Judge Thomas D. Long, Case 29STCV40825 2022-08-16 Tentative Ruling

On November 13, 2019, TIAA Commercial Finance, Inc. (“TIAA”) filed this action against Khalid Shafiq, M.D., P.A. and Khalid Shafiq (“Dr. Shafiq”) (collectively, “Shafiq”), alleging Khalid Shafiq, M.D., P.A. breached a Master Lease Agreement by not reimbursing TIAA for $52,420.26 in property taxes paid in Texas, both defendants were unjustly enriched based on that alleged failure to reimburse TIAA, and Dr. Shafiq breached a guaranty in connection with the Master Lease Agreement. TIAA also alleged an account stated against both defendants for $52,420.26.

On January 24, 2020, Shafiq filed a cross-complaint against Canon Medical Finance Systems USA, Inc. (“Canon”) and TIAA, alleging a declaratory relief cause of action seeking a determination about various contractual matters under the Master Lease Agreement, unjust enrichment for an unstated amount of money, and an accounting concerning excess funds in an unstated amount that Shafiq paid to Canon and TIAA.

On September 29, 2020, Canon filed a cross-complaint against Shafiq and TIAA, alleging indemnification, indemnity, contribution, and declaratory relief.

The Court held a bench trial on December 16, 17, 20, 22, and 27, 2021. On April 7, 2022, the Court issued its Final Statement of Decision. On the complaint, the Court awarded TIAA $52,420.26 against Shafiq. For Shafiq’s cross-complaint’s cause of action for declaratory relief, the Court concluded (a) Shafiq did not fully perform under the Master License Agreement; (b) Shafiq owed TIAA $52,420.26, jointly and severally; (c) Shafiq did not prove overpayment of any amount under the Master License Agreement; (d) Shafiq did not prove TIAA owe any amount under the Master License Agreement; (e) Khalid Shafiq, M.D., P.A. was entitled to purchase the machine for the quarterly payments and $1.00 purchase option; (f) Khalid Shafiq, M.D., P.A. is now the owner of the Toshiba Cath Lab machine; (g) there was no evidence about conveying title of the machine; and (h) TIAA has the right to make its claims for unreimbursed property taxes. The Court dismissed the causes of action for unjust enrichment and accounting at Shafiq’s request.

For Canon’s cross-complaint, the Court found against Canon on the cause of action for contractual indemnity and against Canon on the causes of action for implied indemnity and contribution because Canon was not required to pay any damages. On the cause of action for declaratory relief, the Court concluded Canon was not required to pay any damages and was not entitled to contribution or implied indemnity.

The Court directed TIAA to file and serve a proposed judgment (1) for TIAA and against defendants Khalid Shafiq, M.D., P.A. and Khalid Shafiq, jointly and severally, in the amount of $52,420.26 on the complaint; (2) for cross-defendants and against cross-complainants on the cross-complaint of Khalid Shafiq, M.D., P.A. and Khalid Shafiq; and (3) for cross-defendants and against Canon on Canon’s cross-complaint. The Court entered judgment on May 2, 2022.

On July 1, 2022, TIAA filed a motion for attorney fees. Shafiq did not file an opposition.

Attorney fees are recoverable only when authorized by contract or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) A prevailing party may recover reasonable attorney fees in any action on a contract where the contract specifically provides that attorney fees and costs incurred to enforce that contract shall be awarded, whether that party is specified in the contract or not. (Civ. Code, § 1717, subd. (a).) “California courts liberally construe the term ‘“‘on a contract””’ as used within section 1717. [Citation.] As long as the action ‘involve[s]’ a contract it is ‘on [the] contract’ within the meaning of Section 1717. [Citations.]” (Dell Merk, Inc. v. Franzia (2005) 132 Cal.App.4th 443, 455.)

TIAA identifies attorney fees clauses in both the Master Lease Agreement and Dr. Shafiq’s personal guaranty. (Motion at p. 7; Donoyan Decl. ¶¶ 7-8.) The Master Lease Agreement provides that in the event of a default, “You agree to pay all costs incurred by us in connection with enforcing our rights against you, including attorneys’ fees.” (Donoyan Decl., Ex. A, ¶ 11.) The personal guaranty promises “all payments and other obligations owed by the Lessee to the Lessor under this Agreement and all Schedules and any add-on leases between Lessor and Lessee, including but not limited to the Lessor’s attorney’s fees and legal costs incurred in enforcing the Lease and Guaranty.” (Donoyan Decl., Ex. A at p. 2.) Accordingly, TIAA has shown its entitlement to attorney fees pursuant to contact.

California courts apply the “lodestar” approach to determine what fees are reasonable. (See, e.g., Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, 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.” (Ibid.) Relevant factors include “(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, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.) The party seeking fees has the burden of documenting the appropriate hours expended and hourly rates. (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 784.)

TIAA requests fees for 314.4 hours billed at an hourly rate of $275, for a total of $86,510.00 in attorney fees. (Donoyan Decl. ¶ 30.) This rate is reasonable for counsel based on their experience. (See id. at ¶¶ 32-33.)

Counsel provides copies of monthly invoices detailing their work since the filing of Shafiq’s cross-complaint. (Donoyan Decl. ¶ 27 & Ex. B.) Considering the length and complexity of this litigation—including discovery, summary judgment, settlement discussions, and trial—the amount of hours and attorney fees is reasonable.

The motion for attorney fees is GRANTED. The Court awards TIAA $86,510.00 in attorney fees.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

Hon. Thomas D. Long

Judge of the Superior Court