Virtue v. Zamora et al

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SAN FERNANDO VALLEY DIVISION
In re:
Continental Coin Corporation
Debtor(s).
Rodger Virtue
Plaintiff(s),
v.
Hill Farrer & Burrill LLP, Liberty Mutual
Insurance Company, Daniel J. McCarthy,
Nancy Zamora, Zamora & Hoffmeier,
APC
Defendant(s)
_________________________________
NANCY HOFFMEIER ZAMORA,
Solely in her capacity as Chapter 11
Trustee for Continental Coin Corporation,
Counter-Claimant and Plaintiff
v.
RODGER VIRTUE, an individual,
Counter-Defendants.
And DANIEL J. McCARTHY, an
individual, HILL, FARRER & BURRILL
LLP, a California limited liability
partnership, and DOES 1-20,
Defendants.
Case No.: 1:00-bk-15821-GM
Adv No: 1:07-ap-01291-GM
Chapter 11
MEMORANDUM OF OPINION REGARDING
COUNTER-DEFENDANT’S MOTION FOR
ATTORNEY FEES [DOCKET NUMBER 74]
Date: July 31, 2012
Time: 10:00 a.m.
Courtroom: Courtroom 303
On December 16, 2011 Nancy Zamora, solely in her capacity as Chapter 11
FILED & ENTERED
SEP 13 2012
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	gasparia
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Trustee for Continental Coin Corporation, filed a counter-claim against Rodger Virtue
and his attorney Daniel J. McCarthy, and the law firm of Hill, Farrer & Burrill LLP (jointly
counter-defendants). The counter-defendants answered and then filed a motion to
strike and for judgment on the pleadings. (doc. #53). On April 30, 2012, the court
entered its memorandum of opinion and order. The Court granted the motion
dismissing claims 1, 2, 3, and 10 with prejudice and striking claims 4 through 9 with
prejudice. The striking of claims 4-9 was pursuant to the anti-SLAPP statute, Cal. Code
of Civ. Proc. §425.16, which also provides that the prevailing party shall be awarded its
attorneys’ fees and costs. Virtue was ordered to file his motion for attorneys’ fees and
costs within 30 days of the entry of the order. (doc. ##63, 64).
On May 30, 2012 the counter-defendants filed their joint motion for attorneys’
fees (doc. #74) seeking $20,633.41. Hill Farrer was represented in part by Waxler
Carner Brodsky LLP (WCB), which billed them $5,047.50 for work on the anti-SLAPP
motion. Hill Farrer sought $10,454.91 in fees and costs for its representation of Virtue
(but not of itself). This was opposed by Zamora, who had filed an appeal on May 14,
2012 (doc. #67).
The tentative ruling for the July 31, 2012 hearing was as follows:
The Virtue parties are entitled to their fees as the prevailing party on the anti-
SLAPP motion. The application states that Hill Farrer did the research, drafting,
and arguing both on its own behalf and on behalf of Virtue and thus it allocated
half of the time to Virtue and half to the firm. It is not seeking reimbursement for
the half allocated to the firm since a law firm is not entitled to recover its fees as
prevailing party under the anti-SLAPP statute for services performed by a
member of that firm. Carpenter & Zuckerman, LLP v. Cohen, 195 Cal.App.4th
373 (2011).
In opposition, the Trustee argues that Virtue is not the prevailing party because
the matter is on appeal; there can be no recovery for the fees billed by Waxler,
Carner & Brodsky because it represented Hill Farrer and McCarthy, not Virtue;
there cannot be a recovery for fees and costs related to the non-anti-SLAPP
causes of action; and there are no time entries solely for the anti-SLAPP motion
on behalf of Virtue.
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The Waxler and H&F reply covers a variety of grounds. As to jurisdiction, this is
not the vacating or modification of an order on appeal, but the enforcement of
one. They also request an additional award of fees of $5,047.50 for the anti-
SLAPP motion and this fee motion as well as $2,177.50 for opposing the motion
for stay. As to the fact that Waxler and H&F were not mentioned in the
Memorandum of Opinion, it did not have to specifically allow fees and would only
preclude the request if it so stated, which it did not. The only fees that H&F
requests are those actually paid to Waxler. The payment of fees should not be
stayed pending outcome of the appeal.
Proposed Ruling
The Court is well-aware of the pending appeal and has previously decided that it
is appropriate to liquidate the attorney's fees. There is no stay pending appeal as
to that. I have not yet decided whether it is appropriate to allow execution on the
determined amount and there is no motion on that issue for a stay pending
appeal. As to jurisdiction, this is not a modification of the prior order, but
enforcement of it.
There is no dispute that Virtue is entitled to attorneys' fees once he has been
designated as the prevailing party. Hill Farrer and McCarthy (jointly H&F) were
named in claims 4, 6, 7, 8, and 9, all of which were dismissed against H&F in that
the Trustee did not meet her anti-SLAPP burden. (doc. 64, 17:9-12). Although
other grounds for dismissal are discussed in the memorandum of opinion, they
do not vitiate the ruling that the third party claim is dismissed under anti-SLAPP.
However it is true that although the memorandum and the order specifically order
Virtue to seek his fees, they do not preclude H&F from doing so.
Since H&F were only named in the anti-SLAPP causes of action, there is no
reason to apportion fees paid to an outside firm (WCB) for bringing the motion to
dismiss. Andrew Waxler supervised the whole process of the opposition, which
may have been limited to the H&F motion, but also included the Virtue one.
Since this is an outside firm, H&F is entitled to recoup the fees paid, as is Virtue.
Exhibit A to the fee motion indicates that $5,047.50 of the time (and costs, I think)
are attributable to the anti-SLAPP motion. While these are summarized in the
Waxler declaration, the individual time entries are not highlighted, so I cannot tell
which are included. And it is likely that the work on the anti-SLAPP and other
parts of the motion are inseparable given the way that the time records were
kept.
The allocation of the H&F fees between that firm and Virtue as to the anti-SLAPP
motion is appropriate. However, Virtue is not entitled to his fees on the motion to
dismiss as to claims 1, 2, and 3 (claim 10 was also dismissed, but that was due
to the dismissal of other claims). My review of the Motion (doc. 53) shows that
the part that concerned the first and second causes of action are set forth in pp.
17-20. The rest of the arguments are the basis of the anti-SLAPP motion, which
required that the Court determine whether the plaintiff has a probability of
prevailing on each claim asserted.
There is no reliable way to apportion the requested fees, so the court will use the
somewhat crude method of dividing them by virtue of the amount of pages
attributed to them. There are twenty pages of law and argument in this motion of
which four are about the first and second causes of action. Thus, I hold that 20
percent of the fees attributable to the motion, its argument and appearance are
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for non-anti-SLAPP work and no attorney's fees can be allowed for those. Of the
remaining 80 percent, half are for work done on behalf of Virtue and the other
half for H&F.
As to the Waxler fee request, the total fees in the initial application were $7,548.
Since 80 percent of this is $6,038.40 and this exceeds the requested amount of
$5,047.50, I will allow $5,047.50 plus half the costs which will be $44.22 . All of
the supplemental fees are dealing with anti-SLAPP and they are allowed as
requested in the amount of $2,177.50. Thus the total fees payable to Waxler
Carner Brodsky, LLP is $7,269.22.
As to the other specific objections to the fees, these are overruled.
Applying the above formula to the H&F fee request, the initial request is for a
total of $11,594 (prior to the courtesy discount). Half of that is attributable to
H&F's own motion, leaving $5,797. Eighty percent is for the anti-SLAPP work,
which ends up being $4,637.60 in fees and half the costs at $22.52. The
supplemental fee request for $6,595 is all for anti-SLAPP and will be divided in
half so that $3,297.50 is attributed to Virtue as are half the costs at $5.45. Thus
the total fees payable to Hill, Farrer & Burrill LLP is $7,963.07.
At the July 31 hearing, Zamora asked for more time to review the time records
and arguments presented by Hill Farrer, so this matter was submitted as to that firm and
the parties were given time to submit supplemental briefs. However the Court ruled that
the amount the Hill Farrer will receive for the work done by Waxler Carner & Brodsky
would be $7,313.44 per the tentative ruling and oral argument.
In her supplemental opposition to the motion for attorneys’ fees, Zamora
disagrees with my crude method of allocation, but asserts that if I do use it I should
expand it to include the work done on the third cause of action, which also was not anti-
SLAPP and thus the 20 percent reduction must be increased. (doc. #99, p. 2) Zamora
is correct that I did not talk about the portion of the motion concerning the third cause of
action (breach of duty as member of official creditors committee), but this is because no
separate law or argument was presented as to that part of the pleading. The movants
simply included it as part of the anti-SLAPP assertions.
In reply to the supplemental opposition, counter-defendants break down the fee
request and seek a total of $19,226.95 payable to Virtue and $7,313.44 payable to Hill
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Farrer (for the amounts paid to Waxler Carner & Brodsky on behalf of Hill Farrer) as
follows (doc. #100, p. 1):
Virtue Hill Farrer
Anti-SLAPP Motion $7,500.95 $5,047.50
Motion for Attorneys’
Fees $5,131.00 N/A
Opposition to Motion
for Stay Pending
Appeal $6,595.00 $2,177.50
$19,226.95 $7,313.44
The Court agrees with these amounts and with the methodology already set out
in the tentative ruling above. Thus, the order will be entered that Nancy Zamora is liable
to Rodger Virtue for fees and costs that he has expended in the sum of $19,226.95 and
to Hill, Farrer & Burrill for fees and costs that it has expended in the sum of $7,313.44.
No award is made directly to Waxler Carner & Brodsky since that is covered by the
award to Hill, Farrer & Burrill.
###
United States Bankruptcy Judge
DATED: September 13, 2012
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This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
June 2012 F 9021-1.1.NOTICE.ENTERED.ORDER
NOTICE OF ENTERED ORDER AND SERVICE LIST
Notice is given by the court that a judgment or order entitled (specify): _ MEMORANDUM OF
OPINION REGARDING PLAINTIFF AND COUNTER-DEFENDANT’S MOTION FOR
ATTORNEY FEES [DOCKET NUMBER 74]
______________________
was entered on the date indicated as AEntered@ on the first page of this judgment or order and will be
served in the manner stated below:
1. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) B Pursuant to controlling
General Orders and LBRs, the foregoing document was served on the following persons by the court via
NEF and hyperlink to the judgment or order. As of (date)________________, the following persons are
currently on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding to receive
NEF transmission at the email addresses stated below.
Anthony Zamora Email: zamora3@aol.com
Danielle Sokol Email: dsokol@wcb-law.com
Andrew Waxler Email: awaxler@wcb-law.com
Service information continued on attached page
2. SERVED BY THE COURT VIA UNITED STATES MAIL: A copy of this notice and a true copy of this
judgment or order was sent by United States mail, first class, postage prepaid, to the following persons
and/or entities at the addresses indicated below:
Daniel J. McCarthy
300 South Grand Avenue, 37th Floor
Los Angeles, CA 90071-3147
Service information continued on attached page
3. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this judgment
or order which bears an AEntered@ stamp, the party lodging the judgment or order will serve a complete
copy bearing an AEntered@ stamp by United States mail, overnight mail, facsimile transmission or email
and file a proof of service of the entered order on the following persons and/or entities at the addresses,
facsimile transmission numbers, and/or email addresses stated below:
Service information continued on attached page
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