Case Number: 19NWCV00160 Hearing Date: December 17, 2019 Dept: SEC

ANABI OIL CORPORATION vs ARTASHES YEPREMYAN, et al.

CASE NO.: 19NWCV00160

JUDGE: OLIVIA ROSALES

HEARING: 12/17/2019

#1

TENTATIVE ORDER

Defendant Artashes Yepremyan and iFuel, Inc.’s motion for attorney’s fees is GRANTED in the reduced amount of $61,801.61.

Moving Party to give NOTICE.

Background

On January 29, 2013, Evon Halaka and S&J Petroleum (Landlord Defendants”) and iFuel, Inc. and Artashes Yepremyan (“Tenant Defendants”) entered into a lease agreement, whereby the Tenant Defendants agreed to lease the premises at 14200 Telegraph Road, Whittier, CA 90604 (“subject property”) with the intent to operate a gas station on the premises. The lease was for an initial term of 10 years with two additional five-year option terms. Plaintiff Anabi Oil Corporation (“Plaintiff”) entered into an agreement with iFuel, Inc. to purchase a minimum amount of gasoline per month for a term of 10 years. The agreement granted Plaintiff a right of first refusal regarding the transfer of any interest in the gas station or the agreement.

iFuel entered into a Retailer Facility Development Incentive Program Agreement (“Facility Development Agreement”) with Plaintiff. Pursuant to this agreement, Plaintiff agreed to fund certain improvements to the Shell station and iFuel agreed to keep the station branded as Shell for a fixed term of approximately ten years. In the event that the Shell station did not remain a Shell-branded station, iFuel was required to reimburse Plaintiff for various improvements and to make other payments.

On September 16, 2016, Landlord Halaka filed an unlawful detainer action against the Tenant Defendants. The basis for the action was a three-day pay or quit notice issued after the Tenant Defendants allegedly failed to pay rent. On March 21, 2017, the Court granted judgment in favor of the Tenant Defendants based on a technical defect in the notice, specifically the failure of the notice to include the telephone number of the person to whom rent it to be paid.

On April 14, 2017, Landlord Halaka filed an action against Tenant Defendants, asserting claims for declaratory relief, damages and fraud. In December 2018 and January 2019, the Halaka Court held a mandatory settlement conference before the Honorable John Torribio. A settlement was reached, and, on January 10, 2019, the terms were memorialized on the record in open court.

In the Complaint, Plaintiff alleges that the settlement, in which the Landlord Defendants and Tenant Defendants agreed to terminate the lease between them disregarded any rights Plaintiff had in the lease interest. Plaintiff contends that pursuant to the terms of the right of first refusal, Tenant Defendants were obligated to provide Plaintiff with an opportunity to purchase the gas station. On May 1, 2019, Landlord Defendants filed an Anti-SLAPP motion to strike the Complaint. On June 7, 2019, S&J Petroleum and Evon Halaka filed their respective Anti-SLAPP motion.

On August 28, 2019, the Court issued an order on the Anti-SLAPP motion:

1. granting Halaka and S&J Petroleum’s motion to strike the 4th Cause of Action for intentional interference;

2. granting iFuel’s motion as to the first cause of action to the extend the claim alleges a breach of the right of first refusal in the Retail Product Sales Agreement, but denied as to allegations of a breach of the payment obligations; and

3. granting Yepremyan’s Anti-SLAPP as to the 3rd Cause of Action for Specific Performance and 5th Cause of Action for Declaratory Relief, both causes of action arising from Plaintiff’s claim to a right of first refusal.

On October 1, 2019, Plaintiff filed a Request for Dismissal without prejudice as to moving Defendants.

Request for Judicial Notice

Plaintiff’s Request for Judicial Notice is GRANTED.

Discussion

Defendants Artashes Yepremyan and iFuel, Inc. (“Defendants”) move the Court for attorney’s fees and costs in the amount of $92,701.74. Defendants move pursuant to Code Civ. Proc. § 425.16(c) as the prevailing parties on their special motion to strike (“Anti-SLAPP”).

Prevailing Party

Defendants argue that iFuel is a prevailing party because the Court granted to motion to strike allegations of the Complaint pertaining to the right of first refusal (“ROFR”). As to Yepremyan, Defendants note that the Court struck the 3rd and 5th Causes of Action in full. Defendants contend that these Tenant Defendants are the prevailing parties because they obtained a practical benefit through their Anti-SLAPP motion. Specifically, Defendants argue that they have disposed of all claims premised on the allegation that Tenant Defendants were in breach of the ROFR.

Thus, the factual allegations relating to the ROFR are no longer required to be litigated, and Plaintiff’s relief limited to its claims for beach of the payment obligations. Defendants note that the Anti-SLAPP motions have thus diminished remaining litigation, narrowed the scope of discovery and motion practice, and reduced Defendants’ exposure to damages.

In opposition, Plaintiff argues that iFuel was not a prevailing party on the Anti-SLAPP because although it obtained success on the issue of the ROFR, its ultimate goal was to strike the entirety of the Complaint.

“[A] party who partially prevails on an anti-SLAPP motion must generally be considered a prevailing party unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion. The determination whether a party prevailed on an anti-SLAPP motion lies within the broad discretion of a trial court.” Mann v. Quality Old Time Serv., Inc. (2009) 139 Cal. App. 4th 328, 340. Plaintiff cites to Endres v. Moran, where the court held

[t]o be blunt, defendants’ motion accomplished nothing, except that plaintiffs were put to the cost of defending the motion. The possible recovery against defendants did not change. The factual allegations which defendants had to defend did not change. The work involved in trying the case did not change. Defendants’ burden concerning their jurisdictional defense did not change. The case was essentially the same after the ruling on the special motion to strike as it was before. The results of the motion were minimal and insignificant, fully justifying the court’s finding that defendants should not recover fees.

Moran v. Endres (2006) 135 Cal. App. 4th 952, 955.

Plaintiff argues that the factual allegations which iFuel must defend remain the same because the ROFR allegations stem “derive from the anticipated and/or actual breach of the underlying RPSA and RFDIP.” (Opp. 8:11-12.) Plaintiff acknowledges that the “ROFR provided a potential remedy for Anabi Oil to potentially protect its rights under the RSPA and RFDTP by ensuring that the required fuel purchases were made,” and that such remedy has now become unavailable. (Opp. 8:13-15.) Plaintiff asserts that it was not required to exercise the ROFR even had it been offered; however, such argument carries no weight as the relevant inquiry is the available recoveries, not whether Plaintiff could have elected no to exercise it. The Complaint sought specific performance and declaratory relief as to Plaintiff’s ROFR, Defendants’ Anti-SLAPP motion disposed such causes of action. Plaintiff summarizes its argument as follows: “[s]triking the causes of action for specific performance and declaratory relief relative to the ROFR would not have reduced the time needed to prepare for trial or the length of trial as those causes of action are avenues of relief for Anabi Oil.” (Opp. 8:18-20.)

However, “the relevant test is not whether the defendant gained ‘the most important’ benefit, it is whether the defendant obtained a practical benefit.” City of Colton v. Singletary (2012) 206 Cal. App. 4th 751, 783–84. In Colton, the defendant “gained a practical benefit from partially prevailing on the anti-SLAPP motion, because he caused the request for specific performance relief to be stricken, and removed the associated injunction request related to his attempts to profit.” Id. In the facts at hand, Plaintiff’s causes of action for specific performance and declaratory relief by which Plaintiff affirmatively sought to exercise its ROFR have been stricken from the Complaint.

Similar to Colton, Defendants have successfully stricken the plaintiff’s request for specific performance. Therefore, contrary to Moran, the possible recovery against Defendants has changed; Defendants have successfully stricken two causes of action, removing exercise of the ROFR from the available remedies Based on the foregoing, Defendants are the prevailing party in this matter.

Reasonable Fees

Defendants submit the declaration of Ryan Kashfian, who declares that his current hourly billing rate for this type of case is $695. (Kashfian Decl. ¶ 3.) Defendants submit a table summarizing the total hours and costs expended in the Anti-SLAPP matter, as well as charts reflecting individual billing entries. (Id. ¶ 11.)

A request for fees must be support with evidence so that “a neutral judge [could] make a fair evaluation of the time expended, the nature and need for the service, and the reasonable fees to be allowed.” Jordan v. Multnomah Cnty. (1987) 815 F.2d 1258, 1263. “The evidence should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.” Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320.

Here, entries such as 7.95 hours for “PARTNER: Legal Drafting, Researching, and Review – Legal Research and Drafting of Reply to Opposition,” followed by 8.35 hours for “PARTNER: Legal Drafting, Researching, and Review – Continued Legal Research and Drafting of Reply to Opposition” provides this Court with insufficient evidence to determine whether the hours expended were reasonable. (Kashfian Decl. ¶ 11.)

Additionally, the Court finds Defense counsel’s travel expenses excessive. Defense counsel is billing 21.75 hours, or $13,135.50, for two partners, Ryan Kashfian and Robert Kashfian to simultaneously attend two hearings on the Anti-SLAPP matter. (Id.) Similarly, Defendants request an anticipated 14.7 hours, or $10,216.50, for both partners to travel and appear at the hearing on the present motion. (Id.)

Plaintiff also takes issue with the hourly rate charged, arguing that Defendants have submitted no evidence supporting an hourly rate of $695 in the context of the work performed and attorney experience. In support of this argument, Plaintiff submits the declaration of Kenneth Roberts, who declares that he has been litigating in this field for over 40 years, that he charges $400 an hour, and that “[a]ttorneys in this field do not charge and receive $695 per hour.” (Robert Decl. ¶ 4.) However, neither party provides evidence other than self-serving declarations to support or contest Defense counsel’s rate.

Based on the foregoing, Defendants’ motion for attorney’s fees is GRANTED. In light of Defense counsel’s excessive travel requests and vague billing entries, Defendants’ fee request is reduced by one third to the amount of $61,801.61.