Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-00886/USCOURTS-caed-2_02-cv-00886-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

DAVID C. HOBSON and D.C.

HOBSON, DDS, MS, a

professional corporation,

NO. CIV. S-02-0886 WBS PAN

Plaintiffs, 

v. MEMORANDUM AND ORDER

RE: ATTORNEY’S FEES

ORTHODONTIC CENTERS OF

AMERICA, INC. and ORTHODONTIC

CENTERS OF CALIFORNIA, INC.,

Defendants.

----oo0oo----

Currently before the court is plaintiffs David C.

Hobson and D.C. Hobson, DDS, MS, a professional corporation

(collectively “Hobson”) motion for attorney’s fees after appeal. 

I. Factual and Procedural Background

Hobson brought this action against defendants

Orthodontic Centers of America, Inc. and Orthodontic Centers of

California, Inc. (collectively “OCA”) for (1) declaratory relief,

(2) breach of contract, (3) breach of fiduciary duty, (4) unfair

business practices, and (5) money had and received. OCA

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 1 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

counterclaimed for (1) specific performance, (2) breach of

contract, (3) conversion, (4) promissory estoppel, (5) unjust

enrichment, (6) quantum meruit, and (7) money had and received. 

On summary judgment, this court dismissed OCA’s promissory

estoppel claim. The rest of the parties’ claims were tried, with

the exception of Hobson’s claim for money had and received, which

was dismissed at trial. 

After a fourteen-day trial, the jury awarded Hobson

$82,594 on his breach of contract claim and rejected OCA’s

contract and conversion claims. (Sept. 14, 2004 Am. J.). 

Hobson’s fiduciary duty claim was also rejected. (Id.) 

Thereafter, this court held a hearing on OCA’s remaining claims

and awarded OCA $194,500 plus interest for rent paid after Hobson

terminated his contract with OCA. (Id.) The court gave Hobson

the choice of either returning the furniture, fixtures, and

equipment Hobson had retained in his offices or paying OCA

$106,828 plus interest in restitution. (Id.) 

On November 29, 2004, this court held that Hobson was

the “prevailing party” under the parties’ Business Services

Agreement (“the Agreement”) for purposes of attorney’s fees and

costs and awarded him attorney’s fees in the amount of

$485,022.00. OCA appealed, and on January 29, 2007, the Ninth

Circuit affirmed this court’s judgment. Hobson v. Orthodontic

Ctrs. of Am. Inc., No. 05-15105, 2007 U.S. App. LEXIS 2202 (9th

Cir. Jan. 29, 2007). On February 22, 2007, the Ninth Circuit

denied OCA’s petition for a rehearing. (See Court of Appeals No.

05-15105 Docket.) 

Hobson filed a motion to transfer consideration of

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 2 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

attorney’s fees on appeal to this court on March 9, 2007. (Id.) 

On March 13, 2007, Hobson filed this motion for attorney’s fees

in the amount of $54,387.50. (Id.) The Ninth Circuit granted

Hobson’s motion to transfer the attorney’s fees motion to this

court on March 30, 2007. (Id.) 

II. Discussion

A. Timeliness

OCA objects to this court’s consideration of Hobson’s

motion for attorney’s fees and costs on the ground that it was

not filed within the 14 day period set forth in Ninth Circuit

Rule 39-1.6, and that Hobson’s excuses do not constitute good

cause. OCA argues that the Ninth Circuit’s transfer of Hobson’s

motion for attorney’s fees and costs to this court did not

“sanitize” Hobson’s late-filing. OCA cites Cummings v. Connell

for the proposition that “Rule 39-1.8 authorizes [the Ninth

Circuit] to transfer a timely-filed fees-on-appeal request to the

district court for consideration.” 402 F.3d 936, 947-948 (9th

Cir. 2005). However, in Cummings, the Ninth Circuit vacated a

district court’s order awarding attorney’s fees because the party

seeking attorney’s fees never filed their request with the Ninth

Circuit. Accordingly, the Ninth Circuit never transferred the

request to the district court. Cummings does not apply here,

however, because in this case the Ninth Circuit did transfer the

attorney’s fees motion to this court.

Ninth Circuit Rule 39-1.8, which governs the request

for transfer of attorney fee’s motions, reads:

Any party who is or may be eligible for attorneys fees on

appeal to this Court may, within the time permitted in

Circuit Rule 39-1.6, file a motion to transfer consideration

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 3 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

of attorneys fees on appeal to the district court or

administrative agency from which the appeal was taken. 

Ninth Cir. Rule 39-1.8. Because OCA filed a timely petition for

rehearing, Rule 39-1.6 requires that a request for attorney’s

fees be filed “within 14 days after the court’s disposition of

such petition or filing.” Ninth Cir. Rule 39-1.6. 

Here, Hobson sent his request for transfer one day

prior to the 14-day deadline. However, Hobson’s request was not

filed by the clerk until one day after the 14-day period elapsed. 

Federal Rule of Appellate Procedure 25(a)(2)(A) notes that

“filing is not timely unless the clerk receives the papers within

the time fixed for filing.” Fed. R. App. P. 25(a)(2)(A). 

However, Fed. R. App. P. 26(b) allows the extension of a time

period for good cause. Fed. R. App. P. 26(b). Although a court

may not extend the time to file certain documents, such as notice

of appeal, a motion for attorney’s fees and a motion for transfer

do not have that restriction. Id. “The exercise of that

discretion is especially appropriate [where] there is no

suggestion of prejudice.” Hutchinson v. Pfeil, 211 F.3d 515, 518

(10th Cir. 2000) (citing Hammett v. Seastrunk, 365 F.2d 232, 233

n.2 (4th Cir. 1966)). 

Hobson’s attorney was on vacation when the court denied

OCA’s petition for rehearing, and did not receive notice of the

Ninth Circuit’s action until March 5, 2007. This court finds

that Hobson proceeded diligently upon learning that OCA’s

petition for a rehearing was denied and fails to see the

prejudice caused to OCA by the one-day delay. Therefore, this

court excuses any tardiness on the part of Hobson.

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 4 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

OCA even if the late-filing of Hobson’s motion to

transfer is excused, there was no excuse for Hobson’s failure to

file the motion for attorney’s fees itself within the 14 days

allowed by Ninth Cir. Rule 39-1.6. That motion was filed on

March 13, 2007, and only out of an abundance of caution. The

expiration of the 14-day period was March 8, 2007. Ninth Circuit

Rule 39-1.8 only requires that a motion to transfer consideration

of attorney’s fees be filed within the 14-day period. When a

motion to transfer is filed, it is not clear that the attorney’s

fees motion itself has to be filed at all with the Ninth Circuit. 

Cummings held only that the absence of the transfer meant that

the district court was not authorized to rule on the request for

appellate attorney’s fees. 402 F.3d at 948. 

Should Circuit Rule 39-1 also require that Hobson

timely file a motion for attorney’s fees in the Ninth Circuit,

this court finds good cause for Hobson’s delay under Federal Rule

of Appellate Procedure 26(b) because no prejudice resulted to

OCA. OCA was able to fully brief and present oral argument of

the matter on the merits. Indeed, at oral argument, OCA spent

little time discussing its substantive objections Hobson’s

request for appellate attorney’s fees. 

B. Applicable Law

Section 8.10 of the Agreement between the parties

provides that:

[i]f a legal action is commenced by either party to

enforce or defend its rights under this Agreement, the

prevailing party in such action shall be entitled to

recover its costs and reasonable attorneys’ fees in

addition to any other relief granted.

When sitting in a diversity case, a federal court applies the law

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 5 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

of the forum state regarding an award of attorney’s fees. See,

e.g., Kona Enter., Inc. v. Estate of Bernice Pauahi Bishop, 229

F.3d 877, 883 (9th Cir. 2000). Under California law,

“[California Civil Code §] 1717 is the applicable statute when

determining whether and how attorney’s fees should be awarded

under a contract.” Sears v. Baccaglio, 60 Cal. App. 4th 1136,

1157 (1998). 

Under § 1717, the prevailing party is “the party who 

recover[s] the greater relief in the action on the contract.” 

Cal. Civ. Code § 1717(b)(1); Sears, 60 Cal. App. 4th at 1143. 

The Ninth Circuit has affirmed this court’s determination,

pursuant to § 1717, that Hobson is the prevailing party. Hobson,

2007 U.S. App. LEXIS 2202 at *4. “A contract for a reasonable

attorney’s fee in enforcing its provisions embraces an allowance

for legal services rendered upon appeal as well as during the

trial.” Cirimele v. Shinazy, 134 Cal. App. 2d 50, 52 (1955)

(citing Hahn v. Hahn, 123 Cal. App.2d 97, 103 (1954)). 

C. Lodestar Calculation

Under California law, “the fee setting inquiry . . .

ordinarily begins with the ‘lodestar,’ i.e., the number of hours

reasonably expended multiplied by the reasonable hourly rate.” 

PLCM Group, Inc. v. Drexler, 22 Cal. 4th 1084, 1095 (2000).

1. Reasonable Hourly Rates

The reasonable hourly rate is determined with reference

to that prevailing in the community for similar work. Id.

(citation omitted). One attorney, Matthew Bradford, and one law

clerk, Paul Dolberg, worked on the appeal of this case for

Hobson. Matthew Bradford billed Hobson at the rate of $235 per

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 6 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Matthew Bradford worked 220 hours and Paul Dolberg 1

worked 21.5 hours. (See Pls.’ Am. Mot. in Supp. of an Award of

Atty’s Fees Detailed Chart of Att’s Fees at 6.)

Detailed Chart of Attorney’s Fees by Plaintiffs Nos. 7, 2

8, 9, 12, 13, 15, 16, 20, 21, 22, 23, 24, 26, and 27. 

Detailed Chart of Attorney’s Fees by Plaintiffs Nos. 3

51, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, and 101. 

7

hour, and Paul Dolberg billed at $125 per hour. (See Bradford’s

Decl. in Supp. of Pls.’ Mot. for Atty’s Fees After Appeal ¶¶ 11-

12; Malm’s Decl. in Supp. of Pls.’ Mot. for Atty’s Fees ¶¶ 1-4;

Rios’ Decl. in Supp. of Pls.’ Mot. for Atty’s Fees ¶¶ 1-4.) OCA

does not contest the hourly rates claimed by Hobson’s attorney,

and the court finds those rates to be reasonable.

2. Reasonable Hours Expended 

Under California law, a court determining the number of

hours reasonably expended on a case “must carefully review

attorney documentation of hours expended; ‘padding’ in the form

of inefficient or duplicative efforts is not subject to

compensation.” Ketchum v. Moses, 24 Cal. 4th 1122, 1132 (2001)

(quoting Serrano v. Priest, 20 Cal. 3d 25, 48 (1977)). 

Hobson’s attorney has requested compensation for 241.5

hours of work. OCA objects to several entries on the ground 1

that under the Federal Rules of Appellate Procedure, Hobson may

only be reimbursed for fees incurred in the court of appeals. 

OCA’s objections can be classified into two categories: (1) work

concerning whether this court’s judgment would be stayed during

the pendency of the appeal and (2) work concerning OCA’s 2

bankruptcy and the effect of that bankruptcy on the execution of

this court’s judgment. 

3

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 7 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

OCA’s cited authority does not support the proposition

that only fees incurred in the court of appeals may be reimbursed

in this case. In Stevedoring Servs. of Am. v. Price, the Ninth

Circuit denied a request for attorney’s fees pursuant to

Longshore and Harbor Workers Compensation Act (“LHWCA”), 33

U.S.C. § 928(a), because the “Federal Rules of Appellate

Procedure solely govern proceedings in the courts of appeals and

therefore provide no authority for us to award costs for

proceedings in the Supreme Court.” 432 F.3d 1112, 1114 n.1 (9th

Cir. 2006). Because § 928(c) states that a court “‘may approve

an attorney’s fee for the work done before it by the attorney for

the claimant,’” the Ninth Circuit disallowed an award for work

done before the Supreme Court. Id. at 1113-14 (citing 33 U.S.C.

§ 928(c)) (emphasis in original). However, when sitting in

diversity, a federal court applies the law of the forum state

regarding an award of attorney’s fees. Kona Enter., 229 F.3d at

883. In California, contract attorney’s fees clauses allow for

reimbursement for services rendered on appeal. Cirimele, 134

Cal. App. 2d at 52 (citing Hahn, 123 Cal. App. 2d at 103). 

Nevertheless, the court must “carefully review” and

ensure that all claimed work was “rendered upon appeal.” Ketchum,

24 Cal. 4th at 1132 (citing Serrano, 20 Cal. 3d at 48); Cirimele,

134 Cal. App. 2d at 52 (citing Hahn, 123 Cal. App. 2d at 103). 

Whether this court’s judgment was to be stayed during the

pendency of the appeal clearly relates to the appellate

proceedings in this case. OCA’s appeal necessitated work by

Hobson’s attorney on securing a supersedeas bond from OCA during

the pendency of that appeal. (See Detailed Chart of Attorney’s

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 8 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

Fees by Plaintiffs Nos. 7, 8, 9, 12, 13, 15, 16, 20, 21, 22, 23,

24, 26, and 27.) Hobson secured a bond $270,360 in this court on

January 27, 2005. (January 27, 2005 Order 4.) The court will

therefore allow reimbursement for these fee entries. 

OCA also objects to billing entries related to OCA’s

bankruptcy. During the pendency of the appeal, OCA filed a

complaint in the Superior Court of California for the County of

San Joaquin, alleging breach of promissory notes, money had and

received, and quantum merit. OCA removed that case to this

court, pursuant to 28 U.S.C. §§ 1441, 1452, and Fed. R. Bankr. P.

9027, because it related to a bankruptcy proceeding in the United

States Bankruptcy Court for the Eastern District of Louisiana. 

On January 9, 2007, this court denied OCA’s motion to transfer to

the Louisiana Bankruptcy Court. Orthodontic Ctrs. of Cal., Inc.

v. Hobson, No. 06-1805, 2007 U.S. Dist. LEXIS 5279 (E.D. Cal.

Jan. 9, 2007). 

Although the bankruptcy matter related to OCA’s appeal

of this court’s judgment, the services of Hobson’s attorney in

connection with the bankruptcy matter cannot be deemed to be

rendered on the appeal. The bankruptcy case remains on-going. 

In response to OCA’s objection, Hobson affirms that none of the

requested fees relate the bankruptcy matter or matter decided by

this court in January. Instead, that work related to whether the

appeal could proceed given OCA’s bankruptcy and some filings with

the appellate court showing that the bankruptcy automatic stay

had been lifted. (Bradford Reply Decl. ¶ 12.) Moreover, these

fees were mostly incurred between March and August, 2006, lending

credibility to Hobson’s attorney’s declaration that none of the

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 9 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

fees were incurred in connection with the bankruptcy matter in

Louisiana or the matter removed and still pending in this court. 

(See Detailed Chart of Attorney’s Fees by Plaintiffs Nos. 51, 76,

77, 78, 79, 80, 81, 82, 83, 84, 85, and 101.) Accordingly,

reimbursement for these fee entries will be allowed. 

Given that the court has reviewed the fee bills

submitted by Hobson and found that Hobson’s attorney expended a

reasonable amount of hours on the litigation underlying this

motion, and that no apportionment is necessary, the court

determines that Hobson’s request for compensation of 241.5 hours

of work is reasonable. 

iii. Adjustments To The Lodestar Figure 

After performing the lodestar calculations, the court

must “consider whether the total fee award so calculated under

all of the circumstances is more than a reasonable amount and, if

so, [must] reduce the . . . award so that it is a reasonable

figure.” PLCM Group, 22 Cal. 4th at 1095-96. To make this

determination, the court considers “a number of factors,

including the nature of the litigation, its difficulty, the

amount involved, the skill required in its handling, the skill

employed, the attention given, the success or failure, and other

circumstances of the case.” Id. at 1096 (quoting Melnyk v.

Robledo, 64 Cal. App. 3d 618, 623-624 (1976)).

Multiplying the reasonable hours expended by Hobson’s

attorney by the hourly rates approved by the court, the lodestar

figure amounts to $54,387.50. The table below illustrates this

calculation:

///

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 10 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

Attorney Time Billed Hourly Rate Total

Matthew Bradford 220 hours x $235 = $ 51,700.00

Paul Dolberg 21.5 hours x $125 = $ 2,687.50

 Total = $ 54,387.50

In preparing their case, Hobson’s attorneys had to sort

through voluminous documents. In this court’s previous

attorney’s fees order, the court noted that the issues at the

trial were sophisticated and could only be conveyed to the jury

by skilled attorneys. (November 29, 2004 Order 10.) The court

held, “Given the nature and difficulty of this litigation, the

number of hours reasonably expended by Hobson’s attorneys, the

skill demonstrated by those attorneys, and Hobson’s overall

victory on the contract claims, the court finds that the lodestar

figure need not be adjusted.” (Id.) The court did not observe

the work of Hobson’s attorney on appeal. However, the court has

no reason to doubt--nor has OCA argued--that the level of skill

employed was materially different such that the lodestar should

be adjusted. Therefore, the court will award Hobson $54,387.50

in attorney’s fees. 

IT IS THEREFORE ORDERED that plaintiffs’ motion for

attorney’s fees be, and the same hereby is, GRANTED in the amount

of $54,387.50. 

DATED: June 19, 2007

Case 2:02-cv-00886-WBS-PAN Document 374 Filed 06/20/07 Page 11 of 11