2018-00233771-CU-UD
6492 Florin Perkins Road, LLC vs. Brian Galletta
Nature of Proceeding: Motion for Attorney Fees
Filed By: Turner, Marcus L.
** If any party requests oral argument, then at the time the request is made, the requesting party shall inform the court and opposing counsel of the specific issue(s) on which oral argument is sought. **
Defendant Brian Galletta’s (Galletta) post-judgment motion for fees and costs is GRANTED in the amount of $38,738.50.
Galletta’s request for judicial notice of court documents filed in this case is GRANTED.
Plaintiffs’ request for judicial notice of a complaint filed in another case is DENIED as irrelevant.
Factual / Procedural Background
This dispute over real property ended with a motion granting summary judgment in Galletta’s favor. (See Galletta Decl., Exh. 2 [Ruling of 7/10/18]; Judgment of 8/15/18.) The plaintiffs are 6492 Florin Perkins Road LLC (the “Company”), Miguel Rodriguez, Alicia Darrow, David Kang and Michael Christian Gard (collectively “Plaintiffs”). The property in question was used to operate a licensed cannabis retail store. In their complaint, Plaintiffs alleged that they owned the property, and that the deed was in the
Company’s name. Plaintiffs alleged that the Company’s operating agreement (Agreement) designated them 50 percent owners of the premises. (See Compl., ¶¶ 3, 9.) They further alleged that Plaintiff Darrow managed the Company along with Galletta. Galletta allegedly owned the other 50 percent interest in the premises. Plaintiffs alleged that they possessed the premises jointly with Galletta since November 2016. They alleged that on 5/14/18, Galletta changed the locks on the premises, hired security personnel and directed such personnel to bar the individual plaintiffs from the premises. Plaintiffs pleaded causes of action against Galletta for forcible entry under CCP § 1159(1), forcible entry under CCP § 1159(2), and forcible detainer under CCP § 1160(2).
A copy of the Agreement cited in the complaint is attached to the Galletta Declaration as Exhibit 3. Section 13.14 of the Agreement reads:
The prevailing party in any dispute between any Member or Manager and the Company or between the Members themselves is entitled to recover from the losing party all reasonable costs incurred, including any attorney’s fees and any costs of mediation, arbitration, court fees, appraisals, and expert witnesses.
Based on these provisions, as well as the judgment entered in his favor, Galletta now moves for his fees and costs in the amount of $38,738.50.
Discussion
Preliminarily, the court agrees with Galletta that he is the prevailing party within the meanings of both the Agreement and CCP § 1032. Galletta obtained an unqualified judgment in his favor, and Plaintiffs obtained no relief whatever.
Plaintiffs nonetheless argue that this action did not resolve other legal claims being litigated in another forum. Without citing any supporting legal authority, they argue that the ongoing dispute elsewhere somehow bars a determination that Galletta is the prevailing party in this case. The argument lacks merit. Galletta is the prevailing party in this dispute. Whether he will prevail in another dispute is irrelevant.
Next, Galletta argues that the current action was within the scope of the Agreement’s fee-shifting provisions and, therefore entitles him to fees and costs as the prevailing party. Again, the court agrees. The Agreement entitles the prevailing party to “all reasonable costs incurred,” including attorney’s fees and court fees, in “any dispute between any Member or Manager and the Company or between the Members themselves[.]” Because this action qualifies as “any dispute,” the Agreement’s fee-shifting provisions benefit Galletta now.
In opposition, Plaintiffs argue that CC § 1717 does not apply to this action because that section governs actions “on a contract,” not the torts they pleaded in the complaint. The argument is unavailing. Section 1717 only governs actions “on a contract” in which a party seeks to “enforce the contract.” Nothing in § 1717, however, bars agreements to award fees incurred prosecuting or defending against torts or other non-contract claims. (See Santisas v. Goodin (1998) 17 Cal.4th 599, 608 [“’[P]arties may validly agree that the prevailing party will be awarded attorney fees incurred in any litigation between themselves, whether such litigation sounds in tort or in contract’”].) Assuming Plaintiffs are correct that their claims against Galletta were torts
outside the scope of CC § 1717, the Agreement still enables Galletta to recover his fees and litigation expenses as “costs” under CCP § 1032.
Returning to the terms of the Agreement, Plaintiffs argue that the terms do not encompass this tort action litigated in court. In Plaintiffs’ view, a reading of § 13.14 in context discloses that the Agreement’s fee-shifting provisions are limited to equitable actions involving material breaches of the Agreement and arbitrations. They cite §
13.10, which provides that any controversy not resolved in mediation shall be decided in arbitration. Plaintiffs also cite § 13.01, which directs Members to use the prescribed ADR procedures “to resolve any dispute, contest or claim…that may relate to this Agreement.” And they cite to § 13.13, which provides that “[i]f a party materially breaches this Agreement…the parties alleging material breach may seek temporary restraining orders, preliminary injunctions or similar temporary or equitable relief in a court of competent jurisdiction.”
The court rejects Plaintiffs’ construction. First, the Agreement does not equate “dispute” with “arbitration.” The last sentence in § 13.01, for example, reads, “[t]he purpose of the alternative dispute resolution procedures in this Article is to resolve all disputes, contests and claims without litigation.” The term “dispute” is more akin to a disagreement or controversy, as opposed to a particular means for resolution. Moreover, § 13.14 contemplates an award of “all reasonable costs incurred” “in any dispute,” including “any attorneys’ fees[.]” Given the Agreement’s references elsewhere to arbitration, if the parties had intended to limit fee-shifting to arbitration proceedings, they would have said so expressly. Instead, they agreed to awards of fees and costs in “any dispute between any Member or Manager and the Company or between the Members themselves[.]” Because this action was such a dispute, Galletta is entitled to recover his reasonable fees and costs.
The Agreement’s provisions for court actions involving injunctive relief do not prevent Galletta from seeking his fees and costs either. Those provisions were intended as exceptions to provisions governing arbitrations of disputes, not as limits on the prevailing party’s right to fees and costs.
The remaining question whether the fees and costs Galletta now seeks were reasonably incurred. Plaintiffs do not argue that any of the fees or costs incurred, or any of the rates charged, are unreasonable. The court’s review of the Turner Declaration and invoices submitted in the Galletta Declaration does not disclose any unreasonable rate or charge either. As a result, the court grants the request for fees and costs in the total amount of $38,738.50.
Disposition
The motion is GRANTED in the amount of $38,738.50.
The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or further notice is required.