Judge Randolph M. Hammock, Case 20STCV40645 2022-08-29 Tentative Ruling

RESPONDING PARTY: Defendants/Cross-Complainants Gardens of Paradise, LLC; Ronit Waizgen; and Shaul Yakovi

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs the People of the State of California, the County of Los Angeles, and Muntu Davis, M.D., M.P.H., brought this Complaint against Defendants Ben and Reef Gardens, Inc., Gardens of Paradise, LLC, Shaul Yakovi, and Ronit Waizgen. Plaintiffs sought injunctive relief to prevent Defendants from hosting gatherings during the Covid-19 pandemic. Cross-Defendants then Cross-Complained against the County for (1) Violation of the First Amendment and California Constitution Article I, Section 2, (2) violation of procedural due process, (3) violation of substantive due process, (4) violation of Equal Protection Clause of 14^th Amendment, (5) Violation of 5^th and 14^th Amendment Takings Clause, (6) Violation of legitimate police powers, and (7) declaratory and injunctive relief.

The County then moved to strike the Cross-Complaint pursuant to the Anti-SLAPP statute. This court granted the motion as to the First, Third, Sixth, and Seventh causes of action in their entirety. (See Ruling 11/9/21.) The Court also granted the motion as to the Second, Fourth, and Fifth causes of action “except to the extent premised on the denial of a CUP application.” (Id.)

Plaintiff/Cross-Defendant moves for an order awarding attorney fees and costs pursuant to its anti-SLAPP motion. Defendant filed an untimely opposition.[1] This court exercises its discretion to treat the motion as unopposed.

Plaintiff/Cross-Defendant’s motion for attorney’s fees and costs is GRANTED, as modified herein.

The Plaintiff/Cross-Defendant is awarded a total amount of $42,000 as its reasonable attorney’s fees in connection with its successful special motion to strike in this case.

A prevailing defendant on a special motion to strike “shall” be entitled to recover its attorney’s fees and costs. (CCP 425.16(c)(1).) A party may file a noticed motion for attorney's fees after receiving a successful ruling on the anti-SLAPP motion. (Martin v. Inland Empire Utilities Agency (2011) 198 Cal. App. 4th 611, 631.)

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 has broad discretion in determining the amount of a reasonable attorney's fee award which will not be overturned absent a “manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence.” (Bernardi v. County of Monterey (2008) 167 Cal. App. 4th 1379, 1393-94. 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 Plaintiff/Cross-Defendant objects to the entirety of the Defendants/Cross-Complaints untimely filed opposition. It is correct to note that the opposition was due on August 16, 2022, and that it was untimely filed on August 19, 2022. Be that as it may, the experienced team of lawyers representing the County still had plenty of time to file a reply, if one was needed. They could have asked for additional time for a reply (which would have been granted). They are free to orally argue their reply, if need be, at the hearing. Given there was nothing new, magical, or unanticipated said in the opposition, no such reply is needed.

The objection is OVERRULED. The Court will read and consider the opposition papers within its sound discretion to do so. The County will not suffer any undue prejudice as a result thereof.

A defendant who partially succeeds on an anti-SLAPP motion generally is considered a prevailing party and may be awarded his or her fees and costs unless “the results of the motion were minimal and insignificant” so that defendant did not achieve any “practical benefit” from bringing the motion. This determination lies within the “broad discretion” of the trial court. (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal. App. 4^th 328, 340.) However, only those fees and costs incurred in connection with the successful portion of the anti-SLAPP motion may be recovered. (Jackson v. Yarbray (2009) 179 Cal. App. 4th 75, 82.) Thus, “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.”

Here, there is little question the County’s Anti-SLAPP Motion was successful. The County struck four of the Cross-Complaint’s causes of action in full. The remaining three were substantially narrowed: five of six factual allegations supporting those causes of action were struck. Thus, the County is the prevailing party, and is entitled to recover attorney’s fees for the successful portion of the motion.[2]

The County submits the hourly rate of its partners Amnon Siegel and Jason Tokoro, both of whom bill at $950 per hour. Also working on the case was associate Andrew Schrader, who bills at $695 per hour. They were assisted by three other non-attorneys billing at $325, $325, and $165 per hour, respectively. The County submits these hours are reasonable “based on the quality of [the firm’s] services and the value that the market places on them.” (Mtn. 16: 9-10.) The County also notes that the firm has charged the County a discounted rate that is less than the firm’s standard rates because of the volume of business that the County provides the firm. Notwithstanding, they contend that they should recover based on their standard hourly rates. (See, e.g., Nemecek & Cole v. Horn, 208 Cal.App.4th 641, 651–52 (2012) (prevailing party is entitled to fees based on reasonable hourly rates, even if the client was charged a lower discounted rate; see also, Pasternack v. Mccullogh (2021) 65 Cal.App.5^th 1050, 1054-1055 [There is no “paid in full” or “made whole” rule in awarding attorney’s fees. A court may award reasonable fees greater than was actually paid by the client as part of a discounted rate or package deal.)

Under the totality of the circumstances and based upon general prevailing rates in the Los Angeles area for this type of litigation, this court will award an average rate for all services in this case at $600 per hour. This is a reasonable rate based on the complexity of the case, the quality of services provided, and the attorneys’ relative experience.

The County says its counsel has billed 192.1 hours of work—or roughly 4 complete working weeks—on the anti-SLAPP motion. The County says its hours are reasonable because it “had to research numerous causes of action brought under both the U.S. and California Constitutions.” (Mtn. 15: 17-22.) The County also contends “GOP’s counsel prolonged the process by failing to file a timely opposition, filing an ex parte application to continue the original hearing on the Anti-SLAPP Motion, failing again to file a timely opposition, and then filing an untimely and overlength opposition just days before the continued hearing date.” (Id.) Recognizing the motion did not dispose of the entire Cross-Complaint, the County purports to have reduced its fee request by 10% “to account for the minimal cross-claims that remain.” (Mtn. 13: 10-11.)

The fee award “should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee.” (Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1133 [emphasis in the original].) A prevailing defendant on an anti-SLAPP motion is entitled to seek fees and costs incurred in connection with the anti-SLAPP motion itself but is not entitled to an award of attorney's fees and costs incurred for the entire action. (Wanland v. Law Offices of Mastagni, Holstedt & Chiurazzi (2006) 141 Cal. App. 4th 15, 21.)

The County contends it should also recover fees incurred in preparing its demurrer, which it filed concurrently with the anti-SLAPP motion. In support, they cite the federal Ninth Circuit case Graham-Sult v. Clainos, 756 F.3d 724 (9th Cir. 2014.) In that case, a party objected to hours incurred separate from an anti-SLAPP, which “included time lawyers spent on the motion to dismiss, reply, other filings, document review, and preparing initial disclosures.” (Id. at 752.) The court found the district court's decision to award fees other than those exclusively incurred in responding to the anti-SLAPP motion was not an abuse of discretion. (Id. at 752.) The County, however, has not cited any California authority permitting a party to recover fees for a demurrer filed with an anti-SLAPP. Nonetheless, this Court agrees that the County’s other actions, including responding to Plaintiff’s ex parte application to continue the hearing date on the anti-SLAPP, were related to the motion and are recoverable. This is also the case for preparing the instant fee motion.

Although there were some complex issues in this matter, the hours quoted are clearly excessive and unreasonable. In fact, nearly every task shown in the billing records appears grossly inflated. (See, e.g., Siegel Decl., 39.) To illustrate: in total, counsel claims to have spent 18.1 hours just to “prepare for and attend the hearing on the anti-SLAPP motion.” Counsel claims to have spent 13.1 hours preparing its 8-page opposition to Cross-Complainant’s ex parte motion to continue the anti-SLAPP hearing. Perhaps most shocking, by this Court’s calculation, counsel says it spent over 60 hours preparing the instant fee motion. To repeat: over sixty (60) hours on a fee motion![3]

Even broadly construing the hours billed, there is no justification for billing nearly 200 hours on this motion. Judge Doyle, who ruled on the anti-SLAPP motion, remarked at the beginning of the hearing on the motion that “unlike a lot of SLAPP motion[s]…this one was pretty clear cut.” (Siegel Decl., Exh. I, 1: 23-24.) Indeed, the firm promotes that it “does high-end trial work,” “is regularly opposite large, prestigious law firms,” and most of its attorneys “come from top law schools and big law firms.” (Mtn. 16: 3-4.) As another court has said in a similar context, “[s]uch a motion should not have been such a monumental undertaking.” (Maughan v. Google Tech., Inc. (2006) 143 Cal. App. 4th 1242, 1251.)

Considering the totality of the circumstances—including the complexity of the motion, the quality of the work, and the motion’s substantial success in striking the majority of the Cross-Complaint—the court finds that a total of 70 hours were reasonably expended relating to the anti-SLAPP motion. Accordingly, utilizing a lodestar approach, and in view of the totality of the circumstances, this court finds and awards a total amount of $42,000.00 in attorney’s fees, calculated by multiplying $600/h x 70 hours.

If appropriate and allowed by law, the County may file and serve a proposed judgment consistent with this and the prior rulings of this court in connection to the special motion to strike.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.

[1] This court notes that Defendant/Cross-Complainant also failed to oppose the anti-SLAPP motion itself.

[2] More specifically, this Court rejects the suggested approach in the opposition that this Court merely award 4/7ths of the total fees incurred, since the County only prevailed in four out of the seven causes of action in the cross-complaint. (Opposition, Argument II a.) However, there is no legal authority for such a simplistic approach or formula. The key is the relative importance or significance of each cause of action stricken as it relates to the totality of the complaint/cross-complaint. It is the substance and quality of each cause of action– not its total quantity.

[3] It is well established that a trial court has the discretion to deny a request for attorney’s fees altogether, even though it may be required by law, whenever the request for attorney’s fees is grossly excessive and/or shocks the conscience of the court. “A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990-991 [citing Serrano v. Unruh (1982) 32 Cal.3d 621, 635; accord, Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137.]) This court respectfully submits that this motion treads dangerously close to a Chavez situation.

MOTION TO SET ASIDE DEFAULT

MOVING PARTY: Defendant, Ben and Reef Gardens, Inc.

RESPONDING PARTY: Plaintiff, County of Los Angeles

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiffs the People of the State of California, the County of Los Angeles, and Muntu Davis, M.D., M.P.H., brought this Complaint against Defendants Ben and Reef Gardens, Inc., Gardens of Paradise, LLC, Shaul Yakovi, and Ronit Waizgen. Plaintiffs sought injunctive relief to prevent Defendants from hosting gatherings during the Covid-19 pandemic. Cross-Defendants then Cross-Complained against the County for (1) Violation of the First Amendment and California Constitution Article I, Section 2, (2) violation of procedural due process, (3) violation of substantive due process, (4) violation of Equal Protection Clause of 14th Amendment, (5) Violation of 5th and 14th Amendment Takings Clause, (6) Violation of legitimate police powers, and (7) declaratory and injunctive relief.

Defendant Ben and Reef Gardens LLC (“B&R”) now moves for an order to set aside the default entered against it on June 02, 2021. Plaintiff has opposed. Judge Doyle initially heard this motion on January 3, 2022. Judge Doyle issued a written tentative denying Defendant’s motion to set aside the default, but instead, he set the matter for a “motion setting hearing.” (See, Minute Order, 1/3/22). Judge Doyle subsequently retired before issuing any final ruling, and this case was subsequently transferred to Department 49.

TENTATIVE RULING:

Defendant B&R’s Motion to Set Aside Default is GRANTED.

Moving party to give notice, unless waived.

DISCUSSION:

Motion to Set Aside Default

Defendant Ben and Reef Garden LLC moves under CCP Section 473(b) to set aside the default entered against it on June 2, 2021. Under the discretionary provisions of Section 473(b), the Court “may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” (CCP § 473(b).) To obtain relief under this provision, the application for relief must be made “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding.” (Ibid.) This type of application must also be “accompanied by a copy of the answer or other pleading proposed to be filed therein.” (Ibid.)

For relief to be warranted, any mistake must be something other than professional incompetence or ignorance of the law. (Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1206.) The term “surprise” refers to “some condition or situation in which a party is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against.” (Ibid., internal quotations omitted.) Similarly, to be excusable, a litigant’s inadvertence or neglect must have been “such as might have been the act of a reasonably prudent person under the same circumstances.” (Ibid.)

Defendant contends the default occurred only because it was suspended due to tax liabilities. Defendant contends that once default was entered, it engaged counsel to resolve its complex tax situation such that it would no longer be suspended.

At the time of the original hearing on this motion, Judge Doyle issued a Tentative denying the motion. The Tentative stated:

Defendant has not established that its conduct was excusable. At the very least, Defendant learned that it was suspended in November 2020 when Plaintiff pointed such out in its ex parte briefing. Defendant did not initiate action to remedy this until seven months later when default was entered on June 2, 2021. Defendant did not pay its taxes, knew that a lawsuit existed against it, and chose to do nothing about the situation until default was officially entered.

(See Minute Order, 01/03/2022.)

On February 22, 2022, Defendant B&R filed a Reply in support of its Motion. In that filing, Defendant argues this court “should remember that Ben and Reef was only served in this litigation on March 18, 2021, then defaulted on June 2, 2021 and revived on October 4, 2021—all within a very short time despite (i) a complex tax situation that required engaging accountants to correct, amend and file new tax returns, and (ii) contending with a Franchise Tax Board that was physically closed, working with limited staff and resources during the ongoing COVID-19 pandemic.” (Reply 2: 6-11.)

It is well established that there is a strong preference in hearing cases on their merits. Given the state of the COVID-19 pandemic in late 2020 and early and mid-2021, Defendant has adequately demonstrated that its admitted neglect was “excusable” under the totality of the circumstances.

This court will exercise its discretion to set aside the default. Defendant B&R has demonstrated that its default and resulting delay were the result of navigating a tax situation. Although much of this was indeed self-inflicted, the court recognizes that some of the delay may have been out of Defendant’s control. Moreover, the trial date formerly scheduled for February of 2022 has been vacated. This court finds the County would suffer little, if any, undue prejudice if the default is set aside. In doing so, this court notes that “[b]ecause the law favors disposing of cases on their merits, ‘any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations]. (Austin v. Los Angeles Unified Sch. Dist. (2016) 244 Cal. App. 4th 918, 929.)

Accordingly, Defendant B&R’s Motion to Set Aside the Default is GRANTED. Defendant B&R are to file and serve a separate stand-alone Answer, as previously lodged with this Court.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: August 29, 2022 ___________________________________

Randolph M. Hammock

Judge of the Superior Court