Judge Randolph M. Hammock, Case 19STCV33849 2023-03-16 Tentative Ruling

Plaintiff WVS SPE, LLC (“Plaintiff”) brought the instant action against Defendants Lloyd Sugarman (“Sugarman”) and Robert Azinian (“Azinian”), asserting a single cause of action for breach of written guaranty. Plaintiff alleges Defendants have failed to pay rent, costs, and expenses they personally guaranteed to be paid to Plaintiff for the lease of Ike’s Sandwich Place of Westwood, Inc.

Subsequently, Defendant Sugarman filed a Cross-Complaint against Defendant Azinian for (1) breach of contract, (2) breach of fiduciary duty, (3) accounting, and (4) declaratory relief. Defendant Azinian also filed a Cross-Complaint, asserting a cause of action for (1) declaratory relief against both WVS and Sugarman, and for equitable indemnity against Sugarman only.

The determination of reasonable amount of attorney fees is within the sound discretion of trial courts. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095; Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal. App. 4th 1127, 1134.) “The determination of what constitutes a reasonable fee generally ‘begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate….’” “[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award….” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 154.) In setting the hourly rate for an attorney fees award, courts are entitled to consider the rate of “‘fees customarily charged by that attorney and others in the community for similar work.’” (Bihun v. AT&T Information Systems, Inc. (1993) 13 Cal. App. 4th 976, 997 overruled on other grounds by Lakin v. Watkins Associated Indus. (1993) 6 Cal. 4th 644, 664.) The burden is on the party seeking attorney fees to prove reasonableness of the fees. (Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal. App. 4th 603, 615.) The Court need not explain its calculation of the amount of attorney’s fees awarded in detail; identifying the factors considered in arriving at the amount will suffice. (Ventura v. ABM Industries Inc. (2012) 212 Cal.App.4th 258, 274-75.)

The Continuing Guaranties in this case—in which Defendants personally guaranteed the obligations of Ike’s Sandwich Place of Westwood, Inc. under its commercial lease with Plaintiff—formed the basis of the Complaint. On November 11, 2022, this court entered judgment in Plaintiff’s favor in the sum of $1,236,409 following Plaintiff’s successful motion for summary judgment.

Pursuant to an attorney’s fee provision in the Guaranties, Plaintiff now brings this motion for attorney’s fees and costs as the prevailing party. Plaintiff seeks total fees and costs in the amount of $376,083.22 against Defendants Azinian and Sugarman jointly and severally. In support of its motion, Plaintiff contends (1) the fee award is authorized by the guaranties, (2) that it is the prevailing party in this action, and (3) that the fees requested are reasonable.

In any 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.

Azinian does not contest that WVS is the prevailing party or that the subject guaranty contained an attorney's fees clause. (Opp. 1: 26-27.) Instead, he only contests the reasonableness of the fees sought. This court therefore finds that Plaintiff is the prevailing party in this case, and pursuant to the guaranties, is entitled to recover its reasonable attorney’s fees.

Three professionals worked on this matter for Plaintiff. Attorney Steven S. Karic, who billed the bulk of the hours, billed at rates between $595 and $650 per hour. (Karic Decl. ¶ 12.) Also on the case was David A. Householder billing at rates between $495 and $520 per hour, and David A. Newman billing at rates between $470 and $520 per hour. Negligible time is also attributed to Sidney A. Hamburg at $275 per hour, and to paralegal Valery Ballesteros at $180 per hour.

The court finds the hourly rates to be reasonable based on the complexity of the case, the quality of services provided, and the attorneys’ respective experiences. Defendant does not contend otherwise, or present any evidence that the rates are inconsistent with the rates commonly charged for similar work in the Los Angeles area. Given the multiple attorneys billing at different rates, this court will award a blended hourly rate of $580 per hour as a reasonable rate approximation for purposes of the lodestar.

In total, Plaintiff’s counsel attests to have billed over 600 hours on this matter beginning to end. (Karic Decl. ¶ 12.) In opposition, Defendant challenges the reasonableness of the time spent. In particular, he points to the following time entries as unreasonably excessive: 132.5 hours of attorney time to draft the motion for summary judgment and reply papers; 50.90 hours of attorney time to draft the application for a writ of attachment; 12.2 hours of attorney time to draft a nine (9) page trial brief; 31.4 hours of attorney time to draft a motion to strike; and 45.5 hours of attorney time to draft an opposition to Azinian's motion for leave to amend his answer and to file a cross-complaint. (Opp. 3: 20-25.)

This court agrees with Plaintiff that Defendants’ strategy likely “made this case far more expensive than necessary.” (Mtn. 12: 5.) That approach now has consequences. Plaintiff responded in turn by taking the litigation steps necessary to vindicate its rights under the guaranties, culminating with the successful motion for summary judgment. “Parties who litigate with no holds barred in cases such as this, in which the prevailing party is entitled to a fee award, assume the risk they will have to reimburse the excessive expenses they force upon their adversaries.” (Stokus v. Marsh (1990) 217 Cal.App.3d 647, 653-654.) “A party cannot litigate tenaciously and then be heard to complain about the time necessarily spent by the plaintiff in response.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 638.)

This court believes, generally, that Plaintiff’s litigation posture—and all steps taken in furtherance thereof—was reasonably necessary under the circumstances of the case. Therefore, Plaintiff should recover fees for all of these actions. Be that as it may, this does not mean the actual time spent on those tasks was reasonable. This court agrees with Defendant that in some instances, the time reflected on the time sheets is objectively excessive, especially for a case that ended without a trial.

The Complaint contains a single cause of action for breach of written guaranty. The facts were minimal and largely undisputed. By all accounts, this case was not complex, and the time spent should reflect that reality. Indeed, Plaintiff concedes “this case was relatively straightforward at the outset.” (Mtn. 12: 10.) Although this court will not ignore counsel’s commendable advocacy, nor the highly favorable result it obtained for its client, the simple fact is the time spent here was not justified.

Most, if not every task shown in the billing records, appears somewhat excessive. As calculated by Defendant and not disputed by Plaintiff, the records reflect that counsel spent approximately 132.5 hours on the motion for summary judgment alone. Whether counsel actually spent 132.5 hours on the MSJ is beside the point—even accepting that it did, it was unreasonable to do so. Given the relatively straightforward facts and law in this case, “[s]uch a motion should not have been such a monumental undertaking.” (Maughan v. Google Tech., Inc. (2006) 143 Cal. App. 4th 1242, 1251.)

The same is true of Plaintiff’s other filings in this case. Indeed, the problem infects even the instant motion: Plaintiff’s counsel estimates “at least another ten hours of time reviewing the oppositions of both Defendants to this Motion, preparing a reply, and appearing at the hearing of the Motion.” (Karic Decl., ¶ 21.) That estimation is not a reasonable one.

To further illustrate the discrepancy, consider a comparison of the hours billed by counsel. A “comparative analysis of each side’s respective litigation costs may be a useful check on the reasonableness of any fee request.” (Mountjoy v. Bank of America, N.A. (2016) 245 Cal.App.4th 266, 273, 281 [quoting Donahue v. Donahue (2010) 182 Cal.App.4th 259, 272].). Here, Defendant shows that from August of 2021 through November of 2022—the period of time that Defendant Azinian was represented by its current counsel—Defendant’s counsel billed 184.30 hours. (Hawes Decl. ¶ 5.) During that same period, it appears that Plaintiff’s counsel billed more than twice that amount. To be fair, Plaintiff was also dealing with two separate Defendants. But there was still a substantial overlap between the two. This again suggests the time purportedly spent is excessive.

Thus, using a lodestar approach, and in view of the totality of the circumstances, this Court awards Plaintiff its reasonable attorney’s fees in the amount of $203,000.00. This was calculated by multiplying the blended hourly rate of $580 by 350 hours, which this court deems to be the total amount of reasonable time spent under the totality of the circumstances. The court declines to award a multiplier, as it is not justified in this situation.

Plaintiff also filed a memorandum of costs on November 28, 2022, seeking a total of $6,558.66 in costs. This reflects $1,469.30 for filing and motion fees; $2,159.00 for deposition costs; $209.00 for service of process; $62.17 for attachment expenses; $250.00 for surety bond premiums; $138.21 for court-ordered transcripts; $451.10 for electronic filing fees; and $1,819.88 for court reporters and other miscellaneous fees. (Memorandum of Costs, 11/28/2022.)

In the instant motion, Plaintiff now seeks an additional $3,636.17 in costs, “consisting of $2,500.00 in expert witness fees; $580.16 in online research and database (e.g., Westlaw) charges; $56.21 in other Superior Court fees and charges; and $499.80 in imaging, copying and printing charges, none of which were included in WVS’ Memorandum of Costs.” (Mtn. 17: 6-11 [emphasis added].)

In general, the prevailing party is entitled as a matter of right to recover costs for suit in any action or proceeding. (Code Civ. Proc., §1032(b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Scott Co. Of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) Allowable costs under Code of Civil Procedure section 1033.5 must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation, and must be reasonable in amount. An item not specifically allowable under section 1033.5(a) nor prohibited under subdivision (b) may nevertheless be recoverable in the discretion of the court if they meet the above requirements (i.e., reasonably necessary and reasonable in amount). (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774.) In determining litigation success, Courts should “respect substance rather than form” and consider “the unique facts and circumstances of each case.” (Marina Pacifica Homeowners Assn. v. S. California Fin. Corp. (2018) 20 Cal. App. 5th 191, 206.)

Defendant has not filed a motion to tax costs and does not point to any item in the cost bill that it contends is unrecoverable. It is the challenging party that has the burden of demonstrating that those costs are unreasonable or unnecessary. (Adams v. Ford Motor Co., 199 Cal. App. 4th 1475, 1486 (2011); 612 South LLC v. Laconic Limited Partnership, 184 Cal. App. 4th 1270, 1285 (2010).)