REYNOLDS REALTY ADVISORS, INC. vs. CAPITAL INSIGHTS

This action sought to enforce a Property Management Agreement executed between Reynolds Realty Advisors, Inc. and Capital Insights. (See Exhibit A of Complaint [ROA No. 2].) Included within this agreement was a provision providing for the recovery of attorney fees. (Id. at ¶14.) Consistent with the above, Plaintiff requested attorneys’ fees in the Complaint. (¶11(g) of Complaint [ROA No. 2].)

Nonetheless, there has been no showing Defendant is the prevailing party entitled to attorney fees, pursuant to the Property Management Agreement as: (1) It is undisputed Defendant Capital Insight settled Plaintiff’s claim based on the

Property Management Agreement, for $20,000 (¶7 of Saccuzzo Declaration); and (2) Defendant has not demonstrated compliance with the mediation requirement, included within ¶12A of the Agreement. Per ¶12A, to obtain attorneys’ fees pursuant to the agreement, Defendant must not have refused a request to mediate, made before commencement of the action. (Exhibit A to the Complaint, at ¶12A [ROA No. 2].)

Indeed, had Plaintiff dismissed its claims under the Property Management Agreement, based on the settlement, the lack of a prevailing party would be clear: “Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.” (Civ. Code, § 1717, subd. (b)(2).)

Based on the above, with respect to the Property Management Agreement, the Court finds “there is no party prevailing on the contract for purposes of this section.” (Civ. Code, § 1717, subd. (b)(1).)

Relying on Santisas v. Goodin (1998) 17 Cal.4th 599 (Santisas), Defendant asserts entitlement to fees pursuant to the Property Management Agreement, given Plaintiff requested attorney fees within its Complaint and judgment was nonetheless entered against it. Per Santisas, successfully arguing unenforceability of a contract does not deprive the prevailing party of any attorneys’ fees provision included therein (Id. at p. 611); however, Santisas does not address a situation where, as here, the underlying contract claim is settled. As Defendant settled the underlying contract claim and provided Plaintiff with a monetary recovery based thereon, this action is distinguishable from Santisas.

Nonetheless, the Court finds that Defendant is the prevailing party, pursuant to the subsequently entered Settlement and Release Agreement.

The Settlement and Release Agreement states: “In the event any Party prevails in an action, motion, application, and/or petition to enforce or challenge any of the terms of this Agreement, to preserve its, his or her rights under this Agreement, or in the event of breach by any Party of obligations under this Agreement, the prevailing Party shall be entitled to all costs and expenses incurred in enforcing the terms of this Agreement, including, without limitation, reasonable attorneys’ fees, expert fees, and other expenses.” (¶7 of Saccuzo Declaration and Exhibit 1 of the Appendix of Exhibits.)

On June 27, 2025, the Court granted summary judgment in favor of Defendant, as the undisputed evidence demonstrated the parties entered into the Settlement and Release Agreement, wherein Plaintiff agreed to release its claim and dismiss this action. (ROA No. 87.)

As noted above, per Civil Code section 1717, “the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract.” (Civ. Code, § 1717, subd. (b)(1).) “California courts construe the term ‘on a contract’ liberally. As long as the action involve[s] a contract it is on [the] contract within the meaning of section 1717.” (Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 821 [internal quotations omitted].)

Based on the above, given Defendant succeeded in enforcing the Settlement and Release Agreement via its successful Motion for Summary Judgment, Defendant is the prevailing party thereunder.

“[T]he fee setting inquiry in California ordinarily begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) “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. (Ibid.) “The reasonable hourly rate is that prevailing in the community for similar work.” (Ibid.)

The Court approves the hourly rates of $765 and $515, for attorneys R. Joseph Kerendian and Jason P. Saccuzzo, respectively. The Court finds these rates to be reasonable, given the substantial legal experience of Counsel. (See ¶6 of Kerendian Declaration and ¶22 of Saccuzzo Declaration.)

In reviewing the hours claimed, the Court notes the validity of the Settlement and the Release Agreement appears to have been the bulk of Defendant’s defense in this action.

A review of the relevant Settlement and Release Agreement indicates its execution was completed on May 17, 2024. (¶7 of Saccuzo Declaration and Exhibit 1 of the Appendix of Exhibits.) On this same day, Defendant filed an Answer, which referenced the Settlement and Release Agreement within its Twentieth Affirmative Defense. (ROA No. 18.) Similarly on this same day, Defendant filed a Cross-Complaint, which asserted breach of the Settlement and Release Agreement. (ROA No. 19.)

Based on the above, essentially all of Defendant’s conduct in this action occurred following the execution of the Settlement and Release Agreement and involved litigating the validity of the same.

This is evidenced further, by the declaration of Counsel Saccuzzo who states: “After Reynolds refused to dismiss the Instant Action as required under the Agreement, Capital Insight was forced to defend itself by preparing and filing an Answer to the Complaint and by undertaking efforts to enforce the Agreement. Capital Insight also propounded written discovery to determine the basis, if any, for Reynolds’ refusal to honor its contractual obligation to dismiss its claims with prejudice.” (¶18 of Saccuzzo Declaration.)

Given the above timing, only minimal apportionment was necessary. In total, the Court found that 2.0 hours claimed by Mr. Kerendian and 3.1 hours claimed by Mr. Saccuzzo, were attributable to the Property Management Agreement. (See ¶4 of Kerendian Declaration and ¶21 of Saccuzzo Declaration.)

Substantial additional reductions are made, however, given the expected efficiency of attorneys with comparable experience.

With respect to Mr. Kerendian, the Court approves 10 hours of labor, which reflects a reasonable amount of time reviewing the Settlement Agreement, written discovery responses and the Motion for Summary Judgment. (See ¶4 of Kerendian Declaration.)

With respect to Mr. Saccuzzo, following a thorough review of the Motion for Summary Judgment, the Court approves 34.2 pre-Judgment hours incurred by this attorney. This includes time reviewing the Settlement and Release Agreement, preparing the Answer and written discovery, corresponding regarding the Settlement Agreement, the Motion for Summary Judgment, and preparing the Notice of Ruling and Proposed Judgment. (¶21 of Saccuzzo Declaration.)

Finally, as noted by Defendant “it is well established that [prevailing parties] and their attorneys may recover attorney fees for fee-related matters.” (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 580.) Given the instant motion is unopposed, and given the relative simplicity of this motion, the Court approves an additional 8 hours by Mr. Saccuzzo.

Based on the above, the reasonable amount of attorneys’ fees incurred herein, in litigating the validity of the Settlement and Release Agreement is $29,383.00.