Tentative Rulings: Attorney fee motion is granted in part; Costs motion is denied.

Following a court trial, judgment was entered in favor of plaintiffs /cross-defendants IMT Capital 11525 Blucher LLC and Investors Management Trust Real Estate Group Inc. dba IMT Residential (collectively IMT), against defendants/cross-complainants NMS Properties Inc. and Northgate Apartments LLC (collectively Northgate). IMT moves for an award of attorney fees, and Northgate moves to strike or tax costs claimed by IMT.

Evidence –
The parties have made objections to the declarations submitted in connection with the motions. Northgate objects to the Arshonsky, Stern and Schaffer declarations: Objections 3, 14, 20, 23, 58, 59 and 63 are sustained, and all others are overruled. IMT objects to the Silas and Zelig declarations: Objections 31 and 32 are sustained, and all others are overruled.

IMT has requested judicial notice of two matters. The RJN is granted for the complaint in BC532377 and denied for the National Law Journal article.

Attorney Fees –
IMT moves for recovery of attorney fees pursuant to Civ. Code §1717, based upon an attorney fee provision in the easement. The provision states broadly that “In the event of any litigation between the parties to this Agreement to enforce any provision of this Agreement, or obtain damages by reason of any alleged breach of any provision of this Agreement, or for any declaration of such parties’ rights pursuant to this Agreement, then the prevailing party on such litigation shall be entitled to be reimbursed by the losing party for all costs and expenses incurred thereby, including but not limited to, actual attorneys’ fees.”

IMT’s complaint asserted causes of action that sought a “declaration of rights” under the easement, and Northgate’s cross-complaint also sought a “declaration of rights” in the 1st and 2nd causes of action. All of these claims fall squarely within the easement and §1717. Northgate’s remaining causes of action are not based directly upon a breach of the easement and they do not seek a declaration of rights under the easement, but they were inextricably intertwined with the principal claims in the case. They involved the same facts and were based on the parties’ rights under the easement. Under these circumstances, IMT is entitled to recover attorney fees for all work performed on all claims in the case. See Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1111; Gil v. Mansano (2004) 121 Cal.App.4th 739, 742.

The determination of what constitutes a reasonable attorney fee begins with the “lodestar,” – the number of hours reasonably expended multiplied by a reasonable hourly rate. The lodestar is the basic fee for comparable legal services in the community, and it may be adjusted up or down by the court based on the unique circumstances of the case. E.g. PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095; Graciano v. Robinson Ford Sales (2006) 144 Cal.App.4th 140, 154.

IMT requests attorney fees in the total amount of $1,824,282.98. This is based upon 4,042.55 hours, apportioned as follows: 980.5 hours for a total fee of $395,431 for Lewis Roca Rothgerber LLP (LRR); 2,386.15 hours for a total fee of $1,264,516.48 for Hughes Hubbard & Reed LLP (HHR); 675.9 hours for a total fee of $149,935.50 for Levinson Arshonsky & Kurtz LLP (LAK); and 28 hours for a fee of $14,400 in replying to Northgate’s opposition and attending the hearing on this motion.

Northgate has argued that IMT’s total attorney fees are unreasonably inflated, and it requests a complete denial of fees pursuant to Serrano v. Unruh (1982) 32 Cal.3d 621 and Chavez v. City of Los Angeles (2010) 47 Cal.4th 970. That request is denied. The court will instead examine the components of IMT’s fee request and determine a reasonable overall fee.

IMT’s effective hourly rates range from $222.62 to $799 for partners, $215 to $629.70 for associates, and $162.04 to $232.16 for paralegals. Northgate objects to the rates charged by HHR and LRR, but not LAK. The court finds all that all of IMT’s hourly rates are reasonable. While the rates charged by HHR are high, they are within the range of comparable law firms in the Los Angeles area.

IMT’s total number of hours is 4,070 (including time on this motion), divided between three law firms. The greatest number of hours were at HHR (2,386), followed by LRR (980) and LAK (675). Northgate objects to these hours as inflated and unreasonable. Northgate points to multiple IMT attorneys appearing at depositions, hearings and trial.
IMT contends that the use of multiple law firms was justified, based on the different phases of the litigation, IMT’s long-time use of LRR in real estate matters, and LAK’s role in defending certain claims made in Northgate’s cross-complaint. Partners from each of IMT’s law firms state that they made diligent efforts to minimize duplication and maximize efficiency.

The court has considered all of the parties’ arguments and has carefully reviewed the billing statements and other evidence submitted. The court will award IMT a total of $1,185,783 in attorney fees.

The court’s award is based upon the lodestar, billing rates and hours claimed by IMT, which are supported by its papers. The lodestar is reduced by 35 percent, for the following reasons:

The award has been reduced because of the substantial duplication by those who worked on the case. There were 23 individuals who worked on the trial court proceedings: 7 partners, 11 associates, 4 paralegals, and 1 summer associate. These individuals were employed at three separate law firms: two in Los Angeles and one in Phoenix. This complex structure necessarily resulted in duplication and inefficiency.

The court recognizes that this case involved complex issues and was aggressively litigated by Northgate. A sizeable fee award is a necessary product of those factors. But dividing the case among three separate law firms and a sizeable number of individuals at each firm produced an excessive total fee. The duplication of services is apparent from IMT’s billing statements, and it was obvious during the proceedings before the court. A significant downward adjustment is entirely appropriate.

In applying these factors, the court has made a gross reduction of 35 percent in the lodestar claimed by IMT. The court considered making a more precise adjustment by deducting services from the lodestar itself, but this simply was not feasible. A gross reduction was appropriate under the circumstances, and the overall fee award of $1,185,783 is a reasonable amount based upon all the circumstances of the case.

The award of attorney fees shall be entered in favor of all of the IMT parties (i.e. IMT Capital 11525 Blucher LLC and Investors Management Trust Real Estate Group Inc. dba IMT Residential), and against all of the Northgate parties (i.e. NMS Properties Inc. and Northgate Apartments LLC). Northgate argued in its supplemental opposition that the award should be apportioned as to those entities that were direct parties under the easement, but this argument has no merit. The easement runs with the land and affects the title holders of the dominant and servient estates. The related corporate entities have rights that are dependent upon those of the title holders, and the related entities asserted interests and claims (and sought recovery of attorney fees) in the litigation. Under these circumstances, apportionment is not required. See Loduca v. Plyzos (2007) 153 Cal.App.4th 334, 343; Abdallah, supra 43 Cal.App.4th at 1111.

Costs –
IMT has filed a memorandum of costs totaling $94,498.96. Northgate moves to strike or tax IMT’s costs on several grounds.

“If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs.” Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774. “If a specific cost item is not identified in either [CCP § 1033.5(a),(b)], it may be awarded in the trial court’s discretion under section 1033.5, subdivision (c)(4), provided it satisfies the further requirement of section 1033.5, subdivision (c)(2), that it was reasonably necessary to the conduct of the litigation.” Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1558.

Northgate argues that the cost memorandum was only filed on behalf of IMT Blucher, and that costs of all other IMT entities and individuals must be stricken. A joint cost memorandum is permitted under these circumstances. See Jonkey v. Carignan Constr. Co. (2006) 139 Cal.App.4th 20, 26. While a cost memorandum could have been filed earlier on behalf of the entities other than IMT Blucher, the court will grant relief under CCP §473(b) and consider the costs requested by all parties. See Jones v. John Crane Inc. (2005) 132 Cal.App.4th 990, 1012; Douglas v. Willis (1994) 27 Cal.App.4th 287, 290. The costs claimed by other IMT entities will be awarded.

Northgate moves to strike travel expenses incurred during depositions. These costs are authorized by CCP §1033.5(a)(3), and will be awarded.

Northgate moves to strike the pro hac vice filing fees by IMT’s attorneys at LRR. These fees are authorized by CCP §1033.5(a)(1), and will be awarded.

Northgate moves to strike deposition costs for transcripts, copies and expedited transcripts. These are authorized by CCP §1033.5(a)(3), and will be awarded.

Northgate moves to strike costs for trial exhibits, photos, videos and electronic projection services. All of these were used by both parties during trial, and they were extremely helpful to the court. They are authorized by CCP §1033.5(a)(13), and will be awarded.

Northgate’s motion is denied, and costs will be awarded in the full amount requested.