Christopher Wulf vs. William Wong

Opposition

Cal. Super. - 4th Dist.March 11, 2016

© 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O Raymond J. Seto, Esq. [State Bar No. 149767] HANSEN SETO, LLP 21515 Hawthorne Blvd., Ste. 820 Torrance, CA 90503 Telephone: (310) 944-9800 Facsimile: (310) 944-9805 Attorneys for Defendants WILLIAM WONG and DORIS WONG ELECTRONICALLY FILED Superior Court of California, County of Orange 01/20/2017 at 05:06:00 Pi Clerk of the Superior Court By & Clerk, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE CHRISTOPHER WULF, an individual; CHANTAL WULF, an individual; TOM QUEEN, an individual; KELLI QUEEN, an individual; STEVE VOLLAND, an individual, and MARY VOLLAND, an individual, Plaintiffs, VS. WILLIAM WONG, an individual; DORIS WONG, an individual; and DOES 1 through 100, inclusive, Defendants. Case No.: 30-2016-00840423 Assigned For All Purposes To: Judge: Honorable Theodore R. Howard Dept.: C18 DEFENDANTS WILLIAM AND DORIS WONG’S OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS Date: February 2, 2017 Time: 1:30 p.m. Dept.: C18 Action Filed: March 11, 2016 Trial Date: March 6, 2017 Defendants William and Doris Wong (collectively, “Defendants”) hereby respectfully submit the following Memorandum of Points and Authorities in Opposition to the Motion to Tax Costs filed by Plaintiffs Christopher Wulf, Chantal Wulf, Tom Queen, Kelli Queen, Steve Volland, and Mary Volland (collectively, “Plaintiffs”). n DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O TABLE OF CONTENTS Page(s) TABLE OF ALT TER TTTES iso sss 5 nome is 565 ammes s 15 5 sammeoss 515 5 sansunas s 3 15 SASHES 55 SARSIGAS ES iv I. INTRODUCTION... eee eects esses ae tesa esse sate reassess ss saaaae ae ee esses snsenaaens 1 II. STATEMENT OF FACTS... ooo eee eee eee ee eee ee etaae eee eeaae ease naar ease eavae ee eans 1 III. AS THE PREVAILING PARTIES UNDER CODE OF CIVIL PROCEDURE § 1032, DEFENDANTS ARE ENTITLED TO RECOVER THEIR COSTS AS A MATTER OF A. Defendants Prevailed for Purposes of Recovering Costs Under § 1032 When This Case Was Dismissed in Their FaVOTr.....o.. vee eee eee eee eee eens 5 B. All of the Costs Which Defendants Request are Allowable, Reasonable, and Were Necessarily INCUITE.......ooveiiiiiiiiiiiie cece 6 C. Plaintiffs Have Failed to Meet Their Burden to Show That the $75.90 in Motion and Filing Fees Was Unreasonable or Unnecessary ..........cecueeveerneenieereeneenneeenneenane 6 IV. DEFENDANTS ARE ALSO THE PREVAILING PARTIES UNDER CIVIL CODE § 5975, WHICH PROVIDES THAT THEY SHALL BE AWARDED THEIR REASONABLE ATTORNEYS’ FEES AND COSTS ....cooiiieirinieneceenseee sree sieceeneens 7 A. Defendants Prevailed on a “Practical Level” Under Civil Code § 5975 Because Their Main Litigation (Goals Were ACHEVEl. cuss smmssmmsssssmes mmm 8 -ii- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O VIL TABLE OF CONTENTS Page(s) B. As the Prevailing Party, Defendants are Entitled to Recover Their Attorneys’ Fees as a Matter of Right .......cocooiiiiiiiiii tees 11 THE REQUESTED ATTORNEYS’ FEES AND COSTS ARE REASONABLE AND WERE INCURRED NECESSARILY; sunisnsusswusmessssnasss nus msm asi 12 A. Attorneys Kron, Card, and Seto All Contributed to the Defense of This Matter ...... 12 B. The Defense Work Performed Was Reasonable and Necessary in Order for the Defendants to Achieve Their Goal of Seeing This Case Dismissed.................... 13 CONCLUSION Lottie eects sete sa es eset se ee saa be este eee sate sabe ese estes snes sane eaaees 14 -iii- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O TABLE OF AUTHORITES Page(s) Cases Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal. APP.Ath 1568 oneness eee eee sae see ees 8 Hurwitz v. Sobertec, LLC, et al. No. 30-2015-00790256 (Sup. Ct. May 28, 2015) ..coeierieriirieinieeieceereee nee eeie eene ene 10 Jones v. Dumrichob (1998) 63 Cal. APP.Ath 1258 onic eres secre ee sae sere ees 6 Ketchum v. Moses (2001) 24 CallAth 1122 o.oo eect etter eres sree serene sees 12 Ladas v. California State Auto. Assn. (1993) 19 Cal. APPATh TOT «eerie e e sae eee ees 6 Meister v. Regents of University of California (1998) 67 Cal. APPA 437 concerts sre sree eens see eee 12 Rancho Mirage County Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal.APP.Sth 252 eee eee 8, 11 Salehi v. Surfside III Condominium Owners’ Assn. (2011) 200 CAL APDATH 1146 im. 555500 sswssn os sons awa os mms 0555/55. 5555355 59553 5045 595555 8,9,10, 11 Statutes CIVAL COUR 8 1359 ix sums swsnssnn somos esos 55.08.5550 5505575545 1550585 £5535 55.05.555555 5555 55.08. 5555405 £555 5045 SH3455 S0R3555 49 55555 8 CLVIL COE § 1717 cenit eect eet sae estes sate sabe ee eens saee sane eee nee 8 Code OF CiV. Proc. § 1033.5. iii eee eee eee eee eee esterases sete teats e eee eeseseaaen ees 6,7 Code Of Civil Procedure § 1032... .uu ieee eee eet eee teeta sees sete teases esse eesessnnanns 1,5,6,7 Rules of Court, RULE 3.1700 .....oooooiiiiiiiiiiieeeeeeeeeeeeeeeeeeee ee eee 6 Liv- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Defendants hereby oppose Plaintiffs’ Motion to Tax Costs, and ask this Court to deny the same on the basis that the Defendants are the prevailing parties and are therefore entitled to recover their costs, including attorneys’ fees, under Code of Civil Procedure § 1032 and Civil Code § 5975. II. STATEMENT OF FACTS Prior to the initiation of this litigation, the Plaintiffs’ only direct interaction with either of the Defendants consisted of a telephone call from Plaintiff Tom Queen to Defendant William Wong. During this conversation, Mr. Queen alleged that the Defendants’ lease of their Nellie Gail Ranch Home (“Wongs’ Home”) to Hope by the Sea, Inc. (“Hope”), for use as a sober living residence, was a violation of the Nellie Gail Ranch Declaration of Restrictions (“Nellie Gail Ranch CC&R’s”). In closing their conversation, Mr. Queen threatened to sue the Wongs if they did not stop leasing their home to Hope, and if they would not agree not to lease their home to sober living operators in the future. (See p. 2, {4 of Declaration of William Wong (“Wm. Wong”), filed on 12/9/16 in support of Defendants’ Fee Motion). When Defendant William Wong refused to submit to Plaintiff Tom Queen’s demands, Mr. Queen persisted by leaving Mr. Wong voicemail messages inquiring whether Hope’s sober living residents had yet been “kicked out” of the Wongs’ Home. (See Decl. of Wm. Wong, p. 2, 5, filed 12/9/16). Then, on or about December 9, 2015, Defendants received a letter from Richard J. McNeil (“Attorney McNeil”) as counsel for fellow Nellie Gail Ranch homeowners including Plaintiffs Tom Queen, Kelli Queen, Steve Volland, and Mary Volland. Attorney McNeil’s letter alleged that the Wongs’ Home was being used as a “commercial business” in violation of the Nellie Gail Ranch CC&R’s, and that his clients would pursue legal action against the Defendants if the Defendants “and/or [their] tenants and guests” did not “immediately cease and desist the operation of [the Wongs’ Home] as a commercial business...” (See Decl. of Wm. Wong, pp. 2-3, { 6, filed 12/9/16). -1- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O On or about December 12, 2015, Defendants forwarded a copy of Attorney McNeil’s December 9, 2015 letter to Hope, since Hope’s lease and use of the Wong’s Home as a sober living residence was the gravamen of the Nellie Gail homeowners’ complaint. It was thereafter agreed between the Defendants and Hope that Hope would prepare a response to Attorney McNeil’s letter, and would defend and indemnify the Defendants from any claims against them arising out of Hope’s use of the Wongs” Home as a sober living residence. (See Decl. of Wm. Wong, p. 3, 7, filed 12/9/16). On January 20, 2016, Hope, by and through its counsels Scott A. Kron (“Attorney Kron”) and Anne L. Card (“Attorney Card”), drafted and sent a letter responsive to Attorney McNeil’s letter of December 9, 2015, wherein Attorney McNeil’s allegations were denied, and it was reiterated that neither the Wongs nor Hope would comply with the demands that Hope move its sober living residents out of the Wongs’ Home. The letter also asserts Hope’s sober living residents’ rights as a protected class under the federal Americans with Disabilities Act, the California Unruh Civil Rights Act, and federal and state fair housing laws. (See p. 2, {3 of the Declaration of Anne L. Card (“Card”) filed 12/9/16 in support of Defendants’ Fee Motion). On or about February 4, 2016, Attorney Kron received a response from Attorney McNeil disputing the Wongs’ and Hope’s legal and factual assertions, but stating a desire to discuss a potential resolution, short of litigation. (See Decl. of Card, pp. 2-3, {4, filed 12/9/16). On March 10, 2016, Attorney McNeil, Plaintiff Tom Queen, and one other Nellie Gail Ranch homeowner met face-to-face with Attorneys Kron and Card to discuss possible resolution of the matter. Plaintiff Tom Queen expressed that the only acceptable resolution would be for Hope to immediately vacate the Wongs’ Home and to agree not to lease or occupy any other homes in Nellie Gail Ranch. When Attorney Kron stated that Hope would not submit to such demands, and that Hope had the support of the Wongs, Plaintiff Tom Queen responded by threatening to “just drag the Wongs into court and see what happens,” and then angrily storming out of the meeting. (See Decl. of Card, p. 3, { 5, filed 12/9/16). On or about the next day of March 11, 2016, the Plaintiffs initiated the instant enforcement action by filing their complaint against Defendants William and Doris Wong =, DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O pursuant to Civil Code § 5975, which provides that homeowners may bring an action to enforce their common interest development’s covenants and restrictions (CC&R’s) as against other homeowners. Specifically, Plaintiffs sought to enforce the Nellie Gail Ranch CC&R’s provision prohibiting business and commercial activities from being conducted at any Nellie Gail homes. Despite the Plaintiffs’ knowledge that it was Hope which was using the Wongs’ Home as a sober living residence, and not the Wongs, the Plaintiffs did not join Hope as a defendant in this action. (See Decl. of Wm. Wong, p. 3, {8, filed 12/9/16). On or about May 4, 2016, the Defendants and Hope agreed to extend the term of Hope’s lease of the Wongs’ Home for an additional two years, moving the lease expiration date to September 15, 2018. The Defendants and Hope also agreed to jointly defend the Plaintiffs’ claims in this action, and to seek to have Hope joined as a defendant and indispensable party since Hope’s interests stood to suffer the greatest injury if the Plaintiffs were able to prevail on their claims. (See Decl. of Wm. Wong, p. 3, 9, filed 12/9/16). On May 11, 2016, Attorney Card drafted and dispatched a letter to Attorney McNeil; the letter was sent on behalf of both the Defendants and Hope. The letter demands the Plaintiffs’ dismissal of the Complaint forthwith on the grounds that: (1) the Plaintiffs lacked probable cause to file the Complaint; and (2) that Plaintiffs’ claims were brought based on an improper motive and for an improper discriminatory purpose. The letter also asserts Hope’s role as an interested and indispensable party. Finally, the letter also served to initiate the meet-and-confer process required prior to filing a demurrer, by pointing out the ways in which Plaintiffs’ claims were improperly or insufficiently pleaded. (See Decl. of Card, p. 3, ] 6, filed 12/9/16). On June 10, 2016, Attorney Card received a letter from Attorney McNeil’s firm disputing the legal and factual contentions made on behalf of the Defendants and Hope in the May 11, 2016 letter, but promising to amend the Plaintiffs’ Complaint to address the issues raised in support of the Defendants’ plan to demur. (See Decl. of Card, p. 3, 7, filed 12/9/16). On August 23, 2016, the Plaintiffs filed their First Amended Complaint (“FAC”). (See Decl. of Wm. Wong, p. 3, 10, filed 12/9/16). On September 20, 2016, Attorney Card drafted and dispatched a letter to Attorney Be DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O McNeil requesting that the Plaintiffs stipulate to join Hope as a defendant in the instant action, and providing legal and factual support therefor. (See Decl. of Card, pp. 3-4, | 8, filed 12/9/16). On September 27, 2016 Attorney McNeil responded to the September 20, 2016 letter by stating that he questioned the feasibility and propriety of joining Hope as a defendant in this action, and stated that any claims involving Hope should be considered separate and apart from the claims in this action. (See Decl. of Card, p. 4, 9, filed 12/9/16). On September 29, 2016 Defendants filed an Answer to the FAC, in which they raised affirmative defenses including, but not limited to, lack of probable cause and institution of a civil proceeding for a discriminatory purpose. Defendants’ Answer also asserts that Plaintiffs’ claims herein are barred as they seek to have the Court interpret and enforce the Nellie Gail Ranch CC&R’s in a manner which would violate the California Fair Housing Act, the Unruh Civil Rights Act, the federal Americans with Disabilities Act, and the federal Fair Housing Amendments Act. (See Decl. of Wm. Wong, pp. 3-4, (11, filed 12/9/16). On November 3, 2016, Defendants filed a Motion to Compel Joinder, whereby they sought to compel Plaintiffs to join Hope as a defendant in this action. (See Decl. of Wm. Wong, p- 4, 12, filed 12/9/16). On November 17, 2016, Attorney McNeil telephoned counsel for the Defendants, Raymond J. Seto (“Attorney Seto”) to inform him that the Plaintiffs were considering dismissing the instant action against the Defendants, in exchange for the Defendants’ agreement to waive their right to recover costs, and their agreement to discontinue leasing their home to Hope. Attorney McNeil requested that the Defendants respond the Plaintiffs’ proposal as soon as possible so that the Plaintiffs could avoid incurring the cost of having to file an opposition to the Motion to Compel Joinder of Hope, which opposition was due on November 23, 2016. (See p- 2, I 3 of the Declaration of Raymond J. Seto filed 12/9/16 in support of Defendants’ Fee Motion). Defendants would not agree to discontinue leasing their home to Hope, and would not agree to a waiver of their costs in exchange for the Plaintiffs’ agreement to dismiss the instant action. (See Decl. of Seto, p. 2, (4, filed 12/9/16). A= DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O On or about November 29, 2016 Attorney McNeil submitted a Request for Dismissal of the FAC and the “entire action of all parties and all causes of action” without prejudice. Accordingly, on that same day of November 29, 2016, the Clerk of the Court entered the dismissal of this action as requested. (See Decl. of Seto, p. 2, { 5,filed 12/9/16). As of the date of the dismissal of this action, Defendants had incurred $27,977.00 in attorneys’ fees and $945.90 in costs in having to defend themselves. (See Decl. of Seto, pp. 2-4, fq 6-15, filed 12/9/16; Decl. of Card, pp. 4-6-, 1 10-21, filed 12/9/16). On December 9, 2016, Defendants filed a Motion for Award of Attorneys’ Fees and Costs (“Fee Motion”) along with supporting declarations of William Wong, Raymond J. Seto, and Anne L. Card. In their Fee Motion, Defendants request that they be deemed the prevailing parties under Civil Code § 5975 and that they be awarded their attorneys’ fees in the amount of $27,977.00 and their costs in the amount of $945.90. Concurrently with their Fee Motion, Defendants also filed a Memorandum of Costs which includes the same costs that are requested in the Fee Motion. In response to the filing of the Memorandum of Costs, Plaintiffs filed the Motion to Tax Costs which the Defendants oppose as set forth herein. Plaintiffs also filed an Opposition to the Defendants’ Fee Motion, to which Defendants filed a Reply on January 19, 2017. III. AS THE PREVAILING PARTIES UNDER CODE OF CIVIL PROCEDURE § 1032, DEFENDANTS ARE ENTITLED TO RECOVER THEIR COSTS AS A MATTER OF RIGHT Code of Civil Procedure § 1032(b) provides that “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.” Under that same section, “prevailing party” is defined to include “a defendant in whose favor a dismissal is entered.” (Code of Civ. Proc. § 1032(a)(4), (b)). A. Defendants Prevailed for Purposes of Recovering Costs Under § 1032 When This Case Was Dismissed in Their Favor In this action, because William and Doris Wong are defendants in whose favor a dismissal was entered by this Court on November 29, 2016, they are deemed the “prevailing 5 DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O parties” for purposes of recovering their filing and motion fees as costs under Code of Civil Procedure § 1032. B. All of the Costs Which Defendants Request are Allowable, Reasonable, and Were Necessarily Incurred Allowable “costs” under Section 1032 include “filing, motion, and jury fees” as well as “attorney’s fees, when authorized by any of the following: (A) contract; (B) statute; [or] (C) law.” Attorney’s fees allowable as costs pursuant to [statute] may be fixed upon a noticed motion. (Code of Civ. Proc. § 1033.5(a)(10), (c)(5)). Allowable costs shall be reasonable in amount and reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation (Code of Civ. Proc. § 1033.5). To obtain an award of costs, the prevailing party must serve and file a memorandum of costs within the earlier of 15 days after the clerk’s mailing of notice of entry of judgment or dismissal, or 15 days after any party’s service of such notice. (Rules of Court, Rule 3.1700). Defendants diligently filed and served a Memorandum of Costs along with their Fee Motion within 15 days of receipt of Plaintiffs’ notice that dismissal had been entered. Defendants’ Memorandum of Costs requests that they be awarded $945.90 for their filing and motion fees incurred in this action, as well as $27,977.00 in attorneys’ fees as authorized by Civil Code § 5975. C. Plaintiffs Have Failed to Meet Their Burden to Show That the $75.90 in Motion and Filing Fees Was Unreasonable or Unnecessary “If items on their face appear to be proper charges, the verified memorandum of costs is prima facie evidence of their propriety, and the burden is on the party seeking to tax costs to show they were not reasonable or necessary. ‘On the other hand, if items are properly objected 233 to, they are put in issue and the burden of proof is on the party claiming them as costs.” (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1266, citing Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.) Since Defendants’ cost items appear on their face to be proper charges, the burden is on the Plaintiffs to show why any of these costs were not reasonable or necessary. -6- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O By their Motion to Tax Costs, Plaintiffs seek to tax a $75.90 portion of the $945.90, on the unsubstantiated grounds that this $75.90 was “incurred by a non-party who did not prevail in this action.” Contrary to Plaintiffs’ assertion, and as is supported by the Declarations of William Wong and Anne L. Card filed in support of Defendants’ Motion for Award of Attorneys’ Fees and Costs, the $75.90 was incurred by the Defendants for filing their Motion to Compel Joinder; it consists of the $60.00 motion filing fee assessed by the Court, and $15.90 in fees assessed for mandatorily filing the documents electronically. The reason why these costs appear on an invoice generated by Kron & Card LLP, rather than an invoice generated by Defendants’ counsel of record -- Hansen Seto LLP -- is because both firms performed work on behalf of the Defendants in this action pursuant to an Indemnification, Joint Defense and Common Interest Agreement reached between the Defendants, their tenant Hope by the Sea, Inc., Kron & Card LLP, and Hansen Seto LLP with regards to this matter. Each and every cost and fee which is sought to be recovered by the Defendants was in fact incurred by the Defendants, for work performed on Defendants’ behalf, by either Kron & Card LLP or Hansen Seto LLP. Plaintiffs’ challenge to the propriety of the $75.90 in requested motion and filing fees, which is based on the evidence submitted with Defendants’ Fee Motion, does not meet the Plaintiffs’ burden of showing that such costs were unreasonable or unnecessary. Accordingly, Defendants are entitled to recover the $75.90 they incurred in motion and filing fees. IV. DEFENDANTS ARE ALSO THE PREVAILING PARTIES UNDER CIVIL CODE § 5975, WHICH PROVIDES THAT THEY SHALL BE AWARDED THEIR REASONABLE ATTORNEYS’ FEES AND COSTS Pursuant to Code of Civil Procedure §§ 1032 and 1033.5 cited above, attorneys’ fees are allowable costs if authorized by statute and fixed by a noticed motion. In accordance with these sections, Defendants have invoked Civil Code § 5975s provision for an award of reasonable attorneys’ fees and costs to the prevailing party in an action such as this, which was brought to enforce the governing documents of a common interest development. Defendants also moved to have the amount of fees fixed by way of the Fee Motion filed on December 9, 2016 and set to be Te DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O heard on January 26, 2017. A. Defendants Prevailed on a “Practical Level” Under Civil Code § 5975 Because Their Main Litigation Goals were Achieved Civil Code § 5975 does not define “prevailing party.” The analysis of who is a prevailing party under Civil Code § 5975 focuses on who prevailed “on a practical level” by achieving its main litigation objectives; the limitations applicable to contractual fee-shifting clauses, codified at Civil Code § 1717, do not apply. (Rancho Mirage County Club Homeowners Assn. v. Hazelbaker (2016) 2 Cal. App.5th 252, 230, citing Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574). The Second District Court of Appeal’s analysis, reasoning, and holding in Salehi v. Surfside III Condominium Owners’ Assn. (2011) 200 Cal.App.4th 1146, is instructive in this matter. In Salehi, the Court of Appeal was presented with a set of facts similar to the facts at bar: the plaintiff, who was an attorney, filed suit against her homeowners association (“HOA”) to enforce CC&R’s under what was then Civil Code § 1354, now § 5975; then, three (3) days after plaintiff’s client lost his lawsuit against the same HOA defendant, the plaintiff voluntarily dismissed nearly all of her claims against the HOA defendant, despite not having obtained any relief or achieving any of her litigation objectives. At the trial level, the court denied the HOA defendant’s motion for attorneys’ fees under what is now Civil Code § 5975, refusing to find that the defendant was the “prevailing party” largely because the plaintiff had dismissed her claims against the defendant voluntarily. On the defendant’s appeal, however, the Court of Appeal found that the trial court had abused its discretion as to who was the “prevailing party.” The Court of Appeal found that since the plaintiff had not achieved any of her litigation objectives, she could not be deemed the “prevailing party;” rather, the Court found that “because of [the plaintiff’s] dismissals, [the defendant] ‘realized its litigation objectives,” and that the defendant was therefore the “prevailing party” entitled to an award of its reasonable attorney fees. (Id. at 1155-1156). The parallels that may be drawn between the Salehi case and this case support a finding that the Defendants are the prevailing parties in this action, and that they are entitled to recover -8- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O their attorney fees and costs: First, at the time that they voluntarily dismissed their claims, neither Salehi nor the Plaintiffs in this case had been granted any of the relief that they had sought to obtain in the litigation; in Salehi, the Court of Appeal found this to be determinative of their holding that the defendant was the prevailing party. eo Here, the Plaintiffs’ goals -- since well before the litigation and actually continuing to the present -- have been to get Hope out of the Wongs’ Home and out of Nellie Gail Ranch, to turn homeowners like the Wongs against tenants like Hope by making the homeowners fear litigation, and to prevent other Nellie Gail Ranch homes from being used as sober living residences. The Defendants’ goal, obviously, has been to see this case dismissed or for Plaintiffs to otherwise fail to obtain any relief on their claims. In fact, on May 11, 2016 which was prior to the filing of their Answer, the Defendants sent a six-page letter to Plaintiffs’, “the purpose...[of which was] to demand that Plaintiffs dismiss their Complaint forthwith on the grounds that proceeding in this action subjects Plaintiffs to liability for malicious institution of a civil proceeding, in that Plaintiffs’ Complaint was filed without probable cause and primarily for an improper purpose.” eo As of the dismissal of this case on November 29, 2016, not a single one of Plaintiffs’ goals has been achieved. The Defendants, on the other hand, have achieved every one of their goals -- this case has been dismissed; Hope is still leasing the Wongs’ Home and will continue to lease it through at least September of 2018; Hope and the Wongs are united in their position that they will not be intimidated by homeowners like the Plaintiffs, even in the face of litigation; Hope and other sober living providers still offer sober living opportunities in Nellie Gail Ranch; no court has declared that sober living homes are business or are otherwise an illegal use of single family residences; and there is nothing to ! See Declaration of Anne L. Card, Ex. “C” thereto, filed 12/9/16. -9- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O prevent any Nellie Gail Ranch homes from being used as sober living residences in the future. Next, both Salehi and the Plaintiffs here seem to have been motivated to dismiss their claims based on a perceived unlikelihood of prevailing on the merits. In Salehi, the Court of Appeal considered the reasons why the case was dismissed in order to aid in their determination of who had prevailed, and implied that a plaintiff’s dismissal based on a fear of losing would support a finding that the defendant had prevailed. The Court of Appeal inferred that Salehi may have dismissed her claims against her HOA not because she had “achieved [her] litigation goals,” but because her client had just lost a similar lawsuit against the same defendant HOA. e It may be similarly inferred here that Plaintiffs’ decision to dismiss their claims not because they had actually accomplished anything in the litigation, but because they feared that they would not prevail on their claims based on a recent unfavorable ruling issued by the Honorable Judge Craig Griffin in the Orange County Superior Court case called Hurwitz v. Sobertec, LLC -- a case in which homeowners, also represented by Attorney McNeil, brought a CC&R enforcement action against their neighbors who were using their home as a sober living residence, alleging that the home was being run as a business in violation of their community’s CC&R’s. On June 27, 2016, Judge Griffin ruled that the plaintiffs had failed to establish that sober living homes are businesses, or that the defendant’s use of the home as a sober living residence violated the CC&Rs prohibition on operating businesses out of the home. e Given the timing of the dismissal, which was proposed just days before the Plaintiffs were due to file their opposition to the Defendants’ Motion to Compel the Joinder of Hope as a defendant, it may also be implied that the Plaintiffs’ fear of the outcome of that motion compelled them to dismiss this case. The Plaintiffs have never wanted Hope to be a part of this litigation, and Defendants contend that this is because of Hope’s greater ability to * Hurwitz v. Sobertec, LLC, et al., No. 30-2015-00790256 (Sup. Ct. May 28, 2015) -10- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O affirmatively defend Plaintiffs’ claims due to the legal protections afforded to Hope and its sober living residences under state and federal anti- discrimination and fair housing laws. In short, the Defendants here, like the defendant in Salehi, are the prevailing parties in this action because the Plaintiffs’ dismissal came when they finally embraced the unlikelihood that they would prevail on the merits of their case, and because the Defendants have been able to emerge from this litigation virtually unscathed. The Plaintiffs, on the other hand, have spent countless hours and dollars waging a NIMBY" war against the Defendants, Hope, and “sober living homes” -- a war which they are no closer to winning than they were before they filed suit. By filing this lawsuit as a matter of calling the Defendants’ bluff, and then being the ones to throw in the towel before discovery was even completed, the Plaintiffs have emboldened the Defendants and Hope to continue to defend their rights at all costs, and to stand firm against bullies who would try to coerce them into submission. Ironically, in the end, it was the Plaintiffs who finally submitted to the Defendants when they granted their May 11, 2016 written demand that this case be dismissed. Most importantly, this case has reinforced the Defendants’ belief that they are in the right, and they hope to be an example for other homeowners and sober living residents who have been targets of the same bullying behavior that the Plaintiffs have displayed. B. As the Prevailing Party, Defendants are Entitled to Recover Their Attorneys’ Fees as a Matter of Right Once the trial court has determined the prevailing party in an enforcement action, it has no discretion to deny attorney fees. (Rancho Mirage County Club Homeowners Assn. v. Hazelbaker, supra, 2 Cal. App.5th at 263, citing to Civ. Code § 5975 and Salehi v. Surfside III Condominium Owners Assn., supra, 200 Cal. App.4th at 1152 [language of § 5975 reflects a legislative intent to award attorney fees as a matter of right when statutory criteria are satisfied]). Accordingly, as the Defendants are the parties to achieve their litigation goals in this matter and have thus “prevailed on a practical level,” they are entitled to an award of their reasonable attorneys’ fees in the amount of $27,977.00, and costs in the amount of $945.90, > NIMBY is an acronym for “Not In My Backyard” -11- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O including the $75.90 for filing their Motion to Compel Joinder. V. THE REQUESTED ATTORNEYS’ FEES AND COSTS ARE REASONABLE AND WERE INCURRED NECESSARILY A court assessing attorneys’ fees must “begin with a touchstone or lodestar figure.” (Ketchum v. Moses (2001) 24 Cal.4th 1122. 1131-1132). “[T]he lodestar is the basic fee for comparable legal services in the community” and is calculated by compiling the time reasonably spent and the reasonable hourly compensation of each attorney involved. (Id.). The Court has considerable discretion to determine which hours “expended by the attorneys were ‘reasonably spent’ on the litigation.” (Meister v. Regents of University of California (1998) 67 Cal.App.4th 437, 449). A. Attorneys Kron, Card, and Seto All Contributed to the Defense of This Matter In defending this action, due to Hope’s obligation and agreement to defend and indemnify the Defendants from any claims against them arising out of Hope’s use of their home as a sober living residence, the Defendants entered into a joint defense agreement. The Defendants and Hope also agreed that Hope’s counsel, Attorneys Kron and Card, would undertake the bulk of the work in this case, but always with Attorney Seto’s input and participation. Accordingly, the attorneys’ fees sought to be recovered by the Defendants consist of those billed by Attorneys Kron, Card, and Seto. (See Decl. of Card, p. 4, | 11, filed 12/9/16). The billing statements attached to the concurrently-filed declarations of Anne L. Card and Raymond J. Seto reflect all of the work performed on behalf of the Defendants, by each attorney’s firm, from the filing of the Complaint on March 11, 2016 through the dismissal of this entire action on November 29, 2016. As of November 29, 2016, the fees billed by Attorneys Kron and Card in connection with the defense of this action were $23,921.00; the fees billed by Attorney Seto were $4,056.00. The Defendants also seek to recover their costs incurred in defending this action, which consist of $870.00 in fees assessed to file their Answer to the FAC, the $60.00 filing fee for their Motion to Compel Joinder, and $15.90 in mandatory electronic filing service fees, for a =19- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O total of $945.90 in costs. (See Decl. of Card, p. 5, | 16, filed 12/9/16; Decl. of Seto, p. 3, { 12, filed 12/9/16). The hourly rates charged by the professionals performing services in the defense of this matter are as follows: (1) Attorney Kron’s hourly rate is $275.00 with 11 years of practice; (2) Attorney Card’s hourly rate is $250.00 with six years of practice; (3) Kron & Card LLP’s certified paralegal’s hourly rate is $95.00; and (4) Attorney Seto’s hourly rate is $390.00 with 26 years of practice. Each attorney’s hourly rate is similar to or below the market rate in Southern California for this kind of work, and in consideration of each attorney’s professional experience. (Decl. of Card, pp. 4-5, { 13; p. 5, | 18, filed 12/9/16; Decl. of Seto, p. 3, 9; p. 4, 14, filed 12/9/16). B. The Defense Work Performed Was Reasonable and Necessary in Order for the Defendants to Achieve Their Goal of Seeing This Case Dismissed The hours spent and billed on the nine-month defense of this action were necessary and reasonable. The time claimed by each of the attorneys is based entirely upon detailed time records, and all of the fees sought were actually paid. Defense counsel vigorously, yet economically, advocated and litigated the Defendants’ position from even before the action was commenced, and continue to do so now even after having helped the Defendants to achieve their goal of seeing this case dismissed. Defense counsel made appreciable efforts to convince Plaintiffs’ counsel to dismiss this case even before the Defendants were forced to file responsive pleadings, including drafting a six-page letter on May 11, 2016, which laid out the reasons why Plaintiffs’ claims were not viable and why proceeding would subject Plaintiffs to liability for malicious institution of a civil proceeding. When Plaintiffs insisted on continuing to pursue their claims, defense counsel successfully persuaded the Plaintiffs to amend their complaint to avoid demurrer after a three- month meet-and-confer process, followed by defense counsel’s preparation of an extremely fact-intensive and thorough Answer whereby all new matter at issue was presented to the Court. Defense counsel also provided the Plaintiffs with very thorough, non-evasive responses to their discovery questions which were meant to assist the Plaintiffs in understanding that their claims =13= DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS © 0 J O N n n BA W N = ND N N N N N N N N N E m Em Em Em em em e m e m c o NN O N Un kA W D = O OO N N N N R E W N D = O were not as meritorious as they believed them to be. Finally, defense counsel engaged Attorney McNeil in a meet-and-confer process to try to secure the Plaintiffs’ stipulation to join Hope as a defendant, but the Plaintiffs refused to agree, which forced defense counsel to draft and file the Motion to Compel Joinder. The Motion to Compel Joinder, as it seems, brought the Plaintiffs to the tipping point and caused them to wave the white flag and dismiss this case. Each task undertaken by defense counsel was integral in eventually securing the Defendants’ victory in this case, and the fees incurred were therefore necessary and reasonable. VI. CONCLUSION In consideration of the points and authorities set forth above, the Defendants hereby once more respectfully request that this Court deny the Plaintiffs’ Motion to Tax Costs and award Defendants all costs claimed in its Memorandum of Costs, Fee Motion, and herein including motion and filing fees of $945.90 and attorneys’ fees of $27,977.00. DATED: January 20, 2017 HANSEN SETO, LLP By: /s/ Raymond J. Seto RAYMOND J. SETO Attorney for Defendants William and Doris Wong -14- DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION TO TAX COSTS