Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-04792/USCOURTS-cand-3_03-cv-04792-0/pdf.json

Nature of Suit Code: 240
Nature of Suit: Torts to Land
Cause of Action: 42:9607 Real Property Tort to Land

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SLEEPY HOLLOW INVESTMENT

COMPANY NO. 2.,

Plaintiff,

 v.

PROTOTEK, INC., et al.,

Defendants /

No. C-03-4792 MMC 

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

APPLICATION FOR DEFAULT

JUDGMENT; DIRECTING CLERK TO

FILE DOCUMENT UNDER SEAL;

VACATING HEARING

Before the Court is plaintiff’s application for entry of default judgment against

defendants Prototek, Inc. and Prototek II, Inc. (collectively, “Prototek”), pursuant to Rule

55(b)(2) of the Federal Rules of Civil Procedure. Having reviewed the papers submitted by

plaintiff, the Court hereby rules as follows.

In its application, plaintiff seeks two types of damages, as well as an award of

attorney’s fees and costs, prejudgment interest and postjudgment interest.

With respect to damages, plaintiff seeks to recover $148,601.05, which plaintiff

expended to perform the environmental clean-up of plaintiff’s premises after Prototek’s

abandonment. For the reasons stated in the Court’s order of March 18, 2005, plaintiff is

entitled to an award of damages in the amount of $148,601.05, (see Order Affording Pl.

Case 3:03-cv-04792-MMC Document 95 Filed 05/20/05 Page 1 of 5
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In the Court’s March 28, 2005 order, this sum was stated as “$148,501.05.” The

correct sum, as set forth above, is $148,601.05.

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Leave to Supplement Appl. for Def. J., filed March 28, 2005, at 1:22-26),1 less $95,000, the

amount plaintiff received from the settling defendants, (see Order Affording Pl. Further

Leave to Supplement Appl. for Default J., filed April 15, 2005, at 2:7-9), leaving a balance

of $53,601.05. Additionally, plaintiff seeks to recover $107,413.81, representing loss of

rent and loss of use of the premises. For the reasons stated in the Court’s order of April

15, 2005, plaintiff is entitled to damages in the additional amount of $107,413.81, (see id. at

2:3-6), resulting in a total award of damages in the amount of $161,014.86.

Plaintiff seeks to recover the sum of $175,429.04 in attorney’s fees and costs. For

the reasons stated in the Court’s order of April 15, 2005, plaintiff is entitled to fees and

costs reasonably incurred to prosecute its claims against Prototek, under the attorney’s

fees provisions in the lease agreements between plaintiff and Prototek. (See id. at 2:11-

15.) Plaintiff, however, is not entitled to the fees and costs it incurred in prosecuting its

claims against the other defendants, as the lease agreements cannot reasonably be

interpreted to require Prototek to pay the fees and costs plaintiff incurred in prosecuting

claims against defendants other than Prototek. Plaintiff’s reliance on the principle that “fees

need not be apportioned when incurred for representation on an issue common to both a

cause of action in which fees are proper and one in which they are not allowed,” see

Reynolds Metals Co. v. Alperson, 25 Cal. 3d 124, 129-30 (1979), is unavailing to the extent

plaintiff seeks to recover fees and costs incurred after February 25, 2004, the date the

Clerk entered Prototek’s default. As a result of the entry of Prototek’s default, plaintiff was

relieved of its obligation to prove Prototek’s liability. Consequently, fees and costs incurred

to establish the liability of other defendants cannot be deemed reasonably incurred in the

prosecution of plaintiff’s claims against Prototek, as any common issue with respect to

liability ceased to exist upon entry of Prototek’s default. The Court will award, however, in

addition to fees and costs reasonably incurred prior to entry of Prototek’s default, fees and

costs reasonably incurred after entry of Prototek’s default, to the extent the Court can

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Plaintiff states that the amount of fees reasonably incurred during this period was $20,988.75. (See Horner Decl., filed May 6, 2005, ¶ 10.) The billing records submitted by

plaintiff, however, indicate that, for this period, Berding & Weil LLP billed plaintiff for fees in the amount of $13,995.75, (see In Camera Submission Ex. D at 6-11), and that Resolution

Law Group P.C. billed plaintiff for fees in the amount of $6630.00, (see id. Ex. E), for a total of $20,625.75.

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ascertain from the billing records submitted by plaintiff that such fees and costs were

incurred by plaintiff to establish the amount of its damages against Prototek, to prepare a

case management statement, and to prepare the instant application.

Specifically, the Court, having reviewed the billing records, finds plaintiff reasonably

incurred the following fees and costs in pursuing its claims against Prototek: (1) for the

period prior to the filing of the complaint, plaintiff reasonably incurred fees in the amount of

$25,582.50 and costs in the amount of $7144.29; (2) for the period from the filing of the

complaint to the entry of Prototek’s default, plaintiff reasonably incurred fees in the amount

of $20,625.752 and costs in the amount of $3396.12; and (3) for the period after entry of

Prototek’s default, plaintiff reasonably incurred fees in the amount of $15,298.25 and costs

in the amount of $118.21. Accordingly, plaintiff is entitled to fees in the amount of

$61,506.50, together with costs in the amount of $10,658.62, for a total of $72,165.12.

Plaintiff seeks an award of prejudgment interest at the rate of 10%. Two of the four

lease agreements implicated herein provide that “any amount due to [plaintiff] not paid

when due shall bear interest at 10% per annum from the date due,” (see Amended Rouse

Decl., filed April 8, 2005, Ex. C ¶ 16.4, Ex. D ¶ 16.4), and two provide that “any amount due

to [plaintiff] not paid when due shall bear interest at the maximum rate then allowable by

law from the date due,” (see id. Ex. A ¶ 19, Ex. B ¶ 19). Because the maximum rate of

prejudgment interest allowable under the applicable law is 10% per annum, see Cal. Civ.

Code § 3289(b), plaintiff is entitled to prejudgment interest in the amount of 10% per

annum from the date an obligation was due. Specifically, plaintiff is entitled to the following: 

(1) interest on lost rent of $27,263.80, at a daily rate of $7.47, calculated from August 8,

2003 through May 20, 2005, for a total of $4862.97; (2) interest on loss of use of

$80,150.01, at a daily rate of $21.96, calculated from February 26, 2004 through May 20,

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On January 12, 2005, plaintiff received a check for $60,000 from settling defendant

Samuel Waksal, (see In Camera Submission Ex. D at 30), thus receiving partial payment

on the obligation due.

4

On March 10, 2005, plaintiff received a check for $15,000 from settling “ICN”

defendants, (see In Camera Submission Ex. D at 31), thus receiving partial payment on the

obligation due.

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On a date no later than April 8, 2005, plaintiff received a check for $20,000 from

settling “ESP” defendants, (see In Camera Submission Ex. D at 31; Pl.’s Supp. Mem. of P.

& A., filed April 8, 2005, at 5:25-26), thus receiving partial payment on the obligation due.

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2005, for a total of $9882; (3) interest on clean-up costs of $148,601.05, at a daily rate of

$40.72, calculated from February 26, 2004 through January 12, 2005,3

 for a total of

$13,111.84; (4) interest on clean-up costs of $88,601.05, at a daily rate of $24.27,

calculated from January 13, 2005 through March 10, 2005,4

 for a total of $1383.39;

(5) interest on clean-up costs of $73,601.05, at a daily rate of $20.16, calculated from

March 11, 2005 through April 8, 2005,5 for a total of $584.64; and (6) interest on clean-up

costs of $53,601.05, at a daily rate of $14.69, calculated from April 9, 2005 through May

20, 2005, for a total of $616.98. Accordingly, plaintiff is entitled to an award of prejudgment

interest in a total amount of $30,441.82.

Finally, plaintiff seeks an award of postjudgment interest. An award of postjudgment

interest is applicable to the entire judgment, including the sums awarded for attorney’s fees

and prejudgment interest. See Air Separation, Inc. v. Underwriters at Lloyd’s of London, 45

F. 3d 288, 290-91 (9th Cir. 1994). Postjudgment interest is “calculated from the date of the

entry of the judgment, at a rate equal to the weekly average 1-year constant maturity

Treasury yield, as published by the Board of Governors of the Federal Reserve Systems,

for the calendar week preceding the date of the judgment.” See 28 U.S.C. § 1961(a). The

applicable rate for a judgment entered on May 20, 2005 is 3.35%, see

http://www.federalreserve.gov/releases/H15/Current/, computed daily and compounded

annually, see 28 U.S.C. § 1961(b).

//

//

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CONCLUSION

For the reasons stated above, plaintiff’s application is hereby GRANTED in part and

DENIED in part, as follows:

1. Plaintiff shall have judgment against Prototek in the amount of $263,621.80

($161,014.86 + $72,165.12 + $30,441.82), such judgment to bear interest at the rate of

3.35% until paid.

2. The Clerk of the Court is hereby DIRECTED to file under seal the In Camera

Submission, dated May 6, 2005, submitted by plaintiff in support of the instant application.

The Clerk shall close the file.

IT IS SO ORDERED.

Dated: May 20, 2005 /s/ Maxine M. Chesney 

MAXINE M. CHESNEY

United States District Judge

Case 3:03-cv-04792-MMC Document 95 Filed 05/20/05 Page 5 of 5