Judge: Monica Bachner, Case: 21STCV18903, Date: 2022-09-29 Tentative Ruling

Case Number: 21STCV18903    Hearing Date: September 29, 2022    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendant Telegraph I, LLC’s unopposed motion for attorneys’ fees is granted in the reduced total amount of $50,000.

          Defendant Telegraph I, LLC (“Telegraph”) (“Defendant”) moves for an unopposed order awarding its attorneys’ fees in the amount of $53,681.25 against Plaintiffs Martin Tate (“Martin”) and Yassi Tate (“Yassi”) (collectively, the “Tates,” “Plaintiffs”).  Plaintiff moves pursuant to a written contract, Civil Code §1717, C.C.P. §1033.5(a)(10)(A).  (Motion, pgs. 5-6.)

          Background

Plaintiffs filed a complaint on May 19, 2021, alleging a cause of action for breach of contract against Defendant.  Plaintiffs alleged Defendant breached a lease assignment and assumption (“Lease Agreement”) for a property Plaintiffs used to operate a car wash; the property was not formally subdivided.  (Complaint ¶¶6-8.)  Plaintiffs alleged the contiguous sublot, leased to McDonalds encroached on their leasehold, and McDonald’s site redevelopment doubled Plaintiffs’ tax burden. (Complaint ¶¶8-11.) Defendant filed an unlawful detainer action against Plaintiffs in August 2019 (Telegraph I, LLC v. Imperial La Mirada, LLC et al., Case No. 19NWUD01948) (“the UD action”). (Complaint ¶12.)  The parties agreed to resolve the UD action pursuant to a signed stipulated agreement.  (Complaint ¶13, Exh. B.)  Plaintiffs alleged Defendant refused to complete the sale and instigated this suit. (Complaint ¶¶21-22.)  On July 26, 2021, Defendant filed a Demurrer, which this Court sustained without leave to amend on December 6, 2021.  (12/06/21 Minute Order.)  On December 28, 2021, the Court ordered this case dismissed with prejudice. Defendant filed this Motion for Attorneys’ Fees on February 25, 2022, seeking attorneys’ fees pursuant to contract. 

          Attorneys’ Fees

Civil Code §1717(a) provides: “In any action on a contract, where the contract specifically provides that attorneys’ fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorneys’ fees in addition to other costs.” 

Civil Code §1717(b)(1) provides: “The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract…”

California courts liberally construe “on a contract” to extend to any action as long it involves a contract and one of the parties would be entitled to recover attorneys’ fees under the contract if that party prevails in its lawsuit.  (San Francisco CDC LLC v. Webcor Construction L.P., (2021) 62 Cal.App.5th 266, 287 [fees recoverable for noncontractual causes of action initiated because of alleged breach of contract].)  As a result, the right to recover attorneys’ fees generally extends to all causes of action that are “inextricably intertwined” with the contract action. (Finalco, Inc. v. Roosevelt (1991) 235 Cal.App.3d 1301, 1307.) Here, the Complaint is on the contract as it explicitly alleges that this action arises out of the contract, as it alleges ““The Agreement and/or Lease contain an attorney’s fee provision. Plaintiffs have retained legal counsel to enforce their rights under the Agreement, which arise out of the Lease.” (Complaint, ¶23.)

C.C.P. §1032(b) provides: “[e]xcept as otherwise expressly provided by statute, a prevailing party is entitled … to recover costs in any action or proceeding.”  Attorneys’ fees awarded pursuant to Civil Code §1717 are allowable as costs under C.C.P. §1032 as they are attorneys’ fees authorized by contract.  (C.C.P. §1033.5(c)(5)(B); C.C.P. §1033.5(a)(10)(A).)  Attorneys’ fees are therefore recoverable as an element of costs.

C.C.P. §1032(a)(4) provides: “‘Prevailing party’ includes …, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant….”

C.C.P. §1021 provides: “the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties[.]”

The Lease Agreement, the governing contract between the parties, includes an attorney fee provision, which provides: “In the event of any action or proceeding brought by either party against the other under this Lease, the prevailing party shall be entitled to recover for the fees of its attorneys in such action or proceeding, including costs of appeal, if any, in such amount as the court may adjudge reasonable as attorney’s fees.”  (Decl. of Ryan, Exh. A.)

Although the Lease Agreement does not define “prevailing party,” courts apply a “pragmatic definition of the extent to which each party has realized its litigation objectives, whether by judgment, settlement, or otherwise.”  (Santisas v. Goodin (1998) 17 Cal.4th 599, 622.)  When a party obtains a simple, unqualified victory by completely prevailing on or defeating all claims in the action and the contract contains a provision for attorney fees, section 1717 entitles the successful party to recover reasonable attorney fees incurred in prosecution or defense of those claims. (Scott Co. of California v. Blount, Inc. (1999) 20 Cal.4th 1103, 1109.) 

Here, Defendant is the prevailing party because this Court sustained its Demurer to the Complaint without leave to amend and dismissal with prejudice was entered in its favor. Under C.C.P. 1032(b), Defendant is entitled to an award of reasonable attorneys’ fees.

Reasonableness of Hourly Rate

The “lodestar” method requires the Court to consider the number of hours reasonably expended by Defendant’s counsel multiplied by the reasonable hourly rate. (PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1095.)  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.  (Ibid.)  In addition, this Court should also consider: “[t]he nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorney’s efforts, his learning, his age, and his experience in the particular type of work demanded….” (La Mesa-Spring Valley School District of San Diego County. v. Nobuo Otsuka (1962) 57 Cal.2d 309, 316.)

Here, Defendant has submitted documentation in support of a claimed 115.85 hours in compensable fees totalling $53,681.25, not including the 5.5 hours incurred by counsel to prepare the instant motion and all supporting documents or 2 hours counsel anticipates devoting to appearing at a hearing on this motion.  (Decl. of Ryan ¶¶12-13, Exh. B.)  Counsel declares that given the litigation involves a related action that spanned more than four years and required extensive legal research, factual investigation, development of claims, and preparation of filings, the amount of time devoted to this matter is reasonable.  (Decl. of Ryan ¶14.)  However, the work performed on the related case is not a basis to impose fees on this case.  Counsel spent a total of 45.5 hours assisting in this case at an hourly rate of $525.00 per hour, totaling $23,861.25.  (Decl. of Ryan ¶15.)  Counsel declares that his hourly rate is comparable to rates charged by attorneys of similar skill, reputation, and experience for litigation and trial concerning contracts and real property. (Decl. of Ryan ¶15.)  Counsel declares he has thirty years of experience representing businesses and individuals in commercial disputes including breach of contract, premises liability, fraud, and negligence cases. (Decl. of Ryan ¶15.)  Counsel also declares the 70.35 remaining hours billed by attorneys in his firm, including Ryan Stearns at $525 per hour for 2.40 hours, Jordan Stern at $420 per hour for 52.40 hours, and Brian Cohen at $420 per hour for 15.60 hours are reasonable.  (Decl. of Ryan ¶16, Exh. B.)  Based on its knowledge of hourly rates in the community, the Court finds the rates reasonable.  This motion was unopposed and therefore does not require consideration of additional hours worked on Defendant’s reply brief or for Defendant’s appearance at a hearing on this motion.  Moreover, it appears that some of the hours billed for preparing the demurrer were excessive.  Accordingly, Defendant’s unopposed motion for attorneys’ fees is granted in the reduced total amount of $50,000.

Dated: September _____, 2022

Hon. Monica Bachner

Judge of the Superior Court