tBear v. Forman

District Court, N.D. California·Decided June 29, 2022·No. 3:17-cv-00796·Unknown

Opinion

CALEB AVERY T’BEAR, Case No. 17-cv-00796-JSC

Plaintiff, ORDER RE: ATTORNEYS’ FEES TO v. ENFORCE JUDGMENT

BARRY FORMAN, Re: Dkt. No. 302 Defendant.

Before the Court is Defendant’s motion for attorneys’ fees to enforce the judgment. (Dkt. No. 302.)1 After carefully considering the parties’ briefing, including Defendant’s supplemental filing, (see Dkt. Nos. 307, 308), the Court GRANTS the motion in part. In February 2020, following a bench trial, the Court entered judgment in favor of Defendant and against Plaintiff on Plaintiff’s claims and Defendant’s counterclaims and awarded damages to Defendant in the amount of $1,410,895.00. (Dkt. No. 240; see Dkt. No. 235.) The judgment also rescinded the December 2011 Memorandum of Understanding and restored Defendant’s direct security interest in the FairWay IP. (Dkt. No. 240.) Plaintiff filed a notice of appeal of the judgment, which the Ninth Circuit dismissed for lack of jurisdiction as untimely filed. (Dkt. No. 259); t’Bear v. Forman, No. 20-15619 (9th Cir. June 26, 2020) (order). In June 2020, the Court awarded Defendant $2,590,863.40 in attorneys’ fees. (Dkt. No. 258.) Plaintiff appealed and the Ninth Circuit affirmed the award. (Dkt. No. 294); t’Bear v. Forman, No. 20- 16348 (9th Cir. Sept. 20, 2021) (order). After the Ninth Circuit dismissed Plaintiff’s appeal of the judgment and while his appeal of the fee award was pending, Plaintiff filed a motion for an order nunc pro tunc to change the filing date of his notice of appeal of the judgment. This Court denied the motion in August 2020. (Dkt. No. 266.) Plaintiff filed a notice of appeal of that order, which the Ninth Circuit dismissed for lack of jurisdiction as untimely filed. (Dkt. No. 286); t’Bear v. Forman, No. 20-16742 (9th Cir. Nov. 23, 2020) (order). In August 2021, Plaintiff filed a motion for relief from (1) the August 2020 order denying his request for an order nunc pro tunc and (2) the February 2020 judgment. This Court denied the motion in September 2021. (Dkt. No. 295.) Plaintiff filed a notice of appeal, which remains pending in the Ninth Circuit. (Dkt. Nos. 299, 300.) In November 2021, the Court awarded Defendant $48,465.00 in attorneys’ fees incurred in responding to Plaintiff’s motion for relief. (Dkt. No. 301.) According to Defendant, Plaintiff has not paid the $1,410,895.00 judgment or $2,639,328.40 combined attorneys’ fees awards. Defendant moves for attorneys’ fees pursuant to Federal Rule of Civil Procedure 69(a) and California Code of Civil Procedure § 685.040. He seeks fees in the amount of $571,123.00 incurred to enforce the judgment over the past two years by defending against Plaintiff’s appeals and by conducting a foreclosure sale on the FairWay IP, the collateral that secured Defendant’s loans to Plaintiff. Defendant’s request excludes the work underlying both of the Court’s earlier fee awards. (See Dkt. No. 302-1 ¶¶ 20, 31.) I. Attorneys’ Fees to Enforce the Judgment Motions for attorneys’ fees to enforce the judgment are governed by Rule 69(a), which provides that “proceedings supplementary to and in aid of a judgment or execution [] must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.” Fed. R. Civ. P. 69(a)(1); see Carnes v. Zamani, 488 F.3d 1057, 1059–60 (9th Cir. 2007). California procedural law applies here because there is no applicable federal statute. See Carnes, 488 F.3d at 1060. California substantive law applies because this is a diversity action. California’s Section 685.040 provides that a “judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment.” Cal. Code Civ. P. § 685.040. The statute is “intended to address the problem unique to a claim for postjudgment fees in actions based on contract.” Jaffe v. Pacelli, 82 Cal. Rptr. 3d 423, 428 (Cal. Ct. App. 2008) (cleaned up). A Section 685.040 motion must be filed before the underlying judgment is fully satisfied. Carnes, 488 F.3d at 1060. Defendant’s motion is timely in this regard. Two additional elements are required: “(1) the fees must have been incurred to ‘enforce’ a judgment; and (2) the underlying judgment had to include an award for attorney fees pursuant to [Section 1033.5(a)(10)(A)], which provides that attorney fees may be awarded when authorized by contract.” Jaffe, 82 Cal. Rptr. 3d at 429. A. Enforce the Judgment As to the first element, Defendant argues that it enforced the judgment by defending against Plaintiff’s appeals and by conducting a foreclosure sale on the FairWay IP. 1. Appeals Defendant’s work on Plaintiff’s appeal of the June 2020 attorneys’ fees award (see Dkt. Nos. 258, 294) incurred fees to “enforce” the judgment. See Logtale, Ltd. v. IKOR, Inc., No. 11- cv-05452-EDL, 2019 WL 12517082, at *4–5 (N.D. Cal. Jan. 18, 2019) (awarding Section 685.040 attorneys’ fees incurred from appeal of attorneys’ fees award in underlying judgment); Rosen v. LegacyQuest, 170 Cal. Rptr. 3d 1, 7–8 (Cal. Ct. App. 2014) (“[S]tatutory fee provisions . . . include fees on appeal unless the statute expressly states otherwise.”). So too for Defendant’s fees incurred from Plaintiff’s appeal of the judgment, (see Dkt. Nos. 240, 259), motions challenging the judgment, (see Dkt. Nos. 266, 295), and fully resolved appeal of this Court’s order on one of those motions, (see Dkt. Nos. 285, 286). Imperial Bank v. Pim Elec., Inc., 39 Cal. Rptr. 2d 432, 444 (Cal. Ct. App. 1995) (“Statutory authorization for the recovery of attorney fees incurred in trial court proceedings necessarily includes attorney fees incurred on appeal unless the statute specifically provides otherwise.”); see also Nomadix, Inc. v. Guest-Tek Interactive Ent. Ltd., No. 2:19-CV-04980-AB (SKx), 2022 WL 258494, at *1 (C.D. Cal. Jan. 11, 2022) (fees incurred from 79 (N.D. Cal. 1985) (same); Reveles v. Toyota by the Bay, 67 Cal. Rptr. 2d 543, 552 (Cal. Ct. App. 1995) (fees incurred from appeal of judgment), abrogated on other grounds by Gavaldon v. DaimlerChrysler Corp., 690 P.3d 752 (Cal. 2004). And so too for Defendant’s fees incurred in preparing the instant fee motion. See Bruckman v Parliament Escrow Corp., 235 Cal. Rptr. 813, 819 (Cal. Ct. App. 1987) (“[W]hen an amount of attorney’s fees is statutorily authorized, the reasonable expenses of preparing the application for fees should be included in the award.”). Not so, however, for Defendant’s fees incurred from Plaintiff’s pending appeal of this Court’s order denying Plaintiff’s motion for relief from a judgment or order.2 (See Dkt. Nos. 299, 300.) The Ninth Circuit retains jurisdiction and could reverse this Court’s order; if it does, Defendant’s work in unsuccessfully defending Plaintiff’s appeal will not have been necessary to enforce the judgment. See MST Farms v. C.G. 1464, 251 Cal. Rptr. 72, 74 (Cal. Ct. App. 1988) (“[I]n a proper case the trial court has jurisdiction to award, as an element of costs under section 1717, attorney fees incurred by the prevailing party in successfully defending or prosecuting an appeal.” (emphasis added)). Accordingly, it would be premature to determine that fees for such work were incurred to enforce the judgment. 2. Foreclosure Defendant’s foreclosure on the FairWay IP, which secured Defendant’s loans to Plaintiff, incurred fees to “enforce” the judgment. Plaintiff has not paid the $1,410,895.00 judgment issued by this Court. Accordingly, Defendant’s work to perfect his interest in and foreclose upon the FairWay IP was “reasonable and necessary” to satisfy the judgment. Cal. Code Civ. P. § 685.040. Defendant, the only bidder at the foreclosure sale, bid $100,000.00 f

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