Judge: Robert S. Draper, Case: 20STCV09517, Date: 2022-10-27 Tentative Ruling

Case Number: 20STCV09517    Hearing Date: October 27, 2022    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Defendants/Cross-Complainants Sally Ing and Samuel Ing’s Motion for an award of Attorneys’ Fees and Costs is GRANTED in the amount of $74,018.49

FACTUAL BACKGROUND

This is a breach of contract action. The Complaint alleges as follows. On January 5, 2018, Plaintiff John Zheng (“Zheng”) and Defendants Sally Ing (“Sally”) and Samuel Ing (“Samuel,” and together with Sally, the “Ings”) entered into a commercial property purchase agreement for the Ing’s purchase from Zheng of a commercial real estate property (the “Property”). (Compl. ¶ 5.) At the same time, the Ings made a money deposit into escrow of $22,500. (Compl. ¶ 5.) On January 6, 2018, Defendants cancelled the contract due to inability to obtain a loan. (Compl. ¶ 7.)

The Ings filed a Cross-Complaint alleging as follows. After entering into the agreement with Zheng, during the due diligence period, the Ings received a title report showing that Zheng was not the owner of the property and that there existed various liens and citations for building code violations, none of which was disclosed by Zheng. (XC ¶ 7.) The Ings gave notice of cancelling the contract pursuant to the terms of the contract, but Zheng refuses to release the $22,500 deposit. (XC ¶ 7.)

PROCEDURAL HISTORY

On March 9, 2020, Zheng filed the Complaint asserting three causes of action:

1.    Fraudulent Inducement;

2.    Breach of Written Contract; and,

3.    Declaratory Relief

On May 5, 2020, the Ings filed a Cross-Complaint alleging four causes of action:

1.    Recission and Restitution;

2.    Declaratory Relief;

3.    Statutory Penalties; and,

4.    Financial Elder Abuse

On June 2, 2020, Zheng filed a Demurrer to the Cross-Complaint.

On September 15, 2020, this Court overruled that Demurrer.

On April 26, 2022, this Court, the Hon. Douglas W. Stern presiding, impaneled a jury for trial.

On April 28, 2022, the Ings made an oral motion for non-suit which the Court took under submission. Additionally, the Ings dismissed their Cross-Complaint.

On June 2, 2022, the Court entered judgment naming the Ings the prevailing party and awarding them the entirety of the $22,500 deposit.

DISCUSSION

      I.          MOTION FOR ATTORNEYS’ FEES

The Ings seek reasonable attorneys’ fees pursuant to a provision in the parties’ purchase contract that states “the prevailing Buyer or Seller shall be entitled to reasonable attorneys’ fees and costs.” (Ex. A, ¶ 29.) Zheng does not object to the Ings’ right to attorneys’ fees but argues that Plaintiff’s claimed fees are excessive.

The fee setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. 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. 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 (1977) 20 Cal.3d 25, 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 48, n.23.) After the trial court has performed the lodestar calculations, 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 award so that it is a reasonable figure. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-96.) 

The factors considered in determining the modification of the lodestar include the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. (EnPalm, LLC v. Teitler Family Trust (2008) 162 Cal. App. 4th 770, 774 (emphasis in original).) A negative modifier is appropriate when duplicative work had been performed. (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819.) 

Here, the Ings seek $82,518.49 in attorneys’ fees and costs. (Motion at p. 3.) This figure represents 239.10 hours of attorney time billed at $300 an hour, and five anticipated hours to reply to Zheng’s Opposition and appear at hearing, also billed at $300 an hour. (Klinkert Decl., ¶ 7.) In addition, the Ings request $9,708.49 in costs. (Ibid.) No lodestar multiplier is requested.

In Opposition, Zheng does not argue that the billing rate is excessive, but that the billed hours are inflated for the following reasons.

A.   Unconscionability

First, Zheng argues that it is unconscionable for the Ings’ Counsel to charge the Ings in excess of $80,000 for a claim that has a maximum value of $22,500. (Opposition at p. 4.)

“The Supreme Court has not adopted a rule that measures a fee award by a proportion of the damages awarded. [Citation] Instead, the court must consider the significance of the overall relief obtained by the prevailing party in relation to the hours reasonably expended on the litigation and whether the expenditure of counsel’s time was reasonable in relation to the success achieved. [Citation].” (Harman v. City and County of San Francisco (2007) 158 Cal.App.4^th 407.)

Here, there can be little doubt as to the Ings’ success, as they were awarded the entirety of the deposit on a motion for non-suit. As such, the Court will not penalize the Ings’ Counsel for mounting a vigorous and ultimately successful defense of their clients claims absent evidence of inflated billing.

B.   Pre-Litigation Activities

Next, Zheng argues that the Ings improperly request $5,700 in fees billed prior to the commencement of this action. Zheng contends that, as the attorney fee provision allows only for recovery related to “any action, proceeding, or arbitration between buyer and seller arising out of [the] agreement,” the Ings may not recover attorney fees for time spent arguing for settlement and in mediation prior to the filing of the Complaint.

In Reply, the Ings note that the Contract contained a provision requiring the parties to mediate before commencing any legal action or arbitration. (Ex. A., ¶26(A).) As the Ings note, “[i]f the contract under which the prevailing litigant is seeking an award of attorney’s fees contains a provision that the fee award is contingent on the performance of an act, such as submitting the dispute to mediation before commencing litigation, a party who commences litigation is liable for the opposing party’s fees after the opposing party prevails in the litigation.” (Johnson v. Siegel (2000) 84 Cal.App.4^th 1087, 1100.)

Here, the Ings initiated the mediation process as required by the contract. And, as they note in their reply, this process was drawn out longer than expected due to several changes in Plaintiff’s representation, and issues with the escrow company holding the deposit in question. Accordingly, the Court finds that proposed pre-litigation expenses are both recoverable and reasonable.

C.   Unrelated Matters

Next, Zheng contends that the billing log contains entries for unrelated matters. Zheng notes that the log shows communication with “Margaret,” “Sharon,” and “Andrew,” none of whom are parties in this action.

In Reply, the Ings note that Margaret, Sharon, and Andrew are the Ings’ family members, with whom the Ings’ Counsel had to communicate as the Ings are in poor health.

Accordingly, the Court finds that there are no unrelated billing hours in the billing log.

D.   Failure to Identify Attorney

Next, Zheng contends that Attorneys’ Fees should be denied as the billing log fails to identify which attorney was doing what work.

As Zheng concedes, each attorney bills $300 an hour, an “amount that is undisputably under market.” (Opposition at p. 5.) However, Zheng argues, the disparity in experience between the attorneys makes it relevant which attorney was doing what work, as the less experienced attorney would require more time to do the same task than a more experienced attorney.

The three attorneys representing the Ings have practiced for between 16 to 38 years. The Court finds that that, considering the experience of all three attorneys and the under market value at which they are billing, the failure to differentiate between each attorneys work does not result in a substantial inflation of attorney fees. 

Next, Zheng argues that several of the tasks performed by the attorneys are largely administrative and could have been performed by paralegals or legal secretaries. Zheng identifies $2,110 worth of such billings.

In Reply, the Ings argue that these tasks were generally performed by attorneys, and notes that the largest of the identified billing blocks was for a “detailed review of all trial exhibits and prepar[ing] exhibit testimony matrix.” The Ings contend that this is work necessarily performed by an attorney.

The Court finds that there is some evidence of administrative work performed by attorneys, but not to the extent Zheng contends. Accordingly, the Court reduces the Ings’ proposed award by $1,000.

E.   Cross-Complaint

Finally, Zheng contends that the Ings fail to differentiate between hours spent defending themselves against Zheng’s Complaint, as opposed to prosecuting their own Cross-Complaint. As Zheng notes, the Ings dismissed this Cross-Complaint of their own accord without presenting any evidence. Zheng argues that the Court should either deny the Ings attorney fees in the entirety, or substantially reduce the amount to deduct time spent litigating the Cross-Complaint.

In Opposition, the Ings argue that time would have been spent litigating the matters in the Cross-Complaint whether or not a Cross-Complaint was filed, as those same claims were defenses against Zheng’s Complaint.

As the Supreme Court noted in Hensley v. Eckerhart (1983) 461 U.S. 424, determining a reasonable attorneys’ fees is particularly complicated where a party “is deemed ‘prevailing’ even though he succeeded on only some of his claims for relief. In this situation two questions must be addressed. First, did the plaintiff fail to prevail on claims that were unrelated to the claims on which he succeeded? Second, did the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?” (Hensley at p. 434.)

Here, as the Ings note, the Cross-Complaint and the Complaint are undoubtedly related and pertain entirely to the same set of facts. However, as Zheng notes, the Ings can’t be said to have prevailed on the Cross-Complaint having dismissed it without presenting evidence. With that said, it must be noted that Zheng’s Demurrer to the Cross-Complaint was overruled, indicating that the Cross-Complaint was neither frivolous nor meritless.

Accordingly, the Court reduces the Ings’ requested fees by $7,500. This number is intended to deduct the hours exclusively spent prosecuting the Cross-Complaint, upon which they did not prevail, while recognizing that much of the research and work put into that Cross-Complaint was also essential in establishing their defense to the Complaint.

Accordingly, the Ings’ Motion for Attorney Fees is GRANTED in the amount of $74,018.49.

DATED:  October 27, 2022

___________________________

Hon. Robert S. Draper

Judge of the Superior Court