Tentative Rulings

Case Number: BC469884    Hearing Date: March 26, 2021    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Defendant Charon Solutions, Inc. and Perry Leonard Segal’s Motion to Recover Post-Judgment Costs and Attorney Fees is GRANTED in the amount of $27,025 in attorneys’ fees and $2,492.11 in costs.

1. MOTION TO RECOVER POST-JUDGMENT COSTS AND ATTORNEY FEES

The facts relating to this case are fully forth in prior Rulings by the Court.

On October 6, 2020, Charon Solutions, Inc. (“Charon”)’s attorney requested an award of fees and costs incurred in attempting to collect on the judgment. (Minute Order 10/6/20.) This court held that because the underlying award included an award of attorneys’ fees, these attorneys’ fees as well as costs are recoverable pursuant to Code of Civil Procedure section 685.040 but required a noticed motion. (Minute Order 10/6/20.)

On November 2, 2020, Judgment Creditors Charon and Perry Leonard Segal (“Segal”) filed the instant Motion to Recover Post-Judgment Costs and Attorney Fees from Peachtree Financial, Inc. (“Peachtree”). On March 10, 2021, Peachtree filed an Opposition. On March 16, 20201, Charon and Segal filed a Reply.

Here, Judgment Creditors Charon Segal, move to recover post-judgment costs and attorneys’ fees from Plaintiff Peachtree Financial Inc. (“Peachtree”) in a noticed motion pursuant to Code of Civil Procedure section 685.040. Section 685.040 states: “The judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment. Attorney's fees incurred in enforcing a judgment are not included in costs collectible under this title unless otherwise provided by law. Attorney's fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney's fees to the judgment creditor pursuant to subparagraph (A) of paragraph (10) of subdivision (a) of Section 1033.5.” (Code Civ. Proc., § 685.040.)

Parties to litigation must generally bear their own attorney’s fees, unless they otherwise agree. (Code Civ. Proc. § 1021.) Code of Civil Procedure section 685.040 “can permit the recovery of reasonable and necessary attorney fees and costs incurred in enforcing a judgment. The express language of section 685.040 extends to legal expenses incurred in the enforcement of a judgment.” (Chinese Yellow Pages Co. v. Chinese Overseas Marketing Service Corp. (2008) 170 Cal.App.4th 868, 881, as modified (Jan. 26, 2009), as modified on denial of reh'g (Jan. 29, 2009).)

“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. (See id.)

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 p. 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).) The Court in Serrano IV also stated that fees associated with preparing the motion to recover attorneys’ fees are recoverable. (See id. at p. 624.)

On October 6, 2020, this Court previously held “that reasonable attorney’s fees and costs incurred before Peachtree paid the funds listed in the Partial Satisfaction of Judgment in connection with counsel’s attempt to collect on the judgment would be appropriate[.]” (Minute Order 10/6/20.) On December 24, 2019, Peachtree filed a Declaration of Judgment Debtor Regarding Satisfaction of Judgment stating that judgment was entered against it on July 17, 2012, and that the judgment was fully paid via check on November 29, 2019. On January 30, 2020, Peachtree filed an Amended Declaration of Judgment Debtor Regarding Satisfaction of Judgment stating that Peachtree paid the debt in two installments, and that Peachtree paid the second installment via check on January 6, 2020. (Amend. Decl., Attach 2, ¶ 4.) On February 5, 2020, the Judgment Creditors filed an Acknowledgment of Partial Satisfaction of Judgment, stating that they had received $7,660, which is the $4400 award plus $3220 in interest. (See Minute Order 10/6/20, fn. 1.)

The Court finds that Charon and Segal may recover attorneys’ fees and costs from entry of judgment until satisfaction of judgment on February 5, 2020. Charon and Segal request attorneys’ fees of $27,025 and $2,492.11 in costs.

In Opposition, Peachtree argues that “Defendants made no attempt to collect its judgment of $4440 until it filed a Judgment Debtor examination on February 15, 2019.” (Oppo. at p. 2.) Defendants’ Motion largely corresponds with this, with the exception of a handful of small tasks in 2017 and 2018 totaling about $1470. The Court finds these pre-2019 tasks to relate to enforcing the judgment. (Josefsberg Decl., ¶ 7.) Peachtree does not offer any legal support for its argument that Judgment Debtors should not be able to collect attorneys’ fees because they allegedly did not attempt to collect prior to February 2019. (Oppo. at p. 2.)

The Court also disagrees with Peachtree that Judgment Debtors should not be able to collect for time dedicated to the Judgment Debtor Examination based on Peachtree’s opinion that Judgment Debtors conduct resulted in “abuse and misuse the legal process.” (See Oppo. at p. 5.) The Court also disagrees that Judgment Debtors should not be able to recover fees and costs incurred after November 29, 2019 because payment of interest in full was not made in full until January 6, 2020. (See Oppo. at p. 6.) Without the payment of interest in full, the judgment was not “paid in full” until the judgment plus interest was satisfied, which Peachtree acknowledged in its own declaration filed January 30, 2020. (See, Amend. Decl. Judgment Debtor, Attach. 2, ¶ 5 [“This amount of $3,320 represents the exact amount owed in interest at the 10% legal rate on the principal balance of $4,440 for a total of 2,729 days since the order was issued on July 17, 2012”].)

Peachtree does not otherwise challenge the Motion, or any specific billing entries or costs. The Court finds that Judgment Debtors’ requested billing rates and number of hours spent are reasonable. The Court also finds the requested costs are reasonable.

Accordingly, the Motion to Recover Post-Judgment Costs and Attorney Fees is GRANTED in the amount of $27,025 in attorneys’ fees and $2,492.11 in costs.

DATED: March 26, 2021

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC469884    Hearing Date: September 16, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Defendants Brockmeier Law Group and John A. Brockmeier’s Motion to Strike Portions of Plaintiff’s Second Amended Complaint is DENIED.

Factual Background

This is an action for legal malpractice. The First Amended Complaint (“FAC”) alleges as follows. Plaintiff Linda Whitcombe (“Whitcombe”) filed a personal injury lawsuit following an injury in October 2011. (SAC ¶ 6.) On March 30, 2017, Whitcombe’s attorney (non-Defendant John Howard) referred the case to Defendant David Raphael Olan at the Olan Law Corporation (collectively, “Olan”). (SAC ¶ 7.) Olan had Whitcombe sign a new agreement with Olan, which increased the attorney fee percentage from 40 to 45% and added a surcharge for expenses. (SAC ¶ 9.) Before trial, Olan associated with lead trial counsel Defendant John Brockmeier at the Brockmeier Law Group, P.C. (collectively “Brockmeier”). (SAC ¶ 10.) The FAC alleges that Brockmeier and Olan made strategic mistakes, failed to file certain documents, were unprepared for trial, and pressured Whitcombe to accept a low settlement offer. (SAC ¶¶ 11-14.)

procedural history

Whitcombe filed the Complaint on April 30, 2019, and then filed the FAC without seeking leave from the Court on September 16, 2019, alleging two causes of action:

1. Professional Negligence

2. Breach of Fiduciary Duty

On February 20, 2020, Whitcombe filed a Second Amended Complaint (“SAC”) without seeking leave from the Court.

On March 3, 2020, this Court granted Olan and Brockmeier’s Motions to Strike Portions of the FAC.

On March 11, 2020, Whitcombe filed another SAC, alleging the same two causes of action.

On May 14, 2020, Brockmeier filed the present Motion to Strike Portions of the SAC.

On September 3, 2020, Whitcombe filed an Opposition.

On September 9, 2020, Brockmeier filed a Reply.

Discussion

1. REQUEST FOR JUDICIAL NOTICE

The court may take judicial notice of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452.)

Brockmeier seeks judicial notice of an email sent June 6, 2019 that is referenced in the SAC ¶ 26. The Court DENIES this request as not judicially noticeable.

1. MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)

Brockmeier moves to strike the SAC’s Prayer ¶ 3 for punitive/exemplary damages and the allegations of Defendants’ malicious/fraudulent behavior in ¶ 40, p. 15, lines 7-11, and ¶ 42, p. 15, lines 17-24. (Motion at p. ii.)

Punitive damages are allowed in non-contract cases when a defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code § 3294.) The terms are defined as:

1. “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

2. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.

3. “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

Something more than the mere commission of a tort is always required for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Proof of negligence, gross negligence, or recklessness is insufficient to warrant an award of punitive damages. (Dawes v. Sup.Ct. (Mardian) (1980) 111 Cal.App.3d 82, 88–89.) Punitive damages may be recovered in an action for negligence or other nonintentional torts if the plaintiff pleads and proves that the defendant acted with the state of mind described as “conscious disregard” of the potential dangers to others. (Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299.) When malice is based on a defendant’s conscious disregard of Plaintiff’s rights, the conduct must be both despicable and willful. (College Hospital v. Superior Court (1994) 8 Cal.4th 794, 713 (“College Hospital”).)

A breach of fiduciary duty alone without malice, fraud, or oppression does not permit an award of punitive damages. (Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 716.) “Punitive damages are appropriate if the defendant's acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages.... Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff's rights, a level which decent citizens should not have to tolerate.” (Id. at 715-716.)

The SAC alleges in the Second Cause of Action for Breach of Fiduciary Duties that the Defendants, including Brockmeier, failed to timely release Whitcombe’s net settlement proceeds to pressure and intimidate her into waiving any claims that she had against them. (SAC ¶ 39.) In Opposition, Whitcombe points the Court to various allegations of fraudulent behavior in the SAC. (Oppo. at pp. 5-10.) Most of the allegations in the SAC are regarding actions by Olan, not Brockmeier, who has brought this Motion.

However, the SAC alleges as to Brockmeier that on June 6, 2019, Olan and Brockmeier emailed Whitcombe a proposed settlement breakdown that did not increase her settlement amount by the amount of non-party Howard’s fees that he agreed to waive. (SAC ¶ 26.) Further, that Olan and Brockmeier refused to release Whitcombe’s settlement unless she agreed to release all claims against them. (SAC ¶ 26.)

The greater issue, here, is that Brockmeier is using an improper motion to challenge the allegations going to punitive damages in the SAC. A demurrer is the appropriate motion for Brockmeier to challenge the allegations in the SAC. “[A] motion to strike is generally used to reach defects in a pleading which are not subject to demurrer. A motion to strike does not lie to attack a complaint for insufficiency of allegations to justify relief; that is a ground for general demurrer.” (Pierson v. Sharp Memorial Hospital, Inc. (1989) 216 Cal.App.3d 340, 342.) Further, Brockmeier seeks to challenge the allegations based on the validity of the email sent on June 6, 2019. A Motion to Strike may not be based on extrinsic evidence showing that allegations are false, and the email in question is not judicially noticeable. Where a party needs to introduce extrinsic evidence to show than an allegation is false, the proper motion is a Motion for Summary Judgment. (Code Civ. Proc. § 473c.)

The Court finds that Brockmeier has not established sufficient reason, on the face of the pleadings, to strike the allegations going to punitive damages. The SAC corrects the defects in the FAC and now makes numerous relevant factual allegations against the Defendants. The SAC alleges various claims of fraudulent conduct/misrepresentations by Brockmeier in seeking to compel Whitcombe to accept an undesirable settlement while retaining the fees waived by Howard for themselves. (SAC ¶¶ 25-28.)

The Motion to Strike is therefore DENIED.

DATED: September 16, 2020

______________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC469884    Hearing Date: September 15, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

The facts relating to this case are fully set forth in prior Rulings by the Court. Although the motions here are styled as discovery motions, Former Plaintiff Peachtree Financial Corp. (“ Peachtree”) and Defendant Charon Solutions, Inc. (“Charon”) have agreed that the Court’s ruling on one issue will be dispositive. The issue is whether Charon was been awarded $12,320 in attorney’s fees in connection with its successful Anti SLAPP motion in 2012 or whether the request for $12,320 in attorney’s fees was taxed so that correct award is $4400.

The parties have agreed that if the correct amount is $4400, the judgment for costs has been paid in full. If the award was $12,320, Peachtree has agreed to pay the full amount found by the Court to be due. For the reasons stated below, the Court finds that the attorney’s fees awarded to Charon in connection with its successful Anti SLAPP motion was $4400 and the judgment against Peachtree has been paid in full.

The Memorandum of Costs at issue here was filed by counsel for Charon on May 7, 2012. As relevant to this ruling the cost bill listed as item 10 attorney’s fees in the amount of $12,320 and as item 11 cost for models and blowups in the amount of $444.73

On July 17, 2012 the Court heard, inter alia, Peachtree’s motion to tax costs. In connection with that hearing, the Court issued a tentative ruling which contained an extensive legal analysis relating to the request for attorney’s fees. After this analysis, the Tentative Ruling stated: “Therefore, attorney’s fees should be allowed as follows: 17.6 hrs at a rate of $250/hr for a total award of $4400. The motion to tax is therefore granted in part as to item 10. Item 10 is. taxed in the amount of $7920.00.” The tentative ruling also taxed item number 11, the $444.73 request for the costs of models and blowups of by striking it in its entirety.

The list of Tentative Rulings distributed by the court on July 17, 2012 stated the same ruling: “GRANTED as to item 10 in the amount of $7920 and item 11 in the amount of $444.73. See attached legal analysis.” The minute order for that hearing, however, stated:“The motion to Tax Costs is GRANTED as to items 10 in the amount of $443.73. Pursuant to the legal analysis attached to the tentative ruling given to counsel’”

Charon contends that the July 17, 2012 minute order reflects a ruling by the Court rejecting Peachtree’s motion to tax the attorney’s fees in total. In light of the evidence, however, the Court finds that the minute order of July 17, 2012 was a result of a clerical error and that the Courts intended ruling was as set forth in the Tentative Ruling. It is telling that although Charon’s current counsel was present at the July 17, 2012 hearing, no declaration has been filed explaining why the minute order, which stated that the ruling was “ Pursuant to the legal analysis attached to the tentative ruling given to counsel,” was in fact inconsistent with that tentative ruling. Nor is there any declaration stating what arguments were made to “turn the court around.” There also is no other explanation for the fact that item 11 for models and blowup costs of $443.73 was listed as item 10 in the minute order..

On April 26, 2019 Charon filed another memorandum of costs labeled “Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest.” Charon listed the sum of $12,320 as “All previously allowed postjudgment costs” along with later costs incurred in attempting to enforce the judgment in that Memorandum of Costs. Charon now claims that because Peachtree did not file a motion to tax these costs, the act of filing the Memorandum of Costs is dispositive on the issue of whether the $12,320 in attorney’s fees is owed.

As Peachtree points out, however, a party cannot create a right to attorney’s fees simply by filing a Memorandum of Costs. Under Code of Civil Procedure §1033.5, attorney’s fees are allowable only if authorized by contract, statute or law. The Court has held that the order of July 17, 2012 did not entitle Charon to the attorney’s fees it now claims. And even if the Memorandum of Costs had been recorded or accepted by the Court’s clerk, which it was not, these attorney’s fees still could not be properly awarded because only allowable costs may be awarded absent a ruling by the Court.

For all the above reasons, and based on the party’s stipulation, the Court finds that the Judgment for Costs against Charon has been satisfied in full, the Motions to Quash are GRANTED the Motion to Compel Further Responses are DENIED.

DATED: September 15, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court