Judge William A. Crowfoot, Case Number: 21GDCP00151, Date: 2024-07-29 Tentative Ruling

Judge: William A. Crowfoot, Case: 21GDCP00151, Date: 2024-07-29 Tentative Ruling

Petitioner Ghougas Ourfali (“Petitioner”) seeks to recover $45,189.50 from respondent 21^st Century Insurance Company (“Respondent”) as costs of proof incurred in an uninsured motorist (“UIM”) arbitration proceeding pursuant to Code of Civil Procedure section 2033.420. Petitioner states that at the time of the accident, he was at a full and complete stop when he was struck in the rear by a Ford E350 driven by an uninsured driver. (Motion, p. 3.) Petitioner contends that Respondent failed or refused to admit the truth of certain matters in response to Petitioner’s Requests for Admission (“RFAs”) regarding issues of causation and damages and should be responsible for the attorneys’ fees and expenses, including expert costs, incurred to prove those matters. Specifically, Petitioner asked Respondent to admit that Petitioner sustained injuries to his neck and back and that various medical expenses were reasonable and necessary. (Motion, pp. 8-9.)

When a party propounds requests for admission of the truth of certain facts and the responding party denies the requests, if the propounding party proves the truth of those facts at trial, he or she may seek an award of the reasonable costs and attorney fees incurred in proving those facts. (§ 2033.420, subd. (a).) The court is required to award those costs and fees unless it finds the party who denied the requests “had reasonable ground to believe [he or she] would prevail on the matter” or “[t]here was other good reason for the failure to admit.” (§ 2033.420, subd. (b)(3), (4).) “In evaluating whether a ‘good reason’ exists for denying a request to admit, ‘a court may properly consider whether at the time the denial was made the party making the denial held a reasonably entertained good faith belief that the party would prevail on the issue at trial.’ [Citation.]” (Laabs v. City of Victorville (2008) 163 Cal.App.4^th 1242, 1276.)

Petitioner argues that Respondent had no reasonable basis for denying the RFAs related to causation and damages because Respondent had access to his medical records and bills for several months and had conducted a medical examination before the responses to those RFAs were served on November 10, 2021.

In opposition, Respondent argues that the insurance policy prohibits Petitioner from recovering costs of proof because the arbitration clause provides that “[t]he Arbitrator’s fees shall be divided equally between the parties, and all other costs, including attorney’s fees, shall be paid by the party incurring them.” (Opp., p. 6; Forbath Decl., Ex. A, p. 9.) Respondent also refers to Code of Civil Procedure section 1284.2 which states: “Unless the arbitration agreement otherwise provides or the parties to the arbitration otherwise agree, each party to the arbitration shall pay his pro rata share of the expenses and fees of the neutral arbitrator, together with other expenses of the arbitration incurred or approved by the neutral arbitrator, not including counsel fees or witness fees or other expenses incurred by a party for his own benefit.” Respondent argues that the text of the arbitration agreement and section 1284.2 require each party to bear its own costs in arbitration.

In his reply brief, Plaintiff cites to Storm v. The Standard Fire Insurance Company (2020), in which the Second Appellate District analyzed the interplay between sections 998 and 1284.2 of the Code of Civil Procedure. The Storm court concluded that the reference to “arbitration” in section 998 applied to uninsured motorist proceedings. The court reasoned that although section 1284.2 provides for the equal payment of arbitration costs, it does not limit a party’s ability to recover those costs under section 998. Therefore the language in the arbitration agreement in Storm, which essentially adopted the language of section 1284.2, allowed for the recovery of arbitration costs under section 998.

Here, Insurance Code section 11580.2 states that the Civil Discovery Act, with limited exceptions, applies to UIM arbitration proceedings. Therefore, even if each party is to pay for their equal shares, it does not preclude that party from recovering them at a later time pursuant to some statutory authority, such as the costs of proof authorized by section 2033.420.

Respondent alternatively argues that even if section 2033.420 applies, it had reasonable grounds for failing to admit causation and damages posited in Petitioner’s RFAs. Respondent argues that it relied on expert opinion to investigate Petitioner’s claims and found that it could not admit or deny those RFAs. Respondent provides no detail as to what specific opinions were relied on at the time that Respondent served its responses to Petitioner’s RFAs and thus fails to show that it acted reasonably.

Last, Respondent argues that Petitioner’s request for costs is unreasonable. When a court awards attorney’s fees, the court has discretion to determine a reasonable rate. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) The “inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (PLCM, supra, 22 Cal.4th at p. 1095.) A reasonable rate is generally the “basic fee for comparable legal services in the community.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Petitioner seeks attorney’s fees in the sum of $22,400. Petitioner’s counsel declares that reasonable hourly rate for an attorney with more than 20 years of experience is $700 per hour and that he has been in practice for over 43 years since 1978. Petitioner’s counsel states that he has billed 32 hours since Respondent served its responses to the RFAs, consisting of 9 hours of deposition for all 6 experts, 7 hours for preparation for those experts, 3 hours to review medical records prior to arbitration, 2 hours conferring with Petitioner’s medical experts, 6 hours preparing for the arbitration hearing, including reviewing depositions and preparing exhibits, witnesses, and the arbitration brief, and 5 hours for the actual hearing itself. Petitioner also lists $20,625 for expert witness bills and expert witness fees paid for the deposition of defense expert witnesses, $964.50 for the cost of deposition transcripts, and a $1,200 fee for the arbitrator.

Respondent challenges the reasonableness of this amount in several ways. First, Respondent argues that Petitioner’s counsel’s hourly rate is unreasonably high. Respondent acknowledges that Petitioner’s counsel has a “long line of impressive credentials for complex areas of law, such as international law, real estate, complex litigation, appellate law, and more,” but argues that this case was a simple UIM matter culminating in a 5-hour arbitration hearing and that typical attorneys handling UIM claims do not charge $700 an hour. Respondent points out that its own counsel charges $300 an hour and that the arbitrator’s award for costs of proof, which was later determined by the court of appeal to have been improperly issued, awarded fees at an hourly rate of $600. (Motion, Ex. 15, p. 2.)

The Court agrees with Respondent that an hourly rate of $700 is excessive for this run-of-the-mill UIM arbitration proceeding. Even if Petitioner’s counsel took this matter on contingency (which is unclear from his declaration), he does not state whether it precluded him from taking on other work.

Next, Respondent argues that Petitioner should not recover $7,400 in costs related to Dr. Lawrence Miller and argues for a reduction of 3 hours of attorney’s fees for work performed relating to Dr. Miller (for an overall total of 19 hours). The arbitrator determined that Dr. Miller was “over reaching [sic]” when he opined that Petitioner would require future surgery; the arbitrator also noted that Dr. Miller’s opinion regarding future surgery was of less value because he was not a surgeon, but a pain management specialist. (Motion, Ex. 15, p. 2.) The arbitrator also expressed that he was “a little surprised” at Dr. Miler’s testimony because Dr. Miller “admitted that he did not review all of the documentation before giving his opinion.” (Id., pp. 1-2.)

Petitioner attempts to rebut Respondent’s wholesale dismissal of Dr. Miller’s opinion as “selective” and argues, without explanation, that “on balance”, Dr. Miller’s services were “persuasive, especially on the points that Respondent failed to admit.” (Reply, p. 10.) In light of the diminished value that the arbitrator placed on Dr. Miller’s surgery recommendation in his award, and the arbitrator’s ultimate conclusion that surgery was not needed, the Court agrees that Dr. Miller’s fees (and any attorney time associated with him) were not a “reasonable expense incurred” in proving the extent of Petitioner’s injuries and damages.

Last, Respondent argues that Petitioner’s claimed attorney’s fees are unreasonable because a UIM arbitration is of a “pro forma” nature and should not have involved 32 hours of work. Again, Respondent refers to the arbitrator’s award in which the arbitrator reduced Petitioner’s request for fees from 32 hours to 22 hours. However, with the exception of any time incurred in connection with Dr. Miller as stated above, the Court finds that the claimed number of hours is reasonable in light of the tasks which were performed.

Accordingly, the Court awards Petitioner $32,789 for costs of proof consisting of:

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.