Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01548/USCOURTS-casd-3_05-cv-01548-14/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance 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

05cv1548

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CENTURY SURETY COMPANY,

Plaintiff,

v.

350 W.A., LLC, et al.,

Defendants.

 

AND RELATED COUNTERCLAIMS.

 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Civil No. 05-CV-1548-L(LSP)

ORDER GRANTING IN PART AND

DENYING IN PART MOTION FOR

ATTORNEYS’ FEES RE:

STIPULATED JUDGMENT [doc.

#146] 

Plaintiff moves for attorneys’ fees and costs incurred in connection with the prosecution

and enforcement of the Stipulated Judgment that was entered in this action. The motion has

been fully briefed. For the reasons discussed below, the Court grants plaintiff’s motion for

attorneys’ fees but denies without prejudice the motion as to the amount of fees to be awarded.

Background

The Court and the parties are well aware of the factual and procedural background of this

case. Nevertheless, the Court briefly reviews the relevant facts found in the Court’s Order that

directed entry of the Stipulated Judgment. 

After sustaining an adverse decision in the underlying Helleis action in state court, 350

filed a notice of appeal. In an effort to obtain an appeal bond to protect its assets from

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 1 of 10
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 As part of the Bond Agreement, there were also Guaranty and Indemnity

Agreements executed by Blackburn and Blackburn entities, including 350.

2

 The Blackburn entities are 350 W.A. LLC; B&H Property Systems, Inc.; 350 West

Ash Urban Homes, Inc.; and the David A. Blackburn Family Trust. With respect to the present

motion, these entities and David A. Blackburn will be designated as the “judgment debtors.”

3 Plaintiff initially brought its request in the form of an ex parte application for an

order that the stipulated judgment be entered. [doc. #23]. In response, 350 and Blackburn filed

an ex parte application for an order that Century’s ex parte application be heard as a noticed

motion which would allow for full briefing. [doc. #24]. The parties then filed a joint motion

regarding hearing dates that included a hearing date and briefing schedule for plaintiff’s ex parte

application. [doc. #25] Consequently, 350 and Blackburn’s ex parte application was rendered

moot and the Court construed plaintiff’s ex parte application as a motion for an order that the

stipulated judgment be entered.

2 05cv1548

immediate and allegedly aggressive execution by the judgment creditor (Helleis), Century,

Blackburn and 350 entered into an “Agreement to Procure Appeal Bond” (“Bond Agreement”)

whereby Century would provide, for a six-month period only, collateral as security for the

appeal bond and after that time period expired, 350 and Blackburn would substitute their

collateral as security for the appeal bond.1

 After the six-month period expired, along with

several extensions of time, 350 and Blackburn failed to substitute their own collateral for the

appeal bond. Under the parties’ Bond Agreement, in the event Blackburn and 350 did not

timely substitute their collateral, a Stipulated Judgment would be entered in this action in

Century’s favor against Blackburn, 350 and other entities2

 associated with Blackburn (the

“Blackburn entities”). Because 350 and Blackburn never provided substitute collateral, plaintiff

sought, by way of an ex parte application for entry of the Stipulated Judgment in accordance

with the parties’ Bond Agreement. After full briefing on the merits, the Court granted entry of

the Stipulated Judgment. (See Order filed September 25, 2007 [doc. #73].)3

On October 25, 2007, Blackburn and 350 filed a timely Notice of Appeal to the Ninth

Circuit Court of Appeals which was limited to the Stipulated Judgment and did not encompass

any other portions of the case or orders entered. This left the case in an unusual procedural

stance because plaintiff’s pending claim for rescission prevented entry of a final judgment. 350

later moved for Rule 54(b) language which was granted as to the Stipulated Judgment only. 

Plaintiff moved for attorneys’ fees based upon the Bond Agreement and Stipulated Judgment –

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 2 of 10
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 The Stipulated Judgment was filed on September 25, 2007 and the present motion

for attorneys’ fees based on the Bond Agreement and Stipulated Judgment was filed on

December 28, 2007.

5 Thus far, the Ninth Circuit has not indicated whether the appeal of the Stipulated

Judgment is or is not interlocutory.

3 05cv1548

the matter under consideration here.

1. Timeliness of Request

Attorneys’ fee motions are generally governed by Federal Rule of Civil Procedure

54(d)(2), which provides that such motions shall be “filed no later than 14 days after entry of

judgment.” Judgment Debtors contend plaintiff’s request for attorneys’ fees is untimely because

it was not filed until three months after entry of the stipulated judgment.4

 As noted above, the

present case presents a situation where a stipulated judgment was entered that did not constitute

a final judgment as to the entire case. Plaintiff contends that Rule 54(d) is not applicable to the

stipulated judgment for this very reason – it is not a final judgment. After an inquiry by the

Court, the judgment debtors were uncertain enough about the finality of the stipulated judgment

to seek Rule 54(b) language in determining whether their appeal was interlocutory.5

 Given the

unsettled status of the stipulated judgment, the Court concludes that plaintiff’s motion for

attorneys’ fees is timely and even if untimely, excusable neglect provides a basis for considering

the motion on the merits. 

2. Entitlement to Attorneys’ Fees and Costs

The Stipulated Judgment underlying plaintiff’s request for attorneys’ fees is based upon a

Bond Agreement that provides for an award of reasonable attorneys’ fees and costs to the

prevailing party:

18. Prevailing Party’s Fees and Costs. If any party commences an action against

another party to interpret or enforce any terms of this Agreement, or because of

the other party’s breach of any provision in the Agreement, or an action arising

out of and/or in connection with rights and/or obligations set forth in this

Agreement, the losing party shall pay to the prevailing party reasonable

attorneys’ fees, costs and expenses, court costs and other costs of action

incurred in connection with the prosecution or defense of such action,

whether or not the action is prosecuted to a final judgment. . . . 

(Bond Agreement (emphasis added), Pltf’s Exh. 1, ¶ 18.)

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 3 of 10
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 05cv1548

Because Blackburn breached the Bond Agreement by failing to provide substituted

collateral, plaintiff sought entry of the Stipulated Judgment in the present action. The Court

entered the Stipulated Judgment in the amount of $1,201,088.16 and permitted execution of the

judgment. (See Order filed September 25, 2007 [doc. #73].) As a result of the entry of the

Stipulated Judgment based on the Judgment Debtors’ breach of the Bond Agreement, Century is

the prevailing party with respect to the Stipulated Judgment. Century therefore contends it is

entitled to its reasonable attorneys’ fees and costs under the Bond Agreement. Judgment

Debtors, however, argue that plaintiff is not entitled to attorneys’ fees under either the Stipulated

Judgment or state law, specifically Civil Code § 1717, because there was no “action on a

contract.”

When a party obtains a “simple, unqualified victory” by defeating the only contract claim,

Civil Code § 1717 entitles the successful party to recover reasonable attorney fees incurred

prosecuting that claim if the contract contained a provision for attorney fees. Hsu v. Abbara, 9

Cal.4th 863, 877 (1995). California Civil Code § 1717 provides in relevant part:

In any action on a contract, where the contract specifically provides that attorney’s

fees and costs, which are incurred to enforce that contract, shall be awarded either

to one of the parties or to the prevailing party, then the party who is determined to

be the party prevailing on the contract, whether he or she is the party specified in

the contract or not, shall be entitled to reasonable attorney’s fees in addition to

other costs. 

But as Judgment Debtors note, no contract claim is alleged in the complaint. Instead, the

action Century brought was for declaratory relief and rescission concerning a different contract,

i.e., the underlying insurance contract. Even though the Bond Agreement is an enforceable

contract between the parties that is closely associated with the underlying merits of this action,

Judgment Debtors contend, based on Civil Code § 1717, plaintiff was required to initiate a

separate action on the Bond Agreement in order to seek attorneys’ fees and cost with respect to

their acknowledged breach of the Bond Agreement and the entry of the Stipulated Judgment. 

Judgment Debtors rely on the initial phrase of section 1717, “[i]n any action on a

contract,” to contend that because there was no action on the contract, – the Bond Agreement –

attorneys’ fees and costs are not available to plaintiff. 

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 4 of 10
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 Section 18 of the Bond Agreement provides for the award of reasonable attorneys’

fees and costs based on alternative situations: (1) where a party commences an action against

another party to interpret or enforce any terms of the Bond Agreement; OR (2) because of the

other party’s breach of any provision in the Bond Agreement; OR commences an action arising

5 05cv1548

Judgment Debtors’ argument is not well taken. In attempting to obtain entry of the

Stipulated Judgment in this action, Century was seeking to have the Bond Agreement enforced. 

The parties fully briefed the enforceability of the Bond Agreement. Judgment Debtors argued

that their acknowledged breach of the Bond Agreement should be excused based upon the

doctrines of impossibility and/or frustration of purpose. They also asserted that the Bond

Agreement was unenforceable because it was unconscionable both substantively and

procedurally. (See 350 and Blackburn’s opposition to application for entry of judgment [doc.

#28]). Their opposition consisted of 59 pages that included declarations and exhibits, much like

a response to a motion for summary judgment.

Because 350 and Blackburn had a full opportunity to challenge the enforceability of the

Bond Agreement, they cannot now contend that a separate action would have provided them

with a greater or more advantageous circumstance to press their arguments. As a result, the

phrase “action on a contract” cannot be read so narrowly as to vitiate the clear language of the

Bond Agreement’s provision providing for attorneys’ fees and costs.

Additionally, the Bond Agreement specifically provides that in the event of a default of

the Bond Agreement, the Stipulated Judgment would be entered in the present case: 

In the event that the Insured parties or their affiliated entities default on the

agreements made in Paragraphs 4, 5, or 6 of this Agreement, Century Surety is

entitled to file the Stipulated Judgment with the clerk of the court forthwith and

have it presented to the United States District Court for signature by a judge.

(Bond Agreement at 4, ¶ 7, Exh. 1.) Consequently, the attorneys’ fees and cost provision in the

Bond Agreement would necessarily be determined in this action and would not require a

separate action “on the contract” to be filed in this or any other court.

Further, the Bond Agreement does not require a separate action in order to obtain

attorneys’ fees and costs. As noted above, paragraph 18 provides for attorneys’ fees and costs 

“because of the other party’s breach of any provision in the Agreement.”6

 The Court found, and

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 5 of 10
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

out of and/or in connection with the rights and/or obligations set forth in the Bond Agreement. 

The Judgment Debtors’ argument that a separate action must be commenced in order to obtain

attorneys’ fees and costs is belied by the language of the Bond Agreement.

6 05cv1548

Judgment Debtors conceded that substitute collateral was not provided timely as required under

the Bond Agreement and therefore, a breach of the Bond Agreement occurred. The Court

carefully considered, after full briefing including documentary evidence, whether the Bond

Agreement was enforceable and found that it was. The Judgment Debtors are “the losing party”

and are required, in the present action, “to pay to the prevailing party reasonable attorneys’ fees,

costs and expenses, court costs and other costs of action incurred . . . .” 

Based on the clear language of the Bond Agreement, the entry of the Stipulated Judgment

and a reasonable reading of Code of Civil Procedure § 1717, Century, as the prevailing party, is

entitled to recover its reasonable attorneys’ fees and costs. 

3. Post-Judgment Enforcement Fees

In addition to attorneys’ fees incurred in seeking the entry of the Stipulated Judgment,

Century seeks fees and cost in connection with the enforcement of the Stipulated Judgment. 

Such fees involve obtaining attachment orders and responding to Judgment Debtors’ efforts to

vacate the attachment orders. 

Plaintiff points to California Code of Civil Procedure § 685.040 to show that fees

incurred in enforcement activities are recoverable if attorneys’ fees are awarded by contract. 

Section 685.040 provides: 

The judgment creditor is entitled to the reasonable and necessary costs of

enforcing a judgment. Attorney's fees incurred in enforcing a judgment are not

included in costs collectible under this title unless otherwise provided by law.

Attorney's fees incurred in enforcing a judgment are included as costs collectible

under this title if the underlying judgment includes an award of attorney's fees to

the judgment creditor pursuant to subparagraph (A) of paragraph (10) of

subdivision (a) of Section 1033.5.

Section 1033.5(a)(10)(A) provides for attorneys’ fees when authorized by contract.

In the present case, the Bond Agreement clearly provides for an award of reasonable

attorneys’ fees and costs. But the Judgment Debtors argue that even though the Bond

Agreement provides for an award of attorneys’ fees and cost to the prevailing party, because the

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 6 of 10
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

7 05cv1548

Stipulated Judgment is silent as to attorneys’ fees, there is no basis to recover fees incurred to

enforce the judgment. This proposition is without citation and without merit.

In the present case, because the contract – the Bond Agreement – grants the prevailing

party the right to recover attorneys’ fees, such fees are recoverable as costs under Code of Civil

Procedure section 1033.5(a)(10)(A). Code of Civil Procedure 685.040 permits recovery of postjudgment fees if the judgment creditor is entitled to fees under § 1033.5(A)(10)(a), i.e., pursuant

to a contract. Plaintiff here is entitled to reasonable attorneys’ fees as the prevailing party for

both pre- and post-judgment attorneys’ fees.

4. Reasonableness of Attorneys’ Fees and Costs Request

Century seeks $61,797.50 for both pre- and post-judgment attorneys’ fees incurred in this

matter. The Court has already determined Century is entitled to such attorneys’ fees but must

undertake an analysis of whether the amount sought is reasonable. The attorney claiming fees

has the burden of producing evidence to support the fee claim. See Melnyk v. Robledo, 64 Cal.

App.3d 618, 624 (1976). Judgment Debtors contend Century has failed to establish the

reasonableness of its claimed fees. 

The first step in determining the amount of fees is computing the lodestar figure, a

calculation based on the number of hours reasonably expended by the attorney multiplied by the

attorney's hourly rate. EnPalm, LLC v. Teitler, 162 Cal. App. 4th 770 (2008). A reasonable

hourly rate "is that prevailing in the community for similar work." PLCM Group v. Drexler, 22

Cal.4th 1084, 1095 (2000). Once the court has determined the lodestar figure, the court next

considers whether the total award calculated under all of the circumstances of the case is a

reasonable amount. Factors that may be considered to assess reasonableness are the necessity

and nature of the litigation, skill required, experience of counsel, attention given, and the success

or failure of the case. Id.

 “To enable a trial court to determine whether attorney fees should be awarded and in

what amount, an attorney should present ‘(1) evidence, documentary and oral, of the services

actually performed; and (2) expert opinion, by [the applicant] and other lawyers, as to what

would be a reasonable fee for such services.’” Martino v. Denevi, 182 Cal. App.3d 553, 558-559

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 7 of 10
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 05cv1548

(1986) (citations omitted.) “[I]n the absence of such crucial information as the number of hours

worked, billing rates, types of issues dealt with and appearances made on the client's behalf, the

trial court is placed in the position of simply guessing at the actual value of the attorney's

services. That practice is unacceptable and cannot be the basis for an award of fees.” Id. at 559. 

Century provides the declaration of lead counsel, Jacqueline M. Jauregui, in support of its

motion for attorneys’ fees. Ms Jauregui states that Exhibit 10 to her declaration contains the

billing records for services provided to obtain entry of the Stipulated Judgment, enforce the

Bond Agreement, obtain the temporary protective order, right to attach order and writs of

attachment, and to respond to 350 and Blackburn’s actions in relation thereto. (Jauregui

Declaration at ¶ 11.) She also notes that she “reviewed the time records, and exercising billing

judgment, have determined that the time billed to the client included only reasonably necessary

attorney work performed with respect to enforcement of the terms of the Bond Agreement in this

particular case.” Id.

Judgment Debtors contend, however, that the billing entries “are rife with vague

descriptions of uses of time, inappropriate to the relatively straightforward task of issuing writs

of attachment.” (Opp. at 11). “In challenging attorney fees as excessive because too many

hours of work are claimed, it is the burden of the challenging party to point to the specific items

challenged, with a sufficient argument and citations to the evidence. General arguments that

fees claimed are excessive, duplicative, or unrelated do not suffice.” Premier Medical

Management Systems, Inc. v. California Ins. Guarantee Ass'n, 163 Cal. App.4th 550, 563

(2008). 

The Court has carefully reviewed Century’s billing records and finds them to be

sufficiently descriptive of work performed in connection with this matter. Judgment Debtors

have failed to challenge plaintiff’s request for attorneys’ fees with specificity. Nevertheless,

neither the billing records nor Ms Jauregui’s declaration provides any information concerning

the billing rates of counsel involved in this matter. Further, counsel does not provide any

evidence that the fees billed are the prevailing rate in San Diego for this type of case. Although

touching on the other relevant factors to be considered in assessing reasonableness, Ms

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 8 of 10
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 05cv1548

Jauregui’s declaration does not provide sufficient detail to assist the Court in its task. The Court

therefore cannot determine the reasonableness of the attorneys’ fees sought in this motion. 

Accordingly, the motion will be granted with respect to Century’s entitlement to attorneys’ fees

and costs under the Bond Agreement and Stipulated Judgment but is denied without prejudice as

to the amount to be awarded.

5. Costs

The Court finds that Century, as the prevailing party, is entitled to its costs in addition to

its attorneys’ fees. However, the determination of the amount of costs to be awarded is

committed to the Clerk of the Court under Civil Local Rule 54.1. Century shall present to the

Clerk of the Court a cost bill in conformity with Rule 54.1 no later than 10 days after the filing

of this Order.

Conclusion

For the reasons set forth above, plaintiff’s motion for attorneys’ fees is GRANTED IN

PART and DENIED IN PART. The Court finds that plaintiff is entitled to attorneys’ fees but

have not demonstrated that the amount sought is reasonable. Plaintiff shall submit a renewed

declaration and any other supporting documents within ten days of the filing of this Order that

addresses the issues discussed above. Defendants may file an opposition to the billing statement

within ten days of the filing of plaintiff’s billing statement. Plaintiff may file a reply

memorandum within five days of the filing of defendants’ opposition, if any.

The Court further GRANTS plaintiff’s request for costs but costs are determined by the

Clerk of the Court. Accordingly, plaintiff shall submit a cost bill in compliance with Civil Local

Rule 54.1 within 10 days of the filing of this Order. 

IT IS SO ORDERED.

DATED: September 26, 2008

M. James Lorenz

United States District Court Judge

/ / /

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 9 of 10
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 05cv1548

COPY TO: 

HON. LEO S. PAPAS

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

Case 3:05-cv-01548-L-BGS Document 210 Filed 09/26/08 Page 10 of 10