Frank Dufour v. Robert Allen et al

Filing 293

MINUTES (IN CHAMBERS) - DEFENDANTS ROBERT ALLEN, D.A.H.A.R., PROSPER, INC., PROSPER HOLDINGS INCORPORATED, AND R.A.H.A.D.'S SUPPLEMENTAL MOTION FOR ATTORNEYS' FEES by Judge Christina A. Snyder: The Court finds reasonable the hourly rates ch arged by the Prosper Defendants. The Court DIRECTS the Prosper Defendants to submit a proposed form of order consistent with this decision on or before 6/5/2017. Thereafter, the matter 289 will be taken under submission. Court Reporter: Not Present. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Present: The Honorable 
Catherine Jeang 
Deputy Clerk 

CHRISTINA A. SNYDER 

N/A 

Tape No.

Attorneys Present for Defendants: 

Not Present 
Court Reporter / Recorder

Attorneys Present for Plaintiffs: 

Not Present 
Not Present 
(IN CHAMBERS) - DEFENDANTS ROBERT ALLEN,
Proceedings:  
D.A.H.A.R., PROSPER, INC., PROSPER HOLDINGS
INCORPORATED, AND R.A.H.A.D.’S SUPPLEMENTAL
MOTION FOR ATTORNEYS’ FEES (Dkt. 289, filed April 24,
2017)
The Court finds this motion appropriate for decision without oral argument. See
Fed. R. Civ. P. 78; C.D. Cal. L.R. 7–15. Accordingly, the hearing date of June 5, 2017 is
vacated, and the matter is hereby taken under submission.1
I.

INTRODUCTION & BACKGROUND

This lawsuit commenced on February 8, 2012, when plaintiff Frank DuFour filed a
complaint in Los Angeles County Superior Court. Plaintiff filed the operative Fourth
Amended Complaint (“FAC”) on December 27, 2013, also in Superior Court. See Dkt.
No. 1-2. The FAC names as defendants Robert Allen, Enlightened Wealth Institute
International, L.C., Enlightened Wealth Institute, L.C., Prosper, Inc., Green Planet
Services, Opteum Financial Services, Midland Mortgage Company, Aurora Loan
Services, Sherson Lehman, Millennium Home Loans, Charlie Payne, and Giddens &
Giddens, as well as other Doe defendants. Id. ¶¶ 2–26. On February 28, 2014, the
Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver of defendant

1

Furthermore, when the Court directed the Prosper Defendants to file a
supplemental motion for attorneys’ fees, the Court indicated that the matter would be
taken under submission unless the Court believed a hearing was necessary. Dkt. 288 at
17.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Millennium Bank, N.A., a failed bank.2 See Dkt. 1. On July 19, 2014, the FDIC
removed this action to federal court because, where the FDIC is a party, a case is deemed
to arise under the laws of the United States. Id. The case was transferred to the
undersigned on July 25, 2014. Dkt. 10. A number of defendants have been dismissed
pursuant to prior orders of this Court.
In brief, plaintiff alleges in the FAC that defendants schemed to induce plaintiff to
enroll in a fraudulent real estate investment course offered by Allen and Prosper to buy
fraudulently marketed properties, from which defendants profited through undisclosed
relationships with management and financing companies. Plaintiff alleges that Allen is
the co-founder of entities which offer real estate investment instruction. Plaintiff
contends that Allen, through multiple incarnations of the same business model,
deceptively promoted risky and illegal investment techniques, and fraudulently induced
him to pay thousands of dollars to enroll in a real estate investment course. According to
plaintiff, Prosper is a corporation affiliated with Allen and other defendants, and after
plaintiff was referred to Prosper by Allen, Prosper employees provided plaintiff with
training materials and coaching and eventually connected plaintiff with other players in
the alleged scheme. Plaintiff asserts that Freedom employees fraudulently induced
plaintiff to make a series of real estate investments in Mississippi. Plaintiff also alleges
that Allen and other defendants breached an implied contractual duty of good faith and
fair dealing by failing to disclose that Freedom and other defendants “were all doing
business together” with Prosper, which was “associated with, affiliated and involved in a
joint venture business arrangement with . . . Allen.”3
On December 23, 2013, just prior to the filing of the FAC, Prosper filed a crosscomplaint for breach of contract against plaintiff. Dkt. No. 153 Ex. 1 (“CrossComplaint”). Prosper alleged in this Cross-Complaint that plaintiff breached an

2

The FAC named “Millennium Home Loans, an unknown business entity,” as a
defendant, but did not name Millennium Bank. See generally FAC. However, on May
21, 2014, plaintiff filed in the Superior Court an application to amend the FAC based on
an “incorrect name.” Dkt. 7-3. This application represented that plaintiff had discovered
the true name of “Millennium Home Loans” to be “Millennium Home Loans a/k/a
Millennium Bank, N.A.” Id.
3

These facts are drawn from the Court’s prior orders dated September 15, 2014,
dkt. 46, November 10, 2014, dkt. 75, and March 19, 2015, dkt. 160.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Enrollment Agreement he purportedly entered into with Prosper by failing to fulfill his
obligations as an enrollee in the course and refusing to mediate or arbitrate this dispute.
Id. ¶ 10. Plaintiff filed a demurrer to the Cross-Complaint in the Superior Court, which
was overruled. Plaintiff subsequently filed a so-called “Cross-Cross-Complaint,”
(“CCC”) which this Court dismissed on September 15, 2014, on the ground that it
impermissibly duplicated claims already raised in the FAC. Dkt. 46. Plaintiff appealed
the order dismissing the CCC to the Court of Appeals for the Ninth Circuit. On March
19, 2015, the Court granted Prosper’s motion for voluntary dismissal without prejudice of
its Cross-Complaint. Dkt. 160.
In May 2014, before this case was removed to federal court, the Superior Court
granted summary judgment in favor of defendants Freedom Home Mortgage Corporation
(“Freedom”), as well as defendants Allen, Prosper, Inc., Prosper Holdings, Inc.,
Education Success, Inc., R.A.H.A.D., Inc., and D.A.H.A.R., Inc. (collectively the
“Prosper Defendants”). On November 21, 2014, this Court entered judgment in favor of
Freedom and the Prosper Defendants. Dkt. 90. On December 19, 2014, plaintiff
appealed to the Court of Appeals for the Ninth Circuit the entry of judgment in favor of
Freedom and the Prosper Defendants. Dkt. 110.
On April 20, 2017, the Court granted the Prosper Defendants’ motion for
attorneys’ fees on the basis of the indemnity provision of the Enrollment Agreement.
Dkt. 288. The Court ordered the Prosper Defendants to submit a supplemental request
for attorneys’ fees, specifying the amount of costs and fees they seek to recover,
documenting the hours expended and the hourly rates of their counsel, and demonstrating
that those rates are consistent with those prevailing in the community given the skill,
experience, and reputation of the Prosper Defendants’ counsel. Id. at 17.
On April 24, 2017, the Prosper Defendants filed their supplemental motion for
attorneys’ fees and costs. Dkt. 289 (“Motion”). On May 8, 2017, plaintiff filed his
opposition. Dkt. 290 (“Opp’n”). On May 17, 2017, the Prosper Defendants filed a reply
in support of their motion. Dkt. 291. On the same day, plaintiff filed an objection to the
reply. Dkt. 292.
Having carefully considered the parties’ arguments, the Court finds and concludes
as follows.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

II.

LEGAL STANDARD

To determine reasonable attorneys’ fees, the starting point is “the number of hours
reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v.
Eckerhart, 461 U.S. 424, 433. This is called the “lodestar” method. The fee applicant
must submit evidence of the hours worked and the rates claimed. Id. Once the fee
applicant has done so, “[t]he party opposing the fee application has a burden of rebuttal
that requires submission of evidence to the district court challenging the accuracy and
reasonableness of the hours charged or the facts asserted by the prevailing party in its
affidavits.” Gates v. Deukmejian, 987 F.2d 1392, 1397–98 (9th Cir. 1992). All hours
that are not reasonably expended, or that are excessive or redundant, should be excluded.
Hensley, 461 U.S. at 434. “[T]here is a strong presumption that the lodestar represents a
reasonable fee.” Gates, 987 F.2d at 1397.
“Although in most cases, the lodestar figure is presumptively a reasonable fee
award, the district court may, if circumstances warrant, adjust the lodestar to account for
other factors which are not subsumed within it.” Camacho v. Bridgeport Financial, Inc.,
523 F.3d 973, 978 (9th Cir. 2008) (quoting Ferland v. Conrad Credit Corp., 244 F.3d
1145, 1149 n. 4 (9th Cir. 2001)). In such cases, a district court may make upward or
downward adjustments to the presumptively reasonable lodestar based on the factors set
out in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69–70 (9th Cir. 1975): (1) the time
and labor required; (2) the novelty and difficulty of the questions presented; (3) the
necessary skill required; (4) the preclusion of other employment by the attorney; (5) the
customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by
the client or the circumstances; (8) the amount involved and the results obtained; (9) the
experience, reputation and ability of the attorneys on the case; (10) the undesirability of
the case; (11) the nature and length of the professional relationship with the client; and
(12) awards in similar cases. These twelve factors are not disputed here and plaintiff’s
attorneys do not seek a multiplier.
III. DISCUSSION
The Prosper Defendants assert that they were represented by five attorneys who
charged between $130 and $350 per hour, depending on the attorney, and one paralegal
who charged between $95 and $125 per hour. Motion at 4–5. Specifically, Wm. Kelly
Nash, who billed between $275 and $300 per hour, has practiced as an attorney for more
than thirty years and has concentrated on business and civil ligation. Dkt. 289-1,

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Declaration of Wm. Kelly Nash (“Nash Decl.”) ¶ 2. While Nash is a member of the Utah
State Bar, he has litigated in numerous federal district courts and state superior courts in
California. Id. Jordan Cameron was admitted to practice in 2008 and billed between
$150 and $245 per hour. Id. ¶¶ 5, 13. David Tufts, who billed $350 per hour, was
admitted to practice in 1995, provided supervision and local coordination, and billed only
2.9 hours on this matter. Id. ¶¶ 5, 13. Kimberly Barnes, who billed $130 per hour, was
admitted to practice in 2013. Colin P. Schmutz, who billed between $110 and $170 per
hour, served as a law clerk and, upon his admission in 2015, an attorney. Finally, Kim
Altamirano, who billed between $95 and $125 per hour, served as a paralegal. Counsel
for the Prosper Defendants were first retained in November 2011 and attorneys and
paralegals expended 2,168.05 hours on this matter. Id. ¶ 14.
A reasonable hourly rate is that prevailing in the community for similar work
performed by attorneys of comparable skill, experience, and reputation. Moreno v. City
of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008). “Generally, when determining a
reasonable hourly rate, the relevant community is the forum in which the district court
sits.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008)
After reviewing awards in similar cases, the Court concludes that the hourly rates
plaintiff’s counsel seeks are reasonable for this case. See, e.g., PSM Holding Corp. v.
Nat’l Farm Fin. Corp., No. 05-cv-08891-MMM-FMO, 2015 WL 11652518, at *18 (C.D.
Cal. May 19, 2015) (in a fraud and breach of contract case, finding rates between $250
and $550 reasonable for attorneys, and rates between $125 and $175 per hour reasonable
for paralegals); see also State Comp. Ins. Fund v. Khan, No. 12-cv-01072-CJC-JCG,
2016 WL 6440138, at *6 (C.D. Cal. July 6, 2016) (“Courts routinely award attorneys’
fees for paralegals and case assistants who perform necessary work under the direction of
attorneys.”).
Counsel for the Prosper Defendants have provided time sheets accounting for the
2,168.05 hours spent defending this action. See Nash Decl. Ex. A. The requested
attorneys’ fees break down as follows:
Name
Wm. Kelly Nash
Jordan Cameron
David Tufts
Kimberly Barnes

Rate
$275–$300
$150–$245
$350.00
$130.00

Hours
794.05
971
2.9
5.5

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Lodestar Amount
$228,289.37
$191,772.50
$1,015.00
$2,002.00
Page 5 of 12 

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Colin P. Schmutz
Kim Altamirano
TOTAL

$110–$170
$95–$125

90.9
304
2168.35

$12,726.00
$33,440.00
$469,244.87

Plaintiff argues that the Prosper Defendants are not entitled to recover any
attorneys’ fees or costs or, in the alternative, that the fees and costs sought should not be
granted in the amount requested.
At the outset, plaintiff again argues that the Prosper Defendants are not entitled to
recover fees on the basis of the Enrollment Agreement because the Prosper Defendants
did not prove that such an agreement existed. Opp’n at 6. The Court has already
concluded that plaintiff is estopped from denying the enforceability of the Enrollment
Agreement because he attempted to enforce his rights under that agreement when he filed
his CCC. Dkt. 288 at 15. Furthermore—and contrary to plaintiff’s assertion, see Opp’n
at 9–10—the fact that the Court relied on plaintiff’s CCC as a basis for finding estoppel
does not mean that the Prosper Defendants are entitled to only those fees arising from
defending the CCC. The indemnity provision provides:
You understand and agree to defend, indemnify and hold Prosper, Inc., and
its officers, directors, employees, independent contractors, instructors,
coaches, and their related companies harmless from an against all damages,
liabilities, costs, losses, expenses, claims, and/or judgments, including legal
costs and reasonable attorney’s fees and disbursements which any of them
may occur or become obligated to pay arising out of or resulting from (I) the
activities pursuant to this agreement (with the exception of willful
misconduct on the part of Proper, Inc.) and (II) the breach of the User of any
of its representation, warranties, covenants, obligations, agreements (with
the exception of the breach of/or a default under any other agreement,
instrument, order, law or regulation applicable to us or by which it may be
bound) and claims of injury or otherwise arising from the sales of any
products or services pursuant to this enrollment agreement.
274-4, Ex. A at 3 (emphases added). The Court finds that plaintiff’s claims arose out of
activities pursuant to Enrollment Agreement because plaintiff sued the Prosper
Defendants on the basis of their allegedly fraudulent provision of real estate courses and
services, which led to plaintiff’s failed real estate investments. Thus, the Court finds that
indemnity provision entitles the Prosper Defendants to recover attorneys’ fees for

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

defending against plaintiff’s action more broadly, not merely to fees for defending
against plaintiff’s CCC.
Plaintiff next argues that the Prosper Defendants are not entitled to recover fees on
the basis of the Enrollment Agreement because they never sought mediation, as is
required under the agreement. Opp’n at 7. However, the Court previously noted that, “to
the extent the parties agreed to submit any disputes to mediation and arbitration,
DuFour’s filing of the original lawsuit would presumably operate as a waiver of any
breach of contract claim [for failure to mediate or arbitrate that] DuFour might have had
against Prosper and Allen.” Dkt. 46 at 16. In determining whether arbitration has been
waived pursuant to California law, a court may consider the following factors:
(1) whether the party’s actions are inconsistent with the right to arbitrate;
(2) whether the litigation machinery has been substantially invoked and the
parties were well into preparation of a lawsuit before the party notified the
opposing party of an intent to arbitrate; (3) whether a party either requested
arbitration enforcement close to the trial date or delayed for a long period
before seeking a stay; (4) whether a defendant seeking arbitration filed a
counterclaim without asking for a stay of the proceedings; (5) whether
important intervening steps [e.g., taking advantage of judicial discovery
procedures not available in arbitration] had taken place; and (6) whether the
delay affected, misled, or prejudiced the opposing party.
Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1124 (9th Cir. 2008) (quoting Saint
Agnes Med. Ctr. v. PacifiCare of California, 82 P.3d 727, 733 (Cal. 2003)). Considering
these factors—and noting particularly that plaintiff initiated this litigation more than five
years ago and never sought to mediate or arbitrate this dispute—the Court finds that
plaintiff waived his right to mediation and arbitration. Plaintiff cannot now rely on the
mediation and arbitration provisions of the Enrollment Agreement as a basis to deny
attorneys’ fees to the Prosper Defendants.
To the extent the Court finds it appropriate to award attorneys’ fees at all, plaintiff
sets out six reasons to reduce the requested award. Plaintiff first argues that the Prosper
Defendants are not entitled to fees for their appeal to the Ninth Circuit because they did
not seek fees from the Ninth Circuit. Opp’n at 11. “The case law on this topic appears to
be somewhat unsettled in the Ninth Circuit.” Van Asdale v. Int’l Game, Tech., No. 3:04cv-00703-RAM, 2011 WL 2118637, at *11 (D. Nev. May 24, 2011). In Cummings v.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Connell, 402 F.3d 936 (9th Cir. 2005), the Ninth Circuit held that, “pursuant to Ninth
Circuit Rule 39-1.6, a request for attorney’s fees incurred on appeal must be made to us,
not to the district court. The district court is not authorized to award attorney’s fees for
an appeal unless we transfer the fee request to the district court for consideration.” Id. at
940. Just seven months later, in Twentieth Century Fox Film Corp. v. Entertainment
Distributing, 429 F.3d 869 (9th Cir. 2005), the Ninth Circuit affirmed a district court’s
award of attorney’s fees pursuant for work done on appeal and did not address
Cummings. In Natural Resources Defense Council, Inc. v. Winter, 543 F.3d 1152 (9th
Cir. 2008), the Ninth Circuit acknowledged the conflict between Cummings and
Twentieth Century Fox, but appeared to conclude that Cummings properly stated the rule,
absent a statutory provision to the contrary. Id. at 1164. The Winter court affirmed an
award for attorneys’ fees for work spent preparing an appeal, but only because the Equal
Access to Justice Act (“EAJA”)—the relevant fee shifting statute—“states that ‘a court
shall award to a prevailing party other than the United States fees and other expenses . . .
incurred by that party in any civil action . . . brought by or against the United States in
any court having jurisdiction of that action.’” Id. (quoting 28 U.S.C. § 2412(d)(1)(A)).
Subsequently, district courts have followed Cummings and denied attorneys’ fees for
time spent preparing an appeal to prevailing parties that did not seek to recover such fees
from the appellate court. See Lefay v. Lefay, No. 1:13-cv-01362-AWI-MJS, 2017 WL
1450592, at *3 (E.D. Cal. Apr. 24, 2017) (“On the record before this Court, Plaintiffs did
not request a fee award under Ninth Circuit Rule 39-1.6 from the Ninth Circuit, nor did
Plaintiffs request a post-appeal transfer under Ninth Circuit Rule 39–1.8. Therefore, in
these circumstances, the Court is without authority to award Plaintiffs their appellate
attorneys’ fees.”); Barboza v. California Ass’n of Prof’l Firefighters, No. 2:08-cv-0519KJM-EFB, 2016 WL 3125996, at *10 (E.D. Cal. June 3, 2016) (“If a litigant is eligible
for fees incurred in an appeal but requests neither a fee award under Rule 39-1.6 nor a
post-appeal transfer under Rule 39-1.8, the district court is not authorized to rule on a
post-remand request for attorneys’ fees incurred on the appeal.”); Van Asdale, 2011 WL
2118637, at *14 (“Plaintiffs do not indicate that they made any requests for fees from the
circuit court or that they filed a motion to transfer consideration of attorney’s fees on
appeal. The court recognizes that this may have been an oversight, and that this oversight
is met with harsh results; however, the court is without authority to award any appellate
fees. Therefore, the court finds that the Plaintiffs are not entitled to attorneys’ fees
incurred in the course of the appeal.”); cf. Greer v. T.F. Thompson & Sons, Inc., No. 10cv-799-PHX-SMM, 2012 WL 6164960, at *2 (D. Ariz. Dec. 11, 2012) (“Ninth Circuit
Rule 39-1.8 . . . authorizes the Ninth Circuit to transfer a request for appellate fees to the
district court, ‘but the decision to permit the district court to handle the matter rests with

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

the court of appeals,’ and absent transfer a district court is not authorized to rule on a
request for such fees. However, a district court may be authorized to rule on a motion for
appellate attorneys’ fees where the language of the fee-shifting statute relied on by the
moving party allows the district court to award fees for all levels of litigation.” (citations
omitted)).
On the record before this Court, the Prosper Defendants did not request a fee award
from the Ninth Circuit and they did not file a motion to transfer consideration of
attorneys’ fees on appeal. Furthermore, there is no applicable fee shifting statute, akin to
the EAJA, to the contrary of Ninth Circuit Rule 39-1.6 that would allow this Court to
award fees for all levels of litigation. Therefore, in these circumstances, the Court is
without authority to award the Prosper Defendants their appellate attorneys’ fees.
The Court is not in a position to disaggregate which fees and costs relate to the
appeal on the present this record. For example, many entries in the Prosper Defendants’
billing record appear related to the appeal, but are not expressly designated as such. In
addition, individual entries in the billing record contain work related to the appeal and
work seemingly unrelated to the appeal (i.e., “mixed entries”). See Navarro v. Gen.
Nutrition Corp., No. 03-cv-0603-SBA, 2005 WL 2333803, at *11 (N.D. Cal. Sept. 22,
2005) (“[C]ourts frow[n] on block billing where discrete and unrelated tasks are lumped
into one entry, as the practice can make it impossible . . . to determine the reasonableness
of the hours spent on each task.” (quotation marks omitted)). Because the Court cannot
discern what portion of these mixed entries is attributable to work performed in
connection to the appeal, any allocation would be speculative. Therefore, the Prosper
Defendants may not recover any fees for work identified in these mixed entries. Welch
v. Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) (“The fee applicant bears the
burden of documenting the appropriate hours expended in the litigation and must submit
evidence in support of those hours worked. . . . It was reasonable for the district court to
conclude that [plaintiff] failed to carry her burden, because block billing makes it more
difficult to determine how much time was spent on particular activities.” (citation
omitted); Mendez v. Cty. of San Bernardino, 540 F.3d 1109, 1129 (9th Cir. 2008) (block
billing “practices are legitimate grounds for reducing or eliminating certain claimed
hours, but not for denying all fees”) rev’d on other grounds by Arizona v. ASARCO
LLC, 773 F.3d 1050 (9th Cir. 2014). Finally, the record of costs does not designate
which costs were incurred on appeal. Accordingly, the Court DIRECTS the Prosper
Defendants to prepare a proposed order awarding fees and costs consistent with this
decision, excluding: (a) fees for work performed in connection with the appeal; (b) fees

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

for mixed entries; and (c) costs incurred on appeal. The Prosper Defendants shall submit
therewith timesheet entries between December 19, 2014 (when the Prosper Defendants
received notice of plaintiff’s appeal) and February 7, 2017 (the date of oral argument
before the Ninth Circuit) for work that is not related—either in whole or in part—to work
performed in connection with the appeal.
Second, plaintiff argues that the Prosper Defendants are not entitled to recover fees
for billing and coverage issues between defendants and their attorneys. Opp’n at 11–12.
“Accounting, budget, or billing communications are not tasks properly billed to the
client. While this may be work requiring an attorney to complete and is not clerical, it is
not traditionally time that is paid for by the client, but is overhead work that is subsumed
within the attorney’s hourly rate.” Miller v. Schmitz, No. 1:12-cv-00137-LJO-SAB,
2017 WL 633892, at *9 (E.D. Cal. Feb. 15, 2017) (excluding fees charged for time spent
on “accounting and case budgeting” because “this is not reimbursable at an attorney
rate”); see Sheehan v. Centex Homes, 853 F. Supp. 2d 1031, 1044 (D. Haw. 2011)
(finding time spent preparing a budget noncompensable); Ko Olina Dev., LLC v. Centex
Homes, No. 09-cv-00272-DAE-LEK, 2011 WL 1235548, at *13 (D. Haw. Mar. 29,
2011) (same); Shorter v. Valley Bank & Trust Co., 678 F. Supp. 714, 725 (N.D. Ill. 1988)
(“[I]n our experience most lawyers do not bill their fee-paying clients for hours spent
preparing bills.”). “Hours that are not properly billed to one’s client also are not properly
billed to one’s adversary pursuant to statutory authority.” Hensley, 461 U.S. at 434
(quotation marks omitted). Accordingly, the Court finds that plaintiff is correct that the
Prosper Defendants are not entitled to recover fees for billing and coverage issues,
including communications regarding such matters. As noted above, individual entries in
the billing record are mixed: work related to billing, budgeting, and coverage and work
unrelated to such matters are listed together within single entries. The Court therefore
DIRECTS that the Prosper Defendants’ proposed order exclude: (a) fees for time spent
managing billing, budget, and coverage issues (including communications regarding such
matters); (b) fees for mixed entries; and (c) costs incurred for billing, budget, and
coverage work.
Third, plaintiff argues that the Prosper Defendants are not entitled to fees for
reinstating defendant D.A.H.A.R.’s corporate status. Opp’n at 12. However, a corporate
entity lacks the capacity to be sued, and may not come into court, if it is not incorporated.
See Fed. R. Civ. P. 17(b)(2); Xcel Data Sys., Inc. v. Best, No. 1:08-cv-00613-OWWGSA, 2009 WL 943780, at *1 n.1 (E.D. Cal. Apr. 7, 2009). The Court therefore finds

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Page 10 of 12 

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

that fees incurred to reinstate D.A.H.A.R. were necessary to the Prosper Defendants’
defense of plaintiff’s action and the Prosper Defendants may recover such fees.
Fourth, plaintiff argues that the Prosper Defendants are not entitled to recover fees
for a renewed petition to compel arbitration that they ultimately did not file. Opp’n at
12–13. The parties dispute the Prosper Defendants’ motivations for deciding not to file
such a motion. Regardless of such motivations, “extensive authority supports awarding
fees for time spent on unfiled motions.” Charlebois v. Angels Baseball LP, 993 F. Supp.
2d 1109, 1125 (C.D. Cal. 2012) (Carter, J.) (collecting cases); see also De La Riva
Const., Inc. v. Marcon Eng’g, Inc., No. 11-cv -52-MMA DHB, 2014 WL 794807, at *6
(S.D. Cal. Feb. 27, 2014) (“Both parties acknowledge that whether to award attorneys’
fees for an unfiled motion is within the Court’s discretion.”); but see James v. City &
Cty. of Honolulu, No. 13-cv-00397 JMS, 2014 WL 6908313, at *12 (D. Haw. Dec. 8,
2014) (“[T]his Court is persuaded by the case cited by Defendant, which provides that
‘time spent on a pleading that was never filed does not advance the case and is not
chargeable.’” (quoting Brother v. Int’l Beach Club Condo. Ass’n, Inc., No. 04-cv-444ORL-DAB, 2005 WL 1027240 (M.D. Fla. 2005))). Consistent with the weight of
authority in this Circuit, the Court finds that the Prosper Defendants may recover fees for
their unfiled renewed petition to compel arbitration because the Court has “no reason to
doubt” the Prosper Defendants’ representation that the work was “reasonably related” to
the case at hand. See Marbled Murrelet v. Pac. Lumber Co., 163 F.R.D. 308, 327 (N.D.
Cal. 1995).
Fifth, plaintiff argues that the Prosper Defendants are not entitled to recover fees
for their Cross-Complaint, which the Prosper Defendants voluntarily dismissed. Opp’n at
12. Consistent with the rule as to unfiled motions, the Court finds it is appropriate for the
Prosper Defendants to recover fees for time spent on the voluntarily dismissed CrossComplaint because the work was reasonably related to the case at hand, there is no
evidence it was filed in bad faith, and withdrawing the Cross-Complaint may have been
part of the Prosper Defendants’ overall legal strategy. See Lantz v. Kreider, No. 3:05-cv00207-VPC, 2010 WL 2609080, at *2 (D. Nev. June 25, 2010) (permitting plaintiffs to
recover fees, even though they voluntarily dismissed claims before trial as part of an
overall strategy, because “[t]he dismissal of valid claims in order to create a more
compelling and comprehensible case for the jury is well within the discretion of the
plaintiff”).

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

Case No. 
Title 

CIVIL MINUTES – GENERAL
2:14-cv-05616-CAS(SSx)
Date
FRANK DUFOUR v. ROBERT ALLEN ET AL.

‘O’
May 22, 2017

Sixth, plaintiff argues that the Prosper Defendants are not entitled to recover fees
for a Rule 11 sanctions motion that they lost. Opp’n at 13. However, the Prosper
Defendants did not file a motion for sanctions. Rather, they spent time reviewing
sanctions motions filed by co-defendants, as is noted in the Prosper Defendants’ billing
record. See Nash Decl. Ex. A.; dkts. 37, 42. Accordingly, Prosper Defendants may
recover such fees.
IV.

CONCLUSION

In accordance with the foregoing, the Court finds reasonable the hourly rates
charged by the Prosper Defendants. The Court DIRECTS the Prosper Defendants to
submit a proposed form of order consistent with this decision on or before June 5, 2017.
Thereafter, the matter will be taken under submission.
IT IS SO ORDERED.
Initials of Preparer

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