Singh et al v. Hancock Natural Resources Group, Inc. et al

Filing 102

FINDINGS and RECOMMENDATIONS Granting in Part Defendant's Motion for Attorneys' Fees and Costs 81 , signed by Magistrate Judge Jennifer L. Thurston on 5/24/2017. Referred to Chief Judge Lawrence J. O'Neill. Objections to F&R due within 14 days. (Hall, S)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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DHILLON SINGH, et al.,
Plaintiffs,

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v.

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HANCOCK NATURAL RESOURCES
GROUP, INC., et al.,

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Defendants.

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Case No.: 1:15-cv-01435 - LJO - JLT
FINDINGS AND RECOMMENDATIONS
GRANTING IN PART DEFENDANT’S MOTION
FOR ATTORNEYS’ FEES AND COSTS
(Doc. 81)

Defendant Goose Pond Ag, Inc. seeks an award of attorneys’ fees and costs related to this

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action, “pursuant to the attorneys’ fees clause in the Real Estate Purchase Agreement … upon which

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Plaintiffs based their Complaint.” (Doc. 81-1 at 2) Plaintiffs oppose the motion, asserting Defendants

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are not entitled to fees and costs because they were not a prevailing party on the contract. (Doc. 94)
For the following reasons, the Court finds Defendant is a prevailing party, and recommends the

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motion for fees be GRANTED in part.

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I.

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Background
This action concerns a dispute arising from the negotiations for a real estate purchase of

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farmland between Plaintiffs Randeep Dhillon, also known as Dhillon Singh, and Kern Lerdo Nuts

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(“Plaintiffs”) and Goose Pond Ag, Inc. (See generally Doc. 29) Dhillon asserted that in May 2015, he

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“became aware of a marketing brochure that stated that Goose Pond was selling approximately 2,470

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acres of farmland, primarily consisting of an almond farm …, which included the existing irrigation
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systems and twenty three water wells in working condition, by requesting bids to potential buyers.”

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(Id. at 4, ¶ 6) According to Plaintiffs, Dhillon contacted Goose Pond’s agent and, in his capacity as

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the Director and President of Lerdo Nuts, signed a confidentiality agreement regarding the farmland.

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(Id. at 5, ¶¶ 7-8) Plaintiffs alleged that Dhillon reviewed information regarding the farmland, and

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received an opportunity to tour the property. (Id., ¶¶ 9-10)
Plaintiffs alleged they submitted a bid on June 6, 2015, including “an offer to purchase” the

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farmland, the 2015 almond crop, irrigation symptoms, 23 water wells, “and all water rights to all

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related properties that had separate APN numbers.” (Doc. 29 at 6, ¶ 11) Plaintiffs asserted that Goose

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Pond informed Dhillon he had “been accepted as one of the top bidders” on June 30, and a “best and

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final offer” with proof of funds was “due Thursday, July 9th by 2pm EST.” (Id. at 7, ¶ 12, emphasis

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omitted) However, the bid deadline was later extended to July 16. (Id., ¶ 13) Plaintiffs alleged

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Dhillon submitted “a new bid in the amount of $62,100,000 … with proof of funds” on July 16, 2015.

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(Id., ¶ 16)
According to Plaintiffs, their agent received an e-mail on July 20, 2015, which stated in relevant

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part: “After review of best and final bids on Kern Lerdo, we would like to proceed with the offer

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submitted by your client, Dr. Randeep Dhillon, for $62,100,000, which is inclusive of the land,

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equipment, and 2015 almond crop.” (Doc. 29 at 8, ¶ 18) In addition, Plaintiffs alleged the e-mail

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addressed cultural costs reimbursement, financial statements, and stated a real estate purchase contract

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would be provided for their review and comment by July 21. (Id.) Plaintiffs asserted that once the

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Purchase and Sales Agreement was received, Dhillon signed and returned the document on August 4,

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which was incorporated into the complaint by reference.1 (Id. at 4, ¶ 5; see also id. at 10, ¶ 27)
Plaintiffs alleged, “Dhillon took steps to liquidate his assets by selling 93 acres of real estate

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property that he owned, and selling five gas stations that he owned” after submitting the signed

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agreement. (Doc. 29 at 10, ¶ 28) However, Plaintiffs asserted that on August 17, 2015, Dhillon was

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informed “Goose Pond was cancelling the Agreement and that all communications were being

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terminated.” (Id. at 13, ¶ 38)

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Nevertheless, Exhibit A was not attached to the First Amended Complaint as, but it was not. (See Doc. 29 at 4, ¶

5)

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Based upon the foregoing allegations, Plaintiffs stated the following causes of action against

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Goose Pond: (1) breach of written agreements, (2) intentional misrepresentation, (3) negligent

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misrepresentation, (4) breach of the implied covenant of good faith and fair dealing, (5) violation of

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California Business and Professions Code § 17200, (6) specific performance, (7) promissory estoppel,

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and (8) common count for goods and services. (See Doc. 29 at 14-27) Plaintiffs included a prayer

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“[f]or reasonable attorney’s fees and costs” related to the breach of contracts claim. (Id. at 27)

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Defendant filed an answer to the first amended complaint on April 19, 2016, asserting that

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Goose Pond “terminated… negotiations before any [Real Estate Purchase Contract] was finalized or

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executed.” (Doc. 30 at 2, ¶ 5) Defendant maintained that the parties “had not even reached an

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agreement of the form of any such agreement” regarding the sale of the farmland, and that “the only

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binding agreement between the parties was the Confidentiality Agreement.” (Id. at 8, ¶ 39) Further,

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Goose Pond asserted the company never “received a signed copy” of the Purchase and Sale

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Agreement. (Id. at 6, ¶ 27)

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The Court issued a Scheduling Order governing the deadlines in the action on July 25, 2016.

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(Doc. 35) Thereafter, the parties engaged in discovery in the action. However, Plaintiffs failed to

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produce requested discovery and the Court ordered Plaintiffs to produce email communications with

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corresponding metadata, including the Purchase and Sale Agreement of August 4, 2015. (Doc. 62)

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Plaintiffs failed to comply with the Court’s order, and Defendant requested the imposition of sanctions.

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In addition, Defendant produced significant evidence that Plaintiffs falsified documents that were

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produced in the course of discovery. (See Doc. 72 at 9-11)

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The Court determined Plaintiffs had “demonstrated their willingness to ignore deadlines

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imposed by the Court, disrupt the course of the litigation, and prepare falsified documents to respond to

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discovery requests.” (Doc. 72 at 13) Further, the Court found that “Plaintiffs’ discovery violations

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make it impossible for [the] court to be confident that the parties will ever have access to the true

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facts,” and as a result it was “appropriate to reject lesser sanctions.” (Doc. 78 at 5, citing Conn. Gen.

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Life Ins. Co. v. New Images of Beverly Hills, 482 F.3d 1091, 1097 (9th Cir. 2007)). Accordingly, the

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recommendation for terminating sanctions was adopted on April 17, 2017, and the action was

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dismissed with prejudice. (Id. at 6)
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On April 25, 2017, Defendant filed the motion for attorney fees and costs now pending before

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the Court, asserting the award was appropriate pursuant to California Civil Code Section 1717, Local

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Rule 293, and Rule 54 of the Federal Rules of Civil Procedure. (Doc. 81) According to Defendant, the

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motion was made “on the grounds that Plaintiff’s eight contract-related claims were premised on the

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existence of a [Real Estate Purchase Agreement] that contained an attorneys’ fees provision” and

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Plaintiffs “claimed entitlement to their fees and costs under this provision in their Complaint and would

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have been entitled to such fees and costs had they prevailed.” (Id. at 2) Further, Defendant asserts it is

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the prevailing party on the contract claims, because the claims were dismissed with prejudice. (Id.) On

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May 9, 2017, Plaintiffs filed their opposition to the motion, arguing fees and costs were not appropriate

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under Section 1717. (Doc. 94) Defendant filed a reply on May 16, 2017. (Doc. 96)

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II.

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Attorney Fees
When an action invokes diversity jurisdiction, the Court is “obligated to apply California state

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law regarding attorneys’ fees. Farmers Ins. Exchange v. Law Offices of Conrado Sayas, 250 F.3d

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1234, 1237 (9th Cir. 2001). Under California law, attorney fees and costs are recoverable when

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“expressly authorized by statute or contract.” Real Property Services Corp. v. City of Pasadena, 25

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Cal. App. 4th 375, 379 (1994); see also Berkla v. Corel Corp., 302 F.3d 909, 919 (2002) (“California

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permits parties to allocate attorney’s fees by contract”).

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The state enacted California Civil Code § 1717 “to establish mutuality of remedy where [a]

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contractual provision makes recovery of attorney’s fees available for only one party [citations], and to

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prevent oppressive use of one-sided attorney’s fees provisions.” Hsu v. Abbara, 9 Cal. 4t h 863, 870

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(1995) (citation omitted). Thus, a “prevailing party” for an action on a contract is entitled to an award

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of attorney’ fees and costs, if a contract includes a provision for fees and costs. Cal. Civ.Code § 1717.

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Specifically, the statute provides:

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

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Cal. Civ. Code § 1717(a). The Court must “determine who is the party prevailing on the contract for

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purposes of this section, whether or not the suit proceeds to final judgment,” and the “prevailing party
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on the contract shall be the party who recovered a greater relief in the contract.” Id. § 1717(b)(1).

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III.

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Discussion and Analysis
Defendant’s counsel seeks an award of $511,279.65 in fees related to this action. (Doc. 81-1 at

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3) Plaintiffs argue Defendant should not be awarded fees because it “is not the prevailing party ‘on

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the contract,” within the meaning of Section 1717. (Doc. 94 at 3, emphasis omitted) Plaintiffs also

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contend an award of fees and costs would be unjust in light of the terminating sanctions. (Id. at 6)

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Finally, Plaintiffs assert the amount requested is “excessive and unreasonable.” (Id. at 2)

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A.

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It is undisputed that Plaintiffs’ claims in this action are based upon an alleged Purchase and Sale

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Whether Defendant is Entitled to Fees and Costs

Agreement with Defendant, and that the agreement included a provision for attorney fees, stating:
In the event any legal proceeding should be brought to enforce the terms of this
Agreement or for breach of any provision of this Agreement, the non-prevailing Party
shall reimburse the prevailing party for all reasonable costs and expenses of the
prevailing Party (including its attorneys’ fees, expert witness’ fees and disbursements)
at trial or on appeal. For purposes of the foregoing, (i) “prevailing Party” means (A) in
the case of the Party initiating the enforcement of rights or remedies, that it recovered
substantially all of its claims, and (B) in the case of the Party defending against such
enforcement, that it successfully defended substantially all of the claims made against
it, and (ii) if no Party is a “prevailing Party” within the meaning of the foregoing, then
no Party will be entitled to recover its costs and expenses (including attorney’s fees
and disbursements) from any other Party.

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(Doc. 82-1 at 56) Plaintiffs argue Defendant is not a prevailing party on the contract within the

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meaning of this provision and, as a result, an award of fees is not appropriate under Section 1717.

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(Doc. 94 at 3-5)

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Prevailing party

Plaintiffs contend an award is not appropriate because “[t]he Court did not make a ruling on

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whether or not an agreement existed between the parties.” (Doc. 94 at 4) However, finding that a

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contract is valid or exists “is not a prerequisite to an award of attorney fees under section 1717.” Hsu,

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9 Cal. 4th at 870. Rather, “a party is entitled to attorney fees under section 1717 ‘even when the party

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prevails on grounds the contract is inapplicable, invalid, unenforceable, or nonexistent, if the other

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party would have been entitled to attorney’s fees had it prevailed.’” Id., quoting Bovard v. American

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Horse Enterprises, Inc., 201 Cal.App.3d 832, 842 (1988); see also Anmaco, Inc. v. Bohlken, 13

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Cal.App.4th 891, 902 (1993) (“[a]s long as an action ‘involves’ a contract, and one of the parties
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would be entitled to recover attorney fees under the contract if that party prevails in its lawsuit, the

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other party should also be entitled to attorney fees if it prevails, even if it does so by successfully

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arguing the inapplicability, invalidity, unenforceability, or nonexistence of the same contract”). The

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California Court of Appeal explained the “mutuality of remedy” under Section 1717 as follows:

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Where a plaintiff claims breach of a contract containing an attorney fee provision and
the defendant asserts there is no contract and wins, it will have established that there is
no contract and, hence, no attorney fee provision. Nevertheless, since the plaintiff
would have been entitled to attorney fees if the plaintiff had succeeded in proving there
was a contract, courts have recognized a right of the defendant to recover attorney fees
even if defendant proves there was no contract, in order to further the purposes of Civil
Code section 1717.
Dhawliwal v. Singh, Case. 1:13-0484-LJO-SKO, 2013 WL 5477374 at *5 (E.D. Cal. Sept. 30, 2013)

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(quoting M. Perez Co. v. Base Camp Condominiums Assoc. No. One, 111 Cal. App. 4th 456, 467

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(2003)).

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In Dhawliwal, this Court determined the defendants were the “prevailing party” under Section

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1717 where claims for breach of contract were dismissed with prejudice. Id., 2013 WL 5477374 at *4-

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5. The Court observed that “California Code of Civil Procedure section 1032(a)(4) defines prevailing

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party to include ‘a defendant as against those plaintiffs who do not recover any relief against that

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defendant,” and because the claims were dismissed with prejudice, the defendants qualified as

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prevailing parties “[w]ithout doubt.” Id. at *5. Similarly, here, Plaintiffs’ claims have been dismissed

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with prejudice, and Plaintiffs have not recovered any relief from Goose Pond Ag. Thus, there is no

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question that Defendant is a prevailing party under California law. See Cal. Code Civ. P. § 1032(a)(4).

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2.

Claims on the contract

Section 1717 only applies to a party that prevails “on the contract.” Plaintiffs argue that the

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eight claims in the First Amended Complaint are not all “on the contract” or “inextricably intertwined”

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to a contract, and as a result Defendant is not entitled to fees. (Doc. 94 at 4) According to Plaintiffs,

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their claims “are not all dependent on the existence of a contract,” and “[m]ore than half of Plaintiffs

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(sic) claims would have survived even if the Court had found that there was no valid contract between

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the parties.” (Id.) Plaintiffs assert, “At the very least, Defendant should not recover on noncontract

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claims.” (Id., citing Reynolds Metals Co. v. Alperson, 25 Cal.3d 124, 129-30 (1979)).

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In Reynolds, the court explained that “[w]here a cause of action based on the contract providing
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for attorney’s fees is joined with other causes of action beyond the contract, the prevailing party may

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recover attorney’s fees under [Civil Code] section 1717 only as they relate to the contract action. Id.,

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25 Cal.3d at 129. On the other hand, “joinder of causes of action should not dilute [a] right to

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attorney’s fees” and “fees need not be apportioned when incurred for representation on an issue

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common to both a cause of action in which fees are proper and one in which they are not allowed.” Id.

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at 129-30. Consequently, where contract and non-contract claims are “inextricably intertwined,”

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making it “impracticable, if not impossible, to separate the multitude of conjoined activities into

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compensable or noncompensable time units,” apportionment is not necessary. Abdallah v. United

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Savings Bank, 43 Cal. App. 4th 1101, 1111 (1996).

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Significantly, here, the Court previously observed that in the First Amended Complaint,

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“Plaintiffs brought eight contract-related claims against Defendant.” (Doc. 78 at 1) Specifically, the

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claims presented included: intentional misrepresentation, negligent misrepresentation, breach of the

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implied covenant of good faith and fair dealing, violation of California Business and Professions Code

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§ 17200, specific performance, promissory estoppel, and common count for goods and services. (See

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Doc. 29 at 14-27) Each claim is inextricably intertwined with the breach of the written agreements

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claim because they are rooted upon the same alleged conduct. For example, Plaintiffs’ claims for

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intentional and negligent misrepresentation rely upon the allegations that Defendant informed Dhillon

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“it had accepted [his] best and final bid to purchase the Farmland,” and “it would sell the Farmland to

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Plaintiffs under the terms and conditions set forth in the Agreement.” (Id. at ¶¶ 54, 66) (emphasis

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added) Plaintiffs base their claim for a violation of Cal. Bus. & Prof. Code § 17200 upon “the

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aforementioned false, misleading and deceptive statements,” evidently related to the acceptance of

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Dhillon’s bid and an agreement to sell. (See id. at 22, ¶ 84)

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Further, “[u]nder California law, a claim for breach of the implied covenant is necessarily based

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on the existence of an underlying contractual relationship, and the essence of the covenant is that

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neither party to the contract will do anything which would deprive the other of the benefits of the

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contract.” Milne Employees Ass’n v. Sun Carriers, 960 F.2d 1401, 1411 (1991) (emphasis added); see

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also Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal. App. 4th 335, 345

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(2001) (“the implied covenant imposes upon each party the obligation to do everything that [a] contract
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presupposes they will do to accomplish its purpose”). As a result, Plaintiffs would be required to

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demonstrate the existence of a contract to claim a breach of the implied covenant, and this claim is

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inextricably intertwined to the claim for a breach of the agreement. See Mosten Mgmt. Co. v. Zurich-

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American Ins. Group, 62 Fed. App’x 175, 178 (9th Cir. 2003) (find a claim for a breach of the implied

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contract was “inextricably intertwined” with the plaintiff’s “claim to obtain… contract benefits”).

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Likewise, Plaintiffs would be required to show the existence of a contract for the “claim” for

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specific performance, which is “not an independent cause[] of action” but rather “a remedy for a breach

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of contract where there is no adequate remedy at law.” Billingsley v. MV Transp., Inc., 2017 U.S. Dist.

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LEXIS 38991 at *16 (E.D. Cal. Mar. 17, 2017) (citing Wilkinson v. Wiederkehr, 101 Cal. App. 4th 822,

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833 (2002)). As a remedy, the request for specific performance is “dependent upon [the] contract

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claims,” and thus inextricably intertwined with the existence of the alleged purchase and sale

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agreement. See id. The same is true of Plaintiffs’ request for a common count. See Batt v. City and

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County of San Francisco, 155 Cal.App.4th 65, 82 (2007) (explaining a common count “is not an

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independent cause of action but merely a type of remedy” under California law).

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Because Plaintiffs’ claims and remedies are all inextricably intertwined to the alleged Purchase

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and Sale Agreement with Goose Pond Ag, no apportionment of fees is required. See Reynolds, 25 Cal.

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3d at 129-30.

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B.

Rule 37 and the Requested Fees and Costs

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Finally, Plaintiffs argue that an award of attorney fees and costs would be unjust. (Doc. 94 at 6-

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7, citing Fed. R. Civ. P. 37(b)(2)(c)). As Plaintiffs observe, Rule 37 provides: “The court must order

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the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including

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attorney’s fees, caused by the failure, unless the failure was substantially justified or other

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circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).

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However, Plaintiffs fail to acknowledge that Rule 37 addresses the imposition of monetary

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sanctions “to penalize some forms of discovery abuse.” Fjelstad v. American Honda Motor Co., 762

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F.2d 1334, 1338-29 (9th Cir. 1985). Thus, the fees and expenses contemplated Rule 37 relate only to

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the discovery failures, not an award of fees and costs for the prevailing party in an action after

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judgment is entered.
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Moreover, the language of Section 1717 is “mandatory, unavoidable and emphatic.” Ribbens

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International, S.A. de C.V. v. Transportation International Pool, Inc., 47 F. Supp. 2d 1117, 1122 (C.D.

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Cal. 1999). Pursuant to the statute, the party prevailing on the contract “shall be entitled to reasonable

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attorney’s fees in addition to other costs.” Cal. Civ. Code § 1717(a) (emphasis added). Accordingly,

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the Court is not persuaded that it should find an award of fees and costs is unjust under Rule 37, or that

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the decision to award fees and costs is discretionary.

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C.

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Because Defendant is the prevailing party within the meaning of Section in 1717, Goose Pond

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Fees to be Awarded

Ag is entitled to an award of fees. In general, the Court determines a reasonable fee award “by

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multiplying the number of hours reasonably expended by counsel on the particular matter times a

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reasonable hourly rate.” Florida v. Dunne, 915 F.2d 542, 545 n. 3 (9th Cir. 1990) (citing Hensley v.

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Eckerhart, 461 U.S. 424, 433 (1983)). The product of this computation, the “lodestar” amount, yields a

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presumptively reasonable fee. Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013);

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Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008).

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Hourly rate

The Supreme Court explained that attorney fees are to be calculated with “the prevailing market

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rates in the relevant community.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). In general, the

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“relevant community” for purposes of determining the prevailing market rate is the “forum in which the

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district court sits.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). Thus, when a

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case is filed in this Court, “[t]he Eastern District of California, Fresno Division, is the appropriate

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forum to establish the lodestar hourly rate.” See Jadwin v. County of Kern, 767 F.Supp.2d 1069, 1129

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(E.D. Cal. 2011). “[R]ates, other than those of the forum, may be employed if local counsel was

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unavailable, either because they are unwilling or unable to perform because they lack the degree of

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experience, expertise, or specialization required to handle properly the case.” Gates v. Deukmejian,

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987 F.2d 1392, 1405 (9th Cir. 1992).

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a.

Attorneys

Mark Erickson reports the attorneys billed hourly rates ranging from $340 to $725, which they
discounted ten percent “[p]ursuant to an agreement between GPA and Haynes and Boone, LLP.”
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(Doc. 82 at 4, Erickson Decl. ¶ 5(e); see also id. at 4-5, ¶¶ 6-7) Accordingly, the requested hourly

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rates range from $292.50 to $652.50. (Id. at 4-5, Erickson Decl. ¶¶ 6-7)

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Significantly, while Defendant argues that “[t]he rates for the attorneys on the case are at or

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below the market rate for attorneys of similar experience” (Doc. 81-1 at 15), Defendant offers no

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evidence in support of this assertion.2 Indeed, the hourly rates requested exceed those typically

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awarded in the Fresno Division of the Eastern District of California. Further, Defendant’s counsel do

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not argue that local counsel was unavailable to handle this breach of contract action and fail to meet

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their burden to show that hourly rates other than those of the Fresno Division should be sued for

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purposes of calculating the lodestar. See Camacho, 523 F.3d at 979; Barjon v. Dalton, 132 F.3d 496,

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500-02 (9th Cir. 1997) (affirming the district court’s decision to decline an award of out-of-district

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billing rates where the fee applicants failed “to prove the unavailability of local counsel,” and instead

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reduced the award to the hourly rates in the relevant community). Therefore, the Court must reduce the

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hourly rates to those in line with the Fresno Division.

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This Court has reviewed the billing rates for the Fresno Division and rejected a $650 hourly

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rate—similar to the rate sought by Mr. Erickson—finding it was “high for even the most experienced

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attorneys in the Eastern District.” Ontiveros v. Zamora, 303 F.R.D. 356, 374 (E.D. Cal. 2014). Rather,

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the Court determined “hourly rates generally accepted in the Fresno Division for competent

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experienced attorneys [are] between $250 and $380, with the highest rates generally reserved for those

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attorneys who are regarded as competent and reputable and who possess in excess of 20 years of

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experience.” Silvester v. Harris, 2014 WL 7239371 at *4 (E.D. Cal. Dec. 2014); see also Trujillo v.

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Singh, 2017 WL 1831941 (E.D. Cal. May 8, 2017) (awarding an hourly rate of $300 per hour to

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counsel with 15 years of experience, finding this amount was appropriate for the Fresno area).

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For attorneys with “less than ten years of experience . . . the accepted range is between $175 and $300

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per hour.” Silvester, 2014 WL 7239371 at *4 (citing Willis v. City of Fresno, 2014 WL 3563310 (E.D.

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“[T]he burden is on the fee applicant to produce satisfactory evidence — in addition to the attorney’s own
affidavits — that the requested rates are in line with those prevailing in the community.” Blum, 465 U.S. at 895, n.11. The
Ninth Circuit determined “satisfactory evidence of the prevailing market rate” includes affidavits of counsel “regarding
prevailing fees in the community,” as well as “rate determinations in other cases.” United Steelworkers of Am. v. Phelps
Dodge Corp., 896 F.2d 403, 407 (9th Cir. 1990).

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Cal. July 17, 2014); Gordillo v. Ford Motor Co., 2014 WL 2801243 (E.D. Cal. June 19, 2014)). With

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these parameters in mind, the hourly rates for counsel must be adjusted to calculate the lodestar.

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The hourly rate for Mark Erickson, who has more than twenty years of experience, will be

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reduced to $400. For Kimberly Chase, who was admitted to the bar in December 2007 and has less

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than ten years of experience, the lodestar will be calculated at the rate of $225 per hour. Finally, the

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hourly rates for Allan Gustin and Brittany Parks, who each had less than one year of experience when

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they began working on this action, will be reduced to $175.3
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Non-attorney staff

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Defendant’s counsel calculated the lodestar using an hourly rate of $144 for Kathleen

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Tenerelli, a certified paralegal. (See Doc. 82 at 5, Erickson Decl. ¶ 7(d)) Generally, paralegal rates

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within the Fresno Division of the Eastern District range between $75 to approximately $150.00. See

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Silvester, 2014 WL 7239371 at *4 (“[t]he current reasonable hourly rate for paralegal work in the

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Fresno Division ranges from $75 to $150, depending on experience”); Trujillo, 2017 WL 1831941 at

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*3 (finding requested hourly rates of $95-115 were reasonable in the Fresno Division); Spence v. Wells

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Fargo Bank, N.A., 2012 WL 844713 at *5 (E.D. Cal., Mar. 12, 2012) (approving “paralegal or other

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support rates” of $125.00, $145.00 and $155.00). Because Ms. Tenerelli is a certified paralegal, the

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Court finds the higher hourly rate is appropriate and it is within the range typically awarded within this

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district. Consequently, no adjustment will be made to the requested rate of $144 per hour.
2.

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Time expended

“The number of hours to be compensated is calculated by considering whether, in light of the

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circumstances, the time could reasonably have been billed to a private client.” Moreno v. City of

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Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008). Applying this standard, “a district court should

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28

3

Mr. Erickson reported that Allan Gustin received his law degree in 2015 and Brittany Parks received her law
degree in 2016 but did not provide any information regarding the admission dates of Mr. Gustin or Ms. Parks. (See Doc. 82
at 5, Erickson Decl. ¶ 7(b) and (c)). However, the Court may take notice of facts that are capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b); United States v.
Bernal-Obeso, 989 F.2d 331, 333 (9th Cir. 1993). Thus, the Court “may take judicial notice of the State Bar of California’s
website regarding attorneys’ dates of admission to the Bar.” Davis v. Hollins Law, 25 F.Supp.3d 1292, 1298 n. 5 (2014).
Review of the state bar’s website indicates that Mr. Gustin was admitted in December 2015, the same month he
began working on this action. (See Doc. 100-2 at 2). Likewise, Ms. Parks was admitted in December 2016, and her time
entry for the action occurred the same month. (See id. at 72)

11

1

exclude from the lodestar amount hours that are not reasonably expended because they are excessive,

2

redundant, or otherwise unnecessary.” Van Gerwen v. Guarantee Mutual Life Co., 214 F.3d 1041,

3

1045 (9th Cir. 2000) (internal quotation marks and citation omitted); also see Tahara v. Matson

4

Terminals, Inc., 511 F.3d 950, 955 (9th Cir. 2007).
a.

5
6

Clerical work

As an initial mater, courts have discounted billing entries for clerical tasks such as “filing,

7

transcript, and document organization time.” Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009);

8

see also Harris v. L & L Wings, Inc., 132 F.3d 978, 985 (4th Cir. 1997) (approving the elimination of

9

hours spent on clerical tasks from the lodestar calculation); Jones v. Metropolitan Life Ins. Co., 845 F.

10

Supp. 2d 1016, 1027 (N.D. Cal. 2012) (discounting time for “filing or retrieving electronic court

11

documents or copying”).

12

Review of the time sheets provided reveals many entries for reviewing the docket,

13

downloading, calendaring deadlines, preparing documents for filing, and filing documents. Courts

14

have determined these tasks are clerical in nature, and time expended should not be awarded. See e.g.,

15

L.H. v. Schwarzenegger, 645 F. Supp. 2d 888, 899 (E.D. Cal. 2009) (finding organizing and updating

16

files appeared clerical, and declining to award fees where the applicant “tendered no evidence that these

17

are tasks that required the skill of a paralegal”); Moore v. Chase, Inc., 2016 U.S. Dist. LEXIS 88293 at

18

*12 (E.D. Cal. July 7, 2016) (finding review of a docket is “purely clerical” work and declining to

19

award fees for the time spent); Douglas v. Colvin, 2016 U.S. Dist. LEXIS 86858 at *6 (E.D. Cal. July

20

5, 2016) (identifying “downloading, filing and mailing of documents” as clerical tasks); Santiago v.

21

CACH LLC, 2013 U.S. Dist. LEXIS 157809, at *11 n.2 (N.D. cal. Nov. 4, 2013) (declining to award

22

time for preparation of service documents and reviewing documents for calendar deadlines); Compass

23

Bank v. Morris Cerullo World Evangelism, 2015 WL 3442030, at *8 (S.D. Cal. May 28, 2015)

24

(identifying drafting a revised subpoena and preparing documents for service as clerical tasks); Given

25

the clerical nature of these tasks, the following time will be deducted:

26
27
28

Date
01/23/16

Attorney/Staff
K. Chase

02/05/16
02/10/16

K. Chase
A. Gustin

Task(s)
Check status of court docket for plaintiff’s opposition to motion
to dismiss.
Check status of docket.
Review calendar court and motion deadlines; analyze Federal
Rules of Civil Procedure regarding backward-looking deadlines.

12

Time
0.1
0.1
1.7

1
2
3
4
5
6
7
8
9
10

02/29/16
03/14/16
03/14/16
03/28/16
04/19/16

M. Erickson
A. Gustin
K. Tenerelli
M. Erickson
A. Gustin

05/19/16
06/08/16
07/05/16
07/27/16

K. Chase
K. Tenerelli
A. Gustin
K. Tenerelli

07/28/16
08/10/16
01/26/17
01/27/17
01/31/17

A. Gustin
K. Chase
K. Tenerelli
K. Tenerelli
K. Tenerelli

02/02/17
02/16/17

K. Tenerelli
K. Tenerelli

Emails regarding filing of scheduling report.
Review and verify Rule 60 calendaring.
Download all Marend Garett’s Facebook postings for 2016.
Review and confirm filing.4
Review Eastern District local rules and Judge O’Neill’s court
rules for filing answer; prepare answer for filing; file answer.5
Check court’s docket for recent activity.
Download client documents from T. Schoenberg.
Prepare service of Trinitas subpoena.
Gather, organize, and download key documents from chronology
to review.
Ensure proper calendaring of scheduling order deadlines.
Review and revise trial calendar and countdown.
Maintain deposition transcript and exhibits file.
Update file with deposition exhibits from Dr. Phillip’s deposition.
Maintain deposition transcript and exhibit files along with
documents received from clients.
Update deposition exhibit binders and indexes.
Update deposition exhibit binder and index.

0.2
0.2
0.4
0.1
1.0
0.1
1.2
1.4
3.4
0.5
0.3
0.5
1.0
0.7
2.0
0.8

11

These entries result in a deduction of 15.8 hours from the lodestar calculation, including 4.8 hours for

12

Allan Gustin, 0.6 hours for Kimberly Chase, 0.3 hours for Mark Erickson, and 10.0 hours for Kathleen

13

Tenerelli.
b.

14

Internal communications and associate training

15

Plaintiffs assert, “Defendant’s request should be reduced to account for excessive duplication.”

16

(Doc. 94 at 7) As Plaintiffs observe, a fee applicant “should make a good-faith effort to exclude from

17

a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at

18

364. Plaintiffs contend Defendant failed to make this effort, and “[i]n numerous instances, multiple

19

attorneys seek fees for working on the same submissions and issues, and for repeatedly ‘consulting’

20

one another.” (Doc. 94 at 7)

21

Notably, the Ninth Circuit has “recognized that ‘the participation of more than one attorney

22

does not necessarily constitute an unnecessary duplication of effort.’” McGrath v. County of Nevada,

23

67 F.3d 248, 256 (1995) (quoting Kim v. Fujikawa, 871 F.2d 1427, 1435 n.9 (9th Cir. 1989)). However,

24

in general, two attorneys cannot bill for attending the same meeting or communicating with each other,

25

as such time is unnecessary. In re Mullins, 84 F.3d 459, 467, 318 U.S. App. D.C. 19 (D.C. Cir. 1996);

26
27
28

4

Notably, Ms. Chase also indicates she spent time on March 28, 2016 to “[o]versee filing” of the same document.
(Doc. 100-2 at 16)
5
Mr. Erickson’s time entries for the same date indicate that he reviewed and filed the answer. (Doc. 100-2 at 21)

13

1

Robinson v. Plourde, 717 F. Supp. 2d 1092, 1099 (D. Haw. 2010). Here, as Plaintiffs assert, there are

2

numerous entries indicating internal communications and conferences with counsel.

3

As this Court previously observed, “many courts have … reduced fee awards for time spent in

4

‘interoffice conferences’ or other internal communications.” Gauchat-Hargis v. Forest River, Inc.,

5

2013 WL 4828594 at *3 (E.D. Cal. Sept. 9, 2013) (citing, e.g., Mogck v. Unum Life Ins. Co. of Am.,

6

289 F.Supp.2d 1181, 1194 (S.D.Cal. 2003) (reducing selected time entries because attorneys “billed an

7

inordinate amount of time for interoffice conferences”); Coles v. City of Oakland, 2007 WL 39304, at

8

*10 (N.D. Cal. Jan.4, 2007) (“[c]laiming a disproportionate number of hours for communication

9

between attorneys may indicate unreasonable overstaffing such that a reduction in hours is

10

appropriate”); Gibson v. City of Chicago, 873 F.Supp.2d 975, 987 (N.D.Ill.2012) (eliminating time

11

entries for duplicative tasks)).

12
13

Here, there are a significant number of billing entries that indicate time spent on interoffice
conferences, whether in person or via e-mail, including6:
Date
01/04/16

Attorney
M. Erickson

16

01/25/16

A. Gustin

17

01/25/16

M. Erickson

01/28/16

A. Gustin

02/16/16

A. Gustin

21

03/03/16

M. Erickson

22

04/06/16

A. Gustin

23

04/07/16

A. Gustin

24

04/14/16

M. Erickson

25

04/14/16

A. Gustin

14
15

18
19
20

26
27
28

Task(s)
Revise memorandum regarding agreements to agree and contracts
to negotiate; email to K. Chase and M. Erickson (sic) with
memorandum attached.
Communicate with K. Chase and M. Erickson about filing 12(b)
motion.
E-mails with co-counsel and with K. Chase; meeting with K.
Chase and A. Gustin; telephone conference e-mail message to
client; evaluate strategy.
Review and edit 12(b)(1) Motion to Dismiss, Notice of Motion,
and Request for Judicial Notice; research FRCP 7.1 and corporate
disclosure statements; discuss research findings with K. Chase
and M. Erickson; draft Corporate Disclosure Statement.
Research and communicate with K. Chase regarding joint
scheduling conference with opposing counsel.
Review Order and Judgment; e-mail to client and R. Martin;
conference with K. Chase regarding effect.
Research and revise affirmative defenses; draft email to M.
Erickson and K.Chase summarizing research findings.
Further revise affirmative defenses; communicate with K. Chase
regarding same.
Review and revise litigation hold; review notes of interview with
D. Harris; conference with K. Chase.
Research and analyze Kern Lerdo Nuts Inc. place of
incorporation and lack of registration with California Secretary of

6

Time
0.5
0.4
0.5
2.7

0.3
0.4
2.0
0.4
0.3
2.4

Notably, there are more billing entries that strongly suggest the e-mails were interoffice communications.
Because the recipients of those e-mails are not identified in the billing records, the Court will not disturb the hours reported
related to those communications.

14

1
2

04/15/16

M. Erickson

3
4

04/19/16
05/02/16
05/31/16

M. Erickson
M. Erickson
A. Gustin

5

06/08/16

M. Erickson

6

07/01/16

M. Erickson

7

07/08/16

M. Erickson

8

07/12/16

M. Erickson

9

07/13/16

M. Erickson

10

07/14/16
07/18/16
07/25/16

M. Erickson
M. Erickson
K. Chase

07/26/16

M. Erickson

15

08/17/16

M. Erickson

16

08/23/16

M. Erickson

08/30/16

M. Erickson

09/01/16

M. Erickson

09/20/16

M. Erickson

09/27/16

M. Erickson

09/28/16

M. Erickson

09/29/16

M. Erickson

10/05/16
10/12/16

M. Erickson
M. Erickson

10/13/16
10/14/16

M. Erickson
M. Erickson

11
12
13
14

17
18
19
20
21
22
23
24
25
26
27
28

7

State; draft summary of research findings for K. Chase and M.
Erickson.
Review documents; review and revise answer and conference
with K. Chase regarding same.
E-mails regarding answer; review and file latest answer.7
Check on e-mails with K. Chase.
Discuss 26(f) conference and checklist, initial disclosures, and
form interrogatories and requests for production with K. Chase.
Prepare for and participate in conference call to interview Rick
Bodio; e-mails with K. Chase regarding same.
Review revised disclosures and conference with K. Chase; review
Trinitas subpoena; e-mail to client.
Review and revise Early Meeting of Counsel report; conference
with K. Chase regarding same
Conference with K. Chase re Early Meeting of Counsel report
and e-mails regarding same.
E-mails regarding discovery and Early Meeting of Counsel
report; telephone conference with K. Chase regarding same.
E-mails with K. Chase regarding discovery and hearing.
Review Protective Order for GPA and conference with K. Chase.
Confer with Mr. Erickson regarding Rule 26 conference; review
court’s minutes from same; review court’s scheduling order;
telephone call from Hancock’s counsel regarding document
collection; email Hancock's counsel regarding sales information;
continue drafting responses to Plaintiff's interrogatories and
requests for production.
E-mails regarding discovery; review and revise interrogatory
responses and conference with K. Chase regarding same; review
Court’s Order and revised schedule; review Trinitas documents.
Conference with K. Chase regarding meet and confer strategy on
discovery; review documents.
Conference with K. Chase regarding discovery and options for
getting sanctions; e-mail to client regarding same; review e-mails
regarding discovery.
E-mails with K. Chase on our native files; review e-mails with
Plaintiffs’ counsel regarding meet and confer.
Conference with K. Chase regarding meet and confer with
opposing counsel and strategy going forward; review and revise
e-mail to client and opposing counsel; review follow-up
discovery to Plaintiffs and to Gary Chahil.
Review e-mail on discovery; e-mails and conference with K.
Chase regarding same.
Review subpoenas to Chahil, etc.; conference with K. Chase
regarding deposition schedule.
Review supplemental responses and conference with K. Chase
regarding discovery.
Conference with K. Chase regarding supplemental responses and
meet and confer; e-mails with third party witness on document
production; review meet and confer.
E-mails with K. Chase regarding depositions.
Review and revise Joint Discovery Statement; e-mails and
telephone conference with K. Chase.
Review e-mails on Chalil and discuss with K. Chase.
E-mail exchange with K. Chase regarding discovery and review

Time spent filing the answer should not be awarded given the clerical nature of the task.

15

2.0
0.3
0.1
0.3
1.5
0.5
0.5
0.3
0.4
0.2
0.4
2.6

1.5
0.4
1.0
0.4
1.3

0.3
0.3
0.3
0.3
0.2
1.4
0.2
0.5

1

10/18/16

M. Erickson

10/20/16

M. Erickson

11/04/16

M. Erickson

11/15/16

M. Erickson

11/28/16

A. Gustin

12/06/16

M. Erickson

12/07/16
12/09/16

M. Erickson
M. Erickson

10

12/13/16

M. Erickson

11

12/14/16

M. Erickson

12

12/29/16

M. Erickson

01/02/17

M. Erickson

01/04/17

M. Erickson

01/05/17
01/09/17
01/14/17

M. Erickson
M. Erickson
M. Erickson

01/24/17

M. Erickson

01/25/17

M. Erickson

01/26/17

M. Erickson

02/16/17

M. Erickson

02/16/17

A. Gustin

2
3
4
5
6
7
8
9

13
14
15
16
17
18
19
20
21
22
23

Joint Statement.
Review bankruptcy information for Plaintiff; e-mail with K.
Chase regardomg (sic) deposition strategy with Trinitas.
E-mail exchange with K. Chase regarding strategy with
deposition of Chalil and purported unavailability.
Review and revise discovery status report; analyze strategy
regarding judge request on motions to compel; conference with K.
Chase regarding Trinitas deposition.
Conference with K. Chase regarding discovery conference and
plan next steps; review e-mail updates to client and opposing
counsel.
Review and analyze Dhillon bankruptcy material with M.
Erickson and K. Chase.
Prepare outline for Bealbti PMK deposition and e-mail to K.
Chase re strategy.
Prepare for deposition and conference with K. Chase re same.
Prepare for and take deposition of Dhillon Singh; conference with
K. Chase and A. Gustin re next steps and additional
discovery/motions.
Prepare for and take deposition of Singh; conference with K.
Chase following deposition re open discovery issues and experts.
Conference with K. Chase re additional discovery; review emails re same; e- mail to Hancock counsel re witness availability.
Review order on motion to compel and confer with K. Chase re
same; review emails on sanctions research; review updates on
service of counsel.
Review Singh deposition transcript on current money in bank for
sanction payment; e-mail to K. Chase re same.
Prepare Requests for Production (Set 5) to Dhillon; telephone
conference with K. Chase re outcome of Chahil deposition.
Conference with K. Chase and e-mails re Bank subpoena.
Conference with K. Chase re counterclaims for fraud.
Emails with K. Chase on depositions; review proposed strategy
on motion for sanctions and provide comment
Travel to and from and attend deposition of D. Phillips and
telecons with K. Chase.
Review and revise stip on transcript; confer with K. Chase on
case.
Confer with K. Chase regarding opposition to motion for
sanctions.
Travel to and from and attend hearing on motion for sanctions;
email to client with update; teleconference updates to K. Chase
and A. Gustin.
Review and analyze Doppes v. Bentley Motors regarding
sanctions for abuse of discovery; review sanctions hearing with
M. Erickson.

0.3
0.2
1.4
0.8
0.8
0.6
0.9
8.0
7.5
1.0
0.9
0.3
0.7
0.2
0.2
0.3
9.5
0.3
0.2
7.5
0.8

24

(Doc. 100-2 at 6, 7, 8, 12, 20, 21, 26, 31, 36, 38, 39, 45, 47, 52, 53, 56, 58-59, 64-65, 70-72, 75, 78-80,

25

82, 84, 85, 90) (emphasis added). Thus, there are 69.5 hours of billed time that include entries related

26

to interoffice conferences and communications. Based upon the review of the record and the nature,

27

the Court finds the time expended should be reduced by 13.84 hours for Mark Erickson, 0.52 hours for

28
16

1

Kathleen Chase, and 3.2 hours for Allan Gustin for purposes of calculating the lodestar.8

2

Furthermore, this Court previously determined that “[t]ime billed by junior associates is not

3

‘reasonably expended’ where it serves as training rather than productive legal work, and courts are

4

justified in eliminating ‘hours not necessary in light of the experience of the attorney.’” Gauchat-

5

Hargis, 2013 WL 4828594 at *3 (quoting Ward v. Tipton Cnty. Sheriff Dep’t, 937 F.Supp. 791, 801

6

(S.D. Ind.1996)).

7

In this case, it appears the junior attorneys billed for hours best described as “training” on

8

many occasions. For example, after Ms. Chase drafted a motion to dismiss, notice of motion, and

9

request for judicial notice, Mr. Gustin indicated that he spent 0.7 hours to “[r]eview and revise” the

10

documents on January 27, 2016. (Id.) On January 28, 2016, Mr. Erickson, Mr. Gustin, and Ms. Chase

11

all billed time for reviewing and revising the motion to dismiss. (Id.) In light of the fact that Mr.

12

Gustin had less than two months’ experience at the time, it appears that his review of the documents

13

was for training purposes only, particularly where the same document was reviewed and revised by a

14

senior attorney on the same date. Accordingly, the time spent by Mr. Gustin communicating with the

15

senior attorneys about the 12(b) motion and reviewing the documents will be eliminated from the

16

lodestar, which results in a deduction of 1.1 hours.

17

Likewise, the Court finds the time spent by Mr. Gustin and Ms. Parks in preparing internal

18

memorandums to the senior attorneys on the action should not be awarded, given both the training

19

nature and status as an internal communication. For example, Allan Gustin began researching

20

“agreements to agree and contracts to negotiated in good faith” in December 2015. (Doc. 100-2 at 3)

21

He reported spending 5.0 hours on January 5, 2016 to perform “research regarding agreements to agree

22

and contracts to negotiate,” including whether such agreements to are enforceable in California and the

23

damages that may be recovered. (Doc. 100-2 at 6) This entry also included time to “begin drafting

24

memorandum summarizing research findings regarding same.” (Id.) Over the next two days, Mr.

25
26
27
28

8

For entries were the only task listed was a conference, the entirety of the time was deducted. For the entries
including both interoffice communications and other tasks, the Court reduced the hours by twenty percent. See Dubose v.
Cnty. of L.A., WL 2135293, at *5 (C.D. Cal. June 11, 2012) (reducing billings by 20 percent due in part to vague time
entries and excessive entries for communications between counsel); see also Lahiri v. Universal Music & Video Distrib.
Corp., 606 F.3d 1216, 1222-23 (9th Cir. 2010) (upholding 30 percent reduction of 80 percent of billable hours to account
for block-billing).

17

1

Gustin indicated he spent 2.9 hours to “finish [the] draft of memorandum summarizing research

2

findings on agreements to agree, contracts to negotiate, and damages,” revising the draft, and emailing

3

the memorandum to Ms. Chase and Mr. Erickson. (Id. at 7) Similarly, when Ms. Parks was admitted

4

to the bar and began working on the action the same month, she researched various topics and prepared

5

memorandums to convey her findings. (See, e.g., id. at 72, 75)

6

While the Court finds the time spent on legal research is appropriate, the time spent drafting—

7

and revising— internal communications to the senior attorneys that simply summarized research should

8

not be awarded. See Gauchat-Hargis, 2013 WL 4828594 at *3; In re Durosette, 2012 WL 9123382 at

9

*3 (E.D. Cal. Aug. 23, 2012) (finding a reduction of time appropriate in part due to the amount of time

10

spent by a new associate for legal research “and preparing memos to the lead partner on the case”).

11

Accordingly, the following time entries will be eliminated from the lodestar:
Date
01/06/16

Attorney
A. Gustin

01/07/16

A. Gustin

01/11/16

A. Gustin

01/12/16

A. Gustin

18

01/12/16

A. Gustin

19

01/13/16

A. Gustin

20

06/22/16

A. Gustin

21

12/16/16

B. Parks

12/23/16

B. Parks

12/27/16

B. Parks

12
13
14
15
16
17

22
23
24
25
26
27
28

Task(s)
Finish draft of memorandum summarizing research findings on
agreements to agree, contracts to negotiate, and damages; revise
draft regarding same
Revise memorandum regarding Agreements to Agree and Contracts
to Negotiate; draft email to K. Chase and M. Erickson with
memorandum attached
Review K. Chase edits and revisions on memorandum for
agreements to agree and contracts to negotiate.
Draft memorandum to K. Chase and M. Erickson regarding whether
the allegations of Singh's complaint give rise to an agreement to
agree or a contract to negotiate.
Draft email to K. Chase regarding update of memorandum regarding
agreements to agree and contracts to negotiate.
Revise research memorandum regarding whether Singh's allegations
give rise to an agreement to agree or contract to negotiate; draft
email to K. Chase and M. Erickson regarding same.
Continue summary of research findings regarding the attorney-client
privilege, waiver, and assertion of that privilege by Goose Pond Ag.
Prepared and wrote summary of findings, including Federal case law
descriptions, regarding whether an agent's statements are admissible
as vicarious admissions of a party-opponent where a seller of real
property authorizes the agent to negotiate with a potential buyer of
the property under the Federal Rules of Evidence 801(d)(2)(C) and
801(d)(2)(D). Also discussed the potential limitations on the Rules.
Prepared and wrote summary of findings on whether Judge
Lawrence O'Neill of the Eastern District of California has issued
sanctions rulings involving a party's falsification or alteration of
evidence.
Prepared and wrote summary of case law findings which held that,
when a party brings a Rule 11 motion for sanctions as opposed to
the court, the party against whom the sanctions are sought may cure
the defects in their complaint or dismiss their claim pursuant to Rule
11's safe harbor provision…

18

Time
2.7
0.2
0.1
1.6
0.2
2.1
2.8
2.0

0.8

0.9

1
2

12/28/16

B. Parks

1/12/17

B. Parks

1/19/17

Prepared and wrote summary of case law and rulings by Eastern
District Judge Lawrence O'Neill where he has issued sanctions
against parties.
Prepare and write summary of California state, California district
court, and Ninth Circuit opinions that discussed the unclean hands
doctrine in relation to breach of contract claims and specific
performance claims.
Prepare and write summary of California case law discussing the
required elements of a claim for specific performance in the context
of a real estate transaction.

B. Parks

3
4
5

0.9
1.3

0.8

6
7

(Doc. 100-2 at 7, 32, 72, 74, 82) Thus, this results in a deduction of 16.4 hours from the lodestar

8

calculation for internal communications and associate training, including 9.7 hours for Allan Gustin

9

and 6.7 hours for Brittany Parks.

10

c.

Block billing

11

The billing records provided to the Court include “block billing,” where the timekeeping

12

format “bundles tasks in a block of time.” See Aranda v. Astrue, 2011 U.S. Dist. LEXIS 63667, at *13

13

(D. Ore. June 8, 2011). As the Ninth Circuit observed, “block billing makes it more difficult to

14

determine how much time was spent on particular activities.” Welch v. Metro. Life Ins., 480 F.3d 942,

15

948 (9th Cir. 2007). Consequently, where attorneys present time expended in “blocks,” the Court may

16

“simply reduce[] the fee to a reasonable amount.” Fischer v. SJB-P.D. Inc., 214 F.3d 1115, 1121 (9th

17

Cir. 2000); see also Welch, 480 F.3d at 948 (“We do not quarrel with the district court’s authority to

18

reduce hours that are billed in block format”). A district court may “impose a small reduction, no

19

greater than 10 percent—a ‘haircut’—based on its exercise of discretion” for block billing. Moreno v.

20

City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008).

21

Here, the use of block billing is particularly troublesome given the number of entries that

22

include clerical tasks and other tasks for which fees should not be awarded. For example, on December

23

16, 2015, Ms. Chase indicated she spent 1.7 hours to “[r]eview complaint, purchase agreement, and

24

other documents; research regarding opposing counsel; [and] analysis regarding next steps.” (Doc.

25

100-2 at 2) On March 8, 2016, she reviewed the substitution of attorney, performed “research

26

regarding Plaintiffs’ new counsel,” and emailed counsel for the co-defendant “regarding same.” (Id. at

27

15) Similarly, on December 28, 2015, Ms. Chase noted 1.6 hours to “[r]eview docket” and conduct

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legal research, without distinguishing the time on the clerical task. (Id. at 3) While time spent
19

1

reviewing documents such as the complaint, purchase agreement, and the substitution of attorney is

2

compensable, the time expended researching Plaintiffs’ attorneys and reviewing the docket should not

3

be awarded. Given the block-billing format of the entries, however, the Court is unable to ascertain the

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amount of time Ms. Chase spent on compensable tasks.

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In light of the block-billing format used by all who worked on this matter, the Court finds it

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appropriate to exercise its discretion to reduce the number of hours expended on the litigation by ten

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percent for purposes of the lodestar calculation. See Moreno, 534 F.3d at 1112.

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9
10
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d.

Hours related to the motion for fees

Defendant seeks compensation in the amount of $16,722.50 for an estimated 45 hours of time
related to the filing of this motion, including:
a. $8,775.00 for approximately 30 hours spent by Allan Gustin organizing and
drafting this motion;
b. $1,305.00 for roughly 2 hours spent by [Mark Erikson] reviewing, editing, and
revising this motion;
c. An anticipated $1,462.50 for roughly 5 hours spent by Allan Gustin reviewing
Plaintiffs’ anticipated opposition and preparing a reply.
d. An anticipated $5,220.00 for roughly 8 hours spent by [Mark Erikson] preparing for
and attending the hearing on this motion.

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16
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(Doc. 82 at 6, Erickson Decl. ¶ 8)
Fees incurred in litigating the award of fees are recoverable. Serrano v. Unruh, 32 Cal.3d 621,

18

639 (1982). However, the thirty hours sought for “organizing and drafting” the motion appears

19

excessive, particularly given the fact that the memorandum of points and authorities is approximately

20

sixteen pages. Though Defendant had an opportunity to present evidence to support this estimation,

21

none was provided. Instead, the billing records provided to the Court stop on March 23, 2017. (See

22

Doc. 100-2 at 99) Although Mr. Gustin provided a declaration in support of the motion for fees and

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costs, he did not provide any information regarding the time he spent preparing the motion. (See Doc.

24

82) In addition, no information regarding the actual time spent on the motion was filed with the reply

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brief. Given the short length of the moving papers, the Court reduces the time awarded for Mr.

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Gustin’s preparation to 15 hours. Further, the Court declines to award the anticipated time for

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preparing and attending the hearing, as the matter was taken under submission without oral argument.

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Accordingly, the Court recommends $4,300.00 be awarded in fees related to this motion.9
3.

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3
4

Lodestar calculation

With the hourly rates and time adjustments set forth above, the lodestar in this action is
$246,758.67, which includes $242,458.67 prior to the filing of the motion:
Legal Professional
Mark Erickson
Kimberly Chase
Allan Gustin
Brittany Parks
Kathleen Tenerelli

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6
7

Adjusted Hours
139.55
427.03
450.63
40.77
31.68

Hourly Rate
$400
$225
$175
$175
$144 (no adjustment)

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Lodestar
55,820.00
96,081.75
78,860.25
7,134.75
4,561.92
$242,458.67

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10

Significantly, there is a strong presumption that the lodestar is a reasonable fee. Gonzalez, 729 F.3d at

11

1202; Camacho, 523 F.3d at 978. Therefore, the Court recommends Defendant’s motion for fees be

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GRANTED in the modified amount of $246,758.67.

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E.

Costs to be Awarded

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In general, an award of costs in federal district court is governed by Federal Rule of Civil

15

Procedure 54(d) and not applicable state law, even in diversity cases. See Champion Produce, Inc. v.

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Ruby Robinson Co., Inc., 342 F.3d 1016, 1022 (9th Cir. 2003) (citing In re Merrill Lynch Relocation

17

Mgmt., Inc., 812 F.2d 1116, 1120 n. 2 (9th Cir. 1987)). This is because “federal courts sitting in

18

diversity apply state substantive law and federal procedural law.” Feldman v. Allstate Ins. Co., 322

19

F.3d 660, 666 (9th Cir. 2003) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). Thus, federal

20

procedural law governs a request for an award of costs.

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Rule 54 of the Federal Rules of Civil Procedure provides that costs “should be allowed to the

22

prevailing party.” Fed. R. Civ. P. 54(d)(1). This “creates a presumption in favor of awarding costs to

23

the prevailing party, but the district court may refuse to award costs within its discretion.” Champion

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Produce, 342 F.3d at 1022. “[A] district court need not give affirmative reasons for awarding costs;

25

instead, it need only find that the reasons for denying costs are not sufficiently persuasive to overcome

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the presumption in favor of an award.” Save Our Valley v. Sound Transit, 335 F.3d 932, 945 (9th Cir.

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9

This amount includes 15 hours for Mr. Gustin preparing the motion ($2,625.00); two hours for Mr. Erickson
reviewing and revising the motion ($800.00); and 5 hours for Mr. Gustin preparing the reply ($875.00).

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2003). For example, costs may be declined in light of “a losing party’s limited financial resources” or

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where there has been “misconduct by the prevailing party.” Champion Produce, 342 F.3d at 1022.

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The Supreme Court explained that 28 U.S.C. § 1920 “defines the term ‘costs’ as used in Rule

4

54(d).” Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987). Costs that may be taxed

5

under 28 U.S.C. § 1920 include:

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(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use
in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the
copies are necessarily obtained for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and
salaries, fees, expenses, and costs of special interpretation services under section 1828
of this title.

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12

Generally, the court may not award costs under Rule 54(d) that are not authorized by statute or court

13

rule. Arlington Cent. School Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 301 (2006). However, the

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Ninth Circuit determined that the cost limitations of 28 U.S.C. § 1920 “do not control” when there is

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an action on a contract under Cal. Civil Code § 1717, and the “plain language” of the agreement

16

indicates that “the prevailing party [is] to recover all costs.” Hobson v. Orthodontic Centers of Am.

17

Inc., 220 Fed. App’x 490, 491 (9th Cir. 2007). The burden is on the losing party to demonstrate that

18

the court should disallow requested costs. Save Our Valley, 353 F.3d at 946.

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Here, the provision governing attorney fees and costs in the Purchase and Sale Agreement

20

provided that “the non-prevailing Party shall reimburse the prevailing party for all reasonable costs

21

and expenses of the prevailing Party (including its attorneys’ fees, expert witness’ fees and

22

disbursements) at trial or on appeal.” (Doc. 82-1 at 56) Thus, the “plain language” of the provision

23

indicates that Plaintiffs shall pay the costs and expenses identified by Defendant. See Hobson v. 220

24

Fed. App’x at 491 (finding the court “properly awarded all costs” where the parties’ contract

25

“provided that the prevailing party on any legal action under the Agreement was entitled to recover

26

attorneys’ fees and costs,” and Cal. Civil Code § 1717 governed the “prevailing party” determination).

27

Consequently, as the prevailing party under Section 1717, Defendant is entitled to recover costs

28

related to this litigation.
22

Defendant’s counsel reports spending “$15,435.00 on expert fees, and $23,478.29 in costs

1
2

defending against the Complaint.” (Doc. 81 at 14) These expenses include costs for attempted service

3

and service of subpoenas; costs for deposition transcripts and videotapes; witness fees; and “making

4

copies of any material where the copies [were] necessarily for use in the case,” such as subpoenaed

5

records. (See Doc. 83-2 at 2-3) Plaintiffs do not raise any objections to the requested costs. (See

6

generally Doc. 94) Because Plaintiffs do not carry the burden to demonstrate the costs should not be

7

awarded, the Court recommends Defendant’s requested award expenses and costs be GRANTED.

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IV.

9
10

Findings and Recommendations
Based upon the foregoing, the Court RECOMMENDS:
1.

Defendant’s motion for attorney fees be GRANTED in the modified amount of
$246,758.67;

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12

2.

The request for expert fees be GRANTED in the amount of $15,435.00; and

13

3.

The request for costs be GRANTED in the amount of $23,478.29.

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These Findings and Recommendations are submitted to the United States District Judge

15

assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(B) and Rule 304 of the Local

16

Rules of Practice for the United States District Court, Eastern District of California. Within fourteen

17

days of the date of service of these Findings and Recommendations, any party may file written

18

objections with the court. Such a document should be captioned “Objections to Magistrate Judge’s

19

Findings and Recommendations.” Any reply to objections shall be filed within seven days of the date

20

of service of the objections. The parties are advised that failure to file objections within the specified

21

time may waive the right to appeal the District Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir.

22

1991); Wilkerson v. Wheeler, 772 F.3d 834, 834 (9th Cir. 2014).

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IT IS SO ORDERED.
Dated:

May 24, 2017

/s/ Jennifer L. Thurston
UNITED STATES MAGISTRATE JUDGE

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