Judge Michael Shultz, Case Number: 22STCV17466, Date: 2025-04-24 Tentative Ruling

DEPARTMENT 40 - MICHAEL J. SHULTZ - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call.

On June 22, 2023, Defendant J&S (“Defendant”) filed a cross-complaint against Plaintiff Creditors Adjustment Bureau (“Plaintiff”). On July 26, 2023, CAB filed its Motion under the anti-SLAPP statute to strike Defendant’s Cross-Complaint. On October 13, 2023, this court denied Plaintiff’s anti-SLAPP motion, but Plaintiff prevailed at the appellate level.

Plaintiff filed a motion for attorneys’ fees. Plaintiff seeks an award of $59,596.39 and additional fees and costs for filing this Motion in connection with prevailing on its Special Motion to Strike in the Court of Appeal.

Defendant argues that any fee award amount should be reduced by the amount of $27,620. Defendant seeks to exclude the following as block billing and repetitive billing: (1) Mr. Freed seeks $8,880 for 14.8 hours from July 20, 2023 to July 25, 2023, (2) Mr. Freed seeks $7,080 for 11.8 hours from October 2, 2024 to October 4, 2024, (3) David Weeks seeks $2,900 for 5.8 hours from October 11, 2023 to October 12, 2023, and (4) Mr. Freed seeks $8,760 for 14.6 hours from October 29, 2024 to November 5, 2024.

Plaintiff argues that the requested hours are reasonable given Plaintiff’s successful appeal and contentious nature. Plaintiff argues the billing specifies each task and adequately supports the requested fees. Plaintiff argues that it has incurred additional fees for the reply brief.

Defendant submits two evidentiary objections to Exhibit 1 of the Declaration of Kenneth J. Freed.

The court sustains Defendant’s objection to Exhibit 1 of the Declaration of Kenneth J. Freed, filed in support of the reply brief. The exhibit is irrelevant. filed in support of Plaintiff’s reply. The court overrules Defendant’s objection to paragraph 4 of the Declaration of Kenneth J. Freed filed in support of Plaintiff’s reply.

California’s anti-SLAPP statute contains a fee-shifting element, where in most circumstances, a prevailing defendant on a special motion to strike “shall be entitled to recover his or her attorney's fees and costs.” (Code Civ. Proc., § 425.16 subd. (c)(1).) Pursuant to California Code of Civil Procedure, section 425.16 (c), any SLAPP defendant who brings a successful motion to strike is entitled to a mandatory award of attorney fees. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) "A statute authorizing an attorney fee award at the trial court level includes appellate attorney fees unless the statute specifically provides otherwise." (Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1499.)

A reasonable fee can be measured by the marketplace by analyzing the quality and necessity of services and then comparing that cost with what other attorneys with similar experience and ability charge for the same services. (Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 1002.)

Ketchum v. Moses states “. . .because the anti-SLAPP provisions refer to attorney fees and costs without indicating any restrictions on how they are to be calculated, we accordingly presume that the Legislature intended courts use the prevailing lodestar adjustment method.” (Ketchum v. Moses, supra 24 Cal.4th 1136.) “[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate....The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Id. at 1134.) “. . .[A]bsent circumstances rendering the award unjust, fees recoverable ... ordinarily include compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim.” (Id. at 1141.) However, “padding” in the form of inefficient or duplicative efforts is not subject to compensation. (Id. at 1132.)

The court may rely on its own experience and is given broad discretion in calculating reasonable attorney’s fees. (Id. at 1132 ["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.”].)

Plaintiff contends that counsel spent 91.90 hours on this case. The court considers all evidence Plaintiff submitted including the Declaration of Kenneth Freed and the Declaration of Timothy Johnson. Managing Partner Kenneth Freed requests an hourly rate of $600 and $500 each for David Weeks and Melody Anderson. (Freed Decl., ¶¶ 2, 4-5.) Timothy (“Tim”) Johnson requests an hourly rate of $440. (Johnson Decl. ¶ 3.) The court finds that the hourly rates are appropriate given each attorney’s relative experience and qualifications.

The court considers Defendant’s argument that block billing, duplicative, and repetitive billing requests should be denied. “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 488.) The use of block billing is not per se objectionable, it is only problematic “when the practice prevents them from discerning which tasks are compensable and which are not.” (Heritage Pac. Fin. LLC v. Monroy (2013) 215 Cal.App.4th 972, 1010.)

Defendant contends that Mr. Freed block billed his 14.8-hour entry for July 20, 2023 through July 25, 2023. Mr. Freed declares this entry is for “[r]eview of cross complaint; discussions with client regarding strategy; legal research and draft the anti-SLAPP motion.” (Motion, p. 12, Freed Decl.) Here, the court finds there is no issue with the entry. The court finds all three entry tasks compensable, and that the total time spent is reasonable. The court denies the requested reduction.

Defendant contends that Mr. Freed’s October 2, 2024, through October 4, 2024, entry, appears to be research on the same subjects that he conducted over the previous a 5-day period.” Mr. Freed declares that this entry is for “Review of opposition to anti-SLAPP motion; researching and drafting Reply brief.” Mr. Freed declares that anti-SLAPP motions are not routine for his firm. (Reply, Freed Decl., ¶ 3.) The entry is not duplicative of the tasks from the July 20, 2023, entry. The court finds the hours reasonable and denies the requested reduction.

Defendant contends that Mr. Weeks block billed his 5.8-hour entry for October 11, 2023, through October 12, 2023. Mr. Freed declares this entry is for “Receipt and review of tentative ruling; conference with Kenneth Freed; prepare for and attend hearing on anti-SLAPP motion.” The court can discern all three entry tasks conducted individually by Mr. Weeks, finds that they are compensable, and finds the time spent reasonable. The court denies the requested reduction.

Defendant disputes Mr. Freed’s 14.6-hour entry for October 29, 2024, through November 5, 2024, as unreasonable. Mr. Freed’s 14.6-hour entry for “Legal research and drafting memorandum of costs and motion for fees per SLAPP motion” requests an amount of $8,760. The court agrees and reduces the hours for excessive billing from 14.6 hours to 4.0 hours for drafting the instant motion. The court reduces the entry from $8,760 to $2,400.

In reply, Plaintiff declares he spent an amount of $6,780.00 for 11.3 hours researching and drafting the reply, a $16.65 e-filing cost, and 1 hour to appear and prepare for the instant motion’s hearing. The court reduces the hours for excessive billing from 11.3 to 3 hours for drafting the reply given that the complexity of the research for the reply brief is limited to Plaintiff’s arguments that the billing is adequate to support the requested fees and that hours are reasonable, and a third of the reply brief focuses on the case background. The court finds the 1.0 hour for appearing at this hearing reasonable.

Plaintiff requests costs in connection with the SLAPP motion, appeal and request for fees in the total amount of $2,772.39. (Motion, pp. 16-18, Freed Decl.) Plaintiff requests a $16.65 e-filing cost for the reply. (Reply, Freed Decl., ¶ 4.)

Based on the foregoing, the Plaintiff’s motion for attorney fees is GRANTED in the reduced amount of $55,623.04 in fees and costs (inclusive of fees and costs incurred to prepare this motion.)

On May 26, 2022, Plaintiff Creditors Adjustment Bureau, Inc. (“Plaintiff”) filed this action against J and S Painting Inc. and Does 1 through 10 for breach of contract, open book account, account stated, and reasonable value. When Defendant J and S Painting Inc. (“Defendant”) failed to answer, Plaintiff secured a default judgment and writ of execution, which it used to satisfy the judgment from Defendant’s bank account.

On March 21, 2023, Defendant filed a motion to set aside its default and judgment. On June 9, 2023, the court granted Defendant’s motion and vacated the default and the judgment. The June 9, 2023, Order stated that “Any writ of attachment attached to the default judgment is quashed.” Defendant asserts that Plaintiff has retained the levied funds despite that it has no equitable or legal claim to the money.

Defendant filed a motion to amend the June 9, 2023, Order Setting Aside the Default Judgment to require an amendment to the Set Aside Order that requires turnover of the levied funds held by Plaintiff after its judgment was vacated. Defendant also requests that the order “includes specific language quashing any writ of execution.” (Motion to Amend Order, 3/18/25, p 5.)

Plaintiff argues that the court lacks jurisdiction to order the funds returned to Defendant, that Defendant’s requested relief is inequitable restitution, and that Plaintiff would suffer irreparable prejudice if the court orders the funds returned. Plaintiff adds, if the court were to find that Plaintiff should return the funds to Defendant, the amount ordered to be returned should be offset by the amount in attorneys' fees and costs that Defendant owes to Plaintiff.

Defendant argues that the court does have jurisdiction because the June 9, 2023, Order restored the parties to their prejudgment position and Plaintiff has no interest in the levied funds.

The court grants Defendant’s request for judicial notice of the instant motion, the court’s June 9, 2023, Order and the October 13, 2023, Order for the hearing on Defendant’s anti-SLAPP motion.[1] A court can take judicial notice of its own records. (Evid. Code, § 452, subd. See Starr v. Ashbrook (2023) 87 Cal.App.5th 999, 1014.)

Defendant asserts that Plaintiff “is in possession of $98,969.45 in which it has no legal nor equitable interest.” (Motion p. 5:3.)

Plaintiff opposes and relies on Adir Internat., LLC v. Superior Court (Adir) (2013) 216 Cal.App.4th 996, claiming the court lacks jurisdiction to order the return of the funds already delivered to the judgment creditor. In Adir, a judgment debtor requested the trial court to order the judgment creditor to return funds disbursed to it by the sheriff. Adir held that it had no jurisdiction to do so once the funds had been delivered to the creditor. Plaintiff asserts that $98,969.45 was delivered to the judgment creditor on April 24, 2023, while the judgment was valid, and remitted to Plaintiff’s Assignor on May 9, 2023. (Eum Decl., ¶7.) Moreover, Plaintiff argues that requested relief must be denied under Code of Civil Procedure section 908 as inequitable because Plaintiff is not in possession of the funds that were remitted two years ago. Defendant ignored the lawsuit until its account was levied, and Defendant owes this debt. (Opp. p. 6:9-11.) Plaintiff also argues that it would suffer irreparable prejudice if the funds are ordered returned to Defendant. (Id. at p. 7:2-4.)

In reply, Defendant relies on footnote 11 of Adir, “As a rule, if a judgment is reversed on appeal, ‘the reviewing court may direct that the parties be returned so far as possible to the positions they occupied before the enforcement of or execution on the judgment or order.’ (Code Civ. Proc., § 908.)” Defendant argues that Adir is inapplicable because the legal effect of the June 9, 2023, Order restored the parties to their pre-enforcement positions. (Reply p. 2:22-26.) However, Defendant does not cite authority supporting the proposition that a court can order the return of funds once disbursed by the levying officer to the creditor. Adir states “. . . [T]here is no statutory authority for the proposition that property disbursed to a creditor after a lien has been extinguished can be ordered to be returned.” (Adir, supra, 216 Cal.App.4th at 1002.) In Estate of Neilson (1960) 181 Cal.App.2d 769, 774, the appellate court issued a writ of supersedeas to restrain the sheriff from disbursing levied funds to a judgment creditor when execution had been stayed by appeal. The court noted, “As long as the funds have not been paid over to the [creditor], this court may issue supersedeas to prevent execution in violation of the statutory stay.” Thus, since the court lacks authority to order the funds returned to Defendant, pursuant to Adir, the court need not address Plaintiff’s additional arguments.

[1] On July 26, 2023, Plaintiff filed its anti-SLAPP Motion to strike Defendant’s Cross-Complaint. On October 13, 2023, the court denied Plaintiff’s Motion.

Counsel	Requested hourly rate	Permitted hourly rate	Time
Kenneth J. Freed (Managing Attorney)	$600.00	$600.00	44.20	$26,520.00
David Weeks (Attorney)	$500.00	$500.00	5.80	$2,900.00
Melody Anderson (Attorney)	$500.00	$500.00	35.30	$17,650.00
			Total	$47,070.00
Tim Johnson (Retained Attorney)	$440.00	$440.00	13.10	$5,764.00
			TOTAL	$52,834.00