Tentative Rulings

Case Number: ****1619    Hearing Date: March 26, 2021    Dept: 73

3/26/2021

Dept. 73

Rafael Ongkeko, Judge presiding

PATRICIA ANN EMERY v. JENNY MARCHICK (****1619)

Counsel for Plaintiff/moving party/Judgment Creditor: Michael Lieb, Andrew Peterson (Ervin Cohen & Jessup LLP)

Counsel for Defendant/Judgment Debtor/moving party: Megan Maitia (Summa LLP)

DEFENDANT’S MOTION REQUIRING PLAINTIFF TO POST AN UNDERTAKING UNDER CCP ;917.9 (filed 3/1/2021)

TENTATIVE RULING

The court orders the parties to meet and confer on a stay of enforcement of the judgment without requiring an undertaking, particularly given Plaintiff/Judgment Creditor’s representation that Plaintiff/Judgment Creditor does not intend to enforce the money judgment. On the other hand, if Plaintiff/Judgment Creditor wishes to continue to occupy the Adjustment Parcel, not accept payment of the money judgment, and enforce the money judgment by recording a lien against the Adjustment Parcel, which would cloud Defendant/Judgment Debtor’s title, the court finds that, in that instance, an undertaking would be appropriate. The court, therefore, continues the hearing on this motion to ____________.

To the extent that the parties do not agree to a stay, five court days before the hearing, Defendant/Judgment Debtor shall brief, with evidence, the amount of an undertaking based on the damages value of a lien being recorded against the Adjustment Parcel. Three court days before the hearing, Plaintiff/Judgment Creditor may file a response, addressing the amount of the undertaking only.

DISCUSSION

Plaintiff alleges that Defendant Marchick breached a Cooperation Agreement to compensate Defendant for a lot line adjustment and loss of an Adjustment Parcel which would be conveyed to Plaintiff.

On March 16, 2020, after a bench trial, the Court entered judgment in favor of Plaintiff and against Defendant on the Complaint and Cross-Complaint. Plaintiff was awarded $285,000.00 on its breach of contract claim, to be offset by any property taxes due and owing to Defendant during the pendency of the action. Plaintiff’s claim deals with the “Adjustment Parcel,” land between two adjoining properties in Los Angeles. As recorded, Defendant Marchick owns the Adjustment Parcel as part of her 3040 Berkeley Avenue property, while Plaintiff Emery has been occupying the land and using it as an extension of her backyard at 3047 Berkeley Circle since November 2012, when Defendant Marchick purchased 3040 Berkeley Avenue. Plaintiff Emery sought specific performance, which would require Marchick to cooperate in a lot line adjustment to transfer the Adjustment Parcel to Emery’s property. The court denied Emery’s request for specific performance after the bench trial, instead awarding the $285,000 money judgment. The court also entered a post-judgment award of attorneys’ fees to Emery in the amount of approximately $196,000.

Plaintiff Emery filed an appeal of the judgment—specifically the denial of specific performance. On March 1, 2021 Defendant Marchick filed a motion requiring Plaintiff to post an undertaking on the grounds that Plaintiff refuses to vacate the Adjustment Parcel, but at the same time refuses to accept Marchick’s payment of the money judgment. On March 15, 2021 Plaintiff filed an opposition. On March 19, 2021 Defendant filed a reply.

ANALYSIS

A trial court may require an undertaking to stay enforcement of a judgment if “[a]ppellant was found to possess money or other property belonging to respondent.” (Cal. Civ. Proc. Code ; 917.9(a)(1)). If the court does so, the “undertaking shall be in a sum fixed by the court and shall be in an amount sufficient to cover all damages which the respondent may sustain by reason of the stay in the enforcement of the judgment or order.” (Cal. Civ. Proc. Code ; 917.9(b)).

Defendant/Judgment Debtor argues that the court should order that Plaintiff/Judgment Creditor pay an undertaking to stay enforcement of her own judgment. Defendant/Judgment Debtor argues that:

· Plaintiff/Judgment Creditor has refused to accept any of the offers from Defendant/Judgment Debtor to pay the money judgment voluntarily because Plaintiff/Judgment Creditor does not want to vacate the Adjustment Parcel. Defendant/Judgment Creditor first offered to pay the judgment on March 24, 2020.

· Even though Plaintiff/Judgment Creditor has refused to vacate the Adjustment Parcel, enforcement of the judgment is not stayed.

· Plaintiff/Judgment Creditor has expressed an intention to enforce the attorney fees order. As a result, Defendant/Judgment Debtor deposited $295,000 with the court to stay enforcement of the attorney fees order (February 10, 2021 Notice of Cash Deposit in Lieu of Appeal Bond). In so doing, Plaintiff filed an abstract of judgment with the intention of putting a lien on Defendant/Judgment Debtor’s property.

· As a result of Plaintiff refusing to accept the money judgment and vacate the Adjustment Parcel, Defendant/Judgment Debtor is unable to sell her property, which she is desperate to do, due to the encumbrance/litigation over the Adjustment Parcel.

Plaintiff/Judgment Creditor argues that section 917.9 does not apply because the court did not order Plaintiff to deliver to Defendant any money or property in Plaintiff’s possession. Further, Plaintiff/Judgment Creditor argues that the purpose of the section prevents parties from enforcing certain types of judgments. Here, Defendant/Judgment has no judgment to enforce against Plaintiff/Judgment Creditor. In short, Defendant/Judgment Debtor is asking Plaintiff/Judgment Creditor to pay an undertaking to stay enforcement of Plaintiff/Judgment Creditor’s own judgment. Finally, Plaintiff/Judgment Creditor argues that nothing compels Plaintiff/Judgment Creditor to enforce a judgment she has chosen to appeal. Plaintiff/Judgment Creditor has not taken any steps to enforce the judgment, so Defendant/Judgment Debtor is not facing the peril against which the undertaking statute protect.

The court does not read section 917.9 so narrowly. The language of the statute uses the term “appellant” and not “judgment creditor.” Further, while the court did not expressly hold that Defendant/Judgment Debtor owned the Adjustment Parcel, the effect of the Statement of Decision would be that “the parameters of the 3040 Berkeley Avenue property will simply remain as already recorded,” i.e., Defendant/Judgment Debtor holds title to that property. (Statement of Decision at p. 11). Further, the effect of the Statement of Decision/Judgment was that specific performance was inappropriate because it would not resolve the issues of finality and certainty given the unknown contingencies of the lot line adjustment process and given that the court could not indefinitely retain jurisdiction to resolve future disputes regarding a decree of specific performance. (Statement of Decision at pp. 7-9). In lieu of specific performance, the court rewarded Plaintiff/Judgment Creditor a money judgment, which reflected the diminution of value of Plaintiff/Judgment Creditor’s 3047 Berkeley Circle property without the square footage of the Adjustment Parcel. (Id. at 10). In other words, Plaintiff/Judgment Creditor received money for the Adjustment Parcel to remain as recorded—in Defendant/Judgment Debtor’s name. Under these facts, the court finds that the language of CCP 917.9—“[a]ppellant was found to possess money or other property belonging to respondent” applies here.

However, the court finds that Defendant/Judgment Debtor has not provided the court with sufficient evidence from which to set a fixed value for the undertaking. Defendant/Judgment Debtor requests a $50,000 undertaking, which represents interest that has accrued because Plaintiff/Judgment Creditor has not accepted the voluntary payment of the monetary judgment. The court agrees with Plaintiff/Judgment Creditor that the court cannot require Plaintiff/Judgment Creditor to do so and moot her appeal. Rather, Defendant/Judgment Debtor has other recourse under the law. An offer of payment stops the running of interest on the obligation. (Cal. Civ. Code, ; 1504.)  A valid tender, made by a defendant pending plaintiff's appeal from the judgment, of the full amount of the judgment and costs to date of tender, stops interest from that moment. (Ferrea v. Tubbs (1899) 125 Cal. 687, 689).

To the extent that Plaintiff/Judgment Creditor records a lien against the Adjustment Parcel that prevents Defendant/Judgment Debtor from selling her property at full market value, the court finds that, in that instance, the reason for the undertaking and the damages that Defendant/Judgment Debtor may suffer are more prevalent. Plaintiff/Judgment Creditor has represented that Plaintiff/Judgment Creditor has not taken any steps to enforce the money judgment—by recording the abstract of judgment or otherwise. That does not mean that Plaintiff/Judgment Creditor may not do so in the future.

The court orders the parties to meet and confer on a stay of enforcement without requiring an undertaking, particularly given Plaintiff/Judgment Creditor’s representation that Plaintiff/Judgment Creditor does not intend to enforce the money judgment. On the other hand, if Plaintiff/Judgment Creditor wishes to continue to occupy the Adjustment Parcel, not accept payment of the money judgment, and enforce the money judgment by recording a lien against the Adjustment Parcel, which would cloud Defendant/Judgment Debtor’s title, the court finds that, in that instance, an undertaking would be appropriate. The court, therefore, continues the hearing on this motion to ____________.

To the extent that the parties do not agree to a global stay, five court days before the hearing, Defendant/Judgment Debtor is to brief, with evidence, the amount of an undertaking based on the damages value of a lien being recorded on the Adjustment Parcel. Three court days before the hearing, Plaintiff/Judgment Creditor may respond, addressing the amount of the undertaking only.

As for Defendant/Judgment Debtor’s remaining arguments, the court denies those requests. First, the court agrees with Plaintiff/Judgment Creditor that the court lacks jurisdiction to order Plaintiff/Judgment Creditor to accept voluntary payment of the money judgment and immediately vacate the Adjustment Parcel. This is new relief that was not granted as part of the judgment, which is on appeal. As for staying enforcement of the attorneys’ fee award without a bond, Plaintiff/Judgment Creditor is correct that the bulk of authority holds that enforcement of an attorneys’ fee award is not automatically stayed and requires a bond.

Unless waived, notice of ruling by moving party.

Case Number: ****1619    Hearing Date: July 02, 2020    Dept: 76

STATEMENT OF FACTS

Plaintiff alleges that Defendant Marchick breached a Cooperation Agreement to compensate Defendant for a lot line adjustment and loss of an Adjustment Parcel which would be conveyed to Plaintiff.

On March 16, 2020, after a bench trial, the Court entered judgment in favor of Plaintiff and against Defendant on the Complaint and Cross-Complaint. Plaintiff was awarded $285,000.00 on its breach of contract claim, to be offset by any property taxes due and owing to Defendant during the pendency of the action. Plaintiff now moves for an award of attorneys’ fees in the amount of $204,386.50 against Defendant Jenny Marchick.

TENTATIVE RULING

Plaintiff is ordered to submit a revised billing matrix which removes all requests for attorneys’ fees incurred in litigating matters involving Defendants Bank of America and Nationstar Mortgage, LLC (Doe 1), and apportions such requests to include only that time fairly allocable to litigating against Defendant Marchick.

The hearing on the motion for attorneys’ fees will be continued to a date to be determined.  Counsel should appear on July 2, 2020 (preferably by telephonic appearance) to be heard as to an appropriate hearing date. Plaintiff’s supplemental brief will be due 14 days prior to the hearing date. Defendant’s supplemental brief will be due 7 days prior to the hearing date.

ANALYSIS

Motion For Attorneys’ Fees

Plaintiff moves for an award of attorneys’ fees in the amount of $204,386.50 against Defendant Jenny Marchick

“[A]s a general rule, attorney fees are not recoverable as costs unless they are authorized by statute or agreement.” (People ex rel. Dept. of Corporations v. Speedee Oil Change Systems, Inc. (2007) 147 Cal. App. 4th 424, 429.)

Civil Code ; 1717 provides in relevant part:

(a) In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.

Where a contract provides for attorney’s fees, as set forth above, that provision shall be construed as applying to the entire contract, unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract.

Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit.

. . .

(b)

(1) The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.

. . .

(Civ. Code, ; 1717(a) & (b).)

Pursuant to the judgment entered on March 16, 2020, the Court awarded Plaintiff $285,000.00 against Defendant as damages for breach of the Cooperation Agreement, while Defendant recovered nothing on her Cross-Complaint. A copy of the Cooperation Agreement is attached to the First Amended Complaint as Exh. 1. Pursuant to Paragraph (i) of the Cooperation Agreement, “[i]n the event a party is required to enforce any of the rights granted under this Agreement, the other party shall be entitled to recover from the breaching party the reasonable attorneys’ fees, costs and expenses incurred as a result of the breach.”

Defendant argues that pursuant to ¶ 26A of the Purchase Agreement underlying the property sale in this case, Plaintiff was required to mediate before filing a lawsuit.

Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. ... If, for any dispute or claim to which this paragraph applies, any party [] commences an action without first attempting to resolve the matter through mediation . . . then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.

(See Marchick Decl., Exh. A at p. 11, ¶ 26A.)

Defendant argues that Plaintiff recognized that the Purchase Agreement governs the Cooperation Agreement and this litigation because she characterized the signing of the Cooperation Agreement as a “condition precedent” to the Purchase Agreement. (Marchick Decl., Exh. B, p. 16.) The Court determined in the Statement of Decision that the Cooperation Agreement was “incorporated into” the Purchase Agreement, and execution of the Cooperation Agreement was a “condition precedent” to the sale. (Maita Decl., Exh. M, p. 61.)

Defendant argues that Plaintiff never sought mediation before filing this lawsuit. (Marchick Decl., ¶ 15; McShane Decl., ¶ 9; Pugh Decl., ¶ 4.) Thus, Defendant argues, Plaintiff is not entitled to recover attorney fees pursuant to ¶ 26A of the Purchase Agreement.

The Court does not find Defendant’s argument to be persuasive. The Cooperation Agreement addressed a specific transaction—the Lot Line Adjustment—and imposed upon Defendant Marchick, as Buyer, an obligation to cooperate in good faith by signing any and all documents required by the City of Los Angeles related to the granting of the Lot Line Adjustment. (See Cooperation Agreement, Exh. 1 to 1AC.) The Purchase Agreement (Declaration of Jenny Marchick, Exh. A) does not impose this obligation upon Defendant Marchick, as Buyer.

Plaintiff’s breach of contract cause of action in the 1AC sought to enforce Defendant’s obligations under the Cooperation Agreement, not the Purchase Agreement. To construe the boilerplate dispute resolution clause at ¶ 26 of the Purchase Agreement as negating the specifically negotiated attorney’s fees clause at ¶ (i) of the Cooperation Agreement would be contrary to rules of contract construction. Even if the Cooperation Agreement were incorporated into the Purchase Agreement and provided that Defendant’s cooperation with a lot line adjustment was a condition precedent to the sale of the property (Statement of Decision, Page 2:7-11), the obligations imposed by the Cooperation Agreement are conceptually distinct from the obligations imposed by the Purchase Agreement. Applying, as written, the attorney fees clause at ¶ (i) of the Cooperation Agreement to Plaintiff’s claim in this lawsuit to enforce the obligations thereunder, rather than the dispute resolution clause at ¶ 26 of the Purchase Agreement, gives effect to the attorney’s fees clause in the Cooperation Agreement consistent with the distinct purpose of that agreement. “Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract.” (Civ. Code, ; 1652.)

Defendant also argues that Plaintiff is not the “prevailing party” for purposes of Civil Code ; 1717 because she failed to achieve her litigation objections, which was specific performance resulting in the Adjustment Parcel. This argument is not persuasive, although the Court did not ward Plaintiff specific performance, the Court did award Plaintiff $285,000 to be offset against any property taxes due and owing to Defendant Marchick during the pendency of this action. As such, Plaintiff is “the party who recovered a greater relief in the action on the contract,” and is deemed to be the party prevailing on the contract, entitled to recover reasonable attorneys’ fees. (Civ. Code, ; 1717(b)(1).)

The determination of reasonable amount of attorney fees is within the sound discretion of trial courts. (PLCM Group v. Drexler (2000) 22 Cal.4^th 1084, 1095; Akins v. Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1134.) “The determination of what constitutes a reasonable fee generally ‘begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate….’” “[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award….” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4^th 140, 154.) In setting the hourly rate for an attorney fees award, courts are entitled to consider the rate of “‘fees customarily charged by that attorney and others in the community for similar work.’" (Bihun v. AT&T Information Systems, Inc. (1993) 13 Cal.App.4th 976, 997 (affirming rate of $450 per hour), overruled on other grounds by Lakin v. Watkins Associated Indus. (1993) 6 Cal.4th 644, 664.) The burden is on the party seeking attorney fees to prove reasonableness of the fees. (Center for Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 615.)

The Court has broad discretion in determining the amount of a reasonable attorney's fee award which will not be overturned absent a “manifest abuse of discretion, a prejudicial error of law, or necessary findings not supported by substantial evidence.” (Bernardi v. County of Monterey (2008) 167 Cal.App.4th 1379, 1393-94.) Generally, though, “[t]he law is clear . . . that an award of attorney fees may be based on counsel's declarations, without production of detailed time records. (Citations omitted.)” (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1375.)

The Court finds the hourly billing rates ranging from $400 to $560 per hour to be reasonable for Plaintiff’s counsel. (See Declaration of Michael C. Lieb, ¶¶ 2 – 9. The Court notes that employing six different attorneys on this case appears to be reasonable, given the case’s litigation history beginning in October 2017, which included a bench trial in 2019.

However, the Court also notes that there were several defendants, and Plaintiff presents no contractual basis for recovery of attorney’s fees against them. “Generally speaking, each party to a lawsuit must pay his or her own attorney's fees unless a statute or contract provides otherwise.” (Hart v. Clear Recon Corp. (2018) 27 Cal.App.5th 322, 326.)

In this regard, Plaintiff must apportion out from the fee request time spent litigating as to defendants against whom there is no basis to recover attorneys’ fees, i.e., Defendants Bank of America and Nationstar Mortgage, LLC (Doe 1). It does not appear that Plaintiff made such an apportionment. For instance, Defendant Bank of America, N.A. filed a motion for judgment on the pleadings on December 27, 2018, which was set for a January 22, 2019 hearing. Plaintiff’s counsel includes in its billing records time spent on litigating this motion. (See Declaration of Michael C. Lieb, Exh. 1, 1/3/2019, 1/4/2019, 1/8/2019, 1/15/2019, 1/16/2019, 1/22/2019 entries.)

Accordingly, Plaintiff is ordered to submit a revised billing matrix which removes all requests for attorneys’ fees incurred in litigating matters involving Defendants Bank of America and Nationstar Mortgage, LLC (Doe 1), and apportions such requests to include only that time fairly allocable to litigating against Defendant Marchick.

The hearing on the motion for attorneys’ fees is CONTINUED.  Plaintiff’s supplemental brief is due 14 days prior to the hearing date. Defendant’s supplemental brief is due 7 days prior to the hearing date.