533713

Hallmark Associates vs. Maurice A. Priest

Nature of Proceeding: Motion for Attorney Fees

Filed By: Davis, Kevin C.

Assignee of Record Ose Properties, Inc.’s (“Ose”) motion for attorneys’ fees is granted, in part, as set forth below.

Ose is the assignee of a judgment obtained by Hallmark Associates against Defendant Maurice Priest related to a 1988 commercial lease agreement. Hallmark and Priest entered into a stipulated judgment that contains an award of prevailing party attorneys’ fees pursuant to a fee provision in the lease agreement. In 2013 Ose renewed the Stipulated Judgment. Priest filed a motion to vacate the Stipulated Judgment and also requested that the Court order Ose to refund him approximately $480,000 in payments he made pursuant to the Stipulated Judgment. The Court denied the motion and Priest appealed the decision. Ultimately the Third District Court of Appeal affirmed the Court’s decision. Ose now seeks $99,023 in attorneys’ fees. Ose argues that the fees are recoverable pursuant to CCP § 685.040.

“The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment…Attorney’s fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney’s fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” (CCP § 685.040.) The judgment creditor may claim costs by noticed motion. The motion “shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred.” (Id. § 685.080(A).) Fees for time enforcing the underlying judgment include fees incurred in defending the validity of the judgment against challenge. (Globalist Internet Techs., Inc. v. Reda (2008) 167 Cal.App.4th 1267, 1274.)

Here, there is no dispute that the Stipulated Judgment contains a contractual fee award in favor of Ose as the assignee. As a result, Ose is entitled to recover its fees incurred to enforce the Stipulated Judgment. Further, Priest’s motion to vacate the judgment was a challenge to its validity and pursuant to the above authorities, Ose is entitled to the fees incurred in defending that judgment.

The Court first rejects Priest’s argument that the motion must be denied in its entirety because the proofs of service are invalid and do not comply with CCP §§ 1013-1020. Priest argues that the proofs of service are invalid because they fail to indicate the place of mailing and also were executed under the penalty of perjury under the laws of the United States (as opposed to California). This is no basis to deny the motion. Indeed, even if the proofs were somehow non-compliant, Priest clearly received the documents as he opposed the motion and any defect did not prevent him from receiving notice. Further, Ose filed amended proofs of service which were executed under penalty of perjury of the laws of California and indicated the place of mailing and which complied with the Code of Civil Procedure.

Priest also argues that Ose’s memorandum of costs on appeal filed on January 8, 2018 is defective because Ose failed to complete the spaces for the prevailing party and the party against whom the costs were sought. The Court simply notes that this is not relevant to the instant motion which seeks to recover post-judgment enforcement fees. The memo of costs only involved filing fees and copying of briefs, not the

attorneys’ fees sought by way of the instant motion and thus any defect in that memo has no bearing on this motion. CCP § 685.080 specifically permits a party to seek post-judgment fees by way of a noticed motion (as opposed to by way of a cost memo). To the extent that Priest sought to challenge the costs set forth in the January 8, 2018 cost memo, he was required to file a motion to tax costs, not raise the challenge in this opposition.

Priest next argues that Enslow Ose’s declaration must be disregarded because it was not dated. He argues that this renders the entire motion defective because Mr. Ose attached the underlying lease, stipulated judgment, etc. The Court rejects this argument. The copy of Mr. Ose’s declaration filed with the Court is dated January 8, 2018. (ROA 47) Further, any failure to date the declaration does not impact the Court’s determination as to whether Ose is entitled to fees.

The Court does agree, to some extent, however, with Priest’s argument that Ose cannot recover certain fees incurred prior to January 8, 2016. As set forth above, a motion for recovery of post-judgment enforcement fees “shall be made before the judgment is satisfied in full, but not later than two years after the costs have been incurred.” (Id. § 685.080(a).) Here the instant motion was filed on January 8, 2018. The Court therefore agrees that any fees incurred prior to January 6, 2016 (which were unrelated to the appeal) are not recoverable. The Court rejects Ose’s argument that the two year period under CCP § 685.080 was tolled during Priest’s appeal. To that end, Ose relies on the doctrine of equitable tolling. However, that doctrine applies to the statutes of limitations for filing an action, not the time limit for filing a motion for attorney’s fees pursuant to CCP § 685.080. That doctrine “reliev[es] plaintiff from the bar of a limitations statute when, possessing several legal remedies he, reasonably and in good faith, pursues one designed to lessen the extent of his injuries or damage.” (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 409.) Ose cites no authority for the proposition that this doctrine applies to the time to file a motion for fees. Moreover, Ose was not, pursuing a remedy designed to lessen its injuries or damages while the appeal was pending, it simply did not file the motion to recover fees incurred during that time period and thus the doctrine is inapplicable even if there was authority extending it to this situation. Parties frequently file motions for fees incurred at the trial court level while an appeal is pending and nothing prevents them from doing so even where the fee award could ultimately be reversed on appeal if the judgment on which it was based was reversed. The fact that Priest may have all of the evidence related to Ose’s fees incurred from 2013 to January 8, 2016 and is not prejudiced by any delay is not relevant given the requirement in CCP § 685.080(a) requires fee motions to be filed not later than two years after the fees are incurred and the lack of any authority extending the doctrine of equitable tolling to CCP § 685.080. The Court will not extend the doctrine to apply here.

However, even though the two year time period in CCP § 685.080(a) precludes Ose from recovering fees incurred prior to January 8, 2016, this only precludes fees that were solely related to post-judgment enforcement. It does not preclude recovery of fees incurred in connection with defending against Priest’s appeal regardless of when those fees were incurred. Indeed, a motion for fees incurred on an appeal must be filed within 40 days after the remittitur issues. (CRC Rule 3.1702.) The remittitur was issued on November 28, 2017, and the instant motion was timely filed on January 8, 2018 (40th day was a Sunday and thus the deadline was extended to the next Court day). The Rules of Court, not the Enforcement of Judgment Law governs appellate fees. (In re Conservatorship of McQueen (2014) 59 Cal.4th 602, 611.)

As a result, Ose is limited to seeking recovery of its fees on appeal, regardless of when incurred, in addition to fees incurred less than two years prior to January 8, 2018. Ose cannot recover post-judgment fees (not related to the appeal) incurred before January 8, 2016.

To that end, Ose’s appellate fees total $42,125.25. Ose also seeks $21,955.50 for work in connection with the instant fee motion. Ose states that its fees for the appeal and non-appeal work incurred in the past two years is $67,735.25. These are the only fees that Ose can properly seek to recover.

Other than the above arguments related to the proofs of service, the unsigned declaration and the two year time limit in CCP § 685.080(a), Priest raises no challenge to the amount of the fees. He makes no argument that the hours sought are unreasonable or that the hourly rates of Ose’s counsel at Boutin Jones are unreasonable.

“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.” ( Plcm Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) “The reasonable hourly rate is that prevailing in the community, for similar work.” (Id.) In making this determination, the Court may consider “the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case. (Id.) “[T]he verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” (Horsford v Board of Trustees of California State University (2005)132 Cal.App.4th 359, 396; Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1367(declarations of counsel are also “sufficient to meet the burden of establishing the reasonableness of the fees incurred, without the need to produce copies of counsel’s detailed billing statements.”) Fee award amounts are matters within the trial court’s discretion: the “trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Here, after reviewing the time records, the Court finds that 129.7 hours for the work

associated with the appeal resulting in $42,125.25 in fees and the 57.85 hours for the
work in connection with the instant fee motion resulting in $21,955.50 are reasonable
under the circumstances. (Stouder Decl. 16, Exh. A.) The appeal in this matter
spanned almost 4 years with the parties participating in the Appellate Mediation
Program, submitting extensive briefing and participating in oral argument. Further the

time spent in connection with the instant fee motion is also reasonable given the long
history of the action, the need to review the multiple time entries, perform the
necessary calculations, prepare the numerous declarations and the moving papers.
(Davis Decl. ¶ 6.) Ose’s counsel’s hourly rates ranged from $225/hr to $430/hr and
are reasonable. While the Court mentioned above that Ose stated that its fees for the
appeal and non-appeal work in the past two years was $67,735.25, the Court’s review
of the papers only shows that Ose incurred $42,125.25 for fees on appeal and
$21,955.50 for the instant motion resulting in $64,080.75 in fees. The papers do not
clearly account for the $3,654.30 difference. The Court will therefore only award

$64,080.75 in fees for the appeal and the instant fee motion.

In addition, the Court will award Ose an additional amount for its fees incurred on reply. Ose seeks $5,710 for the fees incurred for the reply representing 14.8 hours of three separate attorneys’ time. The Court finds that a modest reduction is necessary. The Court finds that Ose is entitled to an additional $3,582 for fees incurred on reply ($375/hr x 8 hrs [attorney Davis] + $410 x 1 hr [attorney Stouder]+ $430 x .4 hrs [attorney Chase].)

As a result, the motion is granted. Ose is entitled to recovery of fees in the amount of $64,080.75 plus an additional amount of $3,582 for fees incurred on reply for a total of $67,662.75. To the extent that Ose incurs any additional fees in connection with the hearing on the motion, it shall present a supplemental declaration to the Court.

Priest’s request for fees in opposition is denied. Ose’s motion was granted and it was the prevailing party on the appeal. There is no basis for Priest’s request.

Ose shall submit an order for the Court’s signature pursuant to CRC 3.1312.