Judge: Teresa A. Beaudet, Case: BC530228, Date: 2024-05-24 Tentative Ruling

Case Number: BC530228    Hearing Date: May 24, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Albert Kirakosian (“Plaintiff”) filed this action on December 11, 2013 against Defendants American Best Engineering, Inc. aka Avakian Engineering, Inc., Sergik Avakian, and Sevak Avakian.

On September 6, 2017, Plaintiff filed the operative Third Amended Complaint (“TAC”) alleging causes of action for (1) breach of contract, (2) fraud, (3) conversion, (4) money due on an open book account, (5) money due on an account stated, and (6) money had and received.

In the TAC, Plaintiff alleges, inter alia, that “[o]n or about January 25, 2007, Defendants SERGIK and SEVAK, and each of them, as individuals and on behalf of ABE and AVAKIAN ENG. (collectively ‘Defendants’), entered into with Plaintiff a ‘Secured Promissory Note’ with Plaintiff (‘Note’) which was signed by Defendant SERGIK as ABE’s President…In or around the same time, Defendants, and each of them, entered into ‘Security Agreement’ (‘Agreement’) which was signed by Defendant SERGIK as ABE’s President.” (TAC, ¶ 14.)

Plaintiff alleges that “from January 1, 2007 to July 5, 2007, Plaintiff individually and through his company loaned to Defendants a total of $165,000, subject to the terms of the Note and Agreement.” (TAC, ¶ 20.) Plaintiff alleges that “[o]n or about March 1, 2007, Defendants made a payment to Plaintiff in the amount of $4,000.00 to Kirako Corp.,” and that “[f]rom 2007 to March 2013, Defendants made a total of $35,800.00 in payments to Plaintiff as an individual and $43,015.45 in payments to Kirako Corp.” (TAC, ¶¶ 21-22.) Plaintiff alleges that “[i]n or about April 2013, Defendants completely ceased making any payments to Plaintiff and/or Kirako Corp.” (TAC, ¶ 23.)

On August 24, 2023, a Judgment was entered in this matter. The Judgment indicates, inter alia, that the case was tried on February 15, 2023, and that Judgment is for defendants Avakian Engineering, Inc. and Sevak Avakian. The Judgment indicates that Plaintiff is to receive nothing from Avakian Engineering, Inc. and Sevak Avakian. (See Judgment, ¶ 6(b).) In addition, the Judgment provides that “Defendants were the prevailing party…Defendants may seek costs and attorney’s fees and, if awarded, file an amended judgment.” (Judgment, ¶ 7.)

Sevak Avakian now moves for an order awarding him and against Plaintiff attorney’s fees and costs in the amount of $68,015.45. The motion is unopposed.

Discussion

A.    Entitlement to Attorney’s Fees

Civil Code section 1717, subdivision (a) provides in pertinent part that “[i]n 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.”

In addition, Code of Civil Procedure section 1033.5, subdivision (a)(10)(A) provides that attorney’s fees, when authorized by contract, are allowable as costs.

As set forth above, the August 24, 2023 Judgment in this action provides, inter alia, that “Defendants were the prevailing party…Defendants may seek costs and attorney’s fees and, if awarded, file an amended judgment.” (Judgment, ¶ 7.)

In addition, as discussed, the TAC in this action alleges that “[o]n or about January 25, 2007, Defendants SERGIK and SEVAK, and each of them, as individuals and on behalf of ABE and AVAKIAN ENG….entered into with Plaintiff a ‘Secured Promissory Note’ with Plaintiff…which was signed by Defendant SERGIK as ABE’s President…” (TAC, ¶ 14.) In his declaration in support of the instant motion, Sevak Avakian states that “[o]n December 11, 2013, Plaintiff Albert Kirakosian…filed a Complaint against me alleging I entered into a Secured Promissory Note (hereinafter referred to as ‘Agreement’) with Plaintiff dated January 25, 2007. A true and correct copy of the Agreement is attached to this declaration as ‘Exhibit #1.’” (Avakian Decl., ¶ 4, emphasis omitted.)

The “Secured Promissory Note” attached as Exhibit 1 to Sevak Avakian’s declaration provides, inter alia, “FOR VALUE RECEIVED, the undersigned (‘Maker’), promises to pay to the order of Albert Kirakosian, or the lawful holder of this Note (‘Holder’)…the principal sum of One Hundred Thousand Dollars ($100,000.00), together with interest thereon at the rate of Four Percent (4%) per month.” (Avakian Decl., ¶ 4, Ex. 1, p. 1.) The “Secured Promissory Note” further provides as follows:

“The undersigned promises to pay all attorneys’ fees and costs and/or other fees and costs (including, without limitation, trustees’, consultants’, accountants’, engineers’ and appraisers’ fees and expenses) incurred by the Holder hereof in connection with the interpretation, collection or enforcement of this Note, the Security Agreement of even date and the UCC-1 Financing Statement (the ‘Loan Documents’), (whether or not legal proceedings are brought by Holder), and/or the protection of the security thereunder, including, without limitation any such fees and expenses incurred by Holder in connection with, related to, or arising out of any judicial or nonjudicial foreclosure proceedings.” (Avakian Decl., ¶ 4, Ex. 1, pp. 1-2.)

Sevak Avakian appears to assert that he is entitled to attorney’s fees pursuant to the above-referenced provision and Civil Code section 1717. Plaintiff does not oppose the instant motion and accordingly does not dispute that Sevak Avakian is entitled to attorney’s fees here.

Based on the foregoing, the Court finds that Sevak Avakian has demonstrated his entitlement to attorney’s fees here.

B.     The Hourly Rate of Counsel and the Reasonableness of the Requested 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 [internal citations omitted].) In determining the reasonable hourly rate, the “burden is on the successful party to prove the appropriate market rate to be used in calculating the lodestar.” ((MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 13.)

“[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.) With regard to the number of hours reasonably expended, “the 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.) 

In his supporting declaration, Sevak Avakian states that “[p]rior to being represented by my current counsel I was represented by Alex Gilanians…and paid Mr. Gilanians $44,441.49 in attorney’s fees. A true and correct copy of the Attorney’s fees paid by me to Mr. Gilanians is attached to this declaration as ‘Exhibit #2.’” (Sevak Avakian Decl., ¶ 9, emphasis omitted.)

As an initial matter, the Court notes that it is unclear what Mr. Gilanians’s requested hourly rate is. Sevak Avakian’s declaration does not discuss Mr. Gilanians’s rate. In addition, Exhibit 2 to Sevak Avakian’s declaration appears to reference different rates for different staff members. (Sevak Avakian Decl., ¶ 9, Ex. 2.) Further, Mr. Gilanians did not file any declaration in support of the motion authenticating the billing records attached to Sevak Avakian’s declaration.

Sevak Avakian’s counsel, Sam Zreik, also filed a declaration in support of the instant motion. Mr. Zreik states that his “billing rate on this matter was and is $400.00 per hour.” (Zreik Decl., ¶ 3.) Plaintiff does not oppose the instant motion and does not challenge Mr. Zreik’s

hourly rate. The Court finds that Mr. Zreik’s requested hourly billing rate is reasonable.

Mr. Zreik states that “[o]n July 15, 2021, I agreed to represent Defendant on this matter, and have continued to represent Defendant to the date of writing this declaration. From the time my representation of Defendant to the present, Defendant has accrued, and has paid, $23,573.96 in legal fees and costs. Thus, from the onset of litigation to the present Defendant incurred legal fees and costs in the amount of $68,015.45.” (Zreik Decl., ¶ 11.)[1]

In his supporting declaration, Mr. Zreik states that “I have prepared invoices for each task performed for Defendant with each entry being made at or near the time in which the tasks it described were completed or incurred. The invoices reflect time reasonably expended by me on the case. I prepared each of my time entries in the invoices in the regular course of firm’s business.” (Zreik Decl., ¶ 12.) However, the Court notes that a copy of the referenced invoices do not appear to be provided in connection with Mr. Zriek’s declaration. Mr. Zreik’s declaration also references a redacted “Client Billing Statement,” but such a statement does not appear to have been provided. (Zreik Decl., ¶ 14.)

In light of the foregoing, the Court will require additional evidence from Sevak Avakian to address the deficiencies identified above.

Conclusion

Based on the foregoing, the Court continues the hearing on the instant motion to _________________,¿ at 10:00 a.m. in Dept. 50.¿¿ 

The Court sets the following briefing schedule:¿¿ 

Sevak Avakian’s supplemental brief is to be filed and served by _________________, with a courtesy copy delivered to Dept. 50.¿¿ 

Plaintiff’s response, if any, to be filed and served by _________________, with a courtesy copy delivered to Dept. 50.¿¿ 

The argument and evidence in the supplemental papers are limited to the requested additional information, as discussed above, and the response thereto. The parties may not include any argument or evidence on any other issue.¿¿¿ 

Sevak Avakian is to provide notice of this ruling.¿¿ 

DATED:  May 24, 2024                                 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court