Tentative Ruling

Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Linea Polk vs David Gerrity
Case No: 18CV00938
Hearing Date: Wed Feb 19, 2020 9:30

Nature of Proceedings: (2) Attorney Fee Motions; Motion to Tax Costs

TENTATIVE RULING: Plaintiffs’ motion for judgment notwithstanding the verdict is denied. Defendant’s motion to tax plaintiffs’ cost memorandum in the amount of $5,424.98 is granted. In all other respects, defendant’s motion to tax plaintiffs’ costs is denied. Plaintiffs’ motion for attorney’s fees is granted. Plaintiffs are awarded attorney’s fees in the amount of $225,000. Plaintiffs’ request for expert witness fees pursuant to Code of Civil Procedure Section 998 is denied. Defendant’s motion for attorney’s fees and Section 998 expert witness fees is denied.

BACKGROUND:

This is an action for personal injuries resulting from mold contamination at residential property located at 512 E. Victoria Street, Santa Barbara, California 93101. Plaintiff Linea Polk and her daughter, plaintiff Shannon Polk, resided at the property for nearly five years pursuant to a written lease agreement with defendant David W. Gerrity. On November 22, 2019, the jury returned a verdict in favor of plaintiffs on their negligence and private nuisance causes of action and awarded them damages in the amount of $122,150.00. The jury also returned a verdict in favor of defendant on his cross-complaint for property damage and awarded him damages in the amount of $10,000.00. Judgment was entered on February 6, 2020.

On December 20, 2019, plaintiffs filed their memorandum of costs for $38,548.09. Both sides have filed motions for attorney’s fees and expert fees. In addition, plaintiffs have filed a motion for judgment notwithstanding the verdict and defendant has filed a motion to strike or, in the alternative, to tax plaintiffs’ cost bill.

ANALYSIS:

Plaintiffs’ Motion for Judgment Notwithstanding Verdict

Plaintiffs move for an order for judgment notwithstanding the verdict or, in the alternative, a remittitur reducing the jury’s award of $10,000.00 to defendant on the ground that there was no evidence to support defendant’s property damage claim. Defendant opposes the motion.

The motion will be denied. Defendant presented credible evidence that his property was damaged as a result of plaintiffs’ negligence. See, Licudine v. Cedars-Sinai Medical Center (2016) 3 Cal.App.5th 881, 890 (motion for judgment notwithstanding verdict will be denied where the record, viewed in the light most favorable to the jury’s verdict, contains evidence that is reasonable, credible and of solid value sufficient to support the verdict). Here, photographic evidence of the damage was presented and the jury heard from defendant regarding the extent of his damage.

Defendant’s Motion to Tax Plaintiffs’ Costs

“Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Code Civ. Proc. §1032, subd. (b). If properly completed and verified, the memorandum of costs filed by the prevailing party in an action is prima facie evidence that the items claimed are recoverable. Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131. The burden is on the party objecting to the costs bill to show that an item is not properly chargeable or is unreasonable. Ladas v. California State Automobile Association (1993) 19 Cal.App.4th 761, 774-776. Where items are properly objected to, however, they are put in issue and the party claiming them as costs must prove they are allowable and reasonable. Acosta v. SI Corporation (2005) 129 Cal.App.4th 1370. 1380.

Plaintiffs were clearly the “prevailing party” in the action as they obtained a net monetary recovery in their favor. Code Civ. Proc. §1032, subd. (a)(4); see also, Michell v. Olick (1996) 49 Cal.App.4th 1194, 1198 (when the defendant in an action has filed a cross-complaint such that plaintiff and defendant have competing monetary claims, then the party in whose favor the net amount is due qualifies as the prevailing part). On December 20, 2019, plaintiffs filed their initial memorandum of costs and on January 27, 2020, they filed their amended memorandum of costs, seeking total costs in the amount of $38,877.02. Plaintiffs’ costs consist of the following:

● Filing and Motion Fees (Item 1) – $1,374.80

● Deposition Costs (Item 4) – $19,859.75

● Service of Process (Item 5) – $1,630.00

● Witness Fees (Item 8) – $4,437.50

● Court Reporter Fees (Item 11) – $3,471.00

● Other (Item 16) – $4,574.23

Defendant objects to the reasonableness and accuracy of plaintiffs’ cost memorandum. Plaintiffs seek $19,859.75 for deposition costs (Item 4), but of that amount, $606.18 is for finance charges incurred due to plaintiffs’ failure to pay the invoices on time, $630.00 is for costs paid to the Santa Barbara Law Library after the court ordered that all depositions in this case take place in the library due to plaintiffs’ counsel’s bad conduct during prior depositions, and $621.30 is for non-appearance and cancellation fees after plaintiffs’ counsel scheduled defendant’s deposition for the wrong location (and contrary to the court’s order). These deposition costs are improper and are ordered taxed in the amount of $1,857.48.

Plaintiffs seek service of process fees (Item 5) in the amount of $1,630, including $100.00 paid to plaintiffs’ counsel’s employees ($25.00 to Sugey Arce and $75.00 to Keila Aguilar), and $500.00 in skip trace fees to locate witnesses (for plaintiffs) who were never deposed and never testified at trial. Plaintiffs have failed to demonstrate the necessity and reasonableness of these charges and their service of process costs are ordered taxed in the amount of $600.00.

Plaintiffs’ cost bill lists witness fees (Item 8) in the amount of $4,437.50. These fees include $275.00 paid to the City of Santa Barbara, but plaintiffs did not offer a witness from the City to testify at trial or at deposition. Because plaintiffs failed to provide any information as to the reasonableness of this charge, their witness fees are ordered taxed in the amount of $275.00.

Lastly, plaintiffs allege “other” costs (Item 16) in the amount of $4,574.23. Included in these charges are $94.00 for an appearance fee in a different case with a different case number (19CV00291) and $2,598.50 for transcripts of court proceedings. Transcripts of court proceedings not ordered by the court are not recoverable as costs, however. Code Civ. Proc. §1033.5, subd. (b)(5); see also, Moore v. City and County of San Francisco (1970) 5 Cal.App.3d 728, 740 (unless there is an express order by the court directing preparation of a transcript of the proceedings, fees for transcripts and copies ordered by the parties must be paid by the party ordering them). Accordingly, plaintiffs’ “other” costs are ordered taxed in the amount of $2,692.50.

In summary, plaintiffs’ memorandum of costs in the amount of $38,877.02 is ordered reduced by $5,424.98, for a total award of $33,452.04.

Plaintiffs’ Motion to Attorney’s Fees and Section 998 Expert Witness Costs

The prevailing party in litigation is entitled to attorney’s fees as an item of costs when authorized by contract, statute, or law. Code of Civil Procedure Section 1033.5 provides, in relevant part:

“(a) The following items are allowable as costs under Section 1032:

“(10) Attorney’s fees, when authorized by any of the following:

“(A) Contract.

“(B) Statute.

“(C) Law.”

Paragraph 40 of the written lease agreement between plaintiffs and defendant contains the following attorney’s fees provision:

“ATTORNEYS FEES: In any action or proceeding arising out of this Agreement, the prevailing party between Landlord and Tenant shall be entitled to reasonable attorney fees and costs . . . .”

(Richards Dec., ¶3, Ex. 1, Residential Lease Agreement, ¶40.)

Defendant argues that the “arising out of this Agreement” language in the subject lease agreement was never intended to cover negligence and private nuisance claims for personal injuries, only contract claims, but the court disagrees. The courts have consistently held that attorney’s fees clauses that use the language “arising from” or “arising out of” an agreement are to be construed broadly to encompass both contract and tort claims related to the agreement. See, Lerner v. Ward (1993) 13 Cal.App.4th 155; Hemphill v. Wright Family, LLC (2015) 234 Ca.App.4th 911. “The parties to a contract may validly agree to allow for the award of attorney’s fees even though the suit is based on tort rather than contract.” Skyway Aviation v. Troyer (1983) 147 Cal.App.3d. 604, 610-611.

In Lerner, plaintiffs sued defendants for falsely representing that the real property that plaintiffs agreed to purchase could be subdivided. The purchase agreement contained a provision permitting the recovery of attorney’s fees to the prevailing party “[i]n any action or proceeding arising out of this agreement . . . .” Although the complaint initially included causes of action for breach of contract and reformation, as well as for fraud, breach of fiduciary duty, and negligence, plaintiffs dismissed all of the causes of action except the fraud claim. After the jury returned a verdict in favor of defendants, they moved for attorney’s fees. The trial court denied the motion, concluding that attorney’s fees were not recoverable in a tort action for fraud arising out of a contract. The court of appeal reversed and remanded the matter for the trial court to determine defendants’ reasonable attorney’s fees. The court held that the provision in the parties’ purchase agreement for attorney’s fees in any action “arising out of this agreement” was broad enough to encompass a claim for fraud. Id., at 161.

Similarly, in Hemphill, the tenant of a manufactured home site brought an action against the landlord for negligence and premises liability. The trial court entered judgment on special jury verdict in favor of the tenant, but denied the tenant’s motion for attorney’s fees notwithstanding a provision in the lease agreement authorizing an attorney’s fees award to the prevailing party in any action “arising out of” the homeowner’s tenancy. On appeal, the order was reversed and the matter remanded to the trial court for a determination of the reasonable amount of attorney’s fees to be awarded to the tenant. The court held that the “the action here arose out of the homeowner’s tenancy and the trial court erred in denying [his] motion.” Id., at 915.

Here, the operative language in the subject lease agreement is identical to the language in Lerner and Hemphill in providing that “[i]n any action or proceeding arising out of this Agreement, the prevailing party between Landlord and Tenant shall be entitled to reasonable attorney fees and costs . . . .” (Richards Dec., ¶3, Ex. 1, Residential Lease Agreement, ¶40.) Thus, while plaintiffs did not prevail on their contract causes of action, their tort causes of action all arose out of the subject lease, entitling them to reasonable attorney’s fees.

The trial court has broad discretion to determine the amount of reasonable attorney’s fees to award to a prevailing party in a contract action. PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095. In most cases, the fees are determined using the “lodestar” method of calculation, which involves multiplying the number of hours worked by a reasonable hourly rate. Ibid. “California courts have consistently held that the computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award. [Citation.] The reasonable hourly rate is that prevailing in the community for similar work.” Ibid. The court then has discretion to increase or reduce the lodestar figure by applying a positive or negative “multiplier” based on a variety of factors, including the nature of the litigation, the difficulty of the issues involved, and the attorney’s skill as reflected in the quality of work. Ibid. As stated in PLCM:

“The experienced 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 – meaning that [the trial court] abused its discretion.”

Ibid.

Plaintiffs seek an award of attorney’s fees in the amount of $362,150.00. As detailed in the moving papers, plaintiffs’ counsel spent a total of 724.3 hours litigating this matter through trial, including preparation of initial and subsequent pleadings, motions, written discovery and deposition, interviews of percipient witnesses and expert witnesses, and trial work. (Richards Dec., ¶27, Ex. 13.) Although plaintiffs’ counsel agreed to represent plaintiffs on a contingency fee basis, his standard hourly rate is $500.00 per hour. (Richards Dec., ¶29.) Trial commenced on November 4, 2019 and concluded on November 22, 2019, a period of eighteen days. The case involved complex medical and legal issues related to environmental contamination and required extensive research of plaintiffs’ neurological, psychological, and respiratory injuries and extensive law and motion work. (Richards Dec., ¶¶ 19, 20.) Because of the difficult and protracted nature of the case, plaintiffs’ counsel was precluded from working on matters for other clients. (Richards Dec., ¶22.) Counsel also took a substantial risk taking this case to trial and, had plaintiffs lost, he would have received nothing for his services.

Defendants argue that plaintiffs’ counsel’s fees are unreasonable and that there is no credible reason why he should charge $500.00 per hour when defendant’s counsel charged only $350.00 per hour. Plaintiffs’ counsel also repeatedly engaged in conduct throughout the case that made much of the law and motion work necessary, including motions for protective orders and motions for medical examinations. Defendant, however, has failed to identify which items on plaintiffs’ attorney’s fee bill are unreasonable or unnecessary. Further, the mere fact that plaintiffs’ attorney’s hourly rate is greater than the rate charged by defendant’s attorney does not make it unreasonable. In considering the lodestar factors, the trial court must “focus on providing an award of attorney fees reasonably designed to fully compensate [the prevailing party’s] attorneys for the services provided.” Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395. Here, the court finds that the attorneys’ fees reasonably designed to fully compensate the attorneys for services provided is $225,000.

Plaintiffs are also entitled to an award of attorney’s fees incurred in bringing their fee claim. Serrano v. Unruh (1982) 32 Cal.3d 621, 639 (attorney’s fee award shall include not only the fees incurred in the underlying action, but also any fees incurred in establishing and defending the fee claim); in accord, Graham v. Daimler Chrysler Corporation (2004) 34 Cal.4th 553, 580. Plaintiffs’ counsel spent 12.8 hours researching and preparing the instant motion, including the points and authorities and supporting declaration. (Richards Dec., ¶31.) The court finds that the amount of hours billed in preparation of plaintiffs’ motion for attorney’s fees is reasonable and will grant plaintiffs’ request for additional fees in the amount of $6,400.00.

In addition to attorney’s fees, plaintiff Linea Polk seeks expert witness fees pursuant to Code of Civil Procedure Section 998, which provides:

“If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff’s costs.”

On April 24, 2019, plaintiffs served on defendant a statutory offer in the amount of $85,000.00 for Linea Polk and $65,000.00 for Shannon Polk. (Richards Dec., Ex. 9.) Defendant did not accept these offers. (Richards Dec., ¶13.) On November 22, 2019, the jury returned a verdict, finding that defendant was liable to plaintiffs on their negligence claim and awarded damages of $75,650.00 to Linea Polk and $16,500.00 to Shannon Polk. (Richards Dec., ¶18 (2).) The jury also found that defendant was liable to plaintiffs on their nuisance claim and awarded damages of $20,000.00 to Linea Polk and $10,000.00 to Shannon Polk. (Richards Dec., ¶18 (3).) Finally, the jury found that Linea Polk was liable to defendant on his negligence claim for property damage and awarded him damages in the amount of $10,000.00. (Richards Dec., ¶18 (4).) Thus, Linea Polk’s net recovery against defendant was $85,650.00 and Shannon Polk’s net recovery against defendant was $26,500.00.

The amount of plaintiff Linea Polk’s net judgment ($85,650.00), plus one-half of the $33,452.04 costs awarded above (i.e., $16,726.02), substantially exceeds her April 24, 2019 Section 998 offer of $85,000.00, entitling her, in the court’s discretion, to an award of expert witness fees. Linea Polk seeks total expert witness fees and costs in the amount of $75,497.31, including $28,836.00 for Dr. Robin A. Bernhoft and $2,816.50 for Dr. Roger M. Katz, both board certified immunologists. (Richards Dec., ¶33, Ex. 14.) However, plaintiff has provided absolutely no evidentiary support for her expert witness fee claim, such as billing statements, cancelled checks, or declarations from the experts, and the request for such fees will be denied.

Defendant’s Motion for Attorney’s Fees and Section 998 Expert Witness Costs

Defendant moves for an award of attorney’s fees pursuant to Civil Code Section 1717 and expert witness costs pursuant to Code of Civil Procedure Section 998. For the reasons set forth above, the motion will be denied. Defendant was not the prevailing party in the action and he failed to obtain a judgment against plaintiffs Linea Polk and Shannon Polk greater than his Section 998 offers to plaintiffs.

Defendant argues that he is entitled to expert witness fees because he beat his 998 offer to Shannon Polk, but the court disagrees. On March 22, 2019, defendant served Section 998 offers on both plaintiffs for $25,250.00 each. (Richards Dec., Ex. 7.) Plaintiffs did not accept these offers. (Richards Dec., ¶10.) The jury’s total verdict for Shannon Polk on her negligence and nuisance causes of action was $26,500.00. (Richards Dec., ¶18 (2) (3).) Defendant argues that Shannon Polk only obtained a judgment of $16,500.00 because she is not entitled to a double recovery for emotional distress, i.e., $16,500.00 on her negligence claim and $10,000.00 on her nuisance claim. However, plaintiffs’ causes of action for negligence and nuisance are based on separate and distinct primary rights. Plaintiffs brought their negligence cause of action for injury to their persons and their nuisance cause of action for violation of their property rights. Any person whose quiet enjoyment of property is lessened by a nuisance may seeks to abate the nuisance and recover damages. County of Santa Clara v. Atlantic Richfield Company (2006) 137 Cal.App.4th 1292, 306.

A plain reading of the jury’s verdict discloses that Shannon Polk was awarded separate and distinct damages for her negligence claim ($16,500.00) and her nuisance claim ($10,000.00) and that there was no double recovery.