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MARCIE ISOM FITZSIMMONS (SBN: 226906)
HIEU T. WILLIAMS (SBN: 280585)
GORDON REES SCULLY MANSUKHANI, LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Telephone: (415) 986-5900
Facsimile: (415) 986-8054
Misom@grsm.com.
HWilliams@grsm.com
Attol for Defendant
PALO ALTO FOUNDATION MEDICAL GROUP, INC.
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
DIANA P. BLUM, M.D., CASE NO. 115CV277582
Plaintiff, DEFENDANT'S REPLY INSUPPORT
OF MOTION FOR ATTORNEYS’ FEES
sas AND COSTS POST CCP § 998- OFFER
TO COMPROMISE
SUTTER HEALTH, a Califomia corporation;
PALO ALTO FOUNDATION MEDICAL A Documents:
GROUP, INC., a Califomia corporation; Declaration of Marcie I. Fitzsimmons;
PALO ALTO MEDICAL FOUNDATION, a Declaration of Maiko Nakarai- Kanivas;
Califomia corporation; and DOES 1 through Declaration of Meg Naizghi;
Declaration of Hieu T. Williams
Defendants.
Hearing Date: April 24, 2018
ing Time: 1:30pm.
216
Honorable Judge Drew C. Takaichi
Trial Date: January 8, 2018
“i
DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
I INTRODUCTION
Plaintiff does not dispute that a defendant is entitled to an award of costs and fees where
the plaintiff fails to beat a Code of Civil Procedure Section 998 (“Section 998 Offer’) offer in a
breach of contract case where the contract has a fee shifting provision. (C.C.P. §998(a); Scott Co.
v. Blount, Inc. (1999) 20 Cal.4th 1103, 1114.) This is exactly what occurred in this case -
Plaintiff failed to beat the Physician Group’s 998 Offer and the Shareholder Employment
Agreement
has a fee shifting provision. The fees and costs sought in the instant motion are
reasonable, necessary, and actually incurred during nearly three years of litigation, including 17
days of trial. Plaintiff fails to counter the Physician Group's evidence to rebut the presumption
10 that the 998 Offer was properly served and received, and that the fees and costs incurred were
11 reasonable and necessary. Accordingly, the Court should grant this motion in its entirety.
12 II. THE PHYSICIAN GROUP S 998 OFFER IS VALID AND SHOULD BE ENFORCED
13 A. Plaintiff s Denial of Receipt Is Insufficent to Overcome the Presumption of Service
14 A document correctly addressed and mailed is presumed to have been received in the
15 ordinary course of mail. (Evid. Code§ 641; 1 Witkin, Cal. Evid. (4th ed. 2000) Burden of Proof
16 and Presumptions, §§67, 78, p. 216, 219; Forslund v. Forslund (1964) 225 Cal.App.2d 476
17 [proof of service raises a presumption of receipt].) To rebut this strong presumption of service,
18 the opposing party must present evidence beyond simply asserting non-receipt. (Palm Prop.
19 Investments, LLC v. Yadegar (2011) 194 Cal.App.4th 1419, 1428 [party failed to provide rebuttal
20 evidence].) Thus, Plaintiff is required
to come forth with evidence- beyond
a denial of receipt to
21 overcome the presumption of proper service. (Farr v. Cnty. of Nevada (2010) 187 Cal.App.4th
669, 680-681.) Where the presumption
is not adequately rebutted, service
must be treated as
proper. (Conservatorship of Wyatt (1987) 195 Cal.App.3d 391, 396 [“Because Wyatt failed to
24 rebut that presumption, we conclude
he was properly served”].)
25
Plaintiff also does not dispute that the Section 998 offer ($201,000, plus fees and costs) was for far more than|
26 Plaintiff’s $28,415 award at trial.
In her Opposition, Plaintiff claims that this Court should disregard the Physician Group’s moving papers because it
27 exceeds the 15-page limit. However, even a cursory review of the moving papers shows that the first 5 pages
consist of a cover page, the table of contents, and table of authorities, and that the motion is the correct length. (See
CRC. 3.1113(d) [“The page limit does not include the caption page, the notice of motion and motion, exhibits,
declarations, attachments, the table of contents, the table of authorities, or the proof of service.”].)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Here, there is a strong presumption of service and receipt of the 998 Offer. The Proof of
Service for the 998 Offer, bears the date and the place of mailing (Plaintiffs counsel’s business
address). (Evid. Code§ 641; C.C.P. § 1013(a)(4); Ex. B to Declaration of Marcie I. Fitzsimmons
ISO of Motion [“Fitzsimmons Motion Decl.”] §B.) Indeed, Meg Naizghi, Legal Secretary to the
Physician Group’s counsel, served the 998 Offer on all parties via mail and confirmed that she
had done so in an email to the Physician Group’s counsel immediately after having done so.
(Ex. A, Declaration of Meg Naizghi ISO Reply 2-4.) Moreover, Co-Defendants PAMF/Sutter|
Health received the 998 Offer shortly after Ms. Naizghi mail served it at the same time and in the
same manner that Plaintiff was served. (Ex. C, Fitzsimmons Motion Decl. (4; Ex. A to
10 Declaration of Maiko Nakarai-Kanivas ISO Reply [“Nakarai Decl.”] 2.)
11 Plaintiff fails to proffer sufficient evidence to overcome the strong presumption that the}
12 998 Offer was served and received. Instead, she merely argues that she never received it
13 Plaintiff contends that Vanessa Langsfeld is the “only person” in Plaintiff's counsel’s office
14 “responsible
for receiving and processing all of the incoming mail,” and that if the 998 Offer had
15 been received she would have processed it. Not only is Court not required to accept the facts in
16 Ms. Barta’s or Ms. Langsfeld’s declarations that they never received the 998 Offer, those
17 declarations are insufficient to overcome the strong presumption of service. (Craig v. Brown &
18 Root, Inc. (2000) 84 Cal.App.4th 416, 421; see Bazaure v. Richman (1959) 169 Cal.App.2d 218,
19 222 [court “free to reject” interested party’s testimony even if it “was otherwise uncontradicted
20 and unimpeached”].) First, nowhere in the Dedarations
of Ms. Langsfeld
or Ms. Barta do
21 they expressly dedare under the penalty of pejjury that Plaintiff never received the|
Physidan Group's 998 Offer. (Langsfeld Decl. {"]l-7, Barta Decl. 91-47.) Second, the|
evidence directly dispute Ms. Langsfeld’s self-serving declaration that she was the “only person
24 in Ms. Barta’s office responsible for receiving and processing all incoming mail.” (Langsfeld
25
26 Plaintiff’s suggestion
that the offer was not served in good faith is refuted by this email, as it clearly demonstrates
that not only was the 998 Offer served, but it was intended
to be served.
27 When Plaintiff’s counsel initially indicated that she had not received the 998 Offer, the Physician Group’s counsel
attempted
to meet and confer with her to find out the basis for Plaintiff’ s counsel’s unusual position. (Ex. B, to Barta|
Decl.) Plaintiff’s counsel was unable to articulate any basis for suggesting the 998 Offer had not been properly
served and did not do so. (Id.)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Decl. {B.) FedEx confirmations indicate that at least five other individuals received documents
served on Plaintiff via FedEx since 2015 to date. (Ex. F, Declaration of Marcie I. Fitzsimmons
ISO Reply [“Fitzsimmons Reply Decl.”]; Ex. B, Nakarai Decl. §B.) Third, the evidence shows
that Ms. Barta’s purported “established policies and practices” related to processing mail has
been deficient throughout the entire litigation, making it even more likely that the 998 Offer was
received
by Plaintiff, and that perhaps
Ms. Barta just neglected to review it and discuss it with
her client. Lastly, Ms. Barta was in and out of the office (e.g., traveling abroad, dealing with a
“medical situation’), around the time the Physician Group served the 998 Offer (August 24,
2015), again suggesting that perhaps Ms. Barta simply overlooked the 998 Offer that was
10 properly served and received. (Ex. A, Fitzsimmons Reply Decl. {2.)
11 Plaintiff's reliance on Craig is misplaced, as that case actually supports the Physician|
12 Group's position that bare denials of receipt are insufficient to overcome a presumption of
13 service. In Craig, the employer twice mailed an arbitration agreement to the plaintiff. (Craig,
14 supra 84 Cal.App.4th at 421-422.) Although the plaintiff submitted a declaration stating “I did)
15 not receive any of these documents at my residence,” the trial court relied on the presumption
16 that a letter correctly addressed and mailed is deemed received. (Id.) The court weighed the
17 Plaintiff's denial of receipt against the presumption of receipt, and ruled against the plaintiff.
18 Id.) Here, the Physician Group has proffered substantial evidence
that the 998 Offer was served]
19 against Plaintiff’s bare denial of receipt. Allowing Plaintiff to simply deny receipt of the 998
20
21 Plaintiff's Counsel has repeatedly requested documents to be resent although they were properly served by the
Defendants in this case. For example, in September 2015, Plaintiff's counsel claimed that she did not receive
PAME/Sutter’s Demurrer which had been served via FedEx Ovemight Mail, despite the fact that the FedEx delivery
confirmation indicates it was signed for by someone (not Ms. Langsfeld) at Plaintiff’s office and it had been email
served to Plaintiff. (Ex. C, D, Nakarai Decl., {§3-5.) That same month (September 2015), Plaintiff's counsel
Claimed that she did not receive the Physician Group’s Amended Notice of Plaintiff's Deposition served via mail,
24 although PA MF/Sutter had received it and it was served to both parties at the same time. (Ex. C, Fitzsimmons Reply
Decl.) Plaintiff's counsel also claimed in September 2015 that she did not receive PAMF/Sutter’s CMC statement
25 that had been served vial mail, although the Physician Group had received it and was served by mail at the same
time. (Ex. D, Nakarai Decl. (6, Fitzsimmons Reply Decl. #8.) In May 2016, Ms. Langsfeld also contacted the
26 Physician Group’ s counsel and informed them that a temporary receptionist had “mixed up and incorrectly delivered
a lot of mail” including “comespondence, discovery, and pleadings” for Ms. Barta’s office. (Ex. D, Fitsimmons
27 Reply Decl. 9.) On another occasion, in February 2017, Plaintiff claimed that she had not received the Physician
Group's supplemental document production that had been served nearly three months prior, that was served on
PAMPF/Sutter
at the same time and that they timely received. (Ex. E, to Fitzsimmons Reply Decl. (110, Nakarai Decl.
W.)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Offer, in light of the evidence, would be patently unfair to the Physician Group, who litigated
this case to verdict based on the strength of the 998 Offer, which Plaintiff
did not accept.
B. The Physidan Group Made the 998 Offer in Good Faith
The reasonableness of a Section 998 offer is evaluated in light of what the offeree knows
or does not know at the time the offer is made. (Bates v. Presbyterian Intercommunity Hosp.,
Inc. (2012) 204 Cal.App.4th 210, 221.) There is no valid basis for suggesting that the 998 Offer
‘was not reasonable
or made in good faith. As a threshold matter, the fact that the jury awarded
Plaintiff far less than the Physician Group’s 998 Offer ($201,000.00, plus fees and costs), results
in a presumption that the offer was reasonable. (Najah v. Scottsdale Ins. Co. (2014) 230
10 Cal.App.4th 125, 143-144; Bates, supra 204 Cal.App.4th at 221 [Where the defendant obtains a)
11 judgment more favorable than its offer, “the judgment constitutes prima facie evidence showing,
12 the offer was reasonable....”]) Plaintiff fails to address this undisputed fact, and instead, argues
13 that the Physician Group did not make the 998 Offer in good faith simply because the Physician
14 Group purportedly “refused” to re-serve the offer and/or extend the time for acceptance.
15 At the time the 998 Offer was served, Plaintiff had not yet propounded
any written
16 discovery and no depositions had been taken. (Fitzsimmons Reply Decl. at {B.) After the 998
17 Offer was served, the parties conducted extensive discovery -- Plaintiff served initial extensive
18 written discovery, the Physician Group made extensive efforts to meet and confer regarding
19
The Physician Group attempted to meet and confer with Plaintiff’ s counsel, but she failed to provide any basis for
20 suggesting that the 998 Offer was invalid or that she did not receive it. She could have sought a written clarification
ora stipulation from the Physician Group related to the legal sufficiency of the offer or a ruling from the court along
21 ‘with an extension of time to accept or reject the offer until the questionwas resolved. (3-37 MB Practice Guide: CA
Pretrial Civil Procedure 37.12 (2018).) Plaintiff failed to do so. (Id; Peterson v. John Crane, Inc. (2007) 154
Cal.App.4th 498, 506-512 [holding that 998 Offer valid, and that Plaintiff failed to take any action to determine
Clarify validity of offer].)
In Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1485, the Court rejected the plaintiffs’ argument the
$10,000 998 Offer was unreasonable “in light of the hundreds of thousands of dollars in costs, and $2 million in
24 damages” they sought. Similarly, in Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, the
appellate court concluded the defendant’s $100,000 offer was not unreasonable or unrealistic, even though the
25 Plaintiff claimed $900,000 in damages. (Id. at 118.) The court reasoned that the “[dJefendants contended they had
no liability
to [the plaintiff] at all, and the jury ultimately agreed.” (Ibid.)
26 Notably, the Physician Group’s counsel emailed Plaintiff’s counsel on October 7, 2015, asking Plaintiff to explain
her concems about the 998 Offer and “what the basis is for such an argument.” (Ex. B, Barta Decl.) Plaintiff's
27 counsel failed to provide the requested information and the Physician Group’s counsel followed up again by
indicating: “We have no reason to believe that the 998 offer was not properly mail served
and would be valid. There
is certainly a strong presumption in our favor on that issue. We welcome hearing any thoughts (and seeing any
cases you have) to the contrary.” (Id.) Plaintiff’s counsel failed to respond further. (Id.)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Plaintiff’s deficient responses, and the Physician Group's counsel spent a significant amount of
time preparing for Plaintiff's upcoming deposition. (Id. at {B.) Re-serving the 998 Offer would
have therefore significantly increased the value of the offer. (Id) Moreover, the Physician
Group felt even more confident
in its defense of the case after initial discovery
was done and had,
no motivation to extend the time for acceptance. (Id.)
Plaintiffs suggestion that the 998 Offer was made in bad faith because the Physician|
Group engaged in subsequent settlement discussions is untenable, unsupported, and flies in the
face of contradictory evidence. The Physician Group offered Plaintiff the value of the 998 Offer|
in subsequent settlement discussions, but Plaintiff did not respond. (Id. at 74.) Nor did Plaintiff
10 ever indicate that she would have accepted the 998 Offer, and the Parties did not even get close
11 to that amount in their settlement discussions, which included two mediations and a settlement}
12 conference. (Id.) If anything, Plaintiffs response (or lack thereof) to those settlement overtures
13 demonstrates that she had no intention of ever accepting the 998 Offer. Plaintiff's after-the-fact
14 claims that she did not receive the 998 Offer are likely because Ms. Barta neglected
to timely
15 discuss the offer with Plaintiff -- presumably because her office was so disorganized that she
16 failed to realize she had received it at the time or Ms. Barta simply wanted to cover her bases in
17 the event Plaintiff failed to beat the 998 Offer at trial. Regardless
of the reason, Plaintiff has
18 failed to overcome the strong presumption that the Physician Group served a valid 998 Offer.
19 C. Plaintiff Has Not Met Her Burden to Challenge The Claimed Fees and Costs
20 As the prevailing party, the Physician Group is entitled to its reasonable attomey’s fees
21 under Section 998. (Scott, supra, 20 Cal.4th
at 1114.)
1. The Physidan Group’s Attorneys’ Hourly Rates Are Reasonable
In its moving papers, the Physician Group established that its counsels’ rates are
24 reasonable and well below those prevailing in the community for similar services by lawyers of
25 comparable skill and experience. Plaintiff does not dispute this. Instead, Plaintiff makes a
26 mountain out of a mole hill by pointing out that Ms. Williams mistakenly declared (in support of
27 a motion to compel filed in December 2016) that she billed $225 per hour, which was the result
of the typographical enor. (Declaration of Hieu T. Williams ISO Reply [“Williams Reply
5
DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Decl.”] 12-4.) Invoices confirm that in October 2016, Ms. Williams’ billing rate changed from
$235 to $275, which is still far below the prevailing rate for an attomey of her skill and
experience. (Ex. A-B, Williams Reply Decl. {"2-3.)
2. The Fees Are Reasonable Given the Complex Nature of the Litigation
“The reasonableness of attomey’s fees is ... to be determined
from a consideration of
such factors as the nature of the litigation, the complexity
of the issues, the experience
and
expertise of counsel and the amount of time involved.” (Wilkerson v. Sullivan (2002) 99
Cal.App.4th 443, 448.) Each of these factors weighs in favor of the Physician Group’ s fee claim,
particularly considering the complex nature of this case and Plaintiff's decision to vigorously
10 (over) litigate it Plaintiff does not dispute that this was a complex lawsuit arising out of
11 complicated allegations as to whether several policies and procedures existed that impaired her
12 ability to provide appropriate medical care, whether the defendants were in a joint venture,
13 whether the Physician Group violated provisions of the Shareholder Employment Agreement,
14 and whether the Physician Group interfered with Plaintiff's purported relationships. The
15 complex nature
of this case is further highlighted by the fact that voir dire took nearly a week
16 and the trial itself was nearly
4 weeks. Nor does Plaintiff dispute the litigious nature of the case,
17 with 50 depositions taken (mostly by Plaintiff), 12 discovery motions filed, over 9,100
18 documents produced, two motions for summary judgement and at least 16 motions in limine
19 filed. (Fitzsimmons Motion Decl. {"23-27.) Accordingly, the total hours expended by the
20 Physician Group’s counsel in litigating this case is entirely reasonable and necessarily incurred
21 to achieve the excellent result in the end - a limited five figure award for a single cause of action
compared
to the $10,000,000 in damages alleged in Plaintiffs FAC.
3. There Were No Inappropriate Or Duplicative Billing Entries
24 “Califomia courts do not require detailed time records ....” (Syers Properties III, Inc. v.
25 Rankin (2014) 226 Cal.App.4th 691, 698.) “Declarations of counsel setting forth the reasonable
26 hourly rate, the number of hours worked and the tasks performed are sufficient.” (Concepcion v.
27
Notably, Ms. Barta failed to submit any kind of declaration or evidence reflecting her own time and fees incurred
in this lawsuit. It is therefore reasonable to assume that her time and fees incurred are far more than what the
Physician Group seeks.
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Amscan Holdings, Inc. (2014) 223 Cal.App.4th 1309, 1324.) The Physician Group has provided
ample evidence in support of the instant motion in the form of declarations from each of the legal
professionals
that billed time on the case, setting forth the actual time spent and the actual rate
charged, supported with actual billing entries (with reasonable redactions on the grounds of
attomey-client privilege and work product). (See Lafayette Morehouse, Inc. v. Chronicle
Publishing. Co. (1995) 39 Cal.App.4th 1379, 1382.) Plaintiff's claim that the Physician Group
camnot recover
its attomey fees, unless she can see the unredacted billing entries is unavailing
and contrary to well-settled law.’°
Plaintiff fails to submit any evidence that the claimed fees were not incurred or|
10 reasonable; instead relying on her counsel’s unsupported self-serving opinions and conjecture,
11 which are insufficient and inadmissible. (Evid. Code § 1200.) Plaintiff speculates that the
12 redacted billing entries demonstrate “double billing’ and “bill padding.” Nothing could be
13 further from the truth and Ms. Barta’s declaration is nothing more than baseless argument. The
14 Physician Group's counsel used contemporaneous time records for all time billing and separated,
15 out the time spent on each discrete task." (Fitzsimmons Reply Ded. 14-16.) The billing|
16 entries are audited prior to submission to ensure reasonable entries, consistent with billing
17 guidelines which prohibit double billing or bill padding.” (Id.)
18 Plaintiff takes issue with the fact that the Physician Group’s attomeys billed different
19 amounts during trial. The fact that Ms. Fitzsimmons and Ms. Williams hilled different hours is
20 not indicative of unreasonableness of fees incurred; rather it demonstrates an effort to accurately
21
10 Even though there is no requirement for the Physician Group to submit actual billing records, if the Court]
believes that it is unable to adequately determine the proper award without access to the billing records, the
Physician Group would be willing to file the actual billing records in question under seal for the Court’s eyes only,
assuming it is agreed that is not a waiver
of privilege. The Physician Group will bring its actual billing records to
the hearing on this motion and submit the records to the Court for in camera review by the Court if requested to do
24 so by the Court. On a separate note, on September
21, 2016, Ms. Williams and Ms. Fitzsimmons attended a jury
focus group for this case, which were redacted in the billing entries produced in support of this motion.
25 (Fitzsimmons Reply Decl. 12.)
" Gordon & Rees’ litigation strategy places the bulk of the initial case work on more junior attomeys with senior
26 attomeys providing supervision and specific direction regarding the overall work product and litigation, as well as
revisions to work product. (Fitzsimmons Reply Decl. 14-16.)
27 ” The Physician Group’s counsel also aims to maintaina positive relationship with its clients in order to continue to
get business in the future. (Fitzsimmons Reply Decl. 14-16.) “Double-billing” or “bill-padding” would not only
violate the client's billing guidelines and be unethical, it would also be a bad business practice for securing future
work from the same client. (Id.) Moreover, the client will not pay for double billing or bill padding. (Id.)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
bill - reflecting the time each attomey actually spent at Court. Any difference
in time merely
reflects the differing schedules and tasks for that day (e.g., arriving early to file papers, meet with
clients and/or witnesses, prepare for oral argument, confer with co-defense counsel, set up or
take down equipment). (Fitzsimmons Reply Decl. 118, Williams Reply Decl. {B.)
Plaintiff also attempts to challenge the reasonableness of the fees incurred by the
Physician Group in preparation for the opening statement (38 hours). Plaintiff offers no concrete
factual reasons supporting her claim that this amount should be reduced. For example, Plaintiff
makes no attempt to identify how much time would be reasonable to effectively present a 45
minute opening statement that was memorized in preparation for alengthy tral.
10 Plaintiff also claims that the Physician Group should not be entitled to fees for taking}
11 Plaintiff’s deposition (16.9 hours). This is completely untenable. Plaintiff initiated this lawsuit
12 and the Physician Group is entitled to fees incurred related to basic discovery that were
13 necessary for litigation. Plaintiff had expansive allegations in the case continued to grow during,
14 the litigation (including during her deposition). Notably, the Physician Group's counsel used the
15 third and fourth volumes of Plaintiff's deposition to impeach her several times during her
16 testimony at trial. (Fitzsimmons Reply Decl. 119.) More importantly, however, if Plaintiff felt
17 that the continued deposition was unnecessary she should have obtained a protective order.
18 Lastly, Plaintiff attempts to dispute the time spent by the Physician Group’s attomeys for|
19 travel and waiting for the jury’s verdict. Such costs were thus reasonable and necessary to the
20 litigation.’ The Physician Group incurred fees for traveling for court appearances and trial, to
21 meet with witnesses (physicians and clinical staff) at various PAMF locations throughout the
Bay Area to prepare for testimony in deposition and/or trial. (Fitzsimmons Reply Decl. 17,
Williams Reply Decl. {6.) The parties were also required to remain close to the court and to be
24 availableto answerjurors’ questions during the deliberations. (Fitzsimmons Reply Decl. 21.)
25
3 “[A] prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (C.C.P. §
26 1032(b).) Section 1033.5 sets forth the items of costs which are recoverable by the prevailing party. (C.C.P. §
1033.5(a)-(c).) An item that is neither specifically allowable under Section 1033.5(a) nor prohibited under Section
27 1033.5(b) may nevertheless be recoverable in the Court's discretion (C.C.P. § 1033.5(0)(4); Ripley v.
Pappadopoulos (1994) 23 Cal. App. 4th 1616, 1623.) To be recoverable, a cost must be “reasonably necessary to the
conduct of the litigation rather than merely convenient or beneficial to its preparation” and “reasonable in amount.”
(C.C_P. § 1033.5(c)(2)-(3).)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
I. THE CLAIMED EXPERT FEES WERE REASONABLE
AND NECESSARY
Section 998 provides that fees for expert witnesses actually incurred and reasonably
necessary in preparation for trial are recoverable. (C.C.P. § 998(c)(1).) As set forth its moving
papers, because Plaintiff failed to obtain a more favorable judgment than the 998 Offer, the
Physician Group is the prevailing party and entitled to its reasonable expert fees. Plaintiff does
not dispute the qualifications of the Physician Group’s experts. Instead, she attempts to
challenge the claimed expert fees based on the fact that some of the experts did not testify at
trial. Califomia law is clear, however, that a Court may award reasonable fees for experts who
aid in the preparation
for trial even if the experts do not actually testify. (Santantonio, supra, 25
10 Cal.App.4th at 124.) Regardless, the fees ($4,192.75) claimed for vocational rehabilitation
11 expert Carol Hyland's services are reasonable and necessary. The Physician Group’s expert
12 economist, Dr. Charles Mahla testified that he relied on Ms. Hyland's expert analysis to prepare
13 his opinion about Plaintiff's damages. (FT 1/31/18, Ex. I to Fitzsimmons Reply Decl.) Ms.
14 Hyland's expert analysis, as relied upon by Dr. Mahla, assisted the jury, who awarded Plaintiff
15 damages far less than the amount requested by Plaintiff’ s expert economist (Zengler).
16 Plaintiff also attempts to question the reasonableness of Dr. Mark Lipian’s expert fees
17 based on pure speculation. Plaintiff claimed to suffer from severe emotional distress in this case,
18 and this Court already ruled that good cause existed for Dr. Lipian to conduct
an IME of Plaintiff
19 in order for the Physician Group to refute her claimed emotional distress. (Ex. G, Fitzsimmons
20 Reply Decl. {113.) Accordingly, Dr. Lipian prepared for and conducted a two-day IME of
21 Plaintiff, prepared a 79 page report regarding his opinions, prepared for and sat for deposition, as
well as prepared
to testify at trial. (Fitzsimmons Reply Decl. {113.)
Plaintiff’ s argument that the Physician Group must provide more detailed expert invoices
24 misapprehends the evidence sufficient to sustain the burden on a motion for an award of expert
25 fees under Section 998.’ In Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, for example, the
26
27 4 An award for expert fees may be based on “less than perfect billing records.” (Michelson v. Camp (1999) 72
Cal.App.4th 955, 975-976 [holding that declaration submitted in support of expert’s fees describing hourly rate and
work done was sufficient.) In the altemative, an award for expert fees may be based on the costs billed (which the
Physician Group submitted). (Santantonino, supra, 25 Cal.App.4th at 109-110.)
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
trial court awarded the prevailing defendant Section 998 expert witness fees based upon a
verified memorandum of costs, supported by the defendant’s expert disclosure, accompanying
declaration of counsel, and the experts’ invoices. (Id. at 1265-1266.) On appeal, the plaintiff
argued the defendant failed to meet his burden that the costs were reasonable. (Id. at 1266.) The
Jones court rejected that contention and observed that nothing in the case law, the statute, or the
Califomia Rules of Court prohibited reliance on the declaration of counsel as documentation of|
expert fees claimed. (Id. at 1265.) The Jones court explained that the experts’ invoices were
admissible to comoborate the verified memorandum of costs; and, insofar as the charges were
paid, the cost memorandum and invoices were evidence that the charges were reasonable. (Id. at
10 1267.) The Jones court’s analysis is applicable here -- the Physician Group has provided
11 competent evidence that Dr. Lipian’s expert fees were reasonably necessary. As in Jones, the
12 Physician Group has provided a verified memorandum of costs, a declaration of counsel, expert
13 invoices, and expert disclosures. The Physician Group’s counsel hereby further submits
14 declarations placing Dr. Lipian’s work in context. (Ex. H, Fitsimmons Reply Decl. {113.) While
15 Dr. Lipian’s fees appear to be high compared to the other experts in this case, Plaintiff has
16 presented no evidence as to what a reasonable fee would be for such services. Dr. Lipian’s
17 qualifications
are beyond reproach and he commands a rate of $724 per hour because
he is in
18 high demand. One of the reasons
that Dr. Lipian is such a well-regarded
expert is because, as a
19 forensic psychiatrist, he spends a significant amount of time carefully reviewing documents,
20 conducting examinations, and preparing a detailed report. (Id. at 113.) The undisputed testimony
21 that the Physician Group paid Dr. Lipian’s invoices is in and of itself evidence that the charges
were reasonable. (Jones supra, 63 Cal.App.4th 1258.)
Iv. CONCLUSION
24 The Physician Group properly served
a 998 Offer that Plaintiff failed to beat. The award
25 of fees and costs is therefore mandatory. The fees and costs the Physician Group seeks are
26 reasonable and recoverable. As such, the Physician Group respectfully requests an award for
27 $1,014,795
in fees incurred
after service of the 998 Offer and $491,834.16
in costs, pursuant to
CCP§ 998, and additional fees and costs with a supplemental memorandum
of costs to be filed.
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Dated: April , 2018 GORDON REES SCULLY MANSUKHANI, LLP
py. Stillen
MARCIE ISOM FITZSIMMONS
HIEU T. WILLIAMS
Attor for Defendant
PALO ALTO FOUNDATION MEDICAL
GROUP, INC.
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Electronically filed
by Superior Court of CA,
County of Santa Clara,
PROOF OF SERVICE on 4/17/2018 2:23 PM
Reviewed By:R. Burciag;
Iam a resident of the State of California, over the age of 18 yeatyeadponspartyyoahy
are 592
a ana
within action. My business address is: Gordon Rees Scully Mansukh: ttery St.,
Suite 2000, San Francisco, California 94111. On the date below, I servi jocuments:
DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND
COSTS POST CCP § 998 - OFFER TO COMPROMISE;
DECLARATION OF MARCIE I. FITZSIMMONS;
DECLARATION OF MAIKO NAKARAI-KANIVAS;
DECLARATION OF MEG NAIZGHI;
DECLARATION OF HIEU T. WILLIAMS
By Electronic Transmission: By transmitting via electronic mail the document(s)
listed above to the e-mail address(es) set forth below.
Via Odyssey E-File CA, Electronic Filing System: By causing electronic service to
all parties listed on the E-Service list on the Odyssey E-File CA website (if any listed).
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O Via Hand: By causing the document(s) listed above to be hand delivered to the
person(s) at the address(es) set forth below.
11 By Fed Ex: By placing a true copy thereof enclosed in a sealed envelope, at a station
designated for collection and processing of envelopes and packages for overnight
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ex
an delivery by FedEx as part of the ordinary business practices of Gordon Rees Scully
oot Mansukhani, LLP described below, addressed as follows:
wfaa 13
eat
Bed
14 O By U.S. Mail: By placing the document(s) listed above in a sealed envelope with
postage thereon fully prepaid, in United States mail in the State of California at San
Francisco, addressed as set forth below.
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Attorneys for Plaintiff Attorneys for Defendants
16 Sutter Health and Palo Alto Medical
Theresa J. Barta
Law Offices of Theresa Barta Foundation
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4041 MacArthur Blvd. Suite 280 Lindberg Porter, Jr.
18 Newport Beach, CA 92660 Maiko Nakarai-Kanivas
Telephone: 949 833-3383 Littler Mendelson, P.C.
19 Facsimile: 949 209-2530 1255 Treat Blvd, Suite 600
Email: Theresa@barta-law.com Walnut Creek, CA 94597
20 Telephone: 925 932-2468
Facsimile: 925 946-9809
21 Email: Lporter@littler.com
MNakarai@littler.com
22 MAMartinez@littler.com
Co-counsel for Plaintiff
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Charles M. Louderback
24 Stacey L. Pratt
Louderback Law Group
25 44 Montgomery St. #2970
San Francisco, CA 94104
26 Telephone: 415 615-0200
Facsimile: 415 795-4775
27 Email: Clouderback@louderbackgroup.com
Spratt@louderbackgroup.com
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE,
lam readily familiar with the finm s practice of collection and correspondence
for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same
day with postage thereon fully prepaid in the ordinary course of business. I am aware that on
motion of the party served, service is invalid if cancellation date or postage
meter date is more than one day after the date of deposit for mailing in affidavit.
I declare under penalty of perjuryunder the laws of the State of Califomia that the above
is true and correct.
Executed on April 17, 2018, at San Francisco, Califomia.
CHa ca
-Y ehimi Olvera
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DEFENDANT’S REPLY IN SUPPORT OF
MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE
Preview
MARCIE ISOM FITZSIMMONS (SBN: 226906) HIEU T. WILLIAMS (SBN: 280585) GORDON REES SCULLY MANSUKHANI, LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Telephone: (415) 986-5900 Facsimile: (415) 986-8054 Misom@grsm.com. HWilliams@grsm.com Attol for Defendant PALO ALTO FOUNDATION MEDICAL GROUP, INC. SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA DIANA P. BLUM, M.D., CASE NO. 115CV277582 Plaintiff, DEFENDANT'S REPLY INSUPPORT OF MOTION FOR ATTORNEYS’ FEES sas AND COSTS POST CCP § 998- OFFER TO COMPROMISE SUTTER HEALTH, a Califomia corporation; PALO ALTO FOUNDATION MEDICAL A Documents: GROUP, INC., a Califomia corporation; Declaration of Marcie I. Fitzsimmons; PALO ALTO MEDICAL FOUNDATION, a Declaration of Maiko Nakarai- Kanivas; Califomia corporation; and DOES 1 through Declaration of Meg Naizghi; Declaration of Hieu T. Williams Defendants. Hearing Date: April 24, 2018 ing Time: 1:30pm. 216 Honorable Judge Drew C. Takaichi Trial Date: January 8, 2018 “i DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE I INTRODUCTION Plaintiff does not dispute that a defendant is entitled to an award of costs and fees where the plaintiff fails to beat a Code of Civil Procedure Section 998 (“Section 998 Offer’) offer in a breach of contract case where the contract has a fee shifting provision. (C.C.P. §998(a); Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1114.) This is exactly what occurred in this case - Plaintiff failed to beat the Physician Group’s 998 Offer and the Shareholder Employment Agreement has a fee shifting provision. The fees and costs sought in the instant motion are reasonable, necessary, and actually incurred during nearly three years of litigation, including 17 days of trial. Plaintiff fails to counter the Physician Group's evidence to rebut the presumption 10 that the 998 Offer was properly served and received, and that the fees and costs incurred were 11 reasonable and necessary. Accordingly, the Court should grant this motion in its entirety. 12 II. THE PHYSICIAN GROUP S 998 OFFER IS VALID AND SHOULD BE ENFORCED 13 A. Plaintiff s Denial of Receipt Is Insufficent to Overcome the Presumption of Service 14 A document correctly addressed and mailed is presumed to have been received in the 15 ordinary course of mail. (Evid. Code§ 641; 1 Witkin, Cal. Evid. (4th ed. 2000) Burden of Proof 16 and Presumptions, §§67, 78, p. 216, 219; Forslund v. Forslund (1964) 225 Cal.App.2d 476 17 [proof of service raises a presumption of receipt].) To rebut this strong presumption of service, 18 the opposing party must present evidence beyond simply asserting non-receipt. (Palm Prop. 19 Investments, LLC v. Yadegar (2011) 194 Cal.App.4th 1419, 1428 [party failed to provide rebuttal 20 evidence].) Thus, Plaintiff is required to come forth with evidence- beyond a denial of receipt to 21 overcome the presumption of proper service. (Farr v. Cnty. of Nevada (2010) 187 Cal.App.4th 669, 680-681.) Where the presumption is not adequately rebutted, service must be treated as proper. (Conservatorship of Wyatt (1987) 195 Cal.App.3d 391, 396 [“Because Wyatt failed to 24 rebut that presumption, we conclude he was properly served”].) 25 Plaintiff also does not dispute that the Section 998 offer ($201,000, plus fees and costs) was for far more than| 26 Plaintiff’s $28,415 award at trial. In her Opposition, Plaintiff claims that this Court should disregard the Physician Group’s moving papers because it 27 exceeds the 15-page limit. However, even a cursory review of the moving papers shows that the first 5 pages consist of a cover page, the table of contents, and table of authorities, and that the motion is the correct length. (See CRC. 3.1113(d) [“The page limit does not include the caption page, the notice of motion and motion, exhibits, declarations, attachments, the table of contents, the table of authorities, or the proof of service.”].) “1 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Here, there is a strong presumption of service and receipt of the 998 Offer. The Proof of Service for the 998 Offer, bears the date and the place of mailing (Plaintiffs counsel’s business address). (Evid. Code§ 641; C.C.P. § 1013(a)(4); Ex. B to Declaration of Marcie I. Fitzsimmons ISO of Motion [“Fitzsimmons Motion Decl.”] §B.) Indeed, Meg Naizghi, Legal Secretary to the Physician Group’s counsel, served the 998 Offer on all parties via mail and confirmed that she had done so in an email to the Physician Group’s counsel immediately after having done so. (Ex. A, Declaration of Meg Naizghi ISO Reply 2-4.) Moreover, Co-Defendants PAMF/Sutter| Health received the 998 Offer shortly after Ms. Naizghi mail served it at the same time and in the same manner that Plaintiff was served. (Ex. C, Fitzsimmons Motion Decl. (4; Ex. A to 10 Declaration of Maiko Nakarai-Kanivas ISO Reply [“Nakarai Decl.”] 2.) 11 Plaintiff fails to proffer sufficient evidence to overcome the strong presumption that the} 12 998 Offer was served and received. Instead, she merely argues that she never received it 13 Plaintiff contends that Vanessa Langsfeld is the “only person” in Plaintiff's counsel’s office 14 “responsible for receiving and processing all of the incoming mail,” and that if the 998 Offer had 15 been received she would have processed it. Not only is Court not required to accept the facts in 16 Ms. Barta’s or Ms. Langsfeld’s declarations that they never received the 998 Offer, those 17 declarations are insufficient to overcome the strong presumption of service. (Craig v. Brown & 18 Root, Inc. (2000) 84 Cal.App.4th 416, 421; see Bazaure v. Richman (1959) 169 Cal.App.2d 218, 19 222 [court “free to reject” interested party’s testimony even if it “was otherwise uncontradicted 20 and unimpeached”].) First, nowhere in the Dedarations of Ms. Langsfeld or Ms. Barta do 21 they expressly dedare under the penalty of pejjury that Plaintiff never received the| Physidan Group's 998 Offer. (Langsfeld Decl. {"]l-7, Barta Decl. 91-47.) Second, the| evidence directly dispute Ms. Langsfeld’s self-serving declaration that she was the “only person 24 in Ms. Barta’s office responsible for receiving and processing all incoming mail.” (Langsfeld 25 26 Plaintiff’s suggestion that the offer was not served in good faith is refuted by this email, as it clearly demonstrates that not only was the 998 Offer served, but it was intended to be served. 27 When Plaintiff’s counsel initially indicated that she had not received the 998 Offer, the Physician Group’s counsel attempted to meet and confer with her to find out the basis for Plaintiff’ s counsel’s unusual position. (Ex. B, to Barta| Decl.) Plaintiff’s counsel was unable to articulate any basis for suggesting the 998 Offer had not been properly served and did not do so. (Id.) -2 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Decl. {B.) FedEx confirmations indicate that at least five other individuals received documents served on Plaintiff via FedEx since 2015 to date. (Ex. F, Declaration of Marcie I. Fitzsimmons ISO Reply [“Fitzsimmons Reply Decl.”]; Ex. B, Nakarai Decl. §B.) Third, the evidence shows that Ms. Barta’s purported “established policies and practices” related to processing mail has been deficient throughout the entire litigation, making it even more likely that the 998 Offer was received by Plaintiff, and that perhaps Ms. Barta just neglected to review it and discuss it with her client. Lastly, Ms. Barta was in and out of the office (e.g., traveling abroad, dealing with a “medical situation’), around the time the Physician Group served the 998 Offer (August 24, 2015), again suggesting that perhaps Ms. Barta simply overlooked the 998 Offer that was 10 properly served and received. (Ex. A, Fitzsimmons Reply Decl. {2.) 11 Plaintiff's reliance on Craig is misplaced, as that case actually supports the Physician| 12 Group's position that bare denials of receipt are insufficient to overcome a presumption of 13 service. In Craig, the employer twice mailed an arbitration agreement to the plaintiff. (Craig, 14 supra 84 Cal.App.4th at 421-422.) Although the plaintiff submitted a declaration stating “I did) 15 not receive any of these documents at my residence,” the trial court relied on the presumption 16 that a letter correctly addressed and mailed is deemed received. (Id.) The court weighed the 17 Plaintiff's denial of receipt against the presumption of receipt, and ruled against the plaintiff. 18 Id.) Here, the Physician Group has proffered substantial evidence that the 998 Offer was served] 19 against Plaintiff’s bare denial of receipt. Allowing Plaintiff to simply deny receipt of the 998 20 21 Plaintiff's Counsel has repeatedly requested documents to be resent although they were properly served by the Defendants in this case. For example, in September 2015, Plaintiff's counsel claimed that she did not receive PAME/Sutter’s Demurrer which had been served via FedEx Ovemight Mail, despite the fact that the FedEx delivery confirmation indicates it was signed for by someone (not Ms. Langsfeld) at Plaintiff’s office and it had been email served to Plaintiff. (Ex. C, D, Nakarai Decl., {§3-5.) That same month (September 2015), Plaintiff's counsel Claimed that she did not receive the Physician Group’s Amended Notice of Plaintiff's Deposition served via mail, 24 although PA MF/Sutter had received it and it was served to both parties at the same time. (Ex. C, Fitzsimmons Reply Decl.) Plaintiff's counsel also claimed in September 2015 that she did not receive PAMF/Sutter’s CMC statement 25 that had been served vial mail, although the Physician Group had received it and was served by mail at the same time. (Ex. D, Nakarai Decl. (6, Fitzsimmons Reply Decl. #8.) In May 2016, Ms. Langsfeld also contacted the 26 Physician Group’ s counsel and informed them that a temporary receptionist had “mixed up and incorrectly delivered a lot of mail” including “comespondence, discovery, and pleadings” for Ms. Barta’s office. (Ex. D, Fitsimmons 27 Reply Decl. 9.) On another occasion, in February 2017, Plaintiff claimed that she had not received the Physician Group's supplemental document production that had been served nearly three months prior, that was served on PAMPF/Sutter at the same time and that they timely received. (Ex. E, to Fitzsimmons Reply Decl. (110, Nakarai Decl. W.) 3 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Offer, in light of the evidence, would be patently unfair to the Physician Group, who litigated this case to verdict based on the strength of the 998 Offer, which Plaintiff did not accept. B. The Physidan Group Made the 998 Offer in Good Faith The reasonableness of a Section 998 offer is evaluated in light of what the offeree knows or does not know at the time the offer is made. (Bates v. Presbyterian Intercommunity Hosp., Inc. (2012) 204 Cal.App.4th 210, 221.) There is no valid basis for suggesting that the 998 Offer ‘was not reasonable or made in good faith. As a threshold matter, the fact that the jury awarded Plaintiff far less than the Physician Group’s 998 Offer ($201,000.00, plus fees and costs), results in a presumption that the offer was reasonable. (Najah v. Scottsdale Ins. Co. (2014) 230 10 Cal.App.4th 125, 143-144; Bates, supra 204 Cal.App.4th at 221 [Where the defendant obtains a) 11 judgment more favorable than its offer, “the judgment constitutes prima facie evidence showing, 12 the offer was reasonable....”]) Plaintiff fails to address this undisputed fact, and instead, argues 13 that the Physician Group did not make the 998 Offer in good faith simply because the Physician 14 Group purportedly “refused” to re-serve the offer and/or extend the time for acceptance. 15 At the time the 998 Offer was served, Plaintiff had not yet propounded any written 16 discovery and no depositions had been taken. (Fitzsimmons Reply Decl. at {B.) After the 998 17 Offer was served, the parties conducted extensive discovery -- Plaintiff served initial extensive 18 written discovery, the Physician Group made extensive efforts to meet and confer regarding 19 The Physician Group attempted to meet and confer with Plaintiff’ s counsel, but she failed to provide any basis for 20 suggesting that the 998 Offer was invalid or that she did not receive it. She could have sought a written clarification ora stipulation from the Physician Group related to the legal sufficiency of the offer or a ruling from the court along 21 ‘with an extension of time to accept or reject the offer until the questionwas resolved. (3-37 MB Practice Guide: CA Pretrial Civil Procedure 37.12 (2018).) Plaintiff failed to do so. (Id; Peterson v. John Crane, Inc. (2007) 154 Cal.App.4th 498, 506-512 [holding that 998 Offer valid, and that Plaintiff failed to take any action to determine Clarify validity of offer].) In Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475, 1485, the Court rejected the plaintiffs’ argument the $10,000 998 Offer was unreasonable “in light of the hundreds of thousands of dollars in costs, and $2 million in 24 damages” they sought. Similarly, in Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, the appellate court concluded the defendant’s $100,000 offer was not unreasonable or unrealistic, even though the 25 Plaintiff claimed $900,000 in damages. (Id. at 118.) The court reasoned that the “[dJefendants contended they had no liability to [the plaintiff] at all, and the jury ultimately agreed.” (Ibid.) 26 Notably, the Physician Group’s counsel emailed Plaintiff’s counsel on October 7, 2015, asking Plaintiff to explain her concems about the 998 Offer and “what the basis is for such an argument.” (Ex. B, Barta Decl.) Plaintiff's 27 counsel failed to provide the requested information and the Physician Group’s counsel followed up again by indicating: “We have no reason to believe that the 998 offer was not properly mail served and would be valid. There is certainly a strong presumption in our favor on that issue. We welcome hearing any thoughts (and seeing any cases you have) to the contrary.” (Id.) Plaintiff’s counsel failed to respond further. (Id.) -4 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Plaintiff’s deficient responses, and the Physician Group's counsel spent a significant amount of time preparing for Plaintiff's upcoming deposition. (Id. at {B.) Re-serving the 998 Offer would have therefore significantly increased the value of the offer. (Id) Moreover, the Physician Group felt even more confident in its defense of the case after initial discovery was done and had, no motivation to extend the time for acceptance. (Id.) Plaintiffs suggestion that the 998 Offer was made in bad faith because the Physician| Group engaged in subsequent settlement discussions is untenable, unsupported, and flies in the face of contradictory evidence. The Physician Group offered Plaintiff the value of the 998 Offer| in subsequent settlement discussions, but Plaintiff did not respond. (Id. at 74.) Nor did Plaintiff 10 ever indicate that she would have accepted the 998 Offer, and the Parties did not even get close 11 to that amount in their settlement discussions, which included two mediations and a settlement} 12 conference. (Id.) If anything, Plaintiffs response (or lack thereof) to those settlement overtures 13 demonstrates that she had no intention of ever accepting the 998 Offer. Plaintiff's after-the-fact 14 claims that she did not receive the 998 Offer are likely because Ms. Barta neglected to timely 15 discuss the offer with Plaintiff -- presumably because her office was so disorganized that she 16 failed to realize she had received it at the time or Ms. Barta simply wanted to cover her bases in 17 the event Plaintiff failed to beat the 998 Offer at trial. Regardless of the reason, Plaintiff has 18 failed to overcome the strong presumption that the Physician Group served a valid 998 Offer. 19 C. Plaintiff Has Not Met Her Burden to Challenge The Claimed Fees and Costs 20 As the prevailing party, the Physician Group is entitled to its reasonable attomey’s fees 21 under Section 998. (Scott, supra, 20 Cal.4th at 1114.) 1. The Physidan Group’s Attorneys’ Hourly Rates Are Reasonable In its moving papers, the Physician Group established that its counsels’ rates are 24 reasonable and well below those prevailing in the community for similar services by lawyers of 25 comparable skill and experience. Plaintiff does not dispute this. Instead, Plaintiff makes a 26 mountain out of a mole hill by pointing out that Ms. Williams mistakenly declared (in support of 27 a motion to compel filed in December 2016) that she billed $225 per hour, which was the result of the typographical enor. (Declaration of Hieu T. Williams ISO Reply [“Williams Reply 5 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Decl.”] 12-4.) Invoices confirm that in October 2016, Ms. Williams’ billing rate changed from $235 to $275, which is still far below the prevailing rate for an attomey of her skill and experience. (Ex. A-B, Williams Reply Decl. {"2-3.) 2. The Fees Are Reasonable Given the Complex Nature of the Litigation “The reasonableness of attomey’s fees is ... to be determined from a consideration of such factors as the nature of the litigation, the complexity of the issues, the experience and expertise of counsel and the amount of time involved.” (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448.) Each of these factors weighs in favor of the Physician Group’ s fee claim, particularly considering the complex nature of this case and Plaintiff's decision to vigorously 10 (over) litigate it Plaintiff does not dispute that this was a complex lawsuit arising out of 11 complicated allegations as to whether several policies and procedures existed that impaired her 12 ability to provide appropriate medical care, whether the defendants were in a joint venture, 13 whether the Physician Group violated provisions of the Shareholder Employment Agreement, 14 and whether the Physician Group interfered with Plaintiff's purported relationships. The 15 complex nature of this case is further highlighted by the fact that voir dire took nearly a week 16 and the trial itself was nearly 4 weeks. Nor does Plaintiff dispute the litigious nature of the case, 17 with 50 depositions taken (mostly by Plaintiff), 12 discovery motions filed, over 9,100 18 documents produced, two motions for summary judgement and at least 16 motions in limine 19 filed. (Fitzsimmons Motion Decl. {"23-27.) Accordingly, the total hours expended by the 20 Physician Group’s counsel in litigating this case is entirely reasonable and necessarily incurred 21 to achieve the excellent result in the end - a limited five figure award for a single cause of action compared to the $10,000,000 in damages alleged in Plaintiffs FAC. 3. There Were No Inappropriate Or Duplicative Billing Entries 24 “Califomia courts do not require detailed time records ....” (Syers Properties III, Inc. v. 25 Rankin (2014) 226 Cal.App.4th 691, 698.) “Declarations of counsel setting forth the reasonable 26 hourly rate, the number of hours worked and the tasks performed are sufficient.” (Concepcion v. 27 Notably, Ms. Barta failed to submit any kind of declaration or evidence reflecting her own time and fees incurred in this lawsuit. It is therefore reasonable to assume that her time and fees incurred are far more than what the Physician Group seeks. 6 DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Amscan Holdings, Inc. (2014) 223 Cal.App.4th 1309, 1324.) The Physician Group has provided ample evidence in support of the instant motion in the form of declarations from each of the legal professionals that billed time on the case, setting forth the actual time spent and the actual rate charged, supported with actual billing entries (with reasonable redactions on the grounds of attomey-client privilege and work product). (See Lafayette Morehouse, Inc. v. Chronicle Publishing. Co. (1995) 39 Cal.App.4th 1379, 1382.) Plaintiff's claim that the Physician Group camnot recover its attomey fees, unless she can see the unredacted billing entries is unavailing and contrary to well-settled law.’° Plaintiff fails to submit any evidence that the claimed fees were not incurred or| 10 reasonable; instead relying on her counsel’s unsupported self-serving opinions and conjecture, 11 which are insufficient and inadmissible. (Evid. Code § 1200.) Plaintiff speculates that the 12 redacted billing entries demonstrate “double billing’ and “bill padding.” Nothing could be 13 further from the truth and Ms. Barta’s declaration is nothing more than baseless argument. The 14 Physician Group's counsel used contemporaneous time records for all time billing and separated, 15 out the time spent on each discrete task." (Fitzsimmons Reply Ded. 14-16.) The billing| 16 entries are audited prior to submission to ensure reasonable entries, consistent with billing 17 guidelines which prohibit double billing or bill padding.” (Id.) 18 Plaintiff takes issue with the fact that the Physician Group’s attomeys billed different 19 amounts during trial. The fact that Ms. Fitzsimmons and Ms. Williams hilled different hours is 20 not indicative of unreasonableness of fees incurred; rather it demonstrates an effort to accurately 21 10 Even though there is no requirement for the Physician Group to submit actual billing records, if the Court] believes that it is unable to adequately determine the proper award without access to the billing records, the Physician Group would be willing to file the actual billing records in question under seal for the Court’s eyes only, assuming it is agreed that is not a waiver of privilege. The Physician Group will bring its actual billing records to the hearing on this motion and submit the records to the Court for in camera review by the Court if requested to do 24 so by the Court. On a separate note, on September 21, 2016, Ms. Williams and Ms. Fitzsimmons attended a jury focus group for this case, which were redacted in the billing entries produced in support of this motion. 25 (Fitzsimmons Reply Decl. 12.) " Gordon & Rees’ litigation strategy places the bulk of the initial case work on more junior attomeys with senior 26 attomeys providing supervision and specific direction regarding the overall work product and litigation, as well as revisions to work product. (Fitzsimmons Reply Decl. 14-16.) 27 ” The Physician Group’s counsel also aims to maintaina positive relationship with its clients in order to continue to get business in the future. (Fitzsimmons Reply Decl. 14-16.) “Double-billing” or “bill-padding” would not only violate the client's billing guidelines and be unethical, it would also be a bad business practice for securing future work from the same client. (Id.) Moreover, the client will not pay for double billing or bill padding. (Id.) -7- DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE bill - reflecting the time each attomey actually spent at Court. Any difference in time merely reflects the differing schedules and tasks for that day (e.g., arriving early to file papers, meet with clients and/or witnesses, prepare for oral argument, confer with co-defense counsel, set up or take down equipment). (Fitzsimmons Reply Decl. 118, Williams Reply Decl. {B.) Plaintiff also attempts to challenge the reasonableness of the fees incurred by the Physician Group in preparation for the opening statement (38 hours). Plaintiff offers no concrete factual reasons supporting her claim that this amount should be reduced. For example, Plaintiff makes no attempt to identify how much time would be reasonable to effectively present a 45 minute opening statement that was memorized in preparation for alengthy tral. 10 Plaintiff also claims that the Physician Group should not be entitled to fees for taking} 11 Plaintiff’s deposition (16.9 hours). This is completely untenable. Plaintiff initiated this lawsuit 12 and the Physician Group is entitled to fees incurred related to basic discovery that were 13 necessary for litigation. Plaintiff had expansive allegations in the case continued to grow during, 14 the litigation (including during her deposition). Notably, the Physician Group's counsel used the 15 third and fourth volumes of Plaintiff's deposition to impeach her several times during her 16 testimony at trial. (Fitzsimmons Reply Decl. 119.) More importantly, however, if Plaintiff felt 17 that the continued deposition was unnecessary she should have obtained a protective order. 18 Lastly, Plaintiff attempts to dispute the time spent by the Physician Group’s attomeys for| 19 travel and waiting for the jury’s verdict. Such costs were thus reasonable and necessary to the 20 litigation.’ The Physician Group incurred fees for traveling for court appearances and trial, to 21 meet with witnesses (physicians and clinical staff) at various PAMF locations throughout the Bay Area to prepare for testimony in deposition and/or trial. (Fitzsimmons Reply Decl. 17, Williams Reply Decl. {6.) The parties were also required to remain close to the court and to be 24 availableto answerjurors’ questions during the deliberations. (Fitzsimmons Reply Decl. 21.) 25 3 “[A] prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” (C.C.P. § 26 1032(b).) Section 1033.5 sets forth the items of costs which are recoverable by the prevailing party. (C.C.P. § 1033.5(a)-(c).) An item that is neither specifically allowable under Section 1033.5(a) nor prohibited under Section 27 1033.5(b) may nevertheless be recoverable in the Court's discretion (C.C.P. § 1033.5(0)(4); Ripley v. Pappadopoulos (1994) 23 Cal. App. 4th 1616, 1623.) To be recoverable, a cost must be “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation” and “reasonable in amount.” (C.C_P. § 1033.5(c)(2)-(3).) -& DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE I. THE CLAIMED EXPERT FEES WERE REASONABLE AND NECESSARY Section 998 provides that fees for expert witnesses actually incurred and reasonably necessary in preparation for trial are recoverable. (C.C.P. § 998(c)(1).) As set forth its moving papers, because Plaintiff failed to obtain a more favorable judgment than the 998 Offer, the Physician Group is the prevailing party and entitled to its reasonable expert fees. Plaintiff does not dispute the qualifications of the Physician Group’s experts. Instead, she attempts to challenge the claimed expert fees based on the fact that some of the experts did not testify at trial. Califomia law is clear, however, that a Court may award reasonable fees for experts who aid in the preparation for trial even if the experts do not actually testify. (Santantonio, supra, 25 10 Cal.App.4th at 124.) Regardless, the fees ($4,192.75) claimed for vocational rehabilitation 11 expert Carol Hyland's services are reasonable and necessary. The Physician Group’s expert 12 economist, Dr. Charles Mahla testified that he relied on Ms. Hyland's expert analysis to prepare 13 his opinion about Plaintiff's damages. (FT 1/31/18, Ex. I to Fitzsimmons Reply Decl.) Ms. 14 Hyland's expert analysis, as relied upon by Dr. Mahla, assisted the jury, who awarded Plaintiff 15 damages far less than the amount requested by Plaintiff’ s expert economist (Zengler). 16 Plaintiff also attempts to question the reasonableness of Dr. Mark Lipian’s expert fees 17 based on pure speculation. Plaintiff claimed to suffer from severe emotional distress in this case, 18 and this Court already ruled that good cause existed for Dr. Lipian to conduct an IME of Plaintiff 19 in order for the Physician Group to refute her claimed emotional distress. (Ex. G, Fitzsimmons 20 Reply Decl. {113.) Accordingly, Dr. Lipian prepared for and conducted a two-day IME of 21 Plaintiff, prepared a 79 page report regarding his opinions, prepared for and sat for deposition, as well as prepared to testify at trial. (Fitzsimmons Reply Decl. {113.) Plaintiff’ s argument that the Physician Group must provide more detailed expert invoices 24 misapprehends the evidence sufficient to sustain the burden on a motion for an award of expert 25 fees under Section 998.’ In Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, for example, the 26 27 4 An award for expert fees may be based on “less than perfect billing records.” (Michelson v. Camp (1999) 72 Cal.App.4th 955, 975-976 [holding that declaration submitted in support of expert’s fees describing hourly rate and work done was sufficient.) In the altemative, an award for expert fees may be based on the costs billed (which the Physician Group submitted). (Santantonino, supra, 25 Cal.App.4th at 109-110.) - DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE trial court awarded the prevailing defendant Section 998 expert witness fees based upon a verified memorandum of costs, supported by the defendant’s expert disclosure, accompanying declaration of counsel, and the experts’ invoices. (Id. at 1265-1266.) On appeal, the plaintiff argued the defendant failed to meet his burden that the costs were reasonable. (Id. at 1266.) The Jones court rejected that contention and observed that nothing in the case law, the statute, or the Califomia Rules of Court prohibited reliance on the declaration of counsel as documentation of| expert fees claimed. (Id. at 1265.) The Jones court explained that the experts’ invoices were admissible to comoborate the verified memorandum of costs; and, insofar as the charges were paid, the cost memorandum and invoices were evidence that the charges were reasonable. (Id. at 10 1267.) The Jones court’s analysis is applicable here -- the Physician Group has provided 11 competent evidence that Dr. Lipian’s expert fees were reasonably necessary. As in Jones, the 12 Physician Group has provided a verified memorandum of costs, a declaration of counsel, expert 13 invoices, and expert disclosures. The Physician Group’s counsel hereby further submits 14 declarations placing Dr. Lipian’s work in context. (Ex. H, Fitsimmons Reply Decl. {113.) While 15 Dr. Lipian’s fees appear to be high compared to the other experts in this case, Plaintiff has 16 presented no evidence as to what a reasonable fee would be for such services. Dr. Lipian’s 17 qualifications are beyond reproach and he commands a rate of $724 per hour because he is in 18 high demand. One of the reasons that Dr. Lipian is such a well-regarded expert is because, as a 19 forensic psychiatrist, he spends a significant amount of time carefully reviewing documents, 20 conducting examinations, and preparing a detailed report. (Id. at 113.) The undisputed testimony 21 that the Physician Group paid Dr. Lipian’s invoices is in and of itself evidence that the charges were reasonable. (Jones supra, 63 Cal.App.4th 1258.) Iv. CONCLUSION 24 The Physician Group properly served a 998 Offer that Plaintiff failed to beat. The award 25 of fees and costs is therefore mandatory. The fees and costs the Physician Group seeks are 26 reasonable and recoverable. As such, the Physician Group respectfully requests an award for 27 $1,014,795 in fees incurred after service of the 998 Offer and $491,834.16 in costs, pursuant to CCP§ 998, and additional fees and costs with a supplemental memorandum of costs to be filed. -10- DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Dated: April , 2018 GORDON REES SCULLY MANSUKHANI, LLP py. Stillen MARCIE ISOM FITZSIMMONS HIEU T. WILLIAMS Attor for Defendant PALO ALTO FOUNDATION MEDICAL GROUP, INC. 10 11 12 13 14 15 16 17 18 19 20 21 24 25 26 27 -11- DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE Electronically filed by Superior Court of CA, County of Santa Clara, PROOF OF SERVICE on 4/17/2018 2:23 PM Reviewed By:R. Burciag; Iam a resident of the State of California, over the age of 18 yeatyeadponspartyyoahy are 592 a ana within action. My business address is: Gordon Rees Scully Mansukh: ttery St., Suite 2000, San Francisco, California 94111. On the date below, I servi jocuments: DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE; DECLARATION OF MARCIE I. FITZSIMMONS; DECLARATION OF MAIKO NAKARAI-KANIVAS; DECLARATION OF MEG NAIZGHI; DECLARATION OF HIEU T. WILLIAMS By Electronic Transmission: By transmitting via electronic mail the document(s) listed above to the e-mail address(es) set forth below. Via Odyssey E-File CA, Electronic Filing System: By causing electronic service to all parties listed on the E-Service list on the Odyssey E-File CA website (if any listed). 10 O Via Hand: By causing the document(s) listed above to be hand delivered to the person(s) at the address(es) set forth below. 11 By Fed Ex: By placing a true copy thereof enclosed in a sealed envelope, at a station designated for collection and processing of envelopes and packages for overnight 12 ex an delivery by FedEx as part of the ordinary business practices of Gordon Rees Scully oot Mansukhani, LLP described below, addressed as follows: wfaa 13 eat Bed 14 O By U.S. Mail: By placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in United States mail in the State of California at San Francisco, addressed as set forth below. 15 Attorneys for Plaintiff Attorneys for Defendants 16 Sutter Health and Palo Alto Medical Theresa J. Barta Law Offices of Theresa Barta Foundation 17 4041 MacArthur Blvd. Suite 280 Lindberg Porter, Jr. 18 Newport Beach, CA 92660 Maiko Nakarai-Kanivas Telephone: 949 833-3383 Littler Mendelson, P.C. 19 Facsimile: 949 209-2530 1255 Treat Blvd, Suite 600 Email: Theresa@barta-law.com Walnut Creek, CA 94597 20 Telephone: 925 932-2468 Facsimile: 925 946-9809 21 Email: Lporter@littler.com MNakarai@littler.com 22 MAMartinez@littler.com Co-counsel for Plaintiff 23 Charles M. Louderback 24 Stacey L. Pratt Louderback Law Group 25 44 Montgomery St. #2970 San Francisco, CA 94104 26 Telephone: 415 615-0200 Facsimile: 415 795-4775 27 Email: Clouderback@louderbackgroup.com Spratt@louderbackgroup.com 28 -12- DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE, lam readily familiar with the finm s practice of collection and correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is invalid if cancellation date or postage meter date is more than one day after the date of deposit for mailing in affidavit. I declare under penalty of perjuryunder the laws of the State of Califomia that the above is true and correct. Executed on April 17, 2018, at San Francisco, Califomia. CHa ca -Y ehimi Olvera 10 11 12 13 14 15 16 17 18 19 20 21 24 25 26 27 1105880/36717970v.1 -13- DEFENDANT’S REPLY IN SUPPORT OF MOTION FOR ATTORNEYS’ FEES AND COSTS POST CCP § 998 - OFFER TO COMPROMISE