Judge Bruce G. Iwasaki, Case Number: 20STCV22721, Date: 2024-01-10 Tentative Ruling

Tentative Ruling: Plaintiff’s motion for attorney fees is granted in the reduced amount of $37,589.50 and costs are granted in the amount of $3,911.48.

In this Song-Beverly Consumer Warranty Act action, Plaintiff Dayna Campbell (Plaintiff) alleged two causes of action: (1) breach of express warranty; and (2) breach of the implied warranty of merchantability. Prior to trial, Defendant BMW of North America, LLC (Defendant or BMW) served an offer of compromise upon Plaintiff under Code of Civil Procedure section 998 (998 Offer). Plaintiff rejected this 998 Offer.

Following trial, the jury found no breach of the express warranty, but did find a breach of the implied warranty and awarded Plaintiff $10,882.47. The verdict was less than the 998 Offer.

Plaintiff moved for a new trial on the grounds that the damages awarded were inadequate and the verdict was the result of juror misconduct. The Court denied the motion.

Defendant separately moved for judgment notwithstanding the verdict on the grounds the jury award was not supported by evidence. The Court also denied this motion.

Plaintiff then moved for an order that Defendant’s (998 Offer) was invalid. The Court denied this motion.

Plaintiff now moves attorney fees and costs in the amount of $103,476.75. Defendant BMW opposes the motion.

A prevailing buyer in an action under Song-Beverly “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.”¿¿(Civ. Code, § 1794,¿subd. (d).)

The prevailing party has the burden of showing that the requested attorney fees were “reasonably necessary to the conduct of the litigation, and were reasonable in amount.” (Robertson v. Fleetwood Travel Trailers of California Inc.¿(2006) 144 Cal.App.4th 785, 817.) The party seeking attorney fees “ ‘is not necessarily entitled to compensation for the value of attorney services according to [his] own notion or to the full extent claimed by [him].’ ” (Levy v. Toyota Motor Sales, USA, Inc.¿(1992) 4 Cal.App.4th 807, 816.)¿¿Therefore, if the “time expended or the monetary charge being made for the time expended are not reasonable under all the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” (Nightingale v. Hyundai Motor America¿(1994) 31 Cal.App.4th 99, 104.)¿¿

A court may “reduce a fee award based on its reasonable determination that a routine, noncomplex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted.”¿¿(Morris v. Hyundai Motor America¿(2019) 41 Cal.App.5th 24, 39.)¿¿It is also appropriate to reduce an award based on inefficient or duplicative efforts. (Id.¿at p. 38.) However, the analysis must be “reasonably specific” and cannot rely on general notions of fairness. (Kerkeles¿v. City of San Jose¿(2015) 243 Cal.App.4th 88,¿102.)¿¿Moreover, in conducting the analysis, courts are not permitted to tie any reductions in the fee award to some proportion of the buyer’s damages recovery. (Warren v. Kia Motors America, Inc.¿(2018) 30 Cal.App.5th 24, 39.)

Plaintiff seeks $17,374.50 in attorneys’ fees for Norman Taylor & Associates (NTA) and $51,610 in attorneys’ fees for Wirtz Law (Wirtz), plus a 1.5 multiplier enhancement, and costs of $3,911.48, for a total $107,388.23. In reply, Plaintiff requests an updated amount of $102,899.25.

A calculation of attorneys’ fees for a Song-Beverly action¿begins with the “lodestar” approach, under which the Court fixes the lodestar¿at¿“the number of hours reasonably expended multiplied by the reasonable hourly rate.” (Margolin v. Regional Planning Com.¿(1982) 134 Cal.App.3d 999, 1004-1005.) “California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys’ fee award.” (Ibid.)¿ “ ‘The reasonable hourly rate is that prevailing in the community for similar work.’ ” (Id.¿at p. 1004.) The lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services¿provided.¿(Serrano v. Priest¿(1977) 20 Cal.3d 25, 49;¿PLCM Group, Inc. v. Drexler¿(2000) 22 Cal.4th 1084, 1095.)

“[T]rial courts need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection. So trial courts may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney's time.” (Fox v. Vice (2011) 563 U.S. 826, 838.)

Defendant BMW disputes that Plaintiff is the prevailing party, arguing she did not achieve her stated litigation objective.

Specifically, Plaintiff sued BMW for breach of express warranty and breach of the implied warranty of merchantability and sought judgment “in an amount not less than $25,820.25” (plus incidental and consequential damages, prejudgment interest and a civil penalty); however, she only received $10,882.47 at trial on her breach of an implied warranty of merchantability claim. The verdict came after Plaintiff rejected Defendant’s $22,736.02 section 998 Offer.

In opposition, Plaintiff contends that these facts are not material to a prevailing party analysis.

Here, Plaintiff is the prevailing party for the purposes of Civil Code section 1794, subdivision (d).

Civil Code section 1794 only awards attorney fees to a buyer who “prevails in an action under this section.” (Civ. Code, § 1794, subd. (d).) Where a statute awards a prevailing party attorney's fees but does not define “prevail,” the trial court is tasked with taking “a pragmatic approach to determine which party has prevailed. That is, the trial court would determine which party succeeded on a practical level, by considering the extent to which each party realized its litigation objectives.” (MacQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th 1036, 1047.)[1]

While Defendant cites numerous cases discussing how prevailing parties and litigation objectives are defined in different contexts (Opp., 2:10-23), Defendant cites no case holding that one cannot be a prevailing party if she is awarded a judgment less than the sum prayed for in the complaint or than was offered under section 998.

In fact, with respect to the 998 Offer, Plaintiff’s reliance on Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 178 demonstrates the opposite. In Duale, the plaintiff failed to obtain a judgment more favorable than the defendant's section 998 offer; nonetheless, the court of appeal allowed the plaintiffs to recover their pre-offer attorney fees as part of their pre-offer costs because they were allowed under Civil Code section 1794, subdivision (d) and within the ambit of section 1032, subdivision (b). (Id. at 724.)

Further, there is no legal authority limiting litigation objectives to the amount sought in a plaintiff’s pleadings. In any event, here, Plaintiff obtained damages for breach of the implied warranty of merchantability.

Defendant also argues that the Court should deny fees and costs pursuant to Code of Civil Procedure section 1033, subdivision (a).

However, Code of Civil Procedure section 1033, subdivision (a) does not require that a court decline to award fees and costs to a plaintiff who files an action as an unlimited civil case but ultimately recovers an amount that could have been recovered in a limited jurisdiction case, but merely gives the court the discretion to do so. As the Supreme Court has explained, Code of Civil Procedure section 1033, subdivision (a) “gives the trial court discretion to deny, in whole or in part, the plaintiff's recovery of litigation costs,” including attorney fees, in a situation in which “a plaintiff has obtained a judgment for money damages in an amount (now $25,000 or less) that could have been recovered in a limited civil case, but the plaintiff did not bring the action as a limited civil case and thus did not take advantage of the cost- and time-saving advantages of limited civil case procedures.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 983, 982.)

The “factors that a trial court should ordinarily consider in exercising its discretion under [Code of Civil Procedure] section 1033[, subdivision](a)” include “the amount of damages the plaintiff reasonably and in good faith could have expected to recover and the total amount of costs that the plaintiff incurred.” (Chavez, supra, 47 Cal.4th at p. 984; see Valentino v. Elliott Sav–On Gas, Inc. (1988) 201 Cal.App.3d 692, 702; Greenberg v. Pacific Tel. & Tel. Co. (1979) 97 Cal.App.3d 102, 108.)

However, as Chavez further counsels, where another statutory provision of law would otherwise provide for the award of attorney fees to a prevailing plaintiff and the court is also exercising its discretion under Code of Civil Procedure section 1033, subdivision (a) to grant or deny litigation costs, including attorney fees, that court “must give due consideration to the policies and objectives of the [specific attorney fees and cost shifting statute at issue] and determine whether denying attorney fees [pursuant to the discretion granted in Code of Civil Procedure section 1033, subdivision (a)], in whole or in part, is consistent with those policies and objectives.” (Chavez, supra, at p. 986.)

Admittedly, while Plaintiff ultimately recovered less than the unlimited civil jurisdiction amount, rejected a 998 Offer that proved greater than the amount ultimately recovered, and engaged in multiple unsuccessful post-judgment motion practice – the Song-Beverly Act specifically contemplated small judgments in creating this consumer protection statute. (See Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 39.) Thus, penalizing Plaintiff for this small judgment would be contrary to the policies and objectives under this Song Beverly Act statutory scheme.

Therefore, the Court declines to exercise its discretion to deny fees and costs under Code of Civil Procedure section 1033, subdivision (a).

Defendant next contends that Plaintiff’s attorneys’ hourly rates are unreasonable.

In assessing the reasonableness of hourly billing rates,¿“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.”¿(569 East County Boulevard LLC v. Backcountry Against the Dump, Inc.¿(2016) 6 Cal.App.5th 426, 437; see¿Mountjoy v. Bank of America, N.A.¿(2016) 245 Cal.App.4th 266, 272 [“ ‘ “a reasonable hourly rate is the product of a multiplicity of factors…[including] the level of skill necessary, time limitations, the amount to be obtained in the litigation, the attorney’s reputation, and the undesirability of the case” ’ ”].)¿

In challenging the hourly rates, Defendant argues that Plaintiff’s attorneys have not submitted competent evidence to support their claimed hourly rates. While Defendant argues Plaintiff improperly relies on unpublished trial court cases and hearsay evidence, Defendant does not specifically address the statements made in these declarations that support the fee amounts or submit any evidentiary objections.[2]

Defendant also cites the holding in Mikhaeilpoor v. BMW of North America, LLC (2020) 48 Cal.App.5th 240 – where the Court of Appeal upheld a trial court’s reduction of a firm’s hourly rate to $350. While this case does suggest that the nature and complexity of the underlying litigation are factors in determining whether attorney’s fees are reasonable (id. at p. 255), it does not definitively hold that the rates requested in this case are unreasonable. That is, under the applicable standard of review, the court of appeal only found that the trial court’s decision to reduce the hourly rate was not “clearly wrong.” (Id. at p. 246.) Thus, Mikhaeilpoor is of only limited help to Defendant.

Rather, a review of the Wirtz Declaration and Taylor Declaration in support of the motion for attorney’s fees – which contains a description of each attorneys’ education and experience – supports finding Plaintiffs’ attorneys’ hourly rates ranging from $200 to $750 were reasonable; the rates are supported by substantial evidence under the present circumstances. (Taylor Decl., ¶¶ 9-23, 26-29 Exs. 2-5; Wirtz Decl., ¶¶ 4-30, Exs. 2-6.)

Based on the Court's familiarity with the current local market, and Plaintiff’s evidence of the experience and skills of the various attorneys – the Court finds that Plaintiff's requested rates per hour – although high – are reasonable. These high hourly rates, however, bear on the reasonableness of the hours incurred given the purported skill and expertise of these attorneys.

Defendant also challenges the reasonableness of the number of hours incurred for various tasks during this litigation.

Defendant first points to hours incurred on client communications and generating a “standard” complaint; Defendant seeks a reduction from 15 hours to 5 hours. This reduction is reasonable given the boilerplate lemon law issues at play in this case and the experience of Plaintiff’s counsel in this area of litigation.

Defendant also seeks to reduce the hours incurred to draft case management conference statements and attend case management conference from 4.5 hours to 1.5 hour. This 3-hour reduction is appropriate given the lack of complexity of these tasks in this standard lemon law case.

Defendant also seeks to reduce the fees generated for managing written discovery from 11.1 hours to 1 hour. In reply, Plaintiff clarifies that it only actually billed 10.5 hours for this task. For the reasons discussed above, the time incurred by Plaintiff’s counsel in responding to discovery is excessive but only permitting one hour is too harsh. Defendant’s reduction to responding to discovery is excessive and should only be reduced by 8 hours.

Finally, Defendant seeks to reduce entirely the 2.4 fees sought for secretarial and clerical work. These fees, which are sought at an attorney rate of $200 an hour, are excessive and thus will be reduced to .4 hours, a two hour reduction.

The total reduction of hours is, therefore, 23 hours. The Court will apply a blended rate of $550 for these hours, resulting in a reduction of $12,650.

First, Defendant challenges the hour incurred on drafting oppositions to the motion to compel arbitration and for attending the hearing. Plaintiff seeks 29.7 hours for these tasks. Although Defendant seeks a reduction to 10 hours, the Court finds that the reasonable time for the tasks involved in opposing Defendant’s motion to compel arbitration is 15 hours (or a reduction of 14.7 hours) for a total of $6,615.

Defendant also seeks to reduce the time incurred in responding to discovery from 8.6 hours to 4 hours. This reduction is reasonable for the same reasons this reduction was appropriate with respect to NTA.

Further, Defendant seeks to reduce excessive billing for client communication from 9.7 to 5 hours. This reduction is reasonable for the same reasons this reduction was appropriate with respect to NTA.

Finally, Defendant seeks to strike all post-998 fees and costs. Specifically, Defendant challenges fees incurred on September 17, 2021 – the day after the 998 Offer was served.

In reply, Plaintiff argues that they are entitled to recover fees because the hours incurred were within the “service window” of Code of Civil Procedure section 1010.6, subdivision (a), which governs electronic service.

Here, as noted by Plaintiff, BMW served its 998 Offer electronically at 10:19 p.m. on Thursday, September 16, 2021. (Wirtz Reply Decl., Ex. 28.) Plaintiff sought fees in this Motion through September 17, 2021.

Plaintiff’s reliance on Code of Civil Procedure section 1010.6 is not well taken. The first sentence of this section provides that “[a] document may be served electronically in an action filed with the court as provided in this section.” (Code Civ. Proc., § 1010.6, subd. (a).) If such a document “may be served by mail, express mail, overnight delivery, or facsimile transmission, [then] electronic service of that document is deemed complete at the time of the electronic transmission of the document or at the time that the electronic notification of service of the document is sent.” (Id., subd. (a)(3)(A).) At the same time, “any right or duty to do any act or make any response within any period ... shall be extended after service by electronic means by two court days ....” (Id., subd. (a)(3)(B).)

There was no duty or right to act in response to the 998 Offer with respect to incurring attorney fees or costs. Thus, pursuant to Code of Civil Procedure section 1010.6, subdivision (a), Plaintiff had been served with the 998 Offer as of September 16, 2021. The Court will strike the $3,060 (6.8 at a blended rate of $450) in costs incurred that day.

However, in contrast, Plaintiff is entitled to fees incurred on the instant motion for attorney fees. Defendant cites no authority addressing this specific issue. Further, it is illogical that Plaintiff could not recover fees on a fee motion that Plaintiff is entitled to seek under 998. Nonetheless, more than 25 hours sought for these fees are excessive. The Court will reduce these fees by 10 hours.

Based on the number of hours reduced, the total amount of fees for Wirtz will be reduced by $18,360.

Finally, Plaintiff seeks a 1.5 lodestar multiplier based on the risk of taking this case on contingency and based on the public interests at issue in this matter.

Relevant factors to determine whether an enhancement is appropriate include (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee award. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Although this matter was taken on contingency (Taylor Decl., ¶ 32; Wirtz Decl., ¶ 32), none of the other factors support the application of a multiplier. This was a garden variety Song-Beverly case; there were no novel or difficult questions presented. (Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 834.) Further, the¿contingent risks, skill, and difficulty¿Plaintiff’s attorneys¿assert are absorbed by¿their¿already high (albeit reasonable) hourly rates. (See¿Robertson v. Fleetwood Travel Trailers of California. Inc.¿(2006) 144 Cal.App.4th 785, 822.)

	Reductions	Total
Original Lodestar Amount		$68,599.50

NTA Billing	$12,650
Wirtz Billing	$18,360

Reduced Lodestar Amount	$31,010	$37,589.50

The Court grants Plaintiff’s motion for attorneys’ fees in the sum of $37,589.50.

Citing California Rule of Court 3.170, Defendant also challenges Plaintiff’s claimed costs on the grounds that Plaintiff may not properly claim costs and expenses by way of this fee motion and was instead required to serve and file a memorandum of costs.

However, where attorney’s fees are allowable as costs, costs may be recovered by noticed motion or under the cost bill procedure. (See [§ 318] In General., 7 Witkin, Cal. Proc. 6th Judgment § 318 (2023).)

Thus, based on this limited challenge, the request to strike the costs is denied. Accordingly, the Court will grant costs in the amount requested by Plaintiff.

The motion for attorneys’ fees and costs is granted in part. In sum, the Court grants Plaintiff’s request for attorneys’ fees in the total amount of $37,589.50, which is a reduction of the lodestar amount by $31,010. The request for costs is granted in the amount of $3,911.48.

Defendant BMW is ordered to pay to Plaintiff’s counsel the sum of $41,500.98 ($37,589.50 + $3,911.48) for attorneys’ fees and costs. Final Payment shall be stayed until determination of Defendant’s cost bill following adjudication of Plaintiff’s Motion to Tax Costs.

[1] However, at a minimum, “the statute contemplates that a buyer must have been damaged to bring an action under Song-Beverly.” (Duff v. Jaguar Land Rover North America, LLC (2022) 74 Cal.App.5th 491, 504–505.) Plaintiff’s $10,882.47 jury award satisfies this requirement.

[2] The Court agrees the attached trial court orders are of no evidentiary value to its analysis here.

Judge Bruce G. Iwasaki

Department 58