not reasonable and Defendants were led to believe that the fees were being paid by Plaintiff; (2) that Plaintiff does not mention why the travel expenses were necessary and reasonable; (3) that reporter fees and real-time transcripts are unreasonable and were not mandated by the Court; and (4) electronic discovery fees are unreasonable and unnecessary. (Reply regarding Motion to Tax Costs, pp. 3:21–22, 5:23–24, 6:16–17, 7:1–2.)

C.      Attorneys’ Fees

1.      Prevailing Party

a.       Legal Standard

“‘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).)

b.       Discussion

Plaintiff prevailed against Defendants in this litigation, including on a cause of action for violation of Penal Code section 496. Thus, Plaintiff is the prevailing party here.

2.      Authority for Fees

Plaintiff argues that the authority for fees comes from a provision in the Parties’ contract and the Penal Code section 496, subdivision (c).

        “Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.” (Pen. Code, § 496, subd. (c).)

        Plaintiff does not provide the Court with a copy of the relevant contract provision.

        Defendants do not argue that Plaintiff is not entitled to attorney fees. Thus, Defendants concede this point.

        As Plaintiff prevailed against Defendants in this litigation, including on a cause of action or violation of Penal Code section 496, the Court agrees with Plaintiff that it is entitled to attorneys’ fees.

3.      Method for Calculating Recovery

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.)

4.      Reasonableness of the Fees Requested

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].)

b.       The Hourly Rates

Plaintiff’s Counsel claims the following hourly rates:

(1)       $750.00 per hour for Partner Gary Brucker, Jr.;

(2)       $750.00 per hour for Partner Amy Goldman;

(3)       $1,000.00 per hour for Partner Craig Holden;

(4)       $750.00 per hour for Partner Michael Magloff;

(5)       $750.00 per hour for Partner Greg Oleson;

(6)       $850.00 per hour for Partner John Yung;

(7)       $450.00 per hour for Associate Tyler Duncan;

(8)       $450.00 per hour for Associate Josh Genzuk;

(9)       $450.00 per hour for Associate Caitlin Higgins;

(10)    $450.00 per hour for Associate Emily Hyatt;

(11)    $450.00 per hour for Associate Anastasiya Menshikova;

(12)    $450.00 per hour for Associate Daniel Velladao;

(13)    $450.00 per hour for Associate Xuan Zhou;

(14)    $250.00 per hour for Paralegal Deniss Bartel;

(15)    $250.00 per hour for Paralegal Sharon Hodgson;

(16)    $250.00 per hour for Paralegal Melinda Timms; and

(17)    $250.00 per hour for Paralegal Shiela Washington.

(Decl. Holden in support of Motion for Attorney Fees, pp. 2–3.)

        Plaintiff’s Counsel only provides detailed information for the two partners (Craig Holden and Gary Brucker, Jr.), two associates (Anastasiya Menshikova and Emily Hyatt), and two paralegals (Dennis Bartel and Melinda Timms) – the attorneys and paralegals who incurred the overwhelming majority of the hours in this matter. (Decl. Holden in support of Motion for Attorney Fees, ¶¶ 2–6.)

        Defendants ask the Court to consider Defense Counsels’ hourly rates in order to ascertain the appropriate hourly rates in the relevant community. (Opposition to Motion for Attorney Fees, p. 4:7–10.) For multiple reasons, the Court declines to do so, not least of which is that there are many good reasons why Plaintiff’s Counsel and Defense Counsel charge different rates.

        Regarding the attorneys and paralegals for which the Court does not have specific information, the Court is unable to determine whether their hourly rates are reasonable. Without that information, the Court has no reason to award them fees rates that are higher than entry-level positions for their categories.

        Regarding Craig Holden (who has been a lawyer for thirty years), Gary Brucker, Jr. (who has been a lawyer for nearly twenty years), Anastasiya Menshikova (who has been a lawyer for more than five years), and Melinda Timms (who has been a paralegal for nearly thirty-five years), the Court finds that their hourly rates are reasonable given their comparable skills and experience in the relevant community.

        However, the hourly rates requested by Emily Hyatt (who graduated law school in 2022) and Dennis Bartel (who appears to have been a paralegal for only five years) as well as the other attorneys and paralegals appear unreasonable given either their skills and experience in the relevant community or the lack of information provided to the Court regarding their skills and experience. The Court will reduce their hourly rates to what it finds to be reasonable in the community.

c.       The Number of Hours

Plaintiff’s Counsel claims that 2,871.5 hours were incurred in this litigation, including 2,534.6 hours by attorneys and 336.9 by paralegals. (Decl. Holden in support of Motion for Attorney Fees, pp. 2–3.) This does not include the supplemental request for $33,815.00 in attorney fees, of which no hourly breakdown is provided to the Court. (See Reply regarding Motion for Attorney Fees, p. 4:16–19; see also Decl. Brucker in support of Reply regarding Motion for Attorney Fees, ¶ 6.)

        For the hours that are specifically claimed, Plaintiff’s Counsel does not provide any invoices that show how the claimed hours were incurred. The Court only has a few paragraphs of declarations from Plaintiff’s Counsel. (Decl. Holden in support of Motion for Attorney Fees, ¶¶ 9–13; Decl. Brucker in support of Reply regarding Motion for Attorney Fees, ¶¶ 3–6.)

        Defendants argue:

“There is no way for the Court to analyze this, and it makes it nearly impossible for Defendants to rebut. Linkun could have simply attached redacted records or summarized by billing code—at least the Court would be able to see how much time was expended on ‘drafting discovery motions,’ or ‘responding to written discovery,’ or ‘preparing for depositions,’ etc. There must be something more specific that [sic] the de minimis and conclusory summary from lead counsel that his firm reasonably expended 2,871.5 hours. Certainly, the law requires Plaintiff to make a greater showing to merit $2 million in attorneys fees.”

(Opposition to Motion for Attorney Fees, p. 5:1–7.)

        The Court agrees with Defendants.

        “In California, an attorney need not submit contemporaneous time records in order to recover attorney fees . . . . Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559, citations omitted.)

        However, “contemporaneous time records are the best evidence of lawyers’ hourly work. They are not indispensable, but they eclipse other proofs. Lawyers know this better than anyone. They might heed what they know.” (Taylor v. Cnty. of Los Angeles (2020) 50 Cal.App.5th 205, 207.)  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, supra, 182 Cal.App.3d at pp. 559-560.)

“In any event, fee motions must be based on detailed time records, not on the memories of the attorneys involved.” (Crespin v. Shewry (2004) 125 Cal.App.4th 259, 271.)

        “To enable the trial court to determine whether attorney fees should be awarded and in what amount, an attorney should present (1) evidence, documentary and oral, of the services actually performed; and (2) expert opinion, by the applicant and other lawyers, as to what would be a reasonable fee for such services. In many cases the trial court will be aware of the nature and extent of the attorney’s services from its observation of the trial proceedings and the pretrial and discovery proceedings reflected in the file. However, in the absence of such crucial information as the number of hours worked, billing rates, types of issues dealt with and appearances made on the client’s behalf, the trial court is placed in the position of simply guessing at the actual value of the attorney’s services. That practice is unacceptable and cannot be the basis for an award of fees.” (Martino, supra, 182 Cal.App.3d at p. 558, cleaned up.)

        Here, Plaintiff’s Counsel has provided hourly rates, aggregate hours incurred (with only a breakdown by individual, not by line item), and only a few paragraphs explaining how the hours were incurred. While the Court could probably award attorneys’ fees based on this marginal amount of evidence, Defendants have been prejudiced by not being able to scrutinize or attack the records for instances of overbilling. Further, while this case has taken three years and has been hard-fought, the more than 2,500 hours of attorney time appears unreasonable.

“If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 [cleaned up].)¿

“A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137; Serrano, supra, 32 Cal.3d at p. 635.)

However, the Court chooses not to deny the fee application on this ground.

“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 30% across-the-board percentage cut to the number of hours claimed.

The Court recognizes that this case was hard-fought; according to the Court’s records, there were law-and-motion hearings on at least 30 days in this matter, and trial took 5 days.  The Court itself has almost 170 pages of notes on this case.  This does not include numerous depositions that were taken in this case. The extraordinarily large number of hearings has made the Court quite familiar with all counsel and parties in this matter. 

Nonetheless, based on the Court’s experience presiding over civil cases for more than 16 years , and based on its familiarity with this case, the Court finds that no more than 1,900 hours of work (including paralegal hours) were reasonably necessary for the outcome Plaintiff’s reached in this litigation. Furthermore, without invoices, both Defendants and the Court have been limited in their ability to fully scrutinize whether more attorney hours were reasonable.

        In addition, the Court will allow an additional $7,500.00 in fees for the work done since the Motion for Attorney Fees was filed. In lieu of any invoices or hourly breakdown for the $33,815.00 requested, the Court awards $7,500.00 in fees based on (1) the hourly rates allowed by the Court and (2) the Court’s experience of what occurred in the litigation during the period since the Motion for Attorney fees was filed. 

D.      Costs

1.      Legal Standard

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) 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

a.       The Court Reporter Fees and Transcript Costs

“Transcripts of court proceedings ordered by the court” are specifically allowable costs, while “[t]ranscripts of court proceedings not ordered by the court” are specifically prohibited, except where expressly authorized by law. (Code Civ. Proc., § 1033.5, subds. (a)(9), (b)(5).

        “Court reporter fees as established by statute” are allowable as costs. (Code Civ. Proc., § 1033.5, subd. (a)(11).)

The Court did not order any transcripts or any court reporting. Plaintiff has not pointed to any law that specifically authorizes the recovery of transcript costs in absence of the Court ordering the transcripts or court reporting, and Plaintiff has not pointed to any law that authorizes court reporter fees. Thus, transcript costs are prohibited, and the Court declines to allow the court reporter fees.

The Court strikes all of those costs. 

b.       The Investigation Costs

“The following items are not allowable as costs, except when expressly authorized by law: . . . (2) Investigation expenses in preparing the case for trial.” (Code Civ. Proc., § 1033.5, subd. (b)(2).)

        Plaintiff does not argue in its Opposition to Motion to Tax Costs that the investigation costs are allowed. Thus, Plaintiff concedes this point. In any case, the Court is not aware of any statute that would authorize investigation costs here.

        The Court strikes all of those costs.

c.       The Expert Witness Deposition Fees

        “Fees of experts not ordered by the court” are “not allowable as costs, except when expressly authorized by law.” (Code Civ. Proc., § 1033.5, subd. (b)(1).)

“Taking, video recording, and transcribing necessary depositions, including an original and one copy of those taken by the claimant and one copy of depositions taken by the party against whom costs are allowed” are “allowable as costs under [Code of Civil Procedure] Section 1032.” (Code Civ. Proc., § 1033.5, subd. (a)(3)(A).)

        Defendants argue that the expert witness deposition fees are not allowable.

Plaintiff argues that the expedited deposition transcripts were necessary.

Defendants do not revisit the issue in their Reply regarding Motion to Tax Costs.

Necessary deposition transcripts, including of experts, are recoverable, and they are different from expert witness fees. The Court finds that these costs were reasonable and will allow them.

d.       The Court Interpreter Fees

“Fees of a certified or registered interpreter for the deposition of a party or witness who does not proficiently speak or understand the English language” are “allowable as costs under [Code of Civil Procedure] Section 1032.” (Code Civ. Proc., § 1033.5, subd. (a)(3)(B).)

        “Court interpreter fees for a qualified court interpreter authorized by the court for an indigent person represented by a qualified legal services project, as defined in Section 6213 of the Business and Professions Code, or a pro bono attorney, as defined in Section 8030.4 of the Business and Professions Code” are “allowable as Costs under [Code of Civil Procedure] Section 1032.” (Code Civ. Proc., § 1033.5, subd. (a)(12).)

        Defendant argues that the court interpreter fees should be stricken.

Plaintiff argues that the court interpreter fees were recoverable, reasonable, and necessary.

Defendants do not revisit the issue in their Reply regarding Motion to Tax Costs.

The Court allows costs for the use of interpreters during depositions, pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(3)(B). Further, the Court allows the rest of the court interpreter costs as being reasonable and necessary to the litigation.

e.       The Electronic Document Hosting Fees

Electronic documenting hosting fees are allowed “if a court requires or orders a party to have documents hosted by an electronic filing service provider. This paragraph shall become inoperative on January 1, 2022.” (Code Civ. Proc., § 1033.5, sub. (a)(15).)

Here, part of these costs could have been incurred when the statute was operative, as this case began before January 1, 2022. However, the Court did not order such fees, and the Court declines to exercise its discretion to allow such fees.

The Court strikes all of those costs.

f.        The “Other” Fees

i.            The Accounting Referee

There is no subdivision of Code of Civil Procedure section 1033.5 that specifically considers “accounting referees.”

        Pursuant to the Parties’ Stipulation on a “special accounting referee,” the Court entered its Order Appointing Special Accounting Referee on April 26, 2021. The relevant provision of the Court’s Order is “[t]he Referee will be privately compensated with Plaintiff bearing 100% of the cost, with such costs being taxable under Code of Civil Procedure §§ 1032 et seq.” (Stipulation and Order Appointing Special Accounting Referee, p. 2:6–7.)  The costs of the special accounting referee were $213,293.00.

        The language of the Order indicates (1) that Plaintiff is to cover the entire cost of the special accounting referee and (2) that even if Plaintiff prevailed, that cost would be taxable.  However, the fact that a cost can be taxed does not mean that the costs must be disallowed.  In this case, both parties agreed to have a special accounting referee.  Had Defendant been the prevailing party, Plaintiff would have paid the referee’s costs.  There is no reason that Plaintiff should be required to pay the referee’s costs now that it is the prevailing party.

        The Court exercises its discretion and declines to tax the costs of the special accounting referee.

ii.          Travel Expenses

“The only travel expenses authorized by section 1033.5 are those to attend depositions. (§ 1033.5, subd. (a)(3).) Routine expenses for local travel by attorneys or other firm employees are not reasonably necessary to the conduct of litigation. [A declaration must] demonstrate how any of these charges were necessary to conduct the litigation, as opposed to being merely convenient. The expenses should not have been allowed.” (Ladas v. Cal. State Auto. Ass’n (1993) 19 Cal.App.4th 761, 775–776, all statutory references are to Code of Civil Procedure.)

“The only meal expenses statutorily allowable are those for jurors while they are kept together during trial and deliberation. (§ 1033.5, subd. (a)(2).) While section 1033.5, subdivision (a)(3) allows the cost of taking and transcribing depositions and ‘travel expenses to attend depositions,’ it does not mention meals eaten while attending local depositions. Nor can meal expenses be justified as ‘necessary to the conduct of the litigation’ since attorneys have to eat, whether they are conducting litigation or not. At best, these expenses are ‘merely convenient or beneficial’ to preparation for litigation, the recovery of which is proscribed under section 1033.5, subdivision (c). They should have been stricken.” (Ladas, supra, at pp. 774–775, italics omitted, all statutory references are to Code of Civil Procedure.)

        Although the Court is willing to consider whether out-of-town travel should be recoverable as a cost in this situation, Plaintiff’s Counsel has not provided any documentation whatsoever to break down these costs. Without sufficient documentation in the MC-010 or the Declaration of Gary K. Brucker, Jr. in support of the Opposition to the Motion to Tax Costs, the Court is unable to ascertain whether these costs are reasonable.

The Court taxes all of the costs claimed regarding travel expenses.

E.      Conclusion

The Motion for Attorney Fees is GRANTED in part.

        The Motion to Tax Costs is GRANTED in part.

        Fees and costs are AWARDED in favor of Plaintiff and against Defendants in the total amount of $1,569,562.20 as indicated the spreadsheets below: