Judge: Teresa A. Beaudet, Case: 22STCV21631, Date: 2025-03-06 Tentative Ruling

Case Number: 22STCV21631    Hearing Date: March 6, 2025    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Nechama Kravitz (“Plaintiff”) filed this action on July 5, 2022 against Defendant Conrad Property Management Inc. (“Defendant”), asserting causes of action for (1) declaratory relief, (2) Business and Professions Code § 17200, (3) unlawful retention of security deposit, (4) breach of residential lease agreement, (5) negligence, and (6) conversion.

On February 10, 2023, Plaintiff filed the operative First Amended Complaint (“FAC”) after the Court sustained Defendant’s demurrer to the first, third, fourth, fifth, and sixth causes of action of the Complaint, with leave to amend. The FAC alleges causes of action for (1) Business and Professions Code § 17200, (2) unlawful retention of security deposit, (3) breach of residential lease agreement, (4) negligence, and (5) conversion. On April 27, 2023, Defendant filed a demurrer and motion to strike, which the Court overruled and denied respectively.

On May 20, 2024, Plaintiff filed a Request for Dismissal to dismiss the entire action against all parties and all causes of action. Plaintiff did not recover anything of value by this action.

On June 24, 2024, Defendant filed this instant motion. Plaintiff did not file an opposition.

Discussion

Availability of Fees

Civil Code section 1717, subd. (a) provides in part: “In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.” ((Id., § 1717, subd. (a).) The term “on a contract” is liberally construed to include any action that “involves” a contract. ((Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 894.) “To determine whether an action is on the contract, we look to the complaint and focus on the basis of the cause of action.” ((Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 821.) “[F]ees are properly awarded under section 1717 ‘to the extent that the action in fact is an action to enforce—or avoid enforcement of—the specific contract.’” ((Turner v. Schultz (2009) 175 Cal.App.4th 974, 980.)

Under Code of Civil Procedure section 1032, subd. (a)(4), a 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.” (Code Civ. Proc., § 1032, subd. (a)(4).)

Generally, “[w]here an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” ((Civ. Code, § 1717, subd. (b)(2).) The Supreme Court of California has found that  “[u]nder section 1717, the [parties voluntarily dismissed] are not ‘part[ies] prevailing on the contract’ because that section specifies that there is no party prevailing on the contract when, as here, the plaintiffs have voluntarily dismissed the action, and therefore defendants may not recover the attorney fees they incurred in the defense of the contract claim.” (Santisas v. Goodin (1998) 17 Cal.4th 599, 619 (Santisas))

 However, the Supreme Court in Santisas v. Goodin has reconciled Civil Code section 1717, Code of Civil Procedure section 1032, subd. (b), and Code of Civil Procedure section 1033.5, subd. (a)(10): “[The conclusion that defendants who were voluntarily dismissed may not recover the attorney fees they incurred in the defense of the contract claim] does not affect the [defendants’] right to recover as costs the attorney fees they incurred in defense of the tort claims.” ((Santisas v. Goodin, supra, 17 Cal.4th at p. 619.)   

 Finally, California Rules of Court, rule 3.1702 states: “A notice of motion to claim attorney's fees . . . must be served and filed within the time for filing a notice of appeal under rules 8.104 and 8.108 in an unlimited civil case . . . .” (Cal. Rules of Court, rule 3.1702, subd. (b)(1).) This is the only limitation under statutory and judicial authority regarding time of filing a motion for attorney’s fees.

As an initial matter, the Court notes that there is no dispute that the motion for attorneys’ fees was timely served and filed.

Defendant first contends that it is the prevailing party in this action, because “Plaintiff voluntarily dismissed this entire action and claims therein.” (Motion p. 4.) The Court agrees that Defendant is the prevailing party under Code of Civil Procedure section 1032, subd. (a)(4), because the dismissal was entered in its favor and Plaintiff did not obtain relief.

Defendant contends that it, as the prevailing party in this action, is entitled to an award of attorney’s fees pursuant to the attorney’s fee provision in the Lease Agreement that served as the basis for the causes of action in the FAC. (Motion p. 5.) That provision provides: “If any legal action or proceeding be brought by either party to this agreement, the prevailing party shall be reimbursed for all reasonable attorney’s fees & costs up to but not more than $3000 in addition to other damages awarded by the court.” (Motion p. 4, Exh. A ¶ 23.) Defendant argues that, under this provision, it “is entitled to reasonable attorneys’ fees as the party prevailing on the non-contractual claims.” (Motion p. 5.)

            The Court finds that Defendant is entitled to attorney fees it incurred in defense of the tort claims, but not those incurred in defense of the contractual claims per Santisas v. Goodin (1998) 17 Cal.4th 599. As discussed, the FAC contains causes of action for (1) Business and Professions Code § 17200, (2) unlawful retention of security deposit, (3) breach of residential lease agreement, (4) negligence, and (5) conversion. (FAC pp. 7-14.) As negligence and conversation are tort causes of action, Defendant is entitled to an award of attorneys’ fees incurred in defense of the tort claims.

Reasonableness of Fees

“[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, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

“[T]he court's discretion in awarding attorney fees is … to be exercised so as to fully compensate counsel for the prevailing party for services reasonably provided to his or her client.” ((Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395.)  “[T]he verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” ((Id. at p. 396.) The trial court may reduce the award where the fee request appears unreasonably inflated, such as where the attorneys’ efforts are unorganized or duplicative. (Serrano v. Unruh (1982) 32 Cal.3d 621, 635, fn. 21.)

Defendant asserts that it has incurred $14,325 in attorneys’ fees but only requests $3,000 per the Lease Agreement. (Motion pp. 6, 8.) Defendant submits declarations from one of its attorneys, Lane Nussbaum, purporting to establish the reasonableness of the attorneys’ fees incurred. (Nussbaum Decl. ¶¶ 4-7.) However, because the Court finds that Defendant is not entitled to fees incurred in defense of the contractual causes of action and Defendant does not distinguish between the time spent on the contractual and tort claims, the Court cannot consider the reasonableness of the fees incurred and determine whether Defendant’s attorney incurred $3,000 in attorneys’ fees on the tort claims. (See Nussbaum Decl. ¶¶ 4-7, Exhs. B-E.)

Because Defendant does not distinguish between the time spent on the contractual and tort claims, the Court will require these additional details. Accordingly, the Court will continue the hearing on this matter to give Defendant an opportunity to provide those details.

Conclusion

            Based on the foregoing, Defendant’s motion for attorneys’ fees is continued to a date to be set.

            The Court orders Defendant to file a supplemental brief and/or declaration setting forth: (1) the hours billed on the contractual causes of action and (2) the hours billed on the tort causes of action. Defendant must provide this information no later than 9 court days prior to the date of the continued hearing.

            No new or additional argument is permitted on matters other than identified above.

Defendant is ordered to provide notice of this ruling.

DATED:  March 6, 2025                                ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court