Case Number: SC127731 Hearing Date: February 14, 2019 Dept: K

Case Name: Pineapple Express, Inc. v. Sean Cunningham

Case No.: SC127731 Complaint Filed: 06/22/17

Hearing: 2/14/19 Motion C/O: N/A

Calendar #: Discovery C/O: N/A

Notice: OK Trial Date: N/A

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SUBJECT: MOTION FOR CONTEMPT AND SANCTIONS INCLUDING AWARD OF ATTORNEY FEES AGAINST JUDGMENT DEBTOR PINEAPPLE EXPRESS, INC.

MP: Judgment Creditor/Cross-complaint Sean Cunningham

RP: Judgment Debtor/Cross-defendant Pineapple Express, Inc.

BACKGROUND

On June 22, 2017, Plaintiff Pineapple Express, Inc. filed this action against Defendant Sean Cunningham. On August 17, 2017, Cunningham filed a cross-complaint against Pineapple Express. It appears that the complaint was dismissed on October 18, 2017. On January 22, 2018, judgment was entered in favor of Cunningham on his cross-complaint.

On June 28, 2018, a judgment debtor’s examination was set for Pineapple Express, but no one appeared. Movant creditor Cunningham brings this instant motion for sanctions against Pineapple Express for failing to appear. Pineapple Express claims that it was never served with notice of the debtor exam date or the subpoena duces tecum. In response, Cunningham submits a Proof of Service by Registered Process Server asserting personal service on Matthew Feinstein, CEO of Pineapple Express on 6/4/18, 24 days before the scheduled hearing.

MOTION— filed 8/13/18

Cunningham moves for order of contempt against judgment debtor Pineapple Express and moves for an award of attorneys’ fees in the amount of $3,600 plus filing costs of $60, based on Pineapple Express’s failure to appear for its judgment debtor’s examination noticed for June 28, 2018. Further, Cunningham requests that Pineapple Express produce documents, without objection, the documents requested in the subpoena issued in relation to the judgment debtor’s examination.

OPPOSITION— filed 1/31/19

Cunningham combines 3 motions into 1 filing.

Feinstein, the agent of Pineapple Express, was never served neither the notice of debtor examination nor the related subpoena. Feinstein does not intend to avoid his legal obligations. Because Feinstein was never served these documents, he nor Pineapple Express should be subject to any consequences.

Feinstein has produced documents in response to a judgment debtor’s examination in another action involving Cunningham (BS171779).

In the event that the court awards Cunningham attorneys’ fees, the fees should be reduced because 6.4 hours of the 9 hours billed consists of time spent driving.

REPLY— none filed as of 2/10/19 (it was due 2/6/19)

TENTATIVE RULING

Cross-complaint Cunningham’s request for an order of contempt against Cross-defendant Pineapple Express is DENIED.

Cross-complaint Cunningham’s request for attorneys’ fees is GRANTED in the reduced amount of $660. These fees “shall be added to and become part of the principal amount of the judgment.” (Code Civ. Proc., § 708.170, subd. (a)(2).)

Cross-complainant Cunningham’s request that the court order Cross-defendant Pineapple Express to produce, without objection, the documents requested in the subpoena, is GRANTED. Witness Matthew Feinstein is ordered to appear and produce the documents listed in the subpoena at Pineapple Express’s on March _____, 2019 at 8:30am.

ANALYSIS

Cross-complainant Cunningham moves for (1) an order of contempt against judgment debtor/Cross-defendant Pineapple Express, Inc., (2) an award of attorneys’ fees, and (3) a request that Pineapple Express produce, without objection, the documents requested in a subpoena served on Pineapple Express related to its judgment debtor examination.

Attorneys’ Fees

I. Parties’ positions regarding the attorneys’ fees incurred in the debtor examination for which Pineapple Express failed to appear

Cunningham “seeks an award of attorney fees pursuant to a finding of contempt of court against Judgment Debtor Pineapple Express, Inc. (“Pineapple”) for its failure to appear for an ordered Judgment Debtor Exam….” (Mot. 2:23-25.) Cunningham argues that Code of Civil Procedure section 708.170, subdivision (a)(2), entitles him to an award of attorneys’ fees. Cunningham contends he can also collect the attorneys’ fees incurred in preparing this motion. In all, Cunningham requests attorneys’ fees in the amount of $3,600 for 9 hours in connection with the debtor’s examination and this motion and also requests a $60 filing fee.

Pineapple Express argues it shows good cause as to why it failed to appear at the debtor examination because Feinstein states he never received notice of the examination. (Opp. 3:24; Feinstein Decl. ¶ 3.) The court may choose to not award attorneys’ fees under section 708.170, subdivision (a)(2), if Pineapple Express had good cause of its non-appearance. Alternatively, if the court is inclined to award attorneys’ fees, Pineapple Express asks the court to reduce Cunningham’s request for attorneys’ fees because approximately 6 of the 9 hours are for travel time, and thus awarding 9 hours would be excessive.

II. Cunningham is entitled to attorneys’ fees incurred for the debtor examination

The court first notes that Cunningham phrased its request for attorneys’ fees as dependent upon a finding of contempt. (Mot. 2:23-25.) However, the statutory authority cited for attorneys’ fees (Code Civ. Proc., § 708.170, subd. (a)(2).) does not require a finding of contempt; it only requires that the judgment debtor fail to appear at the judgment debtor examination without good cause. Thus, the court’s determination of contempt does not bear on the court’s determination of awarding attorneys’ fees under section 708.710, subdivision (a)(2).

If an order requiring a person to appear for an examination was served by a sheriff, marshal, a person specially appointed by the court in the order, or a registered process server, and the person fails to appear: the judgment creditor shall be awarded reasonable attorney’s fees incurred in the examination proceeding, unless the person’s failure to appear is with good cause. (Code Civ. Proc., § 708.170, subd. (a)(2).) “[I]t has been held that when an amount of attorney’s fees is statutorily authorized, the reasonable expenses of preparing the application for fees should be included in the award.” (Bruckman v. Parliament Escrow Corp. (1987) 190 Cal.App.3d 1051, 1062.)

Here, Pineapple Express was purportedly served notice of the Application and Order for Appearance and Examination by a registered California process server. (Donohue Decl., Exh. A.) Thus, if the court finds that Pineapple Express failed to appear at the examination without good cause, Cunningham would be entitled to attorneys’ fees related to the examination under section 708.710, subdivision (a)(2).

Pineapple Express does not assert that notice of the debtor examination was served at the wrong address. The notice of examination was served at 10351 Santa Monica Blvd., Suite 420, Los Angeles, CA 90025. (Donohue Decl., Exh. A.) This address matches the address given for Matthew Feinstein, Pineapple Express’s registered agent, in Pineapple Express’s Statement of Information filed with the California Secretary of State. (Id. at Exh. B.)

Pineapple Express does not explain how or why service would not reach Feinstein, even though it was personally served to him at the correct address. The court would expect some explanation for why Feinstein would not receive service under these circumstances. Although Cunningham was not obligated to notify Pineapple Express’s counsel of the examination date, it nevertheless did so by email to Plaintiff counsel on 6/25/18, 3 days before the scheduled 6/28/18 hearing. That e-mail, however, erroneously and confusingly stated that the debtor exam was to occur on 6/8/18, a date which had already passed. (Feinstein Decl., e-mail exhibit attached.) Pineapple Express does not address why it did not appear at the hearing, despite having at least 3 days’ notice of it; nor does Pineapple counsel explain why he failed to contact Cunningham’s counsel to clear up the date confusion.

Based on the foregoing, the court does not find that Pineapple Express has shown good cause for its failure to appear.

Accordingly, Cunningham is entitled to attorneys’ fees incurred in the examination proceeding. (Code Civ. Proc., § 708.170, subd. (a)(2).) Also, Cunningham is entitled to fees incurred in making this motion. (Bruckman v. Parliament Escrow Corp., supra, 190 Cal.App.3d at 1062.) Pineapple Express does not dispute that attorneys’ fees incurred in making this motion are recoverable.

III. A reasonable amount of recoverable attorneys’ fees are $660

Cunningham requests attorneys’ fees in the amount of $3,600 and a filing fee of $60.

General Law

“It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court, whose decision cannot be reversed in the absence of an abuse of discretion.” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623.) In exercising its discretion, the court should consider a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in handling the matter, the attention given, the success or failure, and the resulting judgment. Ibid.

In determining the proper amount of fees to award, courts use the lodestar method. The lodestar figure is calculated by multiplying the total number of reasonable hours expended by the reasonable hourly rate. “Fundamental to its determination … [is] a careful compilation of the time spent and reasonable hourly compensation of each attorney … in the presentation of the case.” (Serrano v. Priest (1977) 20 Cal.3d 25, 48 (Serrano III).) A reasonable hourly rate must reflect the skill and experience of the attorney. Id. at 49. “Prevailing parties are compensated for hours reasonably spent on fee-related issues. A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 (Serrano IV); see also Weber v. Langholz (1995) 39 Cal.App.4th 1578, 1587 (“The trial court could make its own evaluation of the reasonable worth of the work done in light of the nature of the case, and of the credibility of counsel’s declaration unsubstantiated by time records and billing statements.”).)

Reasonable attorney fees should be based on an objective standard of reasonableness, i.e., the market value of services rendered, not on some notion of cost incurred. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1090.) The value of legal services performed in a case is a matter in which the trial court has its own expertise. (Id. at 1096.) The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. (Ibid.) The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case. (Ibid.)

“A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.[] ‘If … the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful. …’ [Citation.]” (Serrano IV, supra, 32 Cal.3d at 635 (citation and footnote omitted); accord Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137 (quoting Serrano IV); Premier Medical Management Systems, Inc. v. California Ins. Guarantee Ass’n (2008) 163 Cal.App.4th 550, 556 (stating, “‘[P]adding’ in the form of inefficient or duplicative efforts is not subject to compensation.” (citing Ketchum.)).)

Reasonableness

Donohue does not assert spending any time on the debtor examination that does not concern travel time. (Donohue Decl. ¶ 7.) The court is inclined to not award any time for traveling to and from hearings. When Cunningham learned 3 days before the examination that Pineapple Express apparently had not been served notice of the examination, Cunningham had the opportunity to meet and confer with Pineapple Express and avoid appearing at an examination without Pineapple Express.

Donohue states she spent 2.1 hours in preparing this motion and will spend 3 hours in travel time. (Donohue Decl. ¶ 7.) The court finds that 2 hours preparing this motion is reasonable and does not award time for travel and further finds that an hourly rate of $300 is reasonable for this simple motion.

Accordingly, the court awards attorneys’ fees to Cunningham in the reduced amount of $660 (2 hours at $300/hour and a $60 filing fee) payable within 14 days.

Subpoena Compliance

I. Parties’ positions regarding the production of documents requested by Cunningham’s subpoena

Cunningham contends that a subpoena is a recognized tool for requiring a judgment debtor to produce documents at a judgment debtor’s examination. Here, Pineapple Express failed to appear at its scheduled judgment debtor’s examination and also failed to produce documents requested by the duly served subpoena. Cunningham contends that the court has the authority to compel Pineapple Express to produce the documents requested by the subpoena.

Matthew Feinstein, the agent for service for Pineapple Express, asserts that he never was served neither the notice of the judgment debtor examination set for June 28, 2018 nor the accompanying subpoena. (Feinstein Decl. ¶¶ 3-6.) Feinstein states that he has appeared in 3 other judgment debtor examinations for another action between Cunningham and Pineapple Express (BS171779). For those examinations, Feinstein produced all requested documents.

II. Merits of the request for compliance with subpoena

If a subpoena requires the attendance of a witness or the production of documents, the court, upon motion reasonably made by any party, or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. (Code Civ. Proc., § 1987.1, subd. (a).) “In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.” (Ibid.)

To obtain information about a debtor’s assets in advance of a judgment debtor’s examination, “the use of a subpoena duces tecum to discover and inspect relevant documents is an accepted practice.” (Lee v. Swansboro Country Property Owners Assn. (2007) 151 Cal.App.4th 575, 583.)

Here, it is undisputed that Pineapple Express did not object to and did not comply with the subpoena. The subpoena was served on its agent, Matthew Feinstein, on June 4, 2018. The subpoena requested that Pineapple Express produce a witness and produce documents on June 28, 2018. (Donohue Decl. Exh. C.) Cunningham also set Pineapple Express’s judgment debtor examination for the same day. (Id. at Exh. A.)

Although Feinstein states he was never served the subpoena, he does not contend that the subpoena was served at the wrong address. The subpoena was served at 10351 Santa Monica Blvd., Suite 420, Los Angeles, CA 90025. (Id. at Exh. C.) This address matches the address given for Feinstein in Pineapple Express’s Statement of Information filed with the California Secretary of State. (Id. at Exh. B.)

As the court has discretion to make any appropriate order when hearing a motion to compel compliance with a subpoena under section 1987.1, the court also considers Feinstein’s past compliance with the judgment debtor examinations in other actions with Cunningham (Feinstein Decl. ¶ 7.) and considers Feinstein’s willingness to comply with his legal obligations (Id. at ¶ 6.).

Accordingly, Cunningham is entitled to an order compelling Pineapple Express’s compliance with the subpoena. (Code Civ. Proc., § 1987.1, subd. (a).) Pineapple Express is ordered to appear and produce the documents listed in the subpoena at Pineapple Express’s at the judgment debtor’s examination scheduled above.