Judge Robert B. Broadbelt, Case Number: 22STCV00937, Date: 2024-08-15 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 22STCV00937, Date: 2024-08-15 Tentative Ruling

The court considered the moving, opposition, and reply papers filed in connection with this motion.

Plaintiff Marquis Mejia Hill (“Plaintiff”) moves the court for an order awarding attorney’s fees and costs in the amount of $108,315 in his favor and against defendant Citiguard, Inc. (“Defendant”) pursuant to Code of Civil Procedure section 1281.99.

On February 17, 2023, the court issued an order in this action (1) granting Defendant’s motion to compel arbitration and stay proceedings, and (2) ordering Plaintiff and Defendant to submit the claims alleged in Plaintiff’s Complaint to binding arbitration. (Feb. 17, 2023 Order, p. 10:10-14.) Thereafter, on February 20, 2024, the parties lodged a “Stipulation and Proposed Order re: Vacate Arbitration,” in which the parties stipulated that all orders compelling this action to arbitration shall be vacated. (March 3, 2024 Stip. & Order, p. 2:18-19.) On March 3, 2024, the court entered an order on the parties’ stipulation and vacated the court’s February 13, 2023 order compelling this matter to arbitration. (March 3, 2024 Stip. & Order, p. 3:12-16.) Plaintiff filed the pending motion on May 2, 2024, contending that he is entitled to attorney’s fees and costs from Defendant incurred as a result of Defendant’s material breach of the parties’ arbitration agreement. The court agrees.

“The court shall impose a monetary sanction against a drafting party that materially breaches an arbitration agreement pursuant to subdivision (a) of Section 1281.97 or subdivision (a) of Section 1281.98, by ordering the drafting party to pay reasonable expenses, including attorney’s fees and costs, incurred by the employee or consumer as a result of the material breach.” (Code Civ. Proc., § 1281.99, subd. (a).) Code of Civil Procedure “[s]ections 1281.97 and 1281.98 ‘largely parallel’ each other. [Citation.] Whereas section 1281.97 concerns a failure to timely pay ‘the fees or costs to initiate’ an arbitration proceeding (§ 1281.97, subd. (a)(1), italics added), section 1281.98 concerns a failure to timely pay ‘the fees or costs required to continue’ an arbitration proceeding (§ 12891.98, subd. (a)(1), italics added).” (De Leon v. Juanita’s Foods (2022) 85 Cal.App.5th 740, 750.)

First, the court finds that Plaintiff has shown that Defendant materially breached the parties’ arbitration agreement, was in default of arbitration, and waived its right to compel Plaintiff to proceed with that arbitration as a result of its material breach thereof pursuant to Code of Civil Procedure section 1281.98.

Plaintiff has submitted an invoice, dated January 3, 2024, issued to Defendant by the American Arbitration Association (“AAA”) in the amount of $40,250. (Roven Decl., Ex. 4, p. 1.) The AAA advised the parties that Defendant’s payment was “due upon receipt, as of the date of the invoice.” (Roven Decl., Ex. 4A, p. 1.) On February 5, 2024, in response to questioning from counsel for Plaintiff, the parties’ AAA case manager stated that Defendant had not paid the invoice. (Roven Decl., Ex. 5, pp. 2 [Feb. 5, 2024 email from Jonathan Roven], 1 [Feb. 5, 2024 email from AAA’s Daphne Crayne stating as follows: “It doesn’t appear that payment has been applied”].) On that date, counsel for Defendant (1) informed counsel for Plaintiff that Defendant was “not in any financial position to pay the $40,000 invoice[,]” and (2) stated that, if Plaintiff “insist[ed] on returning the matter to Superior Court, [Defendant] will so stipulate so that no motion to vacate the Order to Compel Arbitration is necessary or warranted.” (Id. at p. 1 [Feb. 5, 2024 email from Daniel Josephson].)

Thus, the court finds that Plaintiff has presented evidence showing that Defendant did not pay the fees and costs required to continue the arbitration proceedings within 30 days after the due date as required.

The court acknowledges, as Defendant raises in its opposition papers, that Defendant stipulated to vacate the court’s order compelling the parties to submit this action to arbitration. (March 3, 2024 Stip. & Order; Josephson Decl., ¶ 12.) However, Defendant has not presented evidence or argument showing that (1) the parties, in executing the stipulation, rescinded the arbitration agreement, or (2) Defendant did not materially breach the parties’ arbitration agreement within the meaning of section 1281.98 by failing to pay the fees required to continue the arbitration proceeding within 30 days after the due date. Defendant has not, for example, presented evidence establishing that it did pay the $40,250 invoice within 30 days of the date of the January 3, 2024 invoice.

The court therefore finds that Defendant materially breached the parties’ arbitration agreement under Code of Civil Procedure section 1281.98. Thus, Plaintiff is entitled to an award of attorney’s fees and costs incurred as a result of its material breach. (Code Civ. Proc., § 1281.99, subd. (a).)

Second, the court finds that Plaintiff has shown that he has incurred $4,080 in attorney’s fees and costs as a result of Defendant’s material breach of the arbitration agreement and therefore grants Plaintiff’s motion for attorney’s fees and costs in that amount. (Code Civ. Proc., § 1281.99, subd. (a).)

“[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. . . . .¿ The reasonable hourly rate is that prevailing in the community for similar work.¿ 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.”¿ (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095 (internal citations omitted); Reck v. FCA US LLC (2021) 64 Cal.App.5th 682, 691 [“To determine a reasonable attorney fee award, the trial court applies the lodestar method”].)

The court has reviewed the time entries on the billing statements submitted by Plaintiff. (Roven Decl., Ex. 1, Roven Timesheet; Pl. Appendix of Ex., Ex. 2, Crippen Timesheet; Pl. Appendix of Ex., Ex. 3, Annelyse Gomez Timesheet.) The court acknowledges that Plaintiff has shown that his attorneys have expended 83.7 hours in litigating this action. (Ibid.; Opp., p. 4:9-10, 4:25-27; Reply, pp. 5:4-13 [conceding that there was a clerical error in calculating Crippen’s hours], 6:5-8 [conceding that there was a clerical error in calculating Gomez’s hours].) However, Plaintiff has not cited authority showing that Defendant is required to pay all of the attorney’s fees that he has incurred since commencing this action. Instead, Plaintiff is entitled to receive from Defendant “reasonable expenses, including attorney’s fees and costs, incurred by the employee or consumer as a result of the material breach.” (Code Civ. Proc., § 1281.99, subd. (a) [emphasis added].)

Based on the billing statements submitted by Plaintiff, the court finds that Plaintiff’s attorneys expended a total of 6.70 hours of work incurred as a result of Defendant’s breach of the arbitration agreement, consisting of (1) 0.40 hours expended by attorney Roven to draft the stipulation to vacate the order compelling arbitration, and (2) 6.30 hours expended by attorney Roven to prepare this motion.[1] (Roven Decl., Ex. 1, Roven Timesheet, p. 2.) The other entries set forth the work performed by counsel to, inter alia, prepare pleadings, conduct and review discovery, and engage in other case-related correspondence. (Roven Decl., Ex. 1, Roven Timesheet; Pl. Appendix of Ex., Ex. 2, Crippen Timesheet; Pl. Appendix of Ex., Ex. 3, Annelyse Gomez Timesheet.) Plaintiff did not show, nor do the billing statements reflect, that those hours were expended “as a result of” Defendant’s breach of the arbitration agreement. (Code Civ. Proc., § 1281.99, subd. (a).) The court further finds that a reasonable hourly rate for attorney Roven is $600 in light of Roven’s qualifications, skill, and experience. (Roven Decl., ¶¶ 2-20.)

The court therefore finds that Plaintiff has shown that he incurred $4,020 in attorney’s fees (6.70 hours x attorney Roven’s $600 hourly rate) and $60 in costs as a result of Defendant’s material breach of the arbitration agreement under Code of Civil Procedure section 1298.98. (Code Civ. Proc., § 1281.99, subd. (a); Roven Decl., Ex. 1, Roven Timesheet, p. 2; Roven Decl., ¶ 36 [“I anticipate spending $60 to file this motion”].) The court denies Plaintiff’s request for a multiplier.

The court grants in part plaintiff Marquis Mejia Hill’s motion for attorney’s fees and costs.

The court orders defendant Citiguard, Inc. to pay to plaintiff Marquis Mejia Hill attorney’s fees and costs in the amount of $4,080 within 30 days of the date of this order.

[1] The court notes that there is another entry dated February 5, 2024, showing 0.20 hours of work. (Roven Decl., Ex. 1, p. 2.) However, the billing statement does not include a full description of the work performed, such that the court cannot make a determination that those hours were expended as a result of Defendant’s breach of the arbitration agreement. (Ibid. [stating “Draft correspondence to client re Respondent position on”].)

marquis mejia hill ; Plaintiff, vs. memorial hospital of gardena , et al.; Defendants.	Case No.:	22STCV00937

	Hearing Date:	August 15, 2024

	Time:	10:00 a.m.

	[tentative] Order RE: plaintiff’s motion for attorney’s fees