Altschuler v. Chubb National Insurance Company

• Court: District Court, D. Arizona
• Decided: March 24, 2025
• Docket: 4:21-cv-00119
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Douglas Altschuler, et al., No. CV-21-00119-TUC-JGZ

10 Plaintiffs, ORDER

11 v.

12 Chubb National Insurance Company,

13 Defendant. 14 15 Pending before the Court is Defendant Chubb National Insurance Company’s 16 Application for Attorneys’ Fees. (Doc. 226.) The Application has been fully briefed. (Docs. 17 230, 232.) The Court has reviewed all relevant materials in the docket,1 and for the 18 following reasons, grants the Defendant’s Application in part, awarding the Defendant 19 $252,637.23. 20 I. Background 21 Defendant Chubb National Insurance Company denied Plaintiff’s claims for loss of 22 a Rolex watch and a set of “Andy Mouse” silkscreen prints by Keith Haring. A set of Andy 23 Mouse silkscreens consists of four separate individual prints. (Doc. 169-1 at 93; see Doc. 24 171 at ¶¶ 6, 9.) 25 Plaintiff alleged that he purchased an Andy Mouse set numbered 3 out of 30 (the 26 “Numbered Edition”) in 1987 from the B1 Gallery in Santa Monica, California. (Doc. 171-

27 1 On September 9, 2024, this case was assigned to the undersigned. (Doc. 233.) The Court will approve the parties’ Stipulation to Extend Deadline for Defendants’ Reply To 28 Plaintiff’s Opposition to Motion for Attorneys’ Fees. (Doc. 231.) The Reply was filed on July 21, 2024. (Doc. 232.) 1 1 at 168–70.) Plaintiff’s purchase of the Numbered Edition was attested to by Robert 2 Berman, the owner of the B1 Gallery in 1987, and by Lisa McCollum, Plaintiff’s girlfriend 3 in 1987. (Doc. 171-1 at 353:18-32, 364.) 4 In 2008, Plaintiff purchased insurance coverage from AIG Insurance, in the amount 5 of $250,000.00, for an “Andy Warhol ‘Andy Mouse’ 4 PCS.” (Doc. 171-2 at 414–15.) In 6 2014, Plaintiff purchased insurance for Andy Mouse artwork through Defendant, and 7 Defendant issued coverage based on an appraisal of the artwork performed sight unseen. 8 (Doc. 169-1 at 72.) The “covered property” schedule described the insured artwork as 9 “ARTS $250,000 ANDY WARHOL AND KEITH HARING ANDY MOUSE, 1986 10 COLOR SILKSCREENS EDITION OF 30 38x38 INCHES.” (Doc. 169-1 at 64.) 11 In 2018, Plaintiff increased the replacement coverage for the artwork based on an 12 updated appraisal valuing the artwork at $1,500,000. (Doc. 169-1 at 88, 93.) The updated 13 policy identified the covered artwork as “ANDY WARHOL AND KEITH HARING 14 ANDY MOUSE, 1986 COLOR SILKSCREENS EDITION OF 30 38 x 38 INCHES.” (Id. 15 at 88) The appraisal described the artwork as “Edition Number: 3/30,” purchased at B-2 16 Studio in Santa Monica, California. (Doc. 169-1 at 93; Doc. 169-2 at 15.) The appraisal 17 was also conducted without inspection of the artwork. (Doc. 171-3 at 269–71.) 18 In January 2020, Plaintiff filed an insurance claim with the Defendant for the theft 19 of “Andy Mouse 1986,” stating the artwork had been stolen from his parents’ house in late 20 2019. (Doc. 169-2 at 27–30.) On May 28, 2020, Plaintiff submitted a sworn Proof of Loss, 21 indicating the loss of “Andy Warhol and Keith Haring Andy Mouse, 1986 Color 22 Silkscreens Edition of 30 38 x 38 inches.” (Id. at 32–33.) 23 Defendant denied coverage because Plaintiff could not establish ownership of the 24 Numbered Edition at the time of loss. (Doc. 169-4 at 2–7.) Evidence showed that, in 2002, 25 Plaintiff traded the Numbered Edition to the James Corcoran Gallery for another piece of 26 art. (Doc. 169-1 at 74.)2

27 2 At Defendant’s request, John J. Chvostal of Chvostal Art Advisory prepared an investigative report dated June 20, 2020, which he supplemented on November 8, 2021. 28 (Doc. 169-1.) In his report, Dr. Chvostal concluded, “I am 100% certain that The Insureds did not own and could not have owned the complete set of ‘Andy Mouse’ prints by Keith 1 During the claim process, Plaintiff also stated that in 1989 he purchased an “Artist 2 Proof Edition” of Andy Mouse from Keith Haring directly. (Doc. 171-1 at 108.) Plaintiff 3 did not provide independent proof of ownership of the Artist Proof Edition, and Defendant 4 disputed Plaintiff’s ownership. (Doc. 192 at 20.) 5 During discovery, Plaintiff stated that the specific serial number of the Numbered 6 Edition was likely “5 out of 30.” (Doc. 211 at 4-5; Doc. 169-4 at 16-17; see Doc. 169-1 at 7 74.) An investigation determined that Plaintiff could not have owned the complete set of 8 “5 of 30” Numbered Edition prints. (Doc. 169-1 at 29.) 9 Plaintiff also made an insurance claim for a Rolex watch, which he learned was 10 missing from his parent’s home upon the death of his mother. (Doc. 169-3 at 175–77.) 11 Defendant denied this claim because Plaintiff could not establish that he owned the watch 12 at the time of loss; Plaintiff testified that he had not seen the watch since 2010. (Doc. 169- 13 4 at 2–7.) 14 In February 2021, after Defendant refused to pay Plaintiff’s claims for the Andy 15 Mouse and the watch, Plaintiff filed suit asserting: (1) breach of contract and the implied 16 duty of good faith and fair dealing for the denial of coverage for the artwork and watch, 17 and (2) tortious bad faith in the handling of both of the claims. (See Doc. 1-3, amended by 18 Doc. 48.) After discovery, the parties filed motions for summary judgment. (Docs. 170, 19 173.) 20 The Court denied Plaintiff’s motion for partial summary judgment and granted most 21 of Defendant’s motion for summary judgment. (See Doc. 211.) The Court granted summary 22 Haring bearing the edition number 3/30, which is uniquely described in the 2018 Dina 23 Brown appraisal document, at the time of the claimed loss event.” (Doc. 169-1 at 25.) Dr. Chvostal opined, “Five independent auction listings prove that at least three of the four 24 prints comprising the set that Dina Brown appraised as belonging to The Insured in 2018 had a significantly different ownership history”: 25 a single print from the suite number ‘3/30’ was sold at Sotheby's Amsterdam on May 14,1996 (Lot 151). This same impression was later sold at Sotheby's 26 London on April 1, 2008 (Lot 435). Sotheby's New York sold two other sheets from the set on April 29[, ]2006, [(]Lots 422 and 423). The latter of 27 the two lots (Lot 423) surfaced at Im Kinsky Auktionshaus, Vienna, on March 25, 2014 (Lot 260), having passed through the hands of Martin 28 Lawrence Galleries, New York and a Viennese Private Collector. (Id.) 1 judgment to Defendant on the contract claim for the artwork, concluding Plaintiff failed to 2 make a prima facia case that coverage existed for the artwork as the Numbered Edition 3 was the only Andy Mouse listed on the insurance contract’s schedule of covered property 4 and Plaintiff could not have owned the Numbered Edition at the time of loss. (Doc. 211 at 5 13–14.) For similar reasons, the Court rejected the bad faith claim related to the artwork. 6 (Id. at 18.) 7 The Court denied summary judgment to Defendant as to the Rolex because it could 8 not be determined as a matter of law whether Plaintiff owned the watch during the coverage 9 period. (Id.) The Court concluded this was a factual issue to be determined by a jury. (Id.) 10 The Court, however, granted summary judgment to Defendant on the bad faith claim 11 related to the watch, finding at trial a directed verdict would be warranted. The Court 12 reasoned: 13 Here, the evidence provided by the Plaintiff to Defendant shows he had not seen the Rolex watch for over ten years, he could offer no definitive evidence 14 showing the time of the loss but explained why he believed that the Rolex watch remained at his mother’s home at the time of her death, and Plaintiff’s 15 post-claim conduct arguably reflected fraud. While the Court cannot say that no reasonable mind might conclude the Plaintiff can establish the loss 16 occurred within the coverage period, it finds reasonable minds could only conclude that the question of coverage based on the loss occurring within the 17 coverage period was fairly debatable. In combination with evidence that arguably supports a conclusion of fraud, the Court finds that no reasonable 18 jurors could conclude that in the investigation, evaluation, and processing of the claim, the insurer acted unreasonably . . . . 19 20 (Id. (internal citation omitted).) After the Court’s ruling, the parties stipulated to the 21 dismissal of the breach of contract claim for the Rolex—the only claim to survive summary 22 judgment, and, on May 3, 2024, the Court entered Judgment for the Defendant. (Doc. 215; 23 Doc. 221.) 24 On May 7, 2024, the Plaintiff appealed the Court’s order granting summary 25 judgment on the Andy Mouse contract and bad faith claims. (Doc. 224.) 26 On May 24, 2024, Defendant filed the pending Application for Attorney Fees. (Doc. 27 226.) 28 // 1 II. Application for Attorney Fees and Costs 2 Defendant seeks attorneys’ fees in the total amount of $257,832.73.3 (Doc. 226; 3 Doc. 232 at 1.) As an initial matter, in its application, Defendant fails to distinguish its 4 attorney’s fees from its costs. (See Doc. 226; Doc. 227-1.) The ledgers provided in support 5 show $202,240.38 in fees and $55,583.35 in costs. (Doc. 227 at 4 n. 3; Doc. 227-1 at 2–3.) 6 Different standards govern the award of fees and costs. See Fed. R. Civ. P. 54(d)(1)–(2), 7 LRCiv 54.2(b)–(e). Thus, the Court will separately consider each. 8 Plaintiff does not challenge Defendant’s eligibility to obtain attorney fees or costs, 9 nor the reasonableness of its counsel’s hourly rate, but argues that Defendant’s 10 overlitigation of the case resulted in an unreasonable number of hours spent litigating. 11 (Doc. 230 at 10–11.) Plaintiff argues that the Court should not award any attorney fees to 12 Defendant or, alternatively, requests Defendant’s fee be reduced by $41,591.50 (based on 13 Defendant’s improper billing) and $25,912.32 (to reflect a 10% reduction for time spent 14 on the Rolex claims not clearly described in Defendant’s billing records). (Id. at 14.) 15 A. The Defendant is Eligible and Entitled to Award of Attorney Fees 16 Under Arizona law, the Court “may award” reasonable attorney fees to a successful 17 party in “any contested action arising out of a contract.” A.R.S. § 12-341.01(A). Plaintiff’s 18 claims, including the tortious bad faith claims, are based on Defendant’s alleged breach of 19 an insurance contract and are therefore claims arising out of contract for purposes of A.R.S. 20 § 12-341.01(A). Sparks v. Republic Nat’l Life Ins. Co., 132 Ariz. 529, 544 (1982) 21 (concluding a bad faith claim was “intrinsically related” to plaintiff’s contract claim for 22 purposes of awarding attorneys’ fees). An award of attorney fees under A.R.S. § 12- 23 341.01(A) “is permissive, not mandatory.” AmerisourceBergen Corp. v. Dialysist West, 24 Inc., 465 F.3d 946, 956 (9th Cir. 2006). 25 Trial courts are vested with broad discretion to determine the circumstances 26 appropriate for an award of fees pursuant to A.R.S. § 12-341.01. Associated Indem. Corp. 27 v. Warner, 694 P.2d 1181, 1184 (Ariz. 1985) (en banc). Courts look to several factors to

28 3 Defendant reduced its initial request of $259,123.23 by $1,299.50 after Plaintiff identified additional time entries related to the Rolex claims. (Doc. 232 at 1 n.1.) 1 guide this discretion: (1) the merits of the claim or defense presented by the unsuccessful 2 party; (2) whether the litigation could have been avoided or settled and whether the 3 successful party's efforts were completely superfluous in achieving the result; (3) whether 4 assessing fees against the unsuccessful party would cause an extreme hardship; (4) whether 5 the legal question was novel; and (5) whether the successful party prevailed with respect 6 to all of the relief sought. Id. at 1186. No one factor is determinative. Potter v. U.S. 7 Specialty Ins. Co., 98 P.3d 557, 560 (Ariz. App. 2004). Here, the factors support an award 8 of fees. 9 1. Merits of Plaintiff’s claims 10 The first factor favors the award of fees to the Defendant. With respect to the 11 artwork, the Court found that Plaintiff failed to make a prima facia case for breach of 12 contract and tortious bad faith due to his inability to show ownership of the Numbered 13 Edition artwork during the coverage period. (Doc. 211 at 14.) The Court examined the 14 policy language and schedule of covered property to determine the parties’ intent regarding 15 coverage under Arizona law. (Id. at 12–14.) The Court found that the schedule showed the 16 Defendant assumed the risk of loss only for the Numbered Edition artwork, not the Artist 17 Proof Edition. (Id. at 14.) The plain terms of the policy limited coverage to the specific 18 property listed in the schedule. (Id. at 13–14.) 19 Plaintiff testified that he did and does not know which screenprint he owned. (Id. at 20 13.) Plaintiff argued that because the Artist Proof and the Numbered Edition artworks are 21 of approximate equal value, the specific edition of artwork listed on the schedule was 22 irrelevant. (Doc. 193 at 7.) The Court rejected Plaintiff’s argument and concluded that the 23 Numbered Edition and the Artist Proof Edition are distinct pieces of property and, 24 therefore, coverage under the Policy was limited to the Numbered Edition as identified in 25 the Coverage Schedule. (Doc. 211 at 13–14.) The Court found Plaintiff’s evidence that the 26 Artist Proof Edition generally has a higher value than the Numbered Edition countered 27 Defendant’s allegations of fraud, but did not “show two uniquely different items of 28 property are the same item intended by the parties to be covered by the Policy.” (Id. at 14.) 1 2. Whether litigation could have been avoided 2 The second factor—whether litigation could have been avoided or settled and 3 whether the successful party’s efforts were completely superfluous in achieving the 4 result—favors granting attorney fees to the Defendant. It is axiomatic that an insurance 5 company is not required to pay claims for the loss of items that are not covered under the 6 policy. Plaintiff did not own the Numbered Edition and had little evidence that he owned 7 the Rolex watch during the coverage period. It was reasonable for the Defendant to defend 8 against Plaintiff’s claimed loss of over a million dollars under these circumstances. Plaintiff 9 persisted in asserting his claims, particularly his claim regarding the Andy Mouse artwork, 10 even when evidence obtained during the lawsuit undermined the claim. When confronted 11 with this evidence, Plaintiff responded that it did not matter because the Artist Proof 12 Edition was of equal value. Plaintiff repeatedly asserts that he understood from the 13 beginning of the litigation that he did not own the Numbered Edition at the time of loss, 14 but he continued litigating, even though the Artist Proof Edition was not on the covered 15 property schedule. (Doc. 230 at 2, 4–6.) Under these circumstances, the Defendant’s efforts 16 cannot be said to be superfluous to achieving the dismissal of Plaintiff’s claims. 17 3. Whether assessing fees would cause extreme hardship 18 The third factor—whether assessing reasonable attorney fees would cause the 19 unsuccessful party extreme hardship—tips in favor of the Defendant. Plaintiff asserts he 20 lacks liquid capital because his wealth is tied up in art and real estate, and he has been 21 diagnosed with prostate cancer and is unable to work due to treatment. (Doc. 230 at 7.) 22 Defendant argues Plaintiff is an “avid art collector with a net worth in excess of $30 23 million,” who can simply sell something from his extensive art collection to pay any fee 24 award. (Doc. 226 at 7.) 25 It does not appear that assessing fees against Plaintiff would cause extreme hardship. 26 The lack of liquidity of Plaintiff’s assets is irrelevant in light of Plaintiff’s net worth. The 27 Court is confident that both parties factored the cost of litigating the coverage claims— 28 including the potential for an award of attorney fees to the prevailing party—in their 1 decisions to pursue and defend this lawsuit. 2 4. Whether the legal question was novel 3 The parties agree that the legal issues in this case were not novel or complex. (See 4 Doc. 226 at 7) (describing case as hinging on two foundational coverage issues: ownership 5 and loss during the coverage period); (Doc. 230 at 7–8, 10) (describing case as routine and 6 simple). The lack of novel or difficult legal questions weighs in favor of awarding attorney 7 fees to Defendant. See Huffman v. JP Morgan Chase Bank, NA, 2024 WL 4817654, *6 (D. 8 Ariz. 2014) (holding that the lack of novel legal issues weighs in favor of the defense). 9 5. Whether the successful party prevailed as to all relief sought 10 Defendant asserts it secured judgment on the merits of three of four of Plaintiff’s 11 claims. The Court concludes that Defendant prevailed on all of its claims. The Court 12 granted summary judgment on three of the claims; Plaintiff agreed to dismiss the remaining 13 claim after the summary judgment order which noted the lack of “definitive evidence” in 14 support of the remaining claim and “evidence that arguably supports a conclusion of 15 fraud.” (Doc. 211 at 14; Doc. 215.) The fifth factor tips in favor of the Defendant. 16 6. Whether the award of attorney fees will discourage other parties with 17 valid claims 18 Plaintiff argues that Policy holders are typically unsophisticated litigants with 19 limited personal financial resources. (Doc. 230 at 8.) Plaintiff asserts that awarding the 20 Defendant a large amount of attorney fees would significantly deter other insureds who 21 might otherwise pursue meritorious bad faith claims. (Id.) Defendant argues Plaintiff is 22 not an average litigant or an unsophisticated litigant with limited personal financial means. 23 (Doc. 232 at 5.) 24 The Court agrees that awarding fees against a policyholder who made unsupported 25 high-value claims will not discourage those with valid insurance claims from submitting 26 such claims to their insurance company. In fact, an award of fees may encourage 27 individuals to take more care in identifying property to be insured and in deciding whether 28 to pursue their claims. 1 B. Calculation of Reasonable Fees – Lodestar Method 2 Defendant has complied with Local Rule 54.2(c) in submitting its request for 3 attorney fees, and included a statement showing a good faith attempt to resolve the fee 4 request, a task-based itemized statement of time expended and expenses incurred, and 5 attestation to the reasonableness of counsels’ requested rates. (See Docs. 226, 227.) 6 1. Legal Rule – Lodestar Calculation 7 District courts must calculate awards for attorneys’ fees using the “lodestar” 8 method. Ferland v. Conrad Credit Corp. 244 F.3d 1145, 1149 n.4 (9th Cir. 2001). “The 9 ‘lodestar’ is calculated by multiplying the number of hours the prevailing party reasonably 10 expended on the litigation by a reasonable hourly rate.” Morales v. City of San Rafael, 96 11 F.3d 359, 363 (9th Cir. 1996). “A district court should exclude from the lodestar amount 12 hours that are not reasonably expended because they are excessive, redundant, or otherwise 13 unnecessary.” Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 14 2000) (internal citation omitted). 15 2. Adjustment of Reasonable Fees 16 Defendant requests $202,240.38 in attorney fees exclusive of expenses and costs. 17 The parties have stipulated that the Defendant will not seek fees associated with the breach 18 of contract claim for the Rolex watch. (Doc. 226 at 5 n.4.) Plaintiff does not dispute the 19 reasonableness of defense counsel’s rate, but challenges the reasonableness of the number 20 of hours Defendant spent litigating this matter. Plaintiff asserts that Defendant’s overly 21 aggressive litigation tactics and discovery gamesmanship unnecessarily increased its fees. 22 Plaintiff also requests a blanket ten-percent reduction of any award to the Defendant 23 because of the intertwined nature of investigating Plaintiff’s Andy Mouse and Rolex 24 claims. 25 The Court first addresses Plaintiff’s objection to specific time entries, (Doc. 230-2), 26 and concludes that the time entries are generally reasonable. Many of the entries relate to 27 the issuance of subpoenas and research of legal authorities for the subpoenas. Defendant’s 28 attorneys reasonably subpoenaed numerous art galleries, private foundations, museums, 1 and public institutions to discover that Plaintiff did not own the Numbered Edition. Time 2 entries related to the issuance of subpoenas to the LiveChat platform were reasonable. 3 LiveChat provided information that Plaintiff was seeking a second set of Andy Mouse in 4 2018 and supported the conclusion that Plaintiff only owned one edition of the Andy 5 Mouse artwork in 2018. 6 Plaintiff objects to time entries he describes as “mundane tasks,” such as preparing 7 and reviewing various disclosure statements, researching how to seek a stay, and 8 determining whether the Federal Rules of Civil Procedure require a specific format for the 9 disclosure of electronically stored information. (Doc. 230 at 10–11.) Defendant argues that 10 these tasks were necessary to ensure compliance with subpoena requirements for at least 11 18 out-of-state entities, avoid discovery disputes, and comply with other complex 12 procedures. (Doc. 232 at 7.) Given the fact-intensive and contentious nature of this 13 litigation, the Court finds that these time entries are reasonable. 14 Plaintiff objects to two time entries totaling just over two hours related to research 15 conducted by Defendant via a New York Times article regarding an art inheritance case 16 and podcast regarding art storage. (Doc. 230 at 10.) Defendant argues that such research 17 was necessary for the defense team to understand and contextualize Plaintiff’s use of 18 freeports to store portions of his art collection and to assist in evaluating the records 19 subpoenaed from SRI and Delaware Freeport. (Doc. 232 at 8.) The Court finds the time 20 entries reasonable. 21 Plaintiff identifies $2,541.50 in specific charges reflecting time spent related to the 22 Rolex watch. (Doc. 230 at 11–12.) In its reply, Defendant reduced its requested fees by 23 $1,299.50, removing some of these charges. (Doc. 232 at 1 n.1.) Upon review of Exhibit 24 C to Plaintiff’s Response, the Court will not reduce this amount further as Plaintiff does 25 not explain how the remaining entries are related solely to the Rolex watch. (See Doc. 230- 26 3.) 27 Plaintiff argues that because many of Defendant’s expenses for depositions and 28 expert fees were related to both the Rolex and Andy Mouse disputes, a blanket ten-percent 1 reduction should be applied to all fees awarded to Defendant. (Doc. 230 at 11–12, 14.) 2 Plaintiff does not provide any further factual or legal support as to the reasonability of his 3 proposal. (Id.) Based on the reductions contained in this order, and after review of the 4 Defendant’s itemized billing record, (Doc. 227-1), the Court finds that the stated purpose 5 of the ten-percent blanket reduction has already been achieved and further reduction is 6 unnecessary. 7 Plaintiff asserts that Defendant’s aggressive litigation strategy was unnecessary and 8 argues that $14,271.50 related to Defendant’s Motion for Transfer of Venue, (Doc. 13), 9 should not be awarded. (Doc. 230 at 12.) The Court found that the Defendant’s motion was 10 not without merit, and that the determinative factors were “evenly split.” (Doc. 29 at 19.) 11 Accordingly, the Court cannot conclude that Defendant’s litigation strategy was 12 unreasonable, and the Court will not deduct such fees from Defendant’s award. 13 Plaintiff argues that Defendant’s award should be reduced by $4,173.50 for fees 14 related to Defendant’s “baseless” motions to quash subpoenas, (Docs. 97, 104). (Doc. 230 15 at 12.) The Court granted in part the motions to quash. (Doc. 114.) Accordingly, the Court 16 cannot conclude that the motions were baseless or that an award of the fees related to 17 litigating the motions would be unreasonable. The Court will not deduct such fees from 18 Defendant’s award. 19 Plaintiff argues that Defendant caused itself to incur additional fees by failing to 20 comply with federal discovery rules in redacting the claims file and then billing to fix its 21 own mistakes. (Doc. 230 at 12–14.) The claim file consisted of 4,532 pages and covered a 22 two-year period. Defendant did not seek an extension of the initial disclosure deadline of 23 October 29, 2021 to produce the file, later agreed to produce the file by January 22, 2022, 24 and ultimately produced the file on March 14, 2022. (Doc. 50.) Immediately after 25 production, Plaintiff asserted the file was overly redacted. (Doc. 51.) Defendant’s billing 26 statement reflects ongoing review and supplementation of the disclosure to address 27 Plaintiff’s concerns. (Doc. 230-6 at 1–3.) Defendant explains it took time and resulted in 28 additional costs for it to reexamine and reconsider some of its original redactions. (Doc. 1 232 at 6.) The Court agrees with Plaintiff that these additional costs could have been 2 avoided had Defendant appropriately redacted the claim file in the first instance. The Court 3 will therefore deduct $5,186.50 for fees billed after the initial production on March 13, 4 2022. 5 3. Fees for preparation of Application 6 Defendant submits that an award should include recovery of reasonable fees for time 7 expended preparing the Application for Attorney Fees and related documents. See Clark v. 8 City of Los Angeles, 803 F.2d 987, 992 (9th Cir. 1986). The Court will allow Defendant to 9 request such fees. Based on the Plaintiff’s position that Defendant is not entitled to any 10 attorneys’ fees, Defendant’s request for fees could not have been resolved by the parties 11 absent Defendant filing its application, which required Defendant to incur additional fees. 12 C. Award of Costs 13 Pursuant to Rule 54, Federal Rule of Civil Procedure, costs other than attorney’s 14 fees should be allowed to the prevailing party. Fed. R. Civ. P. 54(d)(1). In the April 10, 15 2024 stipulation, the Parties agreed Defendant retained the right to seek fees for the Andy 16 Mouse claims and to seek costs. (Doc. 215.) The Court approved the Stipulation and 17 ordered Defendant to file its application for attorneys’ fees and costs within 24 days of the 18 entry of Judgment, in compliance with Local Rule 54.2(b)(2). (Doc. 220 at 1–2.) The 19 Defendant timely filed the pending Application in compliance the Court’s Order and with 20 Local Rule 54.2(b)(2). (Doc. 226.) Defendant included $55,583.35 in costs and expenses 21 in its Application. (See Doc. 227-1 at 2, 57-59.) Plaintiff does not object to any specific 22 cost claimed by Defendant. (See Doc. 230.) The costs do not appear to be unreasonable. 23 Consequently, the Court will grant the Defendant’s request for costs. 24 D. Bond for Award 25 Finally, Defendant requests that the Court order Plaintiff to file bond or other surety 26 in an amount at least equal to its award pursuant to Rule 7, Federal Rules of Appellate 27 Procedure, to ensure payment of costs on appeal. (Doc. 226.) Plaintiff does not object, and 28 // 1 || the Court will so order. For the foregoing reasons, 2 IT IS ORDERED: 3 1. The parties’ Stipulation to Extend Deadline for Defendants’ Reply To 4|| Plaintiff's Opposition to Motion for Attorneys’ Fees (Doc. 231) is granted. 5 2. Defendant’s Application for Attorneys’ Fees (Doc. 226) is granted in part. 6 2. Defendant is awarded attorneys’ fees and costs in the amount of $252,637.23. 7 3. Within 30 days of the date of this order, Defendant may move for an award 8 || of attorneys’ fees for fees incurred in the preparation of its Application. 9 4. Plaintiff must obtain and file a bond in the amount of $252,637.23 in 10 || accordance with F.R.App. 7. 11 6. The Clerk of Court shall amend the Final Judgement (Doc. 221) to reflect the || award of attorneys’ fees. 13 Dated this 22nd day of March, 2025. 14 Lernnf DLE 16 Jennifer G. 2 ps 17 Chiet United States District Judge 18 19 20 21 22 23 24 25 26 27 28

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