Judge: Monica Bachner, Case: 21STCV11107, Date: 2023-03-23 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: 21STCV11107    Hearing Date: March 23, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff Alexa Brown’s motion for attorneys’ fees is granted in the reduced amount of $75,000.  Each Broker Defendant is responsible for 1/6 of the total award. ($12,500.)

Plaintiff Alexa Brown (“Brown”) (“Plaintiff”) moves for an order awarding attorney fees against Defendants Oliver Moussazadeh (“Oliver”), Alexander Moussazadeh (“Alexander”), Revilo Realty, Inc. (“Revilo Realty”), Alimon Williams (“Williams”), Garth St. George Davis (“Davis”), and Kyle Lynn Boseman (“Boseman”) (collectively, the “Broker Defendants”), jointly and severally, in the amount of $238,134.00 representing a lodestar of $158,756.00 and a 1.5 multiplier enhancement, pursuant to C.C.P. §998 settlements reached between Plaintiff and Broker Defendants.  (Notice of Motion, pg. 2; C.C.P. §998; Civil Code §1695.7.)  Plaintiff’s revised supplemental brief indicates she seeks total fees in the amount of $120,875.50 plus a 1.5 lodestar enhancement, for a total award of $181,313.25.  (Supp. Brief, pgs. 1-2.)

Request for Judicial Notice

Broker Defendants’ 2/15/23 request for judicial notice is granted as to the Verified First Amended Complaint filed on March 9, 2021, in Bessellieu v. Elzy, Los Angeles County Superior Court case number 21STCV04558; the Verified Complaint filed on March 5, 2021, in Gloria Brown v. John Thomas, LLC, Los Angeles County Superior Court case number 21CHCV0010; and the Verified First Amended Complaint filed on July 9, 2021 in Fisher v. O.Rhyan Capital Management, LLC, Los Angeles County Superior Court case number 21VECV00409.  (D-RJN, Exhs. 1, 2, 3.) 

Background

Plaintiff’s complaint arises from the sale of her house in Lancaster, California (“Property”) and was filed on the basis of the Home Equity Sales Contract Act (“HESCA”).  On September 30, 2022, Broker Defendants served statutory offers to compromise under C.C.P. §998 (the “998 Offers”).  On October 26, 2021, Plaintiff settled with Defendants involved in the sale of the Property via C.C.P. §998 settlement offers.  This Court entered judgments on the accepted the §998 offers on June 23, 2022.  

Motion for Attorneys’ Fees

Pursuant to HESCA, a prevailing equity seller is entitled to the recovery of “reasonable attorneys’ fees and costs.”  (Civ. Code §1695.7.)

Here, Plaintiff is the prevailing equity seller and is entitled to the recovery of reasonable attorneys’ fees and costs.  (Civ. Code §1695.7.)  A party receiving a net monetary payment under a §998 settlement is a prevailing party.  (See Wong v. Thrifty Corp. (2002) 97 Cal.App.4th 261, 265 [discussing prevailing party on a contract].)  Broker Defendants’ argument that the terms of the Purchase Agreement preclude a fee award because Plaintiff failed to mediate before commencing this litigation is unavailing.  Defendant Oliver’s declaration attaching the Purchase Agreement lacks foundation, does not set forth Defendant Oliver’s personal knowledge of the Purchase Agreement, does not reference Defendant Oliver or Defendant Revilo Realty, and is not signed by any of the Broker Defendants.  (See Decl. of Moussazadeh, Exh. 1 [Purchase Agreement].)  The mediation provision of the Purchase Agreement does not apply to “disputes or claims with Brokers” unless the brokers “in writing, agree to such mediation prior to or within a reasonable time after the dispute or claim is presented to the Broker.”  (See Purchase Agreement ¶22(A).)  Broker Defendants have not presented evidence they agreed in writing to mediate any dispute with Plaintiff, and therefore the provision is not applicable to this motion.  Moreover, there is an express exception to the provision for “the filing of a court action to preserve a statute of limitations.”  (See Purchase Agreement ¶22(C)(2)).  Here, the action was filed the day before a possible expiration of the statute of limitations: three years from the date of the resale of the Property, which was alleged to violate Civil Code §1695.6(b).  This Court previously found this action timely on the basis of this analysis. (See 9/17/21 Minute Order, pg. 9 [“Plaintiff in fact filed the Complaint on the last day possible such that the Complaint is timely.”])  Accordingly, the mediation provision does not bar recovery of Plaintiff’s fees.

Second, Broker Defendants’ argument that the Complaint was based on false allegations are improper on a post-judgment motion for attorneys’ fees, particularly a motion based on a §998 offer.  Further, Plaintiff has standing under HESCA to bring the underlying claim for damages because she was an equity seller under Civil Code §1695.7.  (See Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 916 [“The prerequisites for standing to assert statutorily-based causes of action are determined from the statutory language, as well as the underlying legislative intent and the purpose of the statute.”].)  Under the statute, Plaintiff was entitled to pursue equitable remedies beyond mere damages, including restitutionary and non-restitutionary disgorgement.  (Civ. Code §1695.7; see Meister v. Mensinger (2014) 230 Cal.App.4th 831, 398 [restitutionary disgorgement]; County of San Bernardino v. Walsh (2007) 158 Cal.App.4th 533, 542 [non-restitutionary disgorgement].)  Here, Plaintiff expressly sought disgorgement of the commissions paid to the Broker Defendants as well as any other monies wrongfully received. (Decl. of Spencer, Exh. A at pgs. 28:23-25, 29:2).

A.   Reasonable Fees

“[T]the fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.)  In making this calculation, the reasonable hourly rate is the “prevailing rate for private attorneys in the community” handling litigation of the same type.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.)  The court may then adjust that result by using a multiplier to enhance the total fee to be paid to reflect circumstances specific to the case, such as the novelty of the questions involved, the skill displayed by the attorneys, and the contingent nature of the fee award.  (Id. at pg. 1132; PLCM Group, 22 Cal.4th at pg. 1095.)

Plaintiff’s counsel declares: (1) Counsel Suzanne Burke Spencer’s hourly rate is $590 in this matter, (2) Counsel Robert S. Sall’s hourly rate is $700, (3) Stephanie Brault’s hourly rate is $305, (4) Michael A. Sall’s hourly rate is $350, and (5) Derik Lewis’ hourly rate is $595.  (Decl. of Spencer ¶¶14-18; Decl. of Lewis ¶¶4-6.)  Plaintiff has sufficiently demonstrated counsels’ hourly rates are reasonable in their community of practice.  (Decl. of Spencer ¶¶14-18; Decl. of Lewis ¶¶4-6.) 

Plaintiff’s supplemental brief indicates she does not seek fees for time spent opposing the motion to strike of Financial Fitness, LLC or for time spent on discovery disputes and discovery motion practice with Financial Fitness.  (Supp.-Decl. of Spencer ¶5; Supp.-Decl. of Lewis ¶6.) 

Plaintiff’s supplemental brief argues she should be allowed to recover her fees incurred in seeking discovery from the underlying defendants and in responding to discovery for those defendants because Broker Defendants relied on discovery responses and document production from the other defendants.  (Supp.-Decl. of Spencer ¶9.)  Plaintiff’s counsel argues that while Plaintiff alleged multiple causes of action, they all arose from a common nucleus of fact arising from the short sale of Plaintiff’s home to Buyer Defendants, which violated HESCA.  (See Decl. of Spencer, Exh. A at ¶78.)  HESCA requires certain provisions of the purchase contract that were not included in the instant case and prohibits the resale of the property until the expiration of the “time within which the equity seller may cancel the transaction has fully elapsed.”  (Civ. Code §§1695.2, 1695.3, 1695.6(b).)

Plaintiff’s argument is unavailing because Plaintiff’s first cause of action only deals with technical violations of HESCA, such as Broker Defendants failing to provide certain disclosures, including the seller’s right to cancel within a specified period of time.  (Civ. Code §1695.5(a).)  The remaining causes of action assert that the Broker Defendants breached fiduciary duties by failing to fully market the property and that buyer Apostolos and the Broker Defendants were “business partners” who entered into arrangements to secure “secret profits” relating to the purchase and subsequent flip of the home.  Plaintiff’s argument that she can recover fees for answering discovery establish no nexus between the Buyer and the Broker Defendants and overexpands the scope of applicable discovery.  A reduction of fees will be reflected in the final lodestar determination.

In addition, Broker Defendants argue that the fee requests are excessive.  The Court agrees.  For example, 24.6 hours for filing a complaint virtually identical to other complaints is excessive.  Similarly, the hours spent on discovery to multiple defendants is excessive.   A reduction of fees will be reflected in the final lodestar determination.

Lodestar Multiplier

The Court denies Plaintiff’s request for a 1.5 lodestar multiplier.  While Plaintiff’s representation is on a purely contingent basis, this case was not complex and was resolved at the pleading stage on C.C.P. §998 offers that Plaintiff accepted.

Final Lodestar Determination

Based on the foregoing, Plaintiff’s motion for attorneys’ fees is granted in the reduced amount of $75,000 against Broker Defendants.  Each Defendant is responsible for 1/6 of the total award. ($12,500.)

Dated: March _____, 2023

Hon. Monica Bachner

Judge of the Superior Court