Judge: Ronald F. Frank, Case: 23TRCV01692, Date: 2024-02-28 Tentative Ruling
Case Number: 23TRCV01692 Hearing Date: February 28, 2024 Dept: 8
Tentative
Ruling¿
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HEARING DATE: February 28, 2024¿¿
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CASE NUMBER: 23TRCV01692
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CASE NAME: 2002 Mondello Family Trust, Rocco Mondello,
trustee v. Karmic Energy, Inc.; Caroline Londergan
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MOVING PARTY: Defendants,
Karmic Energy, Inc. and Caroline Londergan
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RESPONDING PARTY: Plaintiff,
Rocco A. Mondello, individually, and as trustee of the 2002 Mondello Family
Trust
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MOTION:¿ (1) Motion for Attorneys’ Fees
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Tentative Rulings: (1) GRANTED. Judge
Hill’s SOD establishes that Defendants were the prevailing parties and that
Plaintiff failed to prove an essential element of any UD trial, i.e., proper
service of the Notice to Quit. $40,707 is
the Court’s lodestar award after specific hours and hourly rate deductions
discussed below.
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I. BACKGROUND¿¿
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A. Factual¿¿
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On May26, 2023, Plaintiff, Rocco A. Mondello, individually and
as trustee of the 2002 Mondello Family Trust filed a Complaint for Unlawful
Detainer against Defendants, Carolien Longergan and Karmic Energy, Inc., and
DOES 1 through 20.
This commercial UD action was brought based on a notice to pay
rent or quit. Judge Hill determined in
Defendants’ favor on the principal disputed issue of fact in the trial, which
was that Plaintiff failed to properly serve the 3-day notice pursuant to the service
of notices provision in the parties’ written contract. As such, the Court found
in favor of Defendants and judgment was entered in their favor on December 28,
2023.
Defendants now file a Motion for
Attorneys’ Fees, predicated on the fee and costs provision in the parties’
rental agreement.
B. Procedural¿¿
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On January 24, 2024,
Defendants filed a Motion for Attorney Fees. On February 14, 2024, Plaintiff
filed an opposition. On February 20, 2024, Defendants filed a reply brief.
I. ANALYSIS¿
A.
Legal Standard
Attorney’s fees are recoverable when
authorized by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd.
(a)(10).)
Pursuant to Code of Civil Procedure
section 1033.5, subdivision (a)(10), attorney fees when authorized by contract,
statute or law are allowable as costs and may be awarded upon a noticed motion
pursuant to Code of Civil Procedure section 1033.5, subdivision (c)(5).
Where a contract specifically provides
for attorney’s fees and costs incurred to enforce the contract, attorney’s fees
and costs must be awarded to the party who is determined to be the prevailing
party on the contract. (Civ. Code., § 1717, subd. (a).) “Reasonable attorney’s
fees shall be fixed by the court and shall be an element of the costs of suit.”
(Ibid.)
A prevailing party is defined as follows:
(4) “Prevailing
party” includes the party with a net monetary recovery, a defendant in whose
favor a dismissal is entered, a defendant where neither plaintiff nor defendant
obtains any relief, and a defendant as against those plaintiffs who do not
recover any relief against that defendant. If any party recovers other than
monetary relief and in situations other than as specified, the “prevailing
party” shall be as determined by the court, and under those circumstances, the
court, in its discretion, may allow costs or not and, if allowed, may apportion
costs between the parties on the same or adverse sides pursuant to rules
adopted under Section 1034.
(Code Civ. Proc., § 1032, subd. (a)(4).)
In determining what fees are reasonable,
California courts apply the “lodestar” approach. (See, e.g., Holguin v. DISH
Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with
the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the
reasonable hourly rate.” (See PLCM Group v. Drexler (2000) 22 Cal.4th
1084, 1095.) From there, the “[t]he 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.” (Ibid.) Relevant
factors 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, [and] (4) the
contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th
1122, 1132.)
The party seeking fees has the burden of
documenting the appropriate hours expended and hourly rates. (City of Colton
v. Singletary (2012) 206 Cal.App.4th 751, 784.) This burden requires
competent evidence as to the nature and value of the services rendered. (Martino
v. Denevi (1986) 182 Cal.App.3d 553, 559.) A plaintiff’s verified
billing invoices are prima facie evidence that the costs, expenses, and
services listed were necessarily incurred. (Hadley v. Krepel (1985) 167
Cal.App.3d 677, 682.)
B.
Discussion
Here,
Defendants moving papers indicate that they are seeking attorneys’ fees for
prevailing in this action in the amount of $46,150. Defendants also indicate
that their rental agreement entitles them to an award of attorneys’ fees.
The issues
identified by Plaintiff in opposition as to the attorneys’ fees are that: (1)
Attorneys’ Fees awardable cannot exceed $500 because of some notice by posting
that there was a change in the terms of the commercial lease to limit available
attorneys’ fees; (2) That the notice to quit was properly served on Defendants;
(3) That Defendants have no right to fees for charges allegedly incurred by
Kevin Hermansen; and (4) that even if attorneys’ fees above $500 are awardable
to Defendants’ the current total requested attorneys’ fees is not reasonable.
The Alleged Lease
Modification is Prohibited under the Lease and Did Not Modify The Lease
Here, this Court finds that Plaintiff’s attempted
argument suggesting that it modified the lease to limit attorneys’ fees and
provided such a modification by posting is as unavailing as Plaintiff’s
argument at trial that it posted the 3-day notice. Not only does the lease explicitly prohibit
such behavior, but the lease also requires that notices must be (as the 3-day
notice was) sent by personal delivery or by registered or certified United
States mail. Paragraph 42, as previously noted, expressly prohibits such a
modification by posting. In fact, it states that “[t]his lease may be modified
only in writing, and signed by the parties in interest at the time of such
modification.” Here, Defendant, Londergan asserts that she never received the
document identified by Plaintiff as the modification.
Further,
Defendants make an assertion that the alleged modification of the lease
agreement would potentially create an ambiguity that would be required to be
resolved against the party who caused the uncertainty. The provisions of the
lease clearly make the alleged modification moot. The month-to-month tenancy continued in
effect all material terms of the written lease after expiration of the original
lease duaration.
Kevin Hermansen Incurred Fees
During the Representation of Defendants
In response to Plaintiff’s argument that Kevin Hermansen
cannot seek fees because he was not an attorney in this case is also not a
strong one. As noted in the reply brief, Kevin Hermansen was listed on this
current motion, as well as the Defendants’ closing argument brief. Further,
Hermansen has confirmed, in his declaration, the hours he worked for his
client. The real substance of the defense argument is that this was not a two-attorney
case and thus the billing by two 15-year attorneys in a relatively simple
commercial UD case is unreasonable. Reasonableness is discussed below.
Reasonability of Fees
Here, Plaintiffs argue that many of the request fees are
unreasonable. First Plaintiff points out the one-hour trial included an
attorney charge for 5.5 hours as well as another attorney charging for 3.5
hours of time. Defendants contend that although trial may have been an hour,
the parties were ordered to be present at court at 10:00 am, but had to wait
due to the Court’s impacted morning calendar, and used the time to participate
in an impromptu settlement conference with Judge Tanaka in the hallway.
Further, Defendants note that the reason for a two-hour difference in the time
was actually a billing judgment by the two counsels to only include the travel
time for Gharagozli.
Next, Plaintiff asserts that counsel for Defendants
engaged in conduct designed to merely generate fees. Namely, they filed a
demurrer on the basis of Plaintiff failing to allege it complied with the Tenant
Protection Act of 2019, a residential lease statute, when the tenancy at issue
involved a commercial lease and was not subject to the TPA. Further, with
respect to the billing for the Motion to Quash service of the Complaint, when,
as indicated in Gharagozli’s declaration, line 1 of his billing statement, he
was in possession of the Complaint; and per Hermansen’s declaration, he
corresponded with Defendants prior to these motions being prepared about
unlawful detainer documents received in the mail “from landlord.” In response
to this, Defendants, in their reply brief, merely state that it is impossible
for an attorney to know in advance whether or not his or her work on a
potentially meritorious legal theory will ultimately prevail, and cites to
numerous cases that support this proposition.
Although the Court agrees that such would be an
impossibility for attorneys to know, the Court also notes that moving on an
action an attorney knows is unmeritorious (such as filing a demurrer grounded
on a residential tenancy statute in a commercial tenancy action), would not
generally be rewardable on a fee motion. The Court will allow oral argument as
to why the demurrer based on the TPA should be considered a reasonable fee
activity. The Court tentatively denies attorney’s
fees (1.4 + 1.7 + 0.5 = 3.6 hours x $500 = $1,800) for the arguably frivolous
demurrer, which was apparently filed not for the purpose of generating fees,
but rather for the purpose of delaying the case while the defendants remained
in legal possession of the property. If counsel
of record was using the services of a co-counsel (Mr. Hermansen) with more
expertise in UD cases, that more experienced co-counsel should have identified the
risk that a judge deciding reasonableness of attorney’s fees might discount the
hours incurred for researching and preparing the demurrer.
Is it unreasonable for a commercial tenant to use the
services of two lawyers at trial and a trial-day settlement conference? On the fact presented here, no. Having a former BASTA lawyer to assist
counsel of record may well have saved considerable sums in incurred fees, including
those that might have been incurred if the jury right were not waived and the
trial were postponed while Judge Hill was unavailable to commence a jury trial
in the week between Christmas and New Year’s.
Further, only one of the two defense counsel charged for travel time.
Lastly, Plaintiff argues that Defendants submitted
discovery and motions substantially identical to what they served in a prior
unlawful detainer between the parties yet are attempting to collect fees as if
they created them from scratch. The Court disagrees for the most part with the
discovery charges argument. However, the Court does note that some of the
discovery charges seem unreasonable to the Court, which has considerable
experience in evaluating the reasonableness of discovery motions and of the time
if reasonably should take to work up discovery requests, responses, motions,
and related activities in a UD matter. The
Court reduces the hours claimed for those activities by 3.0. Finally, the lodestar
amounts claimed by both defense counsel will be reduced by $25 per hour, as the
evidence supporting the hourly rates supports $475 per hour, not $500 per
hour. While even that rate is at the
upper limit of reasonableness for a limited civil UD action, it is supported in
an unlimited civil case. 92.3 combined
total hours were attested to by defendants’ counsel. Reducing those hours as noted (92.3 – 6.6 = 85.7)
x $475 = $40,707 plus costs.
The Court’s tentative ruling is to GRANT the Motion for
Attorneys’ Fees in the lowered amount of
$40,707.
Defendants are ordered to
give notice.¿¿¿¿