Judge: Monica Bachner, Case: 19STCV37897, Date: 2023-02-01 Tentative Ruling

Department 71: Attorneys who elect to submit on these published tentative rulings, without making an appearance at the hearing, may so notify the Court by communicating this to the Department's staff at (213) 830-0771 before the set hearing time.  See, e.g., CRC Rule 324(b).   All parties are otherwise encouraged to appear by Court Call for all matters.

Case Number: 19STCV37897    Hearing Date: February 1, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Motion for post judgment attorneys’ fees and costs is granted in the amount of $57,652.75 in attorneys’ fees (which includes the $4320 in attorney’s fees set forth in the Memorandum of costs) and $746.82 in costs totaling $58,399.57.

Plaintiff A.R.D. Service, Inc. (“Plaintiff”) brings this motion for post judgment attorneys’ fees and costs pursuant to Code of Civil Procedure sections 685.040 and 685.080.

Background

On October 22, 2019, Plaintiff filed its complaint against Defendant Laurence Freidin (“Defendant”) and Defendant Michael Levine, Inc. ("Levine") (collectively, "Defendants"), and on May 19, 2020, Plaintiff filed its FAC against Defendants alleging causes of action for (1) breach of written lease [against Levine], (2) breach of guarantees [against Defendant], (3) open book account [against Defendants], (4) account stated [against Defendants], and (5) quantum meruit/unjust enrichment [against Defendants]. The causes of action are based on Levine's alleged breach of two separate lease agreements ("Leases") it entered with Plaintiff for two commercial properties located at 920 S. Maple Avenue, Los Angeles, California 90015 ("Maple Avenue Property") and 410-418 E. 9th Street, Los Angeles, California 90015 ("9th Street Property") (collectively, the "Properties'') by failing to pay rent.

The breach of guarantees cause of action against Defendant is based on allegations Defendant entered a written guaranty with Plaintiff for each of the leases associated with the Properties, and that Defendant accordingly signed the Leases as "Guarantor." (FAC ¶¶ 22-28.) The Leases, which the Court notes are form Standard Industrial/Commercial Multi-Tenant Leases produced by the American Industrial Real Estate Association ("AIREA"), each include boilerplate language relating to the Guarantor as follows: "[t]he Guarantors, if any, shall each execute a guaranty in the form most recently published by the [AIREA], and each such Guarantor shall have the same obligations as Lessee under this Lease." As such, Plaintiff's causes of action against Defendant are based on his role as an alleged guarantor of the Leases. The Court notes the Maple Avenue Lease indicates it is between Plaintiff as "Lessor" and "Michael Levine Inc.; Guarantor: Laurence Alen Freidin" as "Lessee" and that the signature block repeats this entire phrase as "Lessee" on whose behalf Defendant signed. (FAC, Exh. A.) The Court notes the 9th Street Lease is similarly drafted, with Defendant listed as "Guarantor" and in the signature block Defendant signs on behalf of "Michael Levine Inc.; Guarantor: Laurence Alen Freidin." (FAC, Exh. B.)

On July 20, 2020, the Court entered default against Defendants. On August 28, 2020, the Court issued a default judgment against Defendants in the amount of $634,946.13. On February 9, 2021, the Court granted Plaintiff's ex parte application for issuance of an Order for Sale of Dwelling located at 7526 W. 81 Street, Los Angeles, California, 90293 ("Defendant's House") to satisfy judgment. On April 19, 2021, Defendant appeared at his Hearing on Application for Order for Appearance and Examination. On July 14, 2021, Defendant filed a Notice of Bankruptcy Filing and Notice of Bankruptcy Stay indicating Defendants had filed voluntary petitions for relief under Chapter 11, commencing two bankruptcy actions and staying any enforcement of the judgment in the instant action by possession of Defendant's property.

On October 21, 2021, Defendant filed a motion to vacate the judgment which was denied on December 10, 2021. Plaintiff brings the current motion for post judgment attorneys’ fees and costs for defending against the motion to vacate and in representing their interests in the Bankruptcy Case No. 2:21-bk-15683-ER. (Motion, pgs. 3-4: 23-4.)

Summary of Motion for Post Judgment Attorneys’ Fees and Costs

Plaintiff seeks attorneys’ fees for work in defending against Defendants’ Motion to Vacate and Set Aside Judgment and for work representing Plaintiff’s interest in Bankruptcy Case No. 2:21-bk-15683-ER “including adversarial action brought therein, Defendants filing for a contested Motion for Relief from Stay to file their Motion to Vacate Judgment, Plaintiff’s filing of a Motion to Dismiss, and Plaintiff’s filing a contested Motion for Relief from Stay in order to file this Motion and Memorandum of costs before the two year statute ran.” (Motion, pgs. 3-4: 23-4.) Plaintiff states that the underlying judgment includes an award of attorneys’ fees, thus they are entitled to an award of attorneys’ fees on this motion.

Plaintiff seeks $5,790.00 for fees relating to Defendants’ Motion to Vacate and Set Aside Judgment. (Motion, pg. 5:9-12.) Plaintiff states that they incurred $2,580.00 in fees from the Law offices of Andrew Rithol Inc. (Motion, pg. 7:1-2.) Plaintiff states they incurred $24,916.75 in fees and $268.32 in costs from Margulies Faith LLP related to defending the bankruptcy proceeding. (Motion, pg. 7: 3-6.) Plaintiff states they incurred $20,312.00 in fees and $424.18 in costs from LEVENE, NEALE, BENDER, YOO GOLUBCHIK L.L.P. related to defending the bankruptcy proceeding. (Motion, pg. 7:7-12.)

Plaintiff seeks post judgment fees for “recording an abstract, preparation of a writ, propounding requests for production and a subpoena, and, attempting multiple times to arrange for the judgment debtor examination of Laurance Frieden and for the actual examination.” (Motion pg. 4:5-9.) Plaintiff seeks fees in the amount of $4,320.00 for these matters. (Motion, pg. 5:1-7.) Plaintiff also seeks $54.32 for costs “not already on the concurrently filed Memorandum of Costs.” (Motion, pg. 5:13-14.)

In total, Plaintiff seeks $57,652.75 in attorneys’ fees (including the $4,320 in attorney’s fees in the Memorandum of Cost) and $746.82 in costs. Plaintiff presents the declarations of Andrew Ritholz, current attorney for the Plaintiff, Jeremy W. Faith, partner with the firm of Margulies Faith LLP who represented Plaintiff in the bankruptcy proceeding, and Todd Arnold, attorney from LEVENE, NEALE, BENDER, YOO GOLUBCHIK L.L.P., to support the request for fees and costs. Plaintiff also submits a memorandum of costs from Andrew Ritholz, current attorney for Plaintiff.

Defendant did not submit an opposition to this motion.

Legal Standards

Plaintiff brings the current motion pursuant to Code of Civil Procedure sections 685.040 and 685.080. Code of Civil Procedure section 685.040 provides:

The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment. ... Attorney's fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney's fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.

Code of Civil Procedure section 685.080 provides:

(a) The judgment creditor may claim costs authorized by Section 685.040 by noticed motion. The motion shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred. The costs claimed under this section may include, but are not limited to, costs that may be claimed under Section 685.070 and costs incurred but not approved by the court or referee in a proceeding under Chapter 6 (commencing with Section 708.010) of Division 2.

(b) The notice of motion shall describe the costs claimed, shall state their amount, and shall be supported by an affidavit of a person who has knowledge of the facts stating that to the person's best knowledge and belief the costs are correct, are reasonable and necessary, and have not been satisfied. The notice of motion shall be served on the judgment debtor. Service shall be made personally or by mail.

(c)The court shall make an order allowing or disallowing the costs to the extent justified under the circumstances of the case.

Plaintiff may seek to recover attorneys’ fees

Attorneys’ fees are not usually recoverable in an action to enforce a judgment unless the underlying award includes an award of attorneys’ fees pursuant to Code of Civil Procedure section 1033.5 subdivision (A)(10)(a) which allows attorneys’ fees based on a contractual agreement. (Code Civ. Proc., § 685.040.) Here, the underlying default judgment issued August 28, 2020, included an award of $5,000 in attorneys’ fees based on the lease agreements between the parties awarding attorneys’ fees. Because the underlying judgment awarded attorneys’ fees based on contract, Plaintiff may seek attorneys’ fees incurred in enforcing the judgment.

Plaintiff’s motion meets the procedural requirements of Code of Civil Procedure section 685.080

Plaintiff states, in their memorandum of costs after judgment, that there is still an outstanding balance on the judgment of $636,946.13 on the principal amount owed. An outstanding balance is required under Code of Civil Procedure section 685.080 subdivision (a). Additionally, Plaintiff seeks allowable costs under Code of Civil Procedure section 685.070 including:

(1) Statutory fees for preparing and issuing, and recording and indexing, an abstract of judgment or a certified copy of a judgment. ... (5) Costs incurred in connection with any proceeding under Chapter 6 (commencing with Section 708.010) of Division 2 that have been approved as to amount, reasonableness, and necessity by the judge or referee conducting the proceeding. (6) Attorney's fees, if allowed by Section 685.040.

The motion lists the costs incurred, with supporting declarations, and provides proof of service of the motion and accompanying declarations by mail on August 22, 2022, as required by Code of Civil Procedure section 685.080 subdivision (b).

Plaintiff may seek attorneys’ fees and costs for defending against the bankruptcy action

In Jaffe v. Pacelli, (2008) 165 Cal.App.4th 927, the Court of Appeal reviewed, de novo, the question, “whether Section 685.040 entitles [plaintiff] to attorney fees and costs incurred in the bankruptcy proceedings” after Jaffe had been awarded a judgment by the Superior Court. (Jaffe v. Pacelli, surpa, 165 Cal.App.4th at 936.) The Court of Appeal stated, “there are two requirements before a motion for an award of postjudgment (sic.) attorney fees may be awarded as costs: (1) the fees must have been incurred to “enforce” a judgment; and (2) the underlying judgment had to include an award for attorney fees pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(A), which provides that attorney fees may be awarded when authorized by contract.” (Id. at 935.) The Court of Appeal determined that section 685.040 did entitle a plaintiff to recover post judgment attorney fees and costs incurred in defending a bankruptcy proceeding because, “[h]ad [defendant] been successful in the bankruptcy proceedings, the judgment in the superior court would have been extinguished and made unenforceable by the bankruptcy court's discharge order,” thus the fees were incurred to ‘enforce’ the judgment. (Id. at 938.)

Here, if Defendant had succeeded in the bankruptcy action, the default judgment issued on August 28, 2020, would have become unenforceable. The underlying judgment here also included a $5,000 award of attorneys’ fees based on the lease contracts. (Motion, pg. 4:26-28.) Because the requirements demonstrated in Jaffe are satisfied, Plaintiff may seek attorneys’ fees and costs for defending against the bankruptcy action.

            Reasonableness of fees and costs

Under Code of Civil Procedure section 685.040, Plaintiff is only entitled to collect the “reasonable and necessary costs including attorneys’ fees. Plaintiff seeks $57,652.75 in attorneys’ fees and $746.82 in costs total. Plaintiff submits declarations from several different law firms as demonstrated below:

1. Law offices of Andrew Ritholz, Inc., current counsel for Plaintiff. The firm bills at a rate of $300.00 per hour. Law offices of Andrew Ritholz, Inc. claims they spent a total of 14.4 hours of work on routine post judgment enforcement work, 19.3 hours of work opposing the motion to vacate judgment, and 8.6 hours of work on the bankruptcy matter. Law offices of Andrew Ritholz, Inc. request a total of $12,690 in fees and $54.32 in expenses.

1. Margulies Faith LLP, former counsel for Plaintiff in the bankruptcy case. The firm bills at a rate of $435.00 per hour, but several of the billing entries include a 50.0% or 100.00% discount. Margulies Faith LLP, seeks $42,256.75 in fees and $217.92 in expenses. The details of the billing statements seem reasonable in light of the discounts already given to Plaintiff by Margulies Faith LLP.

1. LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P., counsel for Plaintiff in the bankruptcy case. The firm seeks $20,312.00 in fees for 37 hours of work setting an average billing rate of $548.97. The fees are split into 6.8 hours spent on case administration, 8.2 hours spent on relief from stay, and 22.0 hours on other litigation. The firm also seeks costs of $424.18.

The actual total based on the bills presented is $75,258.75 in fees and $696.42 in costs. Plaintiff only seeks $57,652.75 in fees and $746.82 in costs total. Based on the foregoing, the Court finds the requested fees and costs sought as reasonable and necessary to enforce Plaintiff’s judgment.

Conclusion

Motion for post judgment attorneys’ fees and costs is granted in the amount of $57,652.75 in attorneys’ fees (which includes the $4320 in attorney’s fees set forth in the Memorandum of costs) and $746.82 in costs totaling $58,399.57.

Dated:  December 21, 2022

Hon. Monica Bachner

Judge of the Superior Court