Judge: Olivia Rosales, Case: 19NWCV00853, Date: 2022-08-16 Tentative Ruling

DEPARTMENT SE-C LAW & MOTION PROCEDURES ARE AS FOLLOWS: APPEARANCES: The Court will hear oral arguments on all matters at the scheduled time of hearing. If all counsel intend to submit on the Tentative Order and do not want oral argument, please advise the clerk, in Department “C”, by calling (562-345-3702). If all sides submit on the Tentative Order and the clerk is so advised, the Tentative Order will become the final order of the court and the prevailing party shall give written Notice of Ruling per CRC 3.1312. If the Moving and Responding parties do not agree to submit on the Tentative Order, the motion will be called as calendared for hearing. There is no need to contact Department “C”, as the matter will remain on calendar for hearing. If the Moving party does not call Department “C” to submit on the Tentative Order and there is no appearance by any party, then the motion(s), at the Court’s discretion, may be taken off calendar without ruling on the motion(s). ORDERS: The minute order reflecting the Court’s Order will constitute the final Order. No additional orders should be submitted to the Court for signature unless required by law or by the Court. Prevailing party shall give written Notice of Ruling per CRC 3.1312. Minute orders, which constitute the final Order of the Court, will only be sent to the parties via U.S. mail  for the following: OSC re: sanctions, OSC re: contempt or matters taken under submission after oral arguments or briefing. Counsel or parties may request copies of all other minute orders/final orders either at the clerk’s office or in writing. If a request is in writing, a self-addressed stamped envelope and the appropriate fee for copies shall be submitted.

Case Number: 19NWCV00853    Hearing Date: August 16, 2022    Dept: SEC

SPIRTOS v. BOGARDUS HOMEOWNERS ASSOCIATION, et al.

CASE NO.:  19NWCV00853

HEARING:  8/16/22 @ 9:30 AM

JUDGE:  OLIVIA ROSALES

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TENTATIVE ORDER

I.             Plaintiff Spirtos’s motion to determine prevailing party and for attorney fees is GRANTED in part. Plaintiff is entitled to recover attorney’s fees in the sum of $4,500.00. 

II.            Defendant Bogardus Homeowners Association’s unopposed motion to set reasonable attorney’s fees incurred through the time of Defendant’s two settlement offers to determine if attorney’s fees are available to Defendants under CCP § 998, for an award of Defendant’s attorney’s fees of either $2,875 for work after the 12/1/20 § 998 offer, or $6,075.00 for work after the 2/28/20 § 998 offer, and motion to vacate or tax Plaintiff’s attorney award based on CC § 5975 is GRANTED in part.  Defendant is entitled to recover attorney’s fees in the sum of $5,450.00.

Defendant to give NOTICE.

This is an action arising from a breach of a declaration of covenants, conditions and restrictions establishing a plan of condominium ownership (“CC&Rs”).  Plaintiff Polyn Spirtos alleges that she purchased real property located at 10420 Bogardus Ave., Unit 2, Whittier, CA 90603 and was a member of Defendant Bogardus Homeowners Association aka East Whittier Villas Homeowners Association (“Association”).  Plaintiff paid her monthly assessments, despite Association’s failure to comply with its CC&Rs.  In early 2018, Plaintiff notified Association that she was selling her unit.  Association submitted a “Demand for Payment” to Plaintiff’s escrow company in the amount of $12,240.  Plaintiff agreed to the Demand for Payment because Association represented it would produce an audit and accounting and reduce the amount allegedly owed.  The unit sold, and Association received $12,240 from escrow.  Plaintiff never received the audit or accounting, despite her requests.  On November 6, 2019, Plaintiff filed a complaint against Association, asserting causes of action for:

1.    Breach of Covenant

2.    Common Count for Money Had and Received

3.    Fraud

4.    Negligent Misrepresentation

Association filed a cross-complaint against Plaintiff for:

1.    Breach of Contract

2.    Common Counts – open book account, account stated, money owed.

On August 5, 2021, Association filed a notice of settlement.

On January 24, 2022, stipulated judgment was entered in favor of Plaintiff and against Association.

I.             Plaintiff’s motion

Plaintiff Spirtos moves for a determination that she is the prevailing party in this action and for an award of attorney’s fees in the amount of $61,054.00.

CC § 5975 pertains to enforcement of CC&Rs and provides that “[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”  (CC § 5975.) 

Here, the parties’ stipulated judgment specifically provides Plaintiff is the prevailing party.  (Thomas Decl., ¶ 3, Ex. 1.)  Therefore, Plaintiff is the prevailing party in this action and is entitled to reasonable attorney’s fees.

Reasonableness of Attorney’s Fees

The fee setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. A computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award. 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.  (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)  Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary.  (Id. at 48, n.23.) 

Here, Plaintiff requests $61,054.00 in attorney’s fees calculated as 124.6 hours x $490/hour. 

The court has reviewed the Transaction Report submitted as Exhibit 3 to Thomas’s supplemental declaration, and finds that counsel’s hours are excessive.

The court finds that a reasonable amount of time expended on the items listed in the Report should have been 45.85 hours, calculated as follows: 

9/9/19 – 3/4/20 (date of CCP § 998 clarification letter) = 13.25. 

3/5/20 – 12/1/20 (date of 2^nd CCP § 998 offer) = 18.10.

12/2/20 – 5/26/22 (last itemized date of service) = 14.50

The court finds Thomas’s hourly rate of $490 is excessive.  Although Mark Thomas has been practicing real estate litigation since December 2011, he only has three years of exclusively HOA litigation experience.  (7/26/22 Suppl. Thomas Decl., ¶ 5.)  Therefore, the court sets Thomas’s hourly rate at $400.

While Plaintiff has requested 12.6 hours of work performed by Keith Attlesey, the court has no proof of Attlesey’s legal background, nor was the court able to locate any work performed by Attlesey on the Transaction Report submitted as Exhibit 3 to Thomas’s supplemental declaration.

Therefore, the lodestar calculations are:  45.75 hours x $400, totaling $18,300.00.

After the trial court has performed the lodestar calculations, it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the award so that it is a reasonable figure.  (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-96.)  The factors considered in determining the modification of the lodestar include the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case.  (EnPalm, LLC v. Teitler Family Trust (2008) 162 Cal. App. 4th 770, 774 (emphasis in original).)  A negative modifier was appropriate when duplicative work had been performed.  (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819.)

The court finds that the lodestar calculations should be further reduced pursuant to EnPalm, LLC v. Teitler Family Trust (2008) 162 Cal. App. 4th 770, 774.

This is a simple action involving the payment of HOA assessments.  Plaintiff’s initial demand letter to the HOA demanded return of $12,240 in HOA assessments and $9,600 in attorney’s fees.  (Complaint, Ex. 3.)  These issues could have been resolved in 2019 with Plaintiff’s proof of HOA payments.  Plaintiff argues that it is Defendant’s duty to demonstrate an accounting, and therefore refused to turn over proof of payments.  However, as explained by the HOA, the “documentation from the former board and president John Bale… has been locked in probate since his death on July 23, 2018…. As expressed in prior letter dated January 18, 2019, [the HOA] ask that your client provide documentation establishing the payment of her HOA dues during the time she owned the unit.  Please forward them to the HOA.  I will then attempt to reconcile her documentation to the HOA and bank records.”  (Complaint, Ex. 4.) Throughout this litigation, Defendant has requested two items:  proof of Plaintiff’s HOA payments and proof of attorney’s fees.  Instead of cooperating with Defendant, Plaintiff’s counsel has dragged the action on for over three years, culminating in an excessive attorney’s fees request of $61,054.00, wherein the amount in controversy was only $12,240.00.  Further, Plaintiff’s counsel included claims for fraud and negligent misrepresentation, which prevented Defendant from requesting a defense from its insurance company.  Those claims were not viable as the HOA’s actions were protected by the litigation privilege.  Plaintiff later dismissed these claims by agreement of counsel.  Further, proof of counsel’s attorney’s fees were not provided until this Court ordered counsel to do so on May 31, 2022.

Accordingly, after modifications to the lodestar, Plaintiff is entitled to $15,540.00 in reasonable attorney’s fees, calculated as follows:

9/9/19 – 3/4/20 (date of CCP § 998 clarification letter) = 11.25 x $490 = $4,500.00. 

3/5/20 – 12/1/20 (date of 2^nd CCP § 998 offer) = 15.10 x $400 = $6,040.00.

12/2/20 – 5/26/22 (last itemized date of service) = 12.50 x $400 = $5,000.00.

These fees, however, are subject to the CCP § 998 cost-shifting statute, as delineated below.

II.            Defendant’s motion

“[A]ny party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. The written offer shall include a statement of the offer, containing the terms and conditions of the judgment or award, and a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted.”  (CCP § 998(b).)

“If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.  In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.”  (CCP § 998(c)(1).)

“(A) In determining whether the plaintiff obtains a more favorable judgment, the court or arbitrator shall exclude the postoffer costs.”  (CCP § 998(c)(2).)

Here, Defendant made two CCP § 998 offers on February 28, 2020 (which was later clarified on March 4, 202) and December 1, 2020.

The court has reviewed the CCP § 998 offers and finds that Plaintiff did not obtain a more favorable award (which includes the principle of $9,350.00 plus pre-offer attorney’s fees of $4,500.00 plus court costs of $825.88).

Therefore, Plaintiff “shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.”  (CCP § 998(c)(1).)

Accordingly, Plaintiff is entitled to recover pre-offer attorney’s fees in the sum of $4,500.00. 

Regarding Defendant’s post-offer costs, the court finds Attorney Kirk Kolodji’s hourly rate of $125 per hour is reasonable.  (Kolodji Decl., ¶ 12.) 

The court has reviewed the itemization of services rendered in Kolodji’s declaration at ¶ 13, and finds that counsel’s hours are excessive.

The court finds that a reasonable amount of time expended on the items listed in should have been 43.6 hours x $125 = $5,450.00.

Accordingly, Defendant is entitled to recover attorney’s fees in the sum of $5,450.00.