Vaughn v. Teran, No. 1:2017cv00966 - Document 145 (E.D. Cal. 2024)
Court Description: ORDER GRANTING 143 Motion for Judicial Notice; ORDER GRANTING IN PART 128 Motion for Damages and Directing Clerk of Court to Close this Case, signed by Magistrate Judge Helena M. Barch-Kuchta on 10/28/2024. CASE CLOSED. (Maldonado, C)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 MARK VAUGHN, 12 Plaintiff, 13 v. 14 NURSE TERAN, 15 16 17 Case No. 1:17-cv-00966-HBK ORDER GRANTING MOTION FOR JUDICIAL NOTICE (Doc. No. 143) Defendant. ORDER GRANTING IN PART MOTION FOR DAMAGES AND DIRECTING CLERK OF COURT TO CLOSE THIS CASE (Doc. No. 128-3) 18 19 On July 12, 2024, the Court granted Plaintiff’s Motion to Enforcement the Settlement 20 Agreement, deferring a ruling on the amount of any damages to be awarded. (See Doc. No. 125). 21 Pursuant to the July 12, 2024 Order, Plaintiff submitted a Motion for Damages supported by 22 various exhibits. (Doc. Nos. 128-3, 133, 134, 135, 136, 137, 138). Defendant filed a Response to 23 Plaintiff’s Motion (Doc. No. 142) along with a Request for Judicial Notice (Doc. No. 143), and 24 Plaintiff filed a Reply (Doc. No. 144). For reasons set forth below, the Court grants the Request 25 for Judicial Notice and grants in part Plaintiff’s Motion for Damages. 26 REQUEST FOR JUDICIAL NOTICE 27 28 Defendant filed a Request for Judicial Notice, asking the Court to either judicially notice certain court records or find that they are incorporated by reference. (Doc. No. 143 at 1). 1 Specifically, Defendant seeks to judicially notice the following records from two state court 2 proceedings: 3 4 5 6 7 1. The Complaint in Ken I. Karan v. Mark Vaughn, Case No. 37-2023-0030549-CU-BCCTL (Superior Court of California, San Diego County). 2. The Clerk’s Judgment in Ken I. Karan v. Mark Vaughn, Case No. 37-2023-0030549-CUBC-CTL (Superior Court of California, San Diego County). 3. The First Amended Complaint in Ken I. Karan v. California Department of Corrections 8 and Rehabilitation et al., Case No. 24CV000516 (California Superior Court, Sacramento 9 County). 10 Federal Rule of Evidence 201 permits a court to take judicial notice of facts that are “not 11 subject to reasonable dispute” because they are either “generally known within the trial court's 12 territorial jurisdiction,” or they “can be accurately and readily determined from sources whose 13 accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). The Court may take judicial 14 notice of a pertinent law or regulations at any stage of the proceedings. Id.; see also National 15 Agricultural Chemicals Assn. v. Rominger, 500 F.Supp. 465, 472 (E.D. Cal. 1980). The Court 16 may take judicial notice on its own or at the request of any party. Id. 201(c). 17 Courts judicially notice other court proceedings “if those proceedings have a direct 18 relation to the matters at issue.” United States ex. Rel. Robinson Rancheria Citizens Counsel v. 19 Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (citations and internal quotation marks omitted); 20 Trigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011). However, a court may not take judicial 21 notice of findings of facts from another case. Walker v. Woodford, 454 F. Supp. 2d 1007, 1022 22 (S.D. Cal. 2006). The Court may take judicial notice on its own or at the request of any party, 23 and “must take judicial notice if a party requests it and the court is supplied with the necessary 24 information.” Fed. R. Evid. 201(c). 25 The above records reflect the separate court proceedings through which Plaintiff’s 26 Counsel Ken Karan has sought to recover his losses resulting from CDCR’s breach of contract 27 and Plaintiff’s refusal to pay Karan attorney’s fees. The Court finds these cases are related and 28 relevant to the issue of what recovery Plaintiff’s Counsel may be entitled to seek in this action. 2 1 While the Court may not take judicial notice of findings of fact from these documents, it must 2 take judicial notice of the existence and content of these three orders. See Fed R. Evid. 201(c). 3 Thus, the Court takes judicial notice of these records to the extent permitted by law. 4 BACKGROUND 5 The facts of this case are well-known to the parties; thus the Court recites them only 6 briefly. On July 22, 2022, the parties entered into a settlement agreement resolving Plaintiff’s 7 Eighth Amendment deliberate medical indifference claim against Nurse Teran. (See Doc. No. 8 84). Under the settlement agreement, the California Department of Corrections and 9 Rehabilitation (“CDCR”) agreed to pay $225,000.00 to Plaintiff. (Doc. No. 100-1 at 4). Based 10 on his prior dealings with CDCR and industry custom, Plaintiff’s Counsel, Ken Karan, reasonably 11 believed the settlement check would be sent to him so that he could deduct his attorney’s fees and 12 costs, resolve Plaintiff’s liens, and send the remainder (if any) to Plaintiff. (Doc. No. 99 at 10 ¶¶ 13 18-20). Pursuant to a Court order issued when the case was settled, Defendant’s Counsel was to 14 “file a status report every twenty (20) days to advise the Court of the status of payment after the 15 request for payment is submitted.” (Doc. No. 84). Under the terms of the settlement, signed on 16 November 2, 2022, CDCR was to make “a good faith effort” to complete payment within 180 17 days, thus the last day to perform the settlement agreement was May 1, 2023. (See Doc. No. 100- 18 1 at 9 ¶ 22; Doc. No. 99 at 2). Defendant’s Counsel did not file any status reports. See docket. Plaintiff’s Counsel, Ken 19 20 Karan, inquired via email multiple times as to the status of the check, including on February 1, 21 2023 and April 21, 2023, but Counsel for Defendant was unable to provide any detailed 22 information other than responding on April 22, 2023 that according to the Finance Office the 23 “check had been processed.” (Doc. No. 100-1 at 12, 16). Finally, on May 5, 2023, Defense 24 counsel advised Mr. Karan that the check had been sent to an addressing corresponding to 25 Plaintiff’s home address, and that it had been cashed in March 2023, two months prior. (Id. at 18, 26 20). 27 28 On May 17, 2023, Plaintiff filed a Motion to Reopen Case and Enforce Settlement Agreement (Doc. Nos. 99, 100), which the Court granted in part on July 12, 2024. (Doc. No. 3 1 125). The Court found that the payment terms in the settlement agreement, which did not specify 2 to whom the payment would be made or where payment would be sent, were silent or ambiguous; 3 that based on the parol evidence submitted by the parties, the court interpreted the silent or 4 ambiguous payment term as directing payment to Plaintiff’s Counsel’s trust account; and that the 5 failure to do so was a breach of a material term of the settlement agreement. (See generally id). 6 The Court also found that Plaintiff’s Counsel was a third-party beneficiary under the settlement 7 agreement who could sue to enforce its terms. (Id. at 9-10). Thus, the Court directed the parties 8 to brief the issue of what damages, if any, should be awarded to Plaintiff’s Counsel based on 9 CDCR’s breach. 10 A. Plaintiff’s Position1 11 Plaintiff’s Counsel argues that CDCR should pay him as damages the full $225,000 that it 12 mistakenly sent to Plaintiff, plus interest. In support, Karan submits a spreadsheet documenting 13 his costs incurred in the litigation, including deposition fees, service of process, expert fees, 14 records, postage, and travel. (Doc. No. 133-1). These costs total $25,835.41. (Id.). Counsel’s 15 35% fee amount to $78,750. (See id. at 5). Karan also documents several liens, bail expenses, 16 and loans that Plaintiff took out during the litigation, which Karan considers case expenses and 17 which he claims the lienholders will look to him to satisfy. (See Doc. No 128 at 2-3; see 18 generally Doc. Nos. 134-138). 19 Rather than demand the precise total of these costs and fees, Karan contends that CDCR 20 should pay him the full $225,000, plus interest, because if CDCR had sent the settlement check to 21 him consistent with its prior practice and accepted industry custom, Karan would have been able 22 to pay his own costs and fees and resolve Plaintiff’s debts. (Doc. No. 144 at 9). Applying an 23 10% annual interest rate to the $225,000 settlement, per Cal. Civil Code § 3289(b)2 Karan seeks a 24 total of $252,740. (Doc. No. 128-3 at 4). 25 26 //// Real parties in interest at this stage of the litigation are Plaintiff’s Counsel, Ken Karan and CDCR, but the Court generally refers to the parties as “Plaintiff” and “Defendant” for simplicity. 2 Cal. Civ. Code § 3289 prescribes that a 10% interest rate applies to any obligation owed under a breach of contract. 1 27 28 4 1 B. Defendant’s Position 2 Defendant denies that CDCR owes any further payment pursuant to the settlement 3 agreement. CDCR points out that the settlement agreement explicitly makes each party 4 responsible for its own costs and legal fees, as well as any liens. (Doc. No. 142 at 1; see also 5 Doc. No. 100-1 at 4 ¶ 5, 8 ¶ 19). Defendant argues that Plaintiff would enjoy a windfall if he 6 were able to abscond with the initial $225,000 check and then benefit from a further $225,000 7 that satisfied his existing debts. (Id. at 1-2). As to each of the categories of costs identified in 8 Plaintiff’s Motion, Defendant disputes that Plaintiff has a legitimate claim for recovery. As to 9 Plaintiff’s claim for attorney’s fees and costs CDCR does not dispute that Karan’s attorney’s fees 10 and costs are reasonable, but points out that “the parties’ agreement (of which the court 11 determined Karan is a third party beneficiary) provides that Vaughn, not CDCR, is responsible 12 for his own attorney’s fees and costs.” (Id. at 7). 13 CDCR challenges many of the other categories of costs identified by Plaintiff as unrelated 14 to the case, such as repaying the non-recourse loans that Plaintiff took out during the litigation, 15 paying off Plaintiff’s liens to Medi-Cal and the State of Iowa, and repaying Plaintiff’s bail bond. 16 (See id. at 3-7). Defendant argues that under the settlement agreement, Vaughn alone is 17 responsible for paying these debts, and that “[t]here is no evidence that Karan or anyone other 18 than Vaughn is responsible” for these debts. (Id. at 7). CDCR also argues that “the fact that 19 [Vaughn] absconded with the funds is simply not foreseeable damages for mailing a check to a 20 party who knows he owes debts. Since they are not foreseeable, they are not recoverable 21 damages for breach of contract.” (Id. at 8). 22 Finally, Defendant denies that Plaintiff is entitled to recover interest since no judgment 23 was entered in this case and CDCR timely paid its $225,000 obligation under the settlement 24 agreement. (Id. at 6). 25 C. Plaintiff’s Reply 26 In a reply, Karan argues that Defendant misrepresents the underlying nature of this claim, 27 which is to vindicate his (Counsel’s) rights under the settlement agreement and protect him from 28 claims by Plaintiff’s creditors, rather than to earn a windfall for Plaintiff as CDCR suggests. 5 1 (Doc. No. 144 at 1-2). As to each of the liens against Plaintiff, Karan asserts that the creditors 2 will seek recovery against him personally. (See generally id.). Moreover, he argues that whether 3 Plaintiff’s debts are properly deemed “case-related expenses” is not, as CDCR claims, a 4 legitimate basis for relieving CDCR of its obligation to pay the specified damages, because all of 5 Plaintiff’s liens would have been satisfied if not for CDCR’s breach of the settlement agreement. 6 (Id. at 5-6). Further, Karan contends “[t]here should be no doubt that any expenses incurred on 7 Plaintiff’s behalf by his attorney were incurred on the basis that those expenses would be 8 reimbursed from the recovery of damages in the lawsuit.” (Id. at 6). Thus, he argues, “every cost 9 identified arises directly from counsel’s representation of Plaintiff.” (Id.). 10 Karan rejects CDCR’s argument that no post-judgment interest should be awarded; in fact, 11 what he seeks now is pre-judgment interest given that he has had “to wait over 1.5 years to 12 recover from CDCR’s malicious actions.” (Id. at 4-5). And if CDCR fails to pay a judgment 13 issued by this Court, Karan promises to seek post-judgment interest as well. (Id. at 5). 14 DISCUSSION 15 A. Plaintiff’s Counsel is Entitled to Monetary Damages as a Third-Party Beneficiary 16 The Court already determined that CDCR is liable for breach of the settlement agreement. 17 (See Doc. No. 125). The remaining question is what damages should be awarded to Karan for 18 that breach. It is important to clarify that the real parties in interest at this stage of the litigation 19 are not Plaintiff Vaughn and Defendant Teran, but Plaintiff’s Counsel and Defendant’s employer, 20 the California Department of Corrections and Rehabilitation. Nor is the lawsuit brought by 21 Plaintiff’s creditors and lienholders against CDCR. Thus, the measure of damages is to be 22 determined based on the benefit Karan expected to receive as a third-party beneficiary to the 23 settlement agreement from CDCR’s performance and the resulting loss he suffered from their 24 breach, rather than any benefit expected by Plaintiff or his creditors. 25 Under both federal law and state law, the usual remedy for breach of a settlement 26 agreement is monetary damages or specific performance. See Penobscot Indian Nation v. Key 27 Bank of Maine, 112 F.3d 538, 558 n. 28 (1st Cir.), cert. denied, 522 U.S. 913 (1997); TNT 28 Marketing, Inc. v. Agresti, 796 F.2d 276, 278 (9th Cir.1986). The usual remedy for breach of 6 1 contract is monetary damages. See United States v. Winstar Corp., 518 U.S. 839, 116 S.Ct. 2432, 2 2460, 135 L.Ed.2d 964 (1996) (“damages are always the default remedy for breach of contract”). 3 Under Cal. Civ. Code § 3300: 4 For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom. 5 6 7 In other words, the damages should be in an amount sufficient to remedy the harm to the 8 aggrieved party—here, Plaintiff’s counsel—caused by the breach. 9 While Article III of the Uniform Commercial Code does not govern settlement 10 agreements, it addresses situations similar to this one, involving mishandled payment instruments 11 and thus may serve as a source of persuasive authority. See, e.g., Old Stone Bank v. Tycon I Bldg. 12 Ltd. P'ship, 946 F.2d 271, 273 (4th Cir. 1991) (“While the UCC does not of course govern the 13 outcome of this suit involving real property, both sides agree that it provides persuasive authority 14 in these circumstances”). With respect to forgery or theft of checks, Article III provides that 15 where a payor fails to take ordinary care in issuing a check: 16 and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss. 17 18 19 20 UCC 3-404. In this case, as discussed further below, CDCR failed to exercise ordinary care by issuing 21 a $225,000.00 check to a convicted felon rather than to his retained attorney, who CDCR knew 22 had incurred substantial time and costs in litigating the case. Thus, the Court finds that Karan is 23 entitled to monetary damages sufficient to remedy the loss resulting from CDCR’s breach of 24 contract and lack of ordinary care. 25 26 1. The Damages Were a Foreseeable Result of CDCR’s Breach Contract damages are generally limited to those within the contemplation of the parties 27 when the contract was entered into or at least reasonably foreseeable by them at that time. 28 Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 515, 869 P.2d 454, 460 (1994) 7 1 (collecting cases). Here, CDCR argues that “the fact that [Vaughn] absconded with the funds is 2 simply not foreseeable damages for mailing a check to a party who knows he owes debts. Since 3 they are not foreseeable, they are not recoverable damages for breach of contract.” (Doc. No. 142 4 at 8). Respectfully, the Court disagrees. Mailing a settlement check in a personal injury action to 5 a represented client rather than to his attorney is contrary to general industry practice,3 and even 6 more so defies common sense when the plaintiff is a recently released prisoner with a criminal 7 record for theft and the check is for a significant sum of money, here $225,000. The Court takes 8 judicial notice of the fact that Plaintiff Vaughn is a felon with multiple convictions for vehicle 9 theft and a conviction for receiving stolen property. See People v. Mark Aaron Vaughn, 2017 WL 10 1293460, at *6 (Cal. 2017).4 For Defense counsel and the Comptroller’s Office staff5 who issued 11 the check to have ignored this fact, along with well-established industry custom, when they 12 elected to send $225,000 directly to Vaughn rather than to his attorney exposed them to liability 13 for the consequences. This is particularly confounding given that the settlement agreement 14 explicitly directed both Plaintiff and his Counsel to complete payee data forms and provide their 15 addresses of record, (see Doc. No. 100-1 at 4 ¶ 4) providing CDCR the information necessary to 16 send payment to Karan. As the Court discussed at length in its July 12, 2024 Order, the relevant 17 parol evidence supports the inference that the parties expected CDCR to mail the check to Karan 18 and breached that agreement by mailing it instead directly to Vaughn. In doing so, it was 19 reasonably foreseeable that Karan would not receive the benefit he expected from the settlement 20 agreement. 21 //// 22 //// 23 24 25 26 27 28 3 The Court noted in its July 12, 2024 Order Granting in Part the Motion to Enforce the Settlement Agreement, the American Bar Association has explicitly stated that, “[i]n payment of liability claims, it is the customary practice of insurance carriers to deliver the settlement proceeds to the lawyer of record for the claimant, usually by check made payable jointly to the claimant and the claimant’s lawyer. As the Supreme Court of New Jersey observed in Matter of Conroy, 56 N.J. 279, 266 A.2d 279 (1970), the underlying purpose for the practice is to ‘protect and preserve the interests of all three parties to the transaction’ the insured, the successful claimant and the claimant’s lawyer.” 4 See Fed. R. Evid. 201. 5 At a December 7, 2023 Telephonic Status Conference, former Counsel for Defendant, Matthew Roman, advised the Court that the Comptroller’s Office issued the check. 8 1 2 2. Karan is Entitled to Recover His Attorney’s Fees and Costs Incurred in This Case Karan incurred significant time and expense in litigating this prisoner civil rights case on a 3 contingency basis. He settled the case after more than five years and did so on the eve of trial, 4 after he had hired multiple experts and incurred nearly $25,000 in costs. (See Doc. No. 133-1 at 5 4-5). CDCR does not dispute the reasonableness of Karan’s 35% fee ($78,750), or the litigation 6 costs documented in his damages briefing ($25,835.41). (Doc. No. 142 at 7). 7 The Court finds it appropriate to make Karan whole for the contingency fee he expected to 8 receive from the settlement and the basic litigation costs he covered out-of-pocket, such as 9 records, depositions, expert fees, and the like. This was the benefit Karan reasonably expected to 10 receive from CDCR’s performance of the settlement agreement. Based on upon a review of the 11 costs identified in the spreadsheet submitted by Karan, whose reasonableness CDCR does not 12 challenge, the Court finds that both the fees and costs are reasonable and that CDCR is liable for 13 $104,135.41. 14 B. Karan Is Not Entitled to Recovery Based on Vaughn’s Personal Debts 15 The Court does not, however, find that contract principles warrant assigning damages 16 against CDCR for the additional settlement funds in this case. Karan was not a third-party 17 beneficiary to the contract beyond the amount of his fees and costs, and thus cannot claim an 18 interest in the amount that would have gone to Plaintiff or to Plaintiff’s lienholders. 19 Nor would the Court find such damages appropriate even if Karan had made himself 20 personally liable for Plaintiff’s debts. But the Court need not address that question in detail 21 because it finds no evidence of such liability. While the evidence submitted supports the notion 22 that the lenders are “looking to Plaintiff’s counsel” to satisfy Plaintiff’s liens, as Karan asserts, 23 this is not equivalent to those lenders and lienholders having a legal claim against Plaintiff’s 24 counsel personally. With respect to some of Plaintiff’s debts, the evidence submitted explicitly 25 refutes any such obligation on Karan’s part. For example, the “attorney acknowledgment” that 26 Karan signed with one of Plaintiff’s lenders, the Legal Lending Group, specifies, “I [Karan] will 27 honor my client’s irrevocable letter of direction and assignment, subordinate to attorney’s fees, 28 costs and appropriate medical liens as instructed above.” (Doc. No. 137 at 13) (emphasis 9 1 added). This is echoed by the Irrevocable Letter of Direction signed by Plaintiff Vaughn, in 2 which he agrees to: 3 irrevocably direct Ken Karan or any subsequent attorney(s) . . . to tender the Legal Funding Group (Tennessee), LLC Ownership Amount to The Legal Funding Group (Tennessee) LLC pursuant to this assignment from any and all proceeds due to me from the legal claim(s)/case(s) in which you represent me, after payment of any and all legal fees and reimbursable legal costs before releasing any funds to me. 4 5 6 7 (Id. at 4) (emphasis added). In other words, the agreement and acknowledgment specify that 8 Karan is only obligated to distribute funds to the lender after first satisfying his own attorney’s 9 fees and costs. Indeed, the lender may not have anticipated such an eventuality in the situation 10 where the funds received by Karan are only sufficient to pay his attorney’s fees and costs and no 11 more, under the terms of the agreement no recovery is available to the lender. The Court finds no 12 evidence that Karan is under an obligation to pay the lender funds that he never received.6 13 Similarly, for several of Plaintiff’s other loans, liens and his bail bond, Karan was a co- 14 signatory certifying that Plaintiff understood his legal obligations under the applicable agreement 15 or that Karan would pay the third party from the proceeds of the lawsuit, if any, before disbursing 16 money to Plaintiff. However, the Court does not find in any of these documents, or in Karan’s 17 briefing, any evidence that Karan will be held personally liable for the breach of the settlement 18 agreement. Nor would such claims be justified based on the facts or the law. To the extent any 19 of these parties seek recovery of proceeds they expected to receive from the settlement, they must 20 pursue those claims against Vaughn himself, and potentially against CDCR if they believe they 21 have a valid basis for doing so. 22 //// 23 //// 24 25 26 27 28 As to Plaintiff’s other lender, Harmony Asset Holdings LLC, the agreement specifies that “[i]nstead of suing in court, Purchaser and Seller agree to arbitrate all disputes, claims or controversies on an individual, non-representative basis” and Karan signed an acknowledgement that claims against Plaintiff would be resolved via arbitration. (Doc. No. 138 at 3-4). The documents do not support any inference that Harmony can pursue legal action against Karan resulting from another party’s breach of the settlement agreement under an indemnity theory. 6 10 1 C. Karan Is Entitled to Recover Pre-Judgment Interest 2 California Civil Code section 3289 “provides rules for prejudgment interest rates 3 applicable to breaches of contract. If the contract specifies a legal rate of interest, a court will 4 apply that rate ‘after a breach [of contract] until the contract is superseded by a verdict or other 5 new obligation.’ (Civ. Code, § 3289, subd. (a).) If a contract does not stipulate a legal rate of 6 interest, a 10 percent per annum interest rate applies in the event of a breach. (Id., subd. (b).)” 7 Soleimany v. Narimanzadeh, 78 Cal. App. 5th 915, 923 (2022); see also Estrada v. Royalty 8 Carpet Mills, Inc., 76 Cal. App. 5th 685, 727–28 (2022), aff'd, 15 Cal. 5th 582 (2024) (noting 9 that “[t]he primary purpose of an award of prejudgment interest is to compensate the plaintiff for 10 the loss of use of money during the period before the entry of judgment, in order to make the 11 plaintiff whole . . .” quoting Bullock v. Philip Morris USA, Inc. 198 Cal.App.4th 543, 573 (2011). 12 Here, the Court has found that CDCR was liable for the $104,135.41 in benefit that Karan 13 expected to receive as a third-party beneficiary. Due to CDCR’s breach of the settlement 14 agreement, Karan has to date been delayed 17 months in obtaining the funds that he would have 15 otherwise received. Defendant argues that Karan is not entitled to post-judgment interest because 16 no judgment has been entered in Karan’s favor. (Doc. No. 142 at 6). Further, CDCR contends 17 that because Plaintiff undisputably received the $225,000 check in February 2023, CDCR has 18 substantially performed under the settlement agreement and any claim for post-judgment interest 19 is moot. (Id.). 20 CDCR’s arguments are misplaced. The Court determined that CDCR breached the 21 settlement agreement, rather than substantially performing. (See generally Doc. No. 125). And 22 while post-judgment interest is premature at this stage, the Court may appropriately award pre- 23 judgment interest given the extensive delay in Karan receiving the benefit of the settlement 24 agreement due to CDCR’s breach. See Estrada, 76 Cal. App. 5th at 727-28; see also Schudel v. 25 Searchguy.com, Inc., 2010 WL 11508655, at *3 (S.D. Cal. Aug. 9, 2010) (awarding pre-judgment 26 interest based on breach of contract). 27 28 As illustrated by the calculations in Figure 1, the Court awards pre-judgment interest based on a commencement date of May 3, 2023, the latest date CDCR was due to perform under 11 1 the settlement agreement, (see Doc. No. 100-1 at 9 ¶ 22), and the end date of November 29, 2024, 2 30 days from the date of this Order. If CDCR completes payment before November 29, 2024, it 3 may reduce the interest payment accordingly. 4 Figure 1 – Pre-Judgment Interest Calculation7 5 6 7 8 9 10 11 12 13 D. Karan’s State Court Proceedings Do Not Demonstrate Bad Faith 14 CDCR references Karan’s state court actions against Vaughn and CDCR, which are the 15 subject of CDCR’s Request for Judicial Notice, to suggest that Karan is improperly engaging in 16 “serial litigation” to obtain the same relief multiple times. (See Doc. No. 142 at 7-8). CDCR 17 provides no legal authority to suggest that doing so was improper. Nor does the Court find 18 Karan’s actions to be ipso facto evidence of bad faith, particularly given the unusual procedural 19 posture of his claim and the possibility that he may only be able to obtain complete relief in state 20 court. To the extent CDCR believes it is entitled to partial or complete dismissal of the state court 21 action based on the ruling in this action, it may file an appropriate motion in that forum. 22 Accordingly, it is ORDERED: 23 1. The Court GRANTS Defendant’s Request for Judicial Notice (Doc. No. 143). 24 2. The Court GRANTS IN PART Plaintiff’s Motion for Damages (Doc. No. 128-3) to 25 the extent the Court awards $104,135.41 in breach of contract damages, plus 10% pre-judgment 26 interest of $16, 433.40 on these contract damages for a total of $120,568.81. 27 28 7 See https://ijcalc.sdcourt.ca.gov/Default.aspx (last visited: October 28, 2024). 12 1 3. The California Department of Corrections and Rehabilitation is ordered to pay the 2 damages specified in this order to Attorney Karan within 30 days of the date on this Order. 3 Should payment be made before 30 days, the California Department of Corrections and 4 Rehabilitation may reduce the 10% pre-judgment interest accordingly. 5 4. The Clerk of Court shall CLOSE this case. 6 7 8 Dated: October 28, 2024 HELENA M. BARCH-KUCHTA UNITED STATES MAGISTRATE JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13
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