Tentative Ruling

Judge Donna Geck
Department 4 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Avia Spa Property, Inc. vs Carlyle Salon & Style Bar, LLC
Case No: 19CV01622
Hearing Date: Fri Feb 14, 2020 9:30

Nature of Proceedings: Motion: Attorney Fees

TENTATIVE RULING: The motion is granted, in the total amount of $154,127.17.

Background: This is a commercial unlawful detainer action, which was based upon defendant’s purported violations of breaches of the lease unrelated to the rent obligation. The dispute was intensively litigated—at least for an unlawful detainer action—through the filing of two separate actions, and with the litigation of the second action through the filing of a second amended complaint, the conduct of discovery, a number of law and motion hearings (demurrer, three motions to quash deposition subpoenas filed by plaintiff, and defendant’s motion for summary judgment), and through trial. Defendant prevailed at trial, and was awarded continued possession of the premises under the terms of the lease. Plaintiff has appealed the judgment, and the appeal remains pending.

The lease between the parties contained an attorneys’ fees clause, which provided:

Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereunder defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.

The term “Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorney’s fees reasonably incurred.

Defendant now seeks its prevailing party attorneys’ fees pursuant to the contractual provision, in the total amount of $156,377.17. The amount is supported by invoices, and with evidence of the hours and billing rates of the various attorneys who worked on the matters, as well as the hours and billing rate of a paralegal involved in the litigation. The invoices reflect that, as a professional courtesy, more than 80 hours of attorney time was reflected on the invoices as resulting in no charge, in order to avoid any duplication when more than one attorney was involved with a task. Additional courtesy discounts of more than $800 are reflected on the invoices.

In lieu of filing an opposition to the fee motion, and beyond the time within which such opposition was due to be filed (see Code Civ. Proc., § 1005, subd. (b)), plaintiff moved, ex parte, for an order staying enforcement of judgment pending appeal. Specifically, plaintiff sought to have the hearing on the fee motion stayed and deferred until after plaintiff’s appeal of the judgment is decided. Defendant opposed the application, which was denied by the Court.

Defendant’s fee motion now comes before the Court, without opposition.

ANALYSIS: The motion is granted, as outlined below.

California follows the “American rule,” under which each party to a lawsuit must pay its own attorney fees unless a contract or statute or other law authorizes a fee award. (Code Civ. Proc., §§ 1021.1033.5, subd. (a)(10); Mosaelian v. Adams (2009) 45 Cal.4th 512, 516.) Civil Code section 1717 governs attorney fee awards authorized by contract and incurred in litigating claims sounding in contract. Pursuant to section 1717(a), in any action “on a contract,” where the contract specifically provides that attorney’s fees and costs incurred to enforce the contract shall be awarded either to one of the parties or to the prevailing party, the party determined to be the party prevailing on the contract is entitled reasonable attorney’s fees, which shall be fixed by the court as an element of the costs of suit. The primary purpose of section 1717 is to ensure mutuality of remedy for attorney fee claims under contractual attorney fee provisions. (Santisas v. Goodin (1998) 17 Cal.4th 599, 610.)

California courts construe the term “on a contract” liberally. (Turner v. Schultz (2009) 175 Cal.App.4th 974, 979.) It includes not only traditional actions for breach of a contract containing an attorney fee clause, but also any other action that “involves” a contract under which one of the parties would be entitled to recover attorney fees if it prevails in the action. (Eden Township Healthcare District v. Eden Medical Center (2013) 220 Cal.App.4th 418, 426.) In determining whether an action is “on the contract” under section 1717, the proper focus is not on the nature of the remedy, but on the basis of the cause of action. (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 347.) An action or cause of action is “on a contract” for purposes of section 1717 if (1) the action or cause of action “involves” an agreement, in the sense that it arises out of, is based upon, or relates to an agreement by seeking to define or interpret its terms or to determine or enforce a party’s rights or duties under the agreement, and (2) the agreement contains an attorney fees clause. (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 241-242.)

The contractual attorneys’ fees provision set forth in the Lease between the parties is a very broad one. The unlawful detainer action was premised upon defendant’s purported breaches of the lease, and is clearly an action “on a contract” within the meaning of Civil Code section 1717(a). Consequently, as the prevailing party in the unlawful detainer action, defendant is entitled to the reasonable attorneys’ fees it incurred in successfully defending the action.

Defendant’s attorneys have provided their invoices for the services rendered in defending the action, redacted to protect attorney-client privilege and matter protected by attorney work product. The invoices reflect the expenditure of significant efforts on defendant’s behalf, although considerable effort was made in response to actions taken by plaintiff and its attorney. The efforts not only included the prosecution and defense of the law and motion matters articulated above, but also the conduct of written discovery and discovery-related meet-and-confer efforts, as well as review of supplemental discovery responses, the taking of multiple depositions, multiple requests by plaintiff to renegotiate the lease, the settlement conference and informal attempts to settle the matter, and, ultimately, the preparation for and participation in trial proceedings, preparation of post-trial documents including the judgment, memorandum of costs, and this fee motion.

The Court finds the billing rates claimed for the efforts of the various legal professionals are reasonable. The Court further finds that, given the intensity with which the case was litigated, and the significant efforts which defendant was required to expend in order to prevail at trial, the hours expended by defendant’s attorney are also largely reasonable.

Defendant’s motion states that its fee request of $156,377.17 includes eight additional hours which defendant anticipated would be devoted to reviewing opposition, preparing a reply and attending the hearing. However, no opposition was filed. While a “reply to non-opposition” was filed by defendant, there was no need for such filing, since the Court was well aware that no opposition had been filed. The eight hours’ worth of fees is excessive for mere preparation for and attendance at the hearing. The Court will therefore deduct 6 hours of attorney time from the total, @ $375/hour (the billing rate used by defendant to arrive at the $3,000 estimate for 8 hours of fees yet to be incurred at the time the motion was filed), which works out to be a reduction of $2,250, for a total fee award of $154,127.17.

The Court will therefore grant defendant’s motion for contractual attorneys’ fees, in the total amount of $154,127.17.