Maneesh Bansal, M.D., et al. v. Arunpal Sehgal, M.D., et al.

(Stanley Mosk Courthouse: Dept. 510) August 19, 2026 DEPARTMENT 510 LAW AND MOTION RULINGS Please notify Department 510 via email at [email protected] and indicate that the parties are submitting on the tentative ruling. Please provide the attorney's name and represented party. Please notify the opposing side via email if submitting on the Court's tentative ruling.

5 - Maneesh Bansal, M.D., et al. v. Arunpal Sehgal, M.D., et al. Defendants Arunpal Sehgal, M.D. and Paramjot Mann, M.D.'s Motion for Attorney Fees Defendants Arunpal Sehgal, M.D. ("Sehgal") and Paramjot Mann, M.D. ("Mann") move for a total of $1,752,582.35 in attorney fees against Plaintiff Maneesh Bansal, M.D. ("Bansal").

On May 7, 2026, following a 10-day bench trial, the Court entered judgment in favor of Sehgal for Plaintiff Bansal's sole cause of action, a derivative claim for breach of fiduciary duty asserted against him on behalf of their two jointly-owned hospices. The Court also entered judgment in favor of Mann for all five derivative claims asserted against her: breach of fiduciary duty, aiding and abetting breach of fiduciary duty, negligence, money had and received, and implied contractual indemnity.

Evidentiary Objections Bansal makes 14 evidentiary objections to Mann's declaration. Objection nos. 1-6 and 9-14 are sustained based on lack of foundation and incomplete records. Objection nos. 7 and 8 are sustained based on lack of foundation. Bansal also makes 12 evidentiary objections to Jones's declaration. Objection nos. 11-12 are sustained based on lack of foundation and incomplete records. All remaining objections are overruled.

Civil Code Sec. 1717 Defendant Sehgal argues that he is entitled to seek attorney fees because the breach of fiduciary duty claim asserted against him was an action on a contract, as contemplated under Civil Code section 1717. [1] Civil Code Sec. 1717(a) provides that "[i]n any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs."

Sehgal argues that the breach of fiduciary claim asserted against him arose out of his agreed-upon role at the hospices to oversee clinical operations and, therefore, was based on the obligations set forth in their contractual shareholder agreement. In opposition, Bansal contends that the breach of fiduciary claim is not based on a contract because "Sehgal's fiduciary duties arose from his status as an executive and director, and an oral agreement to oversee clinical, not from the Shareholder Agreements." (Opp., at p. 8.)

The Court agrees with Bansal: the breach of fiduciary duty claim did not arise specifically from the shareholder agreements. "Civil Code section 1717 does not apply to tort claims; it determines which party, if any, is entitled to attorneys' fees on a contract claim only. " (Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 708.) "Whether an action is based on contract or tort depends upon the nature of the right sued upon, not the form of the pleading or relief demanded. If based on breach of promise it is contractual; if based on breach of a noncontractual duty it is tortious." (Kangarlou v. Progressive Title Co., Inc. (2005) 128 Cal.App.4th 1174, 1178 [quoting Arthur L. Sachs, Inc. v. City of Oceanside (1984) 151 Cal.App.3d 315, 322].)

Here, Sehgal's fiduciary duties arose independently of the shareholder agreements. Plaintiff's first amended complaint alleges: "As a member of the Hospices' board of directors, Defendant Sehgal owed them a fiduciary duty. . . . Defendant Sehgal breached his fiduciary duty by 1) driving out key employees; 2) unilaterally terminating the Hospices' office lease; and 3) refusing to consent to allowing the Hospices to declare bankruptcy. Defendant Sehgal also breached his fiduciary duty by failing to adequately supervise Defendant Mann [sic] improper certification of patients for Medicare-reimbursed treatment, leading to Medicare clawing back $5.7 million in payments." (FAC, P.P. 45, 47.)

Plaintiff does not allege nor imply that Sehgal's fiduciary duties arose via contractual agreement. Rather, they were duties imposed by California corporate law and existed independent of any contract. A review of the substance of the shareholder agreements compels the same finding. The shareholder agreements consist largely of boilerplate recitation of typical shareholder rights such as various restrictions on the transfers of shares, preemptive and repurchase rights, and voting rights. No provision of the agreement expressly outlines Sehgal's duties to manage the clinical department or supervise others. In addition, Sehgal does not point to any specific provision in the agreement that outlines his undertaking of these specific duties. Therefore, the Court concludes that the breach of fiduciary duty claim sounds in tort, not contract, and that Civil Code section 1717 is inapplicable.

Code of Civil Procedure Sec. 1021 Sehgal also argues that he is entitled to recovery attorney fees under Code of Civil Procedure section 1021. Section 1021 states that "[e]xcept as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties." Code of Civil Procedure section 1032(b) states that "a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." Such costs may include attorney fees. (CCP Sec. 1033.5.)

When not authorized by statute, entitlement to attorney fees derives from the contractual terms chosen, as parties may limit or expand the circumstances under which attorney fees may be awarded. (Chacker v. JPMorgan Chase Bank, N.A. (2018) 27 Cal.App.5th 351, 357; see Rideau v. Stewart Title of California, Inc. (2015) 235 Cal.App.4th 1286, 1301 [whether a party to an agreement is entitled to attorney fees under the agreement depends on its language].) In the case of a contractual attorney fees provision, any inquiry begins with the language of the subject provision.

Thus, for attorney fees to be recovered, the claim on which the fees are incurred must fall within the scope of the attorney fee provision. (Exxess Electronixx v. Heger Realty Corp. (1998) 64 Cal.App.4th 698, 708; see Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 752, 760 ["[I]t is necessary to determine whether the parties entered an agreement for the payment of attorney fees, and if so, the scope of the attorney fee agreement."].)

Sehgal and Bansal entered into two shareholder agreements. Both agreements provided: In the event that any dispute between the Company and the Shareholders or among the Shareholders should result in litigation or arbitration, the prevailing party in such dispute shall be entitled to recover from the other party or parties all reasonable attorney's fees, costs and expenses of enforcing any right of the prevailing party. (Jones Decl., Ex. A, Sec. 6.13; Ex. B, Sec. 6.13.)

First, Defendant Mann is not covered by the attorney fee provision, because she was not a shareholder in either company. She makes no argument to the contrary. As for Bansal's claim for breach of fiduciary duty against Sehgal, the Court finds that the attorney fee provision's scope covers the tort claim. The provision expressly applies to "any dispute" between the parties, which would cover both contract and noncontact claims. Importantly, the clause does not require that the dispute arise from the agreement itself; rather, it governs any dispute between the shareholders. Therefore, Sehgal would be entitled to recover under the attorney fee provision in the shareholder agreement.

In opposition, Bansal contends that the attorney fee provision does not allow Sehgal to recover fees because he was not "enforcing any right" in the lawsuit; instead, he was defending himself against Bansal. The Court finds this argument unconvincing. The clause states that the "prevailing party" may recover fees. The Court does not find that this phrase would limit recovery to only an enforcement action, while excluding any defense against such enforcement action.

Prevailing Party The parties dispute whether Defendants are the "prevailing parties." " 'Prevailing party' includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the 'prevailing party' shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034." (CCP Sec. 1032(a)(4).)

"Trial courts determine who is the prevailing party based on an evaluation of whether a party prevailed on a practical level. Among the factors the trial court should consider is the extent to which each party has realized its litigation objectives." (Regency Midland Construction, Inc. v. Legendary Structures Inc. (2019) 41 Cal.App.5th 994, 1000.) Here, Sehgal is the prevailing party because he is "a defendant where neither plaintiff nor defendant obtains any relief." (CCP Sec. 1032(a)(4).) Judgment was entered in favor of Defendant Sehgal at the end of trial.

Bansal argues Sehgal did not obtain greater relief in the action because he also brought crossclaims that sought damages for the closure of the hospices in a cross-complaint--crossclaims that he later voluntarily dismissed. Bansal argues that because "both sides' litigation objectives were plainly to obtain compensation from the other for the closure of the Hospices," neither party obtained relief and, therefore, there is no prevailing party. (Opp., at p. 10.) The Court disagrees. Code of Civil Procedure section 1032 expressly provides that when neither party obtains any relief, the defendant is considered the prevailing party. Whether Defendant sought relief in a cross-complaint that was later voluntarily dismissed does not change this.

Reasonableness of Fees Defendants presented billing records purportedly showing $1,752,582.35 for 2,697.7 hours of work. (Motion, at pp. 12-13.) The attorney fee hourly rates ranged from $425 to $1,195. (Id., at pp. 11-12.) In determining what constitutes a reasonable fee, the court ordinarily begins with the lodestar, that is, "the number of hours reasonably expended multiplied by the reasonable hourly rate." (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) In calculating the lodestar, the court must determine whether the tasks performed by an attorney were necessary and whether the amount of time billed for each task was reasonable. (Baxter v.

Bock (2016) 247 Cal.App.4th 775, 793.) The moving party has the burden of proof on these issues. (Ibid.) " "A trial court may not rubberstamp a request for attorney fees, but must determine the number of hours reasonably expended.' " (Concepcion v. Amscan Holdings, Inc. (2014) 223 Cal.App.4th 1309, 1325.)

Defendants provided two declarations to support their fee request: the Mann declaration and the Jones declaration. Mann's declaration includes hundreds of pages of invoices from all six law firms that were retained at various stages of the case. Notably, these invoices are heavily redacted, including the description of what legal work was performed. The unredacted portions of the invoices include the date the task was performed, the hours worked, counsel's hourly rate, and, for only a small subset of invoices, the "type" of task performed. The type of task is divided into broad categories such as: "review," "correspondence," "telephone call," "court filing," and "draft."

The Court cannot determine, from the information provided by Defendants, whether the fees incurred were reasonable and necessary to the litigation. No attorney attests to any time or tasks spent on the defense of this case. The heavily redacted invoices provide no meaningful way for the Court to review the reasonableness of the requested fees. As just one random example, on Forward Counsel's 2/16/2024 invoice (Mann Decl., Ex. F), there is an entry on January 4, 2024 of 7.30 hours. The details of work performed are redacted, and no task is specified, so it is unknown if that entry was to draft a one-sentence email, participate in a day-long mediation, draft questions for a deposition, conduct multiple tasks that are block-billed, or any of dozens of other tasks that attorneys perform.

Because there is no content included with any time entry on the dozens of invoices submitted, there is no basis on which the Court can make a reasonableness determination. Indeed, any determination based on the redacted invoices alone would be inherently speculative.

Defendants argue that attorney declarations adequately substantiate the work performed, and the detailed time records are not necessary for the Court's analysis. The Court agrees with this proposition in theory, and has approved fees based on declarations rather than invoices. The single attorney declaration submitted here, by Gregory Jones, does not provide the information the Court requires--namely, the specific tasks completed - i.e., depositions taken, motions drafted or opposed, discovery propounded, etc. - and how long it took to complete each task. The only other declaration, by Mann, understandably does not include any such details, for she lacks first-hand knowledge of the work performed by her outside attorneys. While Mann knows how much she was charged, no evidence was presented as to the work performed by her attorneys.

The lack of substantive information is readily demonstrated by the spreadsheet attached as Exhibit C to the Jones Declaration, an 85-page, single-spaced list of dates, attorney names, hourly rates, hours spent on unknown tasks, and assorted discounts. The length of the exhibit does not make up for its lack of substance. The Court sustained objections to that exhibit and much of the evidence Defendants submitted due to a lack of foundation and substantive information. The Court simply cannot assess the reasonableness of the fees requested based on the information supplied with the motion.

The Court was, though, present at the 10-day bench trial and observed defense counsel in the courtroom on each of those 10 days. The Court has personal knowledge that both Gregory Jones and Deborah Jones were present for all or substantially all 10 days. On each day the Court was in recess from 12:00 pm to 1:30 pm.

· Tuesday, December 2, 2025: 10:00 am to 4:30 pm (5.0 hours) · Wednesday, December 3, 2025: 10:00 am to 4:30 pm (5.0 hours) · Thursday, December 4, 2025: 9:30 am to 4:30 pm (5.5 hours) · Friday, December 5, 2025: 9:30 am to 4:15 pm (5.25 hours) · Monday, December 8, 2025: 9:30 am to 4:15 pm (5.25 hours) · Tuesday, December 9, 2025: 9:30 am to 4:30 pm (5.5 hours) · Wednesday, December 10, 2025: 9:30 am to 4:30 pm (5.5 hours) · Thursday, December 11, 2025: 9:30 am to 4:30 pm (5.5 hours) · Friday, December 12, 2025: 9:30 am to 4:00 pm (5.0 hours) · Monday, December 15, 2025: 9:30 am to 11:00 am (1.5 hours) Total hours = 49

According to the Jones Declaration, Gregory Jones's hourly rate in 2025 was $1,080 and Deborah Jones's hourly rate in 2025 was $960. (Jones Decl., P.P. 6, 7.) Plaintiff did not contest the reasonableness of the hourly rates or contend that they are not appropriate for the defense of this case. Based on the Court's familiarity with hourly billing rates for Los Angeles attorneys in high-stakes corporate litigation such as this case, the Court agrees that the defense rates requested are reasonable hourly rates for attorneys with the experience of Mr. Jones and Ms. Jones. Therefore, 49 hours times $2,040 ($1,080 + $960) equals $99,960 in fees. Counsel is entitled to this sum for the work the Court saw counsel perform on this case. Any determination of fees beyond this amount would be rank speculation.

Disposition

Defendants Arunpal Sehgal, M.D. and Paramjot Mann, M.D.'s motion for attorney fees is granted in part. Defendant Arunpal Sehgal, M.D. shall recover a total of $99,960 in attorney fees from Plaintiff. The motion is denied in all other respects. Defendants are to submit a proposed amended judgment that reflects the fee award.

[1] While Defendant Mann also argues in the motion that she is entitled to fees under Civil Code section 1717, she later concedes in reply "that if Bansal is now taking the position that he was never entitled to recover prevailing party attorneys' fees