Judge Theresa M. Traber, Case BC475350 2022-09-09 Tentative Ruling

Judge: Theresa M. Traber, Case: BC475350, Date: 2022-09-09 Tentative Ruling

Case Number: BC475350 Hearing Date: September 9, 2022 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: September 9, 2022 JUDGMENT ENTERED: July 21, 2022

CASE: Robert Baral v. David Schnitt

CASE NO.: BC475350

(1) MOTION FOR ATTORNEY’S FEES
(2)(3) MOTION TO TAX COSTS (x2)

MOVING PARTY: (1) (2) Defendant David Schnitt; (3) Plaintiff Robert Baral

RESPONDING PARTY(S): (1)(2) Plaintiff Robert Baral; (3) Defendant David Schnitt

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This action for fraud, breach of fiduciary duty, negligent misrepresentation, and declaratory relief was filed on December 16, 2011. Judgment was entered on July 21, 2022 after a lengthy appeal process.

Defendant moves for an award of attorney’s fees in connection with successful defense of an appeal of an award of attorney’s fees in connection with an anti-SLAPP motion. Both parties move to strike or tax the opposing party’s memorandum of costs.

TENTATIVE RULING:

Defendant’s Motion for Attorney’s Fees is GRANTED in the amount of $223.954.90.

Defendant’s Motion to Tax Costs is GRANTED. Plaintiff’s memorandum of costs is stricken.

Plaintiff’s Motion to Tax Costs is DENIED.

DISCUSSION:

Motion for Attorney’s Fees

Defendant moves for an award of attorney’s fees in the amount of $223,954.90 following appellate affirmance of the Court’s order awarding Defendant attorney’s fees for his successful anti-SLAPP motion.

Legal Standard

Code of Civil Procedure section 425.16(c) entitles a prevailing defendant on a special motion to strike, otherwise known as an anti-SLAPP motion, to recover their attorney’s fees and costs. A statute authorizing attorney fee awards at the trial court level also authorizes appellate attorney’s fees unless explicitly stated otherwise. (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1426.) The amount of attorneys’ fees awarded must be reasonable. (See, e.g., Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.)

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.)

Plaintiff’s Evidentiary Objections

Plaintiff objects to portions of the declarations of Michael Lieb and Kent Richland in support of this motion. Plaintiff cites no law requiring the Court to rule on evidentiary objections in connection with a motion for attorney’s fees, as opposed to a motion for summary judgment or anti-SLAPP motion to strike. The Court therefore declines to rule on each of Plaintiff’s evidentiary objections. To the extent that the evidence objected to is relevant, Plaintiff’s objections will be taken into account when weighing the evidence presented.

Plaintiff’s Request for Judicial Notice

Plaintiff requests that the court take judicial notice of numerous documents and records in this case. As these documents are immaterial to the motion, Plaintiff’s requests for judicial notice are DENIED. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 (“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].)

Analysis

Defendant requests an award of reasonable attorneys’ fees in the amount of $223,954.90. The undisputed facts are as follows: the Court awarded Defendant $279,179.80 in attorney’s fees in connection with a successful anti-SLAPP motion on November 14, 2017 following four years of extensive appellate litigation. (November 17, 2017 Minute Order.) Plaintiff appealed the Court’s order awarding attorney’s fees. (May 30, 2019.) The Court of Appeal affirmed and stated that Defendant was to recover costs on appeal. (Declaration of Michael C. Lieb ISO Mot. Exh. 6.)

Defendant states that Defendant’s counsel from Ervin Cohen and Jessup spent approximately 68.80 hours defending the appeal, at rates ranging from $425.00 to $560.00 per hour, for a total of $39,989.50. (Lieb Decl. ¶¶ 4-5, Exh. 1.) Defendant also states that Defendant’s counsel from Greines, Martin, Stein & Richland LLP spent 1,698.30 hours defending the appeal at rates ranging from $125.00 to $850.00 per hour, for a total of $989,785.00. (Declaration of Kent L. Richland ISO Mot. ¶ 15, Exh. 1.) Defendant has provided itemized timesheets for both sets of counsel. (Lieb Decl. Exh. 1.; Richland Decl. Exh. 1.) Defendant concedes that there were multiple issues raised on appeal and does not contend that all time spent or fees incurred pertained to the anti-SLAPP motion, and instead estimates that 20% of defense counsel’s time was spent on issues pertaining to the anti-SLAPP motion. (Lieb Decl. ¶ 6, Richland Decl. ¶ 11.) Defendant thus applies a one-fifth multiplier to the total hours billed to arrive at a total of 13.64 hours billed by ECJ and 339.66 hours billed by GMSR on issues pertaining to the anti-SLAPP motion.

On the issue of whether its attorneys’ hourly rates are reasonable, Defendant presents, for comparison, the Laffey matrix, a standard source for determining comparable hourly rates. (Syers Props. III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 702.) Defendant contends that, applying the Laffey matrix with a 1.58% increase to adjust for the Los Angeles area, Defendant’s counsel’s rates are consistently below market rate. (See, e.g., Lieb Decl. Exh. 5.)

The Court notes that the amount requested exceeds 20% of the total fees billed by defense counsel by an even $18,000. This amount is not accounted for in any of Defendant’s initial moving papers, save a footnote at the end of the motion stating that Defendant is also requesting attorney’s fees in connection with this motion, and anticipated fees in connection with an expected opposition and reply. In Defendant’s reply papers, Defendant provides a supplemental declaration from Michael C. Lieb accounting for the hours billed in connection with this motion. Defendant states that the total fees incurred in connection with the initial moving papers were $12.577.15, representing 2.6 hours of attorney time by Mr. Lieb at $610.00 per hour and 24.5 hours of attorney time by Mr. Peterson at $495.00 per hour. (Supplemental Declaration of Michael C. Lieb ISO Reply ¶ 3.) Defense counsel states that the reply brief required the expenditure of an additional estimated 8 hours of time at $610 per hour, as Mr. Lieb handled the reply himself while Mr. Peterson is on leave, totaling an additional $4,880.00. (Id.) Based on this evidence and accounting for the time that will be spent in hearing this motion, the Court finds that Defendant has substantiated the remaining $18,000 in fees.

Plaintiff opposes the requested attorney’s fees on the grounds that Defendant’s fee request is grossly overinflated. Plaintiff raises several arguments in support of this position. First, perplexingly, Plaintiff resorts to page and word count in the appellate briefing and measuring the length of the reporter’s transcript on appeal. Plaintiff cites no law or precedent for the proposition that page and word counts are a fair measure of the reasonableness of a fee award request, and the Court is not persuaded by Plaintiff’s reasoning. Second, Plaintiff argues that the briefs raised the same arguments and authorities that had previously been briefed by the parties. However, Plaintiff cites no examples of any repetitive briefing, and, furthermore, restatement of arguments raised previously is a necessary component of litigation, as it is well settled that arguments must be raised at the trial court to preserve them for appeal. Third, Plaintiff contends that at least $516,796.25 in fees are not related to the anti-SLAPP award—an argument that Defendant had pre-emptively conceded by only seeking a reduced fee award of 20% of the total fees. Plaintiff’s final substantive argument is that the descriptions of the time entries are vague or heavily redacted, and thus impossible for the Court to determine whether they relate to the anti-SLAPP fee award. But Plaintiff again cites no examples of particular entries that are inappropriately vague, nor does Plaintiff cite any case law requiring an attorney to list in exhaustive detail the issues researched or briefed in that attorney’s billing time entries.

In the Court’s view, given the scope of the issues litigated by the parties on appeal, the experience of defense counsel, and the complexity and history of the case, the Court finds that the requested fee amount is reasonable. The Court will accordingly grant Defendant’s fee award of $223.954.90, as requested.

Conclusion

Defendant’s request for attorney’s fees is GRANTED in the amount of $223.954.90.

Defendant’s Motion to Tax Costs

Defendant moves to strike or tax Plaintiff’s memorandum of costs in its entirety.

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 “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(a)(4).) If any party recovers other than monetary relief, the court has discretion to determine the prevailing party. (Id.) A plaintiff will be considered the prevailing party when the lawsuit yields the primary relief sought in the case. (Pirkig v. Dennis (1989) 214 Cal.App.3d 1560, 1566.)

Plaintiff’s Request for Judicial Notice

Plaintiff requests that the Court take judicial notice of (1) Plaintiff’s Motion to Tax Costs filed with this court, and (2) the docket of the District Court for the Central District of California with Case Number 2:12-cv-04939-FMO-AGR. Plaintiff’s request is GRANTED as to request number 1 pursuant to Evidence Code section 452(d) (court records) but DENIED as to request number 2 for lack of relevance to the Court’s ruling. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 (“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].)

Timeliness of Motion

Prevailing Party

Defendant contends that he is the prevailing party because Plaintiff did not obtain the primary relief sought in the case. According to Defendant, Plaintiff sought some-where between $4.9 and $35 million dollars in compensatory and punitive damages in addition to his claim for declaratory relief. (Declaration of Michael Lieb ISO Mot. ¶ 13, Exh. I.) Defendant contends that Plaintiff’s recovered relief is a declaration that he was a member and manager of an LLC that has no assets and was dissolved in 2011. (Lieb Decl. ¶ 12, Exh. H.) Thus, Defendant argues, Plaintiff cannot be considered the prevailing party because he did not obtain the primary relief sought. In support, Defendant relies principally on Biren v. Equal. Emergency Med. Grp., Inc., (2002) 102 Cal.App.4th 125, 139-40, in which the Court of Appeal held that, where a defendant sought millions of dollars in damages on breach of contract and fiduciary duty claims and recovered nothing on those cross-claims, but did receive an offset award against the plaintiff’s recovery, the result was “mixed” and the trial court properly exercised its discretion to determine the defendant was not the prevailing party. The Court of Appeal stated that the trial court has the authority to consider the disparity between the damages sought and the final result. (Id.) Defendant also argues that, in any event, Defendant is the prevailing party because Defendant received a net monetary recovery by recovering fees on the anti-SLAPP motion.

Plaintiff argues that Biren is distinguishable insofar as the Biren court’s statement regarding whether the trial court could look to the disparity between the damages sought and the final result was discussed for recovery of attorneys’ fees under Civil Code section 1717, not costs under section 1032. Plaintiff is wrong. The Court of Appeal plainly stated that the issue it was addressing was which party was the prevailing party for the purposes of an award of attorney’s fees and pre-settlement offer costs. (Biren, supra, 102 Cal.App.4th at 140.)

Nevertheless, Plaintiff argues that the proper analysis turns on whether Defendant’s conduct made it necessary for Plaintiff to sue, citing Marina Pacifica Homeowners Assn. v. S. California Fin. Corp., (2018) 20 Cal. App. 5th 191, 208. However, nowhere in Marina Pacifica does the Court of Appeal state that the Court must make such a determination. What Plaintiff misconstrues as an element of the analysis is actually the court’s assessment of the underlying theory behind the statutory framework. (Id.) Furthermore, Plaintiff’s sole evidence in support of the contention that Defendant made it necessary to sue Plaintiff arises from comments by Judge Hammock at trial, which have no evidentiary weight.

Plaintiff’s argument that, in reality, the declaration stating that Plaintiff was a manager and member of IQ LLC was the primary relief sought is not credible on its face. Plaintiff does not dispute Defendant’s contention that Plaintiff sought millions of dollars in damages and received only a declaration that Plaintiff was a manager and member of a defunct LLC. Plaintiff’s argument that, despite these concessions, the declaratory relief was the primary relief sought is unpersuasive.

Plaintiff also incorporates by reference his argument in connection with the below Motion to Tax Costs with respect to Defendant’s argument about net monetary recovery. Plaintiff cites no law entitling him to do so. However, as Defendant has not objected in the reply papers, and, in fact, has done the same, the Court will consider the merits of that motion pertaining to this argument.

Plaintiff argues that the anti-SLAPP attorney’s fees are not considered for the purposes of net-monetary recovery, relying on Foothill Props v. Lyon/Coley Corona Assocs. (1996) 46 Cal.App.4th 1542, 1553, in which the Court of Appeal stated that attorney’s fees in connection with discovery sanctions are not to be considered when determining a net monetary recovery, because they are not an item of damages in a cause of action. As Defendant notes in his opposition, Foothill is distinguishable insofar as the award issued in this case was in connection with an anti-SLAPP motion which addressed the merits of Plaintiff’s claims, rather than discovery sanctions. Defendant cites no law, however, and the Court is aware of none, which states that anti-SLAPP attorney’s fees are to be construed as damages in a cause of action. That said, this line of argument ultimately does not salvage Plaintiff’s position, because regardless of whether Defendant obtained a net monetary recovery, Plaintiff has clearly not obtained the primary relief he sought in this case.

The Court therefore finds that Plaintiff is not the prevailing party and is not entitled to recover costs.

Conclusion

Accordingly, Defendant’s motion to strike or tax the memorandum of costs is GRANTED.

Plaintiff’s Motion to Tax Costs

Plaintiff also moves to strike and or tax Defendant’s memorandum of costs, or, in the alternative, to strike specific costs totaling $28,651.60.

Timeliness of Motion

“Any notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum. If the cost memorandum was served by mail, the period is extended as provided in Code of Civil Procedure section 1013.” (Cal. Rules of Court, rule 3.1700(b)(1).) Here, Defendant served the memorandum of costs by mail on May 13, 2022. (Declaration of Amir A. Torkamani ISO Mot. ¶ 10 Exh. H.) This motion was filed on August 11, 2022. The Court had ordered the parties to meet and confer on a briefing schedule for post-judgment motions regarding recovery of costs and/or attorney’s fees, with briefing to occur per code if no agreement was reached. (Id. ¶ 11, Exh. I.) Neither party disputes that the parties did not reach an agreement, although Defendant contends that Plaintiff’s counsel failed to meet and confer regarding a briefing schedule. (Declaration of Michael C. Lieb ISO Mot. ¶ 3.) Defendant therefore contends that the motion is untimely.

Rule 3.1700(a)(1) states that the memorandum of costs must be served and filed either 15 days after service of the notice of entry of judgment, or within 180 days after entry of judgment, whichever is sooner. When a memorandum of costs is filed prematurely, it is not null, but it instead should be treated as having been filed and served the day after entry of judgment. (See, e.g., Hills Laurel Hills Homeowners Assn. v. City Council (1978) 83 Cal.App.3d 515, 528.) The memorandum of costs was filed on May 13, 2022, and final judgment was not entered until July 21, 2022, with notice served via mail on July 22, 2022. Thus, treating the memorandum as having been filed and served by mail on July 22, 2022, the last day to file this motion was August 11, 2022, the date this motion was filed. The motion is therefore timely.

Prevailing Party

Plaintiff argues that Plaintiff, not Defendant, is the prevailing party, and therefore Defendant is not entitled to any costs whatsoever. As stated above, the Court rejects this argument. Defendant, not Plaintiff, is the prevailing party, and Defendant is entitled to recover costs.

Specific Costs

Plaintiff alternatively seeks to strike specific costs as improper.

A verified memorandum of costs is considered correct. However, a party may contest the costs that a prevailing party seeks. (Code Civ. Proc. §1034(a).) The challenging party has the burden of demonstrating that those costs are unreasonable or unnecessary. (Adams v. Ford Motor Co., 199 Cal. App. 4th 1475, 1486 (2011); 612 South LLC v. Laconic Limited Partnership, 184 Cal. App. 4th 1270, 1285 (2010).) If the costs are properly objected to, “they are put in issue and the burden of proof is on the party claiming them as costs.” (Ladas v. California State Automobile Association (1993) 19 Cal.App.4th 761, 774.) To be recoverable, the costs must be reasonably necessary to the conduct of litigation. “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.” (Id.)

Defendant objects to costs in the amount of $4,654.70 in connection with the Deposition of Colin Wallace, $1,295.15 in connection with the Deposition of Nick Bergamo, $2,488.85 in connection with the Deposition of Phil Jablonski, and $20,212.90 in connection with “Support for Electronic Presentation at Trial.”

Turning first to the deposition costs, Plaintiff objects that Defendant previously stated in a March 26, 2019 Motion to Tax Plaintiff’s Costs that these depositions were not necessary for trial, and thus Plaintiff was not entitled to recover costs for these depositions. Plaintiff argues that Defendant is judicially estopped from taking a contrary position. Judicial estoppel applies when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. (Jackson v. Cty. of L.A., 60 Cal.App.4th (1997)171, 183.)

In opposition, Defendant states that, first, the position asserted in the Motion was not adopted because the motion was withdrawn without being heard, and, more importantly, these positions are not inconsistent because the depositions were noticed by Plaintiff, whose pursuit of the depositions imposed the sought-after costs on Defendant. Plaintiff does not contest these arguments, instead merely stating in conclusory fashion that these costs are unreasonable. Plaintiff has failed to demonstrate that Defendant is judicially estopped from asserting this position and seeking costs on this basis.

Plaintiff also contends that Defendant appears to be claiming duplicative costs of $1.097 and $1,131.18 for the Wallace Deposition transcript. In opposition, Defendant states that one invoice is for the written transcript, and the other is for the videographer. (Declaration of Michael Lieb ISO Opp. ¶ 5.) The Court therefore finds that these costs are reasonable.

Plaintiff makes additional objections to the deposition costs for Colin Wallace in his reply brief. As these objections were not raised in the moving papers, the Court will not consider them.

Turning to the remaining objection to the claimed costs of $20,212.90 in connection with “Support for Electronic Presentation at Trial,” Plaintiff contends that it is impossible to determine what these costs were for, and states that Defendant did not appear to have a computer support individual present at trial. (Torkamani Decl. ¶ 14.) Defendant clarifies that this entry is erroneously labeled, and properly consists of invoices issued by eLitigation Services, Inc. for court reporting at trial. Costs for court reporting at trial are recoverable. (Code Civ. Proc. § 1033.5(a)(11).) Plaintiff argues that the costs are not recoverable unless ordered by the court, citing section 1033.5(a)(9) and 1033.5(b)(5). Plaintiff is conflating transcript fees, which are covered by section 1033.5(a)(9), with court reporter fees, which are covered by 1033.5(a)(11). As stated by the Court of Appeal in ruling on exactly this issue in Chaaban v. Wet Seal, Inc, “These charges are not for transcripts. They are for court reporter fees, an entirely different expense. The parties have to pay the court reporter regardless of whether anyone orders transcripts.” (Chaaban v. Wet Seal, Inc. (2012) 203 Cal. App. 4th 49, 58.)

Conclusion

Accordingly, Plaintiff’s Motion to Tax Costs is DENIED.

CONCLUSION:

For the reasons explained above, Defendant’s Motion for Attorney’s Fees is GRANTED in the amount of $223.954.90.

Defendant’s Motion to Tax Costs is GRANTED. Plaintiff’s memorandum of costs is stricken.

Plaintiff’s Motion to Tax Costs is DENIED.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: September 9, 2022 ___________________________________

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.