Judge Theresa M. Traber, Case 22STCP03450 2023-05-18 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCP03450, Date: 2023-05-18 Tentative Ruling

Case Number: 22STCP03450 Hearing Date: May 18, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: May 18, 2023 JUDGMENT ENTERED: January 3, 2023

CASE: Roxbury MP LLC, et al. v. Brian S. Boxer Wachler, Inc.

CASE NO.: 22STCP03450

(1) MOTION TO TAX OR STRIKE MEMORANDUM OF COSTS

(2) MOTION FOR ATTORNEY’S FEES

MOVING PARTY: (1) Petitioners Roxbury MP LLC; Roxsan Investors LLC; Roxbury Medical Towe, LLC; Roxsan Optimus, LLC, as tenants in common dba Roxsan Tower; (2) Respondent Brian S. Boxer Wachler, Inc., a Medical Corporation

RESPONDING PARTY(S): (1) Respondent Brian S. Boxer Wachler, Inc., a Medical Corporation; (2) Petitioners Roxbury MP LLC; Roxsan Investors LLC; Roxbury Medical Towe, LLC; Roxsan Optimus, LLC, as tenants in common dba Roxsan Tower

CASE HISTORY:

· 09/21/22: Petition filed.

· 01/03/23: Judgment entered.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a dispute regarding an arbitration award arising from a commercial landlord-tenant dispute.

Petitioners move to tax or strike Respondents’ memorandum of costs. Respondent moves for attorney’s fees.

TENTATIVE RULING:

Petitioners’ Motion to Tax or Strike the Memorandum of Costs is DENIED.

Respondents’ Motion for Attorney’s Fees is GRANTED.

DISCUSSION:

Motion to Tax Costs

Petitioners seek to strike the entire memorandum of costs, or, alternatively, to tax select items of the memorandum of costs.

Legal Standard

In general, the “prevailing party” is entitled as a matter of right to recover costs for suit in any action or proceeding. (Code Civ. Proc. §1032(b); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Scott Co. Of Calif. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) Assuming the “prevailing party” requirements are met, the trial court has no discretion to order each party to bear his or her own costs of suit. (Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198; Nelson v. Anderson (1999) 72 Cal.App.4th 111, 129.) A defendant who is dismissed from the action is the “prevailing party.” (Code Civ. Proc. §1032(a)(4).) This is so whether the dismissal is voluntary or involuntary. (Santisas, 17 Cal.4th at 606.)

Allowable costs under Section 1033.5 must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation, and must be reasonable in amount. An item not specifically allowable under Section 1033.5(a) nor prohibited under subdivision (b) may nevertheless be recoverable in the discretion of the court if it meets the above requirements (i.e., reasonably necessary and reasonable in amount). If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. (Ladas v. California State Automotive Assoc. (1993) 19 Cal.App.4th 761, 773-774.) On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. (Ibid.) Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court and its decision is reviewed for abuse of discretion. (Ibid.) However, because the right to costs is governed strictly by statute, a court has no discretion to award costs not statutorily authorized. (Id.) Discretion is abused only when, in its exercise, the court “exceeds the bounds of reason, all of the circumstances being considered.” (Ibid.)

Timeliness of Motion

Any notice of motion to strike or tax costs for the enforcement of a judgment must be served on the judgment creditor and filed within 10 days of service of the memorandum of costs on the judgment debtor. (Code Civ. Proc. § 685.070(c).) If the cost memorandum was served by mail, overnight mail, or email, the period is extended as provided in Code of Civil Procedure section 1013. (Code Civ. Proc. § 685.070(f).)

Here, the memorandum of costs was served by mail and email on January 17, 2023. (Memorandum of Costs POS.) Thus, the statutory deadline for this motion before any extension for service was February 3, 2023. This motion was filed and served on January 30, 2023. The motion is therefore timely.

Challenge to Entire Memorandum

Petitioners challenge the entirety of the memorandum of costs as improper and not authorized under any statutory provision or provision of the contract at issue here, and on the conclusory assertion that Respondents were not the prevailing party in the arbitration. These arguments are not well-taken. Code of Civil Procedure section 1032(b) expressly provides that a prevailing party is entitled to recover costs as a matter of right except where expressly provided otherwise. In the context of post-arbitration motions, the prevailing party is the party who successfully confirms or vacates an arbitration award. (See, e.g., Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 878 [prevailing party defeated petition to vacate and confirmed award in party’s favor].)

Here, it is undisputed that Respondents successfully defeated Petitioners’ challenge to the arbitration award. (January 3, 2023 Judgment.) Respondents are the prevailing party in this matter and are therefore entitled to recover costs pursuant to Code of Civil Procedure section 1032(b). Petitioners’ contentions regarding Respondents’ right to recover attorney’s fees constitute an attack on an individual item, and not a basis to strike the memorandum of costs in its entirety.

The Court therefore declines to strike the entire memorandum of costs.

Challenge to Individual Items

Petitioners challenge two items set forth in the memorandum of costs.

First, Petitioners challenge Item 1, which seeks recovery of $435 in filing fees on the Petition to Confirm Arbitration Award, and $60.00 for the pending Motion for Attorney’s Fees. Petitioners do not address this item in their moving papers. As these items are fees expressly permitted by subdivision (a)(1) of Code of Civil Procedure section 1033.5, Petitioners bear the burden of demonstrating why these costs are improper. As Petitioners have not done so, they are not entitled to an order taxing these costs.

Second, Petitioners challenge Item 10, which seeks recovery of attorney’s fees to be determined on motion. Petitioners contend that this item is improper pursuant to the underlying Lease Agreement and Extensions that gave rise to this dispute.

Code of Civil Procedure section 1021 states in relevant part that “[e]xcept as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties.” Civil Code section 1717 subdivision (a) expressly authorizes any party prevailing on an action to enforce a contract to recover reasonable attorney’s fees if 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.” (Civ. Code § 1717(a).)

Courts interpret a contract to give effect to the mutual intention of the contracting parties at the time the contract was formed. (Civ. Code, § 1636; Foster-Gardner, Inc. v. National Union Fire Ins. Co. (1998).) Where possible, the intention of the parties is derived solely from the written contract, but the Court may also consider the circumstances under which the contract was made and the matter to which it relates. (Civ. Code §§ 1639, 1647.) Courts also consider the contract as a whole and interpret its language in context so as to give effect to each provision, rather than interpret contractual language in isolation. (Civ. Code § 1641.) Contractual language is interpreted in accordance with its ordinary and popular sense, and the plain meaning will govern if the contractual language is clear and does not create absurdity. (Civ. Code §§ 1638, 1644.)

Here, section 21.24 of the Lease Agreement provides:

If litigation is instituted between Landlord [Petitioners] and Tenant [Respondents], the cause for which arises out of or in relation to this Agreement, the prevailing party in such litigation shall be entitled to receive its costs (not limited to court costs), expenses and reasonable attorneys’ fees from the non-prevailing party as the same may be awarded by the court.

(Declaration of Joseph Shabani ISO Mot. Exh. A. § 21.24.) However, section 22.4(b), governing arbitration of a dispute between the parties concerning the fair market rental value of the subject property during the term of the Extension, states:

The costs and expenses of the arbitration and of the third party arbitrator shall be shared equally by Landlord and Tenant and each party shall be responsible for the costs and expenses of its designated arbitrator and its own witnesses and counsel.

(Id. § 22.4(b).)

Petitioners argue that this second provision, governing arbitration, prohibits Respondents from recovering attorney’s fees in connection with this matter. In support of this provision, Petitioners rely upon Cal. Union Square L.P. v. Saks & Co., a 2021 appellate opinion from the First District concerning a similar dispute regarding fair market rental value determinations in a lease extension agreement. (Cal. Union Square L.P. v. Saks & Co. (2021) 71 Cal.App.5th 136, 138-140 (“Saks”.) In that case, the Court of Appeal held that the arbitration provision in the operative agreement, which, as here, specifically stated that all parties were to bear their own fees and expenses incurred in connection with the arbitration, extended to post-arbitration court proceedings to confirm or vacate the arbitration award. (Id. at 146.) Petitioners contend that the arbitration provision here is sufficiently similar to the one at issue in Saks, such that the holding in that case is controlling authority.

In opposition, Respondents argue that Saks is factually distinguishable from this case in several respects. First, Respondents contend that Saks did not hold that judicial proceedings relating to an arbitration are always necessarily covered by arbitration provisions. Although Respondents are correct in this assessment, that observation is not sufficient in the context of the apparent factual similarity between Saks and this case. Respondents also argue that the arbitration provision in this matter provides for a very limited arbitration of a single issue that, unlike Saks, did not invite any form of judicial involvement. (See Saks, supra, 71 Cal.App.5th at 146.) As Respondents correctly observe, the fee provision in Saks was not contained in the arbitration provision itself, but adjacent to that provision, in the section for resolution of fair market rental value disputes generally. (Id. at 144-45.) Respondents also argue that the non-arbitration fee provision was significantly narrower in Saks, only pertaining to actions to enforce or obtain a declaration of rights under a lease, (Saks, supra, 71 Cal.App.5th at 142), whereas the equivalent provision here applies to “litigation . . . between Landlord and Tenant, the cause for which arises out of or in relation to this Agreement.” (Shabani Decl. Exh. A. § 21.24.)

The Court concurs with Respondents that Saks is distinguishable from this case. The Saks court’s ruling was grounded in the plain language of the contract at issue and supported by the construction of the contract showing that the intent of the parties was that each party agreed to bear its own attorneys’ fees for all proceedings concerning a dispute around fair market rental value. (Saks, supra, 71 Cal.App.5th at 147.) In Saks, the fee provision stated only “[t]he attorneys’ fees and expenses of counsel for the respective parties and of witnesses shall be paid by the respective party engaging such counsel or calling such witnesses.” (Id. at 144.) This language was central to the Saks court’s ruling, as the court concluded, based on its plain meaning and its presence adjacent to the arbitration provision and accompanied by other provisions for judicial involvement, that there was no limitation of the fee provision’s effect to only fees incurred in an arbitration proceeding, and the court declined to add such a term. (Id. at 146.) Here, however, the relevant provision occurs within the arbitration provision of the section concerning fair market rental value determination, directly following a discussion of how the arbitrator will reach a decision, and preceding a description of the effect of the arbitrators’ final decision. (Shabani Exh. A. § 22.4(b).) In addition, unlike the provision in Saks,, the contract here does not mention attorney’s fees and instead states that each party will bear its own costs and expenses of its designated arbitrator, as well as witnesses and counsel.

In the Court’s view, the narrower scope of the arbitration provision, the context of the fee provision in section 22.4 of the Agreement, and the absence of any provision for additional judicial involvement, evidence an intent that each party should bear their own fees and costs incurred within the arbitration, and not those incurred outside of the arbitration in related proceedings. The intent for expansive application which the Court of Appeal found in Saks is not apparent here. The Court therefore concludes that Respondents are entitled to seek attorney’s fees incurred in confirming the arbitration award.

Although there is some discussion of the proper amount of the fee award in the Opposition and Reply briefing, the Court declines to address this issue in the context of this motion, as there is a separate Motion for Attorney’s Fees before the Court to resolve this particular dispute.

Conclusion

Accordingly, Petitioners’ Motion to Tax or Strike the Memorandum of Costs is DENIED.

Motion for Attorney’s Fees

Respondents also move for attorney’s fees in the amount of $89,318.50 plus $575.36 in costs.

Petitioners’ Evidentiary Objections

Petitioners raised multiple objections to Respondents’ supplemental declarations filed in support of their reply brief. Petitioners cite no law requiring the Court to rule on these objections in the context of this motion, and, in any event, this evidence is not material to the Court’s ruling. The Court therefore declines to rule on these objections.

Request for Judicial Notice

Petitioners also request that the Court take judicial notice of the Motion to Strike the Memorandum of Costs filed January 30, 2023 in this action. Petitioners’ request is GRANTED pursuant to Evidence Code section 452(d) (court records).

Legal Standard

Reasonable attorney’s fees are allowable costs when authorized by contract, statute, or law. (Code Civ. Proc § 1033.5(a)(10), (c)(5)(B).) In actions that are based 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… shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civil Code § 1717(a) [emphasis added].) A recovery of attorney’s fees is authorized even in noncontractual or tort actions if the contractual provision for fee recovery is worded broadly enough. (See Code Civ. Proc § 10211; Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 993 [agreement to award fees based on outcome of “any dispute” encompasses all claims, “whether in contract, tort or otherwise]; Lockton v. O'Rourke (2010) 184 Cal.App.4th 1051, 1076; Lerner v. Ward (1993) 13 Cal.App.4th 155, 160.)

Reasonable attorney’s fees shall be fixed by the Court and shall be an element of the costs of suit. (Code Civ. Proc. § 1033.5(c)(5)(B).) Reasonable attorney’s fees are ordinarily determined by the Court pursuant to the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. (See PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095-1096; Margolin v. Regional Planning Com. (1982) 134 Cal.App.3d 999, 1004 [“California courts have consistently held that 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.”].) “[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (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….” (Ibid.) In setting the hourly rate for a fee award, courts are entitled to consider the “fees customarily charged by that attorney and others in the community for similar work.” (Bihun v. AT&T Info. Sys., Inc. (1993) 13 Cal.App.4th 976, 997 [affirming rate of $450 per hour], overruled on other grounds by Lakin v. Watkins Associated Indus. (1993) 6 Cal.4th 644, 664.) The burden is on the party seeking attorney’s fees to prove the reasonableness of the fees. (Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 615.)

The Court has broad discretion in determining the amount of a reasonable attorney’s fee award, which will not be overturned absent a “manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence.” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393-1394.) The Court need not explain its calculation of the amount of attorney’s fees awarded in detail; identifying the factors considered in arriving at the amount will suffice. (Ventura v. ABM Indus. Inc. (2012) 212 Cal.App.4th 258, 274-275.)

Entitlement to Fees

As stated above, in actions that are based 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… shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civil Code § 1717(a).)

Here, as addressed above in the Motion to Tax Costs, section 21.24 of the amended Lease Agreement provides:

(Declaration of Brian Boxer Wachler ISO Mot. Exh. B.) As explained above, Respondents are unambiguously the prevailing party in this action, pursuant to the judgment entered January 3, 2023. Petitioners challenge Respondents’ entitlement to fees based on the arguments asserted in the Motion to Tax Costs. As the Court has rejected those arguments, the Court finds that Respondents are entitled to recover reasonable attorney’s fees.

Reasonableness of Fees

Here, Respondents seek an award of $89,318.50 in connection with this action. Respondents have provided an itemized list of attorney time billed in connection with this case, showing that Respondents billed a total of 144.3 hours in connection with this action at rates between $675 and $695 per hour. (Declaration of Bruce M. Cohen ISO Mot. ¶¶ 3-4, 9, 11-13; Exh. C.) Attorney Cohen attests to his own skills, training, experience, and customary hourly rate, as well as that of his co-counsel, Julia M. Cohen. (Id. ¶¶ 2-4.) Further, Attorney Cohen states that his standard billing rate is $895 per hour, and his co-counsel’s is $745 per hour, but both billed their services in this matter at the discounted rate of $695 and $675 per hour, respectively. (Id. ¶¶ 3-4.)

In opposition, Petitioners identify numerous entries that they contend are “block billing” “duplicative,” or “excessive time,” Petitioners offer no evidence supporting these contentions beyond a conclusory assertion that they are so. (See Declaration of Maurice Wainer ISO Opp. Exhs. A-D.) Further, Petitioners’ contentions that this was merely a dispute “in connection with competing motions to vacate and/or confirm garden-variety arbitration award” is belied by the vigorous litigation, numerous arguments, and voluminous body of evidence asserted in the motions concerning the arbitration award, as well as the substantial nature of the two competing motions currently before the Court. The Court therefore concludes that Respondents’ unmodified fee requests are reasonably incurred and appropriate for use as the lodestar for Respondents’ fee award.

As the Court has rejected Petitioners’ challenges to the Memorandum of Costs, the Court will award the requested $575.36 in costs.

Conclusion

Accordingly, Respondents’ Motion for Attorney’s Fees is GRANTED.

CONCLUSION:

For the reasons stated above, Petitioners’ Motion to Tax or Strike the Memorandum of Costs is DENIED.

Respondents’ Motion for Attorney’s Fees is GRANTED. Respondents are, thus, entitled to recover $89,318.50 in attorney’s fees and $575.36 in costs.

Respondents are ordered to give notice.

IT IS SO ORDERED.

Dated: May 18, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.