Judge Timothy Patrick Dillon, Case 21STCP03210 2022-09-15 Tentative Ruling

Judge: Timothy Patrick Dillon, Case: 21STCP03210, Date: 2022-09-15 Tentative Ruling

Case Number: 21STCP03210 Hearing Date: September 15, 2022 Dept: 73

MITRA NABATI, et al. v. JOHN RAD, et al.

(1) Counsel for Defendant JB Partners/moving parties: Michael J. Perry (Michael J. Perry, APLC)

Counsel for Plaintiffs/opposing parties: John R. Loftus (Stroock & Stroock & Lavan LLP)

(2) Counsel for Defendants John Rad and Shahla Rad/moving parties: Charles Avrith and Peter W. Ross (Ross LLP)

Counsel for Plaintiffs/opposing parties: John R. Loftus (Stroock & Stroock & Lavan LLP)

(1) Defendant JB Partners, LLC’s Motion for Attorney’s Fees and Costs (filed 6/27/2022)

(2) Defendants John Rad and Shahla Rad’s Motion for Attorney’s Fees and Costs (Filed 6/27/2022)

TENTATIVE RULING

Defendant JB Partners, LLC’s Motion for Attorney’s Fees and Costs is GRANTED.

Defendants John Rad and Shahla Rad’s Motion for Attorney’s Fees and Costs is GRANTED.

Discussion

This is an action to enforce statutory rights under Corporations Code sections 17707.03(c) and 2000. Plaintiffs Mitra Nabati, individually and as trustee of The Bahram Nabati Irrevocable Trust, Mitra Nabati Irrevocable Trust, Bahram Nabati Marital Deduction Trust, and Mitra Nabati Survivors Trust (collectively “Plaintiffs”) allege that the Nabati and Rad families have jointly owned profitable businesses and real estate for over 30 years. Plaintiffs allege that The Bahram Nabati Irrevocable Trust, Mitra Nabati Irrevocable Trust, Bahram Nabati Marital Deduction Trust, and Mitra Nabati Survivors Trust (collectively “Nabati Trusts”) and The John Rad Irrevocable Trust and the Angel Trust dated February 17, 1997 (collectively “Rad Trusts”) co-own or hold membership interests in Defendants Benji Investment, LLC; JB Calvert Property, LLC; JB Delano Property, LLC; JB Investment Enterprise, LLC; JB Parkwood, LLC; JB Partners, LLC; and SHM Holding Inc. (collectively “Companies”) and that the sole purpose of the Companies is to own real property. Plaintiffs allege that following the death of Mitra Nabati’s husband, Bahram Nabati, Mitra discovered that Defendant John Rad has been engaged in self-dealing, gross mismanagement, and wrongful misconduct with respect to their business and real estate ventures to his and his family’s own benefit and to the detriment of Mitra, her family, and the Companies. Plaintiffs allege that, when confronted, Defendants John Rad, individually and as trustee of the Rad Trusts, and Shahla Rad, individually and as trustee of the Angel Trust dated February 17, 1997 (collectively “Rad Defendants”) attempted to first settle the dispute and then initiated a dissolution action against Mitra Nabati, the Companies, and eleven other LLCs in which the Nabati Trusts and the Rad Trusts co-own or hold membership interests. Plaintiffs allege that they exercised their statutory right to avoid dissolution of the Companies in the Dissolution Action and sent a written offer to purchase the Rad Defendants’ membership or shareholder interests in the Companies at fair market value. Plaintiffs allege that John Rad dismissed the dissolution action in an attempt to deprive Plaintiffs of their statutory rights under Corporations Code sections 17707.03(c)(1) and 2000(a) to avoid dissolution of the Companies. Plaintiffs thus bring this action to enforce their statutory rights to avoid dissolution of the Companies by electing to purchase the Rad Defendants’ ownership interest in the Companies.

On September 27, 2021, Plaintiffs filed a complaint against Rad Defendants and Does 1 through 50, alleging:

C/A 1: Declaratory Relief

C/A 2: Violation of California Corporations Code § 17707.03

C/A 3: Violation of California Corporation s Code § 2000

On October 12, 2021, Plaintiffs filed a First Amended Complaint (“FAC”) against Rad Defendants, Companies, and Does 1 through 50, alleging:

C/A 1: Declaratory Relief

C/A 2: Violation of California Corporations Code § 17707.03

C/A 3: Violation of California Corporations Code § 2000

On December 17, 2021, Plaintiffs filed a motion to ascertain and fix the value of ownership interests. The motion was denied on March 22, 2022.

On April 26, 2022, judgment was entered in Defendants’ favor and against Plaintiffs.

On June 27, 2022, Defendant JB Partners, LLC (“JB Partners”) filed a motion for attorney’s fees and costs on the following grounds:

· Defendant’s operating agreement contains an attorney’s fees clause in the event of dispute between the parties

· Defendant is the prevailing party because judgment was entered in its favor and Plaintiffs did not obtain any relief

· The requested amount is reasonable

o Counsel’s hourly rate is reasonable

o Apportionment is not required here because Plaintiffs’ arguments concerning her buyout rights are the same for each of the seven entities such that it is impossible to separate the time that counsel spent into time spent on claims relating to JB Partners

· Defendant is entitled to costs as the prevailing party

Rad Defendants also filed a motion for attorney’s fees and costs on June 27, 2022, asserting the following grounds:

· JB Partners, LLC’s operating agreement provides for attorney’s fees

· Rad Defendants are the prevailing parties in this action because judgment was entered in their favor and Plaintiffs did not obtain any relief

· The requested amount is reasonable

o Counsel’s hourly rates are reasonable

o Allocation is improper in this case because Plaintiffs’ arguments concerning her buyout rights are the same for each of the seven entity defendants and it would be impossible to separate the time counsel spent into time spent on claims relating to JB Partners and time spent on claims relating to the other entities

Plaintiffs filed oppositions to both motions for attorney’s fees and costs on September 1, 2022.

Defendant JB Partners and Rad Defendants filed their reply papers on September 8, 2022.

ANALYSIS

I. Legal Standard

A prevailing party in entitled to recover costs, including attorneys’ fees, as a matter of right. (Code Civ. Proc., §§ 1032(a)(4), 1032(b), 1033.5.) CCP section 1033.5(a)(10)(A) states that attorney’s fees authorized by contract may be recoverable.

The fee setting inquiry in California ordinarily begins with the “lodestar” method, i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. 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. 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. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.) Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary. (Id. at 48, n.23.) After the trial court has performed the lodestar calculations, it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure. (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095-96.)

The factors considered in determining the modification of the lodestar include the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. (EnPalm, LLC v. Teitler Family Trust (2008) 162 Cal. App. 4th 770, 774 (emphasis in original).) A negative modifier was appropriate when duplicative work had been performed. (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819.)

II. Defendant JB Partners, LLC’s Motion

Defendant JB Partners seeks an award of attorney’s fees in the amount of $12,150.00 and costs in the amount of $3,162.44.

A. Entitlement to Attorney’s Fees

Defendant JB Partners argues it is entitled to attorney’s fees because its operating agreement contains an attorney’s fees clause and it is the prevailing party in this action.

In opposition, Plaintiffs argue that (1) the Court already rejected Defendant’s request for attorney’s fees and costs when the Court revised the proposed judgment to strike the request for attorney’s fees and costs, (2) JB Partners’ operating agreement does not apply, and (3) JB Partners is not the prevailing party in this action.

Regarding Plaintiffs’ argument that the Court already rejected Defendant’s request for attorney’s fees and costs in the proposed judgment, the Court finds that the striking of the request for attorney’s fees and costs in the proposed judgment does not mean that this motion should also be denied. While the Court struck the request for fees and costs from the judgment, it was merely an indication that the Court would not award fees and costs merely based on a vague request set forth in the proposed judgment. Indeed, the Court generally requires a noticed motion for attorney’s fees to determine whether attorney’s fees should be awarded in an action. As for costs, CRC Rule 3.1700 requires the service and filing of a memorandum of costs. That the Court struck the request for attorney’s fees and costs from the proposed judgment is not grounds to deny this motion.

Plaintiffs argue JB Partners’ operating agreement does not apply because this action does not arise as a result of the operating agreement because the right to seek involuntary judicial dissolution of a limited liability company and the right to avoid such dissolution through the buyout process are creatures of statute that are independent of the operating agreement. Plaintiffs’ argument is unavailing.

Here, Defendant JB Partners seeks attorney’s fees pursuant to CCP sections 1021 and 1032. CCP section 1021 provides 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; but parties to actions or proceedings are entitled to their costs, as hereinafter provided.” (Code Civ. Proc. § 1021.) Courts have found that CCP section 1021 allows for the recovery of attorney’s fees in actions not based on a contract where the contract is broad enough to encompass non-contractual actions. (Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 989-94; Adam v. De Charon (1995) 31 Cal.App.4th 708, 712; Moallem v. Coldwell Banker Com. Group, Inc. (1994) 25 Cal.App.4th 1827, 1831.) The issue is thus whether the attorney’s fees provision in the JB Partners’ operating agreement is broad enough to encompass the claims in this action.

With respect to attorney’s fees, the JB Partners’ operating agreement provides, in relevant part, that “[i]n the event of any litigation, arbitration or other dispute arising as a result of or by reason of this Agreement, the prevailing party in any such litigation, arbitration or other dispute shall be entitled to, in addition to any other damages assessed, its reasonable attorneys’ fees, and all other reasonable costs and expenses incurred in connection with settling or resolving such dispute.” (Motion, Perry Decl., ¶ 5, Ex. 4, Limited Liability Company Operating Agreement of JB Partners, LLC (“Operating Agreement”), p. 30, ¶ 14.19.)

The Court finds that the attorney’s fee provision is broad enough to encompass the claims asserted by Plaintiffs in this action. The provision provides for attorney’s fees incurred in the event of any litigation or dispute “arising as a result of or by reason of” the operating agreement. As was pointed out by Defendant JB Partners, but for the operating agreement, there would not be any basis for Plaintiffs to file this action to proceed with the statutory buyout procedure. While Plaintiffs’ right to avoid dissolution through the buyout procedure is statutory, JB Partners’ operating agreement provided for the relationship between the parties regarding membership and ownership of JB Partners. It was the parties’ relationship as members and owners of JB Partners that led to the dispute regarding dissolution and thus this action. Under these circumstances, the claims in this action for violations of Corporations Code section 2000 and 17707.03 and declaratory relief regarding the statutory buyout procedure arose as a result of or by reason of the operating agreement and are thus covered by JB Partners’ operating agreement.

Plaintiffs cite to Rice v. Downs (2016) 248 Cal.App.4th 175 to support the proposition that the fact a contract creates a relationship between the parties does not necessarily mean that any dispute between the parties arises under that contract. While the Court agrees that a mere relationship between the parties created by the contract does not necessarily mean any dispute between the parties arises under that contract in all cases, that is certainly the case here. In Adam v. De Charon (1995) 31 Cal.App.4th 708, the Court of Appeal found that a cause of action for violation of a statute was a claim that arose from the agreement to purchase because, but for the agreement to purchase, there would be no cause of action for the statutory violation. (Adam, supra, 31 Cal.App.4th at 712.) The Rice Court discussed Adam and distinguished Adam on grounds that the attorney-client relationship between the parties and the duties the plaintiff alleged the defendants breached pre-dated the operating agreements at issue and the fact that the operating agreements did not create the relationship and breaches. (Rice, supra, 248 Cal.App.4th at 191-92.) This case is more akin to Adam as the relationship between the parties that ultimately gave rise to Plaintiffs’ claims for violations of Corporations Code sections 2000 and 17707.03 arose from JB Partners’ operating agreement.

Plaintiffs’ argument that JB Partners is not the prevailing party in this action is also unavailing.

“An agreement to pay attorney fees to the prevailing party in an action not governed by [Civil Code] section 1717 or some other statute is controlled by the more general provisions found in the Code of Civil Procedure.” (Maynard v. BTI Group, Inc. (2013) 216 Cal.App.4th 984, 993-94.) Such general provisions include CCP sections 1021, 1032, and 1033.5. (Id.)

As discussed, JB Partners is seeking attorney’s fees pursuant to CCP sections 1021 and 1032. CCP section 1032 specifically defines “prevailing party” to include “a defendant where neither plaintiff nor defendant obtains any relief.” (Code Civ. Proc., § 1032(a)(4).) This is exactly the situation here. Judgment was entered in favor of all defendants, including JB Partners, and against Plaintiffs. The judgment specifically provided that “Plaintiffs are not entitled to the declarations and orders sought in their First Amended Complaint, dated October 12, 2021, nor are they entitled to any other relief sought therein.” (4/26/22 Judgment.) Defendant JB Partners did not assert any claims requesting any relief in this action. As neither Plaintiffs nor Defendant JB Partners obtained any relief in this action, JB Partners is the prevailing party under CCP section 1032(a)(4).

Given it is clear JB Partners is the prevailing party under CCP section 1032(a)(4), there is no need to analyze what objectives were achieved by each party to determine who the prevailing party is in this action. Even if such an analysis were necessary, the Court is unpersuaded by Plaintiffs’ contention that the proper context in which to view this lawsuit is as a direct outgrowth of the dismissed dissolution action. While this action may have only been brought because a dissolution action was brought, this does not mean that the Court must consider the objectives in both the dissolution action and this action to determine who the prevailing party is. Plaintiffs have provided no legal authority supporting this position. This is an action separate from the dissolution action and thus any objectives to be considered should only be as to this action. Plaintiffs’ objectives by way of this action were to proceed with the buyout process under Corporations Code sections 2000 and 17707.03. Plaintiffs did not achieve such objectives. Instead, judgment was entered against Plaintiffs and in favor of JB Partners and the other defendants. Under these circumstances, JB Partners would still be the prevailing party.

Plaintiffs also argue that JB Partners cannot be the prevailing party because it is essentially a nominal defendant and had no stake in the outcome in this action. There are no indications JB Partners is a nominal defendant with no stake in the outcome of this action. Additionally, that JB Partners is a nominal defendant does not mean that it cannot be a prevailing party in this action when judgment was entered in its favor and against Plaintiffs. Plaintiffs provide no legal authority supporting such a contention.

As JB Partners is the prevailing party and its operating agreement covers the claims asserted by Plaintiffs, JB Partners is entitled to attorney’s fees in this action.

B. Apportionment of Fees

JB Partners argues attorney’s fees need not be apportioned in this action because Plaintiffs’ arguments concerning buyout rights were the same for each of the seven entities and it would be impossible to separate the time counsel spent into time spent on claims relating to JB Partners and time spent on claims relating to the other entities.

In opposition, Plaintiffs argue that apportionment is simple, not impossible, and the total fees should be divided by seven.

“A prevailing defendant ‘may recover only reasonable attorney fees incurred in [its] defense of the action by [the plaintiff].’” (Hill v. Affirmed Housing Group (2014) 226 Cal.App.4th 1192, 1197 (quoting Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 443 (alteration in original).) “‘To the extent [a prevailing defendant’s] shared counsel engaged in litigation activity on behalf of [a codefendant] for which fees are not recoverable, the [trial] court has broad discretion to apportion fees.’” (Id. (quoting Zintel Holdings, LLC, supra, 209 Cal.App.4th at 443) (alteration in original).) “‘A court may apportion fees even where the issues are connected, related or intertwined.’” (Id. (quoting Zintel Holdings, LLC, supra, 209 Cal.App.4th at 443).) “‘Allocation of fees incurred in representing multiple parties is not required,’ however, when the claims at issue are ‘‘‘‘ inextricably intertwined,’’’’ such that it is not possible to differentiate between compensable and noncompensable time.” (Id. (quoting Cruz v. Ayromloo (2007) 155 Cal.App.4th 1270, 1277).)

The Court finds apportionment is not required in this case. The central issue in this action was whether Plaintiffs were entitled to go through the statutory buyout procedure with respect to the entities. This was a common issue counsel had to deal with in regard to all of the entities in this action. Plaintiffs’ claims are thus inextricably intertwined such that it is not possible to differentiate between fees recoverable with respect to JB Partners and non-recoverable fees as to the other entity defendants in this action. Counsel has also submitted a declaration attesting to the inability to separate any of his legal tasks from the different entity defendants and that his legal bill would have been the same whether he only represented JB Partners or all of the entity defendants. (Reply, Perry Decl., ¶ 3.)

C. Reasonableness of Fees

Plaintiffs argue JB Partners’ requested fees are not reasonable because JB Partners’ counsel has played almost no role in this action and yet seeks fees for 29 hours of billed time when the Rad Defendants are the primary litigants and have sought fees for 43 hours. Plaintiffs argue JB Partners’ counsel spent almost seven hours preparing for the two oral arguments on the motion to enforce the buyout, yet no brief was filed for the entity defendants and counsel did nothing at the hearing other than announce his appearance.

After reviewing JB Partners’ counsel’s billing, the Court finds that the amount billed is reasonable for the most part. However, the Court finds that the February 15, 2022 and March 7, 2022 entries for preparing and attending the hearing on the motion totaling 6.8 hours are unreasonable. While the Court acknowledges that counsel is permitted to prepare for such hearing despite not filing any briefing, the Court will only award a total of 3 hours for preparing and attending the hearing on the motion. The Court will also award an additional 0.5 hours to account for the status conference on February 15, 2022. Based on this, the Court reduces requested amount of attorney’s fees by $1,237.50 (3.3 hours at $375/hour).

The Court also finds that the 6.8 hours billed on January 2, 2022 for reviewing the file, including this action and two other actions between the parties, is unreasonable. JB Partners’ counsel claims that he needed to review all three lawsuits in depth in order to be fully apprised of the facts and circumstances giving rise to the claims asserted by Plaintiffs in this action. (Motion, Perry Decl., ¶ 5.) While it is reasonable for counsel to need to review the dismissed dissolution action to understand this action, the Court is unpersuaded that counsel necessarily had to review the action filed by some of the plaintiffs in this action against John Rad (Case number 21STCV07047) in order to understand this action. The Court will thus further reduce the requested amount by $825.00 (2.2 hours at $375/hour).

Accordingly, JB Partners is awarded attorney’s fees in the amount of $10,087.50.

D. Costs

JB Partners seeks $3,162.44 in costs.

As a preliminary matter, the Court notes that Plaintiffs are correct that the costs are actually sought by all entity defendants, not just JB Partners. Although only JB Partners is the moving party with respect to this motion, the Court finds that the request for entry of costs was properly made by all entity defendants when they filed their memorandum of costs. Thus, while this motion is technically only brought by JB Partners, the Court will construe the portion of the motion requesting costs as a request for costs made by all entity defendants.

Like with JB Partners, the other entity defendants are the prevailing parties pursuant to CCP section 1032 based on neither plaintiff nor defendant obtaining any relief. Unlike with attorney’s fees, the prevailing party is entitled to costs as a matter of right under CCP section 1032(b). The entity defendants are thus entitled to costs in this action even if only JB Partners is entitled to attorney’s fees.

Plaintiffs argue in opposition that they were not served with the memorandum of costs and only learned of the memorandum of costs when this motion was filed such that they were denied their right to object to the costs.

A review of the proof of service attached to the memorandum of costs filed by the entity defendants shows that the memorandum of costs was served by e-mail on Plaintiffs’ counsel at lacalendar@stroock.com; jloftus@stroock.com; ceilice@stroock.com; and dlinden@stroock.com on May 4, 2022. A corrected proof of service was subsequently filed on June 27, 2022 showing the memorandum of costs was served by e-mail on Plaintiffs’ counsel at jloftus@stroock.com on May 4, 2022. A review of the Court’s records shows that Plaintiffs’ counsel’s email of record is in fact jloftus@stroock.com. This is sufficient to show a presumption that the memorandum of costs was in fact served on Plaintiffs through counsel. (See Evidence Code section 641 (“A letter correctly addressed and properly mailed is presumed to have been received in the ordinary course of mail.”).)

Pursuant to Evidence Code section 604, the burden is on the party served with the document at issue to introduce evidence supporting a finding that the document was not received. The evidence needed to rebut the presumption that a document was received is the following: (1) a declaration from the person who ordinarily receives the mail that includes facts describing the procedures for receipt of mail and stating that the document was not received; and (2) a declaration including facts showing that a search was made for the document and that it was not found. (Bonzer v. City of Huntington Park (1993) 20 Cal.App.4th 1474, 1479-80.)

Here, Plaintiffs’ counsel declares that he has exhaustively searched his email inbox for an email from Defendants’ counsel, Michael J. Perry, on or about May 4, 2022 that attaches the memorandum of costs and has been unable to locate any such email. (Loftus Decl., ¶ 3.) Plaintiffs’ counsel declares that he asked Christine Ellice and Dustin Linden to conduct the same search of their email inboxes and they also confirmed they received no such email from Mr. Perry on or about May 4, 2022. (Id.)

Generally, Plaintiffs’ counsel’s declaration would arguably be sufficient to rebut the presumption that the memorandum of costs was received by Plaintiffs. However, in reply, JB Partners’ counsel has submitted a copy of the email from Ace Attorney confirming that Plaintiffs’ counsel was served with the filed memorandum of costs. (Reply, Perry Decl., ¶ 2, Ex. 2.) It thus appears that, rather than defense counsel Perry directly serving the memorandum of costs by email on Plaintiffs’ counsel, the memorandum of costs was actually served by Ace Attorney, one of the Court’s approved e-servers. To this extent, Plaintiffs would need to submit evidence that no emails with the memorandum of costs were received from Ace Attorneys in order for the Court to find Plaintiffs have rebutted the presumption that the memorandum of costs was received by Plaintiffs.

Given that Defendants’ proof of service attached to the memorandum of costs and the separately filed corrected proof of service both indicated the memorandum of costs was directly emailed to Plaintiffs’ counsel by Defendants’ counsel instead of properly indicating that the memorandum of costs was actually served via e-service by Ace Attorneys, it is understandable why Plaintiffs have not provided any proof that they never received any emails with the memorandum of costs from Ace Attorneys. Under such circumstances, the Court would generally continue the motion to allow Plaintiffs an opportunity to provide such evidence.

However, as pointed out by JB Partners in reply, Plaintiffs failed to even properly challenge Rad Defendants’ memorandum of costs because Plaintiffs did not file a motion to tax or strike costs. (Reply, p. 2:10-14.) A review of the Court’s records confirms that, while Plaintiffs filed an objection to Rad Defendants’ memorandum of costs on May 18, 2022, Plaintiffs never filed a motion to tax or strike costs. CRC Rule 3.1700 makes it clear that the proper method for contesting costs is to file a noticed motion to strike or tax costs. (Cal. Rules of Court, rule 3.1700(b).) Given that Plaintiffs failed to properly challenge the costs claimed by Rad Defendants by filing a motion to strike or tax costs, the Court finds that, even if Plaintiffs had received the entity defendants’ memorandum of costs, Plaintiffs would not have properly challenged such costs by filing a motion to strike or tax costs. Plaintiffs’ counsel’s declaration stating that “[h]ad Plaintiffs known about the Company Defendants’ Memorandum of Costs when it was filed, they would likely have objected or otherwise contested the costs therein” essentially confirms that Plaintiffs would have improperly filed an objection to the memorandum of costs instead of a motion to strike or tax costs, like what they did with respect to Rad Defendants’ memorandum of costs. (Loftus Decl., ¶ 3.)

As all indications are that Plaintiffs would not have brought a proper challenge to the memorandum of costs by filing a motion to strike or tax costs even if Plaintiffs had received the memorandum of costs, the Court finds that a continuance to allow Plaintiffs another opportunity to file additional evidence to rebut the presumption of receipt of the memorandum of costs would be an idle act in this case. The Court will thus rule on the entity defendants’ entitlement to costs.

As there is no motion to strike or tax costs challenging these costs, the Court finds entity defendants are entitled to the entire amount of costs claimed in their memorandum of costs. (Cal. Rules of Court, rule 3.1700(b)(4) (“After the time has passed for a motion to strike or tax costs or for determination of that motion, the clerk must immediately enter the costs on the judgment.”).)

Therefore, the entity defendants, including JB Partners, are awarded costs in the amount of $3,162.44.

III. Rad Defendants’ Motion

Rad Defendants seek an award of attorney’s fees in the amount of $36,350.00 and costs in the amount of $2,709.18.

A. Entitlement to Attorney’s Fees

Rad Defendants argue they are entitled to attorney’s fees because JB Partners’ operating agreement provides for reasonable attorney’s fees to the prevailing party and Rad Defendants are the prevailing parties in this action.

As with JB Partners’ motion, Plaintiffs argue in opposition that (1) the Court already rejected Rad Defendants’ request for attorney’s fees and costs when the Court revised the proposed judgment to strike the request for attorney’s fees and costs, (2) JB Partners’ operating agreement does not apply, and (3) Rad Defendants are not the prevailing party in this action.

As explained above with respect to JB Partners’ motion, that the Court struck the request for attorney’s fees and costs from the proposed judgment is not grounds to deny this motion because a noticed motion for attorney’s fees and a memorandum of costs are generally required for an award of such fees and costs.

Also as explained above, JB Partners’ operating agreement does in fact apply and cover Plaintiffs’ claims in this action because JB Partners’ operating agreement provided the basis for the relationship between the parties that led to the dispute regarding dissolution and ultimately this action to avoid dissolution through the buyout procedure. Plaintiffs’ claims thus arose as a result of or by reason of JB Partners’ operating agreement.

Rad Defendants are also the prevailing parties in this action. As discussed above, CCP section 1032 specifically defines “prevailing party” to include “a defendant where neither plaintiff nor defendant obtains any relief.” (Code Civ. Proc., § 1032(a)(4).) As judgment specifically provided that “Plaintiffs are not entitled to the declarations and orders sought in their First Amended Complaint, dated October 12, 2021, nor are they entitled to any other relief sought therein” and Rad Defendants did not assert any claims requesting any relief in this action, Rad Defendants are the prevailing party under CCP section 1032(a)(4).

Additionally, while an analysis as to the objectives achieved by each party is not necessary to determine who the prevailing party is in this action, as explained above, this action is separate from the dissolution action and thus any objectives to be considered should only be as to this action, not as to both the dissolution action and this action. In the context of this action, Plaintiffs did not achieve their objectives with respect to the buyout process and judgment was entered against Plaintiffs and in favor of Rad Defendants and the other defendants. Under these circumstances, Rad Defendants would still be the prevailing party.

As Rad Defendants are the prevailing party and JB Partners’ operating agreement covers the claims asserted by Plaintiffs, Rad Defendants are entitled to attorney’s fees in this action.

B. Apportionment of Fees

As with JB Partners, apportionment is not required in this case. As discussed above, the central issue in this action was whether Plaintiffs were entitled to go through the statutory buyout procedure with respect to the entities, which is a common issue counsel had to deal with regarding all the entities in this action. Plaintiffs’ claims are thus inextricably intertwined such that it is not possible to differentiate between recoverable and nonrecoverable fees in this action. Rad Defendants have also indicated that because both sides’ positions were the same for JB Partners as they were for all other entities, there would have been no reduction in Rad Defendants’ counsel’s time if the other entities were excluded from the case.

C. Reasonableness of Fees

A review of Rad Defendants’ counsel’s billing shows that the amount requested is reasonable. Plaintiffs have not argued otherwise.

Accordingly, Rad Defendants are awarded attorney’s fees in the amount of $36,350.00.

D. Costs

Rad Defendants seek costs in the amount of $2,709.18.

While Plaintiffs filed an objection to Rad Defendants’ memorandum of costs on May 18, 2022, Plaintiffs have not filed a motion to strike or tax costs. CRC Rule 3.1700 makes it clear that the proper method for contesting costs is to file a noticed motion to strike or tax costs. (Cal. Rules of Court, rule 3.1700(b).) As no motion to strike or tax costs has been filed challenging these costs and the time for filing such a motion has passed, the Court finds Rad Defendants are entitled to the entire amount of costs claimed in their memorandum of costs. (Cal. Rules of Court, rule 3.1700(b)(4) (“After the time has passed for a motion to strike or tax costs or for determination of that motion, the clerk must immediately enter the costs on the judgment.”).)

Therefore, Rad Defendants are awarded costs in the amount of $2,709.18.

IV. Conclusion

Defendant JB Partners, LLC’s motion for attorney’s fees and costs is GRANTED.

Defendant JB Partners, LLC is awarded attorney’s fees in the amount of $10,087.50.

Defendants JB Partners, LLC; Benji Investment, LLC; JB Calvert Property, LLC; JB Delano Property, LLC; JB Investment Enterprise, LLC; JB Parkwood, LLC; and SHM Holding Inc are awarded costs in the amount of $3,162.44.

Defendants John Rad and Shahla Rad’s motion for attorney’s fees and costs is GRANTED.

Defendants John Rad and Shahla Rad are awarded attorney’s fees in the amount of $36,350.00 and costs in the amount of $2,709.18.