Case Number: BC533345 Hearing Date: January 17, 2018 Dept: 50

Superior Court of California

County of Los Angeles

Department 50

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: January 17, 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. The Court now considers 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”). Colonnade opposes both motions as impermissibly ambiguous as seeking an excessive amount of fees.

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.)

In its opposition, Defendants argue that it is extremely difficult to ascertain the reasonableness of Redbean’s attorneys’ fees requests since the descriptions of the work performed and the time invoices submitted thereto are vague and confusing and do not align with the actual figures Redbean is requesting. Redbean points to the invoice for August 2016 as an example and Kabat’s declaration describing that month’s tasks. Colonnade argues that Kabat’s declaration requests $5,272.50 for that month, while the firm’s invoice identifies $6,234 for that month and Gookin’s invoice shows $5,175 for the same period. Redbean further argues that the briefs do not identify exactly what tasks were performed or to whom the tasks were attributed, and at what rate. Redbean argues that task descriptions such as “reviewing and processing,” and “research and drafting” are insufficiently specific to allow Colonnade or the Court to determine the reasonableness of the requests.

Colonnade then argues that this ambiguity in tasks is aggravated by what it argues are Redbean’s unreasonable billing practices. Namely, Colonnade argues, Redbean’s invoices include duplicate billings of the same tasks, vague descriptions of those tasks, block billing, excessive and exaggerated time, and billings by individuals not mentioned in the briefs.

In reply, Redbean argues that Redbean’s fees charged were not duplicative or excessive, but necessary to respond to Colonnade’s four appellate briefs in the two appeals, which totaled 218 pages. Redbean argues that Gookin, who has the lowest hourly rate, did initial drafting, with Lee and Kabat finalizing the briefs and conducting oral argument. Redbean argues that their records represent this work sufficiently. Redbean then argues that Colonnade fails to meet its burden in challenging the motion, citing Premier Medical Mgmt. Sys. (2008) 163 Cal.App.4th 550, 564: “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.”

The Court finds that Colonnade is sufficiently specific with its challenges to Redbeans’ fees. Colonnade discusses specific billing periods and their respective failings, with citations to example invoices submitted in evidence by Redbean. In particular, Colonnade argues that Redbean unnecessarily bills for each team member’s time spent at meetings and for duplicative research and drafting work, and blocks bills such that the time spent on each specific task cannot be determined. Colonnade also argues there are charges on the invoices by members not discussed in the brief.

The Court 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.

However, while the Court does not find Redbean’s block billing to be impermissibly vague, there does seem to be a discrepancy between the fees billed and those requested and other issues noted below. Although Kabat declares in support of both motions that administrative tasks and those unrelated to the motions were not included in the total requested amount, those have not been specifically detailed such that it makes the discrepancy between the invoices and the total amount clear. It also is not clear how much of Gookin’s time is being requested. Anything that is not being requested, should be excluded. Accordingly, a more detailed and clear explanation of the total fees requested with deducted fees for unrelated and administrative tasks and any duplication removed, must be submitted.

Additionally, the Court questions entries for Kabat doing research at his rate of $600 (e.g., entry on 8/24/16) and the need for both Gookin and Lee to be researching the opening brief and other issues simultaneously. Further illumination regarding the work each of them was doing is necessary before it can be determined if the work was duplicative or excessive. Additionally, there seems to be some duplication (although it may have been excluded without specifically so indicating) – for example, both Gookin and Lee have the same entry on 9/28/16 and it is not clear why they are preparing a request for dismissal when that seems like a paralegal task. Also, there were three entries on 12/2/16 for preparing for oral argument – Lee for 3.4 hours, Kabat for 9 hours and “NDM” for 2.4 hours – plus a number of additional entries later in the month for the same task. That seems excessive without further explanation. Finally, fees for the ex parte application must be excluded.

Conclusion

Unless matters are resolved at the hearing on this motion, Redbean’s motions for awards of attorneys’ fees on the liability appeal and the fees/costs appeal will be continued so Redbean can address the issues identified above. The time spent to clarify these matters will not be included in any further award of fees as these issues should have been clear in the initial motion.

Colonnade is ordered to give notice.

DATED: January 17, 2018

___________________________

Honorable Teresa A. Beaudet

Judge, Los Angeles Superior Court