San Jacinto Z v. Grantham

Filed 8/14/09 San Jacinto Z v. Grantham CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Edward D. Webster, Judge. Affirmed

Gregory Grantham, in pro. per.; Law Offices of Gregory Grantham and Gregory Grantham for Defendants and Appellants.

Gresham Savage Nolan & Tilden, Theodore K. Stream, Eugene Kim and Jaime N. Ries for Plaintiff and Respondent.

Gregory Grantham (Grantham) and John Saba (Saba) appeal from an award of attorneys fees to San Jacinto Z, LLC (SJZ). The trial court awarded attorneys fees to SJZ after concluding that Grantham and Saba filed a frivolous anti-SLAPP motion (Code Civ. Proc., 425.16).[1] Grantham and Saba contend the award of attorneys fees was improper because (1) SJZ had previously requested attorneys fees, and therefore was collaterally estopped from renewing its motion; (2) the judge who ruled on the attorney fee award was not the same judicial officer who ruled on the anti-SLAPP motion; (3) the trial court did not consider the merits of the anti-SLAPP motion prior to awarding attorneys fees; (4) the trial court considered Grantham and Sabas conduct in a related case when awarding attorneys fees in the instant case; and (5) the amount of the fee award was not reasonable. We affirm the judgment.

FACTUAL AND PROCEDURAL HISTORY

The individuals involved in this case have created a complex web of corporations and partnerships in order to buy and sell a 31.5-acre parcel of property in San Jacinto, located at 7th Street and Ramona Expressway (the San Jacinto property). (See In re Flamingo 55, Inc. (Bankr. D. Nev. 2007) 378 B.R. 893, 900-904 [presenting a partial history of the parties partnerships and corporations].) The parties histories are not necessary to the issues pending in this appeal; therefore, in this section, we focus on the procedural history of the attorney fee award.[2]

Grantham and Saba are attorneys. On December 6, 2005, in Los Angeles County Superior Court, SJZ filed a complaint against Grantham and Saba alleging (1) fraud; (2) breach of fiduciary duty; (3) professional malpractice; and (4) breach of contract. In the complaint, SJZ alleged that Grantham and Saba committed malpractice by, among other things, suing SJZ to quiet title to the San Jacinto property, while SJZ was their client. On December 7, 2005, Grantham and Saba served a first amended cross-complaint against a variety of individuals and entities, including SJZ.

Grantham and Saba also filed a motion to transfer the case to Riverside County, which was granted, and Riverside County received the case on April 3, 2006. The Riverside County Superior Court ordered the matter stayed from June 16, 2006, until October 23, 2006. On March 15, 2007, Grantham and Saba filed (1) an answer to SJZs complaint, and (2) a special motion to strike, i.e. an anti-SLAPP motion ( 425.16). In the anti-SLAPP motion, Grantham and Saba essentially argued that SJZs malpractice suit was a ploy to chill Granthams and Sabas exercise of their constitutional right to sue SJZ to quiet title to the San Jacinto property.

On April 27, 2007, the trial court held a hearing on the anti-SLAPP motion. The trial court stated that it had two procedural problems with the motion: (1) the motion appeared to be significantly untimely because it was filed approximately 143 days after the stipulated stay expired, and (2) the hearing itself was untimely, because an anti-SLAPP motion must be heard within 30 days, and the hearing was held on the 43rd day.

Grantham and Saba argued that their motion was not untimely because the parties stipulated to stay the matter until approximately January 14, 2007. SJZ asserted that the parties had discussed staying the matter through January; however, they had not reached a formal agreement and never discussed a tolling arrangement.[3] Additionally, SJZ urged the trial court to count the time between (1) the filing of the complaint and the day the motion to transfer was filed, which totaled approximately 58 days, and (2) Riverside receiving the case and the stipulation to stay the action. The trial court found that the anti-SLAPP motion was untimely, and declined to exercise what discretion it may have to permit a late filing of the . . . motion.

On March 10, 2007, SJZ moved for an attorney fee award in the amount of $52,430. SJZ requested the trial court find that the anti-SLAPP motion was frivolous, due to it being untimely, and that the court award attorneys fees due to the motion being frivolous. On June 2, 2008, the trial court found the anti-SLAPP motion was frivolous or solely intended to cause delay, and awarded SJZ attorneys fees in the amount of $52,430.

DISCUSSION

A. Previous Request

Grantham and Saba contend the trial court erred by awarding attorneys fees to SJZ, because SJZ had previously requested attorneys fees within its opposition to the anti-SLAPP motion. Grantham and Saba assert that, by operation of law, the request for attorneys fees had been denied at the hearing on the anti-SLAPP motion because the trial court did not rule on SJZs request for attorneys fees, and SJZ did not file a motion for reconsideration or request a specific ruling. Consequently, Grantham and Saba argue, when SJZ brought its separate motion for attorneys fees, the matter had already been resolved and SJZ was collaterally estopped from renewing the motion. We disagree.

The doctrine of collateral estoppel precludes relitigation of an issue previously adjudicated if: (1) the issue necessarily decided in the previous suit is identical to the issue sought to be relitigated; (2) there was a final judgment on the merits of the previous suit; and (3) the party against whom the plea is asserted was a party, or in privity with a party, to the previous suit. [Citation.] (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 910.)

In SJZs opposition to the anti-SLAPP motion, it wrote that SJZ should be awarded attorneys fees, and [SJZ] reserves its right to recover attorneys fees incurred by way of a separate motion. (Italics added.)

SJZ expressly reserved the issue of attorneys fees in order to raise it by a separate motion. The trial court did not address the issue of attorneys fees when denying the anti-SLAPP motion. Moreover, it is common for attorneys fees to be sought in a separate motion, rather than as part of the opposition to the anti-SLAPP motion. (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320.) Accordingly, we conclude SJZ was not collaterally estopped from seeking an award of attorneys fees by separate motion, because the issue had not been previously litigated or ruled upon.

B. Judicial Officer

Grantham and Saba contend the award of attorneys fees was improper because the judge who ruled on the attorney fee award, i.e., Judge Webster, was not the same judicial officer who ruled on the anti-SLAPP motion, i.e., Judge Pro Tempore Gregory.

We note that, at the trial court, Grantham and Saba did not object to Judge Webster deciding the motion for attorneys fees. Accordingly, we conclude that Granthams and Sabas argument concerning Judge Webster is untimely, and they have forfeited their challenge to Judge Webster hearing the motion for attorneys fees.

Nevertheless, we note that there is no statute that mandates a motion for attorneys fees be heard by the same judicial officer who ruled upon the anti-SLAPP motion; however, principles of judicial administration dictate that it is the best policy for one judge to hear the entire matter. (Abbot v. Mandiola (1999) 70 Cal.App.4th 676, 682.)

When Judge Webster ruled on the motion for attorneys fees he stated that he read the points and authorities submitted by the parties and made extensive notes. Judge Webster gave a detailed and lengthy explanation of the reasons supporting the conclusion that SJZ was entitled to an award of attorneys fees. Accordingly, the record reflects that Judge Webster had a good understanding of the facts and issues presented in the case. Therefore, while the trial court may not have followed the best practices for judicial administration, there is no reason to conclude that Judge Webster was barred from ruling on the motion for attorneys fees, or not qualified to rule on the motion for attorneys fees. Accordingly, we find Granthams and Sabas argument unpersuasive.

C. Merits

Grantham and Saba contend the trial court erred by awarding attorneys fees to SJZ because the trial court determined that the anti-SLAPP motion was frivolous without considering the merits of the motion. We disagree.

Attorneys fees and costs shall be awarded to the prevailing party in anti-SLAPP motion matters, pursuant to section 128.5, if the trial court finds that the anti-SLAPP motion is frivolous or is solely intended to cause unnecessary delay. ( 425.16, subd. (c).) The reference to section 128.5 in section 425.16, subdivision (c) means a court must use the procedures and apply the substantive standards of section 128.5 in deciding whether to award attorney fees under the anti-SLAPP statute. [Citation.] (Moore v. Shaw (2004) 116 Cal.App.4th 182, 199, fn. omitted.) A determination of frivolousness requires a finding that the motion is (A) totally and completely without merit[,] or (B) for the sole purpose of harassing an opposing party. ( 128.5, subd. (b)(2).)

Section 425.16 provides that an anti-SLAPP motion may be filed within 60 days of the service of the complaint or, in the courts discretion, at any later time upon terms it deems proper. ( 425.16, subd. (f).)

The trial court found Granthams and Sabas motion was frivolous because Grantham and Sabas sole purpose in filing the motion was to harass SJZ. The court explained that it found the anti-SLAPP motion to be vexatious and harassing, because the motion was untimely.

The complaint was personally served on Grantham on December 14, 2005.[4] The complaint was served on Saba, by substituted service, on December 14, 2005,[5] and mailed to Saba, at a California address, on December 15, 2005. In order to apply the latest possible service date, we will analyze the issue by applying the service date for United States mail, which adds five days to the date of service of process. ( 1013, subd. (a).) Accordingly, the latest possible date of service for Saba would be December 20, 2005.

On February 2, 2006, Grantham and Saba moved to transfer the matter to Riverside County. Forty-four days elapsed between the service of the complaint and the motion to transfer. On April 3, 2006, Riverside County accepted the case transfer. On June 16, 2006, the parties attended a case management conference, and the trial court ordered the matter stayed until October 16, 2006. Seventy-four days elapsed between the date Riverside accepted the case transfer, and the courts order to stay the matter. On June 23, 2006, the court agreed to stay the matter until October 23, 2006; however, the parties participated in a case management conference on October 16, 2006. Also, on January 16, 2007, and February 15, 2007, the parties participated in case management conferences. On March 15, 2007, Grantham and Saba filed their anti-SLAPP motion. One hundred forty-four days elapsed between the expiration of the stay on October 23, 2006, and the filing of the anti-SLAPP motion on March 15, 2007. In total, 262 days elapsed between the service of the complaint and the filing of the anti-SLAPP motion, and that does not take into account the days when the motion to transfer was pending, or the days when the matter was stayed.

In their anti-SLAPP motion, Grantham and Saba explained that the motion was late because the parties entered into successive tolling agreements [and t]he last tolling agreement ended January 14, 2007. Granthams and Sabas representation that the case was stayed a second time, and that the statute of limitations was tolled, was falsethe parties signed an agreement to stay the proceedings until January 2007; however, the agreement was not approved by the court. (See Cal. Rules of Court, rule 3.650(a) & (d) [a stay and notice of stay must be filed with the court].) Moreover, Grantham and Saba did not account for the 74 days between the date Riverside accepted the case transfer, and the day the court ordered the matter stayed.

Accordingly, it was reasonable for the court to find that the anti-SLAPP motion was filed for the purpose of harassing SJZ because (1) the motion was untimely; and (2) the motion included falsehoods, in order to excuse the lateness of the motion. Accordingly, the trial courts finding that the motion was frivolous was within reason; therefore, the trial court did not err by not considering the merits of the motion, because the trial court could properly find the motion was frivolous without reaching the merits.

Grantham and Saba contend the anti-SLAPP motion was not frivolous because it was not brought for the sole purpose of harassing SJZ. Grantham and Saba assert that if an anti-SLAPP motion has merit, then even if it is untimely, the motion could not have been brought for the sole purpose of harassment. Therefore, Grantham and Saba contend, the court was required to consider the merits of the motion before deeming the motion frivolous.

To support their argument, Grantham and Saba rely on Optical Surplus, Inc. v. Superior Court (1991) 228 Cal.App.3d 776, 785, in which the reviewing court noted that once a party shows that his or her action was arguably meritorious . . . the logical conclusion is that the partys motive was probably not solely to harass or cause unnecessary delay, and that sanctions are probably not warranted. We do not find this reasoning persuasive.

Section 128.5, subdivision (b)(2), defines frivolous as (A) totally and completely without merit or (B) for the sole purpose of harassing an opposing party. (Italics added.) If we were to accept the theory that a partys sole motive cannot be harassment unless the partys motion is without merit, then there would be no reason to have the harassment portion of the definition, because every motion that was filed to harass would also need to be without merit. We interpret statutes so as to avoid surplus words. (Breslin v. City and County of San Francisco (2007) 146 Cal.App.4th 1064, 1081; California Highway Patrol v. Workers Comp. Appeals Bd. (1986) 178 Cal.App.3d 1016, 1023.) The portion of the statute concerning harassment would be unnecessary surplus if a motion must be found meritless before it can be found to be harassing. Accordingly, we do not follow the reasoning of Optical Surplus, Inc. v. Superior Court, supra,228 Cal.App.3d at page 785. Therefore, we conclude it was not necessary for the trial court to review the merits of the anti-SLAPP motion prior to ruling on the motion for attorneys fees.

Next, Grantham and Saba contend that reviewing courts frown[] upon sanctions being imposed against attorneys solely because the attorneys deviated from the courts procedural rules. We do not find this argument persuasive. Section 425.16, subdivision (c), requires that attorney fees be awarded if an anti-SLAPP motion is found to be frivolous. A motion is frivolous if (1) it lacks merit, or (2) the sole purpose for the motion is to harass an opposing party. ( 128.5, subd. (b)(2).) Sanctions were imposed in this case because Granthams and Sabas purpose in filing the anti-SLAPP motion was to harass SJZGrantham and Saba were not sanctioned merely for filing an untimely motion.

D. Related Case

1. Facts

In a consolidated case related to the San Jacinto property, Brooks-Wellington v. Grantham, case No. RIC454038 (Brooks-Wellington), Grantham and Saba filed motions to compel discovery. The trial court held the hearing on the motions to compel just prior to the hearing on the motion for attorneys fees. During the hearing on the motions to compel, the trial court described numerous issues it had with Granthams and Sabas legal work.

Later, when considering the motion for attorneys fees, the trial court said, I would adopt[] the filings by Mr. Grantham and declarations signed by Mr. Saba in conjunction with the motions to compel which I went through ad nauseam previously, and the tone there, and the fact that the motion to strike in that case was found to be frivolous because it was filed by the Granthams [sic] even though they had gotten notice that [the SLAPP motion in the Brooks-Wellington case] was deemed untimely, and they went ahead and filed the . . . SLAPP motion in that case. I think that speaks volumes. [] And its my belief that the evidence is compelling that what is going on here is a process of vexatious litigation tactics, and I think I would suggest that beyond the preponderance of the evidence, the evidence is clear and convincing that is the case. [] I will, therefore, grant the motion for attorneys fees.

2. Discussion

Grantham and Saba contend the trial court erred by considering their conduct in the related case of Brooks-Wellington when ruling on the motion for attorneys fees in the instant case.

Neither Grantham nor Saba objected to the trial court adopting the documents, filed in the Brooks-Wellington case, for use in the instant case. Granthams and Sabas failure to object at the trial court level forfeited the issue for appellate review. (Jimenez v. County of Los Angeles (2005) 130 Cal.App.4th 133, 140.) Consequently, we will not analyze whether the trial court erred by considering documents filed in the Brooks-Wellington case when ruling on the motion for attorneys fees.

In a secondary argument, Grantham and Saba argue that their due process rights have been violated because they were sanctioned in the Brooks-Wellington case, and then the trial court used their behavior from the Brooks-Wellington case to sanction them again in the instant case. Essentially, Grantham and Saba contend they have been sanctioned twice for conduct related to Brooks-Wellington.

If subsequent conduct is not the type that warrants the imposition of sanctions, [then] past conduct which has already been considered by a court cannot justify the imposition of additional sanctions; otherwise an attorney might be punished twice for the very same conduct. However, if an attorney continues to engage in dilatory tactics . . . a court should be able to consider past conduct in considering the attorneys bad faith on the subsequent occasions. (Sabado v. Moraga (1987) 189 Cal.App.3d 1, 10-11.)

In the instant case, the trial court sanctioned Grantham and Saba for the frivolous anti-SLAPP motion that they filed in the instant case, not for the motions filed in Brooks-Wellington. The trial court referred to the Brooks-Wellington case as evidence that Grantham and Sabas conduct in the instant case was part of a ongoing pattern of bad faith actions. Accordingly, we conclude that Grantham and Saba were not sanctioned twice for one action.

E. Amount of Fees

Grantham and Saba contend that the amount of the attorneys fees awarded to SJZ was not reasonable. We disagree.

As the prevailing party on the anti-SLAPP motion, SJZ bore the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. [Citation.] To that end, the court may require [a prevailing party] to produce records sufficient to provide a proper basis for determining how much time was spent on particular claims. [Citation.] The court also may properly reduce compensation on account of any failure to maintain appropriate time records. [Citation.] [Citation.] The evidence should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended. [Citation.] (Christian Research Institute v. Alnor (2008) 165 Cal.App.4th 1315, 1320.) We review an anti-SLAPP attorney fee award under the deferential abuse of discretion standard. (Id. at p. 1322.)

SJZ moved for an attorney fee award in the amount of $52,430. The trial court found that SJZs attorney performed quality work and prepared a voluminous and appropriate opposition. The trial court concluded that $52,430 was a reasonable award of attorneys fees.

In its motion, SJZ argued that the requested fees were reasonable because, in responding to the anti-SLAPP motion, it could not simply respond to Granthams and Sabas arguments; rather, SJZ had to (1) address the procedural defects of the anti-SLAPP motion; (2) include a detailed presentation of the parties complex history; (3) respond to Granthams and Sabas substantive arguments; and (4) obtain five witness declarations, including the declaration of an expert witness in the area of legal malpractice. SJZ also filed 22 pages of written evidentiary objections, and a request for judicial notice. In sum, SJZ submitted over 1,500 pages of documents in opposition to the anti-SLAPP motion.

SJZ was represented by a Los Angeles attorney who billed at a rate of $300 an hour, and the attorneys colleague who billed at a rate of $350 an hour. Attorneys fees totaling $51,030 were the result of (1) preparing the various documents listed ante; (2) preparing for the hearing on the motion; and (3) traveling to and from the hearing. The expert witness fee was $1,400. Accordingly, the grand total of fees incurred by SJZ was $52,430. ( 425.16, subd. (c).) SJZ provided detailed billing statements, which accounted for the various activities of the attorneys and the hours spent on each activity.

The trial courts determination that SJZs attorneys performed quality work was reasonable. The hours spent on each activity were not disproportionate to the amount of time a reasonable attorney would spend on similar work. Additionally, an hourly rate of $300 and $350 is reasonable for the Los Angeles area. (See Christian Research Institute v. Alnor, supra, 165 Cal.App.4th at p. 1324 [$300 hourly rate].) Accordingly, we conclude the trial court did not abuse its discretion by awarding SJZ $52,430.

Grantham and Saba contend that SJZs attorneys fee statements are false and exaggerated. In total, SJZs attorney billed for 159.10 hours of work. Grantham and Saba assert that, in order for SJZ to prevail on the anti-SLAPP motion, SJZ only needed to file a response showing that the anti-SLAPP motion was untimelySJZ did not need to address the merits of the motion.

Contrary to Grantham and Sabas position, SJZ did need to address the merits of the anti-SLAPP motion. A reasonable attorney would want to be prepared to discuss the merits and the procedural defects of the motion with the court. The fact that the anti-SLAPP motion was frivolous would likely motivate a reasonable attorney to cover all aspects of the motion, because opposing counsel cannot be relied upon to make reasonable motions and objections, and therefore, the attorney would want to be prepared for all possibilities. Accordingly, we conclude SJZs attorneys bill was not false and exaggerated.

DISPOSITION

The judgment is affirmed. Respondent is awarded its costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

/s/ MILLER

J.

We concur:

/s/ GAUT

Acting P. J.

/s/ KING

J.

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[1] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

[2] Grantham and Saba devote a section of their reply brief to pointing out errors contained in the factual section of the respondents brief. We do not address this argument because the parties shared history is of little importance to the issues pending in this appeal.

[3] We note that the record includes a written agreement to stay the matter from October 16, 2006, until January 14, 2007. The agreement was signed by Saba and SJZ; however, it was not signed by the court, it was not file stamped, and the proof of service was not signed. (See Cal. Rules of Court, rule 3.650(a) & (d).) At the case management conference on October 16, 2006, the parties asked the trial court to order the matter stayed until January 14, 2007, because the parties were in engaged in third-party litigation. The trial court responded, Why do you have to go through that exercise as opposed to continuing the case management conference? The parties agreed to continue the case management conference. Unlike a continuance, the days during which an action is stayed are excluded when computing the time in which an action must be brought to court. (See 583.240, 583.340.)

[4] We take judicial notice of the proof of service filed on December 20, 2005.

[5] We take judicial notice of Exhibit B attached to the case management statement filed on February 7, 2007, which is a proof of service reflecting that Saba was served on December 14, 2005. We infer that when the trial court deemed Saba served, at the case management conference on February 15, 2007, that the court was deeming Saba to have been served as of December 14, 2005.