This case was last updated from Los Angeles County Superior Courts on 11/07/2020 at 09:17:01 (UTC).

MIDLAND ENTERTAINMENT LLC VS HYDRA GROUP LLC ET AL

Case Summary

On 01/19/2018 MIDLAND ENTERTAINMENT LLC filed a Contract - Other Contract lawsuit against HYDRA GROUP LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are RICHARD E. RICO, STEPHANIE M. BOWICK, RICHARD FRUIN, RICHARD L. FRUIN and GREGORY KEOSIAN. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0821

  • Filing Date:

    01/19/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

RICHARD E. RICO

STEPHANIE M. BOWICK

RICHARD FRUIN

RICHARD L. FRUIN

GREGORY KEOSIAN

 

Party Details

Plaintiff, Petitioner and Cross Defendant

MIDLAND ENTERTAINMENT LLC

Defendants, Respondents and Cross Defendants

HYDRA GROUP LLC

EDWARDS CHRISTOPHER

WESTPHAL PAUL

DOES 1 TO 10

THE THIRD FLOOR INC.

NEWTON JOEL

THE VIRTUAL REALITY COMPANY

MIDLAND ENTERTAINMENT LLC

KEECH ROBERT

ROES 1-20

Defendant, Respondent and Cross Plaintiff

THE THIRD FLOOR INC.

Attorney/Law Firm Details

Cross Defendant, Plaintiff and Petitioner Attorneys

KLIEGER ROBERT N.

KLIEGER ROBERT NATHAN

Defendant and Respondent Attorneys

BRENNER LEE S. ESQ.

DAVIDOFF BRIAN L. ESQ.

BALCH NOAH RAM

KRONSTADT KEN D

BRENNER LEE S.

DAVIDOFF BRIAN L.

BALCH NOAH R.

KRONSTADT KEN D.

STEINBERG IRA M

Defendant and Cross Plaintiff Attorney

DAVIDOFF BRIAN L.

 

Court Documents

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

3/12/2020: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Notice - NOTICE OF CASE MANAGEMENT CONFERENCE

1/29/2020: Notice - NOTICE OF CASE MANAGEMENT CONFERENCE

Notice of Case Management Conference

1/24/2020: Notice of Case Management Conference

Summons - SUMMONS CROSS-COMPLAINT

1/3/2020: Summons - SUMMONS CROSS-COMPLAINT

Notice - NOTICE OF ENTRY OF JUDGMENT

8/22/2019: Notice - NOTICE OF ENTRY OF JUDGMENT

Minute Order - MINUTE ORDER (COURT ORDER)

8/20/2019: Minute Order - MINUTE ORDER (COURT ORDER)

Demurrer - with Motion to Strike (CCP 430.10)

7/19/2019: Demurrer - with Motion to Strike (CCP 430.10)

Order - ORDER GRANTING DEMURRER TO SECOND AMENDED COMPLAINT

5/23/2019: Order - ORDER GRANTING DEMURRER TO SECOND AMENDED COMPLAINT

Certificate of Mailing for - CERTIFICATE OF MAILING FOR MINUTE ORDER (COURT ORDER) OF 05/13/2019

5/13/2019: Certificate of Mailing for - CERTIFICATE OF MAILING FOR MINUTE ORDER (COURT ORDER) OF 05/13/2019

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE; HEARING ON DE...)

4/15/2019: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE; HEARING ON DE...)

Notice of Posting of Jury Fees

10/23/2018: Notice of Posting of Jury Fees

Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - Order Appointing Court Approved Reporter as Official Reporter Pro Tempore Linda Lee CSR#13568

10/31/2018: Order Appointing Court Approved Reporter as Official Reporter Pro Tempore - Order Appointing Court Approved Reporter as Official Reporter Pro Tempore Linda Lee CSR#13568

Notice of Case Management Conference

11/14/2018: Notice of Case Management Conference

CASE MANAGEMENT STATEMENT -

7/23/2018: CASE MANAGEMENT STATEMENT -

NOTICE OF MOTION AND MOTION TO STRIKE ALLEGATIONS IN FIRST AMENDED COMPLAINT; DECLARATION OF IRA M. STEINBERG

7/17/2018: NOTICE OF MOTION AND MOTION TO STRIKE ALLEGATIONS IN FIRST AMENDED COMPLAINT; DECLARATION OF IRA M. STEINBERG

FIRST AMENDED COMPLAINT FOR: (1) BREACH OF CONTRACT (2) FRAUD (3) NEGLIGENT; ETC.

6/15/2018: FIRST AMENDED COMPLAINT FOR: (1) BREACH OF CONTRACT (2) FRAUD (3) NEGLIGENT; ETC.

NOTICE OF RULING RE; JOINT STIPULATION TO EXTEND DEADLINE FOR DEFENDANTS TO RESPOND TO COMPLAINT

5/30/2018: NOTICE OF RULING RE; JOINT STIPULATION TO EXTEND DEADLINE FOR DEFENDANTS TO RESPOND TO COMPLAINT

NOTICE OF ORDER TO SHOW CAUSE HEARING

4/4/2018: NOTICE OF ORDER TO SHOW CAUSE HEARING

188 More Documents Available

 

Docket Entries

  • 06/14/2022
  • Hearing06/14/2022 at 09:00 AM in Department 61 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 06/06/2022
  • Hearing06/06/2022 at 09:00 AM in Department 61 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 04/06/2022
  • Hearing04/06/2022 at 09:00 AM in Department 61 at 111 North Hill Street, Los Angeles, CA 90012; Post-Mediation Status Conference

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  • 10/30/2020
  • Docketat 1:37 PM in Department 61, Gregory Keosian, Presiding; Ruling on Submitted Matter

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  • 10/30/2020
  • DocketNotice of Ruling (Ruling Re Defendant and Cross-Complainant Third Floor Inc.'s Motion to Compel Further Responses to Requests for Production; Defendant Joel Newton's Motion for Attorney Fees); Filed by Clerk

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  • 10/30/2020
  • DocketCertificate of Mailing for ((Ruling on Submitted Matter) of 10/30/2020); Filed by Clerk

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  • 10/30/2020
  • DocketMinute Order ( (Ruling on Submitted Matter)); Filed by Clerk

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  • 10/06/2020
  • DocketNotice of Posting of Jury Fees; Filed by Christopher Edwards (Defendant); The Third Floor, Inc. (Defendant); Paul Westphal (Defendant)

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  • 10/01/2020
  • Docketat 2:00 PM in Department 61, Gregory Keosian, Presiding; Hearing on Motion for Attorney Fees - Held - Taken under Submission

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  • 10/01/2020
  • Docketat 2:00 PM in Department 61, Gregory Keosian, Presiding; Hearing on Motion to Compel (Motion to Compel Request for Production of Documents) - Held

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292 More Docket Entries
  • 04/04/2018
  • DocketNotice of Case Management Conference; Filed by Midland Entertainment, LLC (Plaintiff)

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  • 04/04/2018
  • DocketNotice; Filed by Midland Entertainment, LLC (Plaintiff)

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  • 04/04/2018
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 03/12/2018
  • DocketORDER TO SHOW CAUSE HEARING

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  • 03/12/2018
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 03/12/2018
  • DocketOSC-Failure to File Proof of Serv; Filed by Clerk

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  • 03/12/2018
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 01/19/2018
  • DocketSUMMONS

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  • 01/19/2018
  • DocketCOMPLAINT FOR: (1) BREACH OF CONTRACT ;ETC

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  • 01/19/2018
  • DocketComplaint; Filed by Midland Entertainment, LLC (Plaintiff)

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Tentative Rulings

Case Number: BC690821    Hearing Date: October 01, 2020    Dept: 61

Defendant and Cross-Complainant Third Floor Inc.’s Motion to Compel Further Responses to Requests for Production is GRANTED as to Request No. 33.

Defendant Joel Newton’s Motion for Attorney Fees is GRANTED in the amount of $45,000.

Defendant to provide notice.

  1. ATTORNEY FEES AGREEMENT

Newton asks for $45,000 in attorney fees pursuant to an agreement. (Motion at p. 1.)

A prevailing part is entitled to an award of costs (Code Civ. Proc. § 1032, subd. (b)), and among those costs recoverable are attorney fees when authorized by contract, statute, or law. (Code Civ. Proc. § 1033.5, subd. (a)(10).)

Newton argues that he is entitled to attorney fees under either the Purchase Agreement or Operating Agreement attached to Newton’s TAC. Newton was not a party to the purchase agreement, but paragraph 6.15 of same states:

In case any proceeding, whether at law, in equity or in arbitration, shall be brought by any party to enforce the terms of this Agreement or with respect to any breach hereof, the prevailing party in each such proceeding, as determined by the court or arbitrator, shall be entitled to the payment of reasonable attorneys’ fees and costs from the nonprevailing party (as determined by the court or arbitrator).

(TAC Exh. B, ¶ 6.15, emphasis added.)

The Operating Agreement of Hydra, to which Newton is a party, contains a similar clause:

In case any proceeding, whether at law, in equity or in arbitration, shall be brought by any Member or by or on behalf of the Company to enforce the terms of this Agreement or with respect to any breach hereof, the prevailing party in each such proceeding, as determined by the court or arbitrator, shall be entitled to the payment of reasonable attorneys’ fees and costs from the non-prevailing party or parties (as determined by the court or arbitrator).

(TAC Exh. C, ¶ 10.11, emphasis added.)

Newton notes that no claim for breach of contract was alleged against him in the original or First Amended Complaint, but rather there were claims for fraud, negligent misrepresentation, and aiding and abetting breach of fiduciary duty. (Motion at p. 3.) These claims were dismissed against Newton on November 8, 2018, as the representations were alleged against all defendants collectively and not pleaded with the requisite particularity. (See 11/8/2018 Order.) Midland filed the SAC on November 29, 2018, which actually asserted a claim for breach of operating agreement against Newton. (SAC ¶¶ 59–63.) It also continued to allege claims for misrepresentation against Newton, yet the alleged misrepresentations were promises concerning the management of Hydra contained in the operating agreement. (SAC ¶ 82.) Newton thus argues that even Midland’s original and first amended complaints contained no express claim to enforce the contract, their fraud claims must be construed as attempts to enforce the contract through tort. (Motion at p. 5.) So Newton claims to be able to seek attorney fees incurred from the inception of this case.

Newton points to the case Khan v. Shim (2016) 7 Cal.App.5th 49, which held that a contractual provision allowing attorney fees to the prevailing party for “any litigation or arbitration . . . commenced between the parties to this Contract of Sale . . . concerning its terms, interpretation or enforcement or the rights and duties of any party in relation thereto,” was broad enough to encompass fraud and concealment claims made concerning promises in a contract. (Id. at pp. 60–62.) Newton also points to Share v. Casiano Bel-Air Homeowners Assn. (1989) 215 Cal.App.3d 515, which held that an attorney fee provision allowing fees “[i]n any legal or equitable proceeding for the enforcement or to restrain the violation of these restrictions or any provisions hereof,” allowed for the recovery of fees in civil contempt proceedings to enforce the provisions. (Id. at pp. 522–23.)

Midland responds that no fee recovery may be had for proceedings that occurred before the TAC was filed because before the TAC, there were no claims against Newton to enforce the operating agreement or with respect to any breach thereof. (Opposition at p. 8.) Midland relies on the case Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, in which the court held that no fees could be awarded for tort claims related to failure to disclose defects in the premises where a lease provided for fees “to enforce the terms of” or “declare rights” under the lease. (Id. at p. 708–09.)

The dispute centers on whether Midland’s fraud and breach of fiduciary duty claims against Newton can be construed as actions to enforce the operating agreement or “with respect to any breach thereof.” The authority suggests that tort actions in general are not actions to “enforce” the agreement. “A tort claim does not enforce a contract. Where a contract authorizes an award of attorney fees in an action to enforce any provision of the contract, tort claims are not covered.” (Gil v. Mansano (2004) 121 Cal.App.4th 739, 743, citations omitted.) Thus the question is whether Midland’s tort claims were brought “with respect to any beach” of the operating agreement.

The contract language favors a broader approach. The contract here, although it contains an “enforcement” prong that is ordinarily considered to exclude recovery for tort claims, is immediately followed by a phrase allowing recovery of fees for “any proceeding” brought by “any party” “with respect to any breach hereof.” The phrase “with respect to” belongs to the broad category of contractual fee language, meaning “with reference to” or “in relation to.” (RESPECT, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/with%20respect%20to, accessed April 1, 2020.) It is thus appropriate to interpret the fee provision in the operating agreement as allowing fees to parties who prevail on actions brought “in relation to” a breach of the operating agreement. And because in all of Midland’s prior pleadings, the misrepresentations alleged of Newton included the promises contained in the operating agreement, which he allegedly had no intention to fulfill, Newton may properly seek fees incurred from the inception of this action.

II. LODESTAR

“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.)

Newton’s attorneys state they have expended and are projected to expend the following hours at the following rates in prosecuting this action and the present motion:

The total amount incurred is $109,261.93, but Midland claims to only seek $45,000 in fees. (Brenner Decl. ¶ 29; Kronstadt Decl. ¶ 18.)

Midland responds that Newton’s counsel seeks to double-bill for duplicative tasks, such as 46.7 hours sought in connection with the demurrer to the SAC, which was sustained on pleading-particularity grounds previously hashed out in other demurrers, plus an additional 5.6 hours purportedly spent preparing a proposed judgment, and 43 hours of time spent on the present fee motion. (Opposition at pp. 13–14.)

The court agrees with Midland that these amounts are far in excess of what is reasonable, but the court will not adopt Midland’s proposed remedy of denying the motion in its entirety. The total fees sought in connection with the charges identified, according to the Kronstadt declaration, are $25,879.10 for the demurrer to the SAC, $3,522.40 for the proposed judgment, and $34,056.90 for the fees motion, for a total expense of $63,458.40. (Kronstadt Decl. ¶ 18.) If these fees were not simply reduced, but entirely deducted from the total hours computed by Newton, the amount remaining would be not much more than the $45,000 they now seek here: $45,803.53. (Kronstadt Decl. ¶ 18.) Although “[a] fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether,” such a rule is designed to curtail exorbitant fee demands, and Newton has already discounted their demand here. (Serrano v. Unruh (1982) 32 Cal.3d 621, 635.) The $45,000 amount sought is reasonable in light of the hours reasonably expended on the tasks necessarily performed by Newton’s counsel in this action, including two demurrers, discovery, and the present fee motion.

Accordingly, Newton’s Motion for Attorney Fees is GRANTED in the sum of $45,000.00.

III, MOTION TO COMPEL FURTHER – PRODUCTION OF DOCUMENTS

“A party may demand that any other party produce . . . a document that is in the possession, custody, or control of the party on whom the demand is made.” (Code Civ. Proc., § 2031.010(b).) The demanding party may move for an order compelling further response to the demand if the demanding party deems that (1) a statement of compliance with the demand is incomplete, (2) a representation of inability to comply is inadequate, incomplete, or evasive, or (3) an objection in the response is without merit or too general. (Code Civ. Proc., § 2031.310(a).) “The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand,” and “[t]he motion shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., § 2031.310(b).)

A motion to compel a further response to an inspection demand must set forth specific facts showing “good cause” justifying the discovery sought by the inspection demand. (Code Civ. Proc., § 2031.310(b)(1); Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.) Unless there is a legitimate privilege issue or claim of attorney work product, that burden is met simply by a fact-specific showing of relevance. (TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 444.) Once the moving party demonstrates good cause for the discovery, the burden is on the responding party to justify any objection or failure to fully respond to the inspection demand. (Coy v Superior Court (1962) 58 Cal.2d 210, 220.)

Third Floor moves for a further response to Request for Production No. 33, which asks for documents related to the settlement of a “Singer Action.” (Separate Statement.) Third Floor maintains that the Singer action occurred when Michael Singer, one of Midland’s investors, filed suit against Midland making allegations that are similar to the allegations of Third Floor’s own cross-complaint, namely that Midland diverted funds that should have been used for the Hydra investment. (Motion at p. 1.)

Midland objects to this discovery on the grounds that documents related to the settlement are inadmissible under Evidence Code § 1152, subd. (a). But Third Floor argues that the scope of discoverability is greater than the scope of admissibility, as was held in the case Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1488–89.

Midland in opposition points to the court’s order of May 23, 2019, with regard to a motion to compel further responses addressing discovery requests in which the present request was at issue, and in which the parties agreed to the production of the Singer settlement agreement and the court suggested the parties address further Singer-related discovery issues with the requests to an informal discovery conference. (Opposition at p. 6; Exh. B at p. 23.) Midland argues that Third Floor has failed to take the court up on this offer, and continues to push broad requests for all settlement-related documents regardless of whether they relate to Hydra or Midland. (Opposition at pp. 9–10.)

As things presently stand, Third Floor has obtained via subpoena pleadings and discovery responses related to the Singer action from Singer himself. (Motion at p. 8.) Midland has also produced the Singer settlement, but has not produced communications related to the settlement or earlier drafts of the same. (Motion at p. 8.) It is these settlement-related communications and prior settlement agreement drafts that are at issue here. (Motion at p. 11.)

The court agrees with Third Floor’s position as to the discoverability of this material. Although the prior settlement drafts and settlement communications sought may not ultimately be admissible to prove liability under Evidence Code § 1152, the bounds of admissibility and discoverability are not the same. (See Volkswagen, supra, 139 Cal.App.4th at pp. 1488–89 [“[T]he fact that evidence is not admissible does not mean that it is also not discoverable.”].) The metric for discoverability is relevance to the subject matter of the litigation and reasonably likely to lead to the discovery of admissible evidence. (Code Civ. Proc. § 2017.010.) And Third Floor has shown that the materials sought meet this criterion. The Singer action and the present one both concern alike subject matters. Moreover, Third Floor persuasively argues both that Singer himself may be an important witness to this case, and the communications regarding the settlement may be a necessary means of evaluating his testimony. (Motion at p. 12.) Although Midland contends that Singer’s independent interest in the communications is a reason to deny or limit the request, Midland has not made a showing that this interest is sufficient to override the potential probative value of the communications requested. (See Hooser v. Superior Court (2000) 84 Cal.App.4th 997, 1004 [discussing balancing of privacy interest with probative value of material].)

Accordingly, Third Floor’s Motion to Compel Further is GRANTED as to Request No. 33.

Case Number: BC690821    Hearing Date: September 21, 2020    Dept: 61

Defendant and Cross-Complainant Third Floor Inc.’s Motion to Compel Further Responses to Requests for Production is GRANTED as to Request No. 33.

Defendant Joel Newton’s Motion for Attorney Fees is GRANTED in the amount of $45,000.

Defendant to provide notice.

  1. ATTORNEY FEES AGREEMENT

Newton asks for $45,000 in attorney fees pursuant to an agreement. (Motion at p. 1.)

A prevailing part is entitled to an award of costs (Code Civ. Proc. § 1032, subd. (b)), and among those costs recoverable are attorney fees when authorized by contract, statute, or law. (Code Civ. Proc. § 1033.5, subd. (a)(10).)

Newton argues that he is entitled to attorney fees under either the Purchase Agreement or Operating Agreement attached to Newton’s TAC. Newton was not a party to the purchase agreement, but paragraph 6.15 of same states:

In case any proceeding, whether at law, in equity or in arbitration, shall be brought by any party to enforce the terms of this Agreement or with respect to any breach hereof, the prevailing party in each such proceeding, as determined by the court or arbitrator, shall be entitled to the payment of reasonable attorneys’ fees and costs from the nonprevailing party (as determined by the court or arbitrator).

(TAC Exh. B, ¶ 6.15, emphasis added.)

The Operating Agreement of Hydra, to which Newton is a party, contains a similar clause:

In case any proceeding, whether at law, in equity or in arbitration, shall be brought by any Member or by or on behalf of the Company to enforce the terms of this Agreement or with respect to any breach hereof, the prevailing party in each such proceeding, as determined by the court or arbitrator, shall be entitled to the payment of reasonable attorneys’ fees and costs from the non-prevailing party or parties (as determined by the court or arbitrator).

(TAC Exh. C, ¶ 10.11, emphasis added.)

Newton notes that no claim for breach of contract was alleged against him in the original or First Amended Complaint, but rather there were claims for fraud, negligent misrepresentation, and aiding and abetting breach of fiduciary duty. (Motion at p. 3.) These claims were dismissed against Newton on November 8, 2018, as the representations were alleged against all defendants collectively and not pleaded with the requisite particularity. (See 11/8/2018 Order.) Midland filed the SAC on November 29, 2018, which actually asserted a claim for breach of operating agreement against Newton. (SAC ¶¶ 59–63.) It also continued to allege claims for misrepresentation against Newton, yet the alleged misrepresentations were promises concerning the management of Hydra contained in the operating agreement. (SAC ¶ 82.) Newton thus argues that even Midland’s original and first amended complaints contained no express claim to enforce the contract, their fraud claims must be construed as attempts to enforce the contract through tort. (Motion at p. 5.) So Newton claims to be able to seek attorney fees incurred from the inception of this case.

Newton points to the case Khan v. Shim (2016) 7 Cal.App.5th 49, which held that a contractual provision allowing attorney fees to the prevailing party for “any litigation or arbitration . . . commenced between the parties to this Contract of Sale . . . concerning its terms, interpretation or enforcement or the rights and duties of any party in relation thereto,” was broad enough to encompass fraud and concealment claims made concerning promises in a contract. (Id. at pp. 60–62.) Newton also points to Share v. Casiano Bel-Air Homeowners Assn. (1989) 215 Cal.App.3d 515, which held that an attorney fee provision allowing fees “[i]n any legal or equitable proceeding for the enforcement or to restrain the violation of these restrictions or any provisions hereof,” allowed for the recovery of fees in civil contempt proceedings to enforce the provisions. (Id. at pp. 522–23.)

Midland responds that no fee recovery may be had for proceedings that occurred before the TAC was filed because before the TAC, there were no claims against Newton to enforce the operating agreement or with respect to any breach thereof. (Opposition at p. 8.) Midland relies on the case Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, in which the court held that no fees could be awarded for tort claims related to failure to disclose defects in the premises where a lease provided for fees “to enforce the terms of” or “declare rights” under the lease. (Id. at p. 708–09.)

The dispute centers on whether Midland’s fraud and breach of fiduciary duty claims against Newton can be construed as actions to enforce the operating agreement or “with respect to any breach thereof.” The authority suggests that tort actions in general are not actions to “enforce” the agreement. “A tort claim does not enforce a contract. Where a contract authorizes an award of attorney fees in an action to enforce any provision of the contract, tort claims are not covered.” (Gil v. Mansano (2004) 121 Cal.App.4th 739, 743, citations omitted.) Thus the question is whether Midland’s tort claims were brought “with respect to any beach” of the operating agreement.

The contract language favors a broader approach. The contract here, although it contains an “enforcement” prong that is ordinarily considered to exclude recovery for tort claims, is immediately followed by a phrase allowing recovery of fees for “any proceeding” brought by “any party” “with respect to any breach hereof.” The phrase “with respect to” belongs to the broad category of contractual fee language, meaning “with reference to” or “in relation to.” (RESPECT, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/with%20respect%20to, accessed April 1, 2020.) It is thus appropriate to interpret the fee provision in the operating agreement as allowing fees to parties who prevail on actions brought “in relation to” a breach of the operating agreement. And because in all of Midland’s prior pleadings, the misrepresentations alleged of Newton included the promises contained in the operating agreement, which he allegedly had no intention to fulfill, Newton may properly seek fees incurred from the inception of this action.

II. LODESTAR

“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.)

Newton’s attorneys state they have expended and are projected to expend the following hours at the following rates in prosecuting this action and the present motion:

The total amount incurred is $109,261.93, but Midland claims to only seek $45,000 in fees. (Brenner Decl. ¶ 29; Kronstadt Decl. ¶ 18.)

Midland responds that Newton’s counsel seeks to double-bill for duplicative tasks, such as 46.7 hours sought in connection with the demurrer to the SAC, which was sustained on pleading-particularity grounds previously hashed out in other demurrers, plus an additional 5.6 hours purportedly spent preparing a proposed judgment, and 43 hours of time spent on the present fee motion. (Opposition at pp. 13–14.)

The court agrees with Midland that these amounts are far in excess of what is reasonable, but the court will not adopt Midland’s proposed remedy of denying the motion in its entirety. The total fees sought in connection with the charges identified, according to the Kronstadt declaration, are $25,879.10 for the demurrer to the SAC, $3,522.40 for the proposed judgment, and $34,056.90 for the fees motion, for a total expense of $63,458.40. (Kronstadt Decl. ¶ 18.) If these fees were not simply reduced, but entirely deducted from the total hours computed by Newton, the amount remaining would be not much more than the $45,000 they now seek here: $45,803.53. (Kronstadt Decl. ¶ 18.) Although “[a] fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether,” such a rule is designed to curtail exorbitant fee demands, and Newton has already discounted their demand here. (Serrano v. Unruh (1982) 32 Cal.3d 621, 635.) The $45,000 amount sought is reasonable in light of the hours reasonably expended on the tasks necessarily performed by Newton’s counsel in this action, including two demurrers, discovery, and the present fee motion.

Accordingly, Newton’s Motion for Attorney Fees is GRANTED in the sum of $45,000.00.

  1. MOTION TO COMPEL FURTHER – PRODUCTION OF DOCUMENTS

“A party may demand that any other party produce . . . a document that is in the possession, custody, or control of the party on whom the demand is made.” (Code Civ. Proc., § 2031.010(b).) The demanding party may move for an order compelling further response to the demand if the demanding party deems that (1) a statement of compliance with the demand is incomplete, (2) a representation of inability to comply is inadequate, incomplete, or evasive, or (3) an objection in the response is without merit or too general. (Code Civ. Proc., § 2031.310(a).) “The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand,” and “[t]he motion shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc., § 2031.310(b).)

A motion to compel a further response to an inspection demand must set forth specific facts showing “good cause” justifying the discovery sought by the inspection demand. (Code Civ. Proc., § 2031.310(b)(1); Kirkland v. Superior Court (2002) 95 Cal.App.4th 92, 98.) Unless there is a legitimate privilege issue or claim of attorney work product, that burden is met simply by a fact-specific showing of relevance. (TBG Ins. Services Corp. v. Superior Court (2002) 96 Cal.App.4th 443, 444.) Once the moving party demonstrates good cause for the discovery, the burden is on the responding party to justify any objection or failure to fully respond to the inspection demand. (Coy v Superior Court (1962) 58 Cal.2d 210, 220.)

Third Floor moves for a further response to Request for Production No. 33, which asks for documents related to the settlement of a “Singer Action.” (Separate Statement.) Third Floor maintains that the Singer action occurred when Michael Singer, one of Midland’s investors, filed suit against Midland making allegations that are similar to the allegations of Third Floor’s own cross-complaint, namely that Midland diverted funds that should have been used for the Hydra investment. (Motion at p. 1.)

Midland objects to this discovery on the grounds that documents related to the settlement are inadmissible under Evidence Code § 1152, subd. (a). But Third Floor argues that the scope of discoverability is greater than the scope of admissibility, as was held in the case Volkswagen of America, Inc. v. Superior Court (2006) 139 Cal.App.4th 1481, 1488–89.

Midland in opposition points to the court’s order of May 23, 2019, with regard to a motion to compel further responses addressing discovery requests in which the present request was at issue, and in which the parties agreed to the production of the Singer settlement agreement and the court suggested the parties address further Singer-related discovery issues with the requests to an informal discovery conference. (Opposition at p. 6; Exh. B at p. 23.) Midland argues that Third Floor has failed to take the court up on this offer, and continues to push broad requests for all settlement-related documents regardless of whether they relate to Hydra or Midland. (Opposition at pp. 9–10.)

As things presently stand, Third Floor has obtained via subpoena pleadings and discovery responses related to the Singer action from Singer himself. (Motion at p. 8.) Midland has also produced the Singer settlement, but has not produced communications related to the settlement or earlier drafts of the same. (Motion at p. 8.) It is these settlement-related communications and prior settlement agreement drafts that are at issue here. (Motion at p. 11.)

The court agrees with Third Floor’s position as to the discoverability of this material. Although the prior settlement drafts and settlement communications sought may not ultimately be admissible to prove liability under Evidence Code § 1152, the bounds of admissibility and discoverability are not the same. (See Volkswagen, supra, 139 Cal.App.4th at pp. 1488–89 [“[T]he fact that evidence is not admissible does not mean that it is also not discoverable.”].) The metric for discoverability is relevance to the subject matter of the litigation and reasonably likely to lead to the discovery of admissible evidence. (Code Civ. Proc. § 2017.010.) And Third Floor has shown that the materials sought meet this criterion. The Singer action and the present one both concern alike subject matters. Moreover, Third Floor persuasively argues both that Singer himself may be an important witness to this case, and the communications regarding the settlement may be a necessary means of evaluating his testimony. (Motion at p. 12.) Although Midland contends that Singer’s independent interest in the communications is a reason to deny or limit the request, Midland has not made a showing that this interest is sufficient to override the potential probative value of the communications requested. (See Hooser v. Superior Court (2000) 84 Cal.App.4th 997, 1004 [discussing balancing of privacy interest with probative value of material].)

Accordingly, Third Floor’s Motion to Compel Further is GRANTED as to Request No. 33.

Case Number: BC690821    Hearing Date: October 28, 2019    Dept: 19

Defendants The Third Floor, Inc., Christopher Edwards, and Paul Westphal’s Motion to Strike allegations in the Third Amended Complaint is GRANTED in PART and DENIED in PART. The Motion is GRANTED as to paragraph 1, lines 10-12, and paragraph 18, lines 3-7, paragraph 71, page 17, line 28 beginning at “and would be completed”, to page 20, line 9; paragraph 73, lines 25-26; paragraph 93, line 7 starting with “and would be completed” to line 16.

The Motion is otherwise DENIED.

Moving parties to give notice.