Judge: Barbara M. Scheper, Case: 22STCV17782, Date: 2022-12-16 Tentative Ruling

Case Number: 22STCV17782    Hearing Date: December 16, 2022    Dept: 30

Dept. 30

Calendar No.

Lim vs. Mercedes-Benz USA, LLC, et. al., Case No. 22STCV17782

Tentative Ruling re:  Plaintiff’s Motion for Statutory Damages, Fees, and Costs

            Plaintiff John Jun Hee Lim (Plaintiff) moves for an award of statutory damages, attorney’s fees, and costs against Defendant Mercedes-Benz USA, LLC (Defendant). The motion is granted in part. The Court awards Plaintiff attorney’s fees and costs in the amount of $15,408.16, and finds that the mileage offset deduction under the 998 Offer is equal to $5,538.84.

“[A]s a general rule, attorney fees are not recoverable as costs unless they are authorized by statute or agreement.” (People ex rel. Dept. of Corporations v. Speedee Oil Change Systems, Inc. (2007) 147 Cal.App.4th 424, 429.) In a lemon law action, costs, and expenses, including attorney fees, may be recovered by a prevailing buyer under the Song-Beverly Act. (See Civ. Code, § 1794, subd. (d).)

The attorney bears the burden of proof as to “reasonableness” of any fee claim. (Code Civ. Proc., § 1033.5(c)(5).) This burden requires competent evidence as to the nature and value of the services rendered. (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” (Ibid.) 

A plaintiff’s verified billing invoices are prima facie evidence that the costs, expenses, and services listed were necessarily incurred. (See Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.) “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 488, quoting Premier Med. Mgmt. Sys., Inc. v. California Ins. Guarantee Assn. (2008) 163 Cal.App.4th 550, 564.)

            In determining whether the requested attorney’s fees are “reasonable,” the Court’s “first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. The lodestar figure may then be adjusted, based on consideration of facts specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Gorman v. Tassajara Development Corp. (2008) 162 Cal.App.4th 770, 774 [internal citations omitted].) “‘The reasonable market value of the attorney's services is the measure of a reasonable hourly rate. [Citations.] This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel. [Citations.]’” (Center For Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 619.)

In determining whether to adjust the lodestar figure, the Court may consider the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case. (EnPalm LLC v. Teitler (2008) 162 Cal.App.4th 770, 774; PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

            Plaintiff moves for an award of damages, costs, and expenses, including attorney’s fees, as the prevailing party following acceptance of Defendants’ § 998 offer.

Calculation of statutory mileage offset deduction

            Defendant’s § 998 Offer of Compromise provides that the offer is “conditioned upon the agreement of both parties to subsequently deduct a statutory mileage offset in an amount to be determined by the Court from the reimbursement amount of $31,658.47 as listed in Item 1.” (Zolonz Decl., Ex. A ¶ 3 [12].)

            The parties dispute the proper method of calculating the mileage offset for a leased vehicle.

            Civ. Code § 1793.2, subd. (d)(2) requires a manufacturer who fails to conform a vehicle to an express warranty after a reasonable number of attempts to “either promptly replace the new motor vehicle in accordance with subparagraph (A) or promptly make restitution to the buyer in accordance with subparagraph (B).”

For restitution, Section 1793.2 (d)(2)(B) provides, “the manufacturer shall make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding nonmanufacturer items installed by a dealer or the buyer, and including any collateral charges such as sales or use tax, license fees, registration fees, and other official fees, plus any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.”

            The mileage offset calculation is given in the following subparagraph:

When restitution is made pursuant to subparagraph (B), the amount to be paid by the manufacturer to the buyer may be reduced by the manufacturer by that amount directly attributable to use by the buyer prior to the time the buyer first delivered the vehicle to the manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity. The amount directly attributable to use by the buyer shall be determined by multiplying the actual price of the new motor vehicle paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, by a fraction having as its denominator 120,000 and having as its numerator the number of miles traveled by the new motor vehicle prior to the time the buyer first delivered the vehicle to the manufacturer or distributor, or its authorized service and repair facility for correction of the problem that gave rise to the nonconformity.

(Civ. Code, § 1793.2, subd. (d)(2)(C).)

“[T]he phrase ‘actual price paid or payable,’ includes all amounts [the plaintiff] became legally obligated to pay when [he] agreed to [lease] the [vehicle]…” (Crayton v. FCA US LLC (2021) 62 Cal.App.5th 194, 204.) “Both the payments at signing and the future monthly payments are part of the actual price payable under the lease.” (Ibid.)

            Defendant contends that the term “actual price paid or payable,” in the context of the mileage offset calculation in subdivision (d)(2)(C), should be equal to the agreed-upon value of the vehicle leased by Plaintiff, rather than the total of the payments owed by Plaintiff under the lease agreement. The Court disagrees, and finds that Crayton is on point, determinative, and supported by the relevant statutory language. As Crayton noted, where the buyer “[is] not under a legal obligation at the time of the lease signing to purchase the vehicle for the residual value,” that value is not the “actual price paid or payable” by the buyer. (Crayton, 62 Cal.App.5th at 204.) While Defendant argues that the meaning of “actual price of the new motor vehicle paid or payable by the buyer” differs across subdivisions (d)(2)(B) and (C), the plain meaning of the phrase mandates against use of the overall value of the vehicle in cases where that amount is simply not actually paid or made payable by a lessee.

As described in Civ. Code, § 1793.2, subd. (d)(2)(C), the mileage offset (m) can be expressed as follows:

m = (Actual price paid or payable by buyer) * ( # of miles prior to first delivery / 120,000)

Here, Plaintiff’s total payments under the lease are equal to $89,831.23 (Zolonz Decl., Ex. B ¶ 4 [18].) For “the number of miles traveled by the new motor vehicle prior to the time the buyer first delivered the vehicle to the manufacturer or distributor,” the vehicle had a mileage of 7,399 at the time that it was first presented for repair. (Zolonz Decl., Ex. C [23].) Applying the above equation, the milage offset deduction is equal to $5,538.84.

Recovery of incidental damages

            Plaintiff argues that the Court should award him $1,153 in incidental damages for registration renewal fees, in addition to the $1,000 in incidental damages expressly provided for by the 998 Offer. (Zolonz Decl., Ex. A ¶ 1.) Plaintiff cites to Kirzhner v. Mercedes-Benz USA, LLC, (2020) 9 Cal.5th 966, in which the California Supreme Court found that “registration renewal and nonoperation fees . . . are recoverable as incidental damages if they were incurred as a result of the manufacturer's failure to promptly provide a replacement vehicle or restitution once its obligation to do so under section 1793.2, subdivision (d)(2) arises.” (Kirzhner, 9 Cal.5th 966, 977.) However, in Kirzhner, the court determined this issue because the defendant’s “section 998 offer [did] not specify a monetary amount it offer[ed] to pay [plaintiff] to settle the case,” and instead “state[d] that the precise amount of restitution, including any collateral charges and incidental damages, will ‘be determined by court motion if the parties cannot agree.’ ” (Id. at 970.)

            Here, with respect to incidental damages, Defendant’s 998 Offer only provides that Defendant will pay “$1,000 in incidental damages (subject to proof).” (Zolonz Decl., Ex. A ¶ 1.) The 998 Offer does not authorize the Court to award Plaintiff further incidental damages.

Attorney’s fees

            The 998 Offer provides that Defendant will pay Plaintiff “statutory costs and expenses under Civ. Code § 1794(d), including attorneys’ fees, in the amount determined by the Court to have been reasonably incurred by Plaintiff in connection with the commencement and prosecution of this action to and including the date of this offer,” as well as “fees and costs reasonably incurred in bringing such a fee/cost motion(s).” (Zolonz Decl., Ex. A ¶ 4.)

Civ. Code § 1794, subd. (d) provides, “If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.”

Plaintiff requests attorney’s fees in the amount of $23,415, for 51 total hours billed at rates of $450 and $500. (Zolonz Decl. ¶ 44, Ex. G [40].)

Requested rates are reasonable if they are “within the range of reasonable rates charged by and judicially awarded comparable attorneys for comparable work.” (Children’s Hospital & Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 783.) In calculating the lodestar rate, “the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees [Citation], the difficulty or complexity of the litigation to which that skill was applied [Citations], and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases. [Citation.]” (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 437.)

The Court finds that counsel’s requested rates of $450 and $500 per hour are within a reasonable range relative to rates awarded to comparable attorneys for comparable work.

Defendant argues that Plaintiff improperly requests fees incurred after the date set by the 998 Offer. The Offer provides that Plaintiff may recover attorney’s fees incurred “to and including the date of this offer,” except those incurred for a fee or cost motion.  (Zolonz Decl., Ex. A ¶ 4 [12].) The 998 Offer is dated October 12, 2022. (Zolonz Decl., Ex. A [15].) The Offer was accepted by Plaintiff on November 7, 2022. (Ibid.) The Court finds that the Offer precludes recovery of fees incurred by Plaintiff after the date of the Offer’s execution, November 7, 2022, except those related to a fee or cost motion. There is only one entry of 0.30 hours postdating November 7 that is unrelated to the current motion, and so the Court will disregard that entry for purposes of calculating the lodestar.

A significant number of the hours billed by counsel – 39.6 hours total – were incurred in connection with the current motion. (Zolonz Decl. ¶ 44, Ex. G [40].) The Court agrees with Defendant that this is excessive, and determines that 15 of these hours were reasonably expended (equivalent to a reduction of 24.6 hours).

Plaintiff additionally requests fees in the amount of $5,000, at a rate of $500, for an anticipated 10 hours to review Defendant’s Opposition to this motion, draft the Reply, and prepare for and attend the hearing. (Zolonz Decl. ¶ 50.) The Court reduces this to 5 hours.

Accordingly, for purposes of the lodestar, the Court finds that 26.1 hours were reasonably expended by Plaintiff’s counsel; applying a rate of $475 per hour, the Court finds that Plaintiff is entitled to recover $12,397.50 in reasonable attorney’s fees, plus an additional $2,500 for anticipated hours related to this motion.

While the lodestar reflects the basic fee for comparable legal services in the community, it may be adjusted based on various factors, including “(1) the novelty and difficulty of the questions involved, and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; (3) the contingent nature of the fee award” and (4) the success achieved. (Serrano v. Priest (1977) 20 Cal.3d 25, 49 (Serrano).)

The Court declines to award Plaintiff the requested 1.25x lodestar multiplier. This is a standard lemon law case that does not present any particularly novel or complex issues, and no other relevant factors compel granting a multiplier.

Finally, Plaintiff seeks reimbursement for costs in the amount of $510.66. (Zolonz Decl., Ex. H [46].) The Court awards the requested costs. (Civ. Code, § 1794, subd. (d).)

In sum, the Court finds that the mileage offset deduction under the 998 Offer is equal to $5,538.84. The Court awards Plaintiff reasonable attorney’s fees in the amount of $14,897.50, plus costs in the amount of $510.66, for a total award of $15,408.16.