Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-00695/USCOURTS-caed-2_09-cv-00695-4/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

In Re: 

PAUL M. MORLAS, JR.,

Debtor,

__________________________

MICHAEL F. BURKART, Chapter 7 

Trustee

 Plaintiff,

v.

BARONET & CO., INC., a 

California Corporation; SUISUN 

CITY/BREEZEWOOD, L.P., a 

California Limited Partnership; 

and DOES 1 to 20 inclusive, 

 Defendants.

______________________________/

Bankruptcy Case No. 08-24692

District Court No. 09-cv-695-

JAM-DAD

Adv.Pro.No. 08-02360

ORDER GRANTING PLAINTIFF‟S 

MOTION FOR FEES AND COSTS

This matter comes before the Court on Plaintiff Michael F. 

Burkart‟s (“Plaintiff‟s”) motion for an award of attorneys‟ fees 

and costs. Defendant Baronet & Co. (“Defendant”) opposes the 

motion, and brings a cross motion for fees. For the reasons set 

forth below, Defendant‟s cross motion for attorneys‟ fees is 

DENIED and Plaintiff‟s motion for attorneys‟ fees is GRANTED, in 

part. 

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I. FACTUAL AND PROCEDURAL BACKGROUND

This motion arises from an action brought by Plaintiff, as 

the Chapter 7 trustee, against Defendant, for money owed to 

debtor Paul Morlas (“Debtor”) pursuant to a construction 

subcontract agreement (“the subcontract”). Following a jury 

trial, in which Defendant also brought counter claims, the jury 

awarded a judgment of $72,874.43 to Plaintiff, and no money to 

Defendant. Plaintiff now seeks to be declared the prevailing 

party and seeks an award of attorneys‟ fees, statutory and nonstatutory costs, pre- and post- judgment interest, and costs of 

enforcement.

II. OPINION

A. Legal Standard

1. Prevailing Party

There is no general right to recover attorney‟s fees under 

the Bankruptcy Code. Renfrow v. Draper, 232 F.3d 688, 693 (9th

Cir. 2000). However, because state law necessarily controls an 

action on a contract, a party to such an action is entitled to 

an award of fees if the contract provides for an award and state 

law authorizes fee shifting agreements. Id. California Civil Code 

§ 1717(a) states that where attorney‟s fees and costs are 

authorized by contract, the fees should be awarded to the 

prevailing party. Additionally, California Civil Code 

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§ 1717(b)(1) states that the court will decide who is the 

prevailing party, or that no one party prevails. The prevailing 

party is the party that recovered greater relief in an action on 

the contract. Cal. Civil Code § 1717(b)(2). In a contract case, 

typically a determination of no prevailing party results when 

both parties seek relief, but neither prevails, or when the 

ostensibly prevailing party receives only a part of the relief 

sought. Hsu v. Abbara, 9 Cal.4th 863, 875 (1995). When the 

results of the litigation on the contract claims are not mixed, 

a trial court has no discretion to deny attorney fees to the 

successful litigant. Id. at 875-76.

Section 24 of the subcontract at issue in this case states 

that:

In the event the parties become involved in 

litigation or arbitration with each other arising 

out of this Agreement or other performance 

thereof in which the services of an attorney or 

other expert are reasonably required, the 

prevailing party shall be fully compensated for 

the costs of its participation in such 

proceedings, including the cost incurred for 

attorneys‟ fees and experts‟ fees. Unless 

judgment goes by default, the attorneys‟ fees 

award shall not be computed in accordance with 

any court schedule, but shall be such as to fully 

reimburse all attorneys‟ fees actually incurred 

in good faith, regardless of the size of the 

judgment, it being the intention of the parties 

to fully compensate for all attorneys‟ fees and 

experts‟ fees paid or incurred in good faith.

Here, in resolving the dispute which arose from the 

subcontract, the jury awarded Plaintiff money damages, and did 

not award any money to Defendants. Moreover, Plaintiff received 

substantially everything that he requested in the suit. 

Specifically, Plaintiff sought recovery of $95,006.35, and 

received a judgment of $72,874.43, thus receiving approximately 

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77% of the amount sought. Defendant did not receive any monetary 

award from the jury, and did not prevail on any of the 

counterclaims. 

Thus, while both parties claim to be the prevailing party 

for purposes of recovering fees, the Court finds that Plaintiff 

is the prevailing party and entitled to fees. Accordingly, 

Defendant is not the prevailing party and its motion for fees is 

DENIED. 

2. Calculating Fees

The fee applicant bears the burden of establishing 

entitlement to an award and documenting the appropriate hours 

expended and hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 

437 (1983). The Ninth Circuit requires a district court to 

calculate an award of attorney‟s fees by first calculating the 

“lodestar.” See Caudle v. Bristow Optical Co. Inc., 224 F3d 

1014, 1028 (9th Cir. 2000). “The lodestar is calculated by 

multiplying the number of hours the prevailing party reasonably 

expended on the litigation by a reasonable hourly rate.” Caudle, 

224 F.3d at 1028 (citing Morales v. City of San Rafael, 96 F.3d 

359, 363 (9th Cir. 1996). The lodestar should be presumed 

reasonable unless some exceptional circumstance justifies 

deviation. Quesada v. Thomason, 850 F.2d 537, 539 (9th Cir. 

1998). As the Ninth Circuit has indicated, “a district court 

should exclude from the lodestar amount hours that are not 

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reasonably expended because they are excessive, redundant, or 

otherwise unnecessary.” Van Gerwen v. Guarantee Mutual Life Co., 

214 F.3d 1040, 1045 (9th Cir. 2000) The Court is under an 

independent duty to reach its own “lodestar” value. Hensley, 461 

U.S. at 433. 

After computing the lodestar, the district court is to 

assess whether additional considerations enumerated in Kerr v. 

Screen Extras Guild, Inc., 526 F. 2d 67, 70 (9th Cir. 1975), 

cert denied, 425 U.S. 951 (1976), require the court to adjust 

the figure. The Kerr facts are: (1) time and labor required; (2)

the novelty and difficulty of the questions involved; (3) the 

skill requisite to perform the legal service properly; (4) the 

preclusion of other employment by the attorney due to acceptance 

of the case; (5) the customary fee; (6) whether the fee is fixed 

or contingent; (7) time limitations imposed by the client or 

the circumstances; (8) the amount involved and the results 

obtained; (9) the experience, reputation, and ability of the 

attorneys; (10) the “undesirability” of the case; (11) the 

nature and length of professional relationship with the client; 

and (12) awards in similar cases. Kerr, 526 F.2d at 70.

3. Plaintiff‟s Attorneys‟ Fees

Plaintiff requested reimbursement for a total of 716.50 

hours for the work of nine attorneys and paralegals, amounting 

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to a total fee of $195,049.50. The Court does not find it 

reasonable to have had this many attorneys and paralegals 

working on this matter. Therefore, the Court will only award the 

time billed by attorneys Daniel Egan, Natalie Johnston, and 

Steven Williamson, and paralegal Sharon Brazell. These four 

individuals performed the majority of the work for this case.

Having reviewed the attorneys‟ fees timesheets and accompanying 

declaration, hearing oral argument, and taking into account the 

Kerr factors, the Court finds that the 274.1 hours at the hourly 

rates of $335.00 (18.3 hours), $350.00 (97.2 hours) and $370.00

(158.60 hours) sought by Plaintiff‟s lead attorney, Daniel Egan, 

are reasonable. Thus the Court awards the total sum of 

$98,832.50 for Mr. Egan‟s work. The Court also finds that the 

hourly rate of $150.00, for 69.20 hours billed by paralegal 

Sharon Brazell is reasonable. Accordingly, the Court awards fees 

for paralegal Ms. Brazell of $10,380.00. However, the Court 

finds the 306.6 hours billed by attorneys Natalie Johnson and 

Steven Williamson to be excessive, and therefore reduces the 

number of hours billed. Ms. Johnston‟s work was billed at an 

hourly rate of $200.00 for 52.60 hours and $210.00 for 27.00 

hours. Mr. Williamson work was billed at an hourly rate of

$240.00 for 227.10 hours. The Court awards $48,000 for Mr. 

Williamson‟s work (200 hours at $240) and $10,000 for Ms. 

Johnston‟s work (50 hours at $200). The total award for Ms. 

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Johnston‟s and Mr. Williamson‟s work is $58,000.00. In sum, the

attorneys‟ fees awarded to Plaintiff for this matter through 

April 12, 2010 are $167,212.50. 

The Court further awards attorneys‟ fees incurred after 

April 12, 2010. The Court will not award the full $21,889.50 

sought by Plaintiff for post-trail fees, finding the hours 

excessive and redundant. The Court will only award fees for post 

trial work performed by attorney Daniel Egan. The Court awards 

fees in the amount of $814.00 for Mr. Egan‟s work on the Motion 

to Amend, $7,625.00 (25 hours at $305) for Mr. Egan‟s work on 

Plaintiff‟s fee motion, and $3,050.00 (10 hours at $305) for his 

work on the reply brief, for a total additional award of 

$11,489.00 in post-trial attorney‟s fees.

4. Statutory Costs

The parties agree that Plaintiff is entitled to an award of 

statutory costs pursuant to 28 U.S.C. § 1920. Plaintiff has 

submitted a Bill of Costs detailing statutory costs in the 

amount of $1,339.90. Accordingly, the Court awards statutory 

costs in the amount of $1,339.90.

5. Non-Statutory Costs

Plaintiff also seeks non statutory costs, pursuant to the 

terms of the subcontract that authorized compensation of all 

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costs incurred. Having reviewed Plaintiff‟s Bill of Costs, the 

Court awards non-statutory costs in the amount $2,948.03, plus 

an additional $1,244.56 for post-trial costs, for a total of 

$4,192.56 in non-statutory costs. In determining its award, the 

Court has excluded meals and parking from the Plaintiff‟s Bill 

of Costs. 

6. Pre-judgment Interest

Plaintiff seeks an award of pre-judgment interest at the 

statutory rate of 10% per annum, pursuant to California Civil 

Code Section 3287(a), or in the alternative, Section 3287(b). 

California Civil Code Section 3287(a) authorizes pre-judgment 

interest for “every person who is entitled to recover damages 

certain, or capable of being made certain by calculation, the 

right to recover which is vested in him on a particular day. 

Section 3287(b) authorizes prejudgment interest, “for every 

person who is entitled under any judgment to receive damages 

based on a upon a cause of action in contract where the claim 

was unliquidated. . . from a date prior to the entry of 

judgment, as the court may in its discretion, fix, but in no 

event earlier than the date when the action was filed.”

Pre-judgment interest pursuant to Section 3287(a) should be 

awarded from the time of the breach of the contract. Nat‟l Farm 

Workers Serv. Ctr. v. M. Caratan, 146 Cal. App. 3d 796, 810-12 

(Cal. App. 5th Dist. 1983). The existence of a bona fide dispute 

between the parties as to the amount owing under an express 

contract does not render the sum „unliquidated.‟ Id. at 810 

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(internal citations omitted). The rational behind Section 3287 

is that where a defendant does not know the amount he owed and 

cannot ascertain it except by accord or judicial process, he 

cannot be in default for not paying it. Id. at 811 (internal 

citations omitted). However, where the defendant possesses the 

relevant records and knows how much is owing on the contract, 

the Court in Nat‟l Farmworkers held that pre-judgment should be 

awarded from the date of the breach of the contract. Even if the 

plaintiff is awarded less than the amount sought, the excessive 

prayer should not serve to defeat an award of pretrial interest, 

as plaintiff is merely safeguarding their interests. Id. at 811.

Here, the jury found that there was a bonafide dispute 

between the parties, over the amount owing pursuant to the 

contract. However, as noted in Nat‟l Farmworkers, this does not 

render the sum unliquidated. The sum owing under the subcontract 

agreement was an amount capable of being made certain by 

calculation. The Court finds that pre-judgment interest is 

appropriate in this case. Accordingly, the Court awards prejudgment interest from the date the money was due under the 

contract, May 20, 2008, to the date that judgment was entered, 

April 13, 2010, at a rate of 10% per year, for a total award of 

$13,836.16. 

7. Post-judgment Interest and Costs of Enforcement

Plaintiff also seeks an award of post-judgment interest at 

the federal rate, from the date of the judgment to the date of 

satisfaction of the judgment, as well as costs of enforcement. 

At the hearing, on July 7, 2010, the Court noted with concern 

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that the judgment awarded on April 13, 2010 still had not been 

paid. Accordingly, the Court grants Plaintiff‟s request and 

hereby amends the judgment to include an award of post-judgment 

interest at the federal rate, from the date of the judgment to 

the date of satisfaction of the judgment, as well as costs of 

enforcement. 

III. ORDER

For the reasons set forth above, Plaintiff‟s Motion for 

Attorneys‟ Fees and Costs is GRANTED, in part. The Court hereby 

awards $178,701.50 in attorneys‟ fees, $1,339.90 in statutory 

costs, $4,192.56 in non-statutory costs, $13,836.16 in prejudgment interest, post-judgment interest at the federal rate 

and costs of enforcement. 

Defendant‟s cross motion for attorneys‟ fees is DENIED.

The judgment dated April 13, 2010 is amended to include the 

aforementioned costs, attorneys‟ fees, pre- and post- judgment 

interest, and costs of enforcement. 

IT IS SO ORDERED.

Dated: August 5, 2010

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