Buckley v. Bartenwerfer

• Court: United States Bankruptcy Court, N.D. California
• Decided: July 1, 2019
• Docket: 13-03185
• Status: Unknown

Opinion

EDWARD J. EMMONS, CLERK LG, 2X LENG U.S. BANKRUPTCY COURT S| Wore □ NORTHERN DISTRICT OF CALIFORNIA : □□ □□□□ □□ □ LIS □ 1 □□□□□□□□ □□ Signed and Filed: July 1, 2019 2 ~y~-$ LID ° A pwid, 5 Age

4 Ms 5 HANNAH L. BLUMENSTIEL U.S. Bankruptcy Judge 6 7 UNITED STATES BANKRUPTCY COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 |/In re: ) Case No. 13-30827 HLB ) 10 |}DAVID WILLIAM BARTENWERFER and ) Chapter 7 KATE MARIE BARTENWERFER, ) 11 ) Debtors. ) 12 ) KIERAN BUCKLEY, ) Adv. Proc. No. 13-03185 HLB 13 ) Plaintiff, ) 14 /lv. ) ) 15 DAVID WILLIAM BARTENWERFER and _) KATE MARIE BARTENWERFER, ) 16 ) Defendants. ) 17 18 MEMORANDUM DECISION RE APPORTIONMENT OF ATTORNEYS’ FEES 19 On December 22, 2017, the Bankruptcy Appellate Panel of the 290 |)Ninth Circuit (the “BAP”) issued a decision (Dkt. 179; the “BAP 91 |}Decision”) that, among other things, vacated this court’s June 92 |}23, 2016 initial order with respect to fees (Dkt. 95; the 23 |}“Initial Fee Order”); September 2, 2016 final order with respect |\|to fees (Dkt. 108; the “Final Fee Order”); and Second Amended 95 Judgment (Dkt. 143) to the extent they determined that Plaintiff 26 ||Kieran Buckley’s state court attorneys’ fees were non- 27 ||dischargeable. The BAP remanded to this court the question what 9g |j)amount of Mr. Buckley’s attorneys’ fees might be attributable to

1 Defendant David William Bartenwerfer’s fraud (the “Apportionment 2 Issue”). Following remand, the court received additional 3 briefing and evidence on the Apportionment Issue (Dkts. 188, 4 190, 193, 224, 225, 248, & 249) and took the matter under 5 advisement. 6 This memorandum decision constitutes the court’s findings of 7 facts and conclusions of law as required by Rule 52(a)(1) of the 8 Federal Rules of Civil Procedure (the “Civil Rules”), which 9 applies in this proceeding pursuant to Rule 7052 of the Federal 10 Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). 11 I. JURISDICTION 12 This proceeding requires a determination of the extent to 13 which certain attorneys’ fees may be apportioned to a non- 14 dischargeable debt and constitutes a core proceeding in which 15 this court may enter a final judgment. [28 U.S.C. § 1334; 28 16 U.S.C. §§ 157(a) & (b)(2)(I); General Order 24 of the United 17 States District Court for the Northern District of California.] 18 In addition, the parties have consented to entry of a final 19 judgment by this court. See Wellness Int’l Network Ltd. v. 20 Sharif, 135 S.Ct. 1932, 1949 (2015) (holding that “Article III 21 permits bankruptcy courts to decide [statutorily core but 22 constitutionally non-core] claims submitted to them by consent”). 23 24 25 26 27 28 1 II. BACKGROUND1 2 a. The Property 3 David and Kate Bartenwerfer bought and extensively remodeled 4 a home located at 549 28th Street, San Francisco, California (the 5 “Property”), which they subsequently sold to Mr. Buckley. On 6 November 11, 2007, prior to the sale, the Bartenwerfers signed a 7 Real Estate Transfer Disclosure Statement, as well as a 8 supplement thereto (the “TDS”) in which they certified that the 9 information therein was true and correct to the best of their 10 knowledge as of that date. [Plaintiff’s Trial2 Ex. 2 at p. 3.] 11 In the TDS, the Bartenwerfers stated that they answered the 12 questions therein “in an effort to fully disclose all material 13 facts relating to the Property and hereby certify that the 14 information provided is true and correct to the best of [their] 15 knowledge.” [Id. at p. 7.] 16 In the TDS, the Bartenwerfers represented that they were not 17 “aware of any significant defects/malfunctions in any of the 18 following”: interior walls, ceilings, exterior walls, 19 insulation, roof(s), windows, doors, foundation, slab(s), 20 driveways, sidewalks, walls/fences, electrical systems, 21 plumbing/sewer/septic, or other structural components. [Id. at 22 p. 3.] The Bartenwerfers further represented that they were not 23 aware of any “[r]oom additions, structural modifications, or 24 other alterations or repairs made without necessary permits” or 25

26 1 Unless otherwise indicated, the background is derived from this court’s Memorandum Decision dated April 1, 2019 (Dkt. 69) and the BAP Decision. 27 2 Trial held before this court on January 19, 2016 and January 22, 2016. 28 1 “not in compliance with building codes[.]” [Id.] The 2 Bartenwerfers also represented that there were no “past or 3 present leaks or water intrusion from or through the roof, 4 skylights, windows, siding, basement, foundation, or any other 5 source[.]” [Id. at p. 6.] Finally, the TDS required disclosure 6 of any other facts that “may affect the value or desirability of 7 the Property, now or in the future,” whether known or suspected. 8 [Id. at p. 7.] The Bartenwerfers did not make any such 9 disclosures. 10 The parties signed the sale contract with respect to the 11 Property on January 23, 2008. In the sale contract, the 12 Bartenwerfers represented that they “ha[d] no knowledge or notice 13 that the Property has any material defects other than as 14 disclosed by the [Bartenwerfers] in the [TDS] or other writing 15 before Acceptance or as soon thereafter as practicable.” The 16 Bartenwerfers made no additional written disclosures beyond what 17 was contained in the TDS and sale contract. The parties executed 18 several addenda to the sale contract, including a provision for 19 certain repairs requested by Mr. Buckley and a holdback of funds 20 to address outstanding permit and heating issues. 21 b. The State Court Action 22 After the sale closed in March 2008, Mr. Buckley discovered 23 undisclosed defects. Mr. Buckley and the Bartenwerfers were 24 unable to resolve their disputes with respect to those defects. 25 Accordingly, on June 24, 2009, Mr. Buckley commenced an action 26 against the Bartenwerfers and entities that performed work on the 27 28 1 Property (the “Contractors”) in the San Francisco Superior Court 2 (the “State Court”).3 3 On October 1, 2009, Mr. Buckley filed a First Amended 4 Complaint in the State Court Action. [Request to Take Judicial 5 Notice in Support of Defendants’ Brief re Apportionment of State 6 Court Attorneys’ Fees (Dkt. 225; the “Bartenwerfers’ RJN”), Ex. A 7 (the “State Court Complaint”).] The State Court Complaint 8 asserted eight causes of action: (1) strict liability; (2) 9 breach of express warranty; (3) breach of implied warranty; (4) 10 negligence; (5) breach of contract; (6) negligent 11 misrepresentation; (7) fraud/deceit; and (8) rescission. [State 12 Court Complaint at pp. 4-13.] Each of the causes of action were 13 asserted against only the Bartenwerfers, except for the Fourth 14 Cause of Action for negligence which was asserted against the 15 Bartenwerfers and the Contractors. [Id.] 16 The allegations that formed the basis of all eight causes of 17 action are found in paragraphs 9 through 14 of the State Court 18 Complaint. Each cause of action expressly incorporated these 19 paragraphs and the facts alleged therein. [Id. at ¶¶ 9-14, 15, 20 21, 25, 27, 32, 37, & 41.] In sum, the State Court Complaint 21 alleged that the Bartenwerfers were in the business of 22 substantially remodeling and selling residences to the general 23 public (¶ 9); the Bartenwerfers failed to design and construct 24 the Property in accordance with proper and approved techniques, 25 and failed to hire and adequately manage capable contractors, 26 subcontractors, and material suppliers (¶ 10); the Bartenwerfers 27 3 Buckley v. Bartenwerfer, et al., Case No. CGC-09-489793 (the “State Court 28 Action”). 1 failed to perform work at the Property in compliance with 2 building standards established by the California Civil Code (¶ 3 11); after the Property was transferred to Mr. Buckley, he 4 discovered numerous defects (the “Alleged Defects”) (¶ 12); the 5 Property may have additional as yet undiscovered defects (¶ 13); 6 and, as a result of the Bartenwerfers’ remodeling, construction, 7 and sale of the Property in a defective condition, Mr. Buckley 8 was damaged (¶ 14). 9 The Alleged Defects included: 10 • Defects in fire installations, including but not 11 limited to master bedroom fireplace missing the factory 12 provided brick surround. 13 • Defects in the flooring, including but not limited to 14 garden level hardwood floor buckling throughout bedroom 15 and improper moisture levels and related mold issues. 16 • Defects in plumbing, including but not limited to lower 17 toilet backing-up, improperly installed sewage ejection 18 system/sump pump systems, toilet runs intermittently at 19 all times, reversal of hot and cold water, deficiencies 20 in water supplies and water heating, toilet flush 21 handles improperly installed. 22 • Defects in mechanical systems, including but not 23 limited to improperly installed and kinked air ducting, 24 and defective heating/airflow systems. 25 • Defects in installation of doors and windows, including 26 but not limited to doors jamming and/or not latching, 27 windows not opening. Windows must be removed and 28 reinstalled. 1 • Defects in installation of appliances, including but 2 not limited to dishwasher does not work, dryer vents 3 not up to code. 4 • Defects in installation of telephone and cable lines. 5 • Defects in railings and decking, including but not 6 limited to loose deck rail spindles. 7 • Failures to obtain permits or obtain final sign off on 8 permits for work performed at the Property. 9 • Defects in gutters, improperly installed gutters and 10 downspouts. 11 • Headroom issues on stairs. 12 • Loose installation and debris in crawlspace. 13 [Id. at ¶ 12.] 14 While the Second through Eighth Causes of Action set forth 15 additional allegations aimed at pleading the specific elements of 16 those claims, they each expressly incorporated and relied on the 17 factual allegations set forth in paragraphs 9 through 14. For 18 example, the Seventh Cause of Action for fraud/deceit alleged 19 that the Bartenwerfers made intentional misrepresentations or 20 omissions with respect to the Alleged Defects, and that Mr. 21 Buckley relied on such misrepresentations and omissions and was 22 harmed as a result. [Id. at ¶¶ 37-40.] 23 On October 23, 2009, the Bartenwerfers filed an answer to 24 the State Court Complaint in which they asserted a general denial 25 plus a variety of affirmative defenses, including fault of a 26 third party (Eleventh Affirmative Defense); indemnity by other 27 named defendants (Thirteenth Affirmative Defense); and damages 28 caused by another party, wear or tear (Sixteenth Affirmative 1 Defense). [Bartenwerfers’ RJN, Ex. B (the “Bartenwerfers’ 2 Answer”).] On the same day, the Bartenwerfers filed a cross- 3 complaint against Mr. Buckley and the Contractors.4 4 [Bartenwerfers’ RJN, Ex. C (the “Bartenwerfers’ Cross- 5 Complaint”).] In the Bartenwerfers’ Cross-Complaint, the 6 Bartenwerfers asserted breach of contract claims against Mr. 7 Buckley and the Contractors, and implied indemnity and 8 contribution claims against the Contractors. [Bartenwerfers’ 9 Cross-Complaint at pp. 5-7.] 10 In answering the State Court Complaint and the 11 Bartenwerfers’ Cross-Complaint, certain of the Contractors 12 asserted affirmative defenses of indemnification and contributory 13 or comparative negligence of the other parties to the action. 14 [See Bartenwerfers’ RJN, Exs. D, H, & I.] And, at least one 15 Contractor filed its own cross-complaint against Mr. Buckley, the 16 Bartenwerfers, and the other Contractors by which it asserted 17 claims for equitable indemnity, negligence, and contribution. 18 [Bartenwerfers’ RJN, Ex. G.]5 19 Over the course of the next three years, the parties engaged 20 in extensive discovery and motion practice in preparation for 21 trial. [See generally Request for Judicial Notice in Support of 22 Prevailing Party Attorneys’ Fees & Costs and Interest (Dkt. 100), 23 4 The Bartenwerfers’ Cross-Complaint names additional Contractors beyond those 24 named as defendants in the State Court Complaint. For purposes of this decision, all such parties will be referred to as the “Contractors.” 25 5 The Bartenwerfers submitted a number of State Court Action pleadings with 26 the Bartenwerfers’ RJN, but it is not clear to the court that the Bartenwerfers included all answers and cross-complaints filed in the State 27 Court Action. The court speaks only to those pleadings submitted to it by the parties in this adversary proceeding. 28 1 Ex. 1 (State Court Action docket).] Counsel to Mr. Buckley in 2 the State Court Action, Ms. Janet Brayer, explained that the 3 parties did not parse discovery among Mr. Buckley’s claims 4 against the Bartenwerfers and his claims against the Contractors. 5 [Declaration of Matthew J. Olson (Dkt. 224-1; the “Olson Decl.”), 6 Ex. R (Transcript of Brayer Deposition (“Brayer Tr.”)), 14:11- 7 21.] Ms. Brayer further explained that the nature of the 8 indemnity claims by the Bartenwerfers and the Contractors 9 resulted in finger pointing as to who did what and who knew what 10 – issues that went to the heart of Mr. Bartenwerfer’s defense 11 that he was not responsible for, and had no knowledge of, the 12 Alleged Defects. [Id. at pp. 48:16-50:3.] 13 After a 19-day trial, detailed instructions were submitted 14 to the jury. [Bartenwerfers’ RJN, Ex. K (the “Jury 15 Instructions”).] The Jury Instructions reflected that Mr. 16 Buckley made the following claims against the Bartenwerfers: 17 (1) breach of contract; (2) negligent misrepresentation; (3) 18 intentional fraud or deceit; (4) negligent or willful failure to 19 disclose information required to be disclosed by the TDS; and (5) 20 negligence. [Jury Instructions at p. 21.] They further 21 reflected that the Bartenwerfers asserted a breach of contract 22 claim against Mr. Buckley. [Id.] 23 With respect to Mr. Buckley’s breach of contract claim, the 24 Jury Instructions indicated that the relevant contract included 25 the contract for the purchase and sale of Property and the TDS, 26 among other documents. [Id. at pp. 23 & 25.] By this claim, Mr. 27 Buckley asserted that the Bartenwerfers breached the contract by, 28 among other things, failing to disclose information on the TDS 1 and that, as a result, Mr. Buckley was damaged. [Id.] The Jury 2 Instructions advise that, to the extent Mr. Buckley succeeded on 3 his breach of contract claim, the jury should award damages in an 4 amount that put Mr. Buckley “in as good a position as he would 5 have been if Defendant Bartenwerfer had performed as promised.” 6 [Id. at p. 37.] 7 The Jury Instructions indicated that the Bartenwerfers’ 8 breach of contract claim was premised on, among other things, Mr. 9 Buckley’s alleged refusal “to accept the $25,000.00 of hold back 10 funds in satisfaction of all claims relating to the Property.” 11 [Id. at p. 23.] 12 With respect to Mr. Buckley’s negligence claim, the Jury 13 Instructions required the jury to find that the Bartenwerfers 14 were negligent, that Mr. Buckley was harmed, and that the 15 Bartenwerfers’ negligence was a substantial factor in causing the 16 harm. [Id. at p. 41.] The Jury Instructions also provided that 17 the Bartenwerfers could be found responsible for the harm caused 18 by certain Contractors to the extent the Bartenwerfers were 19 negligent in hiring such Contractors. [Id. at pp. 43-44.] With 20 respect to causation, the Jury Instructions advised the jury that 21 if it found that the Bartenwerfers were a substantial factor in 22 causing Mr. Buckley’s harm, then they were responsible for the 23 harm, even if other factors were involved in causing the harm. 24 [Id. at p. 46.] 25 In the context of damages for the Bartenwerfers’ negligence, 26 the Jury Instructions provided a list of specific items of 27 damages claimed by Mr. Buckley, including amounts necessary to 28 remedy and/or repair damages caused by the heating system, sump 1 pump, electrical, plumbing, water leakage, window issues, and 2 master bath fan. [Id. at p. 47.] The Jury Instructions provided 3 that Mr. Buckley must prove either the reasonable cost of 4 repairing the harm or the reduction in the Property’s value. 5 [Id. at p. 50.] With respect to whether the cost of repair is 6 reasonable, the jury was instructed to “decide if there is a 7 reasonable relationship between the cost of repair and the 8 representations by defendant Kate and David Bartenwerfer as to 9 the condition of the property.” [Id.] 10 The elements set forth for the claims of intentional 11 misrepresentation, negligent misrepresentation, and Real Estate 12 Seller’s Nondisclosure of Material Facts (“Seller’s 13 Nondisclosure”) tracked each other to a significant degree. [Id. 14 at pp. 58, 59, & 64.] While intentional misrepresentation and 15 negligent misrepresentation involved the representation of a fact 16 that is not true, and a Seller’s Nondisclosure involved a failure 17 to disclose information, each of these claims required Mr. 18 Buckley to have reasonably relied on the misrepresentation or 19 omission which reliance resulted in harm to Mr. Buckley. [Id.] 20 The Jury Instructions did not specify which fact (or facts) were 21 alleged to have been misrepresented, but did specify that the 22 undisclosed matters related to water leaks, window conditions, 23 status of permits, and the fire escape. [Id.] 24 There was a single Jury Instruction that pertained to 25 damages for intentional misrepresentation, negligent 26 misrepresentation, and Seller’s Nondisclosure. [Id. at p. 68.] 27 If the jury found that Mr. Buckley proved any of those three 28 claims, then the jury was to determine the amount of damages 1 which Mr. Buckley asserted to be: “1. The difference between the 2 amount that Kieran Buckley paid and the fair market value of the 3 property as the time of sale; and 2. Amounts that Kieran Buckley 4 reasonably spent in reliance on false representation/failure to 5 disclose/promise if those amounts would not otherwise have been 6 spent in the purchase or acquisition of the property.” [Id.] 7 With respect to damages on multiple legal theories, the Jury 8 Instructions expressly provided that “[d]amages are recoverable 9 only once under all legal theories.” [Id. at p. 69.] The 10 Verdict Form completed by the jury also reminded the jury that, 11 while Mr. Buckley sought damages from the Bartenwerfers under 12 multiple legal theories, “each item of damages may be awarded 13 only once,” and cautioned that “[y]ou cannot award the same 14 damages under more than one legal theory as each damage is only 15 recoverable once.” [Bartenwerfers’ RJN, Ex. L (Verdict Form) at 16 p. 11.] 17 The jury ultimately found in favor of Mr. Buckley on his 18 breach of contract, negligence, and Seller’s Nondisclosure 19 claims, but in favor of the Bartenwerfers on Mr. Buckley’s claims 20 of intentional misrepresentation and negligent misrepresentation. 21 [Id. at pp. 1-10.] The jury found against the Bartenwerfers on 22 their breach of contract claim. [Id. at p. 14.] 23 The jury awarded Mr. Buckley total damages of $444,671. 24 [Id. at p. 13.] A portion of the damages were later reduced 25 resulting in an amended judgment (the “State Court Judgment”) in 26 the amount of $234,671, plus 10% interest from October 2, 2012 27 until paid, and attorneys’ fees and costs pursuant to a noticed 28 motion. [Bartenwerfers’ RJN, Exs. N & O.] 1 c. The Non-Dischargeability Action 2 After entry of the State Court Judgment, Mr. Buckley filed a 3 motion in the State Court for attorneys’ fees, seeking 4 $378,491.72. After the motion was fully briefed, but before the 5 State Court could issue a ruling, the Bartenwerfers filed a 6 voluntary petition for relief in this court under Chapter 7 of 7 the Bankruptcy Code,6 Case No. 13-30827. Mr. Buckley thereafter 8 commenced this adversary proceeding, seeking entry of a judgment 9 finding that the State Court Judgment was non-dischargeable 10 pursuant to section 523(a)(2)(A). [Dkt. 1.] 11 After two and a half more years of motion practice and 12 discovery, the court convened a two-day trial. On April 1, 2016, 13 the court issued a Memorandum Decision (Dkt. 69) in which it 14 found in favor of Mr. Buckley and against the Bartenwerfers on 15 the section 523(a)(2)(A) claim. 16 The court held that the doctrine of collateral estoppel 17 applied to the State Court Judgment with respect to the Seller’s 18 Nondisclosure claim to the extent the jury found that the 19 Bartenwerfers failed to disclose material information that they 20 knew or should have known, that Mr. Buckley did not know nor 21 could have known about the omitted information, and the omission 22 was a substantial factor in contributing to Mr. Buckley’s harm. 23 [Memorandum Decision at p. 7.] The court went on to find that 24 Mr. Buckley had established the remaining elements of his section 25 523(a)(2)(A) claim – knowledge of the falsity of the statement 26 6 Unless otherwise indicated, all statutory citations shall refer to Title 11 27 of the United States Code, aka the “Bankruptcy Code,” and all citations to rules shall refer to the Federal Rules of Bankruptcy Procedure. 28 1 and intent to deceive – at trial. [Id. at 8-19.] The court thus 2 held that the Bartenwerfers’ debt to Mr. Buckley with respect to 3 the non-disclosure of water leaks, window conditions, permits, 4 and the fire escape non-dischargeable under section 523(a)(2)(A). 5 [Id. at p. 19.] 6 Thereafter, Mr. Buckley filed a motion for attorneys’ fees 7 by which he sought fees for work done on his behalf in the State 8 Court Action and in the non-dischargeability action. [Dkt. 76; 9 the “Fee Motion”.] The Bartenwerfers opposed the Fee Motion. 10 [Dkt. 88.] On June 23, 2016, the court entered the Initial Fee 11 Order (Dkt. 95), by which it denied the Fee Motion to the extent 12 Mr. Buckley sought fees for incurred in this adversary 13 proceeding, but granted his request for fees and costs incurred 14 in the State Court Action in an amount not to exceed $378,491, 15 subject to a determination of reasonableness. [Initial Fee Order 16 at p. 9.] In the Initial Fee Order, the court concluded that Mr. 17 Buckley was not required to apportion the fees in order to have 18 them declared non-dischargeable. [Id. at p. 6-7.] 19 The parties thereafter submitted additional briefs and 20 evidence with respect to Fee Motion. [Dkts. 92, 98, 99, 100, & 21 104.] In his supplemental papers, Mr. Buckley advised the court 22 that he had deducted fees “for work not directed at 23 Bartenwerfer[,]” including fees in the amount of $5,404 for work 24 performed on a motion for summary judgment filed by a third party 25 in the State Court Action. [Dkt. 98 at p. 7; Dkt. 99 at p. 13.] 26 In their supplemental papers, the Bartenwerfers argued, 27 among other things, that the court could not award fees for 28 “clumped” time entries. [Dkt. 104 at pp. 2 & 5-7.] The court 1 rejected this argument, concluding that after reviewing “every 2 time entry on every invoice submitted by Mr. Buckley’s 3 counsel[,]” the court would make deductions only for time billed 4 for travel and time billed for clerical tasks. [Final Fee Order 5 at p. 11.] The court exercised its discretion in assessing a 6 value for such non-compensable tasks where they were clumped with 7 compensable tasks, and calculated a total deduction of $27,265. 8 [Id.] Ultimately, the court concluded as follows: 9 Aside from the deductions explained herein, the court’s careful review of the invoices submitted in support of the 10 Motion leads it to conclude that Mr. Buckley’s counsel’s fees reflect efficient, reasonable work habits and billing 11 practices and are not inflated or otherwise excessive. The fees also were appropriate given the vigor with which the 12 parties contested the state court litigation and the fact that they ground through a three-week trial. 13 14 Final Fee Order at p. 12. The court awarded total fees of 15 $348,483.53. [Id.] 16 The court rejected the Bartenwerfers’ argument that Mr. 17 Buckley was not entitled to fees incurred in litigation with 18 other parties or that did not relate to the non-dischargeable 19 claim. [Id. at p. 12.] In particular, the court concluded that 20 the Bartenwerfers had failed to carry their burden of identifying 21 specific entries that they believed were non-compensable. [Id. 22 at pp. 12-13.] In reaching this conclusion, the court 23 highlighted the fact that the Bartenwerfers had not introduced 24 copies of the State Court Complaint. [Id.] 25 On September 2, 2016, the court entered the Final Fee Order 26 (Dkt. 108), and thereafter a Second Amended Judgment, by which it 27 awarded Mr. Buckley, among other things, attorneys’ fees of 28 $348,483.53, plus interest thereon accruing at a rate of 10% from 1 October 4, 2012 forward, which amounts were declared to be non- 2 dischargeable pursuant to section 523(a)(2)(A). [Dkt. 143.] 3 d. The Cross-Appeals 4 Both Mr. Buckley and the Bartenwerfers appealed to the BAP. 5 The BAP upheld the Memorandum Decision and Second Amended 6 Judgment to the extent the court found the damages arising from 7 the Seller’s Nondisclosure claim were non-dischargeable as to Mr. 8 Bartenwerfer, but vacated and remanded as to Mrs. Bartenwerfer.7 9 With respect to the court’s award of attorneys’ fees, the BAP 10 concluded that because the State Court had never liquidated the 11 amount of Mr. Buckley’s attorneys’ fees or determined their 12 reasonableness, it was up to this court to determine what 13 portion, if any, flowed from Mr. Bartenwerfer’s fraudulent 14 conduct. [BAP Decision at p. 33.] The BAP noted that it could 15 not make such determination based on the record before it and 16 that “[w]ithout a copy of the state court complaint and jury 17 instructions, the bankruptcy court was also unable to make this 18 determination.” [Id.] Accordingly, the BAP directed the court 19 to reopen the record to make that determination.8 20 e. Remand 21 Upon remand, the court first ordered the parties to file 22 briefs with respect to whether Mr. Buckley or the Bartenwerfers 23 bear the burden of proof with respect to the Apportionment Issue. 24

25 7 The court has since issued a Memorandum Decision Following Remand in which it concluded that Mrs. Bartenwerfer did not have sufficient knowledge for 26 purposes of section 523(a)(2)(A). [Dkt. 200; the “Knowledge Remand Decision”.] That decision has been appealed. [Dkt. 210.] 27 8 The BAP upheld the court’s award of interest at a rate of 10% on the 28 attorneys’ fees, once ascertained on remand. [Id. at p. 38.] 1 [Dkt. 186.] The parties agree that Mr. Buckley bears the initial 2 burden of establishing that the attorneys’ fees are traceable to 3 the non-dischargeable claim, and thereafter the burden shifts to 4 the Bartenwerfers to identify or explain why some or all of those 5 fees are not attributable to Mr. Bartenwerfer’s fraud. [Dkts. 6 188, 190, & 193.] 7 Mr. Buckley asserted that he had met his initial burden with 8 the following pleadings (“Buckley’s Apportionment Pleadings”): 9 (a) Declaration of Janet Brayer in Support of Plaintiff’s Motion 10 for Prevailing Party Attorneys’ and Expert’s Fees (Dkt. 77); (b) 11 Supplemental Declaration of Janet Brayer in Support of 12 Plaintiff’s Motion for Prevailing Party Attorneys’ and Expert’s 13 Fees (Dkt. 92); (c) Declaration of Janet Brayer in Support of 14 Award of Reasonable Attorneys’ Fees, Costs and Interest (Dkt. 99; 15 the “Brayer Decl.”); and (d) Plaintiff’s Request for Judicial 16 Notice in Support of Prevailing Party Attorneys’ Fees and Costs 17 and Interest (Dkt. 100). Each of Buckley’s Apportionment 18 Pleadings were previously analyzed by the court in ruling on the 19 Fee Motion. 20 Buckley’s Apportionment Pleadings reflect Mr. Buckley’s 21 position that each of the claims litigated in the State Court 22 Action were both factually and legally intertwined, thus making 23 apportionment impossible. The court concluded that Mr. Buckley 24 had met his initial burden of demonstrating that the attorneys’ 25 fees were traceable to the non-dischargeable claim and the burden 26 thus shifted to the Bartenwerfers. The court reopened the record 27 to permit the Bartenwerfers to depose Ms. Brayer and to request 28 electronic versions of Ms. Brayer’s time sheets. [Scheduling 1 Order (Dkt. 194), pp. 4-5.] The court directed the Bartenwerfers 2 to file a brief explaining why some or all of the fees were 3 improperly apportioned to Mr. Bartenwerfer’s fraud, and directed 4 Mr. Buckley to file a reply. The parties have timely filed their 5 briefs. [Dkts. 224, 225, 248, & 249.] 6 III. SUMMARY OF THE ARGUMENTS 7 a. The Bartenwerfers’ Position 8 The Bartenwerfers argue that Mr. Buckley is entitled only to 9 attorneys’ fees that are traceable to proving the four defects 10 underlying the Seller’s Non-Disclosure claim, that is, (i) the 11 water leak into the master bedroom, (ii) issues with the windows, 12 (iii) the status of permits, and (iv) the status of the fire 13 escape. [Defendants’ Brief re Apportionment of State-Court 14 Attorneys’ Fees (Dkt. 224; “Bartenwerfers’ Brief”), p. 2.] 15 Because Mr. Buckley failed to appropriately trace his fees, the 16 Bartenwerfers argue that his entire request should be denied or 17 substantially reduced. [Id.] 18 In support of their position, the Bartenwerfers start with 19 the premise that all fees must be traceable to the non- 20 dischargeable claim. [Id. at pp. 7-10.] The Bartenwerfers then 21 take a brief detour to argue that Mr. Buckley is only entitled to 22 fees that are reasonable and necessary, and he is not entitled to 23 fees that have been block-billed. [Id. at pp. 10-11.] According 24 to the Bartenwerfers, “the Court should disallow all block billed 25 entries.” [Id. at p. 11.] 26 Returning to the matter of apportionment, the Bartenwerfers 27 make a scant attempt to highlight examples of time entries that 28 do not relate to the Seller’s Nondisclosure claim. [Id. at pp. 1 11-12.] In this regard, the Bartenwerfers refer the court to 2 spreadsheets annexed to the Olson Decl. (the “Spreadsheets”). 3 [Id. at p. 12.] The two Spreadsheets annexed to the Olson Decl. 4 compile Ms. Brayer’s time records for the period of January 29, 5 2009 through April 10, 2013: one presented by category (Ex. P) 6 and the other presented chronologically (Ex. Q). While the 7 Bartenwerfers took the time and effort to compile the 8 Spreadsheets (each 26 pages in length) they did not bother to 9 include any analysis of specific entries they deem problematic. 10 The absence of analysis is only highlighted by the fact that the 11 Spreadsheets include columns for “Notes”, but those fields are 12 completely blank (aside from two entries regarding an incorrect 13 date). Meanwhile, the few time entries that are specifically 14 addressed in the Bartenwerfers’ Brief are not highlighted in the 15 Spreadsheets, which forced the court to dig through the 16 Spreadsheets to locate the purported problematic entries. 17 In an apparent attempt to avoid identifying more than just a 18 few problematic time entries, the Bartenwerfers grouped the time 19 entries into nine categories: (1) Appeal; (2) Attorneys’ Fee 20 Motion; (3) Collection Efforts; (4) Contractor Liability Claims; 21 (5) Interpleader; (6) Occidental MSJ; (7) Other Unrelated Claims; 22 (8) Pro-Rate for Nondisclosure Claim; and (9) Pro-Rate for Non- 23 Disclosure Claim; Other Category. [Bartenwerfers’ Brief at pp. 6 24 & 12-13; Olson Decl., Ex. P.] Again, despite taking the time to 25 categorize the time entries (just as they took the time to 26 itemize them in the Spreadsheets), the Bartenwerfers provide only 27 minimal analysis. 28 1 The Bartenwerfers argue that time entries in the Contractor 2 Liability Claims, Interpleader, Occidental MSJ,9 and Other 3 Unrelated Claims categories “are wholly objectionable and should 4 be disallowed.” [Id. at p. 12.] They posit that time entries in 5 the Pro-Rate for Nondisclosure Claim; Other Category and Pro-Rate 6 for Nondisclosure Claim categories (both of which concededly 7 contain some time connected to the Seller’s Nondisclosure claim) 8 contain block billed entries and should thus be wholly disallowed 9 or pro-rated to account for unrelated tasks.10 [Id.] The 10 Bartenwerfers assert that the time for Attorney’s Fee Motion 11 should be disallowed or reduced because it is excessive. [Id.] 12 And, finally, they argue that the time entries in the Appeal and 13 Collection Efforts categories, and all expenses11 (except for 14 certain depositions relating to the Seller’s Nondisclosure 15 claim), should be pro-rated because some of the work did not 16 touch on the non-dischargeable claim. [Id. at pp. 12-13.] 17 With respect to the requests that the court pro-rate or 18 reduce the fees, the Bartenwerfers do not suggest a specific 19 reduction or pro-ration that the court should apply. Rather, 20 they simply suggest that entire categories should be reduced or 21

22 9 The Bartenwerfers acknowledge that Mr. Buckley has previously excluded time with respect to such motion. [Id. at p. 12.] 23 10 In the Spreadsheets, certain portions of the text of the entries in the 24 Pro-Rate for Nondisclosure Claim; Other Category is presented in red. [Olson Decl., Ex. P at pp. 20-26.] The Bartenwerfers do not address or explain the 25 use of the red text with respect to these entries. 26 11 Costs are not an issue on remand (see generally BAP Decision) and, accordingly, the court does not address the Bartenwerfers’ request that any 27 costs or expenses be reduced, particularly given that the Bartenwerfers have not provided a specific list of allegedly problematic costs. 28 1 pro-rated in an amount to be determined by the court, or excised 2 entirely. 3 In apparent recognition of the BAP’s instruction that an 4 analysis of the State Court Complaint and Jury Instructions be 5 undertaken on remand, the Bartenwerfers annexed copies of these 6 documents, along with other pleadings filed in the State Court 7 Action, to the Bartenwerfers’ RJN. [Dkt. 225.] Despite this, 8 their brief is entirely bereft of any analysis of these 9 documents. They similarly provided a copy of Ms. Brayer’s 10 January 20, 2019 deposition transcript, but failed to give more 11 than a passing reference to Ms. Brayer’s testimony in their 12 brief. [Olson Decl., Ex. R.] 13 b. Mr. Buckley’s Position 14 Mr. Buckley argues that the attorneys’ fees awarded in the 15 State Court Judgment arise from Mr. Bartenwerfer’s fraud and are 16 thus non-dischargeable. [Plaintiff Kieran Buckley’s Brief in 17 Response re Apportionment of State-Court Attorneys’ Fees (Dkt. 18 248; “Buckley’s Brief”), at p. 4.] He further asserts that the 19 court is not obliged to apportion fees between dischargeable and 20 non-dischargeable claims where there is a common core of facts or 21 implicated issues, as is the case here. [Id. at pp. 5-6.] 22 Moreover, he argues that the Bartenwerfers have failed to specify 23 any particular time entry or category that is not traceable to 24 Mr. Bartenwerfer’s fraud and have failed to undertake an analysis 25 of the State Court Complaint and Jury Instructions. According to 26 Mr. Buckley, these failings are further proof that the facts and 27 issues litigated in the State Court Action are intertwined and 28 1 need not be disentangled for purposes of apportionment. [Id. at 2 6-7.] 3 With respect to block-billing, Mr. Buckley asserts that 4 block billing is typical in this district and not a basis for 5 disallowing fees entirely. [Id. at 7-8.] As that is the only 6 apparent basis for disallowing or pro-rating the fees in the Pro- 7 Rate for Nondisclosure Claim and Pro-Rate for Nondisclosure 8 Claim; Other categories, Mr. Buckley argues that the 9 Bartenwerfers have not met their burden with respect to such 10 fees. [Id. at p. 19.] Moreover, he contends that the 11 Bartenwerfers made the same argument in opposition to the Fee 12 Motion, but did not renew such argument before the BAP, thereby 13 leaving this court’s ruling with respect to block-billing as law 14 of the case. [Id. at pp. 19-20 (citing Plaintiff Kieran 15 Buckley’s Request for Judicial Notice in Support of Brief in 16 Response re Apportionment of State-Court Attorneys’ Fees (Dkt. 17 249; “Buckley’s RJN”), Exs. 6 & 7 (Bartenwerfers’ appellate 18 briefs)).] 19 Unlike the Bartenwerfers, Mr. Buckley does undertake an 20 analysis of the State Court Complaint and Jury Instructions, 21 which he argues demonstrates that each of the causes of action 22 are interrelated and premised on the same set of operative facts. 23 Mr. Buckley highlights a variety of examples to support this 24 position, including the fact the Jury Instructions identify the 25 failure to disclose information on the TDS as a breach of 26 contract, which failure is also the basis of the Seller’s 27 Nondisclosure claim. [Id. at p. 10 (citing Jury Instructions at 28 pp. 23-24 & 64-67).] 1 Mr. Buckley also notes that the Bartenwerfers’ breach of 2 contract claim was premised upon an on an alleged waiver and 3 release by Mr. Buckley of “all claims relating to the 4 Property[,]” including the Seller’s Nondisclosure claim, in 5 exchange for a hold back of certain funds. [Id.] These held 6 back funds were the subject of the interpleader action. Thus, 7 according to Mr. Buckley, the time in the Interpleader category 8 should not be disallowed. [Id. at pp. 18-19.] 9 According to Mr. Buckley, the Jury Instructions with respect 10 to damages for each of the causes of action overlap and require 11 proof of similar components. [Id. at pp. 11-12.] He explains 12 that damages required assessment of the costs to repair as 13 compared to the representations by the Bartenwerfers as to the 14 condition of the Property, thus making their representations (or 15 omissions) central to the assessment of damages on all claims. 16 [Id. at p. 11.] Expert testimony was required to prove the 17 reasonableness of costs and was not limited to any single cause 18 of action. [Id.] And he points out that the State Court’s 19 express limitation of damages as being recoverable only once 20 under all legal theories further demonstrates the overlapping 21 nature of the damages under each of the causes of action. [Id. 22 at p. 12.] 23 With respect to time spent litigating with the Contractors, 24 Mr. Buckley argues that such litigation was traceable to the 25 Seller’s Nondisclosure claim as it related to attempts to shift 26 liability for defects. [Id. at p. 13.] He highlights the fact 27 that the Bartenwerfers and various of the Contractors asserted 28 indemnification claims against one another, and asserted the 1 fault of a third party and indemnification as affirmative 2 defenses. [Id.] Mr. Buckley contends that determining the 3 merits of these claims and defenses was necessarily part of 4 determining the merits of the Seller’s Nondisclosure claim and 5 whether the Bartenwerfers had the requisite knowledge required 6 for such claim. These claims and defenses were also central to a 7 determination of damages and whether the Bartenwerfers were 8 responsible for negligent hiring of any of the Contractors. 9 [Id.] As a result, Mr. Buckley argues that the time in the 10 Contractor Liability category should not be disallowed. [Id. at 11 p. 18.] 12 With respect to the Bartenwerfers’ categorization of the 13 fees, Mr. Buckley asserts that they have failed to provide 14 specific rationale by which to disallow or reduce the fees, or to 15 explain how the fees are not intertwined with the fraud claim. 16 [Id. at p. 14.] With respect to the time entries in the Appeal 17 and Collection Efforts categories, Mr. Buckley notes that he has 18 a right to such fees based on statute and controlling precedent. 19 [Id. at pp. 16-18.] With respect the time entries in the 20 Attorney’s Fee Motion category, Mr. Buckley asserts that the 21 amount of time spent was reasonable. [Id. at p. 17.] As to the 22 time entries in the Other Unrelated Claims category, Mr. Buckle 23 notes that this appears to be a catchall category and the 24 Bartenwerfers have not presented any basis for their 25 disallowance. [Id. at p. 19.] 26 Overall, Mr. Buckley asserts that the Bartenwerfers have not 27 met their burden of providing the court with specific reasons for 28 reducing or disallowing the requested fees, despite having had 1 multiple opportunities to do so. [Id. at p. 20.] Thus, Mr. 2 Buckley asserts that the fees previously awarded by this court 3 must stand. 4 IV. ANALYSIS 5 It is well settled that section 523(a)(2)(A) excepts from 6 discharge any liability arising from a debt obtained by fraud, 7 including attorneys’ fees that are traceable to the fraud. Cohen 8 v. De La Cruz, 523 U.S. 213, 218-19 & 223 (1998). It is 9 undisputed that the State Court Judgment awarded Mr. Buckley 10 attorneys’ fees. The Bartenwerfers’ bankruptcy filing 11 intervened, however, before the State Court could liquidate those 12 fees and determine what portion, if any, flowed from Mr. 13 Bartenwerfer’s fraudulent conduct such that those fees would also 14 be non-dischargeable. 15 The party requesting fees “bears the burden of establishing 16 entitlement to an award and documenting the appropriate hours 17 expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424, 18 537 (1983). The court must also consider the “results obtained” 19 and, where feasible, award fees only for work done on successful 20 claims. Id. at 434-35. In the context of non-dischargeability, 21 the prevailing party bears the burden of establishing that 22 attorneys’ fees sought stemmed from the non-dischargeable 23 liability. See Plikaytis v. Roth (In re Roth), 662 F. App’x 540, 24 543 (9th Cir. 2016); Arciniega v. Clark (In re Arciniega), No. 25 CC-15-1123-KiGD, 2016 Bankr. LEXIS 343, at *41, 2016 WL 455428, 26 at *14 (B.A.P. 9th Cir. Feb. 3, 2016) (“Arciniega I”) (remanding 27 for determination of what portion of attorneys’ fees were 28 attributable to non-dischargeable claim). 1 Where a plaintiff’s claims for relief involve a “common core 2 of facts” or are based on “related legal theories”, however, an 3 action on such claims cannot be viewed as a series of discrete 4 claims and the court “should focus on the significance of the 5 overall relief obtained by the plaintiff in relation to the hours 6 reasonably expended on the litigation.” Hensley, 461 U.S. at 7 435. Thus, “[a]pportionment is not required when the issues in 8 the fee and nonfee claims are so inextricably intertwined that it 9 would be impractical or impossible to separate the attorney's 10 time into compensable and noncompensable units.” Harman v. City 11 & County of San Francisco, 158 Cal. App. 4th 407, 417 (Cal. Ct. 12 App. 2007) (quotation and citation omitted). 13 In the context of attorneys’ fees in a non-dischargeability 14 action, the BAP has observed that “when the facts, evidence 15 and/or legal work substantially overlap, the trial court 16 typically does not abuse its discretion in declining to apportion 17 fees between compensable and non-compensable units.” Arciniega 18 v. Clark (In re Arciniega), BAP No. CC-17-1154-SAKu, 2017 Bankr. 19 LEXIS 4215, at *25, 2017 WL 6329748, at *10 (B.A.P. 9th Cir. Nov. 20 20, 2017) (“Arciniega II”) (citing cases). 21 Once the prevailing party has met its initial burden of 22 establishing the fees sought, the burden shifts to the opposing 23 party to submit evidence challenging the accuracy or 24 reasonableness of the fees. Cotton v. City of Eureka, 889 F. 25 Supp. 2d 1154, 1176 (N.D. Cal. 2012). “The party opposing fees 26 must specifically identify defects or deficiencies in the hours 27 requested. Conclusory and unsubstantiated objections are 28 insufficient to warrant a reduction in fees.” Id. (citation 1 omitted); see Moreno v. City of Sacramento, 534 F.3d 1106, 1116 2 (9th Cir. 2008) (“[i]f opposing counsel cannot come up with 3 specific reasons for reducing the fee request that the district 4 court finds persuasive, it should normally grant the award in 5 full, or with no more than a haircut”); Premier Med. Mgmt. Sys., 6 Inc. v. Cal. Ins. Guarantee Ass’n, 163 Cal. App. 4th 550, 564 7 (Cal. Ct. App. 2008) (explaining that opposing party bears burden 8 of pointing to specific items challenged with sufficient evidence 9 and argument and cautioning that “[g]eneral arguments that fees 10 claimed are excessive, duplicative, or unrelated do not 11 suffice”). 12 Where an opposing party challenges a fee award on the basis 13 of block-billing, they must do more than assert a blanket 14 objection to block-billed time. Indeed, though frowned upon in 15 bankruptcy courts, block-billing is an accepted practice in both 16 state and federal district courts in California. See Stonebrae, 17 L.P. v. Toll Bros., Inc., No. C-08-0221 EMC, 2011 U.S. Dist. 18 LEXIS 39832, at *28-29, 2011 WL 1334444, at *9 (N.D. Cal. Apr. 7, 19 2011) (“[b]lock-billing is a typical practice in this district, 20 and blocked-bills have been found to provide a sufficient basis 21 for calculating a fee award”) (citations omitted); Christian 22 Research Inst. v. Alnor, 165 Cal. App. 4th 1315, 1325-26 (Cal. 23 Ct. App. 2008) (describing block-billing as “not objectionable 24 per se”). 25 Where a review of time entries reveals that despite being 26 block-billed, the entries “contain sufficient detail to identify 27 precisely the task accomplished[,]” the party opposing the fees 28 must present specific challenges, such as identifying blocks of 1 time billed for tasks unrelated to the claims on which the party 2 seeking fees prevailed. See PQ Labs, Inc. v. Yang Qi, No. 12- 3 0450, 2015 U.S. Dist. LEXIS 5829, at *8-9, 2015 WL 224970, at *3 4 (N.D. Cal. Jan. 16, 2015) (denying defendants’ request that 5 plaintiffs’ fees be reduced by 10 to 30% due to block-billing and 6 noting that defendants had ample opportunity and information to 7 challenge specific entries, but declined to do so); cf. Welch v. 8 Metro Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) (vacating 9 district court’s 20% across-the-board reduction for block-billing 10 where fewer than half of the entries were block-billed). 11 In the context of apportionment, where a prevailing party 12 has established that his or her claims are inextricably 13 intertwined, the opposing party must make objections to specific 14 time entries. It is not enough to summarily assert that the 15 prevailing party has not established that the fees were not 16 incurred with respect to the non-dischargeable claim, and that 17 the amount of time spent was unreasonable. Arciniega II, 2017 18 Bankr. LEXIS 343, at *25-30. 19 In Arciniega I, the BAP remanded to the bankruptcy court for 20 a determination of what portion of the prevailing creditor’s 21 attorneys’ fees were attributable to his non-dischargeable 22 contract claim as opposed to his fraud claim for which he was not 23 entitled to an award of attorneys’ fees. Arciniega I, 2016 24 Bankr. LEXIS 343, at *41. On remand, the prevailing creditor 25 submitted detailed time entries and the bankruptcy court reviewed 26 those fees and made deductions for fees determined to be 27 unreasonable or attributable to the fraud claim. Arciniega II, 28 2017 Bankr. LEXIS 4215, at *25-26. The prevailing creditor also 1 argued that the claims were premised on a common core of facts 2 and were inextricably intertwined, and the bankruptcy court 3 agreed. Id. at *26. The BAP also agreed, noting that the fraud 4 claim was premised on the debtor’s understanding of her 5 obligations under the contract, and there could have been no 6 actionable promissory fraud claim without establishing the breach 7 of contract claim. Id. at *28. 8 Despite ample opportunity to review the time entries and 9 make specific objections as being non-compensable, the debtor in 10 Arciniega II failed to do so. Id. at *26. Instead, she 11 submitted a “barebones objection” in which she summarily asserted 12 that the prevailing party had not established that the fees were 13 related to compensable contract issue. Id. Ultimately, the BAP 14 found no reason to disturb the bankruptcy court’s fee award, 15 emphasizing the fact that the debtor had “done virtually nothing 16 to establish that the bankruptcy court’s deductions were 17 insufficient.” Id. at *29.12 18 With the foregoing in mind, we turn to the fees at issue in 19 this case. From the beginning, Mr. Buckley has maintained that 20 the facts and issues resolved in the State Court Action were 21 intertwined, thus making apportionment of his attorneys’ fees 22 both impossible and unnecessary. The Bartenwerfers vociferously 23 24 12 Earlier in the Arciniega II decision, the BAP had reversed the bankruptcy 25 court’s liquidated damages award and remanded to permit trial on proximate cause and damages. Id. at *31. As the attorneys’ fees were only available to 26 a plaintiff who obtained a recovery on his claims, and the liquidated damages had served as the creditor’s recovery, the BAP vacated the bankruptcy court’s 27 fee award. Id. If, on remand, the bankruptcy court ultimately awarded damages to the creditor, the BAP noted that the bankruptcy court could 28 reinstate or amend its last fee award. Id. 1 disagree but have presented little in the way of evidence or 2 analysis to support their position. 3 a. The Claims in the State Court Action are Inextricably 4 Intertwined 5 Though the State Court Complaint asserts eight causes of 6 action, each is premised on an identical set of operative facts. 7 Specifically: that the Bartenwerfers13 had remodeled the 8 Property in a defective manner, including by failing to hire and 9 adequately manage competent Contractors, had caused damage to the 10 Property as a result, and thereafter sold the Property to Mr. 11 Buckley. Based on these facts, Mr. Buckley pleaded multiple, 12 alternative theories of relief, which is a common litigation 13 tactic. Hensley, 461 U.S. at 434. 14 The Jury Instructions further confirm the interrelatedness 15 of the claims. The contract for purposes of the breach of 16 contract claim was comprised of, among other documents, the TDS 17 which formed the basis of the Seller’s Nondisclosure claim. In 18 proving the breach of contract claim, Mr. Buckley had to prove 19 that the Bartenwerfers breached the TDS by failing to make 20 adequate disclosures therein. Similarly, the negligence claim 21 required proof of the defective work on the Property which 22

23 13 In the Knowledge Remand Decision, this court concluded that Mrs. 24 Bartenwerfer did not have sufficient knowledge for purposes of section 523(a)(2)(A). Whether Mrs. Bartenwerfer had sufficient knowledge is not among the elements of the Seller’s Nondisclosure claim, rather, the jury was 25 required to determine whether she knew or reasonably should have known about the relevant defects. [Jury Instructions at p. 64.] Moreover, the State 26 Court Complaint, Jury Instructions, and State Court Judgment do not differentiate between Mr. and Mrs. Bartenwerfer – their liability is premised 27 on the same set of facts and issues. Thus, in analyzing whether the fees should be apportioned, the court will generally refer to both of the 28 Bartenwerfers, rather than solely Mr. Bartenwerfer. 1 resulted in breach of the operative contract and about which the 2 Bartenwerfers failed to make adequate disclosures. 3 With respect to specific defects, the Bartenwerfers 4 correctly point out that, while the State Court Complaint 5 contained twelve Alleged Defects, the Seller’s Nondisclosure 6 claim is premised on only four (of which just two are expressly 7 listed as Alleged Defects). A review of the TDS reveals, 8 however, that the Bartenwerfers were required to disclose all of 9 the Alleged Defects to the extent they existed at the time of 10 sale of the Property to Mr. Buckley and were known to the 11 Bartenwerfers. As is common in litigation, the claims and scope 12 of damages appear to have narrowed as the parties approached and 13 ultimately went to trial. 14 Damages for each of the claims required similar analyses of 15 the costs to repair the Property and the differential value in 16 the Property as represented versus its actual condition. This, 17 in turn, required expert testimony. The Jury Instructions’ and 18 the Verdict Form’s emphasis on awarding damages only once for 19 each defect, even if the jury found for Mr. Buckley on more than 20 one of his claims, further confirms that the claims were premised 21 on the same set of facts – the same set of defects and resulting 22 damages. 23 The Bartenwerfers attempted to shift liability on all claims 24 to the Contractors by asserting affirmative defenses of fault of 25 a third party and indemnification and by filing the 26 Bartenwerfers’ Cross-Complaint. Meanwhile, the Jury Instructions 27 make clear that the Bartenwerfers could be held liable for their 28 negligent hiring and management of the Contractors. As a result, 1 it was necessary to determine the role each of the Contractors 2 played in causing the Alleged Defects, and to determine whether 3 the Bartenwerfers were negligent in hiring and managing such 4 Contractors. The Bartenwerfers’ management and hiring of the 5 Contractors speaks to both their liability for the work 6 ultimately performed by such Contractors and their knowledge of 7 whether the work was defective. Indeed, as Ms. Brayer explained 8 in her deposition, a central component of Mr. Bartenwerfer’s 9 defense was that the Contractors were responsible for any Alleged 10 Defects and he had no knowledge of those defects. [Brayer Tr. at 11 48:19-49:2.] Determining whether this defense was viable 12 necessitated resolving the Contractors’ cross-claims. 13 Overall, a review of the State Court Complaint, the 14 Bartenwerfers’ Answer, the Bartenwerfers’ Cross-Complaint, the 15 various pleadings filed by the Contractors (to the extent 16 provided to this court), the Jury Instructions, and the Verdict 17 Form lead to the conclusion that the claims asserted by Mr. 18 Buckley in the State Court Action were based on a common core of 19 facts and implicated issues such that they are inextricably 20 intertwined. As a result, this court is not obliged to apportion 21 Mr. Buckley’s attorneys’ fees. Hensley, 461 U.S. at 434; 22 Arciniega II, 2017 Bankr. LEXIS 4215, at *25. 23 This court previously conducted a thorough review of the 24 time entries submitted by Mr. Buckley’s counsel and, after 25 certain deductions for travel and clerical work, determined that 26 the fees were reasonable and appropriate. [Final Fee Order at p. 27 11.] 28 1 b. The Bartenwerfers Have Not Established that the 2 Attorneys’ Fee Should be Reduced or Disallowed 3 Having determined that Mr. Buckley met his initial burden of 4 demonstrating that the attorneys’ fees are properly allocated to 5 the non-dischargeable claim, and that such time is reasonable and 6 appropriate (subject to the reduction previously applied by this 7 court), the burden shifts to the Bartenwerfers to cite specific 8 reasons for reducing or disallowing the fees with sufficient 9 argument and evidence. See Moreno, 534 F.3d at 1116; Premier 10 Med., 163 Cal. App. 4th at 564. The Bartenwerfers have failed to 11 satisfy their burden. 12 With respect to block-billing, as discussed above, while 13 such practice may result in some reductions for specific entries, 14 it is not a basis for disallowing all fees, as the Bartenwerfers 15 suggest. Stonebrae, 2011 U.S. Dist. LEXIS 39832, at *29. 16 Moreover, a party objecting to fees on the basis that they are 17 improperly block-billed must identify specific entries that are 18 problematic. PQ Labs, 2015 U.S. Dist. LEXIS 5829, at *8. Here, 19 the Bartenwerfers had ample time and opportunity to challenge 20 specific entries. Instead, they elected simply to ask this court 21 to exercise its general discretion to reduce or disallow broad 22 categories of time on the basis that some of the entries were 23 block-billed. The court declines such request now, as it did 24 when it previously reviewed the time entries in ruling on the Fee 25 Motion.14 It is also worth noting that the Bartenwerfers did not 26 14 Though the Bartenwerfers referred to such practice as “clumping” in their 27 opposition to the Fee Motion, the court views “clumping” and “block-billing” as one and the same. 28 1 raise this court’s rejection of its block-billing argument on 2 appeal to the BAP.15 [Buckley’s RJN, Exs. 6 & 7.] 3 i. Categories 4 Turning to the Bartenwerfers’ categorization of fees, the 5 court is similarly unconvinced by their arguments for reducing or 6 disallowing fees by category. 7 Appeal. As Mr. Buckley correctly explains in his brief, 8 time spent on appeal is properly included in an award of 9 attorneys’ fees. Morcos v. Bd. of Retirement, 51 Cal. 3d 924, 10 927 (1990). Although Mr. Buckley filed a cross-appeal, such was 11 engendered by the Bartenwerfers’ appeal in the first instance. 12 The Bartenwerfers argue that the fees in this category “should be 13 prorated because some of the work would have related to the 14 nondischargeable claim, but others-such as Buckley’s own appeal- 15 did not.” [Bartenwerfers’ Brief at pp. 12-13.] Without 16 providing copies of the appellate briefs or additional analysis 17 of the issues resolved on appeal, or highlighting specific 18 problematic time entries, the Bartenwerfers have not carried 19 their burden of demonstrating that the time spent on appeal was 20 wholly unrelated to the Seller’s Nondisclosure claim. 21 Accordingly, the court declines to prorate this category of time. 22 Attorneys’ Fee Motion. In suggesting that this court should 23 disallow or reduce the fees in this category, the Bartenwerfers 24 15 Mr. Buckley seems to suggest that this court’s prior ruling on the block- 25 billing argument is “law of the case”. [Buckley’s Brief at p. 20 (citing American Express Travel Related Servs. Co. v. Franschilla (In re Franschilla) 26 235 B.R. 449, 454 (B.A.P. 9th Cir. 1999)).] As the Franschilla decision makes clear, the “law of the case” doctrine is applicable only to decisions by 27 appellate courts. Franschilla, 235 B.R. at 454. The BAP did not address the issue of block-billing; thus, there is no “law of the case” on this issue. 28 1 argue only that the fees are “excessive.” [Id. at p. 12.] The 2 Bartenwerfers do not argue that these fees are unrelated to the 3 non-disclosure claim. This court has previously reviewed these 4 fees and concluded that they were reasonable and therefore 5 declines to reduce or disallow the fees in this category. 6 Collection Efforts. As Mr. Buckley correctly explained in 7 his brief, California law plainly allows attorneys’ fees for 8 collection efforts. Cal. Civ. Proc. Code. § 685.040. The 9 Bartenwerfers’ suggestion that some of the time spent in this 10 category would not have related to the non-dischargeable claim 11 suggests that parties prevailing on multiple theories, but 12 obtaining a singular money judgment (as was the case here), will 13 attempt to collect on individual portions of that judgment in a 14 piecemeal fashion. This makes no practical or legal sense. The 15 Bartenwerfers’ failure to highlight specific time entries that 16 related to collection on only a portion of the State Court 17 Judgment confirms the weakness of this argument. Accordingly, 18 the court declines to prorate the time entries in this category. 19 Contractor Liability Claims. The Bartenwerfers argue that 20 all fees in this category “are wholly objectionable and should be 21 disallowed.” [Bartenwerfers’ Brief at p. 12.] This argument 22 only makes sense in the vacuum of the Bartenwerfers’ Brief which 23 contains no analysis of the State Court Complaint, cross- 24 complaints, answers, and Jury Instructions. As set forth above, 25 an analysis of these documents makes abundantly clear that the 26 claims against the Contractors are wholly intertwined with Mr. 27 Buckley’s claims against the Bartenwerfers. Accordingly, the 28 1 court declines to wholly disallow the time entries in this 2 category. 3 Interpleader. With little explanation, the Bartenwerfers 4 argue that the time entries in this category (along with two 5 additional entries from July 27, 2012 and August 2, 2012) must be 6 wholly disallowed. Mr. Buckley clarifies that this time related 7 to the Bartenwerfers’ argument that Mr. Buckley had waived and 8 released his claims by accepting $24,000, which funds were 9 subject of the interpleader action by Old Republic. [Buckley’s 10 Brief at p. 10 (citing Jury Instructions at p. 23).] Resolving 11 whether Mr. Buckley waived and released all claims was essential 12 succeeding on all claims. Without more evidence, the court 13 concludes that the Bartenwerfers have failed to meet their burden 14 for having these time entries disallowed. 15 Occidental MSJ. Mr. Buckley has previously reduced his fee 16 request for time spent on this matter in an amount greater than 17 the Bartenwerfers suggest belongs in this category. The court 18 declines to make any further reduction. 19 Other Unrelated Claims. This category appears to be a mixed 20 bag that includes time related to mediation, experts, and 21 research on claims. Rather than highlighting specific entries 22 and providing a clear argument for disallowing such entries, the 23 Bartenwerfers make a blanket demand that all time in this 24 category must be disallowed. The court concludes that the 25 Bartenwerfers have not met their burden and declines their 26 request to disallow the fees in this category. 27 Pro-Rate for Nondisclosure Claim. While the Bartenwerfers 28 concede that some of the time entries in this category are 1 connected to the non-dischargeable claim, they argue that because 2 the entries are block billed, they should be disallowed in their 3 entirety. Alternatively, the Bartenwerfers argue the fees should 4 be pro-rated to account for unrelated tasks. As explained above, 5 block billing is not a basis for wholly disallowing fees, 6 particularly where a review of the block billed entries reveals 7 the entries to be sufficiently detailed for the court to assess 8 the reasonableness of the time. This court has previously 9 rejected the Bartenwerfers’ block billing argument, and does so 10 again here. 11 The Bartenwerfers have had more than enough time to 12 highlight specific entries that contain time unrelated to the 13 non-dischargeable claim. Instead, they have made a blanket 14 request that a category containing 518.42 hours be disallowed 15 because some of the entries might include unrelated time. They 16 have wholly failed to meet their burden and the court declines to 17 disallow or reduce the time entries in this category. 18 Pro-Rate for Nondisclosure Claim; Other Category. The 19 Bartenwerfers present the same arguments with respect to the time 20 entries in this category as they did with respect to the time 21 entries in the Pro-Rate for Nondisclosure Claim category. The 22 only apparent difference is that there are block billed entries 23 that contain time that belongs in one of the other categories. 24 As set forth above, the court finds that the Bartenwerfers have 25 failed to carry their burden of demonstrating that any of the 26 fees should be disallowed or reduced on a category basis. 27 Accordingly, the court declines to reduce or disallow the time 28 entries in this category. 1 In addition to the foregoing broad categories of time 2 entries, the Bartenwerfers took issue with time spent on 3 resolving the permit issue and damages for negligence and strict 4 liability. [Bartenwerfers’ Brief at p. 11.] The Bartenwerfers 5 fail to cite to any specific time entries that relate to these 6 issues. Moreover, they fail to adequately explain how time spent 7 on these matters is unrelated to the Seller’s Nondisclosure 8 claim. The failure to make adequate disclosure with respect to 9 the status of permits is among the four express bases for the 10 Seller’s Nondisclosure claim. And, as discussed above, the 11 analysis of damages on all claims required similar and 12 overlapping analysis. Accordingly, the court declines to make 13 any reductions on account of these issues. 14 Overall, the Bartenwerfers have not met their burden of 15 establishing that the fees in any particular category should be 16 subject to a mechanical reduction or disallowance, or that doing 17 so would be appropriate for this court to do in any event. See 18 Ryan v. Editions Ltd. W., Inc., 786 F.3d 754, 764-65 (9th Cir. 19 2015) (finding district court erred in mechanically excising 20 entire categories of fees and directing district court to provide 21 “a more detailed explanation for its reductions and [to] consider 22 the interrelated nature of the claims involved in the underlying 23 litigation” on remand). 24 ii. Specific Objections 25 As noted above, the Bartenwerfers made a paltry attempt to 26 highlight specific time entries that they believe are not 27 properly apportioned to the non-dischargeable claim. The court 28 will briefly review these specific entries. 1 The Bartenwerfers argue that it was not necessary to engage 2 in extensive efforts to serve process of various Contractors and 3 cite the following time entries (Bartenwerfers’ Brief at p. 4 11):16 5 • May 24, 2010 – Time entry of 0.1 hours for: “Review new 6 order to show cause”. 7 • May 26, 2010 – Time entry of 0.1 hours for: “Review 8 continued order to show cause”. 9 • June 15, 2010 – Time entry of 0.9 hours for: “Draft 10 declaration -motion for service by publication”. 11 • June 28, 2010 – Time entry of 0.8 hours for: “Final 12 motion for publication – Abraham”. 13 • December 20, 2011 – Time entry of 0.7 hours for: 14 “Review multiple discovery requests from Bartenwerfer; 15 review response to order to show cause – Glen French”. 16 [Time Sheets at pp. 21, 22, & 48.] To the extent the foregoing 17 entries relate to time spent serving the Contractors (which is 18 not clear from many of the cited entries), the court declines to 19 disallow such time in light of the interrelatedness of the claims 20 by and against the Contractors. 21 The Bartenwerfers take issue with time spent responding to a 22 motion in limine brought by Occidental Express concerning prior 23 litigation. [Bartenwerfers’ Brief at p. 11.] The Bartenwerfers 24 cite only one specific time entry from August 9, 2012 which is a 25 16 In their brief, the Bartenwerfers do not provide information beyond the 26 date of the allegedly problematic entries. They also did not highlight the entries in the Spreadsheets. Accordingly, the court referred to the time 27 sheets annexed to the Brayer Decl. as Exhibit 3 (Dkt. 99-3; “Time Sheets”) which are among Buckley’s Apportionment Pleadings. 28 1 block entry that includes, among other things, reviewing jury 2 instructions, drafting opposition to Occidental motion to exclude 3 prior litigation, and research on damages and current value of 4 the property. [Time Sheets at p. 68.] Occidental was apparently 5 hired by Mr. Bartenwerfer as a permit expediter and there was 6 evidence that it managed some of the work done on the Property. 7 [Buckley’s RJN, Ex. 2 (Order Denying Occidental Express’ Motion 8 for Summary Judgment).] Given Mr. Bartenwerfer’s potential 9 liability for negligent hiring and supervision of Contractors, 10 such as Occidental, whether Occidental had a prior litigation 11 history was relevant to his liability. Accordingly, the court 12 declines to disallow any portion of the cited time entry, or any 13 other time entry that may relate to Occidental’s motion in 14 limine. 15 The Bartenwerfers take issue with discovery relating to 16 defects not specifically included in the Seller’s Nondisclosure 17 claim, such as those relating to the heating system and 18 electrical work. [Bartenwerfers’ Brief at p. 12 (citing time 19 entries on July 21, 2010, March 22, 2011, and March 23, 2011); 20 see Time Entries at pp. 23 & 33.] These defects are not 21 specifically listed among the Alleged Defects, but the State 22 Court Complaint indicated that Mr. Buckley’s claims cover as yet 23 undiscovered defects. [State Court Complaint at ¶ 13.] 24 Moreover, to the extent proven, defects relating to the heating 25 system and electrical work should have been disclosed by the 26 Bartenwerfers in the TDS. Accordingly, time spent conducting 27 discovery with respect to all alleged defects at the Property was 28 appropriate and necessarily related to each of Mr. Buckley’s 1 claims for relief. The court declines to disallow any portion of 2 the cited time entries, and declines to locate and disallow any 3 other time entries relating to this issue. 4 The Bartenwerfers object to time spent on issues relating to 5 Mr. Bartenwerfer’s status as a contractor, citing the time entry 6 on February 24, 2012. [Bartenwerfers’ Brief at p. 12.] That 7 entry is for 7.8 hours for the following work: “Continue 8 organizing trial exhibits; meet with Kieran; call to Veronica; 9 review jury instructions”. [Time Sheets at p. 57.] The court 10 does not understand how this time entry relates to the purported 11 issue. Moreover, the court disagrees that Mr. Bartenwerfer’s 12 status as a contractor is unrelated to the non-dischargeable 13 claim – rather, it would seem to speak to his knowledge and 14 awareness of the condition of the Property. Accordingly, the 15 court declines to disallow any portion of this time entry, and 16 declines to locate and disallow any other time entry that 17 involves work relating to this issue. 18 The Bartenwerfers also object to research regarding lay 19 opinion concerning contract interpretation, citing the time entry 20 on February 23, 2012. [Bartenwerfers’ Brief at p. 12.] That 21 entry is for 7.5 hours for the following work: “Prepare trial 22 brief; further research on jury instructions and contractor 23 status”. [Time Sheets at p. 57.] As with the prior entry, the 24 court cannot discern what portion of the time entry is 25 problematic. The court also disagrees that lay opinion 26 concerning contract interpretation is unrelated to the non- 27 dischargeable claim. Mr. Bartenwerfer’s understanding of his 28 obligations under the contract of sale, which incorporated the 1 TDS, speaks to whether he knowingly failed to disclose defects. 2 As such, the court declines to disallow any portion of this 3 entry, and declines to locate and disallow any other time entries 4 that involve work done on this issue. 5 The Bartenwerfers next object to time spent at trial on 6 “issues far outside the scope of this adversary proceeding[,]” 7 citing entries for work concerning expert witness testimony on 8 September 18, 2012 and September 19, 2012. [Bartenwerfers’ Brief 9 at p. 11.] Both of these time entries make references to 10 attending trial and work apparently related to expert witnesses. 11 [Time Sheets at p. 79.] The Bartenwerfers do not provide any 12 explanation of how expert testimony was unrelated to the Seller’s 13 Nondisclosure claim, and certainly provide no explanation as to 14 how time spent at trial was unrelated to such claim. As 15 discussed above, the Jury Instructions made clear that the 16 damages for each of the claims relied on similar analyses of 17 costs to repair and the difference in value between the Property 18 as sold and as represented – these analyses necessarily required 19 expert witness testimony. Accordingly, the court declines to 20 disallow any portion of the two cited entries, and declines to 21 locate and disallow additional entries that relate to this issue. 22 Finally, the Bartenwerfers argue that Mr. Buckley settled 23 disputes with several of the Contractors, resulting in good faith 24 settlement motions, none of which are traceable to the Seller’s 25 Nondisclosure claim. [Bartenwerfers’ Brief at p. 12.] In 26 support of this objection, the Bartenwerfers cite to a time entry 27 on January 25, 2012 which is a block entry for 5.1 hours that 28 includes a number of tasks, including reviewing a stipulation of 1 settlement. [Time Sheets at p. 52.] As discussed above, the 2 claims against and by the Contractors were intertwined with Mr. 3 Buckley’s claims against the Bartenwerfers, including the 4 Seller’s Nondisclosure claim. Accordingly, the court declines to 5 disallow any portion of the cited time entry, and declines to 6 locate and disallow any other time entries that involve Mr. 7 Buckley’s settlement with Contractors. 8 As was the case in Arciniega II, the Bartenwerfers had ample 9 opportunity to review the time entries and make objections to 10 specific entries as being unreasonable or not properly allocated 11 to the Seller’s Nondisclosure claim. Instead, they have provided 12 little analysis, highlighted a random smattering of entries that 13 appear to be appropriately apportioned to the Seller’s 14 Nondisclosure claim, and simply ask this court to disallow or 15 substantially reduce the fees sought. Their arguments are 16 unavailing. 17 The court has previously undertaken a thorough analysis of 18 the time billed by Mr. Buckley’s counsel and determined that it 19 was reasonable and appropriate (subject to certain minor 20 reductions). An analysis of the State Court Complaint and Jury 21 Instructions, along with other pleadings filed in the State Court 22 Action, confirm the intertwined nature of the claims asserted by 23 Mr. Buckley. The Bartenwerfers have not carried their burden of 24 proving otherwise. Accordingly, the court exercises its 25 discretion and declines to apportion Mr. Buckley’s fees. 26 27 28 1 V. CONCLUSION 2 For the foregoing reasons, the court rules in favor of Mr. 3 Buckley on the Apportionment Issue and ORDERS that Mr. Buckley 4 shall be allowed non-dischargeable attorneys’ fees in the amount 5 of $348,483.53, plus interest at a rate of 10% from October 4, 6 2012 forward. The court will enter judgment consistent with this 7 memorandum decision. 8 9 **END OF ORDER** 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Court Service List [None]