(PS) Kan v. Verdera Community Assoc.

District Court, E.D. California·Decided October 12, 2023·No. 2:22-cv-00348·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 | Johnny Kan, No. 2:22-cv-00348-KJM-JDP 12 Plaintiff, ORDER 13 v. 14 Verdera Community Association, et al., 1S Defendants. 16 17 Defendants Scott Jacoby as trustee and 22 DM LP seek attorneys’ fees in this action 18 | regarding the Sheriff's sale of a residential property in Lincoln, California. Shortly after 19 | defendants filed their motion, plaintiff's counsel Mr. Applbaum moved to withdraw as counsel of 20 | record for plaintiff. Following hearing on the motions, the court issued an order to show cause to 21 | Mr. Applbaum. For the reasons below, the court grants defendants’ motion for fees, denies 22 | plaintiff’s counsel’s motion to withdraw without prejudice and resolves the order to show 23 | cause. 24 | I. BACKGROUND 25 The court has already discussed the history of this case in two prior orders and 26 | incorporates those discussions by reference here. Prior Order (Apr. 13, 2023) at 1-3, ECF No. 27 | 52; Prior Order (June 30, 2023) at 1-2, ECF No. 61. In relevant part, defendants purchased a 28 | residential property through a Sherriff’s sale. Prior Order (Apr. 13, 2023) at 2. Defendants later

1 learned plaintiff, the former owner of the property, recorded a lis pendens—a recorded notice that 2 real property is the subject of pending litigation—against the residence. This court previously 3 granted defendants’ ex parte motion to expunge the lis pendens, finding plaintiff’s complaint, the 4 pleading on which the lis pendens was based, could not support a valid real property claim. Prior 5 Order (June 30, 2023) at 3; see also Doan v. Singh, No. 13-0531, 2014 WL 3867418, at *2 (E.D. 6 Cal. Aug. 6, 2014). In that same motion, defendants also moved for attorneys’ fees. The court 7 determined the fees motion should be noticed for hearing, so it denied defendants’ ex parte 8 request without prejudice. Prior Order (June 30, 2023) at 4. Defendants have now filed a noticed 9 motion for attorneys’ fees, Mot. for Fees, ECF No. 62, plaintiff opposes, Opp’n, ECF No. 65,1 10 and defendants have replied, Reply, ECF No. 68. As noted, plaintiff’s counsel separately has 11 filed a motion to withdraw as counsel. Mot. to Withdraw, ECF No. 63. The court set the matter 12 for hearing of both motions on September 1, 2023. Hr’g Mins., ECF No. 72. Plaintiff’s counsel 13 was not present.2 Richard Bernstein appeared for defendants. At hearing, the court granted 14 defendants’ counsel seven days to file a supplemental brief supporting his motion for attorneys’ 15 fees, which he has now filed. Supp. Decl., ECF No. 77. 16 II. MOTION FOR FEES 17 “Federal courts look to state law when deciding matters involving lis pendens.” Pearson 18 v. Nationstar Mortg., LLC, No. 16-1079, 2017 WL 6453289, at *1 (C.D. Cal. Dec. 14, 2017) 19 (citing 28 U.S.C. § 1964). California Code of Civil Procedure section 405.31 generally permits 20 an award of attorneys' fees in connection with the expungement of a lis pendens. Specifically, a 21 party prevailing on a motion to expunge “shall . . . be awarded the reasonable attorney’s fees and 22 costs of making or opposing the motion unless the court finds that the other party acted with 23 substantial justification or that other circumstances make the imposition of attorney’s fees and 24 costs unjust.” Cal. Civ. Proc. Code § 405.38. “California cases have defined a ‘substantially 1 Plaintiff filed his opposition late and with no explanation for his tardiness. See generally Opp’n. However, because defendants had the opportunity to file a reply, see Min. Order, ECF No. 66, the court will consider plaintiff’s arguments. 2 The court denies plaintiff’s counsel’s ex parte application to continue the September 1 justified’ position to mean one which is justified to a degree that would satisfy a reasonable 2 person.” Wertin v. Franchise Tax Bd., 68 Cal. App. 4th 961, 977 (1998). Federal district courts 3 commonly award fees under these provisions. See, e.g., Navarette v. JPMorgan Chase Bank, No. 4 12-02270, 2013 WL 1703892 (C.D. Cal. Apr. 19, 2013). 5 In determining fees, the court utilizes the lodestar method, which multiplies the number of 6 hours counsel “reasonably expended” litigating the motion by counsel’s “reasonable hourly rate.” 7 PLCM Group v. Drexler, 22 Cal. 4th 1084, 1095 (2000). The reasonable hourly rate is based on 8 trends in the relevant community, which is the “forum in which the district court sits.” Camacho 9 v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008) (citing Barjon v. Dalton, 132 F.3d 496, 10 500 (9th Cir. 1997)). 11 Defendants prevailed on their prior motion to expunge, see Prior Order (June 30, 2023) at 12 3, so are eligible for attorneys’ fees. Defendants’ counsel asks this court to grant $13,400 in fees 13 for 26.7 hours of work relating to the motion to expunge. Bernstein Decl. ¶¶ 17–18, ECF 14 No. 62–2; Client Invoice, Bernstein Decl. Ex. 9, ECF No. 62–2; Reply at 3; Supp. Decl. 15 ¶¶ 13–14. Counsel spent these hours drafting the initial motion to expunge, after being unable to 16 resolve the matter with plaintiff’s counsel, drafting the renewed motion to expunge and reviewing 17 plaintiff’s opposition, reading this court’s June 30, 2023, order, researching next steps, preparing 18 for hearing on this motion for fees, responding to plaintiff’s opposition to this motion, attending 19 oral argument and drafting a supplemental brief. Bernstein Decl. ¶¶ 3, 5-10, 12, 14-15, 17–18; 20 Reply at 3; Supp. Decl. ¶¶ 13–14. Counsel billed these hours at an hourly rate of $400, a $50 21 reduction from his standard rate of $450. Bernstein Decl. ¶ 20. 22 While plaintiff opposes this motion, he has not met his burden to show he - or more 23 appropriately his counsel - “acted with substantial justification or that other circumstances make 24 the imposition of attorney’s fees and costs unjust.” Cal. Code Civ. Proc. § 405.38; see Am. Nat'l 25 Red Cross v. United Way Calif. Cap. Region, No. 07-1236, 2007 WL 4522967, at *7 (E.D. Cal. 26 Dec. 19, 2007). The arguments counsel lays out in the opposition appear to defend the actions of 27 plaintiff’s counsel by blaming plaintiff himself. See generally Opp’n. The opposition states the 28 imposition of attorneys’ fees and costs would be unjust but makes no reasoned argument to 1 support this claim. Id. at 3. Instead, the opposition contends plaintiff “demanded that counsel 2 record a lis pendens after counsel [] advised him of the risks” and plaintiff “refused to expunge 3 his lis pendens after” defendants learned of the lis pendens and contacted plaintiff’s counsel. 4 Opp’n at 4–6.3 These representations support the conclusion that plaintiff’s counsel’s recording 5 of the lis pendens was not substantially justified. Moreover, as defendants have informed the 6 court, plaintiff’s counsel did not serve them with a copy of the notice of lis pendens, as required 7 by California law. See Cal Civ. Proc. Code § 405.22; Bernstein Decl. ¶ 3. That counsel now 8 claims he advised against filing the notice but still effected it does not change the analysis; if 9 anything, it weighs in defendants’ favor. Plaintiff’s counsel has shown neither he acted with 10 substantial justification nor that it would be unjust to award fees to defendants. 11 Defendants’ counsel has provided the court with billing records describing the work 12 performed. The work appears reasonable.

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