Motion to Tax Costs in Rodney Abbott, et al vs. Ronald Paul Britschgi, et al| Trellis.Law

On September 24, 2007 a Motion,Ex Parte was filed involving a dispute between and for (Breach of Contract/Warranty) in the District Court of Sacramento County.

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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SACRAMENTO

DATE/TIME : APRIL 13, 2 0 1 1 DEPT. NO : 43
JUDGE : BRIAN R. VAN CAMP CLERK : T.BROWN
REPORTER : NONE BAILIFF : NONE

RODNEY ABBOTT and FLORENTINE ABBOTT,
Plaintiff,

VS. Case No.: 07AS04450

RONALD PAUL BRITSCHGI, ind and dba BRITSCHGI
CONTSTRUCTION; RICHARD KIRK RUYBALD, ind and
dba CA CONSTRUCTION; et a!..
Defendant.

Nature of Proceedings: MOTION FOR ATTORNEYS' FEES and MOTION TO TAX
COSTS - FINAL RULING

Defendant, Richard Ruybalid's Motion for Attorney Fees, Expenses and Costs

Contractual Attorney Fees
Background and Arguments
Defendant's nnotion for attorney fees is granted as to its right to obtain such. Ruling on the
amount of fees to be awarded is deferred pending receipt of further supplemental briefing as to the
various types of legal services rendered and the costs or reasonable value thereof, all as more
specifically provided herein.

On February 3, 2011, the court entered judgment on the jury's verdict finding in favor of
defendant on plaintiff's cause of action for breach of contract.

Defendant seeks attorney fees pursuant to contract in the amount of $207,494.

The construction contract that was the subject of this action contains the following attorney
fee provision.

In opposition, plaintiffs contend that defendant is not necessarily the prevailing party on the
contract, because they prevailed on defendant's cross-complaint for indemnity when the law and
motion court granted plaintiff's motion for judgment on the pleadings. Plaintiffs argue that the cross-
complaint was an action on the contract, in that it sought indemnity from plaintiffs under the terms of
the contract. Plaintiff urges the Court to exercise its discretion and find there is no overall prevailing
party in the lawsuit.

In reply, defendant points out that the cross-complaint contained no cause of action based on
contract. The claims were for implied equitable indemnity; comparative indemnity; comparative
negligence; contribution; and declaratory relief.

Code ofCivil Procedure section 1021 specifically authorizes agreement for fee shifting awards.
It provides; "except as attorney's fees are specifically provided for by statute, the measure and mode
of compensation of attorneys and counselors at law is left to the agreement, express or implied, of
the parties."
Analysis
Fee awards for enforcing contracts that include fee-shifting clauses are governed by Civil Code
section 1717.

As pertinent here, Civil Code section 1717 provides:

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

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

"Attorney's fees provided for by this section shall not be subject to waiver by the parties to any
contract which is entered into after the effective date of this section. Any provision in any such
contract which provides for a waiver of attorney's fees is void.

"(b) (1) The court, upon notice and motion by a party, shall determine who is the party
prevailing on the contract for purposes ofthis section, whether or not the suit proceeds to final
judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party
who recovered a greater relief in the action on the contract. The court may also determine that there
is no party prevailing on the contract for purposes of this section. (Civ Code § 1717)"

Here, defendant won the case outright on plaintiffs' breach of contract and related claims.
Defendant obtained its main litigation objective. (See Hsu v. Atbara (1995) 9 cal.4th 863) It is clear
that defendant recovered greater relief in the action on the contract. Plaintiffs' success on the cross-
complaint for equitable indemnity and contnbutory negligence does not change that fact. Therefore,
defendant is entitled to its reasonable attorney fees.

In determining the reasonableness of a fee award, the Court is required to calculate the
"lodestar" amount. The Court must therefore determine the reasonable hourly rate and the
reasonable number of hours expended in this matter. The reasonable market value of the attorney's
services is the measure of the reasonable hourly rate. {PLCM Group Inc. v. Drex/er {2000) 22 Cal.4th
1084, 1094)

Here, defendant claims $185 an hour for partners and associates and $100 for paralegals. In
its independent judgment, the Court finds that the rates are reasonable in this community for the
work performed for the defendant in this case. The question, then, is whether the number of hours
was reasonable.

In his declaration in support ofthe motion, counsel, Todd Jones outlines 278.7 hours for
himself, 95.9 hours for Jasun Molinelli, 664.5 hours for Gregory Federico, 13.10 hours for Mike
McGuire, 29.7 hours for Jason Rose, 0.9 hours for Gino Cano, 3.0 hours for Lynette Hoang, 0.6 hours
for Lisa Estrabrook and 4.8 hours for Wendy Smith. Defendant attaches summaries of the billing
records but no detailed billing records and no description of the work undertaken by the various
attorneys.

Defendant also claims 38.5 hours for paralegal, Quinn Dube, 17.3 hours for paralegal. Mane
Cantrell, 1.6 hours for paralegal. Patrician Gould and 7.1 hours for summer associate, Jonathan S.
Lieberman. Defendant claims a total of 1,144.30.

Mr. Jones states that the time was spent on numerous depositions, pre-tnal pleadings and
appearances, law and motion, visual inspections, mediations/settlement conferences, a two-week jury
trial and post trial activities. He opines that the number of hours is reasonable. Mr. Jones also notes
that the firm is not seeking fees for associate Federico to attend trial.

In their opposition, plaintiffs object that defendant has not provided any basis for the amount
of fees sought, other than the declaration of Todd Jones. In particular, plaintiffs object that there is
no indication of how Gregory Federico spent 664 hours or of the hours spent by Mr. Jones outside of
the trial itself. Plaintiffs contend that the fee award should be based on detailed time records, or at
least a detailed explanation ofthe work performed.

The reply to the opposition is accompanied by a supplemental declaration of Todd A. Jones.
Attached to the declaration are some 112 pages billing records—all in a small font. However, counsel
includes no declaration explaining, interpreting or aggregating the contents of those records into
meaningful descriptions of discrete legal tasks. Further, Plaintiffs have had no opportunity to respond
to such records or make specific objections.

A brief review of the extensive records shows that some of the work performed was not on
behalf of this moving defendant, some of it appears to be duplicative and unnecessary, and some of
was necessitated because of the bankruptcy proceedings, which were not directed toward responding
to plaintiffs' claims, but to seeking debtor's protection against them, based on Federal Bankruptcy
laws Plaintiffs here are liable for none of such fees.

In the circumstances, the Court will defer ruling on the reasonable number of hours until May
13, 2011, at 10:00 a.m., in this department, to permit the parties to submit supplemental briefing.
Defendant therefore shall submit evidence ofthe work performed on his behalf in defense ofthe
contract claims in this action no later than the close of business on April 18, 2011. In so doing.
Defendant shall redact all other work included in the billing records. Defendant shall also summarize
the nature ofthe work performed, including that of paralegals, indicating only those hours ofthe
latter who were actually performing quasi-legal services, as opposed to administrative or clerical

Costs

Defendant also seeks cost pursuant to the contract, citing Code of Civil Procedure section 998,
and as the prevailing party under Code of Civil Procedure sections 1032 and 1033.5. Most of the
costs are included in the memorandum of costs. The Court will address those costs in its ruling on
plaintiffs' motion to tax costs below.

Over and above costs claimed as statutorily awardable. Defendant also seeks additional costs
in the amount of $12,934.88. Plaintiffs contend those costs are not recoverable, unless they are pled
and proved at trial.

Plaintiffs are persuasive. In Ripley v. Pappadopolous {1994) 23 Cal.App.4th 1616, the Third
District Court of Appeal determined that contractual costs not specifically allowed, or specifically
disallowed, by Code of Civil section 1033.5 must be specially pleaded and proven at trial, rather than
included in a memorandum of costs. Since defendant did not specially plead and prove its right to
recover these costs, it is not entitled to them. (See Ripley v. Pappadopolous {supra) at 1627.)

Plaintiffs' Motion t o Tax Costs Awardable by Statute

The motion is denied.

Defendant Is the Prevailing Party

Defendant claims its costs as the prevailing party under Code of Civil Procedure sections 1032
and 1033.5.

Relying on Wolf v. Walt Disney Pictures & Television {2008) 162 Cal.App.4th 1107, plaintiffs
contend that defendant is not necessarily the prevailing party, because they prevailed on defendant's
cross-complaint. Plaintiffs ask the Court to exercise its discretion to declare that no party prevailed.

The first prong of section 1032(a)(4) describes four categories of litigants who automatically
qualify as prevailing parties. It reads: " 'Prevailing party' includes [1] the party with a net monetary

The prevailing party determination is not discretionary under the first prong. {Wakefield v.
Bohlin {2006) 145 Cal. App. 4th 963, 975-976)

The second prong of section 1032(a)(4) provides that, where any party recovers other than
monetary relief, and in situations other than as specified, the prevailing party shall be determined by
the court.

Essentially, the second prong provides that, in situations other than the four specified
categories, or when a party recovers other than monetary relief, the trial court may determine the
prevailing party and. In its discretion, may choose to allow or not to allow costs. {Lincoln v. Schurgin
(1995) 39 Cal. App. 4th 100, 105)

Here, defendant falls squarely into the fourth category of section 1034(a)(4) as a defendant as
against those plaintiffs who do not recover any relief against that defendant. In these circumstances
the Court has no discretion. Defendant is entitled to statutory costs under 1032(a)(4).

Moreover, even ifthe second prong of 1032(a)(4) applies, the result is the same. The Court's
discretion is properly exercised in finding defendant to be the prevailing party entitled to costs. This
is not a mixed result case where the parties should bear their own costs.

Expert Witness Fees Pursuant to CCP Sec 998, Based on "Ambiguity" or "Token Offer"

Defendant seeks its expert witness fees pursuant to Code of Civil Procedure section 998.
Section 998 provides that, up until 10 days pnor to trial, "any party may serve an offer in wnting
upon any other party to the action to allow judgment to be taken or an award to be entered in
accordance with the terms and conditions stated at that time." (§ 998, subd. (b)

A plaintiff who does not accept a valid pretrial offer to compromise and who fails to obtain a
more favorable judgment or award may be required to pay defendant's expert witness costs, so long
as the section 998 offer was reasonable and made in good faith. {Nelson v. Anderson (1999) 72

Whether a section 998 offer was reasonable and made in good faith is left to the sound
discretion of the trial court. {Nelson v. Anderson {supra) When a party obtains a judgment more
favorable than its pretrial offer, it is presumed to have been reasonable and the opposing party bears
the burden of showing otherwise. (See Nelson v. Anderson {supra) at 134; Thompson v. Miller {2003)
112 Cal.App.4th 327, 338-339) If the offer is in a range of reasonably possible results, and the
offeree has reason to know the offer is reasonable, then the offeree must accept the offer or be liable
for costs under Code of Civil Procedure section 998.

The Court determines the reasonableness of a section 998 offer-that is, whether it was
rendered in good faith or was an invalid token offer-as of the time the offer was made. "The
reasonableness of a section 998 offer must be made in light of the circumstances existing at the time
of the offer and not by virtue of hindsight." {Fortman v. Hemco, Inc. (1989) 211 Cal. App. 3d 241,
264)

In light ofthe presumption of reasonableness, plaintiffs have the burden of showing that the
$25,000 offer was not reasonable at the time it was made. Plaintiffs have failed to meet that burden.
Comparing the amount of the offer ($25,000) to the overall amount of the contract work to be
performed ($53,000), and considering the defense's theory ofthe case that, as the owner-builder of
both the cul d' sac and the home, plaintiff Mrs. Abbott knew or should have known, of all the details
about which she sued here, which theory was apparently adopted by the jury, the Court finds that
the offer was in good faith in light of the facts known at the time by both parties. Thus, the 998
penalties were triggered.

At the hearing on the motion, plaintiff raised the question of whether the defendant's 998 was
capable of being evaluated, in light of a) the 'ambiguity" resulting from the offer's silence on the
matter of their pending cross complaint for indemnity. The court finds no ambiguity, however, since,
if the matter is not addressed in the offer, defendant could not be offering to dismiss it. Accordingly,
plaintiffs should have assumed that, even had they accepted the offer, the cross complaint would still
have remained outstanding and pending.

Plaintiff next raised the issue of whether the unresolved cross-complaint between CA and Plaintiffs
rendered the settlement offer uncertain, that is, could the Court have made the determination as to
whether the ultimate outcome of the action was more favorable or not, in light of the uncertainty

The Court finds these cases instructive:

"Section 998 'does not require a [party] to make a global settlement offer to all [opponents]
in an action, or to make an offer that resolves all aspects of a case. [Citation.]' [Citation.]"
(Westamerica Bankv. MBG Industries, Inc. (2007) 158 Cal.App.4th 109, 130 [70 Cal. Rptr. 3d 125].)
Rather, where both a complaint and cross-complaint are pending, an offer to settle only the
complaint is valid to trigger the provisions of section 998 because "'[a] complaint and a cross-
complamt are, for most purposes, treated as independent actions.'" (158 Cal.App.4th at p. 134.)
Thus, in Westamerica, the court held that where the defendant offered to settle the complaint only,
and the plaintiff subsequently recovered less than the defendant's settlement offer, the defendant
was entitled to recover her postoffer costs even though her settlement offer did not address any
causes of action alleged in her cross-complaint. [***27] The court explained: "[Bjased on the
language of section 998 and the settled definitions of the key words in that statute, respondents'
offer to settle only the [complaint] was valid to trigger the provisions of section 998 because
acceptance of that offer by the 'other party to the action' would have allowed 'judgment to be taken.'
(§ 998, subd. (b).)" (Id. at p. 135.)" (One Star, Inc. v. STAAR Surgical Co. (2009) 179 Cal. App. 4th
1082, 1096.)

Accordingly, the complaint and cross-complaint should not be considered together to
determine whether the 998 offer on the complaint was certain or not. Based on the above
authorities, the actions should be considered separately. In that light, the CA offer on the complaint
was clearly certain and effective to trigger the 998 penalty.

Accordingly, Defendant has the right to request the Court to exercise its discretion to award
reasonable expert witness fees under Code of Civil Procedure section 998(c)(1).

Expert Witness Fees—"Reasonable"Amounts

Defendant is entitled to the reasonable costs of expert witnesses actually incurred and
reasonably necessary for trial and trial preparation.

In opposition, defendant has produced declarations from the experts and billing records
outlining the work performed by each of them. Both experts testified at trial and the testimony was
not duplicative.

In reply, plaintiffs contend that the costs are not reasonable because Mr. Newlin spent 150.75
hours after he should have been ready to be deposed and ready for the original 2009 trial date.
Plaintiffs contend that this Court should only award the 43 hours he spent in April and May, 2009 at
$180 for a total of $7,740.

Similarly, plaintiffs contend that Mr. Heryet spent 77.5 hours after May 15, 2009 and that the
59 hours he spent before that time do not appear reasonable as the time was spent in discussions
with various individuals.

Plaintiffs request a reduction to 50 hours at $200 an hour for a total of $10,000.

Defendant has shown that the witness fees were actually incurred. The question then is
whether they were reasonably necessary for preparation for trial and for the trial itself.

In Its opposition, defendant points out that plaintiffs amended their complaint three times after
the original trial date and as a result, both experts were required to conduct additional inspections,
evaluate new documents, read new depositions, formulate new opinions and revise old ones and
perform additional calculations.

Defendant further presents case law imposing on plaintiffthe duty to present evidence in
order to prove the excessive nature of the fees, rather than simply arguing that they are.

Based on the record and evidence presented, and on the failure of plaintiffs to carry their
burden of proof, the Court has no reason to find that the fees incurred were unreasonable. Expert
witness fees are awarded in the requested amount of $70,380.

Mediator DonaldS. Walter's fee of $2,400

BOOK 43 SUPERIOR COURT OF CALIFORNIA,
PAGE 4450 041311RUL COUNTY OF SACRAMENTO
DATE APRIL 13, 2011
CASE NO. 07AS04450
CASE TITLE ABBOTT V BRITSCHGI
BY: T. BROWN,
Deputy Clerk
Page 9 of 11
CASENUMBER: 07AS04450 DEPARTMENT: 43
CASE TITLE: ABBOTT V BRITSCHGI
PROCEEDINGS: MOTION FOR ATTORNEYS' FEES and MOTION TO TAX COSTS - FINAL
RULING
Plaintiffs also object to the $2,400 mediation fee at item 13 of the cost bill. Defendant
contends it is entitled to the fee under Code of Civil Procedure section 998. Plaintiffs contend that
the mediation fee is not an allowable cost under section 998. Defendant responds that, while that
may be correct, nonetheless, such cost should be allowed as a discretionary cost, allowed by
1033.5(c)(4), due to the fact that, shortly after the commencement ofthe settlement conference,
plaintiff abruptly left, rendering useless the enterpnse. Defendant's description of such action by
plaintiff was not contested at the hearing.

Additionally, the contractual fee provision specifically provides that plaintiffs will pay all
arbitration or mediation costs. Based on both these reasons, the mediation cost is awarded pursuant
to contract.

Plaintiffs do not object to items 1, 2, 4, 5, 11 or 12 of the cost bill or to the ordinary witness
fees at item 8. Those costs are therefore awarded.

Dated: April 13, 2011 By vLUci^ f^- C^A^ U - * ^ — -
Hon. Brian R. Van Camp, Judge

Certificate of Service by Mailing attached.

CERTIFICATE OF SERVICE BY MAILING
C.C.P. Sec. 1013a(4))

I, the undersigned deputy clerk of the Superior Court of California, County of Sacramento, do
declare under penalty of perjury that I did this date place a copy of the above entitled notice in
envelopes addressed to each of the parties, or their counsel of record as stated below, with sufficient
postage affixed thereto and deposited the same in the United States Post Office at Sacramento,
California.

Stephanie J. Finelli Todd Jones, Gergory K. Federico
1007 Seventh Street, Ste. 500 Archer Norris
Sacramento, CA 95814 301 University Ave. Ste. 110
Sacramento, CA 95825-5537

Dated: April 13, 2011 Superior Court of California,
County of Sacramento

By:
Deputy ClerJ

BOOK 43 SUPERIOR COURT OF CALIFORNIA,
PAGE 4450 041311RUL COUNTY OF SACRAMENTO
DATE APRIL 13, 2 0 1 1
CASE NO. 07AS04450
CASE TITLE ABBOTT V BRITSCHGI
BY: T. BROWN,
Deputy Clerk
Page 11 of 11

Case Info

Judge

Kevin J. McCormick Track Judge’s New Case

Case No.

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Document Filed Date

April 13, 2011

Case Filing Date

September 24, 2007

County

Parties

Stephanie Finelli Attorneys for Plaintiffs
Todd Jones Attorneys for Defendants
Gregory Federico Attorneys for Defendants
Harold Wright Attorneys for Plaintiffs
Craig Lundgren Attorney
Rachel Anderson Attorneys for Defendants
Nicholas Banko Attorney
James Tenero Attorneys for Plaintiffs
Linda Moin Attorney
Robert DeLong Attorney
Albert Sanchez Attorney
John Britton Attorney
Richard Freeman Attorneys for Defendants
Carmenella Roussos Attorneys for Plaintiffs
Stephanie Jenks Attorneys for Plaintiffs
Razi Shah Attorney
Richard Sopp Attorney
Scott Brooks Attorneys for Defendants
Jasun Molinelli Attorneys for Defendants
Sean Schwerdtfeger Attorneys for Defendants
Richard Dear Attorney
Steven Nimoy Attorney
Randal Barnum Attorneys for Plaintiffs
Elizabeth Boca Attorneys for Plaintiffs
Michael Loewen Attorneys for Plaintiffs
Bradley Larson Attorneys for Defendants
George Rudloff Attorney
Jennifer Wahlgren Attorney
Stephanie Fleming Attorney
John Arguelles Attorney
Alexander Cho Attorney

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Motion,Ex Parte: Rodney Abbott, et al vs. Ronald Paul Britschgi, et al

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