Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02449/USCOURTS-caed-2_06-cv-02449-3/pdf.json

Parties Involved:
Advanced Care Technologies, Inc.
Defendant
BrachySciences, Inc.
Defendant
Paul Davis
Plaintiff
World Wide Medical Technologies, LLC
Defendant

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

PAUL DAVIS, 

 Plaintiff, 

 v. 

ADVANCED CARE TECHNOLOGIES, 

INC., WORLD WIDE TECHNOLOGIES, 

LLC, and BRACHYSCIENCES, INC., 

 Defendants. /

No. Civ. S-06-2449 RRB DAD 

Memorandum of Opinion

and Order

GRANTING Attorney Fees

Paul Davis (“Davis”) filed an action against his former 

employers Advanced Care Technologies, Inc. (“ACM”), World Wide 

Medical Technologies, LLC (“World Wide”), and BrachySciences, 

Inc. (“BrachySciences”) (collectively “Defendants”) seeking a 

determination that the Non-Competition Agreement in his 

employment contract was invalid and unenforceable. Davis 

successfully moved for summary judgment on the ground that the 

restrictive covenants in the Non-Competition Agreement were void 

and unenforceable under California law. Davis now moves for 

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attorney’s fees pursuant to California Civil Code § 1717. For 

the reasons stated below, the court GRANTS the motion.1 

I. 

A. Civil Code § 1717 

In a diversity case, the law of the state in which the 

district court sits determines whether a party is entitled to 

attorney fees. Carnes v. Zamani, 488 F.3d 1057, 1059 (9th Cir. 

2007). California Civil Code § 1717 provides: “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.” Cal. 

Civ. Code § 1717(a). California courts liberally construe “on a 

contract” to include any action that involves a contract where 

one of the parties would be entitled to recover attorney fees 

 

1 Inasmuch as the Court concludes the parties have submitted 

memoranda thoroughly discussing the law and evidence in support 

of their positions, it further concludes oral argument is 

neither necessary nor warranted with regard to the instant 

matter. See Mahon v. Credit Bureau of Placer County, Inc., 171 

F.3d 1197, 1200 (9th Cir. 1999)(explaining that if the parties 

provided the district court with complete memoranda of the law 

and evidence in support of their positions, ordinarily oral 

argument would not be required).

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under the contract if that party prevails in its lawsuit. In re

Baroff, 105 F.3d 439, 442-43 (9th Cir. 1997). “‘Section 1717 

was enacted to establish mutuality of remedy where [a] 

contractual provision makes recovery of attorney’s fees 

available for only one party [citations], and to prevent 

oppressive use of one-sided attorney’s fees provisions.’” Hsu 

v. Abbara, 9 Cal. 4th 863, 870 (1995); Brittalia Ventures v. 

Stuke Nursery Co., Inc., 153 Cal. App. 4th 17, 29 (2007). 

 In the present case, the parties entered into an employment 

contract containing restrictive non-competition covenants. The 

parties agreed that: “In the event that Employee violates any of 

the covenants . . . and the Company or any of its Affiliates is 

required to seek enforcement of such, . . . Employee shall be 

responsible for all reasonable attorney’s fees and costs 

incurred by the Company or the Affiliates in the enforcement of 

[such] covenants. . . .” After leaving Defendants employ, Davis 

filed the underlying declaratory relief action seeking a 

determination that the restrictive covenants in the NonCompetition Agreement were invalid and unenforceable under 

California law. Davis prevailed and now seeks to recover 

attorney’s fees under § 1717. For their part, Defendants argue 

that Davis is not entitled to attorney’s fees because his action 

was not “an action on the contract” within the meaning of 

§ 1717. Alternatively, Defendants argue that Davis is not 

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entitled to attorney’s fees under § 1717 because Defendants 

would not have been able to recover attorney’s fees had they 

prevailed in the underlying proceedings. Defendants’ arguments 

lack merit. 

 It is well settled that “a party is entitled to attorney 

fees under section 1717 ‘even when the party prevails on grounds 

the contract is inapplicable, invalid, unenforceable or 

nonexistent, if the other party would have been entitled to 

attorney’s fees had it prevailed.’” Hsu, 9 Cal. 4th at 870; 

Yuba Cypress Housing Partners, Ltd. v. Area Developers, 98 Cal. 

App. 4th 1077, 1081 (2002); Brittalia Ventures, 153 Cal. App. 

4th at 29. The purpose of this rule is to establish mutuality 

of remedy where a contractual provision makes recovery of 

attorney’s fees available for only one party, and to prevent 

oppressive use of one-sided attorney’s fees provisions. Hsu, 9 

Cal. 4th at 870; Brittalia Ventures, 153 Cal. App. 4th at 29. 

Because the purpose of this rule would be subverted if its 

benefits were denied to parties who defeat contract claims, the 

statute applies in favor of the party prevailing on a contract 

claim whenever that party would have been liable under the 

contract for attorney’s fees had the other party prevailed. 

Hsu, 9 Cal.4th at 870-71; see Milman v. Shukhat, 22 Cal. App. 

4th 538, 545 (1994) (observing that “[a]s long as an action 

involves a contract, and one of the parties would be entitled to 

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recover attorney fees under the contract if that party prevails 

in its lawsuit, the other party should also be entitled to 

attorney fees if it prevails, even if it does so by successfully 

arguing the inapplicability, invalidity, unenforceability, or 

nonexistence of the same contract”); see also Star Pacific 

Investments, Inc. v. Oro Hills Ranch, Inc., 121 Cal. App. 3d 

447, 460-61 (1981) (holding that an action brought to cancel an 

agreement was an action on the contract within the meaning of § 

1717). 

 Based on the foregoing, the court concludes that Davis is 

entitled to attorney’s fees pursuant to § 1717 because he is the 

prevailing party in an action “on the contract” as his 

declaratory relief action sought a determination of the parties’ 

rights under the Non-Competition Agreement. See City and County 

of San Francisco v. Union Pacific R.R. Co., 50 Cal. App. 4th 

987, 1000 (1996) (action for declaratory relief seeking a 

determination of the rights of the parties under a contract is 

“on the contract” within the meaning of § 1717); Harbour 

Landing-Dolfann, Ltd. v. Anderson, 48 Cal. App. 4th 260, 263 

(1996) (declaratory relief action was “on the contract” where 

party sought to enforce rights under a contract). Moreover, 

because Defendants would have been entitled to attorney’s fees 

had they filed a breach of contract action and successfully 

argued that the restrictive covenants in the Non-Competition 

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Agreement were valid and enforceable, Davis is entitled to fees 

for successfully arguing in his declaratory relief action that 

such covenants are invalid and unenforceable under California 

law.2 Indeed, such an outcome comports with the mutuality of 

remedy established by § 1717.3

 

2 See Harbour-Landing, 48 Cal. App. 4th at 263 (concluding 

that a landlord was entitled to attorney’s fees where tenant 

brought a declaratory relief action seeking a determination of 

the parties’ rights regarding a rent increase because had the 

landlord filed a suit for breach of contract based on the 

tenant’s non-payment of the rent the landlord would have been 

entitled to attorney fees). 

3

 To the extent that Defendants’ rely on Gil v. Mansano, 121 

Cal. App. 4th 739 (2004) to support their position that Davis is 

not entitled to recover attorney’s fees, such reliance is 

misplaced. Gil is distinguishable from the present 

circumstances because in that case the court reversed an award 

of attorney’s fees on the ground that a contractual defense to a 

fraud cause of action was not “an action on the contract.” Id.

at 743-45. Here, unlike in Gil, Davis did not assert a 

contractual defense to a tort cause of action; rather, he 

brought a declaratory relief action seeking to invalidate the 

restrictive covenants in the Non-Competition Agreement. As 

such, Davis’ action was an action “on the contract” within the 

meaning of § 1717. Additionally, to the extent that Defendants’ 

rely on Yoo v. Jho, 146 Cal. App. 4th 1249 (2007) to support 

their position that Davis cannot recover fees, such reliance is 

misplaced. Yoo is distinguishable from the present case because 

in that case the court refused to award attorney’s fees on the 

ground that the object of the contract was illegal, not because 

it was found to be void and unenforceable. Id. at 1256. 

Therefore, because the object of the Non-Competition Agreement 

was not illegal, Defendants’ reliance on Yoo is unavailing. See

Yuba Cypress Housing Partners, 98 Cal. App. 4th at 1082 (while 

courts generally will not enforce an illegal contract as there 

is no need for a mutual right to attorney fees since neither 

party can enforce the agreement, “[a] party to a contract who 

successfully argues its illegality stands on different ground 

than a party who prevails in an action on a contract by 

convincing the court the contract is inapplicable, invalid, 

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B. Lodestar 

 Defendants argue that the attorney’s fees sought by Davis 

are excessive because they include fees related to an 

unsuccessful motion to remand. Defendants argue that such fees 

should be excluded from any fee award. 

 “When a party prevails in litigation regarding a contract 

which contains an attorney fee clause, Civil Code section 1717 

directs that, upon motion of the prevailing party, ‘[r]easonable 

attorney’s fees shall be fixed by the court, and shall be an 

element of the costs of suit.’” Yuba Cypress Housing Partners, 

98 Cal. App. 4th at 1083. In California, the fee setting 

inquiry “ordinarily begins with the ‘lodestar,’ i.e., the number 

of hours reasonably expended multiplied by the reasonable hourly 

rate. ‘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.’” PLCM Group v. Drexler, 22 Cal. 4th 

1084, 1095 (2000). “The reasonable hourly rate is that 

 

nonexistent or unenforceable for reasons other than 

illegality”). Although covenants not to compete are void and 

unenforceable under California law, such covenants are valid and 

enforceable in other states. See Application Group, Inc. v. 

Hunter Group, Inc., 61 Cal. App. 4th 881 (1998) (Maryland law 

will enforce non-competition agreements so long as they are 

reasonable in scope and duration); United Rentals, Inc. v. 

Pruett, 296 F. Supp. 2d 220 (D. Conn. 2003) (Connecticut law 

will enforce certain employment contracts restricting the 

mobility of employees and the exercise of free competition). 

 

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prevailing in the community for similar work.” Id. The 

prevailing party bears the burden to prove the appropriate 

market rate to be used in calculating the lodestar. MBNA 

America Bank, N.A. v. Gorman, 147 Cal. App. 4th Supp. 1, 13 

(2006). This burden may be satisfied through affidavits, 

without additional evidence. Id. “Moreover, in assessing a 

reasonable hourly rate, the trial court is allowed to consider 

the attorney’s skill as reflected in the quality of the work, as 

well as the attorney’s reputation and status.” Id. (citing 

Ketchum v. Moses, 24 Cal. 4th 1122, 1139 (2001)). 

 “Under the lodestar method, a party who qualifies for a fee 

should recover for all hours reasonably spent unless special 

circumstances would render an award unjust.” Vo v. Las Virgenes 

Municipal Water Dist., 79 Cal. App. 4th 440, 446 (2000) (citing 

Serrano v. Unruh, 32 Cal. 3d 621, 632-33 (1982)); MBNA America 

Bank, 147 Cal.App.4th Supp. at 12. “Time is compensable if it 

was reasonably expended and is the type of work that would be 

billed to a client.” MBNA American Bank, 147 Cal. App. 4th 

Supp. at 12.4 The prevailing party bears the burden of 

documenting the appropriate hours expended and must submit 

 

4

 When attorney fees are statutorily authorized, compensable 

time includes the reasonable expenses of preparing the motion 

seeking attorney fees. Estate of Trynin, 49 Cal. 3d 868, 875 

(1989). 

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evidence in support of those hours worked. Gates v. Deukmejian, 

987 F.2d 1392, 1397 (9th Cir. 1992) (citing Hensley v. 

Eckerhart, 461 U.S. 424, 433, 437 (1983)).5 The opposing party 

bears the burden of rebuttal, which requires the submission of 

evidence challenging the accuracy and reasonableness of the 

hours charged or the facts asserted by the prevailing party in 

its submitted affidavits. Gates, 987 F.2d at 1397-98. 

Trial courts are vested with broad authority in determining 

a reasonable fee, including adjusting the lodestar figure based 

on case specific factors in order to ensure that the fee 

reflects the fair market value for legal services provided. 

PLCM Group, 22 Cal. 4th at 1095. “The value of legal services 

performed in a case is a matter in which the trial court has its 

own expertise” and should be determined “after consideration of 

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 in the case.” Id. at 1096 

quotation marks omitted). 

 

5

 See Weber v. Langholz, 39 Cal. App. 4th 1578 (1995) 

(absence of time records and billing statements does not deprive 

trial court of substantial evidence to support attorney fee 

award, where attorney declares hourly billing rates, states that 

all fees incurred were connected to attorney’s services, states 

the total fees incurred and summarizes work done).

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 In the instant motion, Davis seeks attorney’s fees and 

costs in the amount of $35,175.76. Specifically, Davis seeks 

$27,416.76 for fees incurred in litigating the underlying 

matter. This figure is based on 122 hours billed at hourly 

service rates of $290 and $240, respectively.6

 The hours include 

time spent drafting the Complaint, litigating the motion to 

remand, preparing the Joint Status Report, reviewing the court’s 

pre-trial scheduling order and drafting the motion for summary 

judgment. Additionally, Davis seeks $7,388.00 for fees incurred 

in preparing the attorney’s fees motion.7 Finally, Davis seeks 

$371.00 in costs. 

Davis argues that the fee award requested is reasonable 

based on the experience of counsel, the complexity of the issues 

and the result obtained. For their part, Defendants do not 

dispute the reasonableness of the hourly billing rates or costs. 

Rather, Defendants dispute the amount of hours billed insofar as 

the billed hours include fees incurred in connection with Davis’ 

motion to remand. Defendants contend that such fees should be 

 

6

 The declaration of Davis’ counsel attests that the 

attorneys in the underlying litigation have 10 and 15 years of 

experience in labor and employment law, respectively. 

7 The declaration of Davis’ counsel attests that two 

attorneys prepared the reply brief in support of Davis’ motion 

for attorney’s fees. One of the attorneys has 10 years of 

experience in labor and employment law while the other is an 

associate. The hourly service rates charged were $240 and $200, 

respectively. 

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disallowed because Davis was unsuccessful in litigating this 

motion and it was unrelated to his prevailing claim. The motion 

to remand, however, was part of the hours reasonably spent in 

litigating the underlying declaratory relief matter and was not 

a separate claim, but rather a method of pursuing Davis’ 

ultimately successful claim. As such, the court declines to 

significantly reduce the lodestar figure. 

Accordingly, because counsel’s hourly rates and the total 

amount of hours spent and costs incurred are generally 

reasonable, and considering all the cirtcumstances and argument 

of the parties, the court concloudes that Davis is entitled to 

attorney fees and costs in the amount of $30,175.76. 

II. 

 For the above stated reasons, the motion for attorney’s 

fees is GRANTED. 

IT IS SO ORDERED. 

ENTERED this 25th day of September, 2007. 

 s/RALPH R. BEISTLINE 

 UNITED STATES DISTRICT JUDGE 

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