Judge: Ralph C. Hofer, Case: 23GDCV00879, Date: 2023-10-27 Tentative Ruling
Case Number: 23GDCV00879 Hearing Date: February 16, 2024 Dept: NCD
TENTAIVE RULING
Calendar: 4
Date: 2/16/2024
Case
No: 23
GDCV00879 Trial Date: None
Set
Case
Name: HR
General Construction, Inc. v. Sakamoto, et al.
MOTION FOR ATTORNEY’S FEES
(Special Motion to Strike)
Moving Party:
Defendants
Scott Sakamoto and Jamie Sakamoto
Responding Party: Plaintiff HR General Construction, Inc.
RELIEF REQUESTED:
Award of
attorneys’ fees in the amount of $16,965.00
SUMMARY OF FACTS:
Plaintiff HR General Construction,
Inc. (HR General Construction) alleges that in December of 2021 plaintiff
entered into a written contract with defendants Scott Sakamoto and Jamie
Sakamoto, and that defendants breached the agreement by failing to pay the
final $5,550 due on the contract and brought defendant Oswaldo Diaz in as the
countertop contractor, and did not allow plaintiff to hang the painted, ready
to hang doors.
The complaint also alleges that the
Sakamoto defendants filed a false claim under oath against plaintiff’s bond
company, claiming plaintiff was responsible for a granite countertop that did
not fit, and was not color coordinated, when the truth was that the Sakamotos
contracted directly with defendant Diaz for the counter tops. The complaint alleges that the cabinet maker
defendant Custom Furniture Design misaligned the cabinets by a 2” offset above
the sink, and that defendant Diaz mis-measured the sink and counter area,
resulting in a first, expensive granite counter which did not fit, and a second
granite countertop had to be purchased.
Plaintiff alleges that defendants
the Sakamotos filed a false claim knowing that plaintiff HR General
Construction had no liability for the counter problems.
The complaint also alleges a cause
of action for negligence against defendants Diaz and Custom Furniture Design.
Defendants Scott Sakamoto and Jamie
Sakamoto have filed a Cross-complaint against plaintiff HR General Construction
as cross-defendant, as well as against HR General Construction’s principal,
Rafael Herrera, and the bonding company Hudson Insurance Company. The cross-complaint alleges that
cross-defendant HR General Construction breached the written and oral contracts
for the construction project by causing problems with the construction which
caused delay, failing to complete construction on several items, performing
substandard work, and ultimately abandoning the project.
It is also alleged that after HR
General Construction stopped work on the project, cross-complainants filed
complaints with the Contractor’s State License Board and the Better Business
Bureau, and in January of 2023 were advised by the CSLB representatives that
they could file a claim against HR General Constructions’ surety bond under
Business & Professions Code section 7107.
The complaint alleges that cross-complainants became aware that HR
General Construction’s contractor’s licensed had expired in November of 2022,
and, fearful that the license bond was the only avenue to recover damages,
cross-complainants submitted a claim on HR General Construction’s license bond
to cross-defendant Hudson Insurance.
The cross-complaint alleges causes
of action for breach of written contract, breach of oral contract, money had
and received, and money due on contractor’s license bond.
Defendants the Sakamotos brought a
special motion to strike portions of the complaint, which was originally heard
on October 27, 2023. Plaintiff had not
filed opposition to the motion, and defendants had filed a Notice of
Non-Opposition to the motion, indicating that timely opposition had not been
filed or served. At the hearing,
counsel for plaintiff appeared and requested a continuance of the hearing. The court continued the hearing to December
15, 2023, permitted opposition papers to be filed pursuant to statute, and
ordered there would be no further continuance without a doctor’s note. [Minute Order, 10/27/2023].
No timely
opposition was filed to the motion. The
file shows that on the morning of the hearing, at 9:56 AM, plaintiff filed a
written opposition to the motion.
At the December hearing, both
parties appeared, through counsel. The
court had issued a tentative ruling via posting on its website. After fulling considering argument, both
written and oral, and the evidence presented, the court granted the motion in
part, finding:
“Defendant Scott Sakamoto and Jamie
Sakamoto’s UNOPPOSED Special Motion to Strike Complaint Pursuant to Code of
Civil Procedure Section 425.16 is GRANTED as to the second cause of action for
fraud. The moving papers have sufficiently established that the second cause of
action of the Complaint arises out of protected activity, shifting the burden
to plaintiff to establish a probability that plaintiff will prevail on the
claims. Plaintiff has failed to oppose the motion, so has failed to submit
argument or evidence showing that there is a probability of prevailing. The
Court also notes that the fraud cause of action does not appear to properly
allege such a claim against the moving defendants based on representations made
not to plaintiff, but to a third party, and upon which plaintiff has failed to
sufficiently allege it reasonably relied.
The second cause of action for
fraud in the complaint is ORDERED STRICKEN WITH PREJUDICE as to moving
defendants Scott Sakamoto and Jamie Sakamoto.”
[Minute Order, 12/15/2023, pp. 8-9].
The minute
order further states, “To the extent the defendants argue that if the motion is
granted, they should be awarded attorney’s fees and costs, defendants have
correctly observed that such relief may be sought by the filing of a noticed
motion supporting such an award.”
Defendants
bring this motion for the court to fix the amount of attorney’s fees to be
awarded to defendants for successfully making the special motion to strike.
ANALYSIS:
Defendants
seek attorneys’ fees pursuant to CCP section 425.16(c)(1), which provides, in
connection with special motions to strike, with certain exceptions not
applicable here:
“…in
any action subject to subdivision (b), a prevailing defendant on a motion to
strike shall be entitled to recover his or her attorney’s fees and costs.”
Where
a defendant brings a successful motion to strike under section 425.16, these
fees are considered mandatory. Ketchum
v. Moses (2001) 24 Cal.4th 1122, 1131. The fee award should ordinarily include
compensation for all hours reasonably spent, including those relating solely to
the fee. Ketchum, at 1133,
1141.
The party seeking fees bears the
burden of establishing entitlement to an award and of documenting the
appropriate hours spent and hourly rates, and the court may require that party
to produce records sufficient to provide a proper basis for that determination.
Computer Xpress, Inc. v.
An
award of fees under this section is reviewed for abuse of discretion, and the
trial court’s determination “will not be disturbed unless the appellate court
is convinced that it is clearly wrong.” Ketchum,
at 1132.
The
trial court’s determination of the amount of a fee award will be upheld on
appeal if supported by substantial evidence.
Macia v. Hartwell (1997) 55 Cal.App.4th 669, 676. The Second District in Macia affirmed
the trial court’s award of attorney’s fees under subdivision (c) in the amount
of $44,445, noting the trial court had based its award on substantial evidence:
“The
trial court reviewed the itemized billings and limited the award for fees to
the anti-SLAPP motion. (Dove Audio, Inc. v. Rosenfeld, Meyer & Susman,
supra, 47 Cal. App. 4th 777, 785; Lafayette Morehouse, Inc. v. Chronicle Publishing
Co. (1995) 39 Cal. App. 4th 1379, 1383-1384 [46 Cal. Rptr. 2d 542].) The
award did not include fees for the federal district court proceedings or fees
incurred prior to the motion to strike. Substantial evidence supports the
reasonableness of the fee award. (Church of Scientology v. Wollersheim,
supra, 42 Cal. App. 4th 628, 658-659.)
Macia,
at 676.
The court of appeal in Wilkerson v.
Sullivan (2002) 99 Cal.App.4th
443 summarized the trial court’s role in determining fees:
“The
reasonableness of attorney fees is within the discretion of the trial court, to
be determined from a consideration of such factors as the nature of the
litigation, the complexity of the issues, the experience and expertise of
counsel and the amount of time involved. (Church of Scientology v.
Wollersheim (1996) 42 Cal.App.4th 628, 659, [49 Cal. Rptr. 2d 620].) The
court may also consider whether the amount requested is based upon unnecessary
or duplicative work.”
Wilkerson,
at 448.
Defendants in this matter prevailed
on the portion of their motion in which they sought to strike the second cause
of action for fraud, based on defendants’ alleged improper submission of a
claim to Hudson Insurance to recover on plaintiff HR General Construction’s
license bond. The motion concedes that
the court denied defendants’ request to strike specific allegations from the
breach of contract cause of action and prayer for damages. The court in the previous minute order
stated:
“Defendants
also briefly argue that specific allegations referring to filing of the claim
with the bonding company should likewise be stricken from the first cause of
action claim for damages, and the exemplary damages attachment. However,
defendants fail to make a sufficient legal argument to establish that the
communications with the bonding company as set forth as one of multiple basis
for those claims are properly stricken from the complaint under the anti-SLAPP
statute.”
[Minute
Order 12/15/2023, p. 8].
Defendants argue that the court may
award fees to a party that only partially prevailed on a special motion to
strike.
Defendants rely on Mann v.
Quality Old Time Service, Inc.
(2006) 139 Cal.App.4th 328, in which the court of appeal
found that the trial court had not abused its discretion in determining that
defendants were prevailing parties on an anti-SLAPP motion in that case where
they were unsuccessful in striking three of the four challenged causes of
action, but that the trial court erred in failing to reduce the fees to reflect
that defendants were only partially successful on the motion. The court of appeal discussed those issues as
follows:
“Given
the express legislative preference for awarding fees to successful anti-SLAPP
defendants, a party need not succeed in striking every challenged claim to be
considered a prevailing party within the meaning of section
425.16. A contrary conclusion would require a partially prevailing
defendant to bear the entire cost of the anti-SLAPP litigation at the outset of
the case. This would create a strong disincentive for a defendant to bring the
motion, undermining the legislative intent to encourage defendants to utilize
the anti-SLAPP procedure to eliminate SLAPP claims and to discourage plaintiffs
from bringing meritless SLAPP claims.
(See Ketchum,
supra, 24 Cal.4th at p. 1131, 104 Cal.Rptr.2d 377, 17 P.3d 735.) On
the other hand, there is no reason to encourage a defendant to bring an
anti-SLAPP motion where the factual and legal grounds for the claims against
the defendant remain the same after the resolution of the anti-SLAPP motion. (Endres
v. Moran, supra, 135
Cal.App.4th at pp. 955–956, 37 Cal.Rptr.3d 786.) Where the results
of the motion are “ ‘minimal’ ” or “insignificant” a court does not abuse its
discretion in finding the defendant was not a prevailing party. (Id. at p. 956,
37 Cal.Rptr.3d 786 (conc. opn. of Mosk, J.); see Los Angeles
Times v. Alameda Corridor Transportation Authority, supra, 88
Cal.App.4th at pp. 1391–1392, 107 Cal.Rptr.2d 29.)
We
thus hold that a party who partially prevails on an anti-SLAPP motion must
generally be considered a prevailing party unless the results of the motion
were so insignificant that the party did not achieve any practical benefit from
bringing the motion. The determination whether a party prevailed on an anti- SLAPP
motion lies within the broad discretion of a trial court. (See Jackson v.
Homeowners Assn. Monte Vista Estates–East (2001) 93 Cal.App.4th 773, 789, 113
Cal.Rptr.2d 363.) We review this determination on an abuse of
discretion standard.
Applying
these principles, we conclude the trial court did not abuse its discretion in
determining defendants were prevailing parties in the underlying litigation.
Defendants successfully eliminated the trade libel cause of action. Although
trade libel bears similarity to the defamation claim that remained in the
litigation, the two causes of action are not identical. Whereas defamation
concerns injury to the reputation of a person or business, trade libel involves
false disparagement of the quality of goods or services. (Guess, Inc.
v. Superior Court (1986) 176 Cal.App.3d 473, 479, 222 Cal.Rptr. 79;
Erlich v.
Etner, supra, 224 Cal.App.2d at pp. 73–74, 36 Cal.Rptr. 256.)
The elimination of the trade libel cause of action thus had the potential to
narrow the litigation with respect to the damage issues and the focus of the
claimed false statements. Additionally, the Mann court's acknowledgment
that an absolute privilege applies to defendants' reports of WSSI's activities
to government entities precluded WSSI from thereafter pursuing any recovery
based on defendants' communications with government agencies. (Mann, supra, 120
Cal.App.4th at p. 108, 15 Cal.Rptr.3d 215.) By bringing the
anti-SLAPP motion, defendants thus successfully narrowed the scope of the
lawsuit, limiting discovery, reducing potential recoverable damages, and
altering the settlement posture of the case.
Mann, at 339-340.
In this case, the court has reviewed
the special motion to strike and the prior ruling, along with the current
moving, opposition and reply papers, and finds that the results here, the
elimination of the fraud cause of action, were not so insignificant that
defendants did not achieve any practical benefit from bringing the motion. The elimination of the fraud cause of action,
an intentional tort, has significantly streamlined the case, reduced the possibility
of plaintiff successfully pursuing punitive damages, and eliminated the need
for certain discovery related to that claim.
The elimination of such a cause of action and a fraud basis for recovery
of punitive damages also presumably alters the settlement posture of the
case. Defendants are accordingly
prevailing parties on that part of their motion to strike, entitled to
reasonable attorney’s fees incurred in bringing that portion of their motion,
and in seeking the attorney’s fee award.
Plaintiff has filed a timely
opposition to the motion, arguing that defendants should be denied their
attorney’s fees for bringing the special motion to strike because defendants
have engaged in conduct which gives rise to a defense of unclean hands. Plaintiff also argues that defendants are
not entitled to anti-SLAPP protection because they engaged in criminally
illegal conduct.
As argued in the reply, plaintiff
has cited no legal authority under which unclean hands has been recognized as a
defense to be raised in opposition to an attorney’s fees motion in the context
of a special motion to strike. As noted
above, once defendant has prevailed in a special motion to strike, there are
only very narrow grounds to challenge the entitlement to fees, including those
discussed above where the success of the motion is only partial. The opposition does not address the
appropriate legal analysis or factors, including the effect that the granting
of the motion has had on the litigation and defendants’ position in it. The opposition does not in any case establish
that defendants have engaged in unclean hands in connection with bringing the
special motion to strike or this motion, as opposed to in connection with the
underlying claims in this lawsuit.
To the extent plaintiff now argues
that defendants’ special motion to strike has no merit, the time to have made
those arguments was in opposition to the special motion to strike, not now,
after the court has already fully considered and ruled on that motion. As argued in the reply, the merits of the
claim are not before the court on a fee motion. Plaintiff in opposition has failed to
establish that defendants were not prevailing parties on the motion, entitled
under CCP section 425.16 (c) to their fees.
This situation leaves the issue of
the amount of fees to be awarded.
Defendants seek a total of 16.8 hours
in fees incurred in connection with the special motion to strike at the hourly
rate of $650 per hour ($10,920.00) and 9.3 hours at the same hourly rate in
connection with the fee motion ($6,045.00), for total fees of $16,965.00.
Defendants submit the declaration of
counsel, John Ly, who explains his qualifications, and the justification for
the billing rate of $650 per hour in this matter. [Ly Decl., paras. 9, 16]. The billing rate is sufficiently
justified. There is only one attorney
for which time is being claimed.
The declaration also attaches invoices
with time broken down by tasks and hours spent at the billing rate. [Ly Decl., Exs. C, D]. The declaration explains that 4.3 hours has
been deducted from the fees for preparing the special motion to strike to
allocate that time to the preparation of the cross-complaint, indicating that
the declaration that was prepared for the special motion to strike formed the
basis of the cross-complaint. [Ly
Decl., para. 15].
Defendants argue that the fees should
not be apportioned because the motion succeeded in having the only claim moved
on stricken from the complaint.
However, as noted above, the special motion to strike had also sought to
strike certain other portions of the complaint, and, under the authority relied
upon by defendants, since defendants were only partially successful, the fees
awarded should be limited to those incurred for the successful portion of the
motion.
The court of appeal in Mann,
in connection with the amount of fees to be awarded in such circumstances noted:
“An
award of attorney fees to a partially prevailing defendant under section
425.16, subdivision (c) thus involves competing public policies: (1)
the public policy to discourage meritless SLAPP claims by compelling a SLAPP
plaintiff to bear a defendant's litigation costs incurred to eliminate the
claim from the lawsuit; and (2) the public policy to provide a plaintiff who
has facially valid claims to exercise his or her constitutional petition rights
by filing a complaint and litigating those claims in court. (§§ 425.16,
425.17;
see Ketchum,
supra, 24 Cal.4th at p. 1131, 104 Cal.Rptr.2d 377, 17 P.3d 735.) In
balancing these policies, we conclude a defendant should not be entitled to
obtain as a matter of right his or her entire attorney fees incurred on
successful and unsuccessful claims merely
because the attorney work on those claims was overlapping. Instead, the court
should first determine the lodestar amount for the hours expended on the
successful claims, and, if the work on the successful and unsuccessful causes
of action was overlapping, the court should then consider the defendant's
relative success on the motion in achieving his or her objective and reduce the
amount if appropriate.
“This
analysis includes factors such as the extent to which the defendant's
litigation posture was advanced by the motion, whether the same factual
allegations remain to be litigated, whether discovery and motion practice have
been narrowed, and the extent to which future litigation expenses and strategy
were impacted by the motion.
The fees awarded to a defendant who was only partially successful on an
anti-SLAPP motion should be commensurate with the extent to which the motion
changed the nature and character of the lawsuit in a practical way. The court
should also consider any other applicable relevant factors, such as the
experience and abilities of the attorney and the novelty and difficulty of the
issues, to adjust the lodestar amount as appropriate. (See Ketchum,
supra, 24 Cal.4th at p. 1132, 104 Cal.Rptr.2d 377, 17 P.3d 735.)
Mann,
at 344-345, italics in the original.
As noted above, in this case the court
did not strike the other portions of the pleading addressed in the moving
papers. The minute order noted that
defendants had only “briefly” argued for striking other portions and had not
appropriately tied the requests for that relief to the framing of a special
motion to strike.
A review of the moving papers
submitted with the special motion to strike shows that the issue of the
striking of the breach of contract request for damages stemming from the
alleged false claim, and of punitive damages was addressed in the notice of motion
and was also addressed in one paragraph of the procedural history portion of
the memorandum, and in one phrase in the second sentence of the
conclusion. [Special Motion to Strike
Complaint, filed 07/27/2023].
The evident basis for moving to strike
those portions of the complaint was because they were based on the same
protected activity upon which the fraud claim was based, that is, the alleged
false claims made to plaintiff’s bonding company. The argument as to these claims accordingly
overlapped the arguments concerning the fraud cause of action. In fact, the reason the motion was denied as
to those additional portions of the complaint was precisely because the
argument was not developed, and evidently no additional research or analysis
time had been spent on it. Under the
circumstances, the court would estimate that the attorney time to make these arguments
which mention the portions of the pleading which were not stricken would total
no more than half of an hour. The court
accordingly reduces the fees to be awarded for preparation of the special
motion to strike by 0.5 hours at $650 per hour, or $325.00.
This amount leaves a total award of 16.8,
less .5 hours, or 16.3 hours for the motion at $650 per hour ($10,920
requested, reduced by $325) for $10,595.00 for the motion, and 9.3 hours at
$650 per hour for this fee motion for $6,045.00. The grand total to be awarded will be $16,640.
This amount appears to be a reasonable
sum, particularly to achieve the result of striking a fraud claim from this
matter at this early stage of the litigation.
The special motion to strike involved presenting a detailed history of
the parties’ dealings, and research into fairly challenging issues involving
the protected status of statements made to the Contractor’s State License
Board. The motion was never timely opposed
by plaintiff in writing and required two hearings to finally resolve the
issue. The time spent appears
appropriate for the product the trial court received, and the outcome achieved
by counsel.
Plaintiff in the opposition does not
challenge any specific sums being claimed by defendants. Instead, as discussed above, plaintiff argues
that no fees should be awarded due to defendants’ unclean hands with respect to
the transactions between the parties.
It is generally the burden of proof of the party challenging attorney’s
fees as excessive to make specific challenges.
In Premier Medical Management, the Second District set forth the
following burden and standard of proof:
“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 to not suffice.”
Premier,
at 564.
In Premier, the Second
District affirmed a trial court award of $219,909.50 in a case where the
opposing party made no evidentiary challenge to the fees claimed but made
arguments that a joint defense had resulted in duplicative charges, and that
there was duplication between the briefs filed at the trial court and appellate
level. The Second District noted that
the challenging party there had failed to submit the pleadings drafted in the
trial court and on appeal from which the court could verify the claim that
there was an overlap of issues and had otherwise offered no basis to contradict
the declarations and billing records submitted by the moving party. Premier, at 563. The Second District observed:
“Respondents
supported their fee requests with declarations describing the joint defense and
the division of labor, with billing records to establish the hours of
work. Appellants had two options to
oppose such a showing: attack the
itemized billings with evidence that the fees claimed were not appropriate or
obtain the declaration of an attorney with expertise in the procedural and
substantive law to demonstrate that the fees claimed were unreasonable. They did neither.”
Premier,
at 563-564.
Since the
issue of the sum of the award is not addressed specifically in the opposition
here, and no challenge is made to the hours claimed, the court finds that
plaintiff failed to meet any burden here and the fees are awarded with the
minor allocation adjustment made by the court due to defendants only partly
prevailing on the motion.
RULING:
The Court awards fees of $16,640.00 [$16,965.00
requested ($16,640 recommended)], reflecting time the Court has adjusted to
account for the partial success, and which the Court finds was reasonably
expended at a reasonable billing rate to partly prevail on the motion and to
obtain the fee award.
DEPARTMENT D IS CONTINUING
TO CONDUCT AND ENCOURAGE
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