Rexel, Inc. v. Hubzone Corp.

Filing 43

ORDER signed by District Judge John A. Mendez on 7/8/19 GRANTING in part and DENYING in part 39 Motion for Attorney Fees and AWARDS ACIC $14,952.00 in attorneys' fees. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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REXEL, INC.,

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Plaintiff,

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v.
HUBZONE CORP., et al.,

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Defendants.

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Case No. 2:16-cv-00408-JAM-EFB
ORDER GRANTING IN PART AND
DENYING IN PART
COUNTERCLAIMANT’S MOTION FOR
ATTORNEYS’ FEES

Counterclaimant, American Contractors Indemnity Company

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(“ACIC”) moves the Court to award $15,795.50 in attorney fees

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resulting from the granting of default judgment on its breach of

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contract claim.

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For the reasons stated below, the Court GRANTS IN PART and DENIES

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IN PART ACIC’s motion.1

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Mot., ECF No., 39.

No opposition has been filed.

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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 June 18, 2019.
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I.

OPINION

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A.

Factual and Procedural Background

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Plaintiff Rexel brought a complaint to recover under the

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Miller Act, 40 U.S.C. § 3133, in February 2016.

Compl., ECF No. 1.

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ACIC filed its answer and cross-claim in August 2016, asserting

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that the Court has supplemental subject matter jurisdiction over

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its pendent state law claims.

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Cross-Claim, ECF No. 18.

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cross-defendants Hubzone Corporation, Charmiane Burnett, and Larry

Answer, ECF No. 9; see also Am.

ACIC sought default judgment against

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Deon Lofton in June 2018.

ECF No. 24.

The Court adopted the

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Magistrate Judge’s findings and recommendations, ECF No. 30, on

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March 29, 2019 and awarded ACIC damages of $528,574.44 and

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prejudgment interest.

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directed the Clerk “to enter judgment in ACIC’s favor and against

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Hubzone, Charmiane Burnett, and Larry Lofton on ACIC’s breach of

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contract claim.”

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stipulated to dismiss the case with prejudice.

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ECF No. 33.

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against Charmaine Burnett due to an automatic stay caused by a

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filing in another court.

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moved for an award of attorney’s fees under state law on April 19,

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2019.

Default Order, ECF No. 34.

Id. at 2.

The Court

A day earlier, the Plaintiff and ACIC
Dismissal Order,

On April 11, 2019, ACIC moved to stay proceedings

Notice Stay, ECF No. 36.

ACIC timely

See Mot.

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B.

Legal Standard

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Generally, parties bear their own attorneys’ fees, absent

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contractual or statutory authorization.

Sheet Metal Workers’ Int’l

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Ass’n Local Union No. 359 v. Madison Indus., Inc. of Arizona, 84

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F.3d 1186, 1192 (9th Cir. 1996).

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Procedure 54(d)(2) sets the procedure for claiming attorney’s fees,

While Federal Rule of Civil

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there must be an independent source of authority for an attorney

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fee award.

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1276, 1281 (9th Cir. 1999).

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See MRO Commc’ns, Inc. v. Am. Tel. & Tel. Co., 197 F.3d

District courts follow the forum state’s law for awarding

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attorney fees when exercising their subject matter jurisdiction

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over supplemental state-law claims.

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law ordinarily does not allow for recovery of attorneys’ fees,

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Farmers Ins. Exch. v. Law Offices of Conrado Joe Sayas, Jr., 250

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F.3d 1234, 1237 (9th Cir. 2001), there are exceptions.

See id.

Although California

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exception occurs in an action to enforce the liability on a bond.

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Cal. Civ. Code § 9564.

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C.

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Discussion
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Section 9564 Requires an Attorney Fee Award to ACIC

ACIC asserts that it is entitled to an award of attorney’s

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fees as the prevailing party in this case.

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to enforce the liability on the bond,” California Civil Code

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mandates that the Court award the prevailing party a reasonable

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attorney’s fee.

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define “prevailing party,” so the Court looks to how California

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courts interpret the term.

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party has prevailed in this context where it receives a final

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judgment that provides all the relief that the party requested.

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Winick Corp. v. Safeco Ins. Co., 232 Cal. Rptr. 479, 482 (Ct. App.

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1986) (interpreting “prevailing party” as to Cal. Civ. Code § 3250,

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which was repealed in 2010 and reinstated in 2012 as Cal. Civ. Code

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§ 9564).

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Cal. Civ. Code § 9564.

See Mot.

“In an action

The section does not

California courts have found that a

Here, Plaintiff Rexel, Inc. brought a single claim under the
Miller Act against defendants Hubzone and ACIC.
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See Compl.

ACIC

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answered and filed five cross-claims against Hubzone; its

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president, Charmaine Burnett; and its secretary, Larry Lofton.

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Answer.

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which ACIC prevailed on its breach of contract claim against

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Hubzone, Burnett, and Lofton and was awarded damages.

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Order.

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considered the prevailing party in its cross-claims against

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Hubzone, Burnett, and Lofton.

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See

The Court granted ACIC’s Motion for Default Judgment, in

See Default

Thus, under the prevailing legal standards, ACIC can be

Accordingly, the Court finds that the provisions of Section

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9564 are satisfied.

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Burnett, and Lofton in an action to enforce the liability on the

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bond.

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attorney fee in this case.

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ACIC is the prevailing party against Hubzone,

The Court next determines what constitutes a reasonable

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An Award of $14,952.00 Is Reasonable

ACIC contends that an award of $15,795.50 is reasonable for

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the fees incurred in the instant case.

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utilizes its discretion to determine what constitutes reasonable

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attorney fees under California law.

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511, 519 (2000), as modified (Cal. 2000).

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See Mot.

The Court

PLCM Grp. v. Drexler, 997 P.2d

Attorney fee awards are computed in a two-step process.

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First, the Court calculates the “lodestar”: the “the number of

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hours reasonably expended multiplied by the reasonable hourly

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rate.”

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Cal. Rptr. 3d 762, 772 (Ct. App. 2010), as modified (Oct. 18,

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2010).

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lodestar calculation is that prevailing in the community for

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similar work.”

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Ctr. for Biological Diversity v. Cty. of San Bernardino,

“Generally, the reasonable hourly rate used for the

Id. (internal quotation marks omitted).

In the second step, the Court may increase or reduce the
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lodestar calculation amount based on factors such as “the novelty

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and difficulty of the issues, the attorneys’ skill in presenting

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the issues, the extent to which the case precluded the attorneys

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from accepting other work, and the contingent nature of the work.”

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Id. at 772–73.

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the fair market value for the particular action.”

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Moses, 17 P.3d 735, 741 (Cal. 2001).

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fees bears the burden of proving that its requested fees are

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reasonable.

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Ketchum v.

The party seeking attorney

Ctr. for Biological Diversity, 115 Cal. Rptr. 3d at

772.

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“The purpose of such adjustment is to fix a fee at

a.

Reasonable Hourly Rates

As to hourly rates, ACIC has requested the following:

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(1) Francis J. Lanak, an attorney with over 45 years of experience,

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at $350 per hour; (2) Tracy A. Stevenson, an attorney with more

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than 26 years of experience, at $310 per hour; (3) Colin K.

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McCarthy, an attorney with over 15 years of experience, at $310 to

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$325 per hour; (4) Kelly C. Sloan, an attorney with four years of

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experience, at $220 per hour; and (5) paralegals at $150 to $190

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per hour.

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“The relevant ‘community’ is that where the court is located.”

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Altavion, Inc. v. Konica Minolta Sys. Lab., Inc., 171 Cal. Rptr. 3d

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714, 751 (Ct. App. 2014).

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paralegals’ time at a rate charged in Orange County, rather than

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that charged within Sacramento.

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attorneys, its requested rate is within the range of prevailing

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rates in Sacramento.

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Co., Inc., No. 2:17-CV-1768-JAM-DB, 2018 WL 3615862, at *1 (E.D.

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Cal. July 26, 2018) (finding that rates of $365 to $385 for

ACIC has billed for attorneys’ and

Nevertheless, for most of ACIC’s

See TCF Inventory Fin., Inc. v. Marker Oil

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partners were reasonable).

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associate, however, the rate sought exceeds that awarded in

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Sacramento.

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$100 per hour); Early v. Keystone Rest. Grp., LLC, No. 2:16-CV-

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00740-JAM-DB, 2019 WL 918211, at *6 (E.D. Cal. Feb. 25, 2019)

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(awarding $175 per hour for an attorney with one to four years of

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experience).

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For ACIC’s paralegals and junior

See id. (finding paralegal rates to be between $75 and

Accordingly, the Court will apply the following hourly rates
to its attorneys fees’ award: (1) Lanak, $350 per hour;

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(2) Stevenson, $310 per hour; (3) McCarthy, $310 to $325 per hour;

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(4) Sloan, $200 per hour; and (5) paralegals at $100 per hour.

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b.

Hours Reasonably Billed

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In the present case, ACIC filed (1) an Answer and Cross-Claim,

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(2) a First Amended Cross-Claim, (3) a Motion for Default Judgment,

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(4) Notices of Stay and Entry of Judgment, and (5) a Motion for

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Attorney Fees.

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None of ACIC’s filings were opposed.

The Court has completed a thorough review of the billing

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entries attached to Tracy Stevenson’s Declaration, ECF No. 39-2,

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and finds that all of the hours billed were reasonably expended in

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furtherance of the case.

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hours billed by ACIC’s counsel and paralegals.

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The Court will not reduce the number of

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The Court’s findings of the lodestar amount in this case is
determined as follows:

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Attorney

Rate
Requested

Rate
Awarded

Hours
Awarded

Total
Awarded

Lanak

$350/hour

$350/hour

0.1

$35.00

Stevenson

$310/hour

$310/hour

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$10,323.00

McCarthy

$310/hour
to
$325/hour

$310/hour
to
$325/hour

5.9

$1,844.00

Sloan

$220/hour

$200/hour

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$1,560.00

Paralegals

$150/hour
to
$190/hour

$100/hour

11.9

$1,190.00

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Total $14,952.00
Fees

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No upwards or downwards adjustment of the above amount is

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necessary.

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issues, so the lodestar value represents the fair market value of

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this particular action.

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finds that ACIC has demonstrated that $14,952.00 is the reasonable

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attorneys fee to which ACIC is entitled under California Civil Code

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§ 9564.

This case did not present any novel or difficult

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See Ketchum, 17 P.3d at 741.

II.

The Court

ORDER

For the reasons set forth above, the Court GRANTS IN PART and

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DENIES IN PART ACIC’s Motion for Attorneys’ Fees and AWARDS ACIC

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$14,952.00 in attorneys’ fees.

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IT IS SO ORDERED.
Dated:

July 8, 2019

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