Judge: Robert S. Draper, Case: 20STCV27865, Date: 2023-02-10 Tentative Ruling

Case Number: 20STCV27865    Hearing Date: February 10, 2023    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Plaintiffs’ Motion for Attorneys’ Fees is GRANTED in the amount of $83,637.00.

Plaintiffs’ Motion to Strike Costs is GRANTED.  

FACTUAL BACKGROUND

This is an action for violation of the Investigative Consumer Reporting Agencies Act (“ICRAA”). The Complaint alleges as follows.

Defendant Solari Enterprises, Inc. (“Solari”) owns and operates the Courson Arts Colony Apartments (the “Subject Property”) located at 931 and 939 E. Avenue Q12, Palmdale, California. (Compl. ¶ 9.) Plaintiffs Sheila Gregory, Mykel McGee and Kevin Crane (“Plaintiffs”) applied to be tenants at the Subject property. (Compl. ¶¶ 6-8.)

Solari requested and procured investigative consumer reports on Plaintiff without providing proper disclosures and obtaining proper authorizations contrary to the ICRAA. (Compl. ¶ 15.)

PROCEDURAL HISTORY 

On July 23, 2020, Plaintiffs filed the Complaint asserting four causes of action:

1.    Violations of the ICRAA;

2.    Unfair Business Practices;

3.    Invasion of Privacy; and,

4.    Declaratory Relief.

On August 27, 2020, Solari filed an Answer.

On September 11, 2020, Plaintiffs named The Screening Pros, LLC as Doe 1.

On January 29, 2021, Plaintiffs named CAC East as Doe 2.

On April 6, 2021, Plaintiffs named Costar Group, Inc. as Doe 3.

On April 7, 2021, Plaintiffs filed a Motion for Summary Adjudication as to the First Cause of Action for Violations of the ICRAA.

On April 29, 2021, Plaintiffs dismissed The Screening Pros.

On July 26, 2021, Plaintiffs dismissed Costar.

On November 4, 2021, the Court granted Plaintiffs’ Motion for Summary Judgment and awarded each Plaintiff $10,000 in statutory damages.

On April 15, 2022, following a jury trial, the jury found Solari not liable on Plaintiffs’ Third Cause of Action for Invasion of Privacy. Plaintiffs dismissed as moot the other two causes of action.

On September 13, 2022, the Court entered judgment.

On September 30, 2022, Solari filed a Memorandum of Costs.

On October 17, 2022, Plaintiffs filed the instant Motion to Tax Costs.

On November 14, 2022, Plaintiffs filed the instant Motion for Attorneys’ Fees.

On December 7, 2022, Solari filed an Opposition to Plaintiffs’ Motion to Tax Costs.

On December 9, 2022, Plaintiffs filed a Reply in Support of their Motion to Tax Costs.

On January 19, 2023, Solari filed an Opposition to Plaintiffs’ Motion for Attorneys’ Fees.

On January 26, 2023, Plaintiffs filed a Reply in Support of their Motion for Attorneys’ Fees.[1]

DISCUSSION 

I.                REQUEST FOR JUDICIAL NOTICE

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) 

Evidence Code Section 452 provides that judicial notice may be taken for facts and propositions that are “not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Cal. Evid. Code § 452(h).) Further, “a court may take judicial notice of [recorded documents and] the fact of a document's recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 745-755.) 

Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. (Fremont Indem. Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113-14 (citations and internal quotations omitted).) In addition, judges “consider matters shown in exhibits attached to the complaint and incorporated by reference.” (Performance Plastering v. Richmond American Homes of California, Inc. (2007) 153 Cal.App.4th 659, 665.) However, “[w]hen judicial notice is taken of a document . . . the truthfulness and proper interpretation of the document are disputable.” (Aquila, Inc. v. Sup. Ct. (2007) 148 Cal.App.4th 556, 569 (quoting StorMedia Inc. v. Sup. Ct. (1999) 20 Cal.4th 449, 457 n. 9).)

The party requesting judicial notice must (a) give each adverse party sufficient notice of the request to enable the adverse party to prepare to meet the request and (b) provide the court with sufficient information to enable it to take judicial notice of the matter. (Cal. Evid. Code § 453.)

Here, Solari requests judicial notice of the following:

1.    Complaint filed by Plaintiffs Sheila Gregory, Kevin Crane, and Mykel McGee in this action. (Ex. D.)

2.    Solari’s Answer to Plaintiff’s Complaint in this action. (Ex. E.)

3.    Verdict Form dated April 15, 2022, following the trial in this action on Plaintiffs’ cause of action for Invasion of Privacy. (Ex. F.)

4.    Plaintiffs’ Evidence in Support of Motion for Summary Adjudication Filed in This Action. (Ex. G.)

5.    Plaintiffs’ Separate Statement in Support of Motion for Summary Adjudication Filed in this Action. (Ex. H.)

6.    Minute Order dated April 4, 2022, reflecting the Court’s ruling on Plaintiffs’ Motion for Attorneys’ Fes in Elmy v. Related Management Company, L.P., Case No. 30-2019-01105181. (Ex. J.)

7.    Joint Witness List filed on or about March 21, 2022, in this matter. (Ex. K.)

8.    Plaintiffs’ Motion for Summary Adjudication filed in Arnetha Dennis, et al. v. Bridge Property Management Company, et al., San Francisco Superior Court, Case No. CGC-19-574516. (Ex. L.)

9.    Plaintiffs’ Motion for Summary Adjudication filed in Lisamarie Griffith v. Related Management Company, L.P., Orange County Superior Court, Case No. 30-2019-01091978. (Ex. M.)

10.                   Plaintiffs’ Motion for Summary Adjudication filed in Mohamad Elmy v. Related Management Company, L.P., Orange County Superior Court Case No. 30-2019-01105181. (Ex. N.)

11.                   Plaintiffs’ Motion for Attorneys’ Fees filed in Mohammad Elmy v. Related Management Company, L.P., Orange County Superior Court, Case No. 30-2019-01105181. (Ex. O.)

12.                   Separate Statement in Support of Plaintiffs’ Motion for Summary Adjudication filed in this action. (Ex. S.)

Solari’s Requests for Judicial Notice are GRANTED.

II.              MOTION FOR ATTORNEYS’ FEES

Plaintiffs move for attorneys’ fees in the amount of $123,582.00 pursuant to Civil Code section 1786.50(a)(2).

Civil Code section1786.50(a)(2) states that in any action brought under ICRAA, a successful Plaintiff is due “the costs of any action together with reasonable attorney’s fees as determined by the court.”

Here, Solari does not contend that Plaintiffs were unsuccessful in this action or that they are not due reasonable attorneys’ fees. Solari contends that, as Plaintiffs rejected a more favorable Code of Civil Procedure section 998 offer, they are owed only preoffer costs and expenses. Additionally, Solari contends that Plaintiffs’ proposed attorneys’ fees are unreasonable and excessive.

A.   Section 998 Offer

First, Solari contends that as Plaintiffs rejected a favorable section 998 offer early in litigation, Plaintiffs’ attorneys’ fees are limited to preoffer expenses.

Code of Civil Procedure section 998 states that “[i]f an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant’s costs from the time of the offer.” (Code Civ. Proc., § 998(c)(1).) 

The purpose of CCP section 998 is to encourage settlement by providing a strong financial disincentive to a party, whether it be a plaintiff or a defendant, who fails to achieve a better result than that party could have achieved by accepting his or her opponent's settlement offer. (Mesa Forest Prods. v. St. Paul Mercury Ins. Co. (1999) 73 Cal. App. 4th 324, 330.) The harsh result of section 998 is that the plaintiff not only loses the right to recover his or her postoffer costs but must also pay the defendant's postoffer costs. (Id.) Simply put, section 998 penalizes a plaintiff who fails to accept what, in retrospect, is seen to have been a reasonable offer. (Id.) 

Here, Solari notes that it extended a section 998 offer to Plaintiffs that included $10,001 for violation of ICRAA and included attorneys’ fees, costs, and expenses. Accordingly, Solari argues, Plaintiffs are not due postoffer costs and expenses.

In opposition, Plaintiffs contend that the 998 offer did not include an admission of liability, and therefore did not guarantee Plaintiffs’ right to attorneys’ fees. Accordingly, Plaintiffs argue, Solari’s 998 offer was not favorable to Plaintiffs’ actual award.

In ruling on this matter previously, the Court found:

[A]s in Linton, Plaintiffs’ “right to recover reasonable attorney’s fees and costs [were] subject to a separately negotiated settlement amount, or a Motion for Fees and costs brought pursuant to civil Code section 17[86].50(a)(2). . .” (emphasis added.)

Under the 998 offer, Plaintiffs’ right to collect attorney fees were subject to a statute that explicitly requires a finding of liability to entitle Plaintiffs to attorney fees. Accordingly, Linton is directly on point, and the 998 offer did not entitle Plaintiffs to attorneys’ fees.

Plaintiffs are the prevailing party and are entitled to costs. (December 20, 2022, Order Denying Solari’s Motion to Tax Costs.)

Here, Solari argues that the recently decided Michael Smalley v. Subaru of America, Inc. (December 13, 2022) G059904 is on-point and mandates that the Court find Solari’s 998 offer did include attorneys’ fees, costs, and expenses.

In Smalley, plaintiff brought a lemon law action against defendant car manufacturer. Defendant offered plaintiff a 998 offer of $35,001.00 plus “either one of the following at Plaintiff’s election: (1) Ten Thousand Dollars ($10,000.00) for Plaintiff’s costs, including attorney’s fees, or (2) Plaintiff’s costs, including reasonably incurred attorney’s fees, to be determined by the Court.” (Smalley at p. 1.)

Plaintiff rejected defendant’s 998 offer, and after a jury trial, was awarded a total recovery of $27,555.74. The trial court found that the 998 offer was valid and exceeded plaintiff’s eventual award, and therefore awarded plaintiff preoffer costs, and defendant postoffer costs.

On appeal, the Smalley Court affirmed. As to plaintiff’s argument that the 998 offer did not concede liability, and therefore did not include attorneys’ fees, the Court held that “[g]iven that the section 998 offer provided that [defendant] would receive his costs and attorney fees, either in the set amount of $10,000 or in an amount to be determined by the court, his argument the section 998 offer was invalid because it did not include a statement that he was the prevailing party is not convincing.” (Smalley at p. 2.)

Solari’s reliance on Smalley is inapposite. In Smalley, defendant’s 998 offer provided concrete terms for attorney’s fees, either in the amount of $10,000 or in an amount to be determined by the court. The offer explicitly provided for attorney’s fees, and plaintiff’s right to those fees was not conditional on anything.

Here, on the other hand, Solari’s offer was explicitly subject to a motion for attorneys’ fees brought under Civil Code section 1786.50(a)(2). That section requires a finding of liability to warrant attorneys’ fees under ICRAA.

Additionally, the Court notes that in Elmy v. Related Management Company, L.P., the Court found that defendant’s 998 offer included attorney’s fees as “Defendant’s 998 Offer expressly provided that Defendant would pay Plaintiff ‘his statutory costs, including reasonable attorney’s fees, incurred to the date of this offer in the amount determined by the Court. [Citation.] Thus, Defendant’s 998 Offer, itself, separate from Civil Code section 1786.50 provided that Plaintiff would obtain preoffer attorney’s fees. In turn, in this regard, Plaintiff’s recovery is not more favorable than Defendant’s 998 Offer.” (Solari’s RFJN, Ex. J at p. 5.)

Again, Solari fails to note the distinction between a 998 offer that explicitly awards attorneys’ fees separate and apart from the plaintiff’s statutory right to recover those fees, and a 998 offer that awards attorneys’ fees contingent on a statute that does not allow for attorneys’ fees absent a finding of liability.

This distinction is dispositive. Solari’s 998 offer did not explicitly include a right to attorney’s fees, therefore Linton is controlling, and Plaintiffs’ award exceeded the 998 offer.

B.   Reasonableness of Attorneys’ Fees

Next, Solari contends that Plaintiffs’ requested attorneys’ fees are excessive and unreasonable.

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 section 1717 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 was appropriate when duplicative work had been performed. (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819.)

1.    Initial Lodestar

Plaintiffs’ Counsel, Glenn A. Murphy (“Murphy”), requests an initial lodestar of $90,032.00. (Murphy Decl., Ex. 5.) This amount is comprised of 127.9 hours of attorney time, billed at $650.00 an hour, and 41.9 hours of paralegal time, billed at $165.00 an hour. (Ibid.)

In Opposition, Solari contests, first, Murphy’s billing rate of $650.00 an hour. Solari notes that Solari’s counsel billed at a rate of between $310 an hour and $285.00 an hour. In addition, Solari notes that though Plaintiff provided an order in which the Court found that Murphy’s rate of $600 an hour was warranted, Courts in similar cases have determined that a rate of $450 was more appropriate. (See RFJN, Ex. J.)

The Court finds that, for a straightforward, statutory consumer protection action, a billable rate of $600 an hour is more appropriate and adjusts Murphy’s billable rate accordingly.

Next, Solari argues that Plaintiffs’ attorneys’ fees should be substantially reduced, as Plaintiffs prevailed on only one of four causes of action, and did not prevail in obtaining punitive damages.

However, as Plaintiffs note, Plaintiffs dropped two of the causes of action as they were rendered moot by Plaintiffs’ successful Motion for Summary Adjudication on the issue of the ICRAA cause of action.

The Court does not find that any of the causes of action or the claim for punitive damages were frivolous or improperly pursued, and therefore does not reduce the lodestar on this basis.

Finally, Solari contends that Plaintiffs’ proffered attorneys’ fees should be greatly reduced as disproportionate to Plaintiffs’ award. Solari notes that Plaintiffs were awarded $10,000 each, for a total award of $30,000. Solari argues that attorneys’ fees in excess of four times that amount are unreasonably disproportionate and should be reduced in the name of equity.

However, the Court has reduced Plaintiffs’ attorneys’ fees by reducing the hourly rate, as addressed above, and by eliminating the lodestar multiplier, as addressed below. Accordingly, the Court will not reduce the amount further without concrete justification for doing so.

Accordingly, the Court reduces Plaintiffs’ initial lodestar to $83,637.00.

2.    Lodestar Multiplier

Next, Plaintiffs request a lodestar multiplier of 1.25.

Relevant factors to determine whether an enhancement is appropriate include (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. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) 

Here, Plaintiffs argue that a lodestar multiplier is appropriate because the suit contributed to the public benefit. Additionally, Plaintiffs contend that a multiplier is due because Plaintiffs’ counsel undertook representation on a contingent basis, and because of the difficulty of the action.

However, as Solari notes, many of Plaintiffs’ briefs were based on templates that Plaintiffs’ counsel used in previous cases. Though the Court did not find it necessary to reduce Plaintiffs’ Counsel’s reasonably accrued hours on this basis, it does find that this mitigates any argument as to the novelty of the questions raised.

Additionally, the Court notes that the risk due to contingent nature of representation was largely mitigated by the statutory right to attorneys’ fees in ICRAA causes of action.

Finally, the Court notes that, though Plaintiffs did obtain the maximum civil award for ICRAA violations, Plaintiffs failed to obtain punitive damages, or to succeed on their invasion of privacy cause of action, mitigating the extraordinary nature of Plaintiffs’ eventual award.

Accordingly, the Court finds that a lodestar multiplier is not appropriate in this action.

Plaintiff’s Motion for Attorneys’ Fees is GRANTED in the amount of $83,637.00.

III.            PLAINTIFFS’ MOTION TO TAX COSTS

Finally, Plaintiffs move to tax or strike Solari’s Memorandum of Costs.

As Solari’s right to recover costs is predicated on the validity of its section 998 offer, which the Court addressed above, and as the Court has previously ruled that Plaintiffs are the prevailing party under Code of Civil Procedure section 1032(b), Solari is not entitled to litigation costs.  

Plaintiffs’ Motion to Strike Solari’s Costs is GRANTED in the entirety. 

DATED: February 10, 2023

___________________________

Hon. Robert S. Draper 

Judge of the Superior Court