Case Number: EC062923 Hearing Date: August 02, 2019 Dept: A

Shen v Gao

Motion for Attorney Fees

Calendar:

10

Case No.:

EC062923

Hearing Date:

August 02, 2019

Action Filed:

August 15, 2014

Trial Date:

Judgment on July 05, 2017

MP:

Plaintiffs Weibao Shen; Jai Li Chai; Huizen Shi; Yu Jia Yin; Xin Li

RP:

Defendant Jinghan Liu, as personal representative for decedent Defendant Ling Ling Zhang

ALLEGATIONS:

The instant action arose from an investment agreement between Plaintiffs Weibao Shen; Jai Li Chai; Huizen Shi; Yu Jia Yin; and Xin Li (“Plaintiffs”) and Defendants Ling Ling Zhang; Jian Ming Gao; and Fei Gao (“Defendants”) whereby Defendants purported to buy shares in two companies (American Pine Bio-tech and Consumer Capital Group, Inc.). Plaintiffs’ sought to recover for causes of action sounding in breach of contract, and several species of fraud. The Court conducted a bench trial, and entered Judgment in favor of Plaintiffs on July 05, 2017.

PRESENTATION:

Following an appeal, which affirmed the Judgement of the Court, Plaintiffs filed the instant motion on July 01, 2019, seeking attorney’s fees in the amount of $97,875.00 for the appeal and $72,315.00 in post-judgment fees. Defendant Jinghan Liu (“Liu”), as personal representative for decedent Defendant Ling Ling Zhang opposed the motion on July 22, 2019, contending that the amount should be reduced to a total of $30,780.00.

RELIEF REQUESTED:

Plaintiffs move for an attorney’s fees award of $170,190.00.

DISCUSSION:

Standard of Review – Attorney’s Fees – As the Court has already determined the propriety of an award of attorney’s fees in its October 13, 2017, Minute Order, and there is no opposition to the award in the first instance, the sole issue for consideration is the amount of the award. A person seeking attorney’s fees bears that “burden of showing that the fees incurred were ‘allowable,’ were ‘reasonably necessary to the conduct of the litigation,’ and were reasonable in amount.’” Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal. App. 4th 807, 816. The Court first notes that an attorney’s hourly rate is determined by the well-established legal standard that attorney’s fees for contested matters are calculated by the use of the Lodestar method. See, e.g., Ketchum v. Moses (2001) 24 Cal. 4th 1122, 1134 (“[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 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. [Citation]. Such an approach anchors the trial court’s analysis to an objective determination of the value of the attorney’s services, ensuring that the amount awarded is not arbitrary.”).

A ‘reasonable’ attorney’s fee award generally falls “within the sound discretion of the trial judge.” Church of Scientology v. Wollersheim (1996) 42 Cal. App. 4th 628, 659. However, in making a determination on the reasonableness of attorney’s fees and costs, a trial court should consider (1) the nature of the litigation, (2) its difficulty, (3) the amount involved, (4) the skill required and the skill employed in handling the litigation, (5) the attention given, (6) the success of the attorney’s efforts, (7) his learning and age, (8) his experience in the particular type of work demanded the intricacies and importance of the litigation, and (9) the labor and necessity for skilled legal training and ability in trying the cause, and (10) the time consumed. Church of Scientology v. Wollersheim (1996) 42 Cal App 4th 628, 638-39.

Neither party provides detailed analysis for the Court to consider the reasonability of the attorney’s fees rate, thus the Court has conducted its own analysis including the factors set forth below in italics.

Here, the opposing party does not challenge the billings of the appellate specialist, Mr. Posner and those fees will be approved and ordered at par, $30,780.00. The claim of Mr. Scandura is challenged as [containing] “ . . . many questionable if not downright phantom tasks.” In the reply, Mr. Scandura contends that [success] “ . . on appeal validates the time spent by them.” The court finds that both counsels’ notions as expressed are unsound. The Court of Appeal decision, while favoring plaintiffs, specifically points out the inadequate record produced by Appellant. This court has reviewed the billings of Mr. Scandura and does not find any indicia of “phantom” billing by which the court understands the claim to mean sham or that time has been recorded for work not in fact done. Mr. Scandura’s bill rate of $450.00 is neither particularly high nor low in this court’s experience for an attorney admitted over twenty years, but is a typical figure in a broad range of civil litigation and practice. The billing sheets show a thorough attention to detail which is confirmed by the attorney’s declaration about the arcane world of securities which was a central subject in the litigation, albeit it a rare one for state courts. Mr. Scandura explains that he spent extensive time on this subject against the possibility that the justices may question the plaintiffs’ recovery under the multifaceted rules pertaining to securities, and that he is not a specialist in this field, but that a specialist would bill at a considerably higher rate, and by inference, would not take the matter on a contingent basis, as did he. All of this activity seems not only reasonable, but exemplary for an attorney who has taken a relatively small dollar case and provided his clients a high level of service and a potentially valuable recovery. The court does question some unintelligible entries in the bill records, notably “Preparation of attorney time calculation.” Such entries total 30.6 hours, and will be deducted from the total claim.

The court addresses other general factors:

Nature of the Litigation – The instant litigation is moderately complex, as it involves issues of international financial transactions, corporate investment, and fraudulent conveyances.

Difficulty of the Litigation – While the underlying litigation was relatively long and challenging, the instant attorney’s fees involve only post judgment motion practice and a single appeal, which militates against the difficulty of the litigation for the purposes of the instant attorney’s fees motion.

Amount Involved – The amount involved in the appeal was the amount of the Judgment: $142,992.67, plus interest; plus the amount of the already assessed attorney’s fees: $123,800.00; for a total amount in controversy of $266,792.67. The current amount of attorney’s fees requested ($170,190.00) represents approximately 1.4 times the amount of attorney’s fees already awarded in the action for the underlying litigation occurring between 2014-2017. It is not infrequent that fee claims end up exceeding the dollar amount at issue.

Skill Required and Skill Employed – Based on the Court’s review of the appellate decision, the Court concludes that very little skill was actually required to succeed on appeal, but given the rare nature of the claim the predictability of the final outcome was far from a sure thing. In the Second Appellate District’s March 22, 2019, statement of decision the appeals court emphasizes that one of the primary reasons for its analysis and ultimate decision is not due to any effort by the appellate attorneys, but rather due to the “extraordinarily incomplete” trial court record. March 22, 2019, Appellate Statement of Decision (“App. Stmt.”), pp.2; see also App. Stmt. pp. 2-3 (“Even the appellant’s appendix is incomplete.”); App. Stmt. pp. 3 (“Because the record before us does not provide the information necessary to fully evaluate Liu’s claims of error, we conclude that the judgment and post-judgment order must be affirmed.”); App. Stmt. pp. 3 (“Our recitation of the procedural and factual background is limited due to the paucity of the record on appeal.”); App. Stmt. pp. 7 (“Although we cannot confirm this assertion because the record does not include the documents cited in the points and authorities, we assume it is correct because plaintiffs did not contest it in their opposition to the motion.”); App. Stmt. pp. 15 (“We conclude that, due to the extremely limited record, Liu has failed to demonstrate error.”); App. Stmt. pp. 17 (“[Appellant’s] arguments fail because the record does not affirmatively demonstrate error.”); et cereta.

Attention Given – The Court notes that the attorneys represent that they spent a significant, though not excessive, amount of time on the case post-judgment, with Steven Scandura representing that he spent 309.8 hours on the case, and Howard Posner spending 68.4 hours directly on the appeal.

Success of Efforts – Plaintiffs were successful in opposing Defendant’s post-judgment appeal and motion practice.

Learning and Age – Mr. Scandura (SBN #153796) has been an active member of the California State Bar since 1991, and is a graduate of UCLA School of Law. Mr. Posner (SBN #94712) has been an active member of the California State Bar since 1980, is a graduate of UCLA also, and is Certified in Appellate Law by the State Bar of California.

Experience in the Particular Type of Work and Importance of the Litigation – While the litigation is undoubtedly of great import to the parties involved in the proceedings, there is no indication that this case is of any particular importance to the broader field, or demonstrative of any novel litigation technique, extension of law, or other noteworthy accomplishment by any litigant or attorney. Otherwise, the attorneys do not provide sufficient information to indicate they have particularly relevant experience in this particular type of work, other than Mr. Posner’s specialization in appellate applications. Indeed, Mr. Scandura declaims his lack of experience in securities law as a reason for expended and extensive preparation for hearing in the higher court.

Need for Specialized Ability – There does not appear to have been any need for special ability by the attorneys for the work performed. There is no contention that an attorney specialized in securities law would undertake this matter at any stage on a contingency for the recovery of $55,000.00.

Time Consumed – As already noted above, the attorneys spent a significant but not grossly excessive amount of time on the litigation.

Pursuant to these considerations and the Court’s further review of the record of attorney’s fees attached to the moving papers, the Court will award fees at par for Mr. Posner and reduce Mr. Scandura’s fees by $14,220.00, net value therefore equaling $125,190.00.

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RULING:

Grant the motion for attorney’s fees and set the total award to $155,970.00.

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In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Plaintiffs Weibao Shen; Jai Li Chai; Huizen Shi; Yu Jia Yin; and Xin Li’s Motion for Attorney’s Fees came on regularly for hearing on August 02, 2019, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

The motion is: GRANTED AS FOLLOWS:

ATTORNEY’S FEES PER THE CURRENT MOTION ARE AWARDED IN THE AMOUNT OF $155,970.00.

DATE: _______________ _______________________________

JUDGE