Judge Theresa M. Traber, Case Number: BC715362, Date: 2023-06-29 Tentative Ruling

MOVING PARTY: Defendants/Cross-Complainants Virut, Vichai, Sumeth, and Narlong Tilakamonkul

RESPONDING PARTY(S): Plaintiffs/Cross-Defendant Vichit and Somsak Tilakamonkul

This dispute involves a partnership in which Plaintiffs sought to quiet title, dissolve a partnership, and partition and sell the partnership property, among other causes of action. The most of the individual parties are siblings. Plaintiffs alleged that the defendant siblings denied that the parties were partners and that Plaintiffs had any interest in several properties. In a cross-complaint, T-Team Investment also sought quiet title and declaratory relief.

Defendants Vichai, Virut, Sumeth, and Narlong Tilakamonkul move for attorney’s fees pursuant to Code of Civil Procedure sections 847.010 and 847.040.

Defendants’ Motion for Attorney’s Fees is GRANTED IN PART as described herein. Defendants are awarded attorney’s fees in the amount of $202,899.10.

Defendants Vichai, Virut, Sumeth, and Narlong Tilakamonkul move for attorney’s fees pursuant to Code of Civil Procedure sections 847.010 and 847.040.

The California Rules of Court require that a motion for attorney’s fees be served and filed within the time for filing a notice of appeal. (Cal. Rule of Court Rule 3.1702(b)(1).) Under Rule 8.104, an appeal must be perfected within 60 days of service of entry of notice of judgment. (Rule 8.104.) Here, notice of entry of judgment was served on September 26, 2023. (Notice of Entry of Judgment.) As the 60th day after September 26, 2023 was Saturday, November 25, 2023, the last date to file the motion pursuant to the Rules of Court was Monday, November 27, 2023. (See Code Civ. Proc. § 12.) Defendants’ motion was filed at exactly midnight on November 28, 2023, one second after the deadline had passed. Plaintiffs argue that the motion should be denied as untimely for being filed one second late, but identify no prejudice which they have suffered. The Court is not inclined to penalize Defendants so harshly for such a narrow violation of Rule 3.1702(b). The Court will therefore exercise its discretion to extend the time for filing by one second, therefore making the motion timely. (See Rule 3.1702(d).)

On July 25, 2018, Plaintiff Vichit Tilakamonkul (Vichit)[1] filed a verified complaint for damages and other relief against Defendants Vichai Tilakamonkul, Virut Tilakamonkul, Somsak Tilakamonkul, Marasri (Mary) Tilakamonkul, Narong Tilakamonkun, Sumeth Tilakamonkul,[2] and others claiming an interest in certain described real and personal property. In the initial complaint, Vichit asserted claims for breach of written contract, partnership accounting, dissolution of partnership and accounting, conversion, breach of fiduciary duty, constructive fraud, and partition and sale and accounting.

After several revised iterations of the complaint, the Second Amended Complaint was filed on August 21, 2019, which was the operative complaint at trial. In that pleading, Vichit Tilakamonkul joined with brother and former defendant, Somsak Tilakamonkul (jointly "Plaintiffs") to assert twelve causes of action against their brothers, Defendants Vichai, Virut, Narlong, Sumeth, and Pramorte, as well as Siriratn Tilakamonkul and several entities owned by some or all of the seven Tilakamonkul brothers. These entity defendants included Royal Thai Cuisine II, Inc. ("RT II"), Royal Thai Cuisine IV, Inc. ("RT IV"), and T-Team Investments, LLC. ("T-Team"). The Second Amended Complaint asserted claims for quiet title, breach of oral contract, negligence, partnership accounting, partnership dissolution and accounting, partition and sale of partnership property, breach of fiduciary duty, and breach of the covenant of good faith and fair dealing.

Various defendants filed Cross-complaints in the action. By the time of trial, there were three at issue. In its Second Amended Cross-Complaint, filed on March 25, 2021, Defendant T-Team sues Plaintiffs Vichit and Somsak, as well as Sudatip Tilakamonkul, who is also known as Dawn Tilakamonkul, alleging causes of action for declaratory relief, quiet title, breach of contract, account stated, and goods and services rendered. T-Team's cross-complaint focuses on the ownership of real property located at 4941 Mount Bigelow in San Diego ("Mt. Bigelow Property") and at 4199 and 4201 Ransom Street in Long Beach ("Ransom Properties"), and the related issue of whether funds paid to Vichit in 2007 constituted a buyout of his interest or a loan still owed by Vichit to T-Team. RT II intervened in the action on or about March 12, 2019 to bring a claim for declaratory relief against Plaintiffs, seeking a judgment regarding the ownership of the Royal Thai Cuisine restaurant in Newport Beach. Further, Defendants Vichai, Virut, Narlong and Sumeth cross-complained against Plaintiffs for declaratory relief on June 30, 2018, requesting a declaration that Plaintiffs own no part of the restaurant businesses or real property they claim to own jointly with the five defendant brothers.

The Court ordered a bifurcated trial with equitable claims to be tried first, followed by legal issues to be tried in a second phase if necessary. A bench trial was conducted from December 13, 2021 to December 21, 2021 and on January 3, 2022. The Court issued its initial statement of decision on June 30, 2022, and an amended statement on October 11, 2022. The Court subsequently concluded that all issues were disposed of in Phase I, so there was no need for a Phase II trial.

Consequently, the Court entered final judgment on September 25, 2023, finding in favor of Vichit and Somsak and against Vichai, Virut, Narlong, Sumeth, and Pramorte on the partition cause of action in the Second Amended Complaint and on all cross-claims and affirmative defenses asserted against Vichit and Somsak, and in favor of Sudatip (as well as Vichit and Somsak) and against T-Team Investment, LLC on T-Team’s Second Amended Cross-Complaint. (Final Judgment.) The Court also found that Vichit and Somsak each sought only one-seventh of the real and personal property or sales proceeds therefrom at issue with respect to the Ransom and Mt. Bigelow properties only, and that each of the brothers were entitled to a one-seventh share of the proceeds from sale of those properties. (Id.)

Defendants seek an order awarding attorney’s fees pursuant to Code of Civil Procedure section 874.010 and 874.040.

Section 874.040 of the Code of Civil Procedure states that, subject to exceptions not at issue here, “the court shall apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable.” (Code Civ. Proc § 874.040.) Costs of partition include, as relevant here, “Reasonable attorney’s fees incurred or paid by a party for the common benefit.” (Code Civ. Proc. § 874.010.)

The “common benefit” in a partition action “is the proper distribution of the ‘respective shares and interests in said property by the ultimate judgment of the court.’” (Orien v. Lutz (2017) 16 Cal.App.5th 957, 967 [quoting Capuccio v. Caire (1932) 215 Cal. 518, 528].) “This sometimes will require that ‘controversies’ be ‘litigated’ to correctly determine those interests, but this ultimately can be for the common benefit as well. The fact that a party resists the partition does not change this.” (Id.)

Plaintiffs’ Motion for Attorney’s Fees filed October 10, 2023 argued that Plaintiffs were entitled to fees and costs under these statutes because they were incurred for the common benefit of determining the proper distribution of the ownership interests in the subject properties. (See October 10, 2023 Motion for Attorney’s Fees.) The Court concurred with Plaintiffs and awarded attorney’s fees incurred in connection with those claims. (November 6, 2023 Minute Order.) Defendants argue that, as the Court has already found that the partition action was brought for the common benefit, Defendants are likewise entitled to reasonable attorney’s fees.

In opposition, Plaintiffs argue that Defendants are not entitled to fees because the Court did not award fees based on a common benefit, but on other equitable considerations. Plaintiffs are incorrect. The Court expressly found that Plaintiffs were entitled to reasonable attorney’s fees incurred in connection with the litigation of the dispute surrounding the proper ownership of the subject properties because they were incurred for the common benefit. (November 6, 2023 Minute Order, p. 5.) The Court reduced Plaintiffs’ total fee award based on the equitable consideration that not all fees incurred were for the common benefit in the context of the partition action, but rather for the individual benefit of the Plaintiffs in connection with non-partition arguments. Specifically, the Court found that of the 1,287.9 hours of attorney time claimed by Plaintiffs, 191.8, totaling $38,356 in fees, were incurred in connection with Plaintiff’s unsuccessful non-partition claims that the family restaurants were owned by a partnership of brothers, not valid corporations, and thus were undertaken not to advance partition goals by disentangling the ownership of the properties, but to litigate entirely separate issues. (Id. pp. 6-7.) The Court also found that another 61.4 hours and $12,274 in fees were incurred on the unsuccessful ownership claim on the Georgia Sue property—fees to which Plaintiffs were not entitled because the evidence established that Plaintiffs had no interest in the properties and the claims were thus undertaken for Plaintiffs’ benefit, not the common benefit. (Id. p.7.) As these fees were not incurred for the common benefit, the Court concluded that it would not be equitable to award those fees.

The Court agrees with Defendants. As the Court has already found that the partition action was undertaken for the common benefit of all parties, Defendants are entitled to reasonable attorney’s fees incurred in connection with the partition aspect of this action.

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.)

Defendants seek recovery of $309,773.66. in attorney’s fees, representing 1,425.25 hours of attorney time incurred at hourly rates between $75 and $259 to litigate this entire action. Put differently, Defendants request that the Court award the full total of all fees incurred in this action, notwithstanding the apportionment of the respective interests, nor of the distribution between successful and unsuccessful claims, partition claims incurred for the common benefit, or other non-partition claims and defenses. This request is supported by an affidavit from Defendants’ counsel attesting to his skills, experience, and hourly rate, as well as those of his subordinate, Merily Sanchez. (Declaration of Andrew D. Weiss ISO Mot. ¶ 18.) Attorney Weiss also provided copies of his contemporaneous billing records. (Id. Exh. 15.)

Code of Civil Procedure section 874.040 directs the Court to apportion the costs of partition among the parties in proportion to their interests or make such other apportionment as may be equitable. A strict allocation based on the interests of all plaintiffs versus all defendants might result in a fee award to Plaintiff of two-sevenths of the pertinent fees in recognition that this litigation established the rights of Vichit and Somsak to their one-seventh shares. Such an apportionment would disregard the confused views of most defendants about who owned the family assets and the pre-filing conflicts among Defendants about whether Plaintiffs still owned their shares in the Tilakamonkul properties. The Court has captured in its Amended Final Statement of Decision the conflicted testimony of various defendants about whether Plaintiffs’ ownership interests in the family’s real property even after the lawsuit was commenced. (Amended Final Statement of Decision, pp. 5-6.) Of even greater significance, however, when three of the brothers sought to sell all the family property and exclude Vichit, Somsak and Pramorte from sharing in the proceeds, Defendants Pramorte and Virut objected and Virut even wrote a check to finance this lawsuit as an effort to block the sale. (Id., p. 10.) The Court concludes, based on these findings after trial, that there were at least four brothers – Vichit, Somsak, Pramorte and Virut – whose interests were actively promoted when this lawsuit was first filed. Moreover, given the familial connections between all the principal parties and their muddled understanding of who owned what, the Court finds that all parties were benefitted by a clear legal ruling finally determining the property interests of the brothers and resolving the claims and accusations leveled by various brothers based on vague oral agreements and longstanding resentments.

(November 6, 2023 Minute Order pp. 7-8.) In so finding, the Court eliminated fees sought which were incurred before February 2022 in furtherance of Plaintiffs’ unsuccessful partnership claims, because they were not expended in pursuit of the partition claims, and fees incurred in connection with the unsuccessful ownership claims as to the Georgia Sue property, as these claims—and the corresponding fees—were not incurred by Plaintiffs for the common benefit. (Id. pp.6-7.) However, the Court awarded fees connected with Defendants’ and Cross-Complainants’ rejected contentions challenging Plaintiffs’ success at trial by reference to cross-claims by their property manager and alleged offsets to Plaintiffs’ successful litigation of the property interests, because, in defeating the efforts of principally of Cross-Complainant T-Team to assert claims over the properties to which it was not entitled, Plaintiffs incurred attorney’s fees for the common benefit of the owners. (Id. p. 7.)

As Defendants are now seeking their share of attorney’s fees, logic and equity dictate that the fee award be adjusted to mirror the adjustments made to Plaintiffs’ fee request. Thus, the Court finds that the fees incurred defending against Plaintiffs’ claims on the Georgia Sue property, accounting for about 22.1 hours and $6,519.50 in fees, should be awarded. (See Weiss Decl. Exh. 15.) Defendants are not entitled to fees incurred for their unsuccessful cross-claims and challenges to Plaintiff’s success at trial that attempted merely to enhance Defendants’ position rather than serve the common benefit, accounting for approximately 177.2 hours of attorney time and $50,006 in fees. (See Weiss Decl. Exh. 15.) As for the fees incurred by Defendants’ counsel before February 2022 to defend against Plaintiffs’ non-partition, partnership claims, it is not apparent from the billing records how much of the fee award relates to those claims. From Attorney Weiss’s records, the Court estimates that Defendants incurred 1181.1 hours of attorney time, totaling $245,474.50, before February 2022 on matters other than the Georgia Sue property. (See Id.) The descriptions in the billing records do not distinguish between hours spent on partition issues and hours spent on partnership issues. Consequently, the Court concludes that the fairest solution is to apply the same 20% reduction to Defendants’ fee award for that time period that the Court imposed on Plaintiff’s fee award. (See November 6, 2023 Minute Order p. 7.) Applying this modifier, the Court reduces those fees to $196,379.60, a reduction of $49,094.90.

Applying these equitable considerations, the Court finds that Defendants are entitled to reasonable fees and costs incurred for the common benefit in the amount of $202,899.10.

Accordingly, Defendants’ Motion for Attorney’s Fees is GRANTED IN PART as described herein. Defendants are awarded attorney’s fees in the amount of $202,899.10.

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.

[1] Most of the parties are brothers with the same or nearly identical last names. for clarity, the Court refers to each brother by his first name but means no disrespect to the parties in doing so.

[2] Where a party's name has been misspelled in an original pleading, the Court has simply corrected the spelling without restating the original misspelling to denote the name under which the party was erroneously sued.