Judge: Michael Shultz, Case: 21CMCV00076, Date: 2022-10-25 Tentative Ruling

INSTRUCTIONS: If the parties wish to submit on the tentative ruling and avoid a court appearance on the matter, the moving party must:

1. Contact the opposing party and all other parties who have appeared in the action and confirm that each will submit on the tentative ruling.

2. No later than 4:00 p.m. on the court day before the hearing, call the Courtroom (310-761-4302) advising that all parties will submit on the tentative ruling and waive hearing; and

3. Serve notice of the Court's ruling on all parties entitled to receive service.

If this procedure is followed, when the case is called the Court will enter its ruling on the motion in accordance with its tentative ruling. If any party declines to submit on the tentative ruling, then no telephone call is necessary, and all parties should appear at the hearing. If there is neither a telephone call nor an appearance, then the matter may either be taken off calendar or ruled on. 

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Case Number: 21CMCV00076    Hearing Date: October 25, 2022    Dept: A

21CMCV00076 Anthony Martin, Samuel Martin v. Jarvis Martin

[TENTATIVE] ORDER GRANTING DEFENDANTS’ MOTION FOR ATTORNEY’S FEES (MODIFIED)

I        AFA I. FACTUAL AND PROCEDURAL BACKGROUND

      This action arises from Defendant’s alleged failure to repay a loan extended to him by his father, Plaintiff, Samuel Martin (“Samuel”). Plaintiff, Anthony Martin (“Anthony”), alleged that Defendant refused to return his personal property. On July 28, 2022, the court heard and granted Defendant’s motion for judgment on the pleading as to the first, second, third, fifth, and sixth causes of action alleged by Plaintiff Samuel as the claims were barred by the parties’ settlement agreement in an earlier action on the same claims and issues. The case bearing Case No. 19CMCV00072 Jarvis Martin v. Samuel Martin, Jr. (the “2019 Action”) was dismissed with prejudice.

II.ARGUMENTS

      Defendant asks for an award of attorney’s fees totaling $26,184.73 as well as fees and costs incurred to prepare this motion. Defendant entered into an agreement with Samuel to settle the 2019 action. The agreement permits recovery of attorney’s fees by a prevailing party stemming from any dispute concerning the settlement agreement. As the prevailing party, Defendant is entitled to reimbursement of attorney’s fees and costs pursuant to Civil Code, section 1717.5 and Code of Civil Procedure, section 1032.

      Plaintiffs’ opposition, untimely filed on October 17, 2022, argues that there is no prevailing party since Plaintiff filed a voluntary dismissal on August 23, 2022. Defendant’s fee motion was not filed until after the dismissal was filed.

      Plaintiffs also argue that the amount of fees requested is unreasonable. Defendant has not established that $695 per hour is reasonable in this case. Defendant’s purported time spent is also excessive.

      In reply, Defendant argues that the opposition was untimely filed as it was due on October 12, 2022. Plaintiffs served the opposition five days later. The court should disregard the opposition. Defendant also argues that Plaintiffs did not address that Defendant prevailed on the first motion for judgment on the pleading of the first, second, third, fifth, and sixth causes of action against Samuel. The request for dismissal filed on August 23, 2022, was stricken by the court in any event.

      Plaintiffs do not dispute that the requested fees fall within the scope of the parties’ settlement agreement. The fees are reasonable as supported by Defendant’s evidence.

III.   DISCUSSION
A. Defendant has not established that Plaintiffs’ late opposition resulted in prejudice.

            Plaintiffs’ opposition was due on October 14, 2022, nine court days before the hearing date. Code Civ. Proc., § 1005 subd. (b). Although untimely filed on October 17, 2022, Defendant has not demonstrated any prejudice resulting from the late filing. The court has discretion to consider late papers in favor of the strong policy favoring disposition of the case on the merits. Kapitanski v. Von’s (1983) 146 Cal.App.3d 29, 32. [“Judges are well aware of the unnecessary burdens placed on courts and counsel when strict compliance with local procedural rules results in the expenditure of unnecessary time and money for the preparation of later section 473 motions.”]. Defendant was able to file a reply brief, which the court has considered.

B.  The terms of the parties’ settlement agreement provide for recovery of attorney’s fees.

            A prevailing party on an action on a contract is entitled to attorney’s fees and costs incurred to enforce the contract if specifically provided for in the contract. Civ. Code, § 1717 subd. (a). The prevailing party 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.” Id., subd. (b)(1). An “action on a contract” is liberally construed “to extend to any action ‘[a]s long as an action ‘involves’ a contract and one of the parties would be entitled to recover attorney fees under the contract if that party prevails in its lawsuit....’" In re Tobacco Cases I (2011) 193 Cal.App.4th 1591, 1601. Additionally, "it is irrelevant if the fees were incurred offensively or defensively." Shadoan v. World Savings & Loan Assn. (1990) 219 Cal.App.3d 97, 107.

            Defendant denied every allegation in the complaint on grounds that the claims were precluded by the parties’ settlement agreement in the 2019 Action that arose from the same facts alleged here. Answer filed 5/11/22, 1:24—2:2.

      The parties’ settlement agreement in the Small Claims Action states as follows:

“If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, the successful or prevailing Party or Parties shall be entitled to recover reasonable attorney’s fees and other costs incurred in that action or proceeding, in addition to any other relief to which it may be entitled.” Declaration of Ryan D. Kashfian, Ex. 1, page 6, ¶ 8.11.

            Plaintiffs do not challenge Defendant’s contention that the scope of the attorney’s fees provision includes the fees incurred to defend against Plaintiffs’ claims. Rather, Plaintiffs allege that Defendant is not entitled to fees because Plaintiffs filed a request for dismissal on August 23, 2022. However, the court struck the dismissal on September 1, 2022, as improperly filed. Regardless, the court had already granted Defendant’s first motion for judgment on the pleading against Samuel on July 28, 2022. Declaration of Kashfian, Ex. 5.

            The remaining fourth cause of action was alleged by Anthony for conversion of personal property. On September 1, 2022, the court granted that motion for judgment on the pleading because Anthony had previously litigated that claim in the 2019 Action resulting in a non-jury verdict against Anthony. Therefore, the conversion claim was barred by res judicata. Anthony was not a party to the Settlement Agreement in the 2019 Action. Declaration of Kashfian, Ex. 1, page 7. Accordingly, Defendant is not entitled to fees incurred to defend against the claim for conversion brought by Anthony as it was not based “on a contract.” Civ. Code, § 1717.

C.     Reasonableness of fees asserted against Plaintiff Samuel.

      A prevailing party “shall be the party who recovered a greater relief in the action on the contract.” Civ. Code, § 1717, subd (b)(1). Plaintiffs did not recover any relief on their claims. A prevailing party is also defined as "a defendant as against those plaintiffs who do not recover any relief against that defendant.” Code Civ. Proc., § 1032, subd. (a)(4). Therefore, Defendant is the prevailing party.

      To determine whether fees are reasonable, the court "begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award.’”

PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095. The court considers a number of factors including " the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.’” PLCM Group at 1096.

      Defendant seeks recovery of fees incurred for the entire case against both Plaintiffs. However, Defendant has not established a basis for recovery of fees against Plaintiff Samuel for litigation fees incurred to propound discovery against Plaintiff Anthony.  The court has considered Defendant’s billing statement. Motion, Ex. 7. Time incurred for general tasks that were not allocated between Plaintiffs were reduced by half. After removing entries incurred with respect to Anthony leaving only discovery propounded on Samuel, and adding the reduced fees incurred for general tasks, the hours incurred are as follows:

The court can reduce the award based on evidence showing duplicative efforts. Defendant is entitled to reasonable compensation; “‘padding” in the form of inefficient or duplicative efforts is not subject to compensation." Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132. The time incurred by Mr. Kashfian to draft, prepare, and review discovery are duplicative of the Mr. Wang’s efforts. The court permits recovery of the fees incurred by the associate only totaling 4.45 hours. The court finds that the fees incurred by the legal assistant and law clerk totaling 4.5 hours are equally duplicative.

The time spent by Mr. Kashfian to prepare for the motion for judgment on the pleadings (4.30) are equally duplicative of the associate’s efforts (23 hours). Only the Mr. Wang appeared at the hearing. Accordingly, the court declines to award the 4.30 hours incurred by Mr. Kashfian. A motion for judgment on the pleading is essentially a demurrer. The court finds that 23 hours incurred to prepare the motion is excessive. Accordingly, the court permits 10 hours for the motion incurred by Mr. Wang.

To determine which market rate applies, "the courts will look to equally difficult or complex types of litigation.” Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 700. The “market rate” is generally based on the rates prevalent in the community where the court is located. Id.  Defendant relies on the “Laffey Matrix” used in Syers to establish reasonable hourly rates for partners and associates. The Syers court stated that the trial court was in the best position to value the services rendered by the attorneys in his or her courtroom for the type of litigation at issue. The court has discretion to consider the Laffey Matrix but is not required to do so. The court also has discretion to determine that the actual rate charged is the reasonable rate for the type of services rendered. Syers at 702.

Mr. Kashfian’s hourly rate of $695 per hour to prepare this motion is not reasonable. The court reduces his rate to $400. The court finds that the hourly rate of $395 incurred by Mr. Wang, who has been licensed to practice for 19 months is excessive. The court reduces the hourly rate to $300 for this type of case.

IV.                CONCLUSION

Based on the foregoing, Defendant’s motion is GRANTED but modified. The court awards fees incurred by Mr. Wang for discovery and general tasks (4.45 hours) and for the motion for judgment on the pleading (10 hours) for a total of 14.45 hours at $300 per hour for a total fee award of $4,335.00 against Plaintiff, Samuel Martin, incurred by Mr. Wang. The court awards reduced fees and costs incurred by Mr. Kashfian to prepare the fee motion and reply (2 hours x $400 per hour) and costs of $61.65 for a total award of $861.65.  Accordingly, total fees and costs awarded are $5,196.65.