THE REDBEAN HOUSE CORPORATION,

Plaintiff,

v.

COLONNADE WILSHIRE CORP., et al.,

Defendants.

­­­­­­

COLONNADE WILSHIRE CORP.,

Cross-Complainant,

v.

THE REDBEAN HOUSE CORPORATION., et al.,

Cross-Defendants.

Case No.: BC 533345

Hearing Date: March 8, 2018

[TENTATIVE] order RE:

PLAINTIFF/CROSS-DEFENDANT THE REDBEAN HOUSE CORPORATION’S MOTIONS FOR ATTORNEY’S FEES for:

A. prevailing on liability appeal and

B. prevailing on fees/costs appeal

Background

On January 15, 2014, Plaintiff The Redbean House Corporation (“Redbean”) filed a complaint against Defendant Colonnade Wilshire Corp. (“Colonnade”), Charles Dunn Real Estate Services, Inc. (“Charles Dunn”), Amir Madadi (“Madadi”), and DOES 1 through 10 (collectively “Defendants”) alleging causes of action for: (1) intentional misrepresentation; (2) negligent misrepresentation; (3) breach of fiduciary duty; (4) professional negligence; (5) rescission (illegality); (6) rescission (fraud); (7) rescission (impossibility); and (8) rescission (mutual mistake).

On March 12, 2014, Colonnade filed a cross-complaint against Redbean, John Chaepil Kang dba AGM Development & Construction dba Chae Pil Kang (“Kang”), and ROES 1 through 20 alleging causes of action for: (1) breach of lease; (2) waste; and (3) negligence per se.

On May 19, 2014, Kang filed a cross-complaint against Colonnade and FOES 1 through 50 alleging causes of action for: (1) negligent interference with prospective economic advantage; (2) violation of California Business and Professions Code § 17200, et seq.; and (3) negligence. Kang dismissed his cross-complaint with prejudice on September 23, 2014.

On March 27, 2015, prior to trial, Redbean dismissed the entire action without prejudice as to Madadi.

A court trial was conducted by Judge Segal in this case from April 27, 2015 to April 30, 2015. Following trial, the Court ruled as follows: (1) on the complaint, in favor of Charles Dunn and against Redbean on Redbean’s second cause of action for negligent misrepresentation; (2) on the complaint, in favor of Redbean and against Colonnade on Redbean’s eighth cause of action for rescission – mutual mistake; (3) on the cross-complaint, in favor of Colonnade and against Redbean and Kang on the second cause of action for waste; and (4) on the cross-complaint, in favor of Redbean and Kang and against Colonnade on the third cause of action for negligence per se. (See July 21, 2015 Judgment.) Colonnade was awarded $49,647.00 in net damages for its success on the second cause of action in the cross-complaint. (Id.) Colonnade appealed from the judgment on August 5, 2015.

Redbean filed a motion for attorneys’ fees on August 26, 2015, while the appeal from judgment was pending. After a number of continuances for supplemental briefing, the fees motion was ultimately granted on June 28, 2016. The Court found apportionment was not necessary and awarded Redbean $ 418,730.75 in attorneys’ fees from Defendants. Colonnade appealed from the order granting attorneys’ fees to Redbean on August 12, 2016. While the appeal of the fees’ motion Order was pending, the liability judgment was affirmed by the Court of Appeal without modification on December 20, 2016. Redbean filed a motion for attorneys’ fees as to the liability appeal on April 13, 2017, which was continued pending the attorneys’ fees appeal.

On August 16, 2017, the Court of Appeal affirmed the Court’s Order on the fees motion without modification. On November 15, 2017, Redbean filed a motion for attorneys’ fees as to the initial fees motion appeal.

On January 17, 2018, the Court considered the April 13, 2017 motion for attorneys’ fees on the liability appeal (“Liability Appeal Fees Motion”) and the November 15, 2017 motion for attorneys’ fees on the fees/costs appeal (“Fees/Costs Appeal Fees Motion”), which were opposed by Colonnade as impermissibly ambiguous and seeking an excessive amount of fees. The Court ordered supplemental briefing to clarify certain issues with the fees request.

The Court now considers the Liability Appeal Fees Motion, the Fees/Costs Appeal Fees Motion, and the supplemental briefing filed by the parties.

Discussion

“[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. … The reasonable hourly rate is that prevailing in the community for similar work. The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (PLCM Grp. v. Drexler (2000) 22 Cal.4th 1084, 1095 (internal citations omitted).) The trial court may reduce the award where the fee request appears unreasonably inflated, such as where the attorneys’ efforts are unorganized or duplicative. (Serrano v. Unruh (1982) 32 Cal. 3d 621, 635, fn. 21.) “[T]he verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” (Horsford v. Bd. Of Trustees Of California State Univ. (2005) 132 Cal.App.4th 359, 396.)

Here, Redbean was represented on both appeals by Irene Lee, Robert Gookin, and Jules L. Kabat. Paralegal Erika Arambula, whose hourly rate is $195.00, also provided her services on both appeals. (Kabat Liability Appeal Fees Mtn Decl. ¶ 2, Kabat Fees Appeal Fees Mtn ¶ 3.) Redbean cites, inter alia, Sundance v. Municipal Court (1987) 192 Cal.App.3d 268, 274, in support of their request for paralegal fees.

Jules L. Kabat reduced his rate to from $750 to $600 per hour for these matters. (Kabat Liability Appeal Fees Mtn Decl. ¶2, Kabat Fees Appeal Fees Mtn Decl. ¶ 3.) Kabat also declares that Irene Y. Lee’s fees are reduced from $550 to $300 per hour for these matters, and Robert F. Gookin’s from $375 to $250 per hour. (Id., see also Gookin Liability Appeal Fees Mtn Decl. ¶ 2, Gookin Fees Appeal Fees Mtn Decl. ¶ 2.) Redbean does not seek an adjustment of the lodestar.

With respect to the total hours incurred, Redbean’s counsel provides billing statements detailing every task performed on both appeals. (Kabat Liability Appeal Fees Mtn Decl., Exh. A, Kabat Fees Appeal Fees Mtn Decl. Exh. A.) Redbean is not requesting compensation for fees related to administrative work and work that did not directly contribute to Redbean’s success on both appeals. (Kabat Liability Appeal Fees Mtn Decl. ¶ 3, Kabat Fees Appeal Fees Mtn Decl. ¶ 4.)

Here, the Court reiterates that it does not generally find entries for work by multiple attorneys on similar tasks, such as researching and revising briefs, to be excessive or duplicative. As cited by Redbean, the Court of Appeal in Horsford v. Board of Trustees of California State University found:

It is not at all unreasonable, however, to interpret this sequence of time records as reflecting completely ordinary practice in a law firm handling a case of this magnitude: The opposition points and authorities are delivered to the senior partner, who reviews the document and makes notes for a meeting with his subordinates. At that meeting, he or she assigns one attorney to research and draft a reply to the opposition and a third attorney to edit and cite check the reply before it goes out.

((2005) 132 Cal.App.4th 359, 397.) While the overall time spent on research and analysis does at first glance appear excessive, as argued by Colonnade, Redbean explains the need for such time in response to the voluminous briefs submitted by Colonnade on its appeals.

With respect to the issues the Court highlighted in its January 17, 2018 Order, the Court finds that the Supplemental Declarations sufficiently clarify how much of Gookin’s time is being requested. With respect to specific questions the Court raised in its January 17, 2018 Order, the Court is satisfied with the explanations provided by Redbean (the entries for research conducted by Kabat; the need for both Gookin and Lee to research issues simultaneously; duplication of an entry for preparing a Request for Dismissal; and duplication of entries for preparing for oral argument). The Court also notes that Redbean has excluded the fees for the ex parte application, as ordered by the Court.

However, the Court notes that Kabat’s Supplemental Declaration fails to illustrate the difference between the invoice amount and the requested amount. For example, for the September 22, 2016 statement, Kabat states that the total fees billed were $5,272.50, which is in accord with his declaration from the Liability Appeal Fees Motion. However, in the Supplemental Declaration, Kabat states that only $4,809.00 of the $5,272.50 is being requested without further explanation for why that is. In any event, since the requested amount is lower than the billed amount, the Court does not find these amounts unreasonable.

The remaining issue is now with the total amount requested by Redbean. As noted by Colonnade, Redbean’s total requested fee is now $283,795.56, whereas it was $190,530.54 previously. In this final round of briefing, Redbean not only removed certain entries from its calculation of fees but it also removed its request for costs, so the total amount should be less than $190,530.54. Additionally, the Court did not authorize Redbean to add fees to its request as part of the additional briefing. In response, Redbean’s explanation for the discrepancy in fees is that the previous fee motions inadvertently omitted from the final calculation of total fees certain of Gookin’s fees. (Redbean’s Reply Brief, p. 6, fn 1.) Redbean asserts that Gookin’s declarations and invoices attached to the previous fee motions sufficiently evidence the correct total amount requested for him. However, the Court was unable to reconcile the discrepancies based on a review of the amounts requested by Gookin in the previous fee motions and the amount requested by Gookin in the Supplemental Declaration. Moreover, the difference between the amount requested now and the amount requested in the previous fee motions is more than the total amount of fees requested by Gookin. The Court finds this additional amount to be excessive in light of the work described in the declarations. Therefore, the Court finds that the amount of reasonable fees is $190,530.54 minus the fees deducted regarding the ex parte application and the other reductions made by Redbean (e.g. removal of the costs).

Conclusion

The Court awards Redbean $190,530.54 minus the fees deducted regarding the ex parte application and the other reductions made by Redbean for a total of $_______________.

Colonnade is ordered to give notice.

DATED: March 8, 2018

___________________________

Honorable Teresa A. Beaudet

Judge, Los Angeles Superior Court