This case was last updated from Los Angeles County Superior Courts on 10/21/2022 at 20:45:47 (UTC).

SKYLIGHT ADVISORS LLC VS ZEPHYR INVESTMENT COMPANY LLC

Case Summary

On 10/25/2017 SKYLIGHT ADVISORS LLC filed a Contract - Other Contract lawsuit against ZEPHYR INVESTMENT COMPANY LLC. This case was filed in Los Angeles County Superior Courts, Pasadena Courthouse located in Los Angeles, California. The Judges overseeing this case are C. EDWARD SIMPSON, DAVID A. ROSEN, LAURA A. MATZ, TIMOTHY PATRICK DILLON, MARGARET L. OLDENDORF, CURTIS A. KIN and RALPH C. HOFER. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****7515

  • Filing Date:

    10/25/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

C. EDWARD SIMPSON

DAVID A. ROSEN

LAURA A. MATZ

TIMOTHY PATRICK DILLON

MARGARET L. OLDENDORF

CURTIS A. KIN

RALPH C. HOFER

 

Party Details

Plaintiffs, Cross Defendants and Appellants

SKYLIGHT ADVISORS LLC

SKYLIGHT ADVISORS LLC A DELAWARE LIMITED LIABILITY COMPANY

Appellants and Cross Defendants

MOGHIM KAZEM

SKYLIGHT ADVISORS LLC A DELAWARE LIMITED LIABILITY COMPANY

Defendants and Cross Plaintiffs

ZEPHYR INVESTMENT COMPANY LLC

BERENY JOSHUA

ZEPHYR INVESTMENT COMPANY LLC A CALIFORNIA LIMITED LIABILITY COMPANY

LA DEPOSITIONS INC

Respondent, Defendant and Cross Plaintiff

ZEPHYR INVESTMENT COMPANY LLC A CALIFORNIA LIMITED LIABILITY COMPANY

Cross Defendants, Defendants and Appellants

BERENY JOSHUA

MAGHIM KAZEM

URBINO CONSTRUCTION

MOGHIM KAZEM

SKYLIGHT ADVISORS LLC A DELAWARE LIMITED LIABILITY COMPANY

STARS ENERGY CORPORATION ROOFING AND SOLAR SYSTEMS A CALIFORNIA CORPORATION

Not Classified By Court

TTS STUDIOS INC. A CALIFORNIA CORPORATION

Attorney/Law Firm Details

Plaintiff Attorney

LU ROBERT K.

Defendant Attorney

GREENBERG TRAURIG

Cross Plaintiff Attorneys

LU ROBERT K

ROWEN ERIC VICTOR

NEIGHBORS MICHAEL SLADE

Cross Defendant Attorney

LESOWITZ SCOTT MICHAEL

Not Classified By Court Attorney

KIM OLIVIA

 

Court Documents

Appeal - Notice of Fees Due for Clerk's Transcript on Appeal - APPEAL - NOTICE OF FEES DUE FOR CLERK'S TRANSCRIPT ON APPEAL N.O.A. 1/14/22; "U1"; B318080

9/6/2022: Appeal - Notice of Fees Due for Clerk's Transcript on Appeal - APPEAL - NOTICE OF FEES DUE FOR CLERK'S TRANSCRIPT ON APPEAL N.O.A. 1/14/22; "U1"; B318080

Notice of Case Reassignment and Order for Plaintiff to Give Notice

9/22/2022: Notice of Case Reassignment and Order for Plaintiff to Give Notice

Appeal - Notice of Default Issued - APPEAL - NOTICE OF DEFAULT ISSUED "U1"

10/4/2022: Appeal - Notice of Default Issued - APPEAL - NOTICE OF DEFAULT ISSUED "U1"

Appeal - Notice Court Reporter to Prepare Appeal Transcript - APPEAL - NOTICE COURT REPORTER TO PREPARE APPEAL TRANSCRIPT "U1"

4/27/2022: Appeal - Notice Court Reporter to Prepare Appeal Transcript - APPEAL - NOTICE COURT REPORTER TO PREPARE APPEAL TRANSCRIPT "U1"

Appeal - Notice Court Reporter to Prepare Appeal Transcript - APPEAL - NOTICE COURT REPORTER TO PREPARE APPEAL TRANSCRIPT "U1"

4/27/2022: Appeal - Notice Court Reporter to Prepare Appeal Transcript - APPEAL - NOTICE COURT REPORTER TO PREPARE APPEAL TRANSCRIPT "U1"

Appeal - Notice of Default Issued - APPEAL - NOTICE OF DEFAULT ISSUED NOA: 01/14/22 B318080

3/8/2022: Appeal - Notice of Default Issued - APPEAL - NOTICE OF DEFAULT ISSUED NOA: 01/14/22 B318080

Appeal - Ntc Designating Record of Appeal APP-003/010/103 - APPEAL - NTC DESIGNATING RECORD OF APPEAL APP-003/010/103 "U1"

1/14/2022: Appeal - Ntc Designating Record of Appeal APP-003/010/103 - APPEAL - NTC DESIGNATING RECORD OF APPEAL APP-003/010/103 "U1"

Appeal - Notice of Appeal/Cross Appeal Filed - APPEAL - NOTICE OF APPEAL/CROSS APPEAL FILED "U1"

1/14/2022: Appeal - Notice of Appeal/Cross Appeal Filed - APPEAL - NOTICE OF APPEAL/CROSS APPEAL FILED "U1"

Proof of Service (not Summons and Complaint)

1/14/2022: Proof of Service (not Summons and Complaint)

Appeal - Notice of Filing of Notice of Appeal - APPEAL - NOTICE OF FILING OF NOTICE OF APPEAL "U1"

1/19/2022: Appeal - Notice of Filing of Notice of Appeal - APPEAL - NOTICE OF FILING OF NOTICE OF APPEAL "U1"

Stipulation and Order - STIPULATION AND ORDER STIPULATION AND ORDER TO CONTINUE HEARINGS

7/9/2021: Stipulation and Order - STIPULATION AND ORDER STIPULATION AND ORDER TO CONTINUE HEARINGS

Request for Judicial Notice

8/16/2021: Request for Judicial Notice

Opposition - OPPOSITION OPPOSITION TO MOTION FOR SANCTIONS

8/16/2021: Opposition - OPPOSITION OPPOSITION TO MOTION FOR SANCTIONS

Opposition - OPPOSITION OPPOSITION TO MOTION TO TAX COSTS

8/16/2021: Opposition - OPPOSITION OPPOSITION TO MOTION TO TAX COSTS

Declaration - DECLARATION OF LESOWITZ IN SUPPORT OF NEW MOTION TO TAX COSTS AND MOTION FOR SANCTIONS

8/20/2021: Declaration - DECLARATION OF LESOWITZ IN SUPPORT OF NEW MOTION TO TAX COSTS AND MOTION FOR SANCTIONS

Declaration - DECLARATION OF MOGHIM IN SUPPORT OF NEW MOTION TO TAX COST AND MOTION FOR SANCTIONS

8/20/2021: Declaration - DECLARATION OF MOGHIM IN SUPPORT OF NEW MOTION TO TAX COST AND MOTION FOR SANCTIONS

Reply - REPLY CONSOLIDATED REPLY IN SUPPORT OF NEW MOTION TO TAX COSTS AND MOTION FOR SANCTIONS

8/20/2021: Reply - REPLY CONSOLIDATED REPLY IN SUPPORT OF NEW MOTION TO TAX COSTS AND MOTION FOR SANCTIONS

Minute Order - MINUTE ORDER (HEARING ON MOTION FOR SANCTIONS; HEARING ON MOTION TO TAX COSTS)

8/27/2021: Minute Order - MINUTE ORDER (HEARING ON MOTION FOR SANCTIONS; HEARING ON MOTION TO TAX COSTS)

306 More Documents Available

 

Docket Entries

  • 10/04/2022
  • DocketAppeal - Notice of Default Issued ("U1"); Filed by Clerk

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  • 09/22/2022
  • DocketNotice of Case Reassignment and Order for Plaintiff to Give Notice; Filed by Clerk

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  • 09/06/2022
  • DocketAppeal - Notice of Fees Due for Clerk's Transcript on Appeal (N.O.A. 1/14/22; "U1"; B318080); Filed by Clerk

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  • 04/27/2022
  • DocketAppeal - Notice Court Reporter to Prepare Appeal Transcript ("U1"); Filed by Clerk

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  • 03/08/2022
  • DocketAppeal - Notice of Default Issued (NOA: 01/14/22 B318080); Filed by Clerk

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  • 01/19/2022
  • DocketAppeal - Notice of Filing of Notice of Appeal ("U1"); Filed by Clerk

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  • 01/14/2022
  • DocketProof of Service (not Summons and Complaint); Filed by Skylight Advisors LLC, a Delaware limited liability company (Appellant)

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  • 01/14/2022
  • DocketAppeal - Notice of Appeal/Cross Appeal Filed ("U1"); Filed by Skylight Advisors LLC, a Delaware limited liability company (Appellant)

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  • 01/14/2022
  • DocketAppeal - Ntc Designating Record of Appeal APP-003/010/103 ("U1"); Filed by Skylight Advisors LLC, a Delaware limited liability company (Appellant)

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  • 11/30/2021
  • DocketAcknowledgment of Satisfaction of Judgment; Filed by Zephyr Investment Company LLC, a California limited liability company (Cross-Complainant)

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424 More Docket Entries
  • 11/09/2017
  • DocketRequest (FOR COPY OF COMPLAINT- 30 PAGES ); Filed by Interested Party

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  • 11/09/2017
  • DocketRequest; Filed by Interested Party

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  • 11/07/2017
  • DocketSummons Filed; Filed by Attorney for Plaintiff

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  • 11/07/2017
  • DocketSummons; Filed by Zephyr Investment Company LLC, a California limited liability company (Defendant)

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  • 10/25/2017
  • DocketComplaint Fld - No Summons Issued

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  • 10/25/2017
  • DocketComplaint ( (1st)); Filed by Skylight Advisors LLC, a Delaware limited liability company (Plaintiff)

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  • 10/25/2017
  • DocketNotice (of case assignment); Filed by Zephyr Investment Company LLC, a California limited liability company (Defendant)

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  • 10/25/2017
  • DocketNotice of Case Management Conference

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  • 10/25/2017
  • DocketNotice (of Order to Show Cause re: failure to comply with trial court delay reduction act); Filed by Zephyr Investment Company LLC, a California limited liability company (Defendant)

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  • 10/25/2017
  • DocketComplaint; Filed by Zephyr Investment Company LLC, a California limited liability company (Defendant)

    [+] Read More [-] Read Less

Tentative Rulings

b'

Case Number: ****7515 Hearing Date: November 16, 2021 Dept: E

Hearing Date: 11/16/2021 – 8:30am Case No. ****7515 Case Name: SKYLIGHT ADVISORS LLC v. ZEPHYR INVESTMENT COMPANY LLC

TENTATIVE RULING ON MOTION TO TAX COSTS

Moving Party: Plaintiffs/Cross-Defendants, Skylight Advisors LLC and Kazem Moghim (“Skylight” or “Debtors”) Responding Party: Defendant/Cross-Complainant, Zephyr Investment Company LLC (“Zephyr” or “Creditors”)

RELIEF REQUESTED

· Grant the motion to tax costs and not award Zephyr any additional attorneys’ fees

BACKGROUND

In the instant cross-complaint, the Court found in favor of Zephyr and judgment was entered on February 10, 2020, awarding Zephyr damages of $142,234.50. On November 6, 2020, an amended judgment awarding Zephyr attorney fees of $553,539.85 and costs of $9,637.52 was entered. On November 12, 2020, Zephyr filed a memorandum of costs after judgment claiming $48,366.15 in attorney fees under CCP ;685.040. On January 8, 2021, the Court granted Skylight’s motion to tax costs without prejudice to Zephyr seeking the costs asserted in the November 12, 2020, memorandum of costs after judgment at a later date within the time allowed under CCP ;685.070(b).

On April 14, 2021, Zephyr filed a memorandum of costs after judgment claiming $192,914.92 which consisted of $32,938.50 for hourly billing, $29,923.65 for a contingency fee already paid, and $130,052.77 for contingency fees that would allegedly be owed to Wallin & Russell LLP if Skylight paid 100% of the Court’s prior attorneys’ fees award.

On August 27, 2021, this Court heard Skylight’s motion to tax costs and granted the motion to tax costs but without prejudice to Zephyr and continued the hearings on the motion to tax costs and motion for sanctions scheduled for 08/27/2021 to 10/07/2021so Zephyr could submit an amended brief and costs bill and Skylight to file a responsive brief.

Zephyr filed an amended memorandum of costs bill on 09/17/2021 for $165,725.99. In its amended brief, Zephyr arrived at $165,725.99 in attorneys’ fees as follows:

[A] – Wallin & Russell billed 106 hours in furtherance of enforcement of the judgment. 106 hours resulted in hourly fees of $18,322.00.

[B] – When Skylight satisfied the damages portion of the judgment by paying $149,618.26 to Zephyr on August 18, 2020, Zephyr had to pay Wallin & Russell its 20% contingency for the amount collected. Therefore, Zephyr paid Wallin & Russell $29,923.65 because 20% of $149,618.26 is $29,923.65.

[C] – Zephyr was awarded $553,539.85 in attorneys’ fees and costs of $9,637.52. Zephyr has accrued post-judgment interest of $24,224.35 as per memo of costs of 4/14/2021. Therefore, when adding $553,539.85 plus $9,637.52 plus $25,224.35, Zephyr is still owed $587,401.72. If Wallin & Russell were to collect the amount of $587,401.72, Wallin & Russell would be entitled to 20% of $587,401.72. Twenty percent of $587,401.72 is $117,480.34.

Therefore, in its supplemental brief Wallin & Russell argues it was owed $165,725.99. [$18,322.00 based on 106 hours of work, plus $29,923.65 in contingency fees already paid, plus $117,480.34 in potential future contingency fees for a total of $165,725.99.]

In Zephyr’s supplemental brief, Zephyr argued that if the Court were not to award the $165,725.99 that Zephyr believes it is owed, Zephyr should be owed at least $99,865.00 in the alternative. Zephyr arrived at this by using the lodestar method and applying a multiplier of two to account for the considerable contingency risk, the complexity of the matter, and the likely long delay between performance of the work and receipt of the contingency fee. Zephyr arrived at the alternative request of $99,865.00 in the following manner:

106 hours of work was performed. Michael Wallin’s reasonable rate would be $550/hr for 66.6 hours, Justin Wolf’s reasonable rate would be $350/hr for 35.5 hours, and Michael Jarzyna’s reasonable rate would be $225/hr for 3.9 hours. Totaling these rates and hours, Wallin & Russell arrived at 106 hours of work for $49,932.50. Wallin & Russell applied a multiplier of two to arrive at $99,865.00 in fees in the alternative if the Court were not to award $165,725.99.

In Skylight’s supplemental Reply, Skylight argued that $165,725.99 in fees was unreasonable. Skylight argued that Zephyr only billed 106 hours’ worth of time and by requesting $165,725.99 in attorneys’ fees, Zephyr would be compensated at $1,563.00 per hour of attorney time. Skylight argued Wallin & Russell only billed $18,322.00 for the 106 hours of attorney time therefore by requesting $165,725.99, the 20% contingency fees requested by Zephyr in collecting the judgment is unreasonable.

On 10/07/2021, this court granted in part Skylight’s motion to tax costs. The Court awarded Zephyr additional attorneys’ fees and costs incurred in enforcing the judgment of $29,923.65 plus $9,161.00 for a total of $39,084.65 without prejudice.

On 10/18/2021, Zephyr filed an ex parte application for reconsideration of the Court’s 10/7/2021 order on the motion to tax costs. Zephyr filed this application for reconsideration because in the 10/7/2021 Minute Order, the Court noted it was not willing to award Zephyr the 20% contingency fee for the $553,539.85 in attorneys’ fees and $9,637.52 in costs Zephyr was already awarded. However, on 10/8/2021, Skylight paid Zephyr $654,105.20. Zephyr now wants its 20% contingency fee based on the reasonable attorneys’ fees allowable under CCP ;685.040. However, since Skylight paid the remainder of the judgment on 10/8/2021, Zephyr faced a problem because CCP ;685.070 allows Zephyr to file a memorandum of costs before the judgment is fully satisfied, and since Skylight now had satisfied the judgment, Zephyr could not get the remainder of its attorneys’ fees. This Court granted Zephyr’s ex parte application for reconsideration of the Court’s 10/7/2021 order on the motion to tax costs on 10/20/2021.

The issue before the Court in the instant hearing is whether Zephyr can collect the 20% contingency fee from the judgment that Skylight paid on 10/8/2021. Zephyr is seeking an additional $117,480.34 – the same amount from its 09/17/2021 amended memorandum of costs bill based on 20% of $587,401.72 [ the $587,401.72 was comprised of $553,539.85 in attorneys’ fees, plus $9,637.52 in costs, plus $24,224.35 in accrued post-judgment interest].

LEGAL STANDARD CCP ;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.”

ANALYSIS Zephyr is seeking an additional $117,480.34 based on the 20% contingency fee Zephyr has with its counsel Wallin & Russell since Skylight paid $654,105.20 on 10/8/2021.

Zephyr argues that its request of $117,480.34 is reasonable. Zephyr’s counsel Wallin & Russell argues that even though it only charged $18,322.00 for 106 hours of work, it billed at this low hourly rate because of the contingency fee that it had with Zephyr. Wallin & Russell stated they only charged $125-$195 per hour which is below market rates because of the 20% contingency fee which considers the complexity of the issues involved, the substantial expenditure of time in the matter, and the many months or even years likely to pass before the judgment is fully collected, if ever. Wallin & Russell stated that attorneys experienced in judgment enforcement often charge a contingency percentage of 33% - 50%.

In Skylight’s motion to tax costs based on the April 14, 2021, memorandum of costs, Skylight cited case law that stated contingency fees may not reflect the reasonable value of counsel’s services, and case law stating that the lodestar method is the default method to calculate attorneys’ fees under any statute unless the statute specifically states that this method is not to be used. (Skylight Mot. Tax Costs filed 4/26/2021 p.6 citing Glaviano v. Sacramento City Unified School Dist. (2018) 22 Cal.App.5th 744, 753.)

In Zephyr’s supplemental brief to its April 14, 2021, memorandum of costs, when arguing in the alternative for at least $99,865.00, Zephyr cited case law stating it is error for the court to refuse to consider contingent risk as a factor in deciding whether to apply a multiplier when using the lodestar method. (Zephyr Supp. Brief filed 9/17/2021 citing Greene v. Dillingham Construction N.A. Inc. (2002) 101 Cal.App.4th 421.)

TENTATIVE RULING The Court GRANTS Skylight’s motion to tax costs in part. This Court reasserts its ruling of October 7, 2021, awarding Zephyr attorney’s fees realized in enforcing the judgment of $39,084.65 against Skylight. Further, while it is difficult to determine the amount of time Zephyr’s attorneys of record spent on enforcing the attorney’s fees and costs portion of the judgment, which Skylight paid on 10/8/21, the Court now awards Zephyr an additional $16,500.00, against Skylight for reasonable fees for such enforcement. Skylight’s pending Motion to Tax is otherwise granted.

CCP ;685.040 allows Zephyr to recover reasonable and necessary attorneys’ fees in enforcing the judgment. This Court finds that Zephyr has already been awarded the bulk of its reasonable and necessary fees and costs.

“As the Court of Appeal herein observed, the fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. ‘California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.’” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095 citing Margolin v. Regional Planning Com. (1982 134 Cal.App.3d 999, 1004-1005.) “The court would not be bound to award the full amount of a contingency fee, simply because a party was actually liable for that amount under a contingency agreement.” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1176 citing Vella v. Hudgins (1984) 151 Cal.App.3d 515, 520.)

Here, in the Court’s 10/7/2021 Minute Order, the Court awarded $39,084.65 to Zephyr - $29,923.65 plus $9,161.00. This $39,084.65 was based on awarding $29,923.65 from the 20% contingency fee when Skylight satisfied the damages portion of the judgment and paid $149,618.26 because 20% of $149,618.26 is $29,923.65. Further, $9,161.00 was awarded based on the 106 hours of work for fees totaling $18,322.00. This means that Zephyr was awarded half of its 106 hours in hourly attorneys’ fees, plus additional contingent fees.

Even though Zephyr argues that its 20% contingency fee is to compensate for its low hourly fee of $125- 195 per hour and the risk of not collecting and the time passed if it ever collects the full amount of the judgment, this Court finds that Zephyr has been adequately compensated for that risk.

Based on 53 reasonable hours of work and the prior 20% contingency fee already awarded of $29,923.65, Zephyr has been awarded a total of $39,084.65 for 53 hours of attorney work. When dividing $39,084.65 by 53, this means Zephyr has been compensated for 53 hours at a rate of $737.45 per hour.

When Zephyr agued in the alternative for $99,865.00 if the Court were to apply the lodestar method, this was based on $49,932.50 in fees with a multiplier of 2. However, for the sake of argument, since this Court only found half the hourly request by Zephyr reasonable, this would mean that Zephyr’s prior argument of $49,932.50 being reasonable would likely be closer to $24,966.25. If the Court were to assume Zephyr’s multiplier of 2 to be appropriate, then $49,932.50 would be closer to the reasonable hourly request in the alternative as opposed to $99,865.00. Therefore, by awarding $39,084.65, the court wouldn’t be applying a multiplier of 2 to $24,966.25, but it would at least be applying a multiplier of 1.56 to arrive at $39.084.65.

When Zephyr agued in the alternative for $49,932.50 before the multiplier of 2, this was based on Michel Wallin charging $550/hr for 66.6 hours, Justin Wolf charging $350/hr for 35.5 hours, and Michael Jarzyna $225/hr for 3.9 hours.

As it stands now, since the Court only found 53 hours of attorney time in enforcing the judgment to be reasonable, and the Court already awarded a 20% contingency fee based on the damages portion, Wallin & Russell is being compensated at a rate of $737.45 per hour. If the Court were to add an additional $117,480.34 to the judgment, this would mean that Wallin & Russell would be compensated at a rate of $2,954.01 per hour.

Wallin & Russell argued in its prior supplemental brief that even though it only charged $125-195/hr, Mr. Wallin’s reasonable hourly rate should be no less than $550 per hour. As it stands with Wallin & Russell’s roughly $737.45/hr the Court finds this adequate to compensate for any multiplier/contingent risk since $737.45/hr is more than $550/hr and Zephyr collected the remainder of its attorney’s fees on 10/8/2021 which is a little less than a year since the amended judgment awarding Zephyr attorney fees and costs was awarded on November 6, 2020. An additional thirty hours of time at Zephyr’s requested hourly rate in enforcing the now paid attorney’s fees and costs judgment is fair and reasonable. Risk has been accounted for, as has the variance in hourly rates, along with subtracting attorney time, as noted in prior rulings, spent on other legal filings and not directly upon enforcement of the judgment in question.

'


b"

Case Number: ****7515 Hearing Date: October 7, 2021 Dept: E

TENTATIVE RULING ON MOTION TO TAX COSTS & MOTION FOR SANCTIONS

Moving Party: Plaintiffs/Cross-Defendants, Skylight Advisors LLC and Kazem Moghim (“Skylight” or “Debtors”) Responding Party: Defendant/Cross-Complainant, Zephyr Investment Company LLC (“Zephyr” or “Creditors”)

RELIEF REQUESTED

· Requests the Court to grant the motion to tax costs and not award Zephyr any additional attorneys’ fees

· Sanctions against Zephyr

BACKGROUND Zephyr filed a memorandum of costs on April 14, 2021 claiming fees from June 19, 2020 through March 31, 2021 for the sum of $192,914.92. The amount of $192,914.92 comprised of three categories: 1) $32,938.50 for hourly billing, 2) $29,923.65 for a contingency fee already paid, and 3) $130,052.77 for contingency fees that would allegedly be owed to Wallin & Russell LLP (“WR”) if Skylight were to pay 100% of the Court’s prior attorneys’ fees awards.

The Court heard argument on the instant motion to tax costs and sanctions on August 27, 2021. The Court’s 8/27/2021 Minute Order mentioned several aspects of Zephyr’s calculation of attorneys’ fees for its pending Costs Bill that were unclear. The Court ruled that Zephyr was to submit an amended brief and cost bill and Skylight was to serve a response brief.

Zephyr has now filed an amended memorandum of costs in the amount of $165,725.99 and is requesting the Court deny Skylight’s Motion to Tax Costs.

PROCEDURAL The Court allowed for Zephyr to file and serve an amended brief and cost bill no later than 9/17/2021. Zephyr met the required deadline.

The Court allowed Skylight to file and serve a responsive brief no later than 10/1/2021. Skylight appears to have met this requirement.

ANALYSIS

Further Background The Court found in favor of Zephyr as to each cause of action in the Cross-Complaint. Judgment on the Cross-Complaint was entered on February 10, 2020 awarding Zephyr damages of $142,234.50. On August 18, 2020, Skylight satisfied these damages by paying $149,618.26.

On October 2, 2020, Zephyr was awarded attorney fees, and the Amended Judgment incorporating these attorney fees of $553,539.85 and costs of $9,637.52 was entered on November 6, 2020.

Legal Standard CCP ;685.040 and the attorney fee provision in the lease agreement allows Zephyr to recover attorney fees incurred in enforcing the judgment. CCP ;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.”

CCP ;685.070 allows Zephyr to file a memorandum of costs. In relevant part, CCP ;685.070 provides:

(b)Before the judgment is fully satisfied but not later than two years after the costs have been incurred, the judgment creditor claiming costs under this section shall file a memorandum of costs with the court clerk and serve a copy on the judgment debtor. Service shall be made personally or by mail. The memorandum of costs shall be executed under oath by a person who has knowledge of the facts and shall state that to the person’s best knowledge and belief the costs are correct, are reasonable and necessary, and have not been satisfied. (c)Within 10 days after the memorandum of costs is served on the judgment debtor, the judgment debtor may apply to the court on noticed motion to have the costs taxed by the court. The notice of motion shall be served on the judgment creditor. Service shall be made personally or by mail. The court shall make an order allowing or disallowing the costs to the extent justified under the circumstances of the case. (CCP ;685.070(b)-(c).)

Where items are properly objected to as not reasonable or necessary, they are put in issue and the burden of proof is on the party claiming them as costs. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.)

Here, Zephyr filed an amended memorandum of costs on September 17, 2021 for $165,725.99. Typically, the judgment debtor must apply to the court on noticed motion to have the costs taxed by the court within 10 days. However, this is a continued motion from August 27, 2021 and the instant deadline does not apply because the Court set deadlines for Zephyr to serve an amended brief and costs bill and for Skylight to serve a responsive brief.

ZEPHYR’S ARUGMENTS Zephyr argues that its request of $165,724.99 in attorneys’ fees in enforcing the judgment is reasonable. To support this argument, Zephyr has included the Declaration of Michael Wallin, and Exhibits A though G. Michael Wallin is an attorney at the firm Wallin & Russell LLP (“WR”). WR was hired by Zephyr to help collect its judgment from Skylight.

Zephyr explains the reasonableness of its $165,724.99 request by noting several aspects of its fee agreement with WR.

Zephyr and WR have a fee agreement that includes both an hourly component and a contingency component. Zephyr argues that since it is only required to pay $125-195 per hour for WR’s time, there is also a contingency component wherein WR receives 20% of the amount it collects on Zephyr’s behalf. WR explains this 20% contingency component is reasonable because of the risks taken by WR, the complexity of the issues involved, the substantial expenditure of WR’s time likely to be necessary in the matter, the many months or even years likely to pass before the Judgment is fully collected, and WR typically charges a contingency percentage of 33%-50% which is custom for similarly experienced attorneys.

The steps in which WR arrived at the $165,724.99 request is as follows:

[A] – WR billed 106 hours in furtherance of enforcement of the Judgment. 106 hours resulted in a fee of $18,322.00.

[B] – When Skylight satisfied the damages portion of the judgment by paying $149,618.26 to Zephyr on August 18, 2020, Zephyr had to pay WR its 20% contingency for the amount collected. Therefore, Zephyr paid WR $29,923.65 because 20% of $149,618.26 is $29,923.65.

[C] –Zephyr was awarded $553,539.85 in attorneys’ fees and costs of $9,637.52. Zephyr has accrued post-judgment interest of $24,224.35 as per memo of costs of 4/14/2021. Therefore, when adding $553,539.85 plus $9,637.52 plus $24,224.35, Zephyr is still owed $587,401.72. If WR were to collect the amount of $587,401.72, WR would be entitled to 20% of $587,401.72. Twenty percent of $587,401.72 is $117,480.34.

Therefore, WR argues it is owed $165,725.99. [$18,322.00 plus $29,923.65 plus $117,480.34 is $165,725.99.]

In its amended memorandum, Zephyr alleges it did not include any costs related to the fraudulent conveyance actions (“UVTA Lawsuits”), as this Court previously noted that those claims are not before this Court. Zephyr highlighted in yellow in Exhibits B, C, and D certain time entries that were subtracted from fees associated with enforcement of the Judgment.

SKYLIGHT’S UNAVAILING ARGUMENTS Work Prior to August 18, 2020 Skylight argues that “it appears Zephyr is seeking compensation for 50 time entries for work performed prior to August 18, 2020, totaling $6,015.50 in billing. The Court should award nothing for these time entries.” (Reply, p.3-4.) However, Skylight either presents case law that does not support its argument, or Skylight presents unpersuasive arguments.

Skylight notes that for the judgment that was entered on February 10, 2020 awarding Zephyr damages of $142,234.50, Skylight paid the entire damages portion plus interest on August 18, 2020. Skylight refers to this as the “Damages Judgment.” Skylight then argues that the “Damages Judgment did not award attorneys’ fees; it did not even rule that Zephyr was entitled to attorneys’ fees with the amount to be determined at a later date.” (Reply p.4.)

The Court notes as a preliminary matter that the Damages Judgment states, “Costs of suit shall be awarded per memorandum, and nothing in this Judgment shall preclude Zephyr Investment Company LLC from filing a motion to recover attorneys’ fees.” (February 10, 2020 Judgment.) Skylight’s argument here is, at best, inapposite.

Additionally on page 4 of Skylight’s Reply, Skylight notes that on November 6, 2020, the Court ruled that Zephyr was entitled to its reasonable attorneys’ fees in the amount of $553,539.85 and costs in the amount of $9,637.52. (Reply p.4.) Skylight refers to this as the “Attorneys’ Fees Judgment.” Skylight then argues that the Attorneys’ Fees Judgment is a separate judgment from the original Damages Judgment and required its own separately filed notice of appeal. To support this argument, Skylight quotes Silver v. Pacific American Fish Co., Inc which states, “[T]he postjudgment order awarding attorney fees was separately appealable and therefore required Silver to file a separate, timely notice of appeal. His failure to do so deprives this court of jurisdiction over his purported appeal from that order and mandates dismissal of that portion of his appeal.” (Reply, p.4 citing Silver v. Pacific American Fish Co, Inc., (2010) 190 Cal.App.4th 688,694.)

Here, the Court does not understand the argument that Skylight is trying to assert. First, the Court is unsure why Skylight is referring to a case that mentions a rule on filing a separate appeal for a postjudgment order awarding attorney fees when Skylight is attempting to argue that time entries prior to August 18, 2020 should not be awarded in the instant memorandum of costs. Zephyr is not filling an appeal; it filed a memorandum of costs. In Silver v. Pacific American Fish Co. Inc., Silver filed a notice of appeal on February 25, 2009, which included a notice of appeal from the trial court’s order granting Pacific’s motion for attorney fees and costs. The notice of appeal was filed after Pacific had filed its attorney fees motion, but well before any hearing or ruling on the motion for attorney fees. Thus, at the time Silver purported to appeal the order on Pacific’s motion for attorney fees, there had been no indication of the trial court’s intended ruling on the motion for attorney fees. The trial court’s oral pronouncement of a ruling did not occur until March 26, 2009, over a month after the filling of Silver’s notice of appeal. The court found that Silver’s purported notice of appeal from the postjudgment order awarding Pacific attorney fees was untimely because Silver filed his notice of appeal before the statement of intended decision. (Silver v. Pacific American Fish Co., Inc. (2010) 190 Cal.App.4th 688, 690-691.) The Court finds Skylight’s argument with respect to Silver unavailing because the facts and circumstances of Silver do not appear to be relevant to the instant memorandum of costs and motion to tax costs.

Additionally on page 4 of the Reply, Skylight argues that once Skylight paid the Damages Judgment on August 18, 2020, Zephyr’s right to seek additional fees related to the original Damages Judgment was extinguished. To support this argument, Skylight cites Gray1 CPB, LLC v. SCC Acquisitions, Inc., (2015) 233 Cal. App.4th 882, 895.) Skylight then goes on to argue that Zephyr lost its ability to file a memorandum of costs or motion for attorneys’ fees for pre-August 18, 2020 work as soon as it accepted Skylight’s cashier’s check on August 18, 2020. But Zephyr had filed its then-pending Motion for Attorney’s Fees on 2/28/2020. As Skylight argues elsewhere in its brief, the Attorney’s Fee award is separate from and in addition to the Judgment. Zephyr timely filed, and the Court entered, a Judgment on the initial attorney’s fees award, which is currently pending Skylight’s appeal.

The Court thus finds that Gray1 CPB, LLC v. SCC Acquisitions, Inc.(“Gray”) does not support Skylight’s argument. In Gray, Gray obtained a judgment in excess of $9.1 million, plus interest against defendants in August 2010. (Id. at 887.) The judgment provided that Gray1 was entitled to attorney fees and costs to be established by a cost bill or motion. By interlineation, the court amended the judgment to reflect the award of over $1.5 million in attorney fees and more than $44,000 in costs. (Id. at 888.) Defendants made no payments on the judgment until June 8, 2012 when Gray1 accepted a cashier’s check for the full amount of the judgment, plus accrued interest and awarded attorney fees. (Id. at 887.) When Gray1 filed a motion for postjudgment costs for fees largely incurred in litigating a separate action to enforce the instant judgment, the court found that the motion for postjudgment attorney fees was untimely because the judgment was fully satisfied.

The facts here are distinguishable from those in Gray. Here, Skylight has not fully satisfied the entire judgment. Although Skylight previously argued that the Damages Judgment is separate from the Attorneys’ Fee Judgment, this argument is not supported by Gray, and in fact is directly in conflict of the proposition that the Damages Judgment and the Attorneys’ Fee Judgment are separate.

Gray noted how Gray1 claimed that defendants did not fully satisfy the judgment because the amount tendered did not include the substantial postjudgment attorney fees Gray1 incurred in attempting to enforce its judgment by bringing a separate action to set aside alleged fraudulent liens. (Id. at 891.) However, the court did not accept Gray1’s argument because it noted that those attorney fees were not part of the judgment. “The amount required to satisfy a money judgment is the total amount of the judgment as entered or renewed with the following additions and subtractions: a) The addition of costs added to the judgment pursuant to Section 685.090, b)The addition of interest added to the judgment as it accrues pursuant to Section 685.010 to 685.020, inclusive, c) The subtraction of the amount of any partial satisfactions of the judgment, d) the subtraction of the amount of any portion of the judgment that is no longer enforceable.” (Id. at 891.) “With exceptions not applicable here, costs (including postjudgment attorney fees) do not become part of the judgment until such time as the court files an order allowing the cost. [Citation.] Attorney fees claimed, but not awarded by the court are not part of section 695.210’s calculation. Therefore Gray1’s contention that defendants’ payment-which in fact exceeded the amount of the judgment plus accrued interest-did not fully satisfy the judgment is without merit.” (Id. at 891-892.)

As the Gray opinion further noted, “The amount required to satisfy a money judgment is the total amount of the judgment as entered or renewed with the following additions…the addition of costs added to the judgment pursuant to Section 685.090.” Under 685.090 (a) (1) Costs are added to and become a part of the judgment upon the filling of an order allowing the costs pursuant to this chapter.” Here, the Court in its October 2, 2020 Minute Order awarded attorneys’ fees and these added attorneys’ fees were incorporated in the Amended Judgment of November 6, 2020. Additionally, 685.0909(b) states, “The costs added to the judgment pursuant to this section are included in the principal amount of the judgment remaining unsatisfied.” Therefore, by Skylight asserting that the Damages Judgment and Attorneys’ Fees Judgment are separate judgments appears to be an unavailing argument when Gray seems to state the exact opposite. Further, Gray is not applicable to the argument Skylight is attempting to make since defendants in Gray paid the full judgment plus accrued interest and awarded attorney fees. Here, Skylight has not paid the full judgment; Skylight has not paid attorneys’ fees or costs.

Skylight Argues the Fees Requested are Unreasonable

Skylight also argues that even if the Court had discretion to award pre-August 18, 2020 billings, the fees requested would still be unreasonable or improper.

Skylight argues, “As an example of unreasonable pre-August 18, 2020, billing, per Exh. B of Mr. Wallin’s Declaration, Mr. Wallin billed $1,833 for drafting subpoenas for judgment debtor examinations that never went forward. Remarkably, Mr. Wallin purports to have spent 7.8 hours on August 5, 2020, alone, on revising subpoenas. Exh. B. at pp. 4-5. Mr. Wallin’s invoice lists 13 separate time entries of 36 minutes (0.6 hours) each on August 5, 2020, for work revising subpoenas.” (Reply p. 5.)

Skylight also argues, “There also are multiple entries for work related to continuing litigation over seeking fees as opposed to collecting on fees awarded. For example, there is a 0.5-hour entry on August 9, 2020, for “Performed research re adding post-judgment attorneys' fees to amount owing on judgment.” There is another 0.5-hour entry on August 9, 2020, for “Drafted Memorandum of Costs and Interest After Judgment.” On August 10, 2020, there is an entry for “Strategized re Memo of Costs related issues.” (Entries related to the prior failed memorandum of costs would be improper to award under any theory.) There is a 0.6-hour entry on August 10, 2020, for “Communicated with Josh re Memorandum of Costs and related issues.” There is a 0.6-hour time entry on August 13, 2020, for “Reviewed Skylight's ex parte application. Communicated re same.” There is an August 14, 2020, time entry for, “Prepared for and attended hearing on Skylight's ex parte application. Communicated re same.”” (Reply p.5.)

November 6, 2020 to November 11, 2020

On page 8 of the Reply, Skylight states, “Per the docket, the Court entered the Attorneys’ Fees Judgment on November 6, 2020. Moghim and Skylight filed its Notice of Appeal of the Attorneys’ Fees Judgment on November 12, 2020. The entries in that short period do not appear to relate to collection work. They are for drafting a subpoena to Angel Oak (who would be a part to a fraudulent conveyance case) and work related to filing a memorandum of costs for Wallin & Russell’s work. The Court granted a motion to tax costs as to that memorandum of costs. Therefore, the time spent on the memorandum of costs (a) did not relate to collecting an outstanding judgment (it was meant to create a new fee award), and (b) even if it did, the time spent on the memorandum of costs led to the Court rejecting the requested fees in full.”

Skylight’s arguments to this point as the reasonability of Zephyr’s requested fees fail for lack of specificity and a complete lack of clarity.

Wallin & Russell’s Work Following November 11, 2020

While the Court does find that Skylight properly argues that the notice of appeal automatically stayed enforcement of the Attorneys’ Fees Judgment and that no appeal bond was required, The Court notes that Skylight cites a case (Quiles v. Parent (2017) 10 Cal.App.5th 130) that Skylight states stands for the proposition that when the damages portion of a judgment is paid and only the portion of the judgment for attorneys’ fees and costs is appealed, the filing of a notice of appeal automatically stays enforcement of the judgment for attorneys’ fees and costs without the necessity of posting a bond.

While enforcement of the judgment for attorneys’ fees and costs are stayed, Zephyr is seeking costs to be added to its judgment via a memorandum of costs. Zephyr is simply seeking an award of additional costs to its judgment. Zephyr is not asking this Court to enforce an award for attorneys’ fees and costs at this time.

SKYLIGHT’S ARGUMENTS THAT ADEQUATELY CALL INTO QUESTION THE REASONABLENESS OF ZEPHYR’S FEES

Fraudulent Conveyance Actions

Skylight notes on page five of its Reply that there are time entries that are not highlighted yellow that appear to be work for the fraudulent conveyance cases. Skylight states, “For example, there is a 30-minute (0.5- hour) entry on June 19, 2020, that is not highlighted yellow that has a description of, “Telephone conference with Josh to discuss several issues, including potential filing of fraudulent transfer lawsuit.” On July 2, 2020, there is a 0.5-hour entry for a call with “Angel Oak’s attorney;” Angel Oak was a party Zephyr sued in one of the fraudulent conveyance cases. There is an August 12, 2020, entry for 0.6 hours for “Drafted Notice of Related Case.” There is an August 13, 2020, entry for 0.4 hours for “Worked on issues re Notice of Related Case.”” (Reply p.5.) Further, there are billing entries dated December 1 and December 3, 2020, as well as February 17 and 26, and March 1, 2021, each of which appear to relate primarily, if not solely to the separate fraudulent conveyance action Zephyr initiated against Skylight, or Zephyr’s separate lawsuit vs. Greenberg Trauwig.

The Court notes that Zephyr was and is to omit from its memorandum of costs all entries related to the work for fraudulent conveyance cases as the Court previously noted that the fraudulent conveyance actions are not before this Court. It is Zephyr’s burden to substantiate the costs and fees it seeks; ambiguity or vagueness in its request is interpreted against Zephyr.

August 18, 2020 through November 6, 2020

The Court also is concerned about the reasonableness of fees from August 18, 2020 through November 6, 2020.

As noted in this Court’s January 8, 2020 Minute Order on page 3:

The Court also questions whether Zephyr should be able to recover for fees incurred after August 18, 2020, which is the date on which Skylight satisfied the damages portion of the judgment. Zephyr was not awarded any attorney fees until October 2, 2020, and the Amended Judgment incorporating these attorney fees was not entered until November 6, 2020. It is unclear why Zephyr should be awarded fees for services provided between August 18, 2020 and October 2, 2020 (or perhaps November 6, 2020) to collect unknown fees Skylight had no obligation to pay. Relatedly, the Court notes that Zephyr filed its memorandum of costs after judgment on November 12, 2020, only six days after the amended judgment was entered and three days after the notice of the entry of judgment was mailed to the parties. Under such circumstances, the Court questions whether any fees incurred between October 2, 2020 and November 12, 2020 were due to reasonable efforts to collect given that Skylight’s obligation to pay attorney fees had only arisen on October 2, 2020.

(January 8, 2020 Minute Order, p.3.)

Zephyr has not addressed the reasonableness for fees during this time period over which the Court has previously expressed concern. While Zephyr has submitted Exhibits with time entries that fall within this period, Zephyr has offered no explanation addressing the Court’s prior concerns about the reasonableness of these requested fees.

Skylight argues:

“The time entries for the period of August 18 through November 6, 2020, virtually all (a) regard supporting Zephyr’s motion to be awarded attorneys’ fees in the first instance, (b) are time entries for the fraudulent conveyance cases that were mistakenly not highlighted yellow, or (c) are too vague to determine whether the time relates to collection work.

For example, of entries related to the motion for attorneys’ fees, on September 4, 23 and 30, 2020, there are entries of 0.4, 0.3 and 0.2, respectively, for Mr. Wallin reviewing papers for the hearing to determine whether to award attorneys’ fees, and if so, how much to award. Wallin Exh. B at p. 7. Then on October 2, 2020, Mr. Wallin billed 1.4 hours for attending the attorneys’ fees hearing. Wallin Exh. B at p. 8. None of this is work to collect on a judgment.

As for mistakenly characterized entries regarding the fraudulent conveyance cases, there are entries for Michael Wallin on October 13, 2020, for 0.8 hours for “Drafted list of next steps re judgment enforcement, UVTA #1, and UVTA #2,” and on October 14, 2020, for 0.3 hours for “Worked on issues re subpoena to Angel Oak” (Angel Oak being the lender Zephyr later sued in one of the fraudulent conveyance cases). Wallin Exh. B at p. 8.

Similarly, there are entries that appear to be related to matters other than the instant case or the fraudulent conveyance cases. For example, Justin Wolf billed 3.6 hours on October 12, 2020, in an entry stating, “Review and analysis of active cases for Moghim, Skylight Advisors, and Urbino Construction in LA County Superior Court. Preparation of memo to file re same.” Wallin Exh. C.

The remaining entries are either too vague to determine whether they pertain to collections or seem unnecessary. As an example of an unduly vague entry, on July 21, 2020, Michael Wallin billed 0.5 hours in an entry stating, “Telephone conference with Josh to discuss several issues.” Wallin Exh. B. at p. 4. As an example of unreasonable entries for this period, Justin Wolf spent a significant amount of time researching if there would be a stay on the un-entered Attorneys’ Fees Judgment if a notice of appeal were filed following entry of the Attorneys’ Fees Judgment. Work confirming an inability to enforce a judgment is not judgement-enforcement work; furthermore, the amount of time expended was too high, especially when there is a recent published appellate decision with the same facts as the instant case. Quiles v. Parent, 10 Cal.App.5th 130 (2017).”]

Further Issues of Reasonableness

Zephyr has requested that in the alternative, it be awarded $99,865.00 if this Court doesn’t award the requested amount of $165,725.99. Zephyr arrived at this number based on the Lodestar method mentioned on page 8 of Zephyr’s Opposition. Zephyr mentions that it spent 106 hours on the case and when calculated for reasonable hourly rates, this would amount to Zephyr being owed $49,932.50. However, Zephyr applies a multiplier of 2 based on the contingent risk which yields the alternative amount requested of $99,865.00. But, this proposal begs the question of whether Zephyr should be awarded all of the hourly fees it has listed; a question Zephyr does not satisfactorily answer in a clear way.

This appears to shed light on why $165,725.99 could unreasonable because in arriving at the amount of $49,932.50 before the multiplier is applied for contingent risk, Zephyr calculates $49,932.50 using what it deems itself to be reasonable hourly rates. Those reasonable hourly rates are 550 for Michael Wallin, 350 for Justin Wolf, and 225 for Michael Jarzyna. However, Zephyr charged a contingency because it was not billing at its reasonable hourly rates, it was instead billing 125-195 per hour. Zephyr charged substantially less.

That being said, Zephyr is requesting $165,725.99 for 106 hours. As mentioned by Skylight, this would be $1,563 per hour, which far exceeds what Zephyr thought would be for reasonable hourly billing.

Additionally, Skylight mentions that Justin Wolf has only been an attorney since 2019. Further, though not mentioned by Skylight, is that Zephyr states Michael Jarzyna’s reasonable hourly rate is 225 but that due to the lowered fees Jarzyna was billed at 125/hour. In the Declaration, it does not state that Jarzyna is an attorney.

Finally, the Court is not willing to now award Zephyr the contingency fee it would owe if Skylight pays, voluntarily or because it loses on its pending Appeal, the $553,539.85 in fees and $9.637.52 in costs it has already been awarded.

TENTATIVE RULING MOTION TO TAX COSTS:

Skylight’s Motion to Tax Costs is GRANTED in part; the Court awards Zephyr additional attorneys fees and costs incurred in enforcing the Judgment of $29,923.65 plus $9,161.00, for a total of $39,084.65, without prejudice. This award is against Defendants Skylight Advisors, LLC, and Kazem Moghim, jointly and severally.

SANCTIONS

As mentioned in this Court’s August 27, 2021 Minute Order, “Plaintiffs here seek sanctions under CCP ;1008(d) and CCP ;128.7 but fail to apply the language of the statutes to the alleged facts here or paraphrase the requirements under 1008(d) and 128.7 to support this motion. Further, Plaintiffs make several allegations as to why sanctions should be awarded without explaining how any of those allegations meet the requirements of 1008(d) and 128.7. Most importantly, Plaintiffs overstate the Court’s findings as reflected in the January 8, 2021, Minute Order. The Creditors here are not, for example, wholly precluded from seeking attorney’s fees incurred in enforcing the judgment, so long as they clearly and accurately delineate the specifics and reasonableness of the fees sought.” (August 27, 2021 Minute Order, p.1-2.)

Skylight simply states in its Reply, “The Court should also sanction Zephyr for once again attempting to relitigate issues that it has lost on numerous times.” (Reply p. 10.)

Skylight does not attempt to address any of the issues mentioned in the August 27, 2021 Minute Order regarding sanctions.

Movants’ Motion for Sanctions is DENIED.

"


b'

Case Number: ****7515 Hearing Date: August 27, 2021 Dept: E

Hearing Date: 8/27/2021(10:00am) Calendar #: 13 Case No. ****7515 Trial Date: Unset Case Name: SKYLIGHT ADVISORS LLV v. ZEPHYR INVESTMENT COMPANY LLC

TENTATIVE RULING ON MOTION FOR SANCTIONS

Moving Party: Plaintiffs/Cross-Defendants, Skylight Advisors LLC and Kazem Moghim (“Debtors”) Responding Party: Defendant/Cross-Complainant, Zephyr Investment Company LLC (“Creditors”)

RELIEF REQUESTED

· Monetary sanctions against Zephyr Investment Company LLC, Joshua Bereny, and Wallin & Russell LLP in the amount of $25,000 jointly and severally in favor of Kazem Moghim and Skylight Advisors LLC under CCP ;1008(d) and CCP ;128.7.

Background

Plaintiffs’ motion for monetary sanctions against Zephyr Investment Company LLC, Joshua Bereny, and Wallin & Russell LLP in the amount of $25,000, jointly and severally, in favor of Kazem Moghim and Skylight Advisors LLC under California Code of Civil Procedure Sections 1008(d) and 128.7.

Plaintiffs’ motion for sanctions is based on Zephyr’s April 2021 Memorandum of costs. Plaintiffs allege that the April 2021 Memorandum of Costs impermissibly requests attorneys’ fees that the Court already denied in its January 8, 2021, minute order.

Analysis

Plaintiffs here seek sanctions under CCP ;1008(d) and CCP ;128.7 but fail to apply the language of the statutes to the alleged facts here or paraphrase the requirements under 1008(d) and 128.7 to support this motion. Further, Plaintiffs make several allegations as to why sanctions should be awarded without explaining how any of those allegations meet the requirements of 1008(d) and 128.7. Most importantly, Plaintiffs overstate the Court’s findings as reflected in the January 8, 2021, Minute Order. The Creditors here are not, for example, wholly precluded from seeking attorney’s fees incurred in enforcing the judgment, so long as they clearly and accurately delineate the specifics and reasonableness of the fees sought.

Tentative Ruling: Plaintiffs’ Motion for Sanctions is DENIED.

Hearing Date: 8/27/2021(10:00am) Calendar #: 13 Case No. ****7515 Trial Date: Unset Case Name: SKYLIGHT ADVISORS LLV v. ZEPHYR INVESTMENT COMPANY LLC

TENTATIVE RULING ON MOTION TO TAX COSTS

Moving Party: Plaintiffs/Cross-Defendants, Skylight Advisors LLC and Kazem Moghim (“Debtors”) Responding Party: Defendant/Cross-Complainant, Zephyr Investment Company LLC (“Creditors”)

RELIEF REQUESTED

· Requests the Court to strike the April 2021 Memorandum of Costs and order that nothing be awarded to Zephyr Investment Company LLC or Joshua Bereny on the April 2021 Memorandum of Costs

Background

In October of 2017, Skylight Advisors LLC filed an action against Zephyr Investment Company LLC and Joshua Bereny asserting several claims stemming from Zephyr not providing eleven legal parking spaces as required by the parties’ lease agreement and concealing the alleged illegality of the parking spaces during lease negotiations. In August of 2018, Zephyr filed a cross-complaint against Skylight Advisors LLC, Urbino Construction Inc., and Kazem Moghim alleging Skylight breached the lease for making unapproved alterations, subleasing without permission, and failing to pay rent for several months. Zephyr alleged Kazem Moghim was individually liable for these breaches based on his guaranty of the lease.

On October 18, 2019, the Court granted summary adjudication in favor of Zephyr Investment Company LLC and Joshua Bereny as to each cause of action in Skylight Advisors LLC’s operative Third Amended Complaint, and on November 1, 2019, the Court entered judgment as to the Third Amended Complaint in favor of Zephyr Investment Company LLC and Joshua Bereny and dismissed the Third Amended Complaint with Prejudice. Zephyr Investment Company LLC’s Cross-Complaint then proceeded to trial. The Court found in favor of Zephyr Investment Company LLC as to each cause of action in the Cross-Complaint

Judgment on the Cross-Complaint was entered on February 10, 2020 awarding Zephyr damages of $142,234.50. On November 6, 2020, an amended judgment awarding Zephyr attorney fees of $553,539.85 and costs of $9,637.52 was entered.

On November 12, 2020, Zephyr filed a memorandum of costs after judgment claiming $48,366.15 in attorney fees under CCP ;685.040 [Zephyr was claiming $19,937.00 in hourly fees and $29,923.65 in contingency fees for a total of $49,320.65, but Zephyr confirmed it was willing to accept the lesser amount of $48,366.15]. Although Skylight paid $149,618.26 to satisfy the damages portion, it was undisputed that Skylight had not satisfied the remainder of the judgment for attorneys’ fees and costs. Skylight and Moghim filed a motion to tax costs as to the November 2020 Memorandum of Costs and this Court issued its order granting the motion to tax costs.

Additionally, since Zephyr/Creditors could not collect the remainder of the judgment from Skylight/Debtors/Plaintiffs, Creditors are currently prosecuting two fraudulent transfer lawsuits, separate from this matter, alleging that Debtors fraudulently transferred real property to shield their assets from Creditor.

Analysis

The instant motion pertains to Skylight Advisors LLC and Kazem Moghim’s objection to, and motion to tax costs on Zephyr Investment Company LLC and Joshua Bereny’s April 14, 2021 Memorandum of Costs After Judgment, Acknowledgement of Credit, and Declaration of Accrued Interest.

CCP ; 685.040 and the attorney fee provision in the lease agreement allows Zephyr to recover attorney fees incurred in enforcing the judgment. [CCP ; 685.040 [“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”].)

CCP ; 685.070 allows Zephyr to file a memorandum of costs. CCP ; 685.070(b) provides:

Before the judgment is fully satisfied but not later than two years after the costs have been incurred, the judgment creditor claiming costs under this section shall file a memorandum of costs with the court clerk and serve a copy on the judgment debtor. Service shall be made personally or by mail. The memorandum of costs shall be executed under oath by a person who has knowledge of the facts and shall state that to the person’s best knowledge and belief the costs are correct, are reasonable and necessary, and have not been satisfied.

(CCP ;685.070(b).)

Here, judgment on the Cross-Complaint was entered on February 10, 2020, awarding Zephyr damages of $142,234.50. On November 6, 2020, an amended judgment awarding Zephyr attorney fees of $553,539.85 was entered.

On April 14, 2021, Zephyr filed a memorandum of costs after judgment claiming $192,914.92 which consists of $32,938.50 for hourly billing paid, $29,923.65 for a contingency fee already paid, and $130,052.77 for contingency fees that would allegedly be owed to Wallin & Russell LLP if Debtors were to pay 100% of the Court’s prior attorneys’ fees award. (Pl. Mot. p.5.) While Skylight paid $149,618.26 to satisfy the damages portion of the judgment, it is undisputed that Skylight has not satisfied the entire judgment because it hasn’t paid attorneys’ fees and costs. It has also been less than two years since the judgment or the amended judgment has been entered. Accordingly, Zephyr’s memorandum of costs after judgment is timely filed.

The motion to tax costs is validly filed. CCP ; 685.070(c) states:

Within 10 days after the memorandum of costs is served on the judgment debtor, the judgment debtor may apply to the court on noticed motion to have the costs taxed by the court. The notice of motion shall be served on the judgment creditor. Service shall be made personally or by mail. The court shall make an order allowing or disallowing the costs to the extent justified under the circumstances of the case.

The memorandum of costs was served by mail on April 14, 2021. With five days added for mailing, Skylight had until April 29, 2021, to file a motion to tax costs. The motion to tax costs was filed on April 26, 2021, therefore the motion is timely filed.

Where items are properly objected to as not reasonable or necessary, they are put in issue and the burden of proof is on the party claiming them as costs. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.) Zephyr’s motion explains a number of reasons as to why Zephyr believes it is justified in claiming costs.

Zephyr is claiming fees from June 19, 2020 through March 31, 2021, for the sum of $192,914.92. Those fees consist of $32,938.50 for hourly billing incurred, 29,923.65 for a contingency fee already paid, and $130,052.77 for contingency fees that would allegedly be owed to Wallin & Russel LLP if Moghim and Skylight were to pay 100% of the Court’s prior attorneys’ fees awards. (Pl. Mot. p.5.)

The instant motion and Wallin’s declaration demonstrates efforts to collect on the judgment and Zephyr’s concerns for not getting paid for the attorneys’ fees that were accrued from attempting to collect on this judgment. Zephyr is concerned that if Skylight pays the entire judgment without warning, its attempt to file a memorandum of costs and recover for attorneys’ fees will be cut off because a memorandum of costs cannot be filed under ;685.070(b) once the judgment is fully satisfied. Zephyr is also concerned about potential fraudulent transfers by Skylight of real property in attempts to shield the creditor from collecting; therefore, Zephyr filed the fraudulent transfer claims. Zephyr argues it can collect for attorneys’ fees in pursuing the fraudulent transfer claims since they are claiming those are attorneys’ fees to enforce the judgment. Skylight argues that the Court should not award fees for the fraudulent conveyance matters in other departments.

CCP ; 685.040 allows Zephyr to recover attorney fees incurred in collecting on the judgment, which ostensibly includes fees that Zephyr incurred in litigating other actions to recover on the judgment. Although the damages portion of the judgment has been satisfied, the attorneys’ fee award, which has not been satisfied, is also part of the judgment. It thus appears that under CCP ; 685.040, Zephyr is entitled to recover the fees it is incurring to obtain full satisfaction of the judgment in the department where the judgment is entered, even if the fraudulent conveyance actions are in other departments.

While the Court understands Zephyr’s concerns for collecting attorneys’ fees in pursuit of collecting the judgment, the Court declines to award costs without prejudice because it doesn’t find that Zephyr has met its burden in establishing the reasonableness of its attorneys’ fees.

The Court has discretion to disallow costs “to the extent justified under the circumstances of the case” under CCP ; 685.070(c).

The Court finds that Zephyr’s calculation of attorneys’ fees for its pending Costs Bill is unclear, at best.

First, the Court finds that Zephyr has not fully explained the reasonableness of its “hybrid” fee agreement with Wallin & Russell, who is attempting to recover the judgment for Zephyr. It appears to the Court that there is a potential for a double recovery.

Part of the $192,914.92 that Zephyr is attempting to collect in its April 14, 2021 memorandum of costs consists of hourly fees of $32,938.50 from June 19, 2020 until March 31, 2021. In addition to those hourly fees, Zephyr alleges Wallin & Russell receives 20% of what it can collect from the judgment. The Court is not convinced of the reasonableness of Wallin & Russell’s 20% contingency fee collected on the judgments it obtains in addition to the hourly fees. Contingency fees may not reflect the reasonable value of counsel’s services. (All-West Design, Inc. v. Boozer (1986) 183 Cal.App.3d 1212, 1227.)

Second, the Court is not convinced of the reasonableness of the calculations that Zephyr provided on pages 12 and 13 of its Opposition to Skylight’s Motion to Tax Costs because there appear to be at least 2 instances of possible double recovery.

On pages 12 and 13 of its Opposition, Zephyr lays out the following math to justify the $192,914.20 it is requesting:

A. Debtor has paid $149,618.26 on the damages portion of the judgment. Since Wallin & Russell gets 20% of that amount, Wallin and Russel was paid $29,923.65.

B. Wallin and Russell was paid for hourly fees totaling $32,938.50. This amount comprises of fees from the underlying action and the fraudulent conveyance actions.

[The 29,923.65 plus 32,938.50 equals $62,862.15 as seen below in for the attorneys’ fees section in C].

C. Wallin and Russell is to receive 20% of the total amount it collects on Zephyr’s behalf. A total of $650,263.87 is owed. This is based on [Judgment ($553,539.85) + Bill of Costs ($9,637.52) + Post-Judgment Interest ($24,224.35) + Attorneys’ Fees (62,862.15) = $650,263.87]. 20% of the $650,263.87 equals $130,052.77.

When adding the $29,923.65 plus $32,938.50 plus $130,052.77, Zephyr arrives at the amount requested in its memorandum of costs for $192,914.92

However, the $29,923.65 [A] amount was calculated based on the 20% Wallin and Russell was able to collect from the damages obtained of $149,618.26. This $29,923.65[A] is then included in the $62,862.15 in attorneys’ fees that is used to calculate the number $130,052.77 [C]. Therefore, Wallin and Russell appears to seek a 20% contingency fee twice based on one collection from Skylight. Or to phrase it differently, Wallin and Russell received 20% of $149,618.26 from the damages it collected for a total of $29,923.65. Wallin and Russell then wants to collect 20% of that $29,923.65 by including it in its attorneys’ fees calculated in [C].

Additionally, Wallin & Russell does the same with its hourly attorneys’ fees. The hourly attorneys’ fees paid to Wallin and Russell totalled $32,938.50. This $32,938.50 was included in the $62,862.15 for attorneys’ fees calculated in [C]. This means Wallin & Russell is not only collecting hourly fees and 20% of the judgments that it obtains, but Wallin & Russell is collecting an additional 20% on the amount it charged for the hourly fees themselves.

Zephyr does partially explain this “hybrid” fee because Wallin & Russell usually charges $425/hr. Instead of the $425/hour, Zephyr here pays a reduced hourly rate of $125-195 plus the 20% contingency fee for the amount collected. Then on page 16 of its Opposition, Zephyr tries to justify the $192,914.92 it seeks by stating that if calculated hourly for the 191.3 hours spent on the case, that would equate to $1,008.44 per hour.

Fourth, Zephyr appears to seek recovery here for time spent on the fraudulent conveyance actions. Those claims are not before this Court, and neither the cost bill at issue nor Zephyr’s opposition to the Motion to Tax Costs clearly segregate those matters from this one.

TENTATIVE RULING: The Court GRANTS the current motion to tax costs, but without prejudice to Zephyr seeking some or all the costs asserted in its April 14, 2021, memorandum of costs after judgment in an amended Memorandum of Costs, if timely per CCP ;685.070(b), with a clearer explanation and bookkeeping. The Court recognizes Zephyr’s concerns to be able to recover for fees spent in attempting to obtain the judgment it is rightfully owed, but the Court fails to see the reasonableness of the fees currently requested.

'


Case Number: ****7515    Hearing Date: March 12, 2021    Dept: E

MOTION FOR ATTORNEY FEES ON APPEAL

[Civil Code ; 1717]

Date: 3/12/21 (8:30 AM)

Case: Skylight Advisors LLC v. Zephyr Investment Co. LLC, et al. (****7515)

TENTATIVE RULING:

Defendant/cross-complainant Zephyr Investment Company LLC’s UNOPPOSED Motion for Attorneys’ Fees on Appeal is GRANTED IN PART.

Defendant/cross-complainant Zephyr Investment Company LLC (“Zephyr”) seeks $16,505.50 in attorney fees incurred in defending against the appeal of the February 10, 2020 judgment by plaintiff/cross-defendant Skylight Advisors LLC (“Skylight”) and cross-defendant Kazem Moghim. (Linhardt Decl. ¶ 6 & Ex. 5.) This amount consists of (1) $12,490.50 incurred between February 19, 2020, the date of service of the notice of appeal, and November 4, 2020, the date of issuance of the remittitur and (2) $4,015.00 associated with this motion for attorney fees. (Linhardt Decl. ¶¶ 15, 17 & Ex. 14.)

The Court finds that Zephyr is the prevailing party in the appeal. The matter arose out of a written Lease Agreement between Zephyr and Skylight and out of a written Guaranty of Lease between Zephyr and Moghim. Both agreements provide that the prevailing party shall be entitled to reasonable attorney fees. (Linhardt Decl. ¶¶ 2, 3 & Exs. 1, 2.) Further, the remittitur issued on November 4, 2020 stated that “Respondents,” i.e. Zephyr, are to recover costs on appeal. (Linhardt Decl. ¶ 13 & Ex. 12.) Costs includes attorney fees when authorized by contract, statute, or law. (CCP ; 1033.5(a)(10).) Under the terms of the attorney fee provisions, Zephyr may recover the fees that it incurred to defend against the appeal.

The Court finds that the hourly rates charged by defense counsel in this action are reasonable. (Linhardt Decl. ¶¶ 20-24.)

The Court has reviewed the billing entries from Zephyr’s counsel and finds that there have been some excessive billings by Zephyr’s attorneys for certain matters (Linhardt Decl. ¶ 16 & Ex. 14.) Accordingly, the Court makes the following reductions:

· Between April 22, 2020 and May 5, 2020, Kristin K. McCarthy, Esq. spent 5.0 hours reviewing Skylight and Moghim’s Notice Designating Record on Appeal and preparing a Counter-Designating Record on Appeal. Michael Neighbors, Esq. spent 2.4 hours on the same project. McCarthy’s hours are reduced by 1 hour, which, based on an hourly rate of $515, amounts to a reduction of $515. Neighbors’ hours are reduced by 1 hour, which, based on an hourly rate of $565, amounts to a reduction of $565.

· On July 3, 5, and 8, 2020, Neighbors billed a total of 4.8 hours for preparing the opposition to Skylight and Moghim’s Motion to Vacate Dismissal. The opposition was two pages and appears not to have required any legal research, as only the Safer at Home order issued by the City of Los Angeles was cited. (Linhardt Decl. ¶ 10 & Ex. 9.) Accordingly, Neighbors’ hours for preparation of the opposition are reduced by 2.8 hours, which, based on Neighbors’ hourly rate of $565, results in a reduction of $1,582. Correspondingly, McCarthy’s hours billed on July 9, 2020 to revise the opposition are reduced from 0.4 hours to 0.2 hours. Based on McCarthy’s hourly rate of $515.00, a 0.2-hour reduction amounts to a reduction of $103. Similarly, Alex Linhardt, Esq.’s hours billed on July 9, 2020 to revise the opposition are reduced from 0.7 hours to 0.3 hours. Based on Linhardt’s hourly rate of $730, a 0.4-hour reduction amounts to a reduction of $292.

· Linhardt’s hours billed on September 14, 2020 in preparing a Notice of Appearance in the Court of Appeal are reduced from 0.5 hours to 0.2 hours. Based on Linhardt’s hourly rate of $730, a 0.3-hour reduction results in a reduction of $219.

Based on the foregoing, Zephyr’s request for $12,490.50 in fees for defending against the appeal are reduced by $3,276.00 to $9,214.50.

Zephyr also seeks $4,015 for fees incurred in connection with this fee motion, based on 4.5 hours reviewing the appellate record and drafting the motion and declaration and 1 hour attending the hearing. (Linhardt Decl. ¶ 17; Graham v. DaimlerChrysler Corp. (2004) 34

Cal.4th 553, 580 [“It is well established that plaintiffs and their attorneys may recover attorney

fees for fee-related matters”].) The Court finds that a reasonable number of hours for the fee motion and hearing is 4 hours total. At an hourly billing rate of$730 for Lindhardt, the Court finds that Zephyr’s recovery of so-called fees on fees should be thus limited to $2,920.00.

Accordingly, using the appropriate lodestar approach, and based on the foregoing findings and in

view of the totality of the circumstances, the Court finds that the total and reasonable amount of

attorney fees incurred for the work performed in connection with Zephyr Investment

Company LLC’s defense against the appeal of the February 10, 2020 judgment filed by plaintiff/cross-defendant Skylight Advisors LLC and cross-defendant Kazem Moghim is $12,134.50, out of $16,505.50 requested. Such fees are awarded to defendant/cross-complaint Zephyr Investment Company LLC against plaintiff/cross-defendant Skylight Advisors LLC and cross-defendant Kazem Moghim, jointly and severally.



Case Number: ****7515    Hearing Date: January 08, 2021    Dept: E

MOTION TO VACATE ORDER OR JUDGMENT AWARDING COSTS OR ATTORNEYS’ FEES

[CCP ;; 657, 659, 663]

Date: 1/8/21 (8:30 AM)

Case: Skylight Advisors LLC v. Zephyr Investment Company LLC, et al. (****7515)

TENTATIVE RULING:

Plaintiff and Cross-Defendant Skylight Advisors LLC and Cross-Defendants Urbino Construction Inc. and Kazem Moghim’s Motion to Vacate Order or Judgment Awarding Costs or Attorneys’ Fees is DENIED.

On October 2, 2020, the Court awarded $553,539.85 in attorney fees to defendant/cross-complainant Zephyr Investment Company LLC (“Zephyr”), to be paid by plaintiff/cross-defendant Skylight Advisors LLC and cross-defendant Kazem Moghim (collectively, “Skylight”), jointly and severally. On November 6, 2020, the Court entered a judgment, which includes the award of fees to Zephyr.

Skylight now seeks to vacate the award of attorney fees contained in the November 6, 2020 judgment, conceding that it did not properly assert the newly raised basis for relief in the instant motion until after the Court rendered its decision and entered judgment thereon. (See Lewowitz Decl. ¶ 5 [“I did not notice until November 2020 . . .”]; Mot. at 6-7 [“Unfortunately, Counsel for the Skylight Parties did not notice prior to the hearing . . .”]; Reply at 6 [“[T]he Skylight Parties may not have pointed out this specific discrepancy prior to October 2, 2020 . . .”].) In the instant motion, Skylight contends that the invoices submitted in support of Zephyr’s motion for attorney fees stated that the total due for legal services provided up to December 31, 2019 was $437,086.94, contrary to the $509,532.00 Zephyr initially sought in its fee motion. (2/28/20 Neighbors Decl. ¶ 57 & Ex. 48.) In awarding fees, the Court noted that Zephyr appropriately did not seek recovery of fees from the separate unlawful detainer action, which were reflected in dark gray highlights in the invoices submitted with Zephyr’s motion. (10/2/20 Minute Order at 4.) Skylight, however, for the first time now contends that the $437,086.94 included a total of $158,072 in highlighted dark gray billing entries. (Lesowitz Decl. ¶ 4.)

Skylight thus argues that the actual amount of fees incurred up to December 31, 2019 was $279,014.94, which is the difference between the $437,086.94 total for pre-2020 billing asserted by Zephyr and the total $158,072 in fees reflected in dark gray highlighted billing entries. Accordingly, Skylight seeks an amendment of the award to $323,022.79, consisting of the sum of $279,014.94 with the highlighted billing entries excluded and the $87,653.90 awarded for the post-attorney fee motion briefing (see 10/2/20 Minute Order at 1), minus the $43,646.05 in billing entries the Court found to be unnecessary and excessive (see 10/2/20 Minute Order at 5).

Insofar as Skylight seeks its post-judgment relief under the provisions of CCP ; 657 for a new trial, the Court finds that none of the grounds under CCP ; 657 apply here. CCP ; 657 states, in relevant part, that relief may be granted for any of the following causes materially affecting the substantial rights of the moving party:

1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.

2. Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors.

3. Accident or surprise, which ordinary prudence could not have guarded against.

4. Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.

5. Excessive or inadequate damages.

6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.

7. Error in law, occurring at the trial and excepted to by the party making the application.

CCP ; 657(2) does not apply, because the underlying judgment was reached after a bench trial and a decision by the Court on Zephyr’s motion for attorney fees. CCP ;; 657(3) and (4) do not apply, because the billing records upon which Skylight could have discovered the purported discrepancy were included in the moving papers filed on February 28, 2020. CCP ; 657(5) does not apply, because Skylight disputes the award of attorney’s fees, not the underlying damages award. CCP ; 657(7) does not apply, because Skylight argues factual error in that the amount of attorney fees awarded to Zephyr is purportedly not supported by its billing records.

With respect to CCP ; 657(1), Skylight fails to show an irregularity in the proceedings of the Court or an order of the Court that prevented Skylight from having a fair trial. “An ‘irregularity in the proceedings’ is a catchall phrase referring to any act that (1) violates the right of a party to a fair trial and (2) which a party ‘cannot fully present by exceptions taken during the progress of the trial, and which must therefore appear by affidavits.’” (Montoya v. Barragan (2013) 220 Cal.App.4th 1215, 1229–30 [quoting Gay v. Torrance (1904) 145 Cal. 144, 149].) Here, as stated with respect to CCP ; 657(3) and (4), Skylight had the opportunity to fully examine the December 2019 invoice and raise any purported discrepancy in its oppositions to Zephyr’s fee request.

Moreover, the Court notes Skylight was afforded more opportunity than is typical to oppose Zephyr’s motion for attorney fees. On May 11, 2020, Skylight filed its initial 14-page opposition to the motion. On August 13, 2020, after the matter was fully briefed and two weeks before the motion was originally scheduled to be heard, Skylight filed an ex parte application seeking to continue the motion hearing on the ground that Skylight hired additional counsel, who had retained the services of an “attorney fee expert . . . to review the extensive billing which was submitted with the motion for attorney fees.” (8/13/20 Mot. to Continue Def’s Mtn. for Attorney Fees; 8/13/20 Tamer Decl. ¶ 3.) Over Zephyr’s objection, the Court continued the hearing and set a briefing schedule to permit Skylight to submit a supplemental opposition. (8/14/20 Minute Order.) With yet additional hired counsel, Skylight filed a supplemental 18-page opposition, along with a 166-page filing in support thereof, which included the 23-page declaration of attorney fee expert Grant D. Stiefel and his several expert reports. (9/9/20 Supp. Opp.; Stiefel Decl. & Exs. D, E, F, G, H & I.) Notably, Stiefel stated he was one of only “a handful of full-time attorney experts is the United States” working in this “highly-specialized niche in the legal profession.” (Stiefel Decl. ¶ 4.) In rendering his highly-specialized opinion in support of Skylight’s opposition, Stiefel specifically indicated he reviewed the declaration of Zephyr’s counsel and all invoices and billing records submitted therewith, stating explicitly that he “personally reviewed each of the nearly 1,000 individual line-item billing entries that comprise [Zephyr]’s fee request.” (Stiefel Decl. ¶¶ 14.e, 27.) Having done so, Stiefel identified numerous errors, problems, and issues he found with respect to Zephyr’s fee request, including inflated hourly rates, inappropriate redactions in billing records, block billing, “unnecessary and non-compensable work,” and “excessive time” spent on matters—all of which led to his conclusion that Zephyr should receive fees no greater than $224,441.96. (Stiefel Decl. ¶¶ 18-48.) In advance of the hearing on Zephyr’s motion, the Court issued a detailed, 7-page tentative ruling addressing all issues raised in Skylight’s two opposition briefs and the Stiefel Declaration. Before making a final ruling, at the October 2, 2020 hearing, the Court entertained substantial oral argument from Skylight, which was represented at the hearing by three separate counsel. (10/2/20 Minute Order.) Based on all the foregoing, the Court cannot find Skylight was denied a “fair trial” or, in this case, a fair hearing on the motion for attorney fees.

With respect to CCP ; 657(6), the record before this Court is sufficient to support the conclusion that the $437,086.94 for “Total Amount Due” (emphasis added), as reflected in the December 2019 invoice, accounts for payments Zephyr made to its counsel prior to the generation of the invoices. As an example, in the April 2018 invoice, the Total Amount Due, which included a previous balance, was $36,606.76. (Neighbors Decl. ¶ 37 & Ex. 28.) However, the May 2018 invoice reflected a Total Amount Due of $30,876.41, with no previous balance. (Neighbors Decl. ¶ 38 & Ex. 29.) These changing amounts in the total amount due are consistent with the invoices accounting for payments Zephyr made to its counsel. As a further example, the December 2019 invoice reflects a Total Amount Due of $437,086.94, with a previous balance of $355,525.53. (Neighbors Decl. ¶ 57 & Ex. 48.) However, the November 2019 invoice reflects a Total Amount Due of $365,732.74, which suggests Zephyr paid its counsel $10,207.21 between the generation of the November and December 2019 invoices. (Neighbors Decl. ¶ 56 & Ex. 47.)

Because it can reasonably be inferred from the invoices that the figures for “Total Amount Due” reflected payments received and thus do not reflect all fees incurred, the Court could credit Zephyr’s assertion in its moving papers that it incurred $509,532.00 as of the filing of the fee motion based on the invoices. (Neighbors Decl. ¶¶ 31-57 & Exs. 22-48; Lindhardt Decl. ¶ 2 [“Defendants filed their fee motion on February 28, 2020. In the motion, Defendants sought $509,532.00 in fees incurred from October 2017 (the month that they retained Greenberg Traurig in this matter) through December 2019 (the most recent month for which fees were billed at the time). The invoices for these fees are attached to the declaration of Michael S. Neighbors in support of the fee motion as Exhibits 22-48.)”] Likewise, the Court was entitled to credit Zephyr’s assertion that its fee request did not include billing entries for the unlawful detainer action highlighted in dark gray. (Neighbors Decl. ¶¶ 31-57.) It was Skylight’s obligation to point out such purported discrepancies, which it did not. Consequently, Skylight can hardly be heard to complain now about Zephyr’s evidence of payments to counsel when it never raised the issue and afforded Zephyr the opportunity to respond or supplement the record further. (See Etcheson v. FCA US LLC (2018) 30 Cal.App.5th 831, 848 [“[G]eneral arguments that fees claimed are excessive, duplicative, or unrelated do not suffice”].) In any event, the record is sufficient to support the fee award such that a new trial should not be granted. (See CCP ; 657 [“A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the . . . decision . . . unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court . . . clearly should have reached a different . . . decision”].)

For the first time in its Reply, Skylight argues that the Court also has the power to modify the judgment under CCP ; 662. However, Skylight did not cite this statute in its notice of motion or points and authorities. (See 11/23/20 Notice of Motion; 11/30/20 Mtn.) Further, the Court can only modify the judgment if it finds grounds to order a new trial. (See CCP ; 662 [“In ruling on such motion [for new trial], in a cause tried without a jury, the court may . . . modify the judgment, in whole or in part, vacate the judgment, in whole or in part, and grant a new trial on all or part of the issues . . . .”].) For the reasons stated above, Skylight fails to state grounds for a new trial.

Skylight also moves to vacate the judgment under CCP ; 663. Although the statute does not require new facts or evidence, the judgment can only be vacated here if there was an “[i]ncorrect or erroneous legal basis for the decision, not consistent with or not supported by the facts.” “A motion to vacate under section 663 is a remedy to be used when a trial court draws incorrect conclusions of law or renders an erroneous judgment on the basis of uncontroverted evidence.” (Simac Design, Inc. v. Alciati (1979) 92 Cal.App.3d 146, 153.) Here, the parties disagree on how the billing records Zephyr presented in its moving papers should be interpreted. Skylight maintains that the invoices do not support fees of $509,532.00 because the “Total Amount Due” in the December 2019 invoice was $437,086.94. Zephyr explains that the balance on the December 2019 invoice is net of payments that Zephyr made prior to the generation of the invoice and therefore, the invoices still support a fee request of $509,532.00 in the moving papers. Based on this dispute, the evidence is not “uncontroverted,” and relief under CCP ; 663 is not appropriate.

Skylight also argues that the filing of a malicious prosecution action, Zephyr Investment Company, LLC v. Skylight Advisors, LLC et al., Case No. 20STCV39640, warrants a stay of the attorney fee award. Skylight points to an allegation in the malicious prosecution complaint mentioning the reduction of $43,646.05 to Zephyr’s request for attorney fees that the Court found to be excessive. (Lesowitz Decl. ¶ 6 & Ex. B, ¶ 29.) According to Skylight, this allegation somehow reopens the issue of the reasonableness of the attorney fee award in this case, even though Zephyr does not pray for recovery of the fee reduction or assert the Court’s ruling was in error. Although this Court has deemed the malicious prosecution action related to this breach of lease agreement action for case management purposes, the actions have not been consolidated. The proceedings in the malicious prosecution action are separate from and do not affect the judgment in this breach of lease agreement action. Skylight cites no authority for its assertion that a separate malicious prosecution action reopens the judgment in an underlying action such that the award of attorney fees should be vacated.

Skylight also points to two lawsuits titled Zephyr Investment Company LLC v. Kazem Moghim et al., Case Nos. 19STCV42992 and 20STCV25582, in which Zephyr alleges that Skylight and/or its manager, Kazem Moghim, fraudulently conveyed real property to shell entities to hinder collection on Skylight’s debts to Zephyr. (Lesowitz Decl. ¶¶ 7, 8 & Exs. C, D.) Skylight fails to cite any applicable authority to support the proposition that a fee award should be vacated when an unrelated action has been commenced.

Skylight also argues that the fees should be reduced or eliminated on equitable grounds. Skylight points to new evidence purportedly showing that someone at Zephyr posted the lease agreement with Moghim’s Social Security number. (Lesowitz Decl. ¶¶ 12-18; see generally Miholovich Decl.; Hyman Decl.) Skylight also argues that its former counsel, Greenberg Traurig, LLP is breaching a fiduciary duty owed to Moghim, because the firm previously represented Moghim with respect to real property that is the subject of one of Zephyr’s fraudulent conveyance actions against Moghim. (See generally Moghim Decl.; Lesowitz Decl. ¶¶ 9, 10 & Exs. E, F.) Greenberg Traurig is purportedly assisting Zephyr’s collection counsel to collect against its former client with respect to such property. (Motion at 9-10, fn. 1.) The Court expresses no opinion on whether the breach of fiduciary issue, other than to conclude that such issue is not relevant to the instant matter concerning attorney fees in this action and may be addressed, if at all, in the other action giving rise to the purported breach.

The Court also declines to modify a final fee award based on Skylight’s assertion that Zephyr failed to return its security deposit. (Moghim Decl. ¶ 3.) The issue of whether Zephyr has withheld the security deposit is not properly before this Court. Moreover, while a wrongfully withheld deposit might be the basis for an offset against Zephyr’s collection of its fee award, it does not provide a basis for this Court to reduce the amount of fees Zephyr should be awarded as reasonably incurred.

Skylight also argues that the award of $9,637.32 in costs should be vacated because the memorandum of costs was not served on Skylight’s counsel. (Motion at 5-6.) Skylight notes that the memorandum of costs attached to the Notice of Proposed Amended Judgment as Exhibit C did not contain a proof of service. The memorandum of costs was filed on February 28, 2020. A proof of service was attached, which stated that Robert K. Lu, Esq. was served on behalf of Skylight. Lu was counsel for Skylight at the time. Accordingly, the memorandum of costs was properly served.

The motion for order vacating the award for attorney fees and costs is DENIED.***********************************************************************************************************************************************************

MOTION TO TAX COSTS

[CCP ; 685.070(c)]

Date: 1/8/21 (8:30 AM)

Case Number: Skylight Advisors v. Zephyr Investment Company, et al. (****7515)

TENTATIVE RULING:

Plaintiff and Cross-Defendant Skylight Advisors LLC and Cross-Defendants Urbino Construction Inc. and Kazem Moghim’s (collectively “Skylight”) Motion to Tax Costs is GRANTED.

In its November 30, 2020 motion papers, Skylight made two requests for relief: (1) to vacate the attorney’s fee award and Amended Judgment, entered November 6, 2020; and (2) to tax costs claimed in the Memorandum of Costs After Judgment, filed November 12, 2020. However, Skylight only paid one $60 motion fee for what should have been two separately filed motions with separate $60 filing fees.  Within two (2) court days from this ruling, Skylight shall pay an additional $60 fee to the Clerk of the Court.  Failure to do so will result in the Court deeming Skylight’s motion to tax costs as having not been made and Zephyr’s November 12, 2020 Memorandum of Costs unopposed.

CCP ; 685.040 and the attorney fee provision in the lease agreement between Zephyr, Skylight, and Moghim provide for Zephyr to recover attorney fees incurred in enforcing the judgment. CCP ; 685.070(b) allows Zephyr to file a memorandum of costs after judgment “[b]efore the judgment is fully satisfied but not later than two years after the costs have been incurred.” Here, judgment on the Cross-Complaint was entered on February 10, 2020, awarding Zephyr damages of $142,234.50. On November 6, 2020, an amended judgment awarding Zephyr attorney’s fees of $553,539.85 was entered.

On November 12, 2020, Zephyr filed a memorandum of costs after judgment claiming $48,366.15 in attorney fees under CCP ; 685.040. While Skylight paid $149,618.26 to satisfy the damages portion of the judgment, it is undisputed that Skylight has not satisfied the entire judgment. It has also been less than two years since the judgment or the amended judgment have been entered. Accordingly, Zephyr’s memorandum of costs after judgment is timely filed.

Zephyr claims $19,397 in hourly fees and $29,923.65 in contingency fees for a total of $49,320.65. Zephyr confirms that it is willing to accept the lesser amount of $48,366.15. (Opposition at 16, fn. 1.)

In support of its request, Zephyr submits the declaration of Michael A. Wallin, Esq., counsel Zephyr hired to collect on the judgment in June 2020. (Wallin Decl. ¶¶ 5, 7.)  Wallin’s declaration describes efforts to collect on the judgment, including drafting subpoenas on entities allegedly owned by Moghim, preparing for debtor examinations, researching debtors’ purported assets, and filing fraudulent conveyance actions. (Wallin Decl. ¶¶ 10-12.) However, Wallin’s declaration also describes work in connection with other cases, namely, fraudulent conveyance matters in other departments of the Los Angeles County Superior Court.  CCP ; 685.040 allows Zephyr to recover attorney fees incurred in collecting on the judgment, which theoretically could include fees incurred in litigating other actions to recover on the judgment. Further, although the damages portion of the judgment has been satisfied, the attorneys’ fee award, which is also part of the judgment, has not been satisfied.  Under CCP ; 685.040, Zephyr might be entitled to recover fees reasonably incurred to obtain full satisfaction of the judgment, even if such fees were incurred in connection with separately filed fraudulent conveyance actions before other courts.

However, under CCP ; 685.070(c), the Court has discretion to disallow costs “to the extent justified under the circumstances of the case.”  Without prejudice to Zephyr seeking its judgment collection costs when warranted under future circumstances, the Court GRANTS Skylight’s motion to tax costs requested in the November 12, 2020 Memorandum of Costs for the reasons that follow.

Zephyr’s current request for attorney fees appears to seek a double recovery.  Counsel seeks $19,397 in fees for hourly attorney work, charging hourly rates ranging from $125 to $195, which appear to be reasonable. (Wallin Decl. ¶ 18.) However, in addition, Zephyr seeks to recover a fee award based on the 20% contingency fee charged by its counsel, totaling $29,923.65. (Wallin Decl. ¶ 8.) Contingency fees may not reflect the reasonable value of counsel’s services. (All-West Design, Inc. v. Boozer (1986) 183 Cal.App.3d 1212, 1227.) Zephyr does not justify why it is entitled to both hourly fees and contingency fees.  Nor does Zephyr provide any basis for the Court to conclude that the requested total fees of over $48,000 otherwise account for the reasonable cost or value of the collection efforts.

The Court also questions whether Zephyr should be able to recover for fees incurred after August 18, 2020, which is the date on which Skylight satisfied the damages portion of the judgment. Zephyr was not awarded any attorney fees until October 2, 2020, and the Amended Judgment incorporating these attorney fees was not entered until November 6, 2020. It is unclear why Zephyr should be awarded fees for services provided between August 18, 2020 and October 2, 2020 (or perhaps November 6, 2020) to collect unknown fees Skylight had no obligation to pay. 

Relatedly, the Court notes that Zephyr filed its memorandum of costs after judgment on November 12, 2020, only six days after the amended judgment was entered and three days after the notice of the entry of judgment was mailed to the parties.  Under such circumstances, the Court questions whether any fees incurred between October 2, 2020 and November 12, 2020 were due to reasonable efforts to collect given that Skylight’s obligation to pay attorney fees had only arisen on October 2, 2020.

The Court also questions whether Zephyr can recover for fees solely incurred in the litigation of the pending fraudulent conveyance actions. A number of billing entries by Wallin & Russell LLP clearly arose only in connection with those separately filed actions, including:

Date

Attorney

Description

Hours

Rate

Total

7/3/2020

Michael Wallin

Drafted complaint re 5814 La Mirada Avenue. Reviewed documents re same.

0.9

$195

7/16/2020

Michael Wallin

Drafted lis pendens re APN 2190-004-028.

0.4

$195

9/1/2020

Michael Wallin

Drafted opposition to Moghim's motion to expunge lis pendens re 2157 Mount Olympus.

4.6

$195

9/15/2020

Michael Wallin

Drafted Requests for Admission to Sunset Horizon LLC.

0.9

$195

11/10/2020

Justin Wolf

Started preparation of written discovery (Form Interrogatories and Requests for Admission) for both UVTA cases

3.8

$175

Zephyr makes an insufficient that the prosecution of those separate actions should be viewed as collection efforts on the judgment obtained in this matter.

Further, the merit of Zephyr’s contention that Skylight and Moghim fraudulently conveyed real properties to shell entities to avoid collection has yet to be determined. Without final resolution of the fraudulent conveyance actions, it would seem the reasonableness of the value of legal services reflected in billing entries solely dedicated to those separate actions cannot be determined.  Further still, even if Zephyr were ultimately to prevail in one or both of the fraudulent conveyance actions, its attorneys’ fees expended in connection with any such action can only be recovered once—either in the fraudulent conveyance action as a prevailing party entitled to fees, on the one hand, or in this action as an effort to collect on the judgment, on the other hand.  The Court questions where such fees may more appropriately be sought, particularly as the court presiding over the fraudulent conveyance action may generally be in a better position to evaluate the value and reasonableness of the attorneys’ work before it.

Accordingly, Skylight’s Motion to Tax Costs is GRANTED, but without prejudice to Zephyr seeking the costs asserted in the November 12, 2020 memorandum of costs after judgment at a later date within the time allowed under CCP ; 685.070(b).



Case Number: ****7515    Hearing Date: October 02, 2020    Dept: E

MOTION FOR ATTORNEY FEES

[CCP ;1033.5(c)(5), Civil Code ; 1717]

Date: 10/2/20 (2:00 PM)

Case: Skylight Advisors v. Zephyr Investment Co., et al. (****7515)

TENTATIVE RULING:

Defendant/cross-complainant Zephyr Investment Company LLC and defendant Joshua Bereny’s Motion for Attorney’s Fees is GRANTED IN PART.

As of the date of this hearing, defendant/cross-complainant Zephyr Investment Company LLC (“Zephyr”) and defendant Joshua Bereny (“Bereny”) (collectively “defendants”) seek $597,185.90 in attorney fees incurred in defense of the Third Amended Complaint and in prosecution of the Cross-Complaint. (10/1/20 Linhardt Decl. ¶ 6.) This amount consists of $509,532 sought in defendants’ initial fee motion, $50,906 sought in defendants’ reply, $32,732.90 requested in defendants’ supplemental reply brief, and $4,015 in opposition to the ex parte application relating to the fee motion. (See 10/1/20 Linhardt Decl. ¶¶ 2-5.)

As an initial matter, the Court finds that plaintiff/cross-defendant Skylight Advisors LLC (“Skylight”) and cross-defendant Kazem Moghim (collectively “Skylight”) had adequate notice that defendants were seeking attorney fees against them. The notice of motion states that it is based on all papers and pleadings on file, which includes the points and authorities and the proposed order. The motion and the supporting papers indicate that the request for attorney fees is against Skylight Advisors LLC and Moghim, jointly and severally. (Mot. at 1 & fn. 1 [“Kazem Moghim is jointly and severally liable for any fees awarded.”]; Proposed Order at 2 [defendants seek fees against “Plaintiff and Cross-Defendant Skylight Advisors LLC and Cross-Defendant Kazem Moghim,” jointly and severally].) The motion also notes that the lease containing the attorney fee provision at issue here was between Zephyr Investment Company LLC, as the landlord, and Skylight Advisors LLC, as the lessee. (Mot. at 1; Neighbors Decl. ¶ 2 & Ex. 1 at ¶ 1.1.) The motion also details Skylight Advisors LLC’s intransigence in refusing to comply with the terms of the lease and engaging in a “war of attrition” during the litigation. (Mot. at 2-6.) Based on the totality of the moving papers, both Skylight Advisors LLC and Moghim had adequate notice that defendants seek attorney fees against them.

The Court finds that defendants are the prevailing parties in the action. The matter arose out of a written Lease Agreement between Zephyr and plaintiff/cross-defendant Skylight Advisors LLC and out of a written Guaranty of Lease between Zephyr and cross-defendant Kazem Moghim. Both agreements provide that the prevailing party shall be entitled to reasonable attorney’s fees. (Neighbors Decl. ¶¶ 2, 3 & Exs. 1, 2.) The Court notes, however, that Bereny signed the agreements in his capacity as Zephyr’s manager. Accordingly, Bereny is not individually entitled to attorney fees. “Someone who is not a party to the contract has no standing to enforce the contract or to recover extra-contract damages for wrongful withholding of benefits to the contracting party.” (Hatchwell v. Blue Shield of California (1988) 198 Cal.App.3d 1027, 1034.)

Skylight argues that the request for attorney fees exceeds the amount allowed under the fee schedule set forth in Los Angeles Superior Court Local Rule 3.214. That may be true, but Local Rule 3.214 also provides the Court with discretion to award greater fees than allowed under the fee schedule. (Cruz v. Ayromloo (2007) 155 Cal.App.4th 1270, 1276 [“[T]he trial court permissibly departed from the guidelines [in the fee schedule] and based its fee award on the ‘lodestar’ method of calculating attorneys' fees . . . . [T]he trial court awarded fees consistent with Civil Code section 1717. Civil Code section 1717 permitted the trial court to award ‘reasonable’ attorneys' fees incurred ‘in connection with” the lease at issue in this case.’”].) Moreover, the attorney fee provisions for both agreements at issue state explicitly that the fee award “shall not be computed in accordance with any court fee schedule.” (Neighbors Decl. ¶¶ 2, 3 & Exs. 1 [¶ 31], 2.)

In addition, the Court’s determination of reasonable attorney fees is not impacted by whether defendants’ counsel has received fees from defendants as of yet or whether some other party (e.g., Bereny Enterprises LLC) may be footing defense counsel’s bill. (West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 707 [“[T]he fact that a fee was not paid is no evidence that it has not been earned and that the client is not obligated to pay it.”]; International Billing Services, Inc. v. Emigh (2000) 84 Cal.App.4th 1175, 1192 [“Here, the [prevailing parties] became liable to pay the fee even if they were not the source of payment the attorney agreed to look to first. Therefore they incurred the fees and, by virtue of the reciprocity provision of [Civil Code] section 1717, they are entitled to an award of fees”] [emphasis in original].)

In evaluating defendants’ fee request, the Court also finds that the declarations of Michael S. Neighbors in support of the motion and reply are admissible. Counsel has a basis to set forth the number of years of experience each attorney has and the position the attorney or paralegal holds at the firm (e.g. Shareholder or Of Counsel), which the Court finds useful in evaluating the reasonableness of the claimed hourly rates. (Neighbors Motion Decl. ¶¶ 23-30.) The Court also finds that Counsel is qualified to authenticate the invoices from his firm, which are attached to the declaration. “A trial judge has broad discretion in admitting business records under Evidence Code section 1271, and it has been held that the foundation requirements may be inferred from the circumstances.” (People v. Dorsey (1974) 43 Cal.App.3d 953, 961.) Indeed, the invoices themselves indicate they pertain to the “Skylight Advisors Lease Dispute” and the dates and descriptions of work therein logically correspond to this action. (Neighbors Decl. ¶¶ 31-57 & Exs. 31-48.) Notably, even Skylight’s expert presumes the invoices to be authentic business records when analyzing their substance.

Based on the record before it, notwithstanding what any hourly rate survey or matrix may indicate, the Court in its discretion finds that the hourly rates charged by defense counsel in this action are reasonable. (Syers Properties III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 702.) The Court notes that the hourly rates charged by defense counsel are in line with customary rates of a large global law firm with expertise in complex commercial real estate litigation and that, consistent with the relatively less complex nature of the instant litigation, defense counsel leanly staffed the matter with relatively junior associates at lower billing rates. (See 2/28/20 Neighbors Decl. ¶¶ 22-30; 5/15/20 Neighbors Decl. ¶¶ 5-6; see also 9/22/20 Linhardt Decl. ¶¶ 11-16, 18.) This approach was entirely appropriate and reasonable under the circumstances.

As for whether Zephyr’s claimed billing entries are reasonable, as an initial matter, the Court notes: “When confronted with hundreds of pages of legal bills, trial courts are not required to identify each charge they find to be reasonable or unreasonable, necessary or unnecessary . . . . A reduced award might be fully justified by a general observation that an attorney overlitigated a case or submitted a padded bill or that the opposing party has stated valid objections.” (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 101.) With respect to Skylight’s various challenges to the reasonableness of the billing entries, the Court makes the following findings:

Defendants do not seek fees incurred in the prosecution of the prior unlawful detainer action. (Mot. at 7 & fn. 3.) Defendants highlighted in dark gray the entries for which they were not seeking fees, including the unlawful detainer matters. (Neighbors Decl. ¶¶ 31-57 & Exs. 22-48.) As for work in connection with a notice to cure-or-quit in May 2018 and a notice to pay-or-quit in June 2018, those notices formed the basis for the ejectment and breach of contract causes of action in the Cross-Complaint in this action.

Defendants are correct that arbitration of this action was not required due to the presence of third parties (including defendant Bereny and cross-defendants Urbino Construction Inc. and Stars Energy Corporation Roofing and Solar Systems) who were not signatories to the lease containing the arbitration provision. (Neighbors Decl. ¶ 16 & Ex. 15.) Accordingly, Zephyr was entitled to oppose the motion to compel arbitration and, as the prevailing party, now collect fees for opposing that motion and litigating this action thereafter. Further, because Zephyr’s claims against Urbino and Stars Energy were intertwined with the claims against Skylight and Moghim, the Court declines to apportion the fees as between the cross-defendants.

Defendants are entitled to redact entries that contained privileged information. (Hartford Casualty Ins. Co. v. J.R. Marketing, L.L.C. (2015) 61 Cal.4th 988, 1005–06 [“If privileged information on these subjects is included in counsel's billing records, it can be redacted for purposes of assessing whether counsel's bills are reasonable”].) The redactions highlighted by Skylight’s expert do not prevent the Court from determining whether the billing was incurred in this matter and whether such billing was reasonable. (Stiefel Decl. ¶¶ 31, 38 & Exs. D, F.) Many phone calls, conferences, and emails, the contents of which are protected by attorney-client privilege, are to be expected in a heavily litigated action like this one.

The purportedly block billed entries generally contain sufficient detail for the Court to evaluate their reasonableness. (Opposition at 10-11; Stiefel Decl. ¶¶ 37, 38 & Exs. E, F) They generally appear reasonable and necessary to the successful resolution of the case. The Court thus finds no basis or reason to apply any across-the-board reductions for block billing or redacted entries.

Zephyr is entitled to fees for post-reply briefing. (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 580 [“It is well established that plaintiffs and their attorneys may recover attorney fees for fee-related matters”].) Skylight and Moghim were on notice that they may be liable for fees they caused defendants to incur after the reply was filed, including by the filing of a supplemental opposition and ex parte application to fix the amount of bond to stay enforcement on appeal. (Reply at 5.)

The Court agrees with Skylight that there have been some unnecessary and excessive billings by defendants’ attorneys for certain matters (Stiefel Decl. ¶¶ 42, 44 & Exs. G, H), and the Court accordingly makes the following reductions:

· Preparation for and finalization of the Case Management Statement was a task that should have taken no more than three hours of an associate attorney’s time (3 hours x $330 = $990). The $2,147.50 claimed for this task should be reduced by $1,157.50

· Defendants’ successful motion for summary judgment involved the fairly straightforward application of principles of estoppel and res judicata. Accordingly, the Court finds the 82.50 hours devoted to this task excessive and will reduce the claim of $39,078.50 for this work by $9,000 (20 hours x $450).

· Preparation of a form Memorandum of Costs is a task that should have taken no more than four hours of an associate attorney’s time (4 hours x $450 = $1,800). The $4,449.50 claimed for this task should be reduced by $2,649.50

· The claimed 11.60 hours for work on an ex parte application to continue trial and motion dates to which Skylight stipulated was excessive. Applying a 50% reduction to the $5,360.50 claimed, the amount should be reduced by $2,680.25

· The claimed 50.70 hours spent on the motion for judgment on the pleadings based on lack of specificity and collateral estoppel was excessive. Applying a 30% reduction to the $17,596 claimed, the amount should be reduced by $5,278.80

· The relatively short ex parte application to compel the continued deposition of Skylight’s PMK should have taken no more than six hours to prepare (6 hours x $450 = $2,700). The claimed $5,580 should accordingly be reduced by $2,880

· In connection with the instant fee motion, it appears defense counsel has billed upwards of $55,000 in connection therewith. (See 5/15/20 Neighbors Decl. ¶ 7 & Ex. 49; 9/22/20 Linhardt Decl. ¶ 7; 10/1/20 Linhardt Decl. ¶¶ 4-5). While the Court recognizes Skylight’s opposition has contributed to such costs, the Court finds the hours spent on this matter excessive (particularly the nearly $40,000 in fees generated in connection with the initial motion papers) and will reduce the claimed amount by $20,000.

For the reasons set forth above, the Court will reduce the amount of fees by $43,646.05. Other than those specific matters identified and discussed above, the Court finds defense counsel’s billing entries were reasonable and necessary. Thus, the Court does not find any further reduction is warranted. In so concluding, the Court notes that, to the extent defendants may have worked on matters that were not used at trial or were denied, defendants were entitled to pursue these legal theories and recover the fees incurred. (Greene v. Dillingham Construction, N.A., Inc. (2002) 101 Cal.App.4th 418, 424, quoting Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 250 [“Attorneys generally must pursue all available legal avenues and theories in pursuit of their clients' objectives; it is impossible, as a practical matter, for an attorney to know in advance whether or not his or her work on a potentially meritorious legal theory will ultimately prevail.”].)

In the supplemental opposition, Skylight also states that defendants and their counsel failed to redact Moghim’s Social Security number in the Cross-Complaint and proposed judgment, which purportedly led to the theft of Moghim’s identity. (Moghim Decl. ¶¶ 3-8.) While the Court has discretion to reduce the lodestar amount based on equitable principles, the Court does not exercise such discretion here. (EnPalm, LLC v. Teitler (2008) 162 Cal.App.4th 770, 774, 778 [“[T] he trial court's use of equitable considerations to reduce the lodestar amount of appellants' attorney fees because most of those fees were unnecessary was proper under both PLCM and Graham”].) Other than speculation, Skylight has no evidence that any of the Zephyr parties posted the “Ripoff Report,” where a copy of the cross-complaint containing the guarantee with Moghim’s unredacted Social Security number was posted, or that the Ripoff Report led to any purported identity theft.

Accordingly, using the appropriate lodestar approach, and based on the foregoing findings and in view of the totality of the circumstances, the Court finds that the total and reasonable amount of attorney’s fees and costs incurred for the work performed in connection with Zephyr Investment Company LLC’s defense against the Third Amended Complaint and prosecution of the Cross-Complaint against Skylight Advisors LLC is $553,539.85, out of $597,185.90 requested. Such fees are awarded to defendant/cross-complaint Zephyr Investment Company LLC against plaintiff/cross-defendant Skylight Advisors LLC and cross-defendant Kazem Moghim, jointly and severally.

Plaintiff/cross-defendant Skylight Advisors LLC and cross/defendants Urbino Construction Inc., and Kazem Moghim’s Ex Parte Application for an Order (1) Striking the Declaration of Alex Linhardt, (2) Continuing the Hearing on the Motion for Attorneys' Fees, (3) Allowing for Fee-related Discovery, (4) Allowing the Filing a Response, and (5) Filing of Satisfaction of Judgment is DENIED.

In the ex parte application, Skylight seeks a continuance of this motion based on the filing of the declaration of Alex Linhardt in support of the supplemental reply. Skylight contends that the Linhardt declaration contains new facts concerning the experience of the attorneys who worked on this matter, which could have been provided in the moving papers. As discussed above, the Neighbors declarations contain the necessary information for the Court to evaluate the reasonableness of the hourly rates. Accordingly, the supplemental (and consistent) information in the Linhardt declaration was not necessary to the Court’s decision. With respect to the objection that the Linhardt declaration lacks foundation concerning the invoicing practices of counsel, the Court finds that the Linhardt declaration is admissible for the same reasons as the Neighbors declarations. With respect to Skylight’s request to conduct discovery regarding the reasonableness of the billing entries, the Court believes Skylight has had ample opportunity to dispute the reasonableness of the fee request, including by submitting an expert declaration. The Court thus finds that additional discovery is unwarranted to evaluate or oppose defendants’ fee request.

With respect to the request for a satisfaction of judgment, the Court inquires from defendants whether they have received the check Moghim claims he served. (Moghim Ex Parte Decl. ¶ 2 & Ex. 1.)



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