KJ-Park, LLC v. Match Group, LLC

Background

KJ-Park brought a federal diversity action concerning a commercial lease for a building located at 2555 Park Boulevard in Palo Alto, California. KJ-Park claimed that Match Group breached the lease and a guaranty and sought at least $6,986,605 in damages, plus additional unpaid rent. Match Group, LLC counterclaimed for breach of contract and money had and received. The central dispute was whether Match Group properly terminated the lease.

The court previously granted in part and denied in part both sides’ summary-judgment motions. The parties then submitted a judgment requiring KJ-Park to pay Match Group, LLC $289,693.74 on its counterclaim, plus prejudgment interest on that amount and post-judgment interest on the total judgment.

Match Group later moved for $1,016,957.92 in attorneys’ fees, $93,550.03 in non-taxable costs, and prejudgment and post-judgment interest on the fees and costs. The lease authorized recovery of reasonable attorneys’ fees and costs by the prevailing party. KJ-Park did not dispute that Match Group was the prevailing party or oppose the request for costs and post-judgment interest, but challenged the reasonableness of the fees and opposed prejudgment interest.

Attorneys’ Fees

Because the action was based on diversity jurisdiction and the lease was governed by California law, the court applied California law, including California Civil Code section 1717. That provision allows the prevailing party in a contract action to recover reasonable attorneys’ fees when the contract authorizes them. The court used the lodestar method, which calculates fees by multiplying the reasonable hours worked by a reasonable hourly rate, and then considered whether the resulting amount was reasonable under all the circumstances.

The court found that the lease authorized fees and that Match Group was the prevailing party. It concluded, however, that Match Group had not adequately shown that several requested hourly rates were reasonable for this relatively uncomplicated commercial lease dispute. The court reduced the rates for Eileen Ridley and Kurt Franklin to $700 per hour, Robert Slovak to $700 per hour, and Alan Ouellette to $600 per hour. It did not reduce Jordan Hamling’s $570 hourly rate.

The court excluded $1,226 for work by Fennemore paralegals Jordan Smith and Michelle Sanchez because Match Group did not provide a proper foundation for evidence about their qualifications. It also excluded $508.62 for work by Foley litigation-support staff member Noel Velasco because Match Group provided minimal information about him and insufficient justification for his $470 hourly rate. The court did not reduce the requested fees for other Foley support staff whose experience was adequately described.

The court found that Match Group had used more attorneys than necessary after Foley assumed primary responsibility for the defense. It therefore excluded $7,414 for work performed by Mark Epstein from November 1, 2023, forward. The court did not make an additional deduction for multiple attorneys attending a deposition because the billing records showed that the attorneys each billed only half of their time.

The court also found that Match Group’s counsel spent excessive time briefing its motion to dismiss. It applied a 20 percent reduction to the hours billed by Mark Epstein and Miguel Saldaña for briefing that motion, resulting in a $14,563.80 deduction. The court did not deduct fees for preparation for or attendance at the motion hearing, communications with Match Group about the motion, or work on unsuccessful discovery arguments, because those activities were not shown to be unreasonable or frivolous.

The court granted in part and denied in part Match Group’s motion for attorneys’ fees and awarded a total of $944,605.08 in fees.

Costs and Interest

The court granted as unopposed Match Group’s request for $93,550.03 in non-taxable costs. It also granted as unopposed Match Group’s request for post-judgment interest on the total award of fees and non-taxable costs under 28 U.S.C. section 1961.

The court denied Match Group’s request for prejudgment interest. It held that the lease’s fee provision did not expressly authorize prejudgment interest. The court also concluded that California Civil Code section 3287(a) did not require prejudgment interest because the amount of the fees and costs was disputed. Finally, the court declined to award discretionary prejudgment interest under section 3287(b), noting that the case was litigated for about 18 months, involved a genuine contractual dispute, and presented no evidence about settlement offers or refusals.

The court directed the parties to file a joint status report by February 13, 2025, addressing whether further proceedings were necessary and whether an amended judgment should be entered.