Judge: Teresa A. Beaudet, Case: BC667151, Date: 2023-11-07 Tentative Ruling

Case Number: BC667151    Hearing Date: January 8, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs Mehdi Saidane and Mimi Saidane (jointly, “Plaintiffs”) brought this action on June 30, 2017 against Defendants Patrick Khalafian, Dertad Teddy Bedjakian (“Bedjakian”), and 168 Entertainment, LLC (“168 Entertainment”). Plaintiffs filed the operative Second Amended Complaint on July 3, 2018, asserting causes of action for (1) fraud, (2) breach of contract, and (3) breach of the covenant of good faith and fair dealing.

On February 15, 2023, the Court issued a Judgment on Special Verdict in this matter. The Judgment on Special Verdict notes, inter alia, that this action came on regularly for trial on January 13, 2023. The Judgment further provides that “IT IS HEREBY ORDERED, ADJUDGED AND DECREED, that Plaintiffs MIMI SAIDANE and MEHDI SAIDANE take nothing as against Defendants DERTAD TEDDY BEDJAKIAN, and 168 ENTERTAINMENT, LLC, on Plaintiffs’ Second Amended Complaint, and that Judgment is entered in favor of Defendant 168 ENTERTAINMENT, LLC, as to the First Cause of Action for Breach of Contract, and as to the Second Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing, and that Judgment is entered in favor of Defendant DERTAD TEDDY BEDJAKIAN as to the Third Cause of Action for Intentional Misrepresentation.” (Judgment at p. 10:1-8.)

Bedjakian and 168 Entertainment previously filed a motion “for a determination that defendants DERTAD TEDDY BEDJAKIAN and 168 ENTERTAINMENT, LLC, were each a prevailing party at trial and for an award of their reasonable attorney’s fees as an item of costs, pursuant to Civil Code, section 1717, and for an award of other items of cost.” On July 6, 2023, the Court issued an Order continuing the hearing on the motion to July 28, 2023. The Court’s July 6, 2023 Order provides, inter alia, that “the Court will require further evidence concerning the attorney’s fees incurred by 168 Entertainment’s counsel solely on behalf of 168 Entertainment. In addition, the Court will require evidence regarding 168 Entertainment’s counsel’s requested hourly billing rate.” (Order at p. 11:17-20.)

On July 28, 2023, the Court issued an Order continuing the hearing on the instant motion again. The Court’s July 28, 2023 Order provides, inter alia, that “the Court will require further evidence and calculations from the Moving Defendants” in light of the discussion set forth in the Order. (July 28, 2023 Order at p. 5:18.) The Court ordered that any supplemental declaration by the Moving Defendants was to be filed and served by August 18, 2023, and that Plaintiffs’ response, if any, was to be filed and served by September 8, 2023.

On August 18, 2023, Bedjakian and 168 Entertainment filed a “Second Supplemental Declaration of Thomas J. Kostos in Support of Defendant 168 Entertainment, LLC’s Motion for an Award of Reasonable Attorney’s Fees as an Item of Costs.” On September 8, 2023, Plaintiffs filed a second supplemental opposition to the motion for attorney fees.  

On September 26, 2023, the Court issued an order on the motion for attorney fees. The Court’s September 26, 2023 Order provides, inter alia, that “Plaintiffs object to, inter alia, the entirety of the Second Supplemental Declaration of Thomas J. Kostos on the basis that it is unsigned. The Court sustains the objection. The Court notes that Code of Civil Procedure section 2015.5 ‘defines a ‘declaration’ as a writing that is signed, dated, and certified as true under penalty of perjury.’ (Kulshrestha v. First Union Commercial Corp. (2004) 33 Cal.4th 601, 606.)” (September 26, 2023 Order at p. 2.) The September 26, 2023 Order provides that “[i]n light of the foregoing ruling on Plaintiffs’ evidentiary objection, the Second Supplemental Declaration of Thomas J. Kostos is not competent evidence that the Court may consider herein.” (Id. at p. 3.) The Court ordered that “as discussed in the Court’s July 28, 2023 Order, the Court required further evidence and calculations from the Moving Defendants. Accordingly, and in view of the sustained objection, The Motion for Attorney Fees filed by 168 Entertainment,LLC, Dertad Teddy Bedjakian on 03/06/2023 is Denied.” (Ibid.)

Bedjakian and 168 Entertainment then moved for “an order setting aside the Court’s September 26, 2023, Order, and any judgment thereon, denying 168 Entertainment, LLC’s and Dertad Teddy Bedjakian’s motion for attorney fees…” In addition, 168 Entertainment moved “for an order awarding 168 ENTERTAINMENT $64,160.25 as its reasonable attorney’s fees in this case, as an item of costs, and other costs listed in the defendants’ Memorandum of Costs, in the sum of $12,496.19; and that the Judgment in this case be amended to include an award of costs to defendant 168 ENTERTAINMENT, LLC in the sum of $78,656.44.” On November 7, 2023, the Court issued a minute order providing, inter alia, that “the Moving Defendants’ motion for an order setting aside the Court’s September 26, 2023, Order is granted.”

The Court’s November 7, 2023 minute order also provides that “Plaintiffs further assert that ‘[i]f this Court is inclined to grant Defendants’ Motion to Set Aside, it should allow Plaintiff’s time to properly oppose the new declarations filed by Mr. Kostos, which now request $64,160.25 in attorney fees.’…This request does not appear to be opposed by the Moving Defendants in the reply.” (November 7, 2023 Minute Order, p. 6.) The Court “continue[d] the hearing on the Moving Defendants’ motion for attorney’s fees to 1-8-2024…at 10:00 a.m. in Dept. 50,” and ordered that “Plaintiffs are to file and serve any response to the Moving Defendants’ Third Supplemental Declaration of Thomas J. Kostos on or before 12-29-2023, with a courtesy copy delivered to Dept. 50.” (Id. at p. 7.) On December 29, 2023, Plaintiffs filed a third supplemental opposition to the motion for attorney fees.

Discussion

A.    Entitlement to Attorney’s Fees 

As discussed in the Court’s July 6, 2023 Order, the Court does not find that Bedjakian and 168 Entertainment demonstrated that Bedjakian is entitled to attorney’s fees. (July 6, 2023 Order at p. 8:21-22.) In addition, the Court found that 168 Entertainment demonstrated its entitlement to attorney’s fees here. (July 6, 2023 Order at p. 10:3-4.)

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].)

“[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.) 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, footnote 21.) “[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.” (Horsford v. Bd. of Trustees of California State Univ., supra, 132 Cal.App.4th at p. 396.)

As set forth in the Court’s July 28, 2023 Order, “Mr. Kostos states that from August 10, 2017 through December 31, 2018, his billing rate was $300/hour; from January 1, 2019, to December 31, 2019 his billing rate was $350/hour; and that from January 1, 2020 and thereafter his billing rate was $400/hour. (Suppl. Kostos Decl., ¶¶ 5-7.) In addition, Mr. Kostos sets forth his background and experience. (Suppl. Kostos Decl., ¶¶ 4-7.) Plaintiffs do not dispute Mr. Kostos’s requested hourly rates. The Court finds that the hourly rates requested by Mr. Kostos are reasonable and commensurate with rates charged by attorneys with comparable skill and experience.” (July 28, 2023 Order at p. 3:19-25.)

As set forth above, 168 Entertainment moves “for an order awarding 168 ENTERTAINMENT $64,160.25 as its reasonable attorney’s fees in this case, as an item of costs, and other costs listed in the defendants’ Memorandum of Costs, in the sum of $12,496.19; and that the Judgment in this case be amended to include an award of costs to defendant 168 ENTERTAINMENT, LLC in the sum of $78,656.44.” (See Notice of Motion filed on October 12, 2023 at p. 2:16-20.)  

In his third supplemental declaration filed on October 12, 2023, Mr. Kostos states that “the Court requested further evidence for the allocation of attorney’s fees between BEDJAKIAN and 168 ENTERTAINMENT. I submitted further evidence in the form of my Second Supplemental Declaration…I have attached a true and correct copy of the signed copy of my Second Supplemental Declaration hereto, marked Exhibit C, and incorporated herein by this reference.” (Third Suppl. Kostos Decl., ¶ 3.)

Mr. Kostos further states that “[c]onsistent with the Court’s tentative rulings, I allocated the attorney’s fees billed exclusively to each defendant to the designated defendant and has [sic] divided the remaining attorney’s fees 50-50 between the parties, except that consistent with the Court’s tentative ruling on September 26, 2023, the billing entries dated 4/11/2019, 4/12/2019, 5/01/2019, and 5/02/2019 pertaining to the depositions of plaintiffs were deducted in their entirety. A true and correct copy of this billing statement is attached hereto marked Exhibit D and is incorporated herein by this reference.” (Third Suppl. Kostos Decl., ¶ 6.) The billing statement attached as Exhibit D to the Third Supplemental Kostos Declaration provides, inter alia, that the “168 Entertainment portion” totals “$64,160.25.” (Third Suppl. Kostos Decl., ¶ 6, Ex. D.)

The Court notes that in the previous July 28, 2023 Order on the subject motion for attorney’s fees, the Court found, inter alia, that “the Court will require further evidence and calculations from the Moving Defendants. The Court notes that for those billing entries pertaining to both 168 Entertainment and Bedjakian, 50% shall be deducted from such entries. Mr. Kostos’s supplemental declaration has not demonstrated why a lesser amount should be deducted from such entries. The Court notes that this does not apply to Mr. Kostos’s billing entries dated 10/18/2018, 10/19/2018, 12/15/2018, 12/17/2018, 3/18/2019, and 3/22/2019 (discussed above), which solely pertain to 168 Entertainment. In addition, this does not apply to the billing entries dated 4/11/2019, 4/12/2019, 5/01/2019, and 5/02/2019 pertaining to the depositions of Plaintiffs, which, as discussed above, are deducted in their entirety.” (July 28, 2023 Order at p. 5:18-26.)

In their third supplemental opposition filed on December 29, 2023, Plaintiffs assert that “[v]ia Mr. Kostos’ third supplemental declaration, he seeks $64,160.25 in attorney fees in this matter. However, the declaration and billing statement attached thereto as Exhibit D simply fails to state why the entries were solely for the benefit of 168 Entertainment LLC. Instead of explaining why a time entry was solely for the benefit of 168 Entertainment LLC, Defendants cut each entry by 50% (except for those entries on May 8, 2019, for some unknown reason). Although Defendants were ordered to cut all entries by 50% for those entries which pertained to both Defendants, Defendants have failed to offer any evidence that the entries which were cut by 50% had anything to do with 168 Entertainment LLC, and why they should not be discounted all together.” (Third Suppl. Opp’n at p. 2:13-21.)

Plaintiffs’ counsel states in his supporting declaration that “[a]ttached hereto as Exhibit A is a true and correct copy of the revised billing submitted by Mr. Kostos via his Third Supplemental Declaration on October 10, 2023. I have put a rectangle around all the billing entries which are attributable 100% to 168 Entertainment LLC. This amounts to $12,250.00.” (Papazian Decl., ¶ 3, Ex. A.) Plaintiffs assert that “[t]his should be the total amount of attorney fees awarded to 168 Entertainment LLC, if any at all.” (Third Suppl. Opp’n at p. 2:24-25.)

In the reply, Bedjakian and 168 Entertainment counter that “Defendants’ moving papers support a 50% allocation of attorney’s fees to 168 ENTERTAINMENT, and more. Two of the causes of action were against 168 ENTERTAINMENT, and only one cause of action in Fraud was alleged against defendant BEDJAKIAN.” (Reply at p. 3:19-22, emphasis omitted.) Bedjakian and 168 Entertainment also point to paragraph 6 of Mr. Kostos’s second supplemental declaration, which provides in part that “[t]he attorney’s fees listed and described in Exhibit H billed to 168 Entertainment were necessary and reasonable legal expenses for 168 Entertainment’s defense. The issues related to the defense of defendant BEDJAKIAN had been disposed of early in the litigation, as plaintiffs admitted in their discovery responses to discovery propounded by BEDJAKIAN that they had no facts to support their allegations of fraud by BEDJAKIAN (he had not provided them with fraudulent business records, he had not diverted a single dollar). Thereafter, I pursued the defense of 168 Entertainment for its alleged breach of contract.” (Second Suppl. Kostos Decl., ¶ 6.) As set forth above, Mr. Kostos’s latest third supplemental declaration attaches as “Exhibit D” a billing statement with 168 Entertainment’s requested fees totaling $64,160.25. (Third Suppl. Kostos Decl., ¶ 6, Ex. D.) Exhibit D appears to contain the same billing entries as Exhibit H attached to the Second Supplemental Kostos Declaration, but with different calculations as to 168 Entertainment’s portion. (Compare Second Suppl. Kostos Decl., ¶ 6, Ex. H with Third Suppl. Kostos Decl., ¶ 6, Ex. D.)[1] In addition, certain entries on and after July 28, 2023 that are contained in Exhibit H do not appear to be included in Exhibit D. (Ibid.) The Court does not find that Plaintiffs have shown that only $12,250.00 in attorney’s fees should be awarded to 168 Entertainment.

Plaintiffs also assert that “[s]hould this Court choose to allow for the additional billings, many of those billings should be discounted. As stated above, the time entries on May 8, 2019 have not been discounted to 50%, as they should be.” (Third Suppl. Opp’n at p. 3:2-4.) The Court notes that the previous July 28, 2023 Order on the subject motion for attorney’s fees provides, inter alia, that “Plaintiffs note that Mr. Kostos billed 10.7 hours for the ‘Deposition of Dertad Bedjakian and 168 Entertainment LLC’ as well as the preparation of Mr. Bedjakian, but that he did not discount the hours requested. (See Suppl. Kostos Decl., ¶ 2, Ex. G, 05/08/2019 and 05/09/2019 entries.) As Plaintiffs acknowledge that Mr. Bedjakian was the person most knowledgeable for 168 Entertainment, the Court finds that it is appropriate to deduct the requested 10.7 hours by half.” (July 28, 2023 Order at p. 5:1-5.)

In Exhibit “D” to the Third Supplemental Kostos Declaration, the entry from May 9, 2019 is deducted by half. However, the two entries from May 8, 2019 are not deducted by half. The May 8, 2019 entry for “[p]repare client for Deposition of Dertad Bedjakian and 168 Entertainment LLC” totals $1,225.00, but 168 Entertainment’s portion is $1,112.00, which is not half of $1,225.00. (Third Suppl. Kostos Decl., ¶ 6, Ex. D.) As Bedjakian and 168 Entertainment acknowledge in the reply, 168 Entertainment’s portion of this time entry should be $612.50. Thus, the Court deducts $499.50 from the total amount of attorney’s fees requested ($1,112.00 - $612.50 = $499.50).

In addition, the May 8, 2019 entry for “[p]repare Dertad Bedjakian for Deposition” totals $1,120.00, but 168 Entertainment’s portion is $1,060.00, which is not half of $1,120.00. (Third Suppl. Kostos Decl., ¶ 6, Ex. D.) As Bedjakian and 168 Entertainment acknowledge, 168 Entertainment’s portion of this time entry should be $560.00. Thus, the Court also deducts $500.00 from the total amount of attorney’s fees requested ($1,060.00 - $560.00 = $500.00.) Bedjakian and 168 Entertainment acknowledge that “[t]he amount overbilled here was $999.50.” (Reply at p. 5:7.)   

Plaintiffs also assert that certain time entries are excessive. Plaintiffs note that the billing entry from September 24, 2019 to “[p]repare file and Serve MSJ; Separate Statement; Exhibits” is for 25 hours. (Third Suppl. Kostos Decl., ¶ 6, Ex. D.) Plaintiffs assert that “[t]his may be for a motion for summary judgment, but it is not clear what Mr. Kostos is referring to in this time entry for an ‘MSJ’. Even if it is for a motion for summary judgment, a 25 hour block billing is excessive, as the motion was based upon a simple statute of limitations argument. Because it is not clear what this time entry is for, the entire 25 hours should be deducted, which Mr. Kostos attributed $4,375 in fees to 168 Entertainment LLC.” (Third Suppl. Opp’n at p. 3:5-10.)

The Court does not agree that the reference to “MSJ” is unclear as “MSJ” is an acronym for motion for summary judgment[2], and the billing entry also references “Separate Statement” and “Exhibits.” (Third Suppl. Kostos Decl., ¶ 6, Ex. D.) Moreover, “Defendants Dertad Teddy Bedjakian’s and 168 Entertainment, LLC’s Motion for Summary Judgment and in the Alternative for Summary Adjudication of Issues” was filed in this matter on September 24, 2019. The Court also does not find that 25 hours is excessive for this billing entry.  

Plaintiffs also assert that “all the time entries from March 1, 2023 and later should be discounted completely, as they are time spent to set aside the judgment that Defendants themselves proposed. This amounted to 14 hours of work, which totaled $5,600 in fees, which Mr. Kostos reduced by half, to $2,800. This $2,800 should be discounted completely.” (Third Suppl. Opp’n at p. 3:11-14.)

168 Entertainment and Bedjakian assert that “Plaintiffs’ argument that defendant 168 ENTERTAINMENT is not entitled to fees billed from March 1, 2023, is also incorrect.” (Reply at p. 4:11-12.) On February 9, 2023, Plaintiffs filed “Objections to Amended Proposed Judgment.” The Objections provide, inter alia, that “Defendants include in their Amended Proposed Judgment an award of attorney fees to Dertad Teddy Bedjakian and 168 Entertainment LLC, however, no breach of contract causes of action were plead against Dertad Teddy Bedjakian, as he was not a party to any contract, and as such, he has no contractual or statutory basis to be awarded attorney fees in this matter, let alone have a judgment entered against Plaintiffs awarding him attorney fees… Plaintiffs request that the Amended Proposed Judgment not be entered until a ruling is made following a hearing on whether Dertad Teddy Bedjakian is entitled to attorney fees in this matter.”

168 Entertainment asserts that “Defendants concurrently filed a motion…so that the February 15, 2023, judgment could be amended and defendants’ reasonable attorney’s fees entered as an item of costs upon the award of attorney’s fees. These motions were reasonable and necessary in this litigation.” (Reply at p. 4:16-20.) The Court does not find that Plaintiffs have demonstrated that the time entries from March 1, 2023 and later should be discounted.

The Court also notes that in the July 28, 2023 Order, the Court found, inter alia, as follows:

“…Plaintiffs challenge other specified billing entries. First, they note that billing entries from 4/11/2019, 4/12/2019, 5/01/2019, and 5/02/2019 pertain to the depositions of Plaintiffs. (Suppl. Kostos Decl., ¶ 2, Ex. G.) These billing entries total $5,600.00. (Ibid.) 

The entries from April 11, 2019 and April 12, 2019 provide, ‘[p]repare and serve Deposition Notice with request for Production of Documents for Mehdi Saidane [and Mimi Saidane].” (Ibid.) However, Plaintiffs indicate that on April 11, 2019, Mr. Kostos served a deposition notice indicating, inter alia, “PLEASE TAKE NOTICE that the oral deposition of plaintiff MIMI SAIDANE will be taken on May 1, 2019…by counsel for defendant DERTAD TEDDY BEDJAKIAN…” (Papazian Decl., ¶ 7, Ex. C, underline added.) The deposition notice for Mehdi Saidane similarly provides, inter alia, “PLEASE TAKE NOTICE that the oral deposition of plaintiff MEHDI SAIDANE will be taken on May 2, 2019…by counsel for defendant DERTAD TEDDY BEDJAKIAN…” (Papazian Decl., ¶ 8, Ex. D.) In light of the foregoing, the Court deducts $5,600.00 from the requested hours.” (July 28, 2023 Order at p. 4:13-25.)

The Court notes that in Exhibit “D” to the Third Supplemental Kostos Declaration, the entries from April 11, 2019, April 12, 2019, May 1, 2019 (two entries), and May 2, 2019 state that the 168 Entertainment portion is $0. (Third Suppl. Kostos Decl., ¶ 6, Ex. D.)

Lastly, as set forth above, 168 Entertainment seeks costs in the amount of $12,496.19. On March 6, 2023, Bedjakian and 168 Entertainment filed a Memorandum of Costs seeking a total of $143,058.69 in costs, which amount includes $130,562.50 in attorney’s fees. The remaining requested costs (other than the requested attorney fees) total $12,496.19. Plaintiffs do not appear to dispute 168 Entertainment’s request for costs. 

Based on the foregoing, the Court grants 168 Entertainment’s motion for attorney’s fees in the amount of $63,160.75 ($64,160.25 - $999.50.) and costs in the amount of $12,496.19.

Conclusion

Based on the foregoing, 168 Entertainment’s motion for attorney’s fees is granted. 168 Entertainment is awarded attorney’s fees and costs in the total amount of $75,656.94.   

Bedjakian and 168 Entertainment are to provide notice of this ruling.¿

DATED:  January 8, 2024                              ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court