Opposition To Motion For Attorneys Fees And Costs

Motion

Cal. Super. - 2nd Dist.March 18, 2016

Electronically FfU 1 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 ED by Superior Court of California, County of Los Angeles on 06/10/2020 12:29 AM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Watson,Deputy Clerk Verdi Law Group PC Alfred Joseph Verdi #101447 29160 Heathercliff Rd Suite 4133 Malibu, CA 90264 Email: al@verdilaw.com Tel: 310-850-6695 Attorneys for Appellants/Defendants TLC Management Inc, Apex Investments Group Ltd. John Spahi and Omar Spahi IN THE SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES — WEST DIVISION RHYS MUSSMAN, an individual, Case No. SC125584 Plaintiff, Dept.: R; Trial Court Dept S29 Long Beach v. Judge: Hon. Mark H. Epstein Trial Judge: Hon. Peter J. Mirich S29 APEX INVESTMENTS GROUP, LTD. dba APEX INVESTMENTS, INC., a Nevada corporation; TLC MANAGEMENT, INC., a Delaware corporation; OMAR SPAHI, an individual; and JOHN SPAHI, an individual, Action Filed: March 18, 2016 Notice of Appeal filed May 27, 2020 DEFENDANTS AND APPELLANT’S OPPOSITION TO PLAINTIFFS MOTION FOR ATTORNEYS FEES AND COSTS; Defendant. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF OMAR SPAHI, an individual; (and proposed STAY OF PROCEEDINGS; DECLARATION TLC Management, Inc., a Delaware OF ALFRED J. VERDI Corporation) Cross Complainants Date: June 22. 2020 Dept: S29 ¥s Time: 10:00 am RHYS MUSSMAN, an individual and ROES 1- 10, inclusive. Cross Defendants MEMORANDA ISO NOTICE OF STAY OF PROCEEDINGS Page 1 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION PURSUANT TO CCP 916 ALL MATTERS EMBRACED BY THE JUDGMENT ARE STAYED AS A RESULT OF THE TIMELY NOTICE OF APPEAL FILED BY APPELLANTS ON MAY 27, 2020. Plaintiff filed its motion for attorney’s fees after the notice of appeal was filed. Asa threshold matter, this motion is automatically stayed and the hearing set only for hearing on Memorandum of Costs (and not the Motion for Attorney’s Fees) for June 22, 2020 must be taken off calendar or continued. CCP 916. (a) Except as provided in Sections 917.1 to 917.9, inclusive, and in Section 116.810, the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order. (b) When there is a stay of proceedings other than the enforcement of the judgment, the trial court shall have jurisdiction of proceedings related to the enforcement of the judgment as well as any other matter embraced in the action and not affected by the judgment or order appealed from. Notwithstanding the automatic stay imposed by CCP 916, a response to the Motion for Attorney’s Fees is provided without prejudice to supplementing it if and when it becomes operative after appeal. Defendants, TLC Management Inc, Apex Investments Group Ltd. John Spahi and Omar Spahi, oppose Plaintiff’s Motion for Attorney’s Fees and requests the Court deny Plaintiff’s requests in their entirety. Alternatively, if the Court is inclined to award fees, Defendants request the Court use its “equitable discretion” to significantly reduce Plaintiff’s requested award in fair consideration of all parties’ interests. DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 2 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 Plaintiff’s attorneys are not entitled to all the fees they are seeking. Plaintiff’s attorneys seek a staggering $761,021.00 plus costs. They also seek over $49,000.00 in costs. Plaintiff’s attorneys seek these fees and costs even though the case sought only $28,000 in withheld security deposit and statutory penalty fees of $56,000. The court reduced that prayer and entered award for only $22,295 and a penalty of $10,000, a reduction of almost 40% from the prayer. Furthermore, a large percentage of the time entries are excessive, unreasonable and duplicative and include unpermitted block billing. In addition to the final judgment being 40% less than the prayer, thus justifying at minimum a 40% reduction in fees, it must be remembered that Plaintiff admits that it incurred only $97,000 in fees and costs at the time of the first trial date at which Apex failed to appear. Plaintiff could have had a default judgment at that time and likely for the entire prayed amount of $78,000. Plaintiff chose to amend and incur the unreasonable fees to come. It is not Defendants fault for not showing up at the Apex trial. It was Apex’s right to basically allow a default which would have ended the case. Since the Plaintiff’s FAC, Plaintiff claims to have expended nearly $650,000 more which resulted in an award of only $32,000, $10,000 of which was a penalty. A failed effort by all accounts not justifying such an unreasonable claim. It was unreasonable for Plaintiffs counsel to have incurred nearly $761,021.36 to try this case, and even a cursory review of the bills submitted shows that counsel spent days performing unreasonable and unjustified work, including almost daily conference calls among the top billing partners simply to discuss the status of the case. Plaintiff’s counsel over-staffed the case, and there are numerous examples of work that high-rate and senior associates performed that lower rate billing professionals should have done. As a prime example, Plaintiff’s counsel also incurred a tremendous amount of time investigating the litigation background of John Spahi and Omar Spahi in other unrelated cases of landlord tenant lawsuits which the Court rejected out of hand as irrelevant. Many of Plaintiff’s exhibits at trial dealt with all of the random and in some cases over 10 year old cases which were not admitted after extensive attempts by Plaintiff’s attorneys to have them admitted. At every turn Defendants objected to these DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 3 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 claims yet Plaintiff persisted in pushing this impeachment which was summarily rejected by the Court. Plaintiff’s attorneys deposed Omar Spahi and John Spahi only for 7 hours each. Most of the questioning dealt with the referred to litigation cases that the Court found to be irrelevant and inadmissible. All of time incurred in the extensive research dealing with this inadmissible impeachment gambit should be deducted from the attorney’s fees claims. The absurdity of this claim of over $800,000.00 in fees and costs is evidenced in Plaintiff’s Motion wherein at page 10:14-16 quoting Appellant’s counsel as saying the following on June 24, 2019 “This case was a $20,000 deposit dispute which was ballooned by your client into a quarter million dollar dispute because of the purported violation of the 21 day rule. Nice work yourself.”. The absurdity is that from June 24, 2019 to the end of a 7 day bench trial on December 12, 2019, Plaintiff claims to have incurred over $600,000.00 over and above the “quarter million”. It’s physically impossible for 2 attorneys (and a staff of 2 assistants) at an average inflated attorney rate of $500/hr. to incur $600,000 bearing in mind that all discovery motions had been filed before that time and the litigation impeachment investigations were completed before June 2019. Plaintiff’s motion cites statements that before trial at the deposition of John Spahi the figure of $250,000 incurred up to that point and undisputed by Plaintiff. There is simply no support for expending another $600,000 from October 9, 2019 until December 12, 2019. It also must be cited that at the end of Plaintiff’s case Defendants John and Omar Spahi moved for nonsuit which was granted by the Court subject to the alter ego ruling. That grant of nonsuit in favor of the individual defendants carries with it a reduction in fees attributable to the individuals. For instance, the grossly exaggerated attempt to impeach the individual defendants on past litigation is clearly unrelated to alter ego. All hours in discovery, investigation and deposition on this past litigation impeachment strategy by Plaintiff’s attorneys must be omitted and a credit of similar hours for Defendants counsel in defending the irrelevant attack. See Wahl Declaration paragraph 46 admitting significant investigations DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 4 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 and reviewing countless documents. All were objected to by Defendants and ruled inadmissible by the Court. THE COURT SHOULD DENY THE REQUEST FOR ATTORNEYS' FEES OR REDUCE ANY AWARD BASED ON BOTH THE EXCESSIVE TIME SPENT AND HOURLY RATES CHARGED The Supreme Court has found, "California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award." (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.) In a case where a party is awarded fees under this statute, the award must be limited to reasonable attorneys’ fees based on a careful compilation of time spent and a reasonable hourly rate for each attorney, i.e. the "lodestar". (See Thayer v. Wells Fargo Bank (2001) 92 Cal. App.4th 819, 833; Best v. California Apprenticeship Council (1987) 193 Cal. App.3d 1448, 1470, quoting Serrano v. Priest (Serrano 111) (1977) 20 Cal.3d 25, 48.) In this matter, the Court should reduce any award, because the amount of time Plaintiff's counsel spent, and their hourly rates, were unreasonable. THE COURT SHOULD DENY THIS MOTION, OR SUBSTANTIALLY REDUCE ANY AWARD, BECAUSE MUCH OF THE TIME SPENT WAS EXCESSIVE, DUPLICATIVE AND UNNECESSARY A fee request may be denied outright if it appears that the requested fee is unreasonable and inflated. (See Serrano v. Unruh (Serrano IV) (1982) 32 Cal.3d 621, 635; Meister v. Regents of Univ. of Cal. (1998) 67 Cal.App.4th 437, 447-48; Chavez v. City of Los Angeles (2010) 47 Cal.4th 970.) In Serrano IV, the Supreme Court recognized the importance of reducing awards to counsel who unreasonably inflate their applications, stating: "If ... the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be a reduction of their fee to what they should have asked for in the first place." (Serrano 1V, supra, 32 Cal.3d at 635.) DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 5 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 Here, plaintiff's counsel are requesting reimbursement for almost 1,200 hours of professional work on this simple deposit case. To put that in perspective, that is an entire attorney-year worth of work and most of it is claimed to have been expended in the last 6 weeks before end of trial. The Court should deny or significantly reduce any award to plaintiff's counsel because the time spent was unreasonable, and the request is inflated in several aspects. For instance, the ratio of alleged costs incurred before John Spahi’s deposition on October 9, 2019 was $250,000 versus a total of $761,000. So over $500,000 is claimed to have been spent in 6 weeks. 67% of the dollars were incurred after October 9, 2019 so applying that to hours, the attorneys claim to have spent 2/3 or 800 hours from October 9 — December 12, 2019. CONCLUSION For the reasons stated herein, Plaintiff’s counsel’s motion for attorneys’ fees should be denied and no fees awarded. If the Court is inclined to grant any fees, such fees should be analyzed forensically for removal of fees exaggerated after October 9, 2019 and which considers the excess of 2 attorneys and staff working on a $28,000 deposit claim and for exceeding the fees incurred after Apex failed to appear at trial and plaintiff deciding not to take the default. DATED: June 9, 2020 VERDI LAW GROUP, P.C. Vel ALFRED J. VERDI, ESQ. Attorneys for Defendants By: DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 6 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 DECLARATION OF ALFRED J. VERDI, ESQ. I, Alfred J. Verdi, declare and state: I am an attorney at law, duly license to practice in the State of California and attorney of record for Defendants TLC Management Inc, Apex Investments Group Ltd., John Spahi and Omar Spahi, herein. The following statements are based upon my personal knowledge except those made on information and belief and as to those matters, I believe them to be true. I could and would competently testify thereto if called as a witness. 1. Defendants First Amended Cross Complaint was filed on July 11, 2019. The Cross Complainant was Omar Spahi, a former officer of TLC Management, Inc. which was a defendant under Plaintiff’s First Amended Complaint. The cause of action for concealment was not frivolous and was found by the Court not to be supported by the evidence yet found that the tour given by Plaintiff’s manager resulted in no revealing all defects. 2. The trial court found that Plaintiff had wrongfully removed Defendants personal property from the Unit as claimed by Defendants. Plaintiff and his wife both admitted to having the property and showed photos of same. 3. Athearing on before trial with Judge Marc Gross in Dept R, the judge did say that someone is going to get hurt but only after being aghast and expressing complete disbelief that Plaintiff had incurred $250,000.00 in fees on a deposit case just before trial. I declared under penalty of perjury according to the laws of the State of California that the foregoing is true and correct. Executed on June 9, 2020 at Malibu, California. Vol ALFRED VERDI DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 7 ~N O N n e A W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 PROOF OF SERVICE STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 29160 Heathercliff Rd Suite 4133, Malibu, CA 90264. On June 9, 2020, I served true copies of the foregoing DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY’S FEES AND COSTS on the interested parties in this action, as follows: BARNES & THORNBURG LLP Sarah E. Johnston sarah.johnston @btlaw.com Joseph M. Wahl joseph.wahl@btlaw .com By United States Mail. I am readily familiar with the firm's practice for collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at Malibu, California, in the ordinary course of business. I enclosed the document(s) referenced herein in a sealed envelope or package addressed to the person(s) at the address(es) as set forth above and following ordinary business practices I placed the envelope or package for collection and mailing on the date and at the place of business as set forth above. Personal Service x By Electronic Service. I caused the document(s) described herein to be served on the person(s) noted above by OneLegal e-filing service. | (STATE) I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Q (FEDERAL) I declare under the laws of the United States of America that I am employed in the office of a member of the Bar of this court at whose direction the service was made and that the foregoing is true and correct. Executed on June 9, 2020, at Malibu, California. yina Calabrase DEFENDANTS OPPOSITION TO MOTION FOR ATTORNEY'S FEES AND COSTS Page 8