Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-01072/USCOURTS-casd-3_11-cv-01072-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PAYROLLING.COM CORP.,

Plaintiff,

CASE NO. 11-CV-1072 – IEG (DHB)

ORDER GRANTING MOTION

FOR ATTORNEYS’ FEES AND

COSTS INCURRED ENFORCING

THE SETTLEMENT AGREEMENT

[Doc. No. 74]

vs.

WMBE PAYROLLING, INC., et al.,

Defendants.

Before the Court is Defendants’ motion for attorneys’ fees and costs incurred

enforcing the parties’ settlement agreement. [Doc. No. 74.] For the reasons below,

Defendants’ motion is GRANTED. 

BACKGROUND

This case arose from a dispute over website domains between competing

payroll servicing companies, Plaintiff Payrolling.com Corp. (“Payroll Corp.”) and

Defendant WMBE Payrolling, Inc. dba Target CW (“WMBE”). Beginning in April

2012, the parties and their counsel negotiated settlement terms, which were reduced

to writing and signed by Plaintiffs on May 24 and 25, 2012, and by all parties as of

June 25, 2012. [Doc. No. 63-6 at 12-27 (Settlement Agreement).] 

In addition to clauses releasing all claims, the written settlement agreement

required, upon its execution, specific performance by the parties as follows:

1. the parties were to sequentially dismiss their claims and counterclaims,

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[Settlement at ¶6];

2. Plaintiffs were to obtain a court order declaring certain real property quitclaim deeds void and record that court order with the San Diego

County Recorder, Defendants were to execute and record documents

necessary to remove a Lis Pendens on the real property, and thereafter the parties were to enter into a standard commercial lease, [Settlement

at ¶9];

3. Plaintiffs were to issue neutral reference termination letters to former

employee Defendants, [Settlement at ¶15];

4. the parties were to issue a joint letter to customers rescinding disparaging comments made as to the other, [Settlement at ¶17].

Per its terms, the agreement was fully executed once all parties signed.

[Settlement at ¶24.] All parties had signed as of June 25, 2012, [see Settlement at

12-27], and thus the specific performance outlined above was to commence

immediately thereafter. The agreement also included an explicit attorneys’ fees

clause, providing that “[t]he prevailing party of any action in connection with their

meritorious enforcement of the Agreement shall be entitled to reasonable attorneys’

fees and costs.” [Settlement at ¶25(c).]

As of January 2013, and notwithstanding Defendants’ repeated inquiries and

requests, [see, e.g., Doc. No. 63 at 5], Plaintiffs had failed to perform any of the

agreed upon terms. Thus, on January 22, 2013, approximately six months after the

agreement was fully signed and executed, Defendants filed a motion requesting that

the Court enforce specific performance under the settlement. [Doc. No. 63.]

Plaintiffs failed to file any opposition brief or otherwise respond, and Defendants

filed a reply brief in support on March 7, 2013. [Doc. No. 66.] On March 18, 2013,

the Court held a hearing, [see Doc. No. 68], and on March 20, 2013, granted in full

Defendants’ motion to enforce the settlement. [Doc. No. 70.]

By the present motion, Defendants seek attorneys’ fees and costs for their

successful enforcement of the settlement against Plaintiffs. [Doc. No. 74.] Plaintiffs

filed an opposition brief, [Doc. No. 75], and Defendants filed a reply brief, [Doc.

No. 77].

///

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DISCUSSION

Defendants seek attorneys’ fees and costs pursuant to ¶25(c) of the

Settlement, which provides that “[t]he prevailing party of any action in connection

with their meritorious enforcement of the Agreement shall be entitled to reasonable

attorneys’ fees and costs.” [Settlement at ¶25(c).] Plaintiffs do not contest the

validity or applicability of this provision, but rather assert two arguments: (1)

Defendants do not qualify as a prevailing party; and (2) the requested fees and costs

are unreasonable. Neither argument is persuasive.

1. Defendants Qualify as a Prevailing Party

Under applicable California contract law,1

 “where the contract specifically

provides that attorney’s fees and costs, which are incurred to enforce that contract,

shall be awarded . . . to the prevailing party, then the party who is determined to be

the party prevailing . . . shall be entitled to reasonable attorney’s fees in addition to

other costs.” Cal. Civ. Code § 1717(a). “[T]he party prevailing . . . shall be the

party who recovered a greater relief in the action on the contract.” Cal. Civ. Code §

1717(b)(1). In determining whether a party has prevailed, “[s]ubstance rather than

form should be respected and to this extent the trial court should be guided by

equitable considerations.” U.S. Fidelity and Guar. Co. v. Scott Cos., Inc., 2007 WL

2729330, at *3 (N.D. Cal. Sept. 18, 2007). “That is, ‘status as the party prevailing []

is ascertained not by technicalities of pleading and procedure but by a pragmatic

assessment of the parties’ ultimate positions vis-à-vis their litigation objectives as

reflected in pleadings, prayers, and arguments.” Id. (quoting Estate of Drummond,

149 Cal. App. 4th 46, 51 (Cal. Ct. App. 2007). Still, “[w]hen a defendant obtains a

simple, unqualified victory . . ., section 1717 entitles the successful defendant to

recover” and “[t]he trial court has no discretion to deny attorney fees.” Hsu v.

Abbara, 9 Cal. 4th 863, 877 (1995).

1 See Settlement at ¶25(a) (“the rights and obligations hereunder . . . shall be construed and enforced in accordance with, and shall be governed by, the laws of the State of California.”).

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Here, Defendants moved to enforce the settlement and the Court granted that

motion in full. [See Doc. Nos. 63, 70.] As a result, Defendants received the entire

relief sought, i.e., dismissal of Plaintiffs’ claims with prejudice, Plaintiffs’ specific

performance under the terms of the settlement, and reaffirmation of Defendants’

deed to real property purportedly worth over $1 million. [See Doc. No. 70.] Given

such “simple, unqualified victory” in enforcing the settlement agreement,

Defendants unquestionably qualify as a prevailing party under Cal. Civ. Code §

1717 and, accordingly, ¶25(c) of the Settlement. Hsu, 9 Cal. 4th at 877; see also

U.S. Fidelity, 2007 WL 2729330, at *3 (party enforcing settlement agreement held

prevailing party because they “obtained their primary litigation objective”).

2. Defendants Request Reasonable Fees and Costs

Under§ 1717, “the trial court has broad authority to determine the amount of a

reasonable fee.” PLCM Group v. Drexler, 22 Cal. 4th 1084, 1095 (2000)).

“California courts have consistently held that a computation of time spent on a case

and the reasonable value of that time is fundamental to a determination of an

appropriate attorneys’ fee award.” Id. Accordingly, “the fee setting inquiry . . .

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

multiplied by the reasonable hourly rate.” Id. “The lodestar figure may then be

adjusted, based on consideration of factors specific to the case, in order to fix the fee

at the fair market value for the legal services provided.” Id. “Such an approach

anchors the trial court’s analysis to an objective determination of the value of the

attorney's services, ensuring that the amount awarded is not arbitrary.” Id.

Here, Defendants seek a total of $70,993.35 in fees and expenses incurred

from June 2012 to present in enforcing the settlement agreement against Plaintiffs. 

This amount includes the cost of researching and drafting motions to enforce the

settlement, to alternatively compel arbitration, and for fees incurred in so enforcing

the settlement. Defendants also seek the cost of depositions, researching and

drafting correspondence, and other discovery undertaken in relation to these

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enforcement efforts. In support, Defendants submit thorough time entries and

reports, including precise time records (recorded in tenths of an hour), the applicable

hourly rates, detailed task summaries, and the resulting billable amounts. [See Doc.

No. 74-1, Ex. B.] These reports reflect hourly rates of $125, $200, and $350 for

respective paralegal, junior associate, and senior attorney time, all falling well within

typical rates for legal work by attorneys and support staff of comparable experience.

[Id.] Defendants also submit detailed summaries of related electronic research costs. 

[See Doc. No. 74-1, Ex. A.] Defendants’ meticulous billing records establish the

reasonableness of the time spent and rates charged, as well as the direct relationship

of each task to Defendants’ settlement enforcement efforts. Moreover, the total

request reflects a simple lodestar, i.e., actual fees and costs incurred without any

modifier for the risk of nonpayment, the complexity of the issues involved, or the

intransigence of Plaintiffs’ counsel. As such, the Court finds Defendants’ requested

fees and costs eminently reasonable.

Because Defendants qualify as a prevailing party, the reasonable fees and cost

incurred in settlement enforcement, and requested here, are recoverable under 

¶25(c) of the Settlement. See Cal. Civ. Code § 1717; see also Hsu, 9 Cal. 4th at 877;

U.S. Fidelity, 2007 WL 2729330, at *3. Accordingly, Defendants’ present motion

for attorneys’ fees and costs in the amount of $70,993.35 is GRANTED. 

CONCLUSION

For the foregoing reasons, the Court hereby GRANTS Defendants’ motion in

its entirety.

IT IS SO ORDERED.

Dated: September 11, 2013 ________________________________

IRMA E. GONZALEZ

United States District Judge

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