04AS04230

Martin A. Steiner vs. Paul Thexton

Nature of Proceeding: Motion to Tax Costs

Filed By: Kolb, Klaus J.

Plaintiffs’ motion to tax costs is ruled upon as follows.

As an initial matter, the Court disagrees with Defendant that the motion to tax is
untimely. The Judgment was filed on October 8, 2013. Plaintiffs filed the instant
motion on October 23, 2013, within the 15 day time period.

Item 8.b. Expert Witness Fees of $5,560

Plaintiffs move to tax the above costs on the grounds that the experts were not
ordered by the court.

These costs were incurred during the December 2006 trial before Judge Philips. At
that time, Plaintiffs moved to tax these costs on the same grounds. Judge Philips
denied Plaintiffs’ motion, finding that “California law provides that disbursements of
counsel for fees of expert witnesses and consultants may be recoverable as a
component of attorney’s fees recovered under a contract pursuant to Civ. Code section
1717, notwithstanding the fact that expert witness fees may not be recoverable as
ordinary costs under Code of Civil Procedure section 1033.5. (See Bussey v. Affleck
(1990) 225 Cal.App.3d 1162,1164-1165.)” While Judge Philips acknowledged that
Defendant’s claims for expert witness fees as an element of costs may have been
technically incorrect, he found that Defendant was still entitled to the expert fees.
Defendant asks that the Court to deny the motion and adopt Judge Philips’ reasoning.

The Court hereby adopts Judge Philips’ reasoning and DENIED the motion to strike
these costs.

Item 13 Delivery Charges to Court and Opposing Counsel of $371.54

Plaintiffs move to tax these costs on the grounds that they are equivalent to “postage”
and are not allowable.

“Messenger fees may be recoverable in the trial court’s discretion if ‘reasonably
necessary to the conduct of the litigation.'” (Foothill-De Anza Community College Dist.
v. Emerich (2007) 158 Cal. App. 4th 11, 30.) Here, Defendants indicate that they
“served multiple opposition briefs in the appellate and supreme court, including briefs
or memoranda on requests for reconsideration and on motions in the reviewing
courts.” Briefs were delivered to the courts and to two opposing lawyers.

However, in the Supreme Court’s remittitur to the Appellate Court, Plaintiff was
awarded costs on appeal. As the delivery charges include costs on appeal,
Defendants are not entitled to them. Accordingly, the motion is GRANTED in the
amount of $371.54.

The Court declines Plaintiff’s request to tax $335.22 in “Printing of Appellate Briefs” as
it was not requested in the moving papers.

In sum, Defendants’ costs are taxed in the amount of $371.54.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.

Plaintiffs’ counsel is admonished for failing to comply with CRC 2.16.

Item 2 04AS04230

Martin A. Steiner vs. Paul Thexton

Nature of Proceeding: Motion for Attorney Fees

Filed By: Price, David L.

Defendant Paul Thexton’s motion for attorneys’ fees is continued to January 7, 2013 at
9:00 a.m. in this department.

The following procedural history is pertinent to this motion. Trial in this matter was
conducted before Judge Lloyd A. Phillips in December 2006. Judge Phillips entered
judgment in favor of Defendant. Defendant moved for attorneys’ fees pursuant to Civ.
Code §1717. Judge Philips awarded Defendant $85,279 in attorneys’ fees and
$10,754.33 in costs. Plaintiffs thereafter appealed. The Third District Court of Appeal
affirmed the trial court’s ruling. Plaintiffs appealed to the California Supreme Court. In
March 2010, the California Supreme Court reversed the Court of Appeal’s judgment
and remanded the case for further proceedings.

The case, however, was not brought to trial within three years of the remittitur being
filed by the clerk of the trial court and Defendant moved to dismiss the case pursuant
to CCP §583.320(a)(3). This Court granted Defendant’s motion in August 2013.
Judgment was entered on October 8, 2013. Plaintiffs’ motion for reconsideration was
denied on October 17, 2013.

Defendant contends that it is the prevailing party because he prevailed on the motion
to dismiss and that pursuant to its contract with Plaintiffs he is entitled to these
attorneys’ fees. The contract provides “in the event any litigation or other legal
proceedings are instituted to enforce or declare the meaning of any provision of this
Contract, the prevailing party shall be entitled to its costs, including reasonable
attorneys fees.”

Here, Plaintiffs do not dispute that Defendant is the prevailing party.

Defendant now seeks $214.576.50 in attorneys’ fees. These amounts encompass fees
incurred as follows:

$85,279.00 – From inception of litigation through the first trial and the post-trial
motions (including Defendant’s motion for fees and Plaintiffs’ motion to tax
costs).

$129,297.50 – From the notice of appeal through the preparation of the instant
motion (total of 476.4 hours of both Partner and Associate time). Partner’s
hourly rate ranged from $275-$325/hour during this time period. Associate
hourly rate ranged from $100-$225/hour during this time period.

Plaintiffs oppose the motion on the following grounds:

(1) Defendant’s attorney has not provided sufficient evidence to support the claim
for attorney’s fees and has prejudice Plaintiffs’ ability to specifically oppose or
object to his claimed fees and has prevented the Court from independently
evaluating the reasonableness of the fees,

(2) The hourly rate claimed by Defendant is excessive and not justified by any
evidence,

(3) Defendant seeks recovery of fees incurred for issues on which he was not
successful,

(4) The total amount of fees sought is excessive, compared to fees incurred by
Plaintiffs.

Fees incurred for issue on which Defendant was not successful

Plaintiffs argue that most of Defendant’s attorneys’ fees were incurred on issues on
which Defendant was not successful (i.e. argument that Plaintiffs’ claims were based
on an unenforceable option.) Plaintiffs contend that the only substantive issue on
which Defendant has so far prevailed is on his motion to dismiss.

Plaintiffs rely upon Boquilon v. Beckwith (1996) 49 Cal. App. 4th 1697, 1721 and
Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 213 for the proposition that a
prevailing party is only entitled to fees for aspects of his claims on which he was
successful.
The above two cases are inapposite. In Boquilon, plaintiffs filed suit against their real
estate agent alleging violations of the Home Equity Sale Contract Act (Cal. Civ. Code
§1695 (“Section 1695”)) and fraud cause of action. At trial, the court found that
Defendant violated Section 1965, but ruled against plaintiffs on the fraud causes of
action. Plaintiffs were awarded attorneys’ fees, but the fees were allocated 50-50
between the fraud cause of action, on which plaintiffs did not prevail, and the statutory
cause of action, on which they did prevail. The appellate court affirmed.

In Sokolow, plaintiffs filed suit for sexual discrimination. The trial court granted
plaintiffs’ motion for summary judgment, but denied their motion for attorneys’ fees
pursuant to 42 U.S.C.S. §1988 and Cal. Civ. Proc. §1021.5. The appellate court
reversed and remanded to the trial court. The court noted that although plaintiffs were
the “prevailing party”, they failed to obtain “all the results they sought.” (Sokolow, 213
Cal.App.3d at 250 [emphasis in original].) For example, plaintiffs were not successful
in obtaining admission for women into the mounted patrol. The appellate court
directed the trial court to take into consideration plaintiffs’ limited success in arriving at
an award of reasonable attorneys’ fees.

Here, however, the prevailing party is not the plaintiff that initiated the litigation. Rather,
it is the defendant that was required to defend the action. Here, Defendant was
entirely successful in his defense of the action and obtained “all the results” he sought.
He did not obtain a partial success. Rather, he obtained a complete victory and the
entire action was dismissed against him. Thus, Defendant is entitled to all of his
attorneys’ fees from the inception of the litigation to the present . The Court is not
convinced that the California Supreme Court’s reversal and remand of the case back
to Judge Philips changes this result.

As Judge Philips was in the best position to evaluate Defendant’s work from the
inception of trial through the post-trial motions, the Court defers to his judgment and
awards Defendant $85,279.00 in attorneys’ fees. Judge Philips January 23, 2007
order is fully referenced and incorporated herein.

With respect to the remaining $129,297.50 in attorneys’ fees, the Court agrees with
Plaintiffs, that given the current record, the Court cannot determine whether all these
fees were reasonably incurred. Defendant’s counsel has provided a chart which
merely identifies time spent each month in defending this action. There is no
specification as to the type of work done or whether it was done in relation to the work
in the Court of Appeal, California Supreme Court, or afterwards. While this type of
chart may have been sufficient for Judge Philips who presided over the trial, this Court
is not familiar with this litigation.

Thus, the matter is continued to allow Defendant’s counsel to submit additional
evidence to support its fees. The Court, however, is not inclined to review invoices or
billing statements for over a four year time frame. Instead, Defendant is directed to
submit a spreadsheet identifying by month and year: (1) the type of work done (i.e.
draft appellate brief, research issue regarding …), (2) whether the work was related to
proceedings in the Court of Appeal, California Supreme Court, or trial court, (3) the
number of hours worked by Partner or Associate, (4) the hourly rate charged to
Defendant.

By no later than December 4, 2013, Defendant’s counsel shall file and serve a copy of
the spreadsheet consistent with the above. By no later than December 18, 2013, Plaintiffs may submit their opposition/response
as to whether the fees outlined in the spreadsheet were excessive/unreasonable.