Case Number: EC061967    Hearing Date: October 31, 2014    Dept: B

Motion for Attorney’s Fees

Motion for New Trial

This case arose from the Plaintiff’s claim that the Defendant had charged a usurious rate of interest and that the Defendant had engaged in elder abuse. The case was resolved on September 5, 2014 when the Court granted the Defendant’s motion for summary judgment. The judgment was entered on September 15, 2014.

This hearing concerns the Plaintiff’s motion for a new trial on the ground of newly discovered evidence, insufficiency of evidence to justify granting summary judgment, and error in law occurred on the motion for summary judgment. It also concerns Defendants’ motion for attorney fees.

A. Motion for New Trial

Under CCP section 657, the grounds for new trial are the following:

1) Irregularity in the proceedings of the Court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.
2) Jury misconduct
3) Accident or surprise, which ordinary prudence could not have guarded against.
4) Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.
5) Excessive or inadequate damages.
6) Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.
7) Error in law, occurring at the trial and excepted to by the party making the application.

A motion for new trial is a creature of statute and the Court may grant a new trial only by conforming to the statutory procedures. Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 899-900. Further, under Article VI, section 13, of the California Constitution, no judgment shall be set aside or new trial granted unless, after an examination of the entire cause, including the evidence, the Court shall be of the opinion that the error complained of has resulted in a miscarriage of justice. In re Marriage of Steiner & Hosseini (2004) 117 Cal. App. 4th 519, 526.

The Plaintiff’s motion is procedurally defective because the Plaintiff did not comply with the statutory requirements for seeking a new trial.
First, CCP section 659 requires the party intending to move for a new trial to file with the clerk and serve upon each adverse party a notice of his or her intention to move for a new trial within the following time periods:

1) After the decision is rendered and before the entry of judgment.
2) Within 15 days of the date of mailing notice of entry of judgment by the clerk of the court pursuant to Section 664.5, service upon him or her by any party of written notice of entry of judgment; or
3) Within 180 days after the entry of judgment, whichever is earliest.

Here, the judgment was entered on September 15, 2014. The Defendant served a written notice of entry of judgment on the Plaintiff on September 15, 2014. Under CCP section 659, the 15-day time period is not extended by CCP section 1013 when service is by mail. Further, CCP section 1054 states that the time limits for filing a notice of intention may not be extended by order or stipulation. In addition, relief under CCP section 473(b) cannot be granted for the failure to file a timely notice of motion for new trial. Advanced Bldg. Maint. v. State Comp. Ins. Fund (1996) 49 Cal. App. 4th 1388, 1393.

The notice of new trial must be given within 15 days of mailing the notice of entry of judgment; a late filing is void. Erikson v. Weiner (1996) 48 Cal. App. 4th 1663, 1672. Compliance with the 15-day requirement of section 659 is jurisdictional and the trial court has no power to entertain or act on the motion for new trial. Douglas v. Janis (1974) 43 Cal. App. 3d 931, 936 (finding that the trial court’s purported grant of the new trial was void because the defendant’s notice of intention to move for new trial had not been filed within 15 days after service of plaintiff’s notice of entry of judgment).

In the pending case, the Defendant served the notice of entry of judgment on September 18, 2014. The Plaintiff had 15 days from the date of mailing to file a notice of intent to move for a new trial, or until October 3, 2014.

The Plaintiff did not file a notice of intent to seek a new trial within the 15-day time period. Instead, He filed his “motion” for new trial on Oct 3, 2014 and then waited until October 10, 2014 to serve a notice of errata containing Plaintiff’s “ notice of intent to move for new trial.” Since the Plaintiff did not file the notice within the required 15-day time period, the notice is ineffectual, the late filing is void, and the Court is without power to entertain or act on the motion for new trial.

The Plaintiff argues that the motion he filed on October 3, 2014 is sufficient. However, the Plaintiff did not file a notice of intent to move for a new trial on October 3, 2014. Instead, the Plaintiff filed a notice of hearing on motion and his motion for new trial selecting the trial date in his motion. The Plaintiff offers no legal authority holding that a “notice of hearing” satisfies the requirement of CCP section 659. Further CCP §661, provides that upon the expiration of the time to file counter affidavits (as specified in the procedures for a new trial set forth in CCP §659and §659a, which Plaintiff did not follow):
“the clerk forthwith shall call the motion to the attention of the judge who presided at the trial, or the judge acting in his place, as the case may be, and such judge thereupon shall designate the time for oral argument, if any, to be had on said motion.”

The Court has not set this oral argument, nor did it determine if any argument should be held, since no notice of intent to move for new trial was timely filed by the Plaintiff.

Instead, the Plaintiff attempted to rectify the situation caused by his filing and setting his motion, by filing a notice of intent to move for new trial on October 10, 2014. Since this was beyond the 15-day time period, and it could not trigger the requirements and time period of §659 and 659a in light of the scheduled motion, it was ineffectual and the Plaintiff’s motion is void.

The Plaintiff’s failure to comply with CCP section 659 is the first ground to deny the Plaintiff’s motion for new trial.

1. Newly Discovered Evidence

In order to obtain a motion for new trial based on newly discovered evidence, the moving party must establish the following:

1) the evidence is newly discovered;
2) reasonable diligence has been exercised in its discovery and production; and 3) the evidence is material to the movant’s case.
Sherman v. Kinetic Concepts, Inc. (1998) 67 Cal. App. 4th 1152, 1161.

The Plaintiff argues that he discovered new evidence in a federal pleading of the Defendant. The new evidence is a bankruptcy court pleading and an exhibit, which is an amortization schedule (see Obagi decl., exhibits 1 and 2). The Plaintiff argues that he discovered this evidence after the hearing and that the evidence demonstrates that the Defendant charged more than 19% annual interest in a pleading filed by the trustee in a bankruptcy case and in an amortization schedule.

The Court has already determined that these are facts which the Plaintiff already had when it denied the Plaintiff’s motion for reconsideration on October 10, 2014 (see Felton decl. in opposition, exhibit D). The Court found that when the Plaintiff filed an ex parte application for a temporary restraining order to halt a foreclosure sale on February 22, 2013, the application contained in exhibit 7 the trustee’s complaint and the amortization schedule (see exhibit D to the Defendant’s request for judicial notice). Since the Plaintiff filed these documents in support of his own application, the Plaintiff cannot claim that he “discovered” them on September 8, 2014.

Further, the Defendant filed these documents in the Court file on two occasions. When the Defendants filed their demurrer on February 28, 2014, they filed a request for judicial notice that included the trustee’s complaint and the amortization schedule. In addition, the Defendant filed the same trustee’s complaint and amortization schedule a second time, when the Defendant filed a request for judicial notice in support of its motion for sanctions on March 3, 2014.

The Plaintiff argued that the Defendant concealed these documents. Since the Plaintiff had already filed a copy of the amortization schedule in his own ex parte application, the Defendant could not conceal a document that the Plaintiff already had in his possession.

Accordingly, the Plaintiff cannot establish the first element because these are not new facts. Further, the Plaintiff cannot establish the second element because the Plaintiff did not act with reasonable diligence in discovering facts that he filed in support of his own ex parte application and that the Defendant filed in a demurrer and in a motion for sanctions.

Therefore, the Plaintiff has not established that newly discovered evidence is grounds for a new trial.

2. Insufficiency of Evidence & Error in Law

The Plaintiff then argues that the Court’s order was not supported by sufficient evidence and was an error in law because there is evidence that the Defendant charged an excessive interest rate and that the Plaintiff could not present evidence of the amount of alleged excess interest. However, the Court granted summary judgment because it found that the transaction between the parties was exempted from the usury laws under Civil Code section 1916.1 because it was a secured loan made by a real estate broker and because the Plaintiff lacked standing. The Court found that the parties had agreed through a real estate broker, VIP, that the Defendant would sell a note and deed of trust to the Plaintiff in return for the Plaintiff paying $916,000.

The Plaintiff’s arguments fail to address this. Accordingly, there is no basis to grant a new trial on insufficiency of evidence or error in law regarding usurious interest rates and evidence of excess interest because they are irrelevant due to the Court finding that the undisputed facts demonstrating that the transaction was exempted from the usury laws.
Therefore, the Plaintiff has not established that either insufficiency of evidence or error in law is a basis for a new trial.

Accordingly, the Court denies the Plaintiff’s motion for a new trial. The Plaintiff did not file the notice of intent to move for new trial under CCP section 659 within the required 15-day time period. The Plaintiff’s notice is ineffectual, the late filing is void, and the Court is without power to entertain or act on the motion for new trial.

Further, the Plaintiff has not established that there are grounds for a new trial under CCP section 657 because he offers no newly discovered evidence that is material and he has failed to demonstrate an insufficiency of evidence or an error in law.

B. Motion for Attorney’s Fees

This hearing concerns the Defendants’ motion for an award of attorney’s fees under the contract at issue. Civil Code section 1717 states that a party may recover attorney’s fees when the party prevails in an action based on a contract that provides for the prevailing party to recover attorney’s fees. California courts construe the term “on a contract” in section 1717 liberally. Turner v. Schultz (2009) 175 Cal.App.4th 974, 979. The phrase “action on a contract” includes not only a traditional action for damages for breach of a contract containing an attorney fees 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 Dist. v. Eden Medical Center (2013) 220 Cal. App. 4th 418, 426-427. 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. Id.

Accordingly, 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 the action or cause of action 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.
Eden Township, 220 Cal.App.4th at 427.

A review of the Plaintiff’s Complaint reveals that the Plaintiff claimed in his prayer for relief that he could recover attorney’s fees under the Note attached as exhibit 1 to his Complaint. The Notice indicates that the prevailing party on an action instituted on Note can recover attorney’s fees and costs.

Under California law, when a non-signatory plaintiff sues a signatory defendant in an action on a contract and the signatory defendant prevails, the signatory defendant is entitled to attorney fees only if the non-signatory plaintiff would have been entitled to its fees if the plaintiff had prevailed. Sessions Payroll Management v. Noble Constr. Co. (2000) 84 Cal. App. 4th 671, 679.

The Plaintiff claimed that he purchased real property and became subject to paying the Note. In paragraph 18, the Plaintiff alleges that he had to pay $916,000 to satisfy the note. This indicates that if the Plaintiff had prevailed on his claim, it would have been an action on the note and he would have been entitled to recover attorney’s fees.

In his opposition, the Plaintiff argues that he is not a party to the Note. However, as noted above, California law authorizes the recovery of attorney’s fees from a non-signatory plaintiff in an action on a contract, if the non-signatory plaintiff would have been entitled to his fees if he had prevailed. As noted above, the Plaintiff brought an action on the Note, the Plaintiff sought attorney’s fees, and the Plaintiff would have been entitled to an award of attorney’s fees if he had prevailed on his claim. Under California law, the Defendant may recover his attorney’s fees from the Plaintiff even though the Plaintiff did not sign the agreement.

The Court found in favor of the Defendant. Accordingly, the Defendant is entitled to recover a reasonable amount of attorney’s fees because he prevailed on a contract that includes a provision awarding attorney’s fees to the prevailing party.

The trial court has broad authority to determine the amount of a reasonable fee. PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 1095. The award of attorney fees under section 1717 is governed by equitable principles. Id. The experienced trial judge is the best judge of the value of professional services rendered and the trial judge’s decision will not be disturbed unless the appellate court is convinced that it is clearly wrong, i.e., that it abused its discretion. Id.

The Defendant’s attorney, James Felton, provides facts in his declaration to demonstrate that the total fees are $50,212.50 and that he seeks $49,212.50 for the fees incurred to litigate the controversy regarding the Note. The $1,000 difference is based on an apportionment of fees to the elder abuse claim.

The Defendant does not seek to recover any amount for the litigation of the elder abuse claim and suggests that $1,000 be apportioned for the fees to litigate the elder abuse claim. Mr. Felton states in paragraph 3 that this case was almost entirely about usury and that the elder abuse claim had no viability without the usury claim. In light of the issues litigated in this case, this is a reasonable request.

Mr. Felton has provided copies of billing in exhibits A. A review of the billing reveals that Mr. Felton charged $450 per hour. Further, a review of the charges reveals that the attorney’s fees are reasonable for this case.

Finally, Mr. Felton filed a supplemental declaration on October 17, 2014 to demonstrate that he has billed an additional $4,244 on the litigation regarding the Plaintiff’s motion for reconsideration and motion for new trial. These motions concerned nearly exclusively the issue of usury.

Therefore, the Court grant the Defendant’s motion and awards the attorney’s fees requested by the Defendant of $49,212.50. In addition, the Court adds $4,244 to this amount for the fees incurred on the Plaintiff’s motions for reconsideration and motion for new trial. The total amount of attorney’s fees is $53,456.50.

Finally, the Plaintiff’s opposition raises arguments about the Defendant’s memorandum of costs. These arguments are irrelevant to the pending motion and should be raised in a properly noticed motion to tax costs. When the time has passed for a motion to tax costs, or after the hearing on a motion to tax costs, then the Clerk of the Court will enter the costs in the judgment. This hearing concerns only the amount of attorney’s fees to enter into the judgment.