Mililani Group, Inc. v. O'Reilly Automotive, Inc.

Filing 50

ORDER signed by Judge John A. Mendez on 9/10/2013 GRANTING O'Reilly's 39 Motion for Attorney Fees. The Court awards O'Reilly $52,741.50. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MILILANI GROUP, INC.,

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2:12-cv-00891 JAM-CKD

Plaintiff,

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No.

v.

ORDER GRANTING O’REILLY’S MOTION
FOR ATTORNEY’S FEES

O’REILLY AUTOMOTIVE, INC.,
and CSK AUTO, INC.

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Defendants.
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This matter is before the Court on O’Reilly Automotive,

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Inc.’s (“O’Reilly”) Motion for Attorney’s Fees (Doc. #39).

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Plaintiff Mililani Group, Inc. (“Plaintiff”) opposes the motion

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(Doc. #43) and O’Reilly replied (Doc. #49). 1

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reasons, O’Reilly’s motion is GRANTED, however, the Court has

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reduced the total amount of the attorneys fees award.

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For the following

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for August 21, 2013.
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I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

This action was originally filed on April 6, 2012, against

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O’Reilly and CSK Auto, Inc.’s (“CSK”) (collectively

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“Defendants”), alleging two causes action, the first for breach

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of contract and the second for waste.

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dismiss all claims against O’Reilly and the waste claim; the

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Court granted that motion with leave to amend (Doc. #16).

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Plaintiff filed a Second Amended Complaint (“SAC”) (Doc. #17),

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Defendants once more moved to dismiss all claims against

Defendants moved to

After

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O’Reilly and the waste claim.

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granted Defendants’ motion to dismiss with prejudice (Doc. #29).

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On June 17, 2013, judgment was entered in favor of O’Reilly

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(Doc. ##37, 38).

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On April 3, 2013, the Court

O’Reilly now seeks attorney’s fees pursuant to the

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prevailing party fee provision found in the written lease

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agreement (“Lease”) that CSK entered into with Plaintiff for

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warehouse and office space in Dixon, California (Doc. #39).

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Specifically, O’Reilly seeks $57,600.50 in attorney’s fees,

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which includes $44,282.50 incurred for 15 months of litigation,

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$8,413.00 incurred to bring its motion for attorney’s fees, and

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$4,905.00 incurred to research and draft its reply to

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Plaintiff’s opposition.

Reply at 2 n.1.

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II.

OPINION

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A.

Legal Standard

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Under the American rule, the prevailing litigant ordinarily

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is not entitled to collect reasonable attorney’s fees from the

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losing party.

Travelers Casualty & Surety Co. of Am. v. Pacific
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Gas & Electric Co., 549 U.S. 443, 448 (2007).

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enforceable contract allocating attorney’s fees, however, can

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overcome this rule.

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of attorney’s fees in contract provisions.

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Co. v. Powers, 278 U.S. 149, 153 (1928).

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Id.

A statute or

State law governs the enforceability
Security Mortgage

California law specifically authorizes contractual

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agreements for attorney fee awards.

Cal. Code Civ. Proc.

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§ 1021.1.

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recovery of attorney’s fees pursuant to an underlying contract.

California Civil Code Section 1717 governs the

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The statute “authorizes reasonable attorney’s fees ‘[i]n any

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action on a contract, where the contract specifically provides

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that attorney’s fees and costs, which are incurred to enforce

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the contract, shall be awarded either to one of the parties or

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to the prevailing party.’”

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583 F.3d 1197, 1216 (9th Cir. 2009) (quoting Cal. Civ. Code §

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1717(a)).

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B.

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Barrientos v. 1801-1825 Morton LLC,

Discussion
1.

Prevailing Party Fee Provision

O’Reilly requests attorney’s fees pursuant to California

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Civil Code Section 1717 (“Section 1717”) because the Lease under

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which Plaintiff sued contains a prevailing party attorney’s fee

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provision.

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The Lease provides as follows:

If either party hereto be made or shall become a party to
any litigation commenced by or against the other involving
the enforcement of any of the rights or remedies of such
party, or arising on account of the default of the other
party in its performance of any of the other party’s
obligations hereunder, then the prevailing party in such
litigation shall receive from the other party all costs
incurred by such party in such litigation, plus reasonable
attorney’s fees to be fixed by the Court, and together with
interest thereon at the rate of twelve percent (12%) per
annum from the date of judgment until paid.
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Lease, Ex. B to the Declaration of Janlynn R. Fleener (“Fleener

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Decl.”), Doc. 39-1, at ¶ 23.

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Plaintiff neither opposes that O’Reilly is entitled to fees

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pursuant to the Lease nor disputes that O’Reilly was the

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prevailing party on the alter ego claim.

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Plaintiff argues that part of the fees claimed here must be

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disallowed because they were incurred defending CSK on the waste

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claim.

See Opp. at 3.

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Allocation is generally required when the same lawyer

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represents one party who is entitled to recover fees and another

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party who is not; however, allocation among jointly represented

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parties “is not required when the liability of the parties is so

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factually interrelated that it would have been impossible to

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separate the activities . . . into compensable and

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noncompensable time units”

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1270, 1277 (2007) (internal quotations and citations omitted).

Cruz v. Ayromloo, 155 Cal.App.4th

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Here, the same counsel represents CSK and O’Reilly, the

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waste claim was against both O’Reilly and CSK, and neither party

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distinguished between O’Reilly’s and CSK’s conduct.

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counsel therefore had to do the same legal research and analysis

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for the waste claim for both O’Reilly and CSK in preparing their

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case.

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to dismiss, the Court addressed whether Plaintiff adequately

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alleged the elements of the claim without distinguishing between

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O’Reilly and CSK because the liability of the parties was

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factually interrelated (Doc. ##16, 29).

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finds that Defendants’ counsel was not obligated to allocate

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attorney’s fees between CSK and O’Reilly as to the waste claim.

Defendants’

In addition, in both orders granting Defendants’ motions

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Accordingly, the Court

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2.

Waste Claim

Plaintiff next argues that O’Reilly is not entitled to any

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fees related to the waste claim.

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should be awarded because the waste claim is inextricably

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intertwined with the other claims, it arose out of the contract,

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and the attorney’s fee provision is broad enough to encompass

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the fees.

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O’Reilly contends that fees

Section 1717 covers only contract actions where the theory
of the case is breach of contract and the contract sued upon

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provides for an award of attorney fees incurred to enforce that

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contract.

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1338, 1341 (1992).

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Section 1021 also allows parties to agree that the prevailing

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party in litigation may recover attorney’s fees, whether the

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litigation sounds in contract or in tort.

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Cal.App.4th 1249, 1259 (2012) (citing Xuereb, 3 Cal.App.4th at

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1341).

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of the agreement broadly applies to ‘any dispute’ under it, the

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attorney’s fee clause encompasses any conflict concerning the

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effect of the agreement, including a tort claim.”

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Gil v. Mansano, 121 Cal.App.4th 739, 744 (2004) (“Broad language

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in a contractual attorney fee provision may support a broader

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interpretation.”)(summarizing cases).

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Xuereb v. Marcus & Millichap, Inc., 3 Cal.App.4th
However, California Code of Civil Procedure

Miske v. Bisno, 204

Thus, in Miske, the Court held that “where the language

“Waste” is considered a tort.

Id.; see also

78 Am. Jur. 2d Waste § 1.

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Therefore, to recover fees related to the waste claim, the fee

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provision in this case must be broad enough to encompass

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litigation that sounds in tort.

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relevant part, that attorney’s fees are recoverable when either

The provision here provides, in

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party becomes “a party to any litigation commenced by or against

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the other involving the enforcement of any of the rights or

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remedies of such party, or arising on account of the default of

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the other party . . . .”

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litigation” and “any of the rights or remedies” is equivalent to

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the phrase “any dispute,” which the court in Miske determined to

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be broad language.

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Therefore, the language of the attorney’s fee provision is broad

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enough to cover a tort claim.

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Lease at ¶ 23 (emphasis added).

“Any

See Miske, 204 Cal.App.4th at 1259.

Accordingly, the Court finds that the attorney’s fee

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provision covers the waste claim.

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not address O’Reilly’s arguments that the waste claim is

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intertwined with the contract claim and that waste claim arises

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out of the contract.

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3.

In addition, the Court need

Reasonable Attorney’s Fees

Plaintiff argues that O’Reilly’s attorney’s fees are

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unreasonable.

Plaintiff concedes that O’Reilly’s counsel’s

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rates “may be within the ballpark for the Sacramento region.”

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Opp. at 4.

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this matter was inflated by the use of multiple attorneys.

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O’Reilly argues that it neither overstaffed this case nor over-

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billed.

However, Plaintiff argues that the time expended on

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Plaintiff refers to two specific examples: First, the

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November 29, 2012, invoice, which “sets forth the fees for the

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initial motion to strike shows that between September 19, 2012

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and September 25, 2012 three separate attorneys spent more than

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thirty-three [] billable hours preparing the initial motion to

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strike.”

Opp. at 5.

A summer associate also provided
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assistance.

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“identical charges by different attorneys for the same work.”

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Id.

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Second, the April 3, 2013, invoice, which has

Having more than one attorney working on a task, on its

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own, does not show that the hours billed were excessive.

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Moralez v. Whole Foods Mkt., Inc., C 12-01072 CRB, 2013 WL

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3967639, at *4 (N.D. Cal. July 31, 2013).

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dictates that a single task can be broken down over several

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discrete time periods and that a number of people might

“[C]ommon sense

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contribute to one end product.”

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Moreover, “the court may permissibly look to the hourly rates

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charged by comparable attorneys for similar work, but may not

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attempt to impose its own judgment regarding the best way to

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operate a law firm, nor to determine if different staffing

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decisions might have led to different fee requests.”

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City of Sacramento, 534 F.3d 1106, 1115 (9th Cir. 2008).

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Nevertheless, where a lawyer does unnecessarily duplicative

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work, a court may legitimately cut the hours. Id. at 1113.

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Id. (citation omitted).

Moreno v.

Here, Plaintiff refers to the number of attorneys assigned

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to a task.

However, without more, the Court may not consider

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staffing decisions.

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excluded work done by summer associates on research and

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analysis.

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the 33 hours billed for the motion to dismiss is an inordinate

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amount of time for the motion.

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O’Reilly’s counsel has attempted to recover only reasonable

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attorney’s fees by cutting fees before submitting their invoices

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to the Court.

In addition, O’Reilly’s counsel has

See Fleener Dec. ¶ 12.

Plaintiff also argues that

The Court recognizes that

However, as mentioned above, the Court has an
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obligation to exclude unnecessary hours.

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29, 2012, invoice, the Court finds that the research and

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analysis in support of the motion to dismiss was unnecessarily

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duplicative (i.e. two associates conducting similar legal

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research).

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invoice.

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finds that the research, revising, and editing of the reply

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brief by two relatively experienced attorneys included hours

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performing duplicative tasks that were not necessary to advance

Reviewing the November

Therefore, the Court deducts $2,583 from the total
Similarly, in the May 23, 2013, invoice, the Court

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the litigation particularly because the reply brief was only

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five pages long and contained similar arguments as in the motion

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(Doc. #23).

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total invoice.

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As a result, the Court deducts $1,276 from the

Accordingly, having considered the record as a whole and

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the relevant fee award factors, the Court finds that the

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reasonable fee award in this case is $52,741.50.

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4.

O’Reilly’s Fees

Plaintiff also argues that O’Reilly is not entitled to fees

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because CSK is paying for O’Reilly’s fees.

However, as O’Reilly

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argues, Plaintiff has not provided any evidence in support of

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this claim or legal support for its conclusion.

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the Court finds that a reduction on this ground is not

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appropriate.

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C.

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On August 12, 2013, the Court ordered Plaintiff’s counsel

Accordingly,

Order to Show Cause

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to file a declaration explaining why Plaintiff’s opposition was

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filed late and why sanctions should not be imposed.

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and Order, Doc. #5, at 2.

Stipulation

Plaintiff’s counsel filed a response
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on August 15, 2013.

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#48.

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sanctions for filing a late opposition.

Response to the Order to Show Cause, Doc.

Good cause having been shown, the Court will not impose

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III. ORDER
For the reasons set forth above, the Court GRANTS

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O’Reilly’s Motion for Attorney’s Fees.

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O’Reilly $52,741.50.

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The Court awards

IT IS SO ORDERED.
Dated: September 10, 2013

____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE

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