Judge: Michael T. Smyth, Case: 37-2018-00034229-CU-BC-CTL, Date: 2024-04-26 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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TENTATIVE RULINGS - April 25, 2024

04/26/2024  09:00:00 AM  C-67 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael T. Smyth

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2018-00034229-CU-BC-CTL RAZUKI VS MALAN [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Attorney Fees, 02/09/2024

Defendants Chris Hakim, Mira Este Properties, LLC ('MEP'), and Roselle Properties LLC's ('Roselle') (collectively, the 'Hakim Parties') Motion for Attorney's Fees is GRANTED in part. As explained below, the request is reduced by at least 228.2 hours. The court will hear argument on whether the Hakim Parties should be denied fees for any work performed on their dismissed cross-complaint and what that amount would be, if any.

Once a final order is issued, Defendant Hakim Parties are ordered to recalculate their request consistent with the order and submit a formal order after providing Plaintiff's counsel with an opportunity to review.

The court finds that, for the purposes of defending against Plaintiff's First Amended Complaint ('FAC'), Defendant Hakim Parties are entitled to fees under both the Transfer Agreement and the operating agreements for MEP and Roselle. It is of no consequence that Defendants argued the inapplicability of the contracts. Under Civil Code section 1717 fees are available when a defendant 'sued on a contract containing a provision for attorney fees to the prevailing party defends the litigation by successfully arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract.' (Santisas v. Goodin (1998) 17 Cal.4th 599, 611 [internal quotation marks omitted].) Here, the Hakim Parties were wholly successful in defeating Plaintiff's FAC. Moreover, the relevant fee provision language is broad enough to cover all claims. (See, e.g., ROA 2702, Ex. 6 [MEP Operating Agreement stating at Article 10 referring to 'any controversy or claim arising out of or relating to this Agreement' and that a prevailing party is entitled to fees 'incurred in connection with any litigation']; id., Ex. 7 [same]; Thompson v. Miller (2003) 112 Cal.App.4th 327, 336 [contractual language 'any dispute under the [agreements]' broad enough to encompass tort actions]; see also Santisas, supra, 17 Cal.4th at 608 [agreement providing for fee award 'in any litigation arising out of the execution of this agreement' embraced both tort and contract claims]; GoTek Energy, Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1248-1250 [same with fee provisions covering matters 'relating to' the contract].) On the other hand, the court agrees that there was no prevailing party with respect to the Hakim Parties' dismissed cross-complaint. (See ROA 2753, Reply at 9:4-8.) While this does not render the entire result of the lawsuit 'mixed' such that fees are not recoverable for defending against the FAC, the court questions whether any fees incurred on the dismissed cross-complaint should be recoverable and requests argument on that issue as well as the amount that was incurred litigating the dismissed cross-complaint.

Having found that fees are available to Defendant Hakim Parties with respect to Plaintiff's FAC, the court must proceed with a lodestar analysis based on the reasonable time spent and reasonable hourly Calendar No.: Event ID:  TENTATIVE RULINGS

3092094  7 CASE NUMBER: CASE TITLE:  RAZUKI VS MALAN [IMAGED]  37-2018-00034229-CU-BC-CTL compensation for each attorney involved in the case. (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322.) 'The magnitude of what constitutes a reasonable award of attorney fees is [] a matter committed to the discretion of the trial court.' (Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.App.5th 252, 263; see also PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1094-1095 [trial courts have broad discretion to determine the amount of reasonable fees].) Defendant Hakim Parties have requested $532,557.90 in fees and fees-on-fees. The court has reviewed the invoices (see ROA 2702) and the amount requested appears to consist of over a thousand hours at an approximate blended rate of under $500. The court finds the rate itself to be reasonable but that certain categories of fees require more scrutiny.

Plaintiff argues that fees should be reduced from the following categories: (1) fees requested for other cases [25.1]; (2) fees requested for excessive communications with companies and individuals not party to the action [57 hours]; (3) fees expended responding to Malan's cross-complaint and discovery propounded by Malan [27 hours]; (4) fees expended responding to SoCal Building Venture's complaint-in-intervention [39.1 hours]; (5) fees responding to a sanctions motion by Malan against Hakim where Hakim was sanctioned [23 hours]; (6) fees for unsuccessful appeal appointment of receivership [133.5 hours]; (7) fees for opposing appointment of receiver [75.8 hours]; (8) vague time entries [97 hours]; and (9) fees expended on motion for summary judgment [65 hours]. The court briefly addresses the propriety of fees for each of these categories in turn.

First, the Hakim Parties concede that the request should be reduced by 25.1 hours for time facially billed to other cases. Thus, fees are reduced by 25.1 hours.

Second, Plaintiff argues that fees should be reduced for so-called 'excessive communications' with various parties. The Hakim Parties have justified these communications because, for example, they were necessary to prevent foreclosure of the properties at issue in the case. But this appears to be a business concern rather than a litigation concern. While those matters may have affected what remedy or damages were ultimately available on the litigation's conclusion, they appear to be matters collateral to ensuring success in the litigation itself. Fees are reduced by 57 hours in this category.

As for the third, fourth, and fifth categories, the court agrees that fees cannot be recovered for defending a cross-complaint or complaint-in-intervention brought by other parties or discovery with respect to those complaints or other parties. Defendants do not respond to this point other than to say such actions were reasonably necessary to the defense of the litigation. That may be true as a general proposition and if Defendants were the prevailing parties as to those other complaints, they may seek fees from the parties who brought them if they are governed by applicable fee-shifting statutes. The fees are not recoverable from Plaintiff. Fees are therefore reduced by the 146.1 hours specified in these categories.

With respect to the sixth and seventh categories, fees for work opposing the receivership and appeal are recoverable. ''Where a plaintiff has obtained excellent results . . . the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.'' (Sundance v. Municipal Court (1987) 192 Cal.App.3d 268, 273-274 [quoting with approval Hensley v. Eckerhart (1983) 461 U.S. 424, 434-435].) While the Fourth District's opinion affirming the appointment of the receiver stated that 'Appellants [including the Hakim Parties] to bear respondent's [i.e., Razuki's] costs on appeal' (ROA 1657, Remittitur and Opinion, p. 53), the California Rules of Court state that '[u]nless the court orders otherwise, an award of costs neither includes attorney's fees on appeal nor precludes a party from seeking them under rule 3.1702' (Cal. Rules of Court, rule 8.278(d)(2)). The Fourth District did not otherwise order that a party was precluded from seeking its fees at a later time. (See De La Carriere v. Greene (2019) 39 Cal.App.5th 270, 277 ['We did not 'order otherwise.' Consequently, our cost award did not determine, or Calendar No.: Event ID:  TENTATIVE RULINGS

3092094  7 CASE NUMBER: CASE TITLE:  RAZUKI VS MALAN [IMAGED]  37-2018-00034229-CU-BC-CTL even indicate, who was the prevailing party for purpose of awarding attorney fees.']; Mustachio v. Great Western Bank (1996) 48 Cal.App.4th 1145, 1150 [provisions of law allowing costs on appeal 'are entirely separate from the contractual provision for fees and do not depend on the party winning the appeal being the ultimate prevailing party.'].) As such, even though Defendants were unsuccessful in opposing the receivership, they are entitled to fees for the work incurred. The motion is granted as to these fees.

Eighth, in reviewing these entries, the record, invoices, and declaration of counsel sufficiently substantiate that the time was properly incurred. As just two examples: (1) Plaintiff argues that fees incurred on August 16, 2018 referring to an ex parte are insufficiently vague, but that entry correlates with Mr. Hakim's August 17, 2018 ex parte filing at ROA 101; and (2) Plaintiff argues that an invoice referencing 'travel and appearance at ex parte proceeding' on October 31, 2019 is insufficiently vague, but it is consistent with the Minute Order at ROA 977 listing Mr. Goria's presence in the court room for an ex parte hearing. The motion is granted as to these fees.

Ninth, the court finds that 65 hours is not so unreasonable for preparation of a heavily litigated summary judgment motion. The motion is granted as to these fees.

The court may further reduce the request after hearing from the parties regarding fees incurred on the dismissed cross-complaint.

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