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Transamerica Life Insurance Co. v. Rabadi

United States District Court, C.D. California

July 20, 2016

TRANSAMERICA LIFE INSURANCE COMPANY, Plaintiff-in-Interpleader,
v.
YOUSEF RABADI; INTESAR ALTURK; BILL BILTAGI; LYSAGHT LAW GROUP, LLP; and DOES 1 to 10, Defendants-in-Interpleader. YOUSEF RABADI; INTESAR ALTURK; and BILL BILTAGI, Cross-Complainants,
v.
LYSAGHT LAW GROUP, LLP and BRIAN C. LYSAGHT, Cross-Defendants.

          ORDER RE: CROSS-DEFENDANTS’ MOTION FOR ATTORNEY’S FEES AND COSTS SANCTIONS UNDER C.C.P. § 425.16 AND 28 U.S.C. § 1927 [63]

          HONORABLE RONALD S.W. LEW, Senior U.S. District Judge

         This case is an interpleader action brought by Plaintiff Transamerica Life Insurance Company (“TLIC”) against Defendants-in-Interpleader Yousef Rabadi, Intesar Alturk (“Alturk”), Bill Biltagi (“Biltagi”) (collectively, Yousef Rabadi, Alturk, and Biltagi are “Cross-claimants”), Lysaght Law Group LLP (“LLG”), and Bryan C. Lysaght (“Lysaght”) (collectively, LLG and Lysaght are “Cross-defendants”), to determine the respective rights to a percentage of the Policy proceeds on a life insurance policy issued by TLIC.

         On May 17, 2016, this Court granted Cross-defendants anti-SLAPP motion to dismiss Cross-claimants’ cross-claim for intentional interference with contractual relations. In its Order granting the anti-SLAPP motion, the Court awarded fees and costs to Cross-defendants. See Order Granting Anti-SLAPP Mot. 2:8-12, ECF No. 59.

         Presently before the Court is Cross-defendants’ Motion for Attorney’s Fees and Costs Sanctions Under C.C.P. § 425.16 and 28 U.S.C. § 1927 [63] (“Motion for Attorney’s Fees”). Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court DENIES the Motion for Attorney’s Fees because Cross-defendants are self-represented litigants who are not entitled to fees.

         I. BACKGROUND

         On January 13, 2016, Cross-claimants filed two cross-claims against Cross-defendants for: (1) declaratory relief, and (2) intentional interference with contractual relations [12].

         On February 23, 2016, Cross-defendants filed: (1) a special motion to strike the intentional interference with contractual relations claim pursuant to California’s anti-SLAPP statute, California Code of Civil Procedure 425.16 [34] (“Anti-SLAPP Motion”), and (2) a motion to dismiss the claim pursuant to Federal Rule of Civil Procedure 12(b)(6) [35] (“Rule 12(b)(6) Motion”).

         On May 17, 2016, this Court granted the Anti-SLAPP Motion, and dismissed as moot the Rule 12(b)(6) Motion [22].

         Cross-defendants filed their Motion for Attorney’s Fees [63] on May 31, 2016. The Opposition and Reply briefs [67, 68, 70, 71] were timely filed, and the matter was taken under submission on June 30, 2016 [75].

         II. DISCUSSION

         A. Legal Standard

         California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16, generally provides that “a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney’s fees and costs.” Cal. Code Civ. Proc. § 425.16(c)(1); see also Ketchum v. Moses, 24 Cal.4th 1122, 1131 (Cal. 2001). “The language of the anti-SLAPP statute is mandatory; it requires a fee award to a defendant who brings a successful motion to strike.” Cabral v. Martins, 99 Cal.Rptr.3d 394, 411 (Cal.Ct.App. 2009).

         Under Trope v. Katz[1] and its progeny, however, law firms and attorney litigants are precluded from recovering attorney’s fees for self-representation. Soni v. Wellmike Enter. Co., 169 Cal.Rptr.3d 631, 639 (Cal.Ct.App. 2014); see also Carpenter & Zuckerman v. Cohen, 124 Cal.Rptr.3d 598, 609-10 (Cal.Ct.App. 2011); Witte v. Kaufman, 46 Cal.Rptr.3d 845, 851-52 (Cal.Ct.App. 2006). Based on this rule, attorney’s fees are not recoverable for a law firm that is represented by an employee or associate of the firm. Carpenter, 124 Cal.Rptr.3d at 609-10. In addition, California courts have not allowed the recovery of attorney’s fees under the anti-SLAPP statute where an attorney litigant is not represented by counsel and an attorney-client relationship does not exist.[2] See Witte, 46 Cal.Rptr.3d at 849 (citing Ramona Unified Sch. Dist. v. Tsiknas, 37 Cal.Rptr.3d 381, 392-93 (Cal.Ct.App. 2005)).

         In contrast, cases that have allowed attorney’s fees under California’s contractual fee provisions[3] or the anti-SLAPP statute[4] are marked by the existence of an attorney-client relationship. Witte, 46 Cal.Rptr.3d at 849; see also Dowling v. Zimmerman, 103 Cal.Rptr.3d 174, 194 (Cal.Ct.App. 2001) (“[A] defendant who appears in a SLAPP action in propria persona and later retains specially appearing counsel who successfully brings on behalf of the defendant a special motion to strike under section ...


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