TENTATIVE RULING

Calendar: 2 

Date:    9/30/2022         

Case No:      19 GDCV00388

Case Name: Canales v. Ideal Kitchen Supply, Inc., et al. 

                                                      MOTION FOR ATTORNEYS’ FEES

Moving Party: Plaintiff Ricardo Canales       

Responding Party: Defendant Ideal Kitchen Supply, Inc.    (No Opposition)

RELIEF REQUESTED:

Award plaintiff attorneys’ fees in the sum of $205,875.00 as an element of the 

costs of suit. 

SUMMARY OF FACTS:

This action was originally brought as an unlawful detainer action brought by plaintiff Ricardo Canales alleging that he is the landlord of premises in Glendale, and that defendant Ideal Kitchen Supply, Inc. entered into a written agreement with plaintiff to rent the premises for a fixed term, was served with a 3-day notice to pay rent or quit and failed to comply with the requirements of the notice by the required date. 

On May 28, 2019, the matter was called for a jury trial, final status conference and motion for summary judgment/adjudication filed by plaintiff Ricardo Canales as against defendant Ideal Kitchen Supply.  

The motion for summary judgment/adjudication was denied as it related to damages.  The court granted summary judgment as to the breach of the lease as to certain clauses, as follows:

“Court now GRANTS Summary Judgment as to breach of the lease as to the clauses concerning subletting and transfer business to new owner. Pursuant to Paragraph 12.1(a) and (b) of the lease, both require prior written consent of the landlord.  The facts are undisputed that Defendant’s did not obtain prior written consent of plaintiff, the landlord, for either the subletting of the premises, or of the transfer of ownership of the defendant’s businesses to the new owners. See Canales Declaration Paragraph 6; Exhibit A, Paragraph 12.1(a) and Paragraph 12.1(b). Pursuant to Paragraph 12.1(d), subletting or assignment without the lessor (Plaintiff’s) consent is a default per Paragraph 13.1(d) and is non-curable at the landlords’ election.  Id. Paragraph 10; Exhibit A, Paragraph 12.1(d); Paragraph 13.1(d). Plaintiff also has a 3-day Notice to Vacate premises based on subletting and assigning the premises without lessor’s prior written consent, in violation of the above referenced provisions of the lease. Toproff Declaration Paragraph 3: Exhibit, B. Landlord has elected to treat this breach as non-curable. Canales Declaration Paragraph 10.

The minute order also states: “Pursuant to an oral stipulation by Counsel, Defendant will turn over possession of the property by turning over the keys to the subject property by Friday.” 

On May 31, 2019, at an OSC re Entry of Judgment, counsel for defendant turned over the keys to counsel for plaintiff in open court, which counsel for plaintiff represented would be accepted on condition that defendant had vacated the premises and removed all other occupants. The court’s minute order states, “In the event that there are other unnamed occupants, Plaintiff may upon ex parte application restore Motion for Summary Judgment to calendar and Judgment in favor of Plaintiff to be Granted.”  It does not appear from the file that a judgment has been entered or notice of entry of judgment served.  

On June 27, 2019, plaintiff filed a First Amended Complaint for breach of lease agreement, alleging that defendant Ideal Kitchen Supply breached the commercial lease agreement by failing to pay appropriate rental amounts and other charges, failing to obtain and provide proof of proper insurance, holding over after the three-day notice, failing to maintain and repair the premises, and vacating the premises prior to the expiration of the lease.  

The FAC also alleges that defendants Norik Barseghian and Rita Gharibians executed a written guaranty of the lease pursuant to which they guaranteed defendant Ideal Kitchen Supply’s prompt performance of the Lease Agreement obligations to Plaintiff.  

Defendant Ideal Kitchen Supply filed a cross-complaint against plaintiff Canales as a cross-defendant, as well as against cross-defendants Hudson Commercial Partners, Inc., a real estate broker, and real estate agents Kelly Betpolice and Peter Steigleder, alleging that cross-defendants understood that when cross-complainant Ideal Kitchen Supply entered into the lease a major consideration for inducing Ideal to enter into the lease was Canales’ consent to permit the subletting of a portion of the premises to Global Packaging, Inc. for occupancy of approximately 50% of Ideal’s monthly base rent.   It is also alleged that cross-defendants failed to disclose and suppressed facts concerning the premises having major issues with hazardous materials and toxic gases, and other defects, including that the building, roof, skylights and other areas allow water to deluge the premises when it rains.  It is alleged that if Ideal had known of these conditions, it would not have entered into the lease, that these issues were not discovered until months into the lease, and that cross-complainant has been damaged by the conduct of cross-defendants.  The cross-complaint alleges causes of action for suppression of facts, rescission, negligent misrepresentation of fact, nuisance, breach of contract, breach of covenant of good faith and fair dealing, and breach of fiduciary duty.

The file shows that on April 14, 2022, at the Final Status Conference in this matter, the court noted there was no appearance by or for the defendant, conferred with counsel for plaintiff regarding the FSC as well an OSC re: Corrected Jury Instruction, and an OSC re: Revival of Suspended Corporate Defendant Ideal Kitchen Supply, Inc., and ruled, “The answer is stricken, and the cross-complaint is dismissed.”  

On April 18, 2022, the matter was called for trial. The minute order from that date indicates the court ruled on motions in limine, and further ruled:

“The Court makes a ruling on its own motion based on the pleadings pursuant to CCP 438 (a)(2) and 438 (c)(ii) and is therefore dismissing the defendants Norik Barseghian and Rita Gharibians.

The Court finds the guaranty was not signed by any of these defendants. The guaranty is not part of the lease or any of the addendums.  Norik Barseghian and Rita Gharibians were not named as defendants in the original unlawful detainer. The Court is not making a finding as to whether or not the guaranty is enforceable as a stand-alone document. 

Plaintiff counsel is to submit a dismissal as to Norik Barseghian and Rita Gharibians with prejudice. 

The Court to signs [sic] the proposed order as it deals with Ideal kitchen re: default prove-up 

The Court proceedes [sic] with the Non-Jury trial as a default prove-up.”

The default prove up was conducted, the witness and admitted exhibits were listed, and the court further ruled:

“Judgment is to be entered for Plaintiff Ricardo Canales, an individual against Defendant Ideal Kitchen Supply, Inc., a California Corporation on the Amended Complaint (1st) filed by Ricardo Canales, an individual on 06/27/2019 for past rent due in the amount of $748,241.00 and interest of $52,326.00 for a total of $800,567.00. 

Plaintiff counsel is to prepare judgment after hearing.”

[Minute Order 4/18/22].

On April 19, 2022, plaintiff filed a Request for Dismissal, requesting dismissal of the action without prejudice as to Norik Barseghian and Rita Gharibians only.  The dismissal was entered as requested the same date. 

On April 20, 2022, defendants Barseghian and Gharibians filed an Objection to Plaintiff’s Request for Dismissal, arguing that plaintiff lost his right to voluntarily dismiss the action against those defendants without prejudice upon the court announcing its decision to adopt its tentative ruling on defendants’ Motion in Limine No. 1 and after the commencement of trial.   

On April 21, 2022, the court heard an ex parte application by plaintiff for order striking proposed order and minute order.  The court granted the ex parte application, and ordered:

“The Court corrects its minute order of April 18, 2022 nunc pro tunc and pursuant to CCP section 473(d) as a clerical error as follows:

The Court does not rule on Defendant’s Motion in Limine #1 but announced a tentative ruling to grant this motion.  The Court does not adopt its tentative ruling as a final ruling and does not enter any ruling on Defendant’s Motion in Limine #1.  

Plaintiff dismisses without prejudice defendants Norik Barseghian and Rita Gharibians. 

The Court proceeds with the Non-Jury Trial as a default prove-up.”

[Minute Order, 4/21/22]. 

 

On May 23, 2022, the court signed and filed as its order an Order re Notice of Errata, ordering that the FAC filed in this action is deemed amended to identify Plaintiff Ricardo Canales in his capacity as the trustee of the Canales Family 1987 Trust rather than as an individual.  

On June 15, 2022, the court signed and filed the Judgment by the court after court trial, indicating defendant did not appear at trial, and entering judgment for plaintiff Canales as trustee and against defendant Ideal Kitchen Supply, Inc. in the total sum of $800,567.00, with attorney fees to be awarded “per motion,” and costs awarded “per memo.”  

On August 5, 2022, the court heard a motion for attorney’s fees brought by defendants Norik Barseghian and Rita Gharibians, which was denied, the court finding that the matter as to those parties was voluntarily dismissed prior to the commencement of trial.  

On August 9, 2022, defendants Barseghian and Gharibians filed a Notice of Appeal of an order after judgment. 

On August 24, 2022, a Notice of Default was filed, informing appellant that the appeal has been placed in default for failure to timely pay deposit for Reporter’s Transcript or take alternative action under statute, and failure to timely pay a $50 fee for holding the Reporter’s Transcript in trust. 

ANALYSIS:

Plaintiff Ricardo Canales seeks to recover against defendant Ideal Kitchen Supply, Inc. the attorney’s fees plaintiff incurred in this matter. 

As an initial matter, the Judgment in this matter was for plaintiff “Ricardo Canales, as trustee of the Canales Family 1987 Trust.”  Any fees will accordingly only be awarded in favor of that party, not plaintiff as an individual.   

In general, under CCP § 102:

 

 “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties...”

Under CPC section 1032(b), “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”  Section 1033.5 (a) provides that an allowable cost under §1032 includes attorney’s fees, when authorized by contract, statute or law.  CCP § 1033.5 (a)(10).    

Where there is an agreement for attorney’s fees, Civil Code 1717 provides: 

“(a) In an action on a contract, where the contract specifically provides that attorney’s 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 attorney’s fees in addition to other costs. ...Reasonable attorney’s fees shall be fixed by the court and shall be an element of the costs of suit.”

CCP § 1032 defines “prevailing party”:

“(4) “Prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.  When any party recovers other than monetary relief and in situations other than as specified, the “prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides...”

(Emphasis added). 

Under Civil Code section 1717 (b)(1), with exceptions not applicable here, “the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract.”  

Here, plaintiff argues that since plaintiff is the party who recovered greater relief in the action on the contract, plaintiff is the party prevailing on the contract as against defendant Ideal Kitchen and is entitled to attorneys’ fees. 

 Plaintiff argues that the Lease Agreement between the parties includes an attorneys’ fees provision, which is briefly quoted in the Memorandum.  Plaintiff has failed to submit the Lease Agreement with the moving papers to permit the court to confirm the existence of such a provision and its terms.   

The court has located the Lease Agreement entered into by “Ricardo R Canales, Canales Family Trust,” as Lessor, and “Ideal Kitchen Supply, Inc.,” as Lessee attached as Exhibit A to the First Amended Complaint filed on June 27, 2019.  The Lease Agreement includes a provision stating, in pertinent part:

“31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule but shall be such as to fully reimburse all attorneys' fees reasonably incurred.”

[FAC, Ex. A, Lease Agreement, para. 31].  

Plaintiff has sufficiently established entitlement to all attorneys’ fees reasonably incurred in this matter pursuant to contract.   There is no opposition, so no argument that plaintiff is not entitled to reasonable fees.  The motion accordingly granted.  

Court’s Determination of Reasonableness of Fees

The California Supreme Court in PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084 established the standard for evaluating the appropriate amount of attorney’s fees to be awarded:  

 

“[T]he fee setting inquiry in California ordinarily begins with the "lodestar," i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. "California courts have consistently held that 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."   Margolin v. Regional Planning Com.  (1982) 134 Cal. App. 3d 999, 1004 1005 [185 Cal. Rptr. 145].) The reasonable hourly rate is that prevailing in the community for similar work.  Id. at p. 1004; Shaffer v. Superior Court (1995) 33 Cal. App. 4th 993, 1002 [39 Cal. Rptr. 2d 506].) 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, supra, 20 Cal. 3d at p. 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 p. 48, fn. 23.)

...After the trial court has performed the calculations of the lodestar, 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 section 1717 award so that it is a reasonable figure

"It is well established that the determination of what constitutes

reasonable attorney fees is committed to the discretion of the trial court . . .

 [Citations.]   The value of legal services performed in a case is a

matter in which the trial court has its own expertise. [Citation.] The trial

court may make its own determination of the value of the services contrary to,

or without the necessity for, expert testimony. [Citations.] The trial court

makes its determination after consideration of a number of factors, including

the nature of the litigation, its difficulty, the amount involved, the 

skill required in its handling, the skill employed, the attention given, the

success or failure, and other circumstances in the case." (Melnyk v.

Robledo (1976) 64 Cal. App. 3d 618, 623 624 [134 Cal. Rptr. 602].)

PLCM, at 1095. (emphasis added).

The Court also held that the standard of review with respect to this determination is abuse of discretion:

 “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong’-- meaning that it abused its discretion.”

PLCM at 1094, quoting Serrano v. Priest (1977) 20 Cal.3d 25, 49.

The fees sought are $205,875, sought at a rate of $450 per hour, for 457.5 hours of work.   The declaration supporting this motion attaches a spreadsheet prepared from time sheets prepared by each attorney assigned to the case, and contains the date, a description of the services rendered, time spent, and the fee calculation.   [Nussbaum Decl., para. 5, Ex. A/5].   The attachment does not identify this case by name or number, but the declaration indicates the time relates to this case, and the dates and services appear to track the documents in the court file on this matter.   The file shows that the case has been pending since March of 2019, that plaintiff filed a motion for summary judgment/adjudication, resulting in an unlawful detainer judgment, and that there has been one discovery motion, various applications for writs, several hearings, and significant paperwork, including motions in limine, submitted in preparation for trial.  The attachment shows that there was activity on discovery, preparation of an amended complaint, and various communications with the client, and time spent in settlement discussions.  [Ex. A/5].  It appears there were also issues of jury waiver, the suspended status of defendant, and the motion for attorneys’ fees by the guarantor defendants which took time to address, as well as time spent preparing this motion for fees.  [Id.].  The hours spent on these matters total 457.5 hours, which is substantial, and the total fees sought are $205,875.00.   A review of the billings shows no obvious irregularities or duplication of efforts between the attorneys assigned to the matter.  

Overall, the fees sought do not appear disproportionate to the work done or the result obtained.  

In addition, there is no opposition here, and as argued in the moving papers, it is generally the burden of the party challenging the reasonableness of fees sought to make specific objections.  See Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363: 

“An “assertion [that] is unaccompanied by any citation to the record or any explanation of which fees were unreasonable or duplicative” is insufficient to disturb the trial court's discretionary award of attorney fees. (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1248, 132 Cal.Rptr.2d 57.) 

Raining Data Corp., at 1375-1376. 

In Premier Medical Management Systems, Inc. v. California Ins. Guarantee Ass’n (2008, 2nd Dist.) 163 Cal.App.4th 550, the Second District held: 

“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.”

Premier, at 564.

No such arguments are asserted here, and there are no obvious problems with the fees as claimed.  The motion is granted, and the fees are awarded in the full sum sought. 

RULING:  

[No Opposition]

Motion for Order Awarding Attorneys’ Fees in Favor of Plaintiff is GRANTED. 

The Court finds that plaintiff Ricardo Canales, as trustee of the Canales Family 1987 Trust, was a prevailing party in this matter, and the party prevailing on the contract in the action, and that the matter arose out of a written Lease between the parties which provides that the prevailing party is entitled to reasonable attorneys' fees.  

The Court finds that reasonable attorneys’ fees incurred in this matter are $205,875.00 [$205,875.00 sought] which are to be awarded to plaintiff Ricardo Canales, as trustee of the Canales Family 1987 Trust, and against defendant Ideal Kitchen Supply, Inc., to be added to the Judgment. 

 GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.