SH ICON Santa Barbara LLC vs Ike’s Place #9 LLC
Case No: 18CV06313
Hearing Date: Fri Jun 21, 2019 9:30

Nature of Proceedings: Motion: Attoney Fees

TENTATIVE RULING:

For the reasons set forth herein, the court determines that plaintiff SH ICON Santa Barbara LLC is the prevailing party and is entitled to an award of attorney fees (and costs as limited below) against defendant Ike’s Place #9 LLC. The court fixes the amount of reasonable attorney fees allowed by the court as $22,750.00. The court confirms an award of costs (not including attorney fees) in the amount of $230.00.

Background:

On December 26, 2018, plaintiff SH ICON Santa Barbara LLC (SH ICON) filed its complaint in this unlawful detainer action against defendant Ike’s Place #9 LLC (Ike’s Place) involving Ike’s Place’s tenancy at 6530 Seville Road, Goleta (the Premises).

This action is related to Ike’s Place #9 LLC v. SH ICON Santa Barbara LLC, case number 19CV00530 (complaint filed on January 30, 2019).

On March 15, 2019, the court denied the motion of Ike’s Place to consolidate this action with case number 19CV00530 and to stay this action pending disposition of case number 19CV00530.

On March 22, 2019, a court trial was held in this action. At the conclusion of trial, the court found for the plaintiff SH ICON.

On April 4, 2019, the court entered its written judgment after court trial in favor of SH ICON, awarding possession of the Premises to SH ICON, damages for past-due rent of $42,400, and awarding attorney fees to be determined by later motion.

On April 14, 2019, Ike’s Place surrendered possession of the Premises to SH ICON. (Thyne decl., ¶ 3.)

On May 16, 2019, SH ICON filed this motion seeking an award of attorney fees in the amount of $24,280.00

On June 14, 2019, Ike’s Place filed, and served by mail, its opposition. (Note: Although the opposition is untimely (see Code Civ. Proc., § 1005, subd. (b)), a reply was filed and the court will consider the opposition. Counsel are reminded of their obligation to file and serve all documents timely.)

Analysis:

“In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. [¶] … [¶] Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit.” (Civ. Code, § 1717, subd. (a).)

Section 21.5 of the lease agreement between the parties provides: “If, on account of any breach or default by any parties obligations hereunder, the other party shall employ an attorney to present, enforce or defend any rights or remedies hereunder, the breaching or defaulting party shall be liable for any reasonable attorney’s fees and court costs incurred in connection therewith.”

The unlawful detainer action was filed to enforce the lease based upon breach by Ike’s Place. SH ICON obtained an unqualified win in obtaining a judgment in this action. SH ICON is the prevailing party entitled to an award of reasonable attorney fees. (See Beverly Hills Properties v. Marcolino (1990) 221 Cal.App.3d Supp. 7, 10-11.)

In opposing the motion, Ike’s Place argues that because possession is no longer an issue, the constitutional basis for an expedited hearing, including a hearing on an award of attorney fees, has been removed. Ike’s Place therefore argues that an award of attorney fees should be delayed so that a potential right to offset may be adjudicated in case number 19CV00530.

Ike’s Place cites Civil Code section 1952.3 in support of its argument. Section 1952.3 does not apply here. Section 1952.3, subdivision (a) begins with a condition: “[I]f the lessor brings an unlawful detainer proceeding and possession of the property is no longer in issue because possession of the property has been delivered to the lessor before trial or, if there is no trial, before judgment is entered, the case becomes an ordinary civil action ….” According to Ike’s Place’s counsel, not only was possession not delivered prior to trial, but possession was not delivered until after entry of judgment in this action. Thus, section 1952.3 is inapplicable. The expedited hearing authorized by the unlawful detainer statutes was necessary to effect the result set forth in the judgment. While Ike’s Place is correct that there is no further need for an expedited hearing, the motion for an award of attorney fees was filed and the hearing on that motion are within the time set forth for an award of attorney fees in an ordinary civil action. (See Code Civ. Proc., § 1005, subd. (b); Rules of Court, rule 3.1702(b)(1).) The timing of this post-judgment motion for fees is proper notwithstanding the change of possession of the Premises.

Ike’s Place also argues that the award of attorney fees should not be made now because of the pendency of case number 19CV00530. “[A] judgment debtor who has acquired a judgment or claim against his judgment creditor may ask the court in which the judgment against him was rendered to have his judgment or claim offset against the first judgment. The offset of judgment against judgment is a matter of right absent the existence of facts establishing competing equities or an equitable defense precluding the offset.” (Brienza v. Tepper (1995) 35 Cal.App.4th 1839, 1847–1848.) “A setoff … is not a claim for relief. It occurs at the end of litigation and ‘is a means by which a debtor may satisfy in whole or in part a judgment or claim held against him out of a judgment or claim which he has subsequently acquired against his judgment creditor. The right exists independently of statute and rests upon the inherent power of the court to do justice to the parties before it. [Citations.]’ [Citation.]” (Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 860-861.)

Ike’s place has not shown that any setoff is now appropriate. First, the monetary component of the judgment in this action is for past-due rent. (See Code Civ. Proc., § 1174, subd. (b) [“The … the court … shall also assess the damages occasioned to the plaintiff by any … unlawful detainer[] alleged in the complaint and proved on the trial, and find the amount of any rent due, if the alleged unlawful detainer be after default in the payment of rent. … The trier of fact shall determine whether actual damages, statutory damages, or both, shall be awarded, and judgment shall be entered accordingly.”].) In a commercial tenancy, such as here at issue, the obligation to pay rent is independent of the duties owed by the landlord to the tenant and a tenant generally may not offset payment of rent against damages that may accrue to the tenant based upon the breach of the landlord’s duties. (Schulman v. Vera (1980) 108 Cal.App.3d 552, 558-559.) Ike’s Place makes no showing that SH ICON’s collection of past-due rent by judgment should be made subject to an immediate offset that would be impermissible by non-payment of the rent.

Second, Ike’s Place does not provide any evidence or information by which the amount of the proposed setoff would be measured. The proposed setoff is at this time a disputed claim that is being litigated in case number 19CV00530. “The mere fact that a judgment debtor asserts a claim against the creditor, however, does not of itself mean that he is entitled to enjoin collection of the judgment, and the trial court has broad discretion in determining whether to grant the stay or enjoin collection of the judgment.” (Erlich v. Superior Court (1965) 63 Cal.2d 551, 556.) “In determining whether to enjoin collection of the judgment pending decision of the validity of the disputed claim, the court should consider the likelihood that the judgment debtor will recover upon his claim, the probability and comparative amount of recovery, and the ability of the judgment creditor to respond should a judgment be rendered against him in the action on the disputed claim. The fact that the judgment creditor may have an immediate need for the funds due to him upon his judgment is not a basis for denial of relief where the foregoing considerations otherwise compel relief.” (Ibid.) There is no factual basis shown for the court to offset the existing judgment in this case.

Third, this motion is to fix the amount of attorney fees to include in the judgment in this case. The amount of attorney fees awardable here is independent of the disposition of case number 19CV00530.

The court will award attorney fees as required by Civil Code section 1717.

SH ICON seeks a lodestar amount of $21,125.00 for attorney fees through trial and judgment plus an additional $2,925.00 for attorney fees and costs in making this motion. SB ICON also seeks a multiplier enhancement for this amount and $230.00 in non-statutory costs. Ike’s Place argues that this amount is excessive and no more than 39 hours of time should be awarded.

SH ICON does not provide any billing statements, but provides the declaration of counsel, attorney Martin Cohn, that he spent approximately 65 hours in attorney time up until the present motion. (Cohn decl., ¶ 9.) Cohn’s declaration fails to provide a correct billing rate, which is erroneously identified as $35.00. (Cohn decl., ¶ 6.) Dividing $21,125.00 by 65 hours, the implied rate is $325.00, which the court finds as a reasonable rate. As to number of hours, the absence of billing records makes assessment more difficult for the court. However, the court does note that this unlawful detainer action did involve responding to a demurrer by defendant, addressing the motion to consolidate and stay this action, as well as preparing for trial. Based upon its familiarity with this litigation and trial, the court finds the requested hours to be reasonable. SH ICON also seeks five hours of attorney time for filing this motion with two additional hours for reviewing the opposition and replying and two hours for the hearing. (Cohn decl., ¶ 12.) The court finds that five hours of attorney time, inclusive of the time to review opposition, to prepare the reply, and to attend the hearing to be reasonable for this motion, for $1,625.00 in attorney fees for this motion.

After considering all factors with respect to an enhancement, SH ICON has not shown, and the court does not find, that any enhancement is warranted here. Among other things, counsel’s billing rate sufficiently reflects the skill and experience of counsel in addressing the issues in this case.

Costs must be claimed by memorandum of costs. (See Rules of Court, rule 3.1700(a)(1).) Insofar as no motion to strike or to tax costs is now before the court and the time for filing such a motion has expired, the court will confirm the costs claimed by memorandum of costs filed and served on May 16, 2019, in the amount (exclusive of attorney fees) of $230.00.

The court will therefore award attorney fees in the amount of $22,750.00 and confirm costs in the amount of $230.00.