Solomon Tesfamichael v. Circle Bar B Ranch Resort, Inc., et al.
Case No: 15CV01126
Hearing Date: Tue Mar 27, 2018 9:30

Nature of Proceedings: Motion Leave to File Third Amended Complaint/Motion Dismiss

Motion to Dismiss First Amended Cross-Complaint and for Attorneys’ Fees and Costs

Motion for Leave to File Third Amended Complaint and Sanctions Against Defendants and Their Counsel in the Amount of $3,355.40 Under CCP § 128.5

Attorneys:

For Plaintiff/Cross-Defendant: Daniella T. Felix (Bycel & Felix); Bryce Killen (Killen Law Firm – Carpinteria)

For Defendants and Cross-Complainant PMB: Eric A. Woosley, Jordan T. Porter (Woosley & Porter)

Rulings:

1. The Court grants cross-defendant Solomon Tesfamichael’s Motion to Strike Defendant/Cross-Complainant PMB Stock, Inc.’s First Amended Cross-Complaint pursuant to CCP § 425.16 and orders the First Amended Cross-Complaint dismissed. Pursuant to CCP § 425.16(c)(1), the Court grants cross-defendant Solomon Tesfamichael’s motion for attorney fees and costs and orders that cross-defendant Solomon Tesfamichael shall recover $30,575 in attorney’s fees and $582.40 in costs from cross-complainant PMB Stock, Inc. The Court strikes the memorandum of costs filed on March 1, 2018, orders PMB Stock, Inc.’s Motion to Strike and/or Tax Costs off calendar, and vacates the hearing on April 17, 2018.

2. The Court denies plaintiff Solomon Tesfamichael’s motion for leave to file a third amended complaint and for sanctions.

Complaint: On May 20, 2015, plaintiff Solomon Tesfamichael filed his complaint for negligence and gross negligence against defendant Circle Bar B Resort, Inc. (“CBB”), and Does 1-100. On December 9, 2015, he amended his complaint to name Danny Miller as Doe 1; Patrick M. Brown as Doe 2, and PMB Stock Co., Inc. (“PMB”), as Doe 3. On June 6, 2016, pursuant to a stipulation and order, Tesfamichael filed his first amended complaint (“FAC”). On September 13, 2016, with leave of Court, Tesfamichael filed a second amended complaint (“SAC”).

Tesfamichael alleges: Miller was a trail guide at CBB employed by PMB. Brown is director and officer of both CBB and PMB. In May 2013, CBB maintained and operated a horseback riding stable, and offered a variety of horseback riding experiences. On May 22, 2013, Tesfamichael and a friend went on a horseback ride with Miller, one of the trail guides. Before the ride, Miller gave Tesfamichael and his friend general instructions, including that they were not to gallop their horses. Tesfamichael and his friend were not experienced riders and Miller was aware that they did not know how to handle horses. Miller chose a straight and downhill trail and galloped his horse and the other horses began to gallop. Tesfamichael’s horse jumped and Tesfamichael was thrown to the ground, injuring his head, left hip, wrist, shoulder, and knee; and he lost consciousness. His injuries were exacerbated when Miller placed him back on the horse and guided him down the trail. The causes of action are 1) negligence, and 2) gross negligence.

On November 15, 2016, the Court struck punitive damage allegations and a prayer for punitive damages as to defendants CBB, Brown, and PMB, but not as to defendant Miller.

Cross-Complaint: On June 14, 2016, PMB filed a cross-complaint for intentional misrepresentation. After the Court sustained Tesfamichael’s demurrer with leave to amend, PMB filed a first amended cross-complaint (“FACC”) on September 13. The FACC is based on Tesfamichael having indicated he was a “good rider” on the Rental Application and Liability Agreement. In his complaint, he now says he was not an experienced rider, having ridden only a few times in the past.

On October 11, 2016, the Court denied Tesfamichael’s special anti-SLAPP motion to strike PMB’s FACC. Tesfamichael appealed that ruling and, on November 21, 2017, the Court of Appeal reversed and remanded to this Court with directions to grant the anti-SLAPP motion. Remittitur was filed in this Court on January 29, 2018. A hearing on the return of remittitur is set for April 10.

Defendants’ motion for summary judgment/adjudication is scheduled for hearing on June 5 and trial confirmation for August 21, 2018.

Motion: Tesfamichael moves to dismiss the FACC without leave to amend pursuant to the Court of Appeal’s ruling. He seeks costs, as stated in an accompanying memorandum of costs, and attorney fees pursuant to CCP § 425.16(c). The attorney fees for the anti-SLAPP motion and appeal total $36,090, plus another $2,610 for seeking the fee award. Other costs total $697.37.

PMB opposes the motion. PMB concedes that Tesfamichael is entitled to an order granting the anti-SLAPP motion, dismissal of the FACC, and the filing of a memorandum of costs and fees. PMB says the remainder of the relief is properly sought at the end of the case because interim fees are not authorized. PMB also contends that fees cannot be awarded because Tesfamichael’s counsel has not provided any time records to determine the reasonableness of the fees requested. PMB also contends that there is no authority for recovery of fees incurred in the motion seeking a fee award.

1. Order Granting Anti-SLAPP Motion and Dismissal: There is no dispute that, pursuant to the Court of Appeals’ ruling, the Court must grant cross-defendant Solomon Tesfamichael’s special anti-SLAPP motion to strike cross-complainant PMB’s FACC and dismiss the FACC. The Court will make that order.

2. Timing of Motion for Fees: PMB contends that the Court cannot award attorney fees under CCP § 425.16(c) until the end of the litigation. That is not the case.

There are three ways in which a party may seek an award of attorney fees under CCP § 425.16(c): 1) in the moving papers; 2) in a separate, subsequently filed motion for fees and costs; or 3) as part of a cost memorandum at the conclusion of the litigation. Carpenter v. Jack In The Box Corp., 151 Cal.App.4th 454, 468 (2007).

This case is in a somewhat unusual posture because the motion was denied and now will be granted in light of the reversal and remand. In the original motion filed on September 15, 2016, Tesfamichael asked that the Court “conditionally award him the fees and costs incurred in bringing this motion subject to submission of proof of those fees and costs.” In the present motion, he essentially renews that motion and again asks for fees. The present motion is either the first or second method of asking for fees as set forth in the Carpenter case. An order awarding anti-SLAPP attorney fees is a collateral order that is immediately appealable. City of Colton v. Singletary, 206 Cal.App.4th 751, 781 (2012).

The motion for fees is procedurally proper and timely. The Court will consider the merits of the motion for attorney fees.

3. Fees to be Included: “[A] prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” CCP § 425.16(c)(1). Tesfamichael is entitled to his fees and costs incurred on the motion as well as the appeal. Dove Audio, Inc. v. Rosenfeld, Meyer & Susman, 47 Cal.App.4th 777, 785 (1996). The fees awarded under CCP § 425.16(c) include those fees relating solely to the fee, i.e., for work on the motion for fees. Christian Research Inst. v. Alnor, 165 Cal.App.4th 1315, 1321 (2008). Tesfamichael is entitled to recover compensation “for the legal services provided in connection with both the special motion to strike, and the recovery of attorney fees and costs under that subdivision.” Dowling v. Zimmerman, 85 Cal.App.4th 1400, 1425 (2001).

4. Amount of Fees: Assessing attorney fees recoverable under the anti-SLAPP statute “begins with a touchstone or lodestar figure, based on the ‘careful compilation of the time spent and reasonable hourly compensation of each attorney … involved in the presentation of the case.’” Ketchum v. Moses, 24 Cal.4th 1122, 1131-1132 (2001) [citation omitted]. “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court.’” Serrano v. Priest, 20 Cal.3d 25, 49 (1977) [citation omitted].

PMB urges the Court to reduce the hourly rates charged by Tesfamichael’s attorneys because they are relatively inexperienced. The Court measures the value of attorney services not by age or experience, but by the quality of representation in this Court.

However, Tesfamichael’s counsel’s representations to the Court regarding the hourly rate are not consistent. Daniella Felix says her rate is $300/hour and lists that rate for time expended from 8/29/16 to 3/27/18. On February 27, 2017, counsel filed a declaration in support of a request for sanctions stating that the “billing rate is $250/hour.” [2/27/17 Dec. ¶ 35] Counsel offers no evidence of a change in the rate. There is no contradictory declaration from the other attorney working on the case, but he is a lawyer of similar experience and the quality of his work is not significantly different from Felix’s.

The Court finds the $250 hourly rate reasonable and appropriate in this case.

In her declaration in support of the motion, Tesfamichael’s counsel provides a cursory summary of the services related to the anti-SLAPP motion and appeal and a statement of the total hours each of two lawyers put in for the motion and for the appeal. She did not provide a detailed breakdown of hours spent or time records. She did not provide any other means for determining the reasonableness of the total hours spent, such as a declaration of an independent attorney.

With the reply, however, counsel does provide detailed records. The Court has reviewed those and finds most of the hours reasonable. The motion was hotly contested in this Court. The issues were not simple, as reflected in the appeal. Even the present motion is hotly contested. A party “‘cannot litigate tenaciously and then be heard to complain about the time necessarily spent by the [opposing party] in response.’” Peak-Las Positas Partners v. Bollag, 172 Cal.App.4th 101, 114 (2009).

Based on the time entries, the Court has no quarrel with the number of hours expended, with a few exceptions. The memorandum of costs was superfluous, as acknowledged in the reply as a “belt and suspenders” approach. [Reply 3:13-16] The Court will not allow 7.1 hours billed for the memorandum of costs on 11/28/17, 1/31/18, 2/25/18, and 2/26/18.

Work on attempting to get the appellate court to publish its opinion was not reasonable and necessary. The Court will not allow the fee entered on 11/29/17 for 1.8 hours.

Numerous entries reflect an attorney charging for preparing documents for filing, filing the documents, and service. These entries are on 9/15/16, 11/18/16, and 8/3/17 for 1.2 hours. There is an entry on 2/27/17 for 3.3 hours that includes some research. The Court will disallow 2.2 hours. There are entries for preparing pleadings, filing and serving on 11/9/16, 11/14/16, 12/16/16, and 2/27/17. Time spent in the preparation of those documents is compensable. The Court will disallow 25% of these entries or 0.8 hours.

Of the total of 135.4 hours, the Court will compensate 122.3 hours at the rate of $250/hr for a total attorney fee award of $30,575.

5. Amount of Costs: The costs requested total $697.37. The Court finds no authority for the proposition that the term “costs” as used in the anti-SLAPP statute is any different from “costs” as defined in CCP § 1033.5. Therefore, the Court will limit costs accordingly.

There are numerous entries for “in-house” copy costs. CCP § 1033.5(b)(3) expressly excludes photocopying charges “except for exhibits.” The Court will not allow these costs.

The Court will award costs for filing fees, including e-filing fees. These include the anti-SLAPP motion fee that was paid to this court in the amount of $90 and $7.20 in related e-filing fees. Appellate filing fees are $110.20. The Court will not allow the fee for fling the request for publication.

The Court awards costs pursuant to CCP § 425.16(c) in the amount of $582.40.

7. Memorandum of Costs: As discussed above, the memorandum of costs is duplicative of the present motion. Therefore, the Court orders it stricken. This renders PMB’s motion to strike/tax costs set for hearing on April 17, 2018, moot and the Court orders it off calendar.

6. Order: The Court grants cross-defendant Solomon Tesfamichael’s Motion to Strike Defendant/Cross-Complainant PMB Stock, Inc.’s First Amended Cross-Complaint pursuant to CCP § 425.16 and orders the First Amended Cross-Complaint dismissed. Pursuant to CCP § 425.16(c)(1), the Court grants cross-defendant Solomon Tesfamichael’s motion for attorney fees and costs and orders that cross-defendant Solomon Tesfamichael shall recover $30,575 in attorney’s fees and $582.40 in costs from cross-complainant PMB Stock, Inc. The Court strikes the memorandum of costs filed on March 1, 2018, orders PMB Stock, Inc.’s Motion to Strike and/or Tax Costs off calendar, and vacates the hearing on April 17, 2018.

Motion for Leave to File Third Amended Complaint and for Sanctions: Tesfamichael moves for leave to file a third amended complaint (“TAC”) to add a third cause of action for malicious prosecution against PMB, Brown, Law Offices of Woosley & Porter, Eric A. Woosley, and Jordan T. Porter. Tesfamichael also asks the Court to sanction Eric Woosley for not stipulating to filing the FAC as he allegedly agreed to do.

PMB, Brown, CBB, and Miller oppose the motion. They contend that Tesfamichael cannot amend to add a cause of action based on events that occurred after the complaint was filed; a malicious prosecution claim is not ripe under after conclusion of the case; and neither defendants nor their counsel engaged in sanctionable behavior by refusing to stipulate to the amendment.

1. Leave to Amend: A Court may, “in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading….” CCP § 473(a). A court may allow an amendment to a pleading in the furtherance of justice at any time. CCP § 576. Courts exercise their discretion to allow amendments liberally. Nestle v. Santa Monica, 6 Cal.3d 920, 939 (1972). The liberal policy of permitting amendments should be applied only where no prejudice is shown to the adverse party. Magpali v. Farmers Group, 48 Cal.App.4th 471, 487 (1996).

When the proposed amendment fails to state facts sufficient to constitute a cause of action, it is proper to deny leave to amend. Foxborough v. Van Atta, 26 Cal.App.4th 217, 230 (1994). “That rule would find its most appropriate application, however, in cases in which the insufficiency of the proposed amendment is established by controlling precedent and where the insufficiency could not be cured by further appropriate amendment.” Cal. Casualty Gen. Ins. Co. v. Superior Court, 173 Cal.App.3d 274, 280-281 (1985), (disapproved on other grounds in Kransco v. Am. Empire Surplus Lines Ins. Co., 23 Cal.4th 390 (2000)).

a. Ripeness of Malicious Prosecution Claim: Defendants contend that a malicious prosecution action cannot be filed until after the entire case in concluded by a final judgment.

Cross-actions are distinct and independent actions. Bertero v. Nat’l Gen. Corp., 13 Cal.3d 43, 51 (1974). “A complaint and cross-complaint are treated as independent actions for most purposes, except with respect to the requirement of one final judgment.” Westamerica Bank v. MBG Indus., Inc., 158 Cal.App.4th 109, 132 (2007). “The ‘one final judgment’ rule provides that an appeal may be taken from a final judgment, but not an interlocutory judgment.” Id. But an anti-SLAPP ruling is immediately appealable and it was successfully appealed in this case.

Generally, courts have prohibited a malicious prosecution cross-complaint against the plaintiff in the same action which defendant claims is being maliciously prosecuted because the underlying matter has not finally concluded in the cross-claimant’s favor. Babb v. Superior Court, 3 Cal.3d 841, 846 (1971).

However an amended cross-complaint for malicious prosecution can be filed after the complaint in the action is dismissed. Loomis v. Murphy, 217 Cal.App.3d 589, 594-595 (1990).

Here, the cross-complaint has been dismissed. Under the reasoning in Loomis v. Murphy, a malicious prosecution claim based on that cross-complaint is ripe even though the other claims in the complaint have not been finally resolved.

b. Amended/Supplemental Complaint: “Matters which occur after the filing of a complaint may not be alleged by amendment to the complaint, but must be brought into the action by means of a supplemental complaint.” Hebert v. Los Angeles Raiders, Ltd., 23 Cal.App.4th 414, 426 (1991). (This procedural issue was not addressed in Loomis v. Murphy.) Therefore, for the Court to allow Tesfamichael to file the TAC, it must treat the motion as a motion for leave to file a supplemental complaint under CCP § 464.

“[T]he motion to file a supplemental pleading is addressed to the sound legal discretion of the court.” Flood v. Simpson, 45 Cal.App.3d 644, 647 (1975). That court held that the trial court “properly denied the motion on the basis that the supplement to the complaint sought to introduce new causes of action.” Id. Accord Hebert v. Los Angeles Raiders, Ltd., supra, 23 Cal.App.4th at 426. “It is not proper to set forth a new and independent cause of action, but only such matters as may be consistent with and in aid of the case made by the original complaint.” Melvin v. E.B. & A.L. Stone Co., 7 Cal.App. 324, 326 (1908). “‘If a party has no cause of action at the time of the institution of his action, he cannot maintain it by filing a supplemental complaint founded on matters which have subsequently occurred.’” Cohn v. Cohn, 47 Cal.App.2d 683, 689 (1941) [citation omitted].

Procedurally, Tesfamichael may not assert a new cause of action based on events occurring after the date he filed the original complaint. Therefore, the Court denies plaintiff Solomon Tesfamichael’s motion for leave to file a third amended complaint.

2. Sanction: Counsel for defendants is under no obligation to stipulate to the filing of an amended complaint, particularly in light of the Court’s ruling above.