Judge Michael P. Linfield, Case 21STCV45988 2022-09-22 Tentative Ruling

Judge: Michael P. Linfield, Case: 21STCV45988, Date: 2022-09-22 Tentative Ruling

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SUBJECT: Motion for Order Determining Defendant Michael Mattox is the Party Prevailing on Contract [Civ. Code § 1717(B)] and to Fix Amount of Attorney’s Fees to Be Awarded as Costs [Civ. Code § 1717(A)] in the Amount of No Less Than $57,732.50

Defendant Michael Mattox’s Motion for Order Determining Defendant Michael Mattox is the Party Prevailing on Contract and to Fix Amount of Attorney’s Fees to Be Awarded as Costs is DENIED.

On December 16, 2021, Plaintiff QianQian Dong filed a verified complaint against Defendants Michael Mattox, Access the USA, LLC, Idea EB5 Bonds Fund II, LP, Idea EB5 Bonds, LP, Access US Oil & Gas, Inc., World Trade Center San Francisco, Sapient Law Group, P.C., Jason Park, Wei Fan Chen, William Yen, Shengan Hu and Awesome Group alleging the following causes of cation:

On March 3, 2022 Defendants Sapient Law Group, P.C. (“Sapient”); Jason Park; Wei Fan Chen; and William Yen (Collectively, “Attorney Defendants”) moved “the Court to compel arbitration and stay all proceedings in this Court, including discovery, as to the Attorney Defendants pending the outcome of this motion and during the pendency of arbitration.” (Motion, filed on March 3, 2022, Notice of Motion.)

On April 8, 2022, the Court GRANTED Defendant Michael Mattox’s Motion to Quash filed on March 3, 2022.

On June 7, 2022, Defendant Michael Mattox moved to “quash service of summons on the ground of lack of jurisdiction of the court over him and the defendants alleged to be his "alter egos;" or, alternatively, to stay or dismiss this action on the ground of improper and/or inconvenient forum pursuant to Code of Civil Procedure sections 418.1 0(a) and/or 410.30, based upon a forum- selection provision in the contract between Plaintiff and IDEA EB5 BONDS FUND II, LP, a Washington limited partnership upon which Plaintiffs action is based, which designates the State of Washington as the proper forum for any litigation connected with the contract.” (Motion, filed June 7, 2022, p. 2:2-8.)

On July 5, 2022, Plaintiff Qianqian Dong opposed Mattox’s motion to quash service of summons.

On July 8, 2022, Mattox objected to and replied to Dong’s opposition to Mattox’s motion.

On August 23, 2022, Defendant Michael Mattox, for himself and on behalf of the “alter ego” Defendants[1], moved for an order “determining that he is the party prevailing on the subject contract for purposes of Section 1717 of the Civil Code and is entitled under that section to an award of attorney’s fees as an item of costs and fixing the amount of attorney’s fees to which he is entitled as the party prevailing on the contract in this action, in an amount of no less than $57,732.50.” (Motion, p. 2:3-6.) “This motion will be made on the ground that Defendant is a “prevailing party” by virtue of the entry of dismissal in his favor and is therefore the party prevailing on the contract within the meaning of Section 1717 of the Civil Code, and has paid or incurred liability for attorney’s fees to defend this action, which he is entitled, as the party prevailing on the contract, to recover as part of his costs of suit.” (Motion, p. 2:7-11.)

On September 9, 2022, Plaintiff Qianqian Dong opposed Mattox’s motion for attorney’s fees.

On September 9, 2022, Plaintiff Qianqian Dong filed a Notice of Appeal in the present case.

The determination of reasonable amount of attorney fees is within the sound discretion of trial courts. PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095; Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal. App. 4th 1127, 1134. “In determining what constitutes a reasonable attorney fee when a contract or statute provides for such an award, courts should consider the nature of the litigation, its difficulty, the amount involved, and the skill required and success of the attorney's efforts, his or her learning, age and experience in the particular type of work demanded, the intricacies and importance of the litigation, the labor and necessity for skilled legal training and ability in trying the cause, and the time consumed.” Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152, 168.

“Except as provided by statute or agreement, each party to a lawsuit must ordinarily pay their own attorney’s fees.” (Glaviano v. Sacramento City Unified School Dist. (2018) 22 Cal.App.5th 744, 750.) During statutory fee-shifting cases, when the prevailing party is statutorily authorized to recover their attorney’s fees from the losing party, the lodestar method is the primary method for establishing the recoverable fee amount. (Id.) The basic fee for comparable legal services in a community is called the lodestar; adjustment of this figure by the Court is based on factors including issue novelty/ difficulty, skill in legal presentation, the extent to which litigation precludes other attorney employment, and the contingent nature of the fee award. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

““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.” (CCP § 1032(a)(4).) “The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.” (Civil Code § 1717(b)(1).)

“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.”” (Id.) “The reasonable hourly rate is that prevailing for private attorneys in the community conducting non-contingent litigation of the same type.” (Glaviano, 22 Cal.App.5th at 751.) “The “‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.’”” (Id.) Once a party establishes that they are entitled to attorney’s fees the lodestar is the presumed analytical starting point to determine the appropriate amount. (K.I. v. Wagner (2014) 225 Cal.App.4th 1412, 1425.

The court may rely on its own knowledge and familiarity with the legal market in setting a reasonable hourly rate. [Citation.] “Affidavits of the plaintiffs' attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs' attorney, are satisfactory evidence of the prevailing market rate.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009.) Trial courts enjoy discretion to increase or decrease the amount of attorney's fees they award pursuant to the lodestar adjustment method. Such adjustment is known as a "fee enhancement" or "multiplier." (Mikhaeilpoor, 48 Cal.App.5th at 247.) "The Supreme Court has “set forth a number of factors the trial court may consider in adjusting the lodestar figure. These include: ‘(1) the novelty and difficulty of the questions involved, and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; [and] (3) the contingent nature of the fee award, both from the point of view of eventual victory on the merits and the point of view of establishing eligibility for an award.’”” (Mikhaeilpoor, 48 Cal.App.5th at 248.)

On July 15, 2022, the Court granted Defendant Michael Mattox’s Motion to Quash Service of Summons on the Ground of Lack of Jurisdiction or Alternatively to Stay or Dismiss the Action for Improper or Inconvenient Forum. (Minute Order, July 15, 2022, p. 1.) That order does not address the causes of action in Dong’s Complaint, merely the enforceability of the forum selection clause within the contract between the parties. Based on the forum selection clause, the Court dismissed the action as to Mattox and the alter ego defendants on July 15, 2022. (Order Granting Motion to Quash Service of Summons or to Dismiss for Improper or Inconvenient Forum, p. 2:16-18.)

This Court finds that Mattox is not the prevailing party, because his successful enforcement of the forum selection clause moving the litigation to Washington does not resolve the contract claims. In fact, a complaint has recently been filed in the Washington court. (See Opposition, Exh. A.) As stated by our Supreme Court, “[b]ecause none of [plaintiff’s] claims had yet been resolved and the litigation was still ongoing in [another state], the California trial court was in no position to compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives; that comparison could be made only upon final resolution of the contract claims.” (DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 974 [cleaned up].)

Defendant’s “victory in moving the litigation to [Washington] did not make it the prevailing party as a matter of law under section 1717.” (Id. at p. 981.) The Court finds that there is, as yet, no prevailing party, and hence the motion must be denied.

Defendant Michael Mattox’s Motion for Order Determining Defendant Michael Mattox is the Party Prevailing on Contract [Civ. Code § 1717(B)] and to Fix Amount of Attorney’s Fees to Be Awarded as Costs [Civ. Code § 1717(A)] in the Amount of No Less Than $57,732.50 is DENIED.

[1] “The “alter ego” co-defendants are ACCESS THE USA, LLC (designated in the Complaint as "Defendant AUSA"), IDEA EBS BONDS FUND II, LP (designated in the Complaint as "Defendant EB"). IDEA EB5 BONDS, LP (designated in the Complaint as "Defendant EB5 Bonds"), ACCESS US OIL & GAS, INC. (designated in the Complaint as "Defendant AUSOG”), and WORLD TRADE CENTER SAN FRANCISCO (designated in the Complaint as "Defendant WTC") (collectively referred to in the Complaint as the "Alter Ego Defendants"). WTC is not a business entity but rather a fictitious business name.” (Motion, p. 2:21-25 n. 1.)