Opinion
B316104
12-22-2022
ALAN ELLIOTT, et al., Plaintiffs and Appellants, v. BARRY TYERMAN, et al., Defendants and Respondents.
Law Offices of Maryann P. Gallagher, Maryann P. Gallagher; Douglas/Hicks Law, Carl E. Douglas; DLA Piper, Justin R. Sarno, for Plaintiffs and Respondents. Miller Barondess, Louis R. Miller, A. Sasha Frid, Mira Hashmall, Colin Rolfs, and Eleanor S. Ruth, for Defendants and Appellants.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of the County of Los Angeles, No. 20STCV42553 Daniel S. Murphy, Judge.
Law Offices of Maryann P. Gallagher, Maryann P. Gallagher; Douglas/Hicks Law, Carl E. Douglas; DLA Piper, Justin R. Sarno, for Plaintiffs and Respondents.
Miller Barondess, Louis R. Miller, A. Sasha Frid, Mira Hashmall, Colin Rolfs, and Eleanor S. Ruth, for Defendants and Appellants.
KIM, J.
I. INTRODUCTION
Plaintiffs appeal from the trial court's order awarding defendants attorney fees pursuant to Code of Civil Procedure section 425.16 subdivision (c)(1). We affirm.
Plaintiffs are Alan Elliott (Elliott) and his companies, Amazing Grace Movie LLC and Al's Records and Tapes Inc.
Defendants are Barry Tyerman (Tyerman) and the law firm, Jackoway Austen Tyerman Wertheimer Mandelbaum Morris Bernstein Trattner & Klein.
All further statutory references are to the Code of Civil Procedure, unless otherwise indicated.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. Motion to Strike
The operative first amended complaint asserted seven causes of action against both defendants for: (1) trade libel; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; (4) interference with contractual relations; (5) unfair competition in violation of Business and Professions Code section 17200; (6) intentional infliction of emotional distress; and (7) negligent supervision and retention.
Defendants filed a special motion to strike each cause of action pursuant to section 425.16, the anti-SLAPP statute. On May 3, 2021, the trial court issued an order granting the motion as to the fourth through seventh causes of action, but denying it as to the first three. B. Motion for Attorney Fees
On July 2, 2021, defendants filed a motion for attorney fees pursuant to section 425.16, subdivision (c)(1), arguing that as the prevailing party on the motion to strike, they were entitled to a mandatory fee award. According to the supporting attorney declaration, four attorneys from defense counsels' firm expended 261.7 hours on the motion which, when multiplied by each attorney's hourly rate (which ranged from $595 to $1,600), came to a total of $221,510.50 in fees incurred for prosecuting the motion. Defendants requested an award in that amount or, in the alternative, four-sevenths of that amount ($127,498.69) because they prevailed on four of plaintiffs' seven claims.
Plaintiffs opposed the motion, arguing that defendants were not the prevailing parties because the four eliminated claims were not substantially different from the three that survived the motion to strike and their elimination did not advance defendants' posture in the litigation or narrow the scope of discovery and motion practice. Plaintiffs also maintained that the amount of claimed fees was excessive.
C. Ruling on Fee Motion
On August 11, 2021, the trial court held a hearing on the attorney fees motion and issued an order granting the fee request, in part. The court first rejected the hourly rates claimed by defense counsel, finding instead that $500 per hour was a reasonable rate for all work performed on the motion to strike. The court also rejected the total billable hours of 261.7 claimed for work on the motion (plus the 67 hours claimed for work on the fee motion) and instead found that 98 hours was the reasonable amount of hours for services rendered on the two motions. According to the court, "some of the billing [by defense counsel] was excessive," the success on the motion to strike was limited, and other services rendered on the motions were "duplicative and redundant." The court therefore awarded $49,000 in attorney fees, plus the uncontested amount of costs claimed.
III. DISCUSSION
A. Standard of Review
A trial court's determination of whether a defendant is entitled to an award of attorney fees as the prevailing party under section 425.16, subdivision (c)(1) is reviewed for abuse of discretion. (Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 340 (Mann).) The court's determination concerning the reasonable amount of fees to be awarded is also reviewed for abuse of discretion. (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 433 (569 East County Boulevard).)
B. Legal Principles
"Under section 425.16, subdivision (c)(1), 'a prevailing defendant on a special motion to strike shall be entitled to recover that defendant's attorney's fees and costs.' The purpose of the statute is to 'compensat[e] the prevailing defendant for the undue burden of defending against litigation designed to chill the exercise of free speech and petition rights. [Citation.]' [Citation.] . . . [¶] The term '"prevailing defendant,"' as used in section 425.16, subdivision (c)(1), is not defined, and it is unstated whether a defendant who prevails on some, but not all, of the claims challenged in his or her anti-SLAPP motion is entitled to fees and costs. [Citation.] But as a general rule, a defendant who prevails in part in bringing a special motion to strike is entitled to fees and costs, subject to the trial court's determination of the appropriate amount awardable based upon the defendant's partial success. [Citations.] The entitlement to fees and costs where the defendant prevails in part, however, is not absolute. As explained by the court in Mann, supra, [139 Cal.App.4th] at [p.] 340, 'a party who partially prevails on an anti-SLAPP motion must generally be considered a prevailing party unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion.'" (Maleti v. Wickers (2022) 82 Cal.App.5th 181, 231-232.)
C. Analysis
1. Prevailing Party
Plaintiffs concede that the "'practical benefit' test" articulated in Mann, supra, 139 Cal.App.4th 328 governs the determination of whether defendants prevailed on the special motion to strike. They contend, however, that the results here were "'minimal'" or "'insignificant'" because the legal and factual grounds for their claims against defendants "'remain the same.'" We disagree.
By their motion, defendants eliminated four causes of action, each of which posed a different potential for liability against them. For example, unlike the surviving intentional and negligent interference with prospective economic advantage claims, the interference with contract claim would have imposed liability against defendants for Tyerman's alleged interference without a separate showing that the underlying conduct was independently wrongful. (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158-1159.)
Similarly, the unfair competition claim would have imposed liability for "any unlawful, unfair or fraudulent business act or practice" (Bus. &Prof. Code, § 17200), a standard that is different and potentially broader than the standards for liability under the three surviving tort claims. (See Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 678 ["'"Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition-acts or practices [that] are unlawful, or unfair, or fraudulent. . . ."' . . . '"[T]he Legislature . . . intended by this sweeping language to permit tribunals to enjoin on-going wrongful business conduct in whatever context such activity might occur. Indeed, . . . the section was intentionally framed in its broad, sweeping language, precisely to enable judicial tribunals to deal with the innumerable '"new schemes which the fertility of man's invention would contrive"'"].) The elimination of that statutory claim therefore reduced defendants' potentially broad exposure for restitution and penalties available under that statute and obviated the need for discovery directed at that claim.
Finally, the negligent supervision/retention claim introduced a theory of direct liability against the law firm defendant, namely, whether the firm knew or should have known that the hiring and retention of Tyerman posed a risk of harm to third-parties such as Elliott. (See Z.V. County of Riverside (2015) 238 Cal.App.4th 889, 902; Federico v. Superior Court (1997) 59 Cal.App.4th 1207, 1213-1214.) Based on the court's order striking this claim, the firm's liability, if any, on the remaining three claims will be derivative or vicarious under the doctrine of respondeat superior, and it should not be compelled to respond to discovery regarding, or defend at trial, its hiring and retention practices or its prior knowledge of Tyerman's abilities and propensities as a lawyer.
Plaintiffs additionally contend that the four stricken claims bore a "tenuous," "questionable" or "non-existent" relationship to protected First Amendment activity and were "ancillary" to the surviving claims, such that an affirmance of the fee award "would authorize a continued pattern of overbroad application and misuse of the anti-SLAPP statute."
Contrary to plaintiffs' contention, the trial court here concluded that defendants had satisfied their first-prong burden of showing that each of the four claims arose from protected activity, that is, they were based on acts in furtherance of defendants' rights of speech and petition. Thus, there is no dispute on appeal that the four dismissed claims arose from protected activity or that plaintiffs could not demonstrate that those claims had minimal merit. (Baral v. Schnitt (2016) 1 Cal.5th 376, 384-385 (Baral).) In our view, the court's fee award does not demonstrate a misuse of the anti-SLAPP statute, but instead advances its goal, which is to provide a mechanism to "weed[] out, at an early stage, meritless claims arising from protected activity." (Baral, supra, 1 Cal.5th at p. 384.)
2. Reasonable Amount of Fee Award
Conceding that the trial court's assessment of the amount of fees to award is a matter of discretion, plaintiffs contend that the court abused its discretion by "arbitrarily choosing an amount of attorneys' fees." Again, we disagree.
In Ketchum v. Moses (2001) 24 Cal.4th 1122, our Supreme Court explained that "a court assessing attorney fees begins with a touchstone or lodestar figure, based on the 'careful compilation of the time spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.' [Citation.] We [have] expressly approved the use of prevailing hourly rates as a basis for the lodestar, noting that anchoring the calculation of attorney fees to the lodestar adjustment method '"is the only way of approaching the problem that can claim objectivity, a claim which is obviously vital to the prestige of the bar and the courts."' [Citation.]" (Id. at pp. 1131-1132.)
a. Hourly Rate
We presume the trial court's choice of a reasonable hourly rate was correct, and plaintiffs therefore have the affirmative burden of showing that the chosen rate was beyond the bounds of reason. (569 East County Boulevard, supra, 6 Cal.App.5th at p. 433.) Here, the court rejected defendants' requested rates and chose instead $500 as a reasonable rate for the work performed on the motions. That rate, which was lower than any rate requested by defendants, was presumptively based on the court's review of the nature and extent of the work-product submitted on the motions, the resumes of the four attorneys included in support of the fee request, and the prevailing hourly rates in the community.
In response, plaintiffs do not point to any evidence in the record tending to show that the chosen rate is unreasonable, such as, for example, expert testimony concerning the prevailing hourly rates in the community for similar legal services. They simply disagree with the rate by summarily characterizing it as arbitrary. Accordingly, they have failed to overcome the presumption of correctness concerning that rate.
In the attorney declaration submitted in support of the motion, a partner in defense counsels' firm testified that she was familiar with the rates charged by attorneys with similar experience in complex civil litigation in the Los Angeles area and that the rates charged by the attorneys who worked on the motion were comparable to those rates.
b. Number of Hours Expended
In challenging the reasonable number of hours allotted by the trial court for the work on the motion to strike, plaintiffs argue that the court's figure-98 hours-was arbitrary because the court "focused quantitatively on the number of causes of action dismissed, as opposed to the qualitative nature of their contextual irrelevance."
Contrary to plaintiffs' assertion, in arriving at the number of reasonable hours component of the lodestar calculation, the trial court did not arbitrarily focus on the fact that defendants eliminated the majority of the claims against them. Instead, the court began with the number of hours claimed by defendants, 261.7, and then reduced that number substantially because, in the court's view, some of the hours claimed were excessive and others were redundant of work performed by other attorneys on the motion. The court also expressly noted that the success of the motion was limited. Based on those rational factors, the court arrived at 98 hours as the number reasonably expended. On this record, we conclude that the court's award was well within the bounds of reason.
IV. DISPOSITION
The order awarding attorney fees is affirmed. Defendants are awarded costs on appeal.
We concur: BAKER, Acting P. J., MOOR, J.