International Fruit Genetics LLC v. P.E.R. Asset Management Trust

Filing 98

ORDER GRANTING PLAINTIFFS MOTION FOR ATTORNEYS FEES 88 by Judge Otis D. Wright, II: The Court GRANTS Plaintiffs Motion for Attorneys Fees and AWARDS $684,358.75 for attorneys fees to Plaintiff International Fruit Genetics, LLC, and against De fendants P.E.R. Asset Management Trust, Pieter Eduard Retief Redelinghuys N.O., in His Capacity as Trustee for the Time Being of the P.E.R. Asset Management Trust, and Deborah Mary Redelinghuys N.O., in Her Capacity as Trustee for the Time Being of the P.E.R. Asset Management Trust. (lc)

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O 1 2 3 4 5 United States District Court Central District of California 6 7 8 9 10 11 12 13 14 15 16 17 18 19 INTERNATIONAL FRUIT GENETICS, LLC, Plaintiff, v. Defendants. 21 23 24 PIETER EDUARD RETIEF REDELINGHUYS N.O., IN HIS CAPACITY AS TRUSTEE FOR THE TIME BEING OF THE P.E.R. ASSET MANAGEMENT TRUST, 25 Counter-Claimant, 26 27 28 ORDER GRANTING PLAINTIFF’S P.E.R. ASSET MANAGEMENT TRUST, MOTION FOR ATTORNEYS’ FEES [88] PIETER EDUARD RETIEF REDELINGHUYS N.O., IN HIS CAPACITY AS TRUSTEE FOR THE TIME BEING OF THE P.E.R. ASSET MANAGEMENT TRUST, and DEBORAH MARY REDELINGHUYS N.O., IN HER CAPACITY AS TRUSTEE FOR THE TIME BEING OF THE P.E.R. ASSET MANAGEMENT TRUST, 20 22 Case No. 2:14-cv-05273-ODW-MRW v. INTERNATIONAL FRUIT GENETICS, 1 LLC, and ROES 1 through 10, inclusive, 2 Counter-Defendant. 3 4 5 I. 6 INTRODUCTION Plaintiff’s request for attorneys’ fees stems from a dispute regarding licensing 7 of proprietary plant material.1 8 International Fruit Genetics, LLC (“IFG”) seeks $687,004.75 in attorneys’ fees 9 incurred throughout the course of this litigation. (Reply 12, ECF No. 94.) (ECF No. 88.) Plaintiff/Counter-Defendant 10 Plaintiff filed its initial Complaint on July 8, 2014, and, over two years later, 11 this Court issued a judgment in Plaintiff’s favor and order of permanent injunction 12 against Defendants/Counter-Claimants Pieter Eduard Retief Redelinghuys and 13 Deborah Mary Redelinghuys on July 25, 2016. The judgment entitles Plaintiff to 14 recover its costs and attorneys’ fees to the extent permitted by law. Provisions within 15 the three licensing agreements at issue in this case also authorize an award of 16 attorneys’ fees and costs to the prevailing party. (Motion for Attys’ Fees (“Mot”), 17 Exs. A–C, ECF No. 88.) 18 19 For the following reasons, the Court GRANTS Plaintiff’s Motion for Attorneys’ Fees and AWARDS Plaintiff $684,358.75 in attorneys’ fees. 20 21 II. LEGAL STANDARD 22 Federal courts apply state law in interpreting and enforcing fee shifting 23 agreements such as licensing agreement provisions providing for attorneys’ fees. See 24 Ford v. Baroff, 105 F.3d 438, 442 (9th Cir. 1997). California law provides two 25 separate frameworks governing fee shifting agreements. California Code of Civil 26 Procedure § 1021 provides that, except where otherwise specified by statute, parties 27 28 1 After carefully considering the papers filed in support of and in opposition to the Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. 2 1 are free to enter their own agreements regarding payment of fees. Similarly, a 2 prevailing party may ordinarily recover costs, and parties may contractually designate 3 fees as recoverable costs. §§ 1021, 1032(b), 1033.5(a)(10). In sum, “[p]arties may 4 validly agree that the prevailing party will be awarded attorney fees incurred in any 5 litigation between themselves, whether such litigation sounds in tort or in contract.” 6 Santisas v. Goodin, 17 Cal. 4th 599, 608 (Cal. 1998) (quoting Xuereb v. Marcus & 7 Millichap, Inc., 3 Cal. App. 4th 1338, 1341 (Cal. Ct. App. 1992)). 8 Where the contract at issue provides specific provisions for attorneys’ fees and 9 costs, California Civil Code § 1717 builds on the general framework provided by the 10 Code of Civil Procedure. Santisas, 951 P.2d at 407 (citing § 1717(a)). In order to 11 recover attorneys’ fees under Section 1717, the party must show: (1) the agreement 12 specifically provides for the award of attorneys’ fees; (2) the party is the prevailing 13 party; and (3) that the attorneys’ fees request is reasonable. See Caldwell v. Wells 14 Fargo Bank, N.A., No. 13-cv-01344-LHK, 2014 WL 789083, at *3 (N.D. Cal. 2014). 15 III. 16 DISCUSSION 17 Defendants do not dispute that the licensing agreements specifically provide for 18 the award of attorneys’ fees or that IFG is the prevailing party. (See Def. Opp’n 1-2.) 19 Instead, Defendants argue that the requested award of attorneys’ fees should be 20 reduced because: (1) the computed amount includes “block-billed” fees; (2) some of 21 the fees sought are unripe because they are related to Defendants’ appeal; (3) some of 22 the fees sought are unrecoverable because they were incurred by IFG’s President, Jay 23 Behmke; (4) there should be a reduction in fees for travel time billed; (5) some of the 24 fees sought in the Motion for Attorneys’ Fees are “double-counted” because they were 25 also listed in Plaintiff’s Application to Tax Costs; and finally (6) there is no evidence 26 to support some of the fees sought.2 (Def. Opp’n 1-2.) 27 2 28 Defendants also urge this Court to deny Plaintiff’s Motion based on a failure to meet and confer prior to filing the Motion. (Def Opp’n 1.) Having considered Plaintiff’s Reply detailing the communication between the parties prior to filing post-judgment motions on both sides, the Court 3 1 On the whole, the Court disagrees with Defendants’ arguments and finds for 2 Plaintiff. However, a discrepancy on IFG’s attorney billing statements regarding 3 unripe fees related to Defendants’ appeal requires that the Court reduce the overall 4 award to IFG accordingly. 5 A. BLOCK-BILLING OF FEES 6 Defendants argue that this Court should reduce the amount of attorneys’ fees 7 awarded to IFG because of IFG’s practice of “block-billing” fees. While Defendants 8 cite Bell v. Vista School District, 82 Cal. App. 4th 672, 689 (2000) and Christian 9 Research Institute v. Alnor, 165 Cal. App. 4th 1315, 1325 (2008) as support for the 10 assertion that block-billing is unreasonable in calculating attorneys’ fees, they misstate 11 the holdings of these cases. The Christian Research Institute Court states, to the 12 contrary, that block-billing is not per se unreasonable in computing attorneys’ fees, 13 but that it can exacerbate underlying vagueness in a fee request. See also Bell, 82 Cal. 14 App. 4th at 689 (finding block-billing impermissible only where it made it impossible 15 to distinguish between tasks for which fees could be recovered and those for which 16 fees could not be recovered). 17 Having reviewed the schedules of fees included as Exhibits in Plaintiff’s 18 Motion, this Court finds no pervasive vagueness in the billing or a blending of 19 permissible and impermissible fees within the block-billed portions. (See Declaration 20 of Richard O’Hare (“O’Hare Decl.”), Ex. E, ECF No. 88.) As such, the Court rejects 21 Defendants’ block-billing arguments. 22 B. UNRIPE FEES RELATED TO PENDING APPEAL 23 As Plaintiff acknowledges, some of the fees initially listed in the Motion are not 24 ripe because they were incurred in connection with Defendant’s pending appeal in this 25 26 27 28 declines to deny the Motion on the suggested grounds. Similarly, this Court declines to exercise its discretion to stay its decision regarding the Motion for Attorneys’ Fees due to Defendants’ pending appeal. The Court has already concluded that Plaintiff is the prevailing party and is entitled to recover its attorneys’ fees. (ECF No. 82.) No further proceedings are needed to determine Plaintiff’s entitlement to attorneys’ fees, and staying this motion will not conserve judicial resources. 4 1 case. (Reply 11.) Defendants’ and Plaintiff’s filings agree that $1,988.75 of the 2 amount initially claimed in Plaintiff’s Motion should be withdrawn and deemed 3 unripe. (Id.; Opp’n 10.) However, the Court has reviewed Exhibit E of Richard 4 O’Hare’s Declaration, which details the attorneys’ fees billed to IFG, and determines 5 that two additional entries, not noted by Defendants or Plaintiff, appear to be fees for 6 appellate work. (O’Hare Decl., Ex. E, ECF No. 88.) In their Opposition, Defendants 7 note the following entries as being related to appellate work: 8 9 Attorney Name 12 Date(s) to Appellate Work 10 11 Hours Billed Related Richard O’Hare 2.9 July 27, 2016 John B. Dawson 1.55 July 27-29, 2016 Kimberly Corcoran 0.9 July 27, 2016 13 14 15 16 (See Opp’n 10; O’Hare Decl. 136.) 17 18 19 20 21 22 23 24 25 26 Yet the Court finds that two additional entries, for 3.9 hours billed by Richard O’Hare on July 28, 2016, for “Teleconference with G. Alexander and E. Totino regarding motion for stay; Research regarding grounds for motion to stay pending appeal; Communication with client,” and 4.5 hours billed by Mr. O’Hare on July 29, 2016, for “Continued research and begin draft of opposition to motion for stay pending appeal,” are appellate related. (O’Hare Decl. 136.) As such, the amount of those fees should also be withdrawn from the total to be awarded. Mr. O’Hare’s stated hourly rate during July 2016 was $350 per hour. (O’Hare Decl. 5.) Thus, the overall award of fees is reduced by that amount times 8.4 hours, less 10% (reflecting 27 28 5 1 the discount already applied to the total attorneys’ fees billed to IGF),3 totaling a 2 reduction of $2,646.00. (See id. 136.) 3 C. FEES INCURRED BY IFG’S PRESIDENT, JAY BEHMKE 4 The Court disagrees with Defendants’ contention that a prevailing party cannot 5 recover fees incurred by its own employee acting in a legal capacity, such as a general 6 counsel or President. (Def. Opp’n 11.) Turner v. Secretary of the Air Force, which 7 Defendants cite as support here, actually allows for the recovery of attorneys’ fees 8 where the billing lawyer was general counsel for the prevailing party. 944 F.2d 804, 9 808 (11th Cir. 1991). Turner merely stands for the rule that the awarded fees must go 10 to the prevailing party, and not paid directly to the lawyer representing that party, as is 11 the case in all awards of attorneys’ fees. Id. at 808. Fees billed by a lawyer in Mr. 12 Behmke’s position are thus recoverable by the prevailing party. Therefore, the Court 13 declines to reduce the fees on these grounds. 14 D. FEES FOR TRAVEL TIME 15 Travel time is generally compensable. See Zuniga v. W. Apartments, No. CV 16 13-04637-JFW, 2014 WL 6655997, at *4 (C.D. Cal. Nov. 24, 2014) (travel time 17 usually compensatory unless the use of out-of-town attorneys was unnecessary or 18 unreasonable). Here the Court is satisfied that the retention of a Santa Rosa firm 19 specializing in representation of grapevine nurseries and grape development 20 companies was necessary, and therefore fees related to the firm’s travel are 21 recoverable. (See Reply 10.) 22 E. “DOUBLE-COUNTED” FEES ALLEGEDLY ALSO LISTED IN 23 APPLICATION TO TAX COSTS 24 Having reviewed the records of costs and fees submitted, the Court finds that 25 Plaintiffs did not “double-count” costs in both the Motion for Attorneys’ Fees and the 26 3 27 28 Plaintiff’s attorneys’ general practice in billing for this litigation was to discount fees by 10%. (Mot. 9.) This is reflected in the invoices for attorneys’ fees. (See generally O’Hare Decl., Ex. E.) The fees related to appellate work, included on invoice # 63846 dated August 8, 2016, were reduced by a 10% discount, so the amount to be withdrawn is accordingly reduced. (See id. 136.) 6 1 Application to Tax Costs. (See O’Hare Decl., Ex. E; ECF No. 87.) Some of the costs 2 listed on the Application to Tax Costs are merely repeated on the invoices used to 3 support the amount requested in Plaintiffs’ Motion for Attorneys’ Fees, but they are 4 not included in the calculation of the amount of fees requested. 5 F. EVIDENTIARY SUPPORT FOR FEES SOUGHT 6 The Court accepts Plaintiff’s Supplemental Declaration of Richard O’Hare, 7 submitted with its Reply, as sufficient proof that the challenged entry lacking 8 evidentiary support does, in fact, reflect compensable work done in the course of this 9 litigation. (Supp. O’Hare Decl. ¶¶ 6–7, ECF No. 94.) 10 IV. 11 CONCLUSION 12 As the prevailing party in the underlying action, IFG has a right to attorneys’ 13 fees under both California Civil Code § 1717 and the terms of the parties’ licensing 14 agreement. (See Mot. Ex. A—C.) 15 After reviewing the records submitted, the Court finds that the amount 16 requested is a reasonable and, minus a slight reduction for appellate work, an accurate 17 reflection of the legal services expended in this matter. 18 For the reasons discussed above, the Court GRANTS Plaintiff’s Motion for 19 Attorneys’ Fees and AWARDS $684,358.75 for attorneys’ fees to Plaintiff 20 International Fruit Genetics, LLC, and against Defendants P.E.R. Asset Management 21 Trust, Pieter Eduard Retief Redelinghuys N.O., in His Capacity as Trustee for the 22 Time Being of the P.E.R. Asset Management Trust, and Deborah Mary Redelinghuys 23 N.O., in Her Capacity as Trustee for the Time Being of the P.E.R. Asset Management 24 Trust. (ECF No. 88.) 25 IT IS SO ORDERED. 26 27 28 September 16, 2016 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 7

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