Stokes v. SBS Transport, LLC

Background

Manasseh Stokes requested sanctions under California Code of Civil Procedure section 1281.99 based on the defendants’ breach of an arbitration agreement and the court’s order vacating the order that had compelled arbitration. Section 1281.99 requires a court to order a drafting party that materially breaches an arbitration agreement to pay the employee’s or consumer’s reasonable expenses, including attorney fees and costs, resulting from the breach.

On January 3, 2023, the court determined that Stokes was entitled to sanctions but could not evaluate the reasonableness of his original lump-sum request for $23,455. The court ordered a supplemental declaration with detailed time records, descriptions of the work performed, and evidence that the hourly rates were reasonable. It also ordered Stokes to exclude fees and costs incurred opposing the initial motion to compel arbitration.

Stokes’s counsel then requested $14,265.60, including a $300 arbitration initiation fee. Counsel identified three attorneys who worked on the matter and submitted a chart summarizing their hours, but did not submit billing records or detailed time entries.

Analysis

The court held that Stokes had not met his burden of documenting the attorney hours. The supplemental declaration gave only broad categories of work, such as “Law & Motion” and “Research/Document Review/Internal Communications,” rather than identifying specific tasks, the time spent on each task, and the dates of the work. The court found that the submitted chart was not a billing record and did not justify the hours claimed.

The court also found unexplained inconsistencies between the original and supplemental requests. In particular, the supplemental declaration attributed 15 hours—the bulk of the work—to associate Kristen Doyen, who was not identified in the original request. Because counsel did not explain the discrepancy and provided no detailed billing entries, the court could not determine whether the attorney fees were reasonable.

The court separately considered the $300 initial arbitration filing fee. Counsel provided the firm’s billing record and confirmation from the American Arbitration Association showing payment of that amount. The court found the fee to be a reasonable expense resulting from the breach.

Disposition

The court granted in part and denied in part Stokes’s request for sanctions. It denied the request to the extent it sought attorney fees and ordered the defendants to pay Stokes $300 as a reasonable expense under section 1281.99.