Judge: Monica Bachner, Case: 19STCV42090, Date: 2023-01-03 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: 19STCV42090    Hearing Date: January 3, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Robert K. Barth’s and Eastwind Financial, LLC’s motion to tax Plaintiffs Haderway PTC, LLC’s and BSFB Portfolio, LP’s costs is granted in part in the reduced amount of $36,105.44, and is continued to February 17, 2023 at 8:30 a.m. for Plaintiffs to identify the portions of the depositions and the Mechanics Bank subpoenas that are recoverable in this action.

Plaintiffs’ motion for attorneys’ fees and litigation expenses is granted in the reduced amount of $1,401,491.50.

Defendants Robert K. Barth (“Barth”) and Eastwind Financial, LLC (“Eastwind”) (collectively, “Defendants”) move to tax costs requested by Plaintiffs Haderway PTC, LLC (“Haderway”) and BSFB Portfolio, LP (“BSFB”) (collectively, “Plaintiffs”) on grounds that $121,768.29 of the costs claimed by Plaintiffs are not properly recoverable under C.C.P. §1033.5 or otherwise pursuant to statute.  (Motion Tax Costs, pg. 4.)  Plaintiffs move for an award awarding attorney's fees and litigation expenses in the amount of $2,373,979.75.  (Notice of Motion Attorneys Fees, pg. 2.)

Background

This is a derivative action Plaintiffs prosecuted on behalf of JBR Alondra, LLC and Centerville Place 1203 Main, LLC, of which Plaintiffs are investors.  Beginning on October 4, 2021, this Court presided over a nine-day bench trial.  On May 26, 2022, this Court entered judgment in favor of Plaintiffs on the first and second causes of action for breach of fiduciary duty and misappropriation of opportunity with damages in the amount of $6,692,740, and punitive damages in the amount of $6,692,740, for total damages of $13,385,480, plus prejudgment interest, and stated that Plaintiffs may “seek attorney fees under the common-fund doctrine by post-judgment motion.”  (Judgment.)  On June 14, 2022, Plaintiffs filed a memorandum of costs seeking $138,686.73 in total costs.  

A.   Defendants’ Motion to Tax Costs

“‘If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.’”  (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131.)

“[T]he mere filing of a motion to tax costs may be a ‘proper objection’ to an item, the necessity of which appears doubtful, or which does not appear to be proper on its face.  [Citation] However, ‘[i]f the items appear to be proper charges the verified memorandum is prima facie evidence that the costs, expenses and services therein listed were necessarily incurred by the defendant [citations], and the burden of showing that an item is not properly chargeable or is unreasonable is upon the [objecting party].’ [Citations.]”  (Id.)

“The court’s first determination, therefore, is whether the statute expressly allows the particular item, and whether it appears proper on its face. [Citation] If so, the burden is on the objecting party to show them to be unnecessary or unreasonable. [Citation.]”  (Id.)

A prevailing party is entitled as a matter of right to recover costs in any action or proceeding, except as otherwise expressly provided by statute.  (C.C.P.  §1032(b).)  California law recognizes three types of litigation costs: allowable, not allowable, and discretionary.  (C.C.P. §1033.5(a), (b), (c)(4).)  Items not specifically allowable as costs under C.C.P. §1033.5(a), and not specifically prohibited under §1033.5(b), may be allowed as costs at the discretion of the trial court if reasonably necessary to the conduct of the litigation.  (Citizens for Responsible Development v. City of West Hollywood (1995) 39 Cal.App.4th 490, 506, citing Ladas v. California State Auto Association (1993) 19 Cal.App.4th 761, 774.)   For allowable costs, C.C.P. §1033.5(c) provides:

(2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.

(3) Allowable costs shall be reasonable in amount.

(C.C.P. §1033.5(c)(2)-(3).) 

To the extent Defendants challenges costs, they must be challenged as costs that were not, “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation” or not “reasonable in amount.”  (C.C.P. §1033.5(c)(2)-(3).)  As discussed above, Plaintiffs are the prevailing party in this action, and as such, are entitled to costs pursuant to C.C.P. §1032(b).

On June 14, 2022, Plaintiffs filed a memorandum of costs seeking $138,686.73 in total costs.  Defendants move to tax $121,768.29 in costs.  (Motion, pg. 5.)

Item No. 1: Filing and Motion Fees

Defendants move to tax $1,987.21 in filing and motion fees costs as “incurred unnecessarily.”  (Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal.App.4th 238, 245.)  Defendants challenge fees it identifies in its motion as Nos. 42, 43, 49, 50, 51, 52, 53, 54, 55, and 56 as duplicative entries totaling $441.66.  (Motion Tax Costs, pgs. 8-9; Reply Tax Costs, pg. 2.)  Plaintiff have failed to substantiate these costs.  Defendant challenges as vague $491.65 in fees it identifies as Nos. 5, 8, 12, 15, 28, 32, 44, 45, 46, 47, 48, 58, 59, and Plaintiffs’ “Special PDF Filing,” identified in Defendants’ motion as Item No. 60 with a filing fee of $104.75.  (Motion Tax Costs, pg. 9; Reply pgs. 2-3.)  Plaintiffs argue their post-trial briefs certain filing fees can no longer be further identified due to issues beyond Plaintiffs’ control between Plaintiffs’ filing service, Nationwide, and the Court’s filing system, and Nationwide’s record keeping.  (Opposition, pg. 3; Decl. of Rothschild ¶5.)  Plaintiff have failed to substantiate these costs.  Defendants challenge fees it identifies as rejected filings, identified as Nos. 16, 18, 19, 20, 21, and 22, totaling $63.90.  (Motion Tax Costs, pg. 7.)  Plaintiff have failed to substantiate these costs.  Defendants challenge $134.20 in fees that Plaintiffs claim for the delivery of courtesy copies, identified as Nos. 6 and 57.  (Motion Tax Costs, pgs. 6, 9.)   However, these filings were for e-filing and courtesy copies and the Court will allow them.  Defendants challenge $696.25 in filing fees incurred in connection with the filing of various motions and ex parte applications for leave to amend to substitute new plaintiffs, identified as Nos. 4, 7, 9, 10, 11, 13, 14, 17, 23, 24, 25, 26, 27, 29, 30, 31, 33, 34, 35, 38, 39, 40, and 41.  (Motion Tax Costs, pgs. 6-8.)   These filings were reasonably necessary to the conduct of the litigation. 

In sum, Defendants motion to tax these fees is granted in the reduced amount of $1,101.96.

Item No. 2: Jury Fees

Defendants move to tax $173.15 in jury fees and argue Plaintiffs’ claims were entirely derivative and therefore Plaintiffs had no right to a jury trial.  (See Rankin v. Frebank Co. (1957) 47 Cal.App.3d 75, 92-93.)  Plaintiffs argue posting jury fees was appropriate because at the early stage of the case when fees were posted, Plaintiffs could not have known with certainty that there would not be a jury trial, and courts often empanel juries to decide factual issues in actions for declaratory relief.  (Entin v. Superior Court (2012) 208 Cal.App.4th 770, 773.) 

Plaintiffs’ action was not one for declaratory relief, but rather a derivative action that may only be tried to a court.  (Rankin, 47 Cal.App.3d at pgs. 92-93.)   Accordingly, Defendants’ motion to tax fees is granted in the amount of $173.15.

Item No. 3: Deposition Costs

Defendants move to tax $58,934.30 in deposition costs and argue twelve of the total nineteen witnesses had their depositions noticed and taken in Stanley Black v. Robert K. Barth, et al., Case No. 19STCV41943 (“Brighton Case”), not the instant action.  (See Decl. of Klieger ¶¶2-13 & Exhs. 1-12.)  Defendants argue costs incurred in connection with depositions in a separate action are not recoverable.  (In re Bauer’s Estate (1943) 59 Cal.App.2d 161, 163.)  Defendants argue two witnesses—Robert K. Barth and Bernhard Punzet—were separately deposed in the Brighton Case and the instant action, but because Plaintiffs lump those costs together, Defendants are unable to determine what portion of the costs were incurred in the instant action.  (Decl. of Klieger ¶¶14-15 & Exhs. 13-14; Memorandum of Costs, Attach. 4(e).)  Plaintiffs argue the parties agreed that depositions taken under this case and the Brighton case would be “treated as taken in both cases.”  (Decl. of Rothschild ¶3, Exh. 1.)  However, Defendants presented evidence that the parties never entered into that stipulation and they instead proceeded on the understanding that the depositions could be used for both cases—not that they were actually taken in both cases.  (Supplemental Declaration of Robert N. Klieger (“Klieger Decl.”) ¶ 2.)

C.C.P. §1033.5(c)(2) allows for costs reasonably necessary to the conduct of the litigation, and C.C.P. §1033.5(b) is silent as to the apportionment of deposition costs among multiple actions.  Plaintiffs concede the $3,553.30 charge for the transcription of Jack Black’s deposition was in error.  (Decl. of Rothschild ¶7.)  Plaintiffs also withdraw their request for $992.95 for Nikki Vallot’s deposition, which was included inadvertently.  (Opposition Tax Costs, pg. 5 n.2.)  Regarding the remaining depositions, the Court cannot determine what portion of the remaining depositions are allocated to the instant case, and Plaintiff is ordered to provide supplemental briefing.

Item No. 4: Service of Process

           Defendants move to tax $8,585.94 in service of process fees. These include fees that are “undated” and “poorly described” and include service of process for subpoenas that were issued only in the Brighton Case.  (See Decl. of Klieger ¶¶6, 17-29, Exhs. 5, 16-28.)  The service of process fees claimed by Plaintiffs include $2,656.95 in fees relating to 20 entries related to subpoenas that were issued and served in the Brighton Case alone.  (Motion Tax Costs, pgs. 12-16, Items Nos. 4, 5, 9, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 33, 34, 35, 36; Reply, pg. 6).  These costs are disallowed. 

Defendants also argue another $1,610.14 in costs should be disallowed as at least eleven of the service of process fees relate to subpoenas to Mechanics Bank, which was subpoenaed in the Brighton Case and the instant case, and Plaintiffs made no attempt to distinguish the fee breakdown between the two cases.  (Motion Tax Costs, pg. 11.)  Plaintiffs are directed to provide supplemental briefing regarding these costs.

Finally, Defendants argue Plaintiffs seek to recover costs incurred in connection with the delivery of courtesy copies, trial boxes, and other materials that do not qualify as “service of process fees.”  (Motion Tax Costs, pg. 11, Item Nos. 10, 11, 37, 39, 46, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85; Reply, pg. 5.)  This court require courtesy copies for trial documents, and as such, costs incurred for the delivery of courtesy copies for trial documents are reasonably incurred under C.C.P. §1033.5(c)(2).  However, courtesy copies for regular motion practice are not required by this Court (Item Nos. 37, 39, 46, 48, 49, 53, 57, 62, 63). Accordingly, Defendants’ motion to tax costs for service of process is granted in the total amount of $832.85.

In sum, Defendants motion to tax these fees is granted in the reduced amount of $3,489.80.

Item No. 9: Transcripts

           Defendants argue the only transcript ordered by this Court is that from closing arguments, for which Plaintiffs paid $1,388, arguing the other transcripts totaling $24,557.72 were not ordered by the Court and cannot be recovered per C.C.P. §1033.5(b)(5).

           Plaintiffs are only entitled to recover costs for transcripts ordered by this Court.  Accordingly, Defendants’ motion to tax costs for transcripts is granted in the total amount of $24,557.72.

Item No. 12: Models, Enlargements, and Photocopies of Exhibits

           Defendants move to tax Plaintiff’s claim for costs, models, enlargements, and photocopies of exhibits in the amount of $2,236.56.  (Motion Tax Costs, pgs. 16-17.)  Plaintiffs have withdrawn their request for the costs challenged by Defendants.  (Opposition, pg. 2 n.1.)  Accordingly, Defendants’ motion to tax costs for models, enlargements, and photocopies of exhibits is granted in the total amount of $2,236.56.

Item No. 13: “Other”

           Defendants challenge $24,291.33 in “other fees,” including costs of editing videotaped depositions, which Defendants argue do not fall within any category of allowable costs under C.C.P. §1033.5(a).  (Wegner, Fairbank, Epstein & Chernow, Cal. Prac. Guide: Civ. Trials & Evid. (The Rutter Group 2022), at ¶¶17:355 et seq.)  Editing videotaped depositions for trial is recoverable. (See Bender v. County of Los Angeles (2013) 217 Cal.App.4th 968, 990-991[allowing costs for video editing as the edited videos “enhanced counsel’s advocacy” before the jury.].)  Here, as in Bender, depositions were presented to the Court in video form and were reasonably necessary to the conduct of the litigation. Moreover, the vast majority of the “other fees” appear to be various reservation fees which are recoverable.  The other fee appears to be a $3,000 fee for trial presentation, which would be recoverable.

           Accordingly, Defendants’ request to tax “other costs” is denied.

           Conclusion

           Defendants’ motion to tax costs is granted in part in the amount of $36,105.44 and is continued to February 17, 2023 at 8:30 a.m. for Plaintiffs to identify the portions of the depositions and the Mechanics Bank subpoenas that are recoverable in this action.

B.   Plaintiffs’ Motion for Attorneys’ Fees

Plaintiffs move for an order awarding attorneys’ fees and litigation expenses in the amount of $2,373,979.75 pursuant to the common-fund and substantial benefit doctrines.  (Notice of Motion Attorneys’ Fees, pg. 2.) 

Evidentiary Objections

Plaintiffs’ 12/23/2022 objections to the Declaration of Robert N. Klieger (“Klieger”) filed in support of Defendants’ opposition to Plaintiff’s motion for attorneys’ fees are overruled.

Analysis

A derivative plaintiff may recover its attorneys’ fees in a post-judgment motion when its efforts resulted in a monetary recovery for, or other substantial benefit to, the corporation.  (See Statement of Decision at pg. 17, citing Fletcher v. A.J. Industries Inc. (1968) 266 Cal.App.2d 313, 320 [“The common-fund doctrine has been held to apply in favor of a plaintiff who has successfully maintained a stockholder’s derivative action on behalf of a corporation.”].)

The Court’s discretion to award such fees is derived from the equitable “common fund doctrine,” which provides that one who brings an action to create or preserve a “common fund” for the benefit of the corporation and its shareholders is entitled to be made whole for its reasonable and necessary expenses in doing so.  (Cziraki v. Thunder Cats, Inc. (2003) 111 Cal.App.4th 552, 557-558.) Similarly, the “substantial benefit” doctrine, an “outgrowth” of the common fund doctrine, “permits the award of fees when the litigant, proceeding in a representative capacity, obtains a decision resulting in the conferral of a ‘substantial benefit’ of a pecuniary or nonpecuniary nature.”  (Serrano v. Priest (1977) 20 Cal.3d 25, 37; see also Baker v. Pratt (1986) 176 Cal.App.3d 370, 378 [“if a judgment confers a substantial benefit on a defendant, such as in a corporate derivative action, the defendant may be required to pay the attorney fees incurred by the plaintiff”].)

The calculation of attorneys’ fees is based on the lodestar method, which multiplies the number of hours reasonably expended by a reasonable hourly rate. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1064, 1094-1095; Lealao v. Beneficial California, Inc. (2000) 82 Cal.App.4th 19, 26.)  “The lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award.  (Graciano v. Robinson Ford Sales (2006) 144 Cal.App.4th 140, 154.)  “The purpose of such adjustment is to fix a fee at the fair market value for the particular action.”  (Id.)  “In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.”  (Id.)  An attorney’s time spent and hourly rate are presumed to be reasonable.  (Mandel v. Lackner (1979) 92 Cal.App.3d 747, 761.) 

In support of their fee request, Plaintiffs submitted the Declaration of Howard King (“King”) of Plaintiffs’ counsel King, Holmes, Paterno & Soriano, LLP, (“KHPS”), and attach a copy of KHPS’s invoices in this matter as Exhibit 1 and invoices in the companion Brighton Case as Exhibit 2.  (Decl. of King, Exhs. 1, 2.)  King sets forth his experience, his hourly rate of $900, and an assertion that his firm has billed $1,139,925 in the instant case and $788,299.71 in the Brighton Case.  (Decl. of King ¶¶2, 23-25, 44, Exh. 1 [Billing Invoice].)  King also sets forth the experience of KHPS attorneys Stephen D. Rothschild and John G. Snow, and KHPS paralegals Richard Purtich and Karen Sloane.  (Decl. of King ¶¶28-41.)  King also attaches invoices from expert witness Eric Sussman, from Development Specialists, Inc. including its employee and expert Shelly Cuff, and RSM US LLP’s, and a paid invoice from Mediator Hon. Louis Meisinger.  (Decl. of King, Exhs. 3-6.)  Plaintiffs submitted the Declaration of Joseph Klapach (“J. Klapach”), in which he sets forth his experience, his hourly rates of $700 (2021 rate) and $750 (2022 rate), and an assertion that he has incurred 240.9 hours in this matter.  (Decl. of J. Klapach ¶¶2-7.)  Plaintiffs submitted the Declaration of Tali Z. Klapach (“T. Klapach”) in which she sets forth her experience, her hourly rate of $700 (2021 rate) and $750 (2022 rate), and an assertion that she has incurred 55.5 hours in this matter.  (Decl. of T. Klapach ¶¶2-6.)

In opposition, Defendants argue the attorneys’ fees award should denied in part for the following reasons: (1) the $788,299.71 in attorneys’ fees billed by KHPS in the Brighton Case are not properly charged to the common fund; (2) the $1,139,925 in fees that were billed by KHPS in the instant case should be reduced by 20% in light of the firm’s disfavored practice of billing in quarter-hour increments; (3) the $211,860 for attorney fees billed by Klapach & Klapach are not properly charged to the common fund; and (4) except for expert fees paid in connection with the expert testimonies of Eric Sussman and Shelly Cuff, the “other expenses” totaling $184,257.54 have been waived by Plaintiffs and are not properly recoverable.  (Opposition Attorneys’ Fees, pgs. 2-3.)  Defendants request this Court award Plaintiffs no more than $808,617.20 in attorneys’ fees and expert witness fees from the common fund.  (Opposition Attorneys’ Fees, pg. 3.)

Lodestar Calculation

Although detailed time records are not required, California Courts have expressed a preference for contemporaneous billing and an explanation of work. (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1375.)  An attorney’s testimony must be based on the attorney’s personal knowledge of the time spent and fees incurred.  (Evid. Code, §702(a) [“the testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter”].)  Here, Plaintiffs submitted documentation supporting work performed by Klapach & Klapach, and KHPS attorneys, but as to the KHPS attorneys do not provide a total number of hours of work performed or the rates of all counsel used to calculate the lodestar.  (See Decl. of King ¶13, Exh. 1; Motion, pg. 6.) However, Defendants do not challenge the fees on this basis.

A.    Fees Incurred in Connection with the Brighton Case

“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. Failure to raise specific challenges in the trial court forfeits the claim on appeal.”   (Premier Medical Management Systems, Inc. v. California Insurance Guarantee Association (2008) 163 Cal.App.4th 550, 564.)

Defendants argue $788,230.71 of KHPS’s fees were incurred and billed in connection to the Brighton Case.  (Opposition, pg. 3.)  Defendants argue parties did not have an agreement that written discovery or depositions in the instant action would be taken under the Brighton Case caption.  (Decl. of Klieger ¶¶3-4.)  While Defendants concede that parties agreed that discovery taken in one matter could also be used in another, they argue that does not mean fees incurred and billed in the Brighton Case can be recouped from damages in the instant case.  (Opposition, pg. 4.)  Defendants argue the issues in the Brighton Case are minimally related to the issues addressed in the instant case.  (Decl. of Klieger ¶¶6-6.)

The Court agrees.  Plaintiffs have not established a basis to allocate the fees in the Brighton case to this case.  Accordingly, the fees are reduced in the amount of $788,230.71.

B.    Billing Increments

California allows awards of fees to attorneys who bill in quarter-hour increments.  (See Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 100.)  Defendant cites Welch v. Metropolitan Life Ins. Co. (9th Cir. 2007) 480 F.3d 942, 949, to suggest this Court adopt a 20% reduction to all time entries submitted in quarter-hour increments.  Welch is inapposite because it is not controlling authority, and the Welch Court imposed a 20% reduction to time entries only after finding that “counsel's practice of billing by the quarter-hour resulted in a request for compensation for hours not reasonably expended on the litigation.”  (Welch, 480 F.3d at pg. 948.)  Here, Defendants do not identify any entries that reflect time not reasonably expended.

Accordingly, Defendants fail to provide a basis to reduce fees and expenses in connection with the quarter-hour billing increments.

C.    Klapach & Klapach Invoices

Defendants argue Plaintiffs cannot recover $211,860 in fees billed by Klapach & Klapach because the firm did not appear as counsel of record for Plaintiffs in the instant case, and Joseph Klapach only entered an appearance as counsel of record for third-party Stanley Black.  (Decl. of Klieger ¶7, Exh. 2.)  Defendants argue Klapach filed briefs on behalf of Black that focused exclusively on his medical privacy, which did not benefit JBR Alondra, LLC and Centerville Place 1203 Main, LLC, and are not properly charged to the common fund.  (Opposition Attorney Fees, pg. 6.)  Defendants further argue Plaintiffs fail to demonstrate Tali Klapach made a substantial contribution to the prosecution of the clams or JBR Alondra, LLC’s and Centerville Place 1203 Main, LLC’s recovery in this action.  (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 843-845.)  Thayer is inapposite because the attorneys in Thayer duplicated each other’s work, and their time was therefore not reasonably spent.  (Thayer, 92 Cal.App.4th at pgs. 843-845.)  Unlike Thayer, Defendants do not challenge Klapach & Klapach’s work as duplicative of KHPS’s work or not reasonably spent.  Moreover, as to both Tali Klapach and Joseph Klapach, they detailed the work that they reasonably spent.  (Decl. of T. Klapach, ¶ 5; Decl. of J. Klapach, ¶6.)  As to Joseph Klapach, he excluded time spent representing Stanley Black at trial, including the time that spent drafting the third-party trial briefs and motion to exclude and/or seal his private medical records.  (Decl. J. Klapach, ¶ 7.) As to Tali Klapach, she excluded time spent testifying at trial or preparing for trial testimony. (Decl. of T. Klapach, ¶ 6.)

Accordingly, Defendants fail to provide a basis to reduce fees and expenses in connection with Klapach & Klapach’s invoices.

D.    “Other Expenses”

Defendants argue Plaintiffs cannot recover as “other expenses” (1) $132,231.54 paid to Development Specialists, Inc. (“DSI”) in connection with consulting and forensics services other than amounts paid to DSI in connection with the preparation of Shelly Cuff’s expert report or testimony in the Greenway Case; (2) $36,801 paid to RSM US LLP (“RSM”) in connection with the processing of server data and the review of hard copy documents; and (3) $15,225 paid to Signature Resolution as mediator’s fees in connection with an unsuccessful mediation of the parties’ disputes.  (Opposition Attorney Fees, pg. 7.)  Defendants do not dispute expert witness fees in the amount of $15,112.50 paid to Eric Sussman.

Initially, Plaintiffs were required to include these amounts on their memorandum of costs.  (C.R.C., Rule 3.1700.)  Moreover, other than the time spent in preparation of Cuff’s expert report and her testimony, Plaintiffs have not established entitlement to the expert fees paid to DSI and RSM.  However, Plaintiffs have provided summary billing without any specification.  As to the mediator’s fees, Plaintiffs have failed to provide any authority that these fees benefited the common fund.

Accordingly, Defendants provide a basis to reduce $214,257.54 in “other expenses” to DSI, RSM, and Signature Resolution.

Damages Payable to Barth

Defendants argue the $911,940 in attorneys’ fees it did not challenge in the first half of their opposition to the motion for attorneys’ fees should be reduced to account for the fact that a significant portion of the damages awarded by the Court are “simply making a ‘round trip’ to Barth” because Barth holds a 12.66% interest in Centerville and a 10% interest in JBR Alondra, for which approximately $1.5 million will flow directly back to Barth and LLC members will not obtain benefit.  (Opposition, pg. 8.)  The Court is not persuaded by Defendants’ unsupported argument.

Conclusion

Accordingly, Plaintiffs’ motion for attorneys’ fees is granted in the reduced total amount of $1,401,491.50.

Dated: January _____, 2023

Hon. Monica Bachner

Judge of the Superior Court