Judge Bruce G. Iwasaki, Case 20STCV23821 2022-09-22 Tentative Ruling

Matter: (1) Motion for Relief due to Attorney Mistake Pursuant to CCP section 473 / Motion for Attorney Fees

Plaintiff seeks an award of attorney’s fees and costs arising from a Song-Beverly case. In October 2021, the parties settled. In April 2022, Plaintiff filed her motion for attorney’s fees, which was denied as being untimely. She then moved for relief under Code of Civil Procedure section 473. In the preceding four months, both parties failed to comply with various court orders as to exhibits and filings, resulting in prolonging this issue almost a year after the case settled. As all papers have now been filed for Plaintiff’s request for relief, fees, and costs, the Court considers the merits of those motions.

The Court finds that Plaintiff has shown a mistake of law and good cause to extend the time for filing the attorney’s fee motion. As adjusted, the Court orders Defendant to pay to Plaintiff’s counsel attorney’s fees and costs.

Background

Monica R. Smith (Plaintiff) sued BMW (Defendant) for violations under the Song-Beverly Act for a defective 2011 BMW 750I. The Complaint was later amended to add in claims for deceptive acts and fraud.

On October 19, 2021, Plaintiff filed a Notice of Settlement. The next day, the Court entered an Order of Dismissal, but retained jurisdiction to enforce the settlement.

On April 22, 2022, Plaintiff filed a motion for attorney’s fees as the prevailing party under Code of Civil Procedure section 1032 and Civil Code section 1794, subdivision (d).

On May 17, 2022, this Court denied Plaintiff’s motion for being untimely, finding that the October 20, 2021 dismissal order date was the operative date for the deadline on a motion for attorney’s fees under Rule of Court 3.1702. Thus, Plaintiff had until December 20, 2021, to file her motion, but did not do so until April 22, 2022. (Cal. Rules of Court, rule 8.1702(a)(1)(A).)[1]

Motion for relief under Code of Civil Procedure section 473, subdivision (b)

One week after denial of the fees motion, Plaintiff moved for discretionary relief under Code of Civil Procedure section 473, subdivision (b).[2] Counsel argued that she misinterpreted the applicability of the deadlines under Rule of Court 3.1702. She stated that she believed no deadline applied because the Settlement Agreement did not expressly contain a specific date to file the fee motion and that no judgment was entered pursuant to section 664.6. Finally, she admits that she mistakenly believed section 581d, which states that all written orders dismissing the case shall constitute judgments for all purposes, was not applicable.

In opposition, Defendant argues that Plaintiff’s mistake was not reasonable nor honest because the statutes are explicit, and counsel were experienced attorneys. Defendant also argues there is prejudice because it has been forced to litigate the fees motion, ex parte applications, and potential appeal. In addition, it contends that the fees issue has created uncertainty with its quarterly financials and ability to allocate funds.

Plaintiff’s counsel replied, stating that her mistake was honest and reasonable under the circumstances given the numerous, overlapping procedural rules and issues. She states that she was diligent in seeking relief and argues that BMW has not shown any prejudice.

Plaintiff’s request for judicial notice of her previously filed motion for attorney’s fees is granted. (Evid. Code, § 452, subd. (d).)

“‘Under the discretionary relief provision, on a showing of “mistake, inadvertence, surprise, or excusable neglect,”¿the court has discretion to allow relief from a “judgment, dismissal, order, or other proceeding taken against”¿a party or his or her attorney.’” (Luri¿v. Greenwald¿(2003) 107 Cal.App.4th 1119, 1124.; Code Civ. Proc., § 473, subd. (b).)¿¿

“Relevant factors in assessing counsel error include: ‘(1) the nature of the mistake or neglect; and (2) whether counsel was otherwise diligent in investigating and pursuing the claim.’” (Huh v. Wang (2007) 158 Cal.App.4th 1406, 1423.) If counsel is asserting a mistake of law as a basis for relief, courts consider “the reasonableness of the misconception and the justifiability of the failure to determine the correct law.” (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 611.) Therefore, an honest mistake of law is a proper basis for discretionary relief where “the legal problem posed ‘“is complex and debatable.”’ (Ibid.)

Good cause for extension of attorney’s fees deadline under California Rules of Court, rule 3.1702(d)

Rule of Court 3.1702(d) states that “[f]or good cause, the trial judge may extend the time for filing a motion for attorney’s fees in the absence of a stipulation or for a longer period than allowed by stipulation.”

This rule provides a court with considerable flexibility to consider late attorney fees motions based on the circumstances. (Robinson v. U-Haul of California (2016) 4 Cal.App.5th 304, 326-327 (Robinson); Lewow v. Surfside III Condominium Owners Assn., Inc. (2012) 203 Cal.App.4th 128, 134-136 (Lewow).) Thus, a court “may grant a request for extension of time to file a motion for attorney’s fees even if the motion is not filed until after the deadline for filing an attorney’s fees motion under rule 3.1702.” (Robinson, supra, at p. 326 [“‘Rule 3.1702(d) is “remedial” and is to be given a liberal, rather than strict interpretation.’”].)

In evaluating good cause, a court may consider whether counsel acted reasonably, whether the explanation is credible, and whether the defendant suffered any prejudice. (See Robinson, supra, 4 Cal.App.5th at pp. 327-328; Lewow, supra, 203 Cal.App.4th at pp. 135-136.) The trial court has broad discretion–even a claim of inadvertence or an honest mistake of law, “if it is not prejudicial, may constitute good cause for a late filing.” (Robinson, at pp. 326; see Pollard v. Saxe & Yolles Development Co. (1974) 12 Cal.3d 374, 381 [“In the absence of prejudice, the trial court had broad discretion in allowing relief on grounds of inadvertence from a failure to timely file a cost bill.”].)

There appears to be a split in case law as to whether the standard for relief under Code of Civil Procedure section 473, subdivision (b), is the same as granting an extension of time for good cause to file a motion for attorney’s fees under Rule of Court 3.1702(d).

In Community Youth Athletic Center v. City of National City (2013) 220 Cal.App.4th 1385, 1444, the Fourth District noted that “[i]In granting relief under Code of Civil Procedure section 473 and rule 3.1702(d), the trial court correctly stated it was empowered to relieve a party from the failure to meet a procedural time limit, upon a proper showing, and that the applications were timely and accompanied by the proposed pleading . . . We agree that this was a proper resolution of these inconsistent rules and provisions, and there was no inexcusable neglect by counsel in interpreting them.” (Community Youth Athletic Center v. City of National City (2013) 220 Cal.App.4th 1385, 1445; see also Lewow, supra, 203 Cal.App.4th at pp. 135-136.)

In Robinson, supra, 4 Cal.App.5th at pp. 326-327, the First District was not persuaded by Defendant U-Haul’s argument that the heightened standard under section 473’s standard of “mistake, inadvertence, surprise, or neglect” must be applied in the good cause analysis of Rule 3.1702(d). The Court of Appeal noted that “[j]ust because Lewow cited a case decided under Code of Civil Procedure section 473 [citation] does not mean it should be read as importing that section’s legal standards wholesale into rule 3.1702. To the extent it has been so read (see Community Youth Athletic Center v. City of National City (2013) 220 Cal.App.4th 1385, 1444 [164 Cal. Rptr. 3d 644] (Community Youth Athletic Center), we believe further proliferation of this idea should be avoided. Rather, in our view, the trial court has considerably more latitude in ruling on an extension of time to file an attorney’s fees motion under the ‘good cause’ standard of rule 3.1702(d) than it does in granting relief from a ‘judgment, dismissal [or] order’ under Code of Civil Procedure, section 473, subdivision (b).” (Robinson, supra, 4 Cal.App.5th at pp. 326-327.)

Irrespective of the reviewing standard for the motion for relief, Plaintiff here has shown mistake and good cause for an extension of her motion for attorney’s fees.

Whether a mistake of law is “‘complex and debatable’” is a factual inquiry evaluating “(1) the reasonableness of the misconception and (2) the justifiability of the failure to determine the correct law.” (McCormick v. Board of Supervisors (1988) 198 Cal. App. 3d 352, 360.) “[I]gnorance of the law coupled with negligence in ascertaining it will certainly sustain a finding denying relief.” (A & S Air Conditioning v. John J. Moore Co. (1960) 184 Cal.App.2d 617, 620.)

Plaintiff requests relief because she believed (1) the Settlement Agreement’s integration clause indicated it was the parties’ complete agreement and no deadline was specified for a motion for attorney’s fees, (2) no judgment was entered, and (3) Code of Civil Procedure section 581d did not apply to “stipulated dismissals” which reserved jurisdiction under section 664.6.

Plaintiff mistakenly interpreted the Settlement Agreement to mean that no deadline applied. (Pazderka v. Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 671 [“Section 998 only settles those issues which would have been resolved at the trial. [Citation.] Costs and attorneys’ fees are authorized solely by statute, and are incident of the judgment unless expressly part of the judgment”].) However, the mistake did not appear to be caused by a negligent failure of counsel to make herself aware of the applicable statutes and rules of court. The agreement expressly allowed for a motion for attorney’s fees but failed to provide a deadline. Defendant’s only argument here is that the agreement did not provide any extension for the fee motion; but neither did it specify the consequence of filing an untimely motion. Thus, the agreement is at least somewhat ambiguous.

As to the notice of judgment, Plaintiff relied on the case of Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 898 (Alan) for her misunderstanding of the deadlines. Alan involved the clerk mailing two separate documents – a “Statement of Decision” denying class certification, and a minute order titled “Ruling on Submitted Matter/Motion for Class Certification.” The minute order stated that copies of the minute order and the Statement of Decision was sent via U.S. mail to counsel. Only the Statement of Decision was file-stamped. (Alan, supra, 40 Cal.4th at p. 898.)

The California Supreme Court held that Rule of Court 8.104 is triggered by a “single document–either a ‘Notice of Entry’ so entitled or a file-stamped copy of the judgment or appealable order–that is sufficient in itself to satisfy all of the rule’s conditions.” (Id. at p. 905.) The high Court rejected the argument that the two documents can be read together as satisfying the requirement. Separately, the Statement of Decision was not an appealable order, and the minute order was not file-stamped; therefore, neither document satisfied the rule’s conditions. (Id. at pp. 901, 905.)

Here, there was no document titled “Notice of Entry” of judgment as in Alan. Instead, there was a stipulated dismissal that was file-stamped and signed by all parties, but which was apparently never served. (Barns Decl. in support of Plaintiff’s Motion for Relief, ¶ 4.) The minute order dismissing the case was served but was not file-stamped. On its face then, it appears this situation is analogous to Alan.

If Plaintiff justifiably relied on Alan, there is still the time limit under Rule of Court 8.104(a)(1)(C) – that the motion for attorney’s fees must be filed within “180 days after entry of judgment.” Whether that deadline applied depends upon whether the dismissal order constituted an “entry of judgment.” This requires consideration of whether Plaintiff’s belief that Code of Civil Procedure section 581d did not apply to stipulated dismissals was reasonable.

Section 581d states, in part, that a “written dismissal of an action shall be entered in the clerk’s register and is effective for all purposes when so entered. [¶] All dismissals ordered by the court shall be in the form of a written order signed by the court and filed in the action and those orders when so filed shall constitute judgments and be effective for all purposes.”

Initially, it appears that the statute plainly applies because the court signed the dismissal order and that therefore, it has the effect of judgment. However, “ordered by the court” refers to involuntary dismissals. (See M & R Properties v. Thompson (1992) 11 Cal.App.4th 899, 902.) For example, Code of Civil Procedure section 581, subdivision (b)(3)-(5) provides scenarios when the Court may dismiss, such as when no party appears for trial within 30 days’ notice or if either party fails to appear at trial. Similarly, a court must dismiss an action if the plaintiff has abandoned their case. (Code Civ. Proc., § 581, subd. (d).) Thus, if a plaintiff or the parties stipulate to a dismissal, “the dismissal is voluntary” and “may be obtained without application to the court at all; a written request to the clerk will suffice.” (D & J, Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1194.)

Certainly, even if Plaintiff voluntarily dismisses the case, the first paragraph of section 581d still gives effect to a clerk’s dismissal “for all purposes when so entered” and Plaintiff here faces the same hurdle. However, the distinction between the kinds of dismissals makes it a closer case of whether Plaintiff justifiably misinterpreted the application of section 581d. If Plaintiff voluntarily dismissed the case, for example, such a dismissal would not be appealable, and the applicability of the appeal deadlines may be questionable. (H. D. Arnaiz, Ltd. v. County of San Joaquin (2002) 96 Cal.App.4th 1357, 1364-1365; Gutkin v. University of Southern California (2002) 101 Cal.App.4th 967, 975; Cal. Rules of Court, rule 3.1702(b)(1) [motion for attorney’s fees must be brought “within the time for filing a notice of appeal under rules 8.104 and 8.108”].)

Nonetheless, the dismissal issue presents minimal ambiguity: since the parties settled, judgment was subsequently entered. (Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, 906 [“The acceptance of the instant compromise agreement calling for a voluntary dismissal with prejudice would have finally disposed of the complaint as effectively (see Code Civ. Proc., § 581d) as one calling for entry of judgment in favor of plaintiff”].) Consequently, this likely triggered the 180-day deadline after entry of judgment under California Rules of Court, rule 8.104(a)(1)(C).

Ultimately, the Court finds that the ambiguity with dismissals under section 581d, along with Plaintiff’s belief that the Settlement Agreement was fully integrated, that there was no “Notice of Entry” document, and that the Stipulated Dismissal was never served on the parties, is sufficient to constitute a “complex and debatable” issue for relief under Code of Civil Procedure section 473.

Defendant’s opposition here is not well-taken. Its contention that section 473 does not offer relief to Plaintiff’s counsel specifically is addressed in the plain language of the subdivision (b): that a court may “relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her.” (Italics added.) Whether the inadvertence or mistake justifies relief depends on whether it was excusable. (See Younessi v. Woolf (2016) 244 Cal.App.4th 1137, 1147.) Defendant also argues that the entire firm must show mistake but does not any legal authority to support that proposition. Finally, Defendant’s cited case of Hernandez v. FCA US LLC (2020) 50 Cal.App.5th 329 is inapposite. That case analyzed the mandatory relief provisions of section 473 and whether denial of the motion for attorney’s fees was akin to a “dismissal” under section 473. (Hernandez, supra, at pp. 337-338.) That case did not analyze the discretionary provisions of section 473 or Rule 3.1702.

Even if this Court agreed with Defendant that section 473 does not permit relief, independent of that basis, Plaintiff has also show good cause for an extension of her motion for attorney’s fees under Rule of Court 3.1702(d).

Plaintiff has shown good cause for an extension based on her admitted inadvertence and the lack of prejudice to Defendant.

The “‘modern trend of judicial decisions favors granting relief unless absolutely forbidden by statute.’” (Barragan v. County of Los Angeles (2010) 184 Cal.App.4th 1373, 1382.) Further, the provisions of Rule of Court 3.1702 are “mandatory, but not jurisdictional.” (Community Youth Athletic Center, supra, 220 Cal.App.4th at p. 1444.) Such deadlines should be given a “liberal, rather than strict interpretation.” (Robinson, supra, 4 Cal.App.5th at p. 326.) Accordingly, the Court separately evaluates Plaintiff’s request for relief from her untimely attorney’s fee motion under the liberal standard for good cause in Rule 3.1702(d). (See also Gunlock Corp. v. Walk on Water, Inc. (1993) 15 Cal.App.4th 1301, 1304-1305 [reversing trial court’s denial of contractual attorney’s fees finding that a court has “substantial latitude in allowing fees to be awarded without strict compliance with statutory temporal and procedural limitations”, especially if Defendant suffers no prejudice].)

Here, Plaintiff’s counsel mistakenly interpreted the Settlement Agreement, which expressly referenced the right to bring an attorneys' fees motion, as meaning no deadline was running. Paragraph 7(c) states in part:

c. Additionally, BMW NA will settle Plaintiffs attorneys' fees and costs in this Action via check made out to their attorneys in the total amount of either:

(ii) If no agreement is reached, Plaintiff may seek fees and costs for this Action by noticed motion with the Court in accordance with Civil Code section 1794, subdivision (d). As this is an offer of compromise, in no event shall BMW NA be liable for a fee multiplier above 1.00.

While the interpretation is mistaken, counsel’s interpretation seems to be an honest mistake. She contends that the Settlement Agreement “controlled the timing of the motion and because it did not contain a specific deadline for the filing of the motion, no such deadline applied.” The Settlement Agreement is silent on any consequences for Plaintiff’s failure to timely file a motion for fees and expressly allows for a motion to be filed.

The declaration of Erin K. Barns provides further support that the mistake was honest. Ms. Barns indicated that she was under the erroneous belief that no deadline applied because the Settlement Agreement “contemplated a schedule of events different from a typical end of case scenario” and “no Judgment was entered.” (Barns Decl. in support of Plaintiff’s Motion for Relief, ¶¶ 8-9.) She acknowledged the “mistaken belief that C.C.P. §581d did not cover stipulated dismissals by the parties pursuant to a C.C.P. §664.6” and “now see[s] this error.” (Id. at ¶ 11.) Ms. Barns also relied on the reasoning of Alan, supra, 50 Cal.4th at p. 905 that because no “Notice of Entry” or signed judgment was served by this Court, there was no appealable order and thus, that the deadline did not yet begin. (Id. at ¶¶ 13-14.) The declaration sufficiently supports the mistake as being honest or inadvertent.

Critically, the Court also considers the lack of prejudice to Defendant. While Defendant argues there will be additional litigation and uncertainty through their quarterly financials, Plaintiff counters that the Settlement Agreement expressly contemplated fees and denying her fee motion would grant a windfall to BMW. The Court agrees with Plaintiff. (Robinson, supra, 4 Cal.App.5th at p. 328 [finding no prejudice to defendant and “no reason to grant it windfall protection [because] It knew from before entry of judgment the legal grounds upon which fees were sought.”].) While a lack of prejudice to Defendant alone may be insufficient to support a finding of good cause, it is an important factor to consider.

Defendant otherwise does not discuss the good cause analysis under Rule of Court 3.1702(d), nor does it sufficiently make a showing of prejudice. Given that Defendant expressly contemplated paying attorney’s fees in the Settlement Agreement, its argument that the granting of this motion “wreaks havoc” on its quarterly financials is not well-taken.

Considering the totality of the circumstances, including the ambiguity with the entry of judgment, counsel’s honest, albeit mistaken interpretation that no deadline applied, and the lack of prejudice to Defendant, the Court finds good cause to extend the time in which the motion for attorneys' fees could have been filed under Rule 3.1702(d), and reaches the merits of the motion. (Robinson, supra, 4 Cal.App.5th at p. 326 [“Even a claim of inadvertence, if it is not prejudicial, may constitute good cause of a late filing”]; Lewow, supra, 203 Cal.App.4th at pp. 135-136.)

Plaintiff’s Objections 5 and 9 are sustained. All other objections are overruled.

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 about 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 initially sought to recover $188,888.50 in attorneys' fees. However, this amount improperly applied current hourly rates retroactively to all the hours incurred since 2019. After this Court ordered Plaintiff to update the hourly rate at the time it was incurred, the new amount sought is now $160,375.00.

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.)

Defendant contends that the hourly rates for attorneys’ fees ranging from $200.00 to $695.00 per hour are unreasonable and should be reduced to $275.00 per hour for attorneys.

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.”’”].)¿

Here, the Court’s review of the Wirtz Declaration in support of the motion for attorney’s fees, its description of each attorneys’ years of experience, the accompanying exhibits, and the arguments and evidence brought forth by Plaintiff leads to the conclusion that Plaintiff’s attorneys’ fees as requested are reasonable. The rates are supported by substantial evidence under the circumstances. (Wirtz Decl. ¶¶ 13-27.) Specifically, Wirtz submitted the 2019 United States Consumer Law Attorney Fee Survey Report and the 2020 Real Rate Report indicating that counsel’s rates fall within the average range for attorneys with the corresponding years of experience. (Wirtz Decl., Exs. C, D.)

While Defendant argues that Plaintiff “misleadingly cites” the Real Rate Report, it fails to challenge the 2019 Consumer Law Attorney Fee Survey Report. The latter report indicates similar hourly rates as that of Plaintiff’s counsel for “Attorneys Handling Vehicle Cases.” (Wirtz Decl., Ex. C.) The Court finds counsel’s hourly rates to be reasonable as commensurate with attorneys with comparable skill, expertise, and experience.

Defendant argues that Plaintiff unreasonably inflated her bill by overstaffing the case and devoting an unreasonable number of hours to preparing the Complaint and opposing the motion to compel arbitration.

While 12 different individuals worked on the case, only seven were attorneys and Defendant has failed to indicate that the billing entries were necessarily duplicative. (McGrath v. County of Nevada (9th Cir. 1995) 67 F.3d 248, 255 [recognizing “that ‘the participation of more than one attorney does not necessarily constitute an unnecessary duplication of effort.’”].) Plaintiff has indicated that two attorneys, Daniel Inscore and Kelsey Henry, handled 81% of the work. (Barns Reply Decl., ¶ 12, filed 5/11/2022.) The Court does not find that the number of attorneys is necessarily evidence of overstaffing or duplicative work.

As to the hours spent on the Complaint and opposition to the motion for compel arbitration, Defendant fails to meet its burden of showing unreasonableness. It claims 41.2 hours is excessive to draft a complaint but fails to offer any legal argument. These hours are not simply for drafting from a form template, as Defendant contends. It also involves investigating facts, discussing the case with client, and gathering the necessary information.

Defendant further argues that the fraud claim provided no additional recovery.[3] Yet the entire case settled. The fraud and unfair competition claims in the First Amended Complaint were not disposed of via summary judgment or otherwise dismissed. Thus, the Court cannot apportion out fees for non-recoverable claims versus recoverable claims.

Finally, Defendant argues that the hours for Plaintiff’s opposition to its motion to compel arbitration was unreasonable and relies on Plaintiff’s counsel’s similar opposition in an unrelated case. This is improper and the Court will not consider references to other cases which may have different facts, claims, and arguments. The Court declines to reduce any hours for these arguments.

· Vague entries: $7,830.00 (20.7 hours). These reductions were for “client communications.” This entry is too vague to meet plaintiff’s burden of showing that an expenditure of time was reasonable and necessary. While counsel should not disclose information subject to the attorney-client privilege, there should at least be evidence of the general subject matter of the conversations involved. (Hensley v. Eckerhart (1983) 481 U.S. 424, 437, n. 12 [counsel should identify general subject matter of time expenditures].)

· Work before the LA Case: $8,935.00 (24.4 hours). Defendant argues that Plaintiff previously filed this case on October 29, 2019, in Riverside County. Plaintiff then dismissed that case and, on June 24, 2020, filed a new complaint in LA County.

After review of the billing, the Court strikes all entries before May 28, 2020, except for the engagement agreement work. There are numerous entries for “Review and revise Damages Model.” It is unclear why this work was done prior to the Complaint being filed in LA County. There is also $7865.00 worth of work related to a motion to compel arbitration in March 2020, before this case was ever filed here. All these fees are improper.

As to work related to the Riverside case after June 24, 2020, the Court declines to strike the hours relating to Plaintiff’s work done for opposing Defendant’s Notice of Related Case and Motion to Transfer Venue. Defendant filed those moving papers and cannot “litigate tenaciously and then be heard to complain about the time necessarily spent by the opposition in response.” (EnPalm, LLC v. Teitler (2008) 162 Cal.App.4th 770, 786.)

Defendant also requests the Court to strike certain entries relating to Plaintiff’s work in opposing Defendant’s Motion to Set Aside a dismissal order, which was filed in Riverside County. While the Court cannot award fees relating to work conducted in the Riverside case, these oppositions were necessary because Defendant opted to engage in concurrent litigation in both venues so that the cases could be related or that this case would be transferred back to Riverside. The amounts were reasonably incurred and necessary for the litigation to continue in this case. Thus, the Court awards these amounts.

· Improper entries: $4,280.00 [11.2 hours]. These entries are unclear on their face when viewed in context with the surrounding billing during the corresponding period.

o August 14, 2020 - Daniel Inscore billed for drafting a response to a “Notice of related case in Riverside case.” The docket indicates that Plaintiff’s response to the Notice of Related Case was filed on July 22, 2020, so it is unclear what this billing entry is for. [$720.00, 1.8 hours]

o September 25, 2020 – Ian Rittinger billed for preparing letter to opposing counsel “regarding payment of costs and prepare check.” It is unclear what this is regarding because this entry is juxtaposed with surrounding entries relating to opposition of the Defendant’s Motion to Transfer Venue. The “No-Charge” entries surrounding this entry indicates a “Motion to Strike Memorandum of Costs,” which appears to have been filed in Riverside. [$100.00, 0.5 hours]

o November 16 & 18, 2020 – Andrea Beatty requested and followed up on a “Transcript from hearing on 3/16/20.” This case was filed in June 2020, so it appears the transcript was for the Riverside case. [$80.00, 0.4 hours]

o May 7, 8 & 9, 2021 – Daniel Inscore billed for reviewing and revising opposition papers to Defendant’s Motion to Compel Arbitration, but the Court already denied the motion on February 22, 2021. [$3,360.00, 8.4 hours]

o October 19, 2021 - Danielle Viviani “[c]onfirm[ed] settlement was fully executed by Mercedes Benz” (despite Defendant being BMW in this case.) This entry is invalid. [$20.00, 0.1 hour]

· Duplicate entries: $7,980.00 [20 hours] These entries contained duplicate descriptions, or another attorney/paralegal worked on the same task that same day. Some of the entries were vague – for example, an attorney failing to specify which of the six Motions to Compel Further Discovery that they worked on. The Court strikes the following entries:

o 2/5/21: Rebecca Evans: Review and revise Opposition to Motion to Compel Arbitration

o 4/16/21: Kelsey Henry: Review and revise discovery meet and confer regarding Requests for Admission

o 4/16/21: Kelsey Henry: Review and revise discovery meet and confer letter regarding Requests for Admission

o 5/4/21: Daniel Inscore: Review and revise discovery motions Requests for production and Special Interrogatories, Set One

o 5/5/21: Kelsey Henry: Revise Request for Admissions, Set One separate statement for Motion to Compel Further for Daniel Z. Inscore

o 5/5/21: Kelsey Henry: Revise Request for Production, Set One separate statement for Motion to Compel Further for Daniel Z. Inscore

o 9/20/21: Daniel Inscore: Draft, review and revise email to opposing counsel regarding settlement

In total, the Court deducts $29,025 for these vague, improper, and duplicative entries.

Defendant argues that the motions to compel further responses were unnecessary. Plaintiff failed to address the argument. On May 7, 2021, Plaintiff filed six Motions to Compel Further Discovery Responses as to her Form Interrogatories (Set One) Requests for Admission (Sets One and Two), Requests for Production (Set One), Special Interrogatories (Sets One and Two). Defendant argues that this Court’s predecessor ordered Plaintiff to “select only three of her six motions to be heard.” (Amir Decl., ¶ 4.) These motions were never heard because the case subsequently settled.

Under Code of Civil Procedure section 2023.030, subdivision (a), a court may impose monetary sanctions against parties who misuse the discovery process. Indeed, each of Plaintiff’s six motions requested sanctions in the amount of $3,860.00 per motion for a total of $23,160.00. This amount is consistent with the detailed billing entries provided. Defendant may argue that the Court never heard the motions and so no fees should be awarded. This argument fails because the motions were still “reasonably incurred” in the “prosecution of [this] action.” (Civ. Code, § 1794, subd. (d).) Such motions may have prompted the Defendant to settle earlier. Thus, any argument to the merits of the motions would be speculative and the Court resolves this in favor of the Plaintiff. (Goglin v. BMW of North America (2016) 4 Cal.App.5th 462, 470 [initial burden is on plaintiff to show fees were allowable and necessary].) Apart from arguing that the motions were “unnecessary and overbroad,” Defendant fails to offer any argument or legal authority as to why the Court should not award these costs.

Defendant reiterates its untimeliness argument in its motion to tax costs and also argues that Plaintiff failed to address the separate deadlines under Rule of Court 3.1700(a)(1). [4] This deadline is separate from a motion for attorney’s fees and requires a memorandum of costs to be served “within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first.”

However, Rule of Court 3.1700(b)(3) authorizes the court to “extend the times for serving and filing the cost memorandum or the notice of motion to strike or tax costs for a period not to exceed 30 days.” Notably, there is no good cause requirement as in Rule 3.1702(d). Thus, in its June 14, 2022 minute order, this Court ordered Plaintiff to file her memorandum of costs, which was timely filed on that same day. Even if good cause is necessary, the Court incorporates its analysis above and grants an extension for Plaintiff to file her memorandum of costs. (See Pollard, supra, 12 Cal.3d at pp. 380-381 [“In the absence of prejudice, the trial court has broad discretion in allowing relief on grounds of inadvertence from a failure to timely file a cost bill”]; Hoover Community Hotel Development Corp. v. Thomson (1985) 168 Cal.App.3d 485, 487-488.) The Court rejects the argument that the cost bill was untimely, and addresses the merits of the cost bill and Defendant’s motion to tax costs.

Plaintiff’s objections 1, 6, 11 are sustained. All other objections are overruled.

Defendant challenged $360.00 in filing fees for the six motions to compel further discovery and $60.00 for the motion to strike filing.

The Court never ruled on the six motions because the case settled. Nevertheless, Plaintiff incurred these costs during litigation. As to the motion to strike, the billing log indicates a significant amount of “no-charge” entries filed between August and September 2020 as to Defendant’s memorandum of costs. This suggests that Plaintiff filed a motion to strike in Riverside County for which this Court cannot award costs. Thus, the Court taxes $60.00.

Plaintiff admits that the transcript on the Ex Parte Hearing on BMW’s Motion to Compel Arbitration and Permitting Pre-Hearing Discovery was not ordered by the Court. (Opposition to Motion to Tax Costs, pp. 7:28-8:8.) Therefore, this cost is not allowed and the Court taxes this amount. (Code Civ. Proc., § 1033.5, subd. (b)(5).)

Defendant makes a cursory challenge to court reporter fees, citing to Code of Civil Procedure section 1033.5, subdivision (c)(2) without additional argument.[5] Subdivision (c)(2) merely states that “[a]llowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation.”

This cost is for the reporter’s per diem rate at various court appearances. (Barnes Decl. in support of Plaintiff’s Opposition to Motion to Tax Costs, Ex. B.) Such costs are allowable. (Chaaban v. Wet Seal, Inc. (2012) 203 Cal.App.4th 49, 58 [noting that court reporter fees are an “entirely different expense” than transcripts and that they must be paid “regardless of whether anyone orders transcripts”].) Both sides benefited from the court reporter as the parties could review the record. The Court declines to tax these costs.

Code of Civil Procedure section 1033.5, subdivision (b)(3) states that postage and photocopying charges (except for exhibits) are not allowable as costs “except when expressly authorized by law.” These expenses fall within reasonable expenses authorized under Civil Code section 1794, subdivision (d). Defendant’s reply fails to address this issue and offers no specific argument regarding these costs. The Court declines to tax these costs.

Defendant did not explicitly challenge this cost in its moving papers but raises it in its reply. Thus, it fails to properly challenge this cost. “The salutary rule is that points raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before.” (Balboa Insurance Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010.)

Defendant argues that Plaintiff fails to show she incurred this expense per search result as opposed to paying a flat rate.

“‘The right to recover any of such costs is determined entirely by statute.’” (Gorman v. Tassajara Development Corp. (2007) 178 Cal.App.4th 44, 71.) Computerized legal research charges are not expressly allowable. “Fees for legal research, computer or otherwise, may not be recovered under section 1033.5.” (Ladas v. California State Automobile Association (1993) 19 Cal.App.4th 761, 776 [finding that section 1033.5, subdivision (b)(2) “precludes recovery of investigation expenses and attorney fees are not compensable as costs in the absence of an agreement of the parties or statutory authority”].)

Plaintiff argues that the research was necessary to oppose BMW’s motion to compel arbitration. However, she cites no legal authority authorizing such costs. Instead, Plaintiff refers to the broad language in Civil Code section 1794, subdivision (d) for recovery of costs “reasonably incurred by the buyer.” The Court is unpersuaded. If Plaintiff’s argument is correct, it is unclear why she is not seeking more legal expenses for the research on the entire case, as opposed to only the motion to compel arbitration. These costs are normal overhead costs associated with any business and are not recoverable. The Court taxes $2,643.61.

Defendant did not contest this cost in its motion to tax costs and first mentions it in its reply. Thus, the Court will not consider its arguments. Furthermore, Defendant’s argument that CourtConnect is a free service only applies to hearings after September 7, 2021.[6] There were numerous hearings before that date. Accordingly, the Court declines to tax these costs. (Code Civ. Proc., § 1033.5, subd. (c)(4).)

Defendant moved to tax this cost but failed to address the issue in its Reply. Plaintiff indicates the cost was incurred as part of her “Affidavit of Venue” that she filed as part of her First Amended Complaint. The Court declines to tax this amount.

In sum, the Court taxes a total of $2,755.36. Plaintiff is awarded $9,105.73 in costs.

[1] Plaintiff’s motion would have also been untimely because it was filed past “180 days after entry of judgment.” (Cal. Rules of Court, rule 8.104(a)(1)(C).

[2] Plaintiff applied ex parte for an expedited hearing because of her deadline to appeal the denial order.

[3] It is true that common-law fraud claims do not provide for attorney’s fees. (Aozora Bank, Ltd. v. 1333 North California Boulevard (2004) 119 Cal.App.4th 1291, 1294.) However, Plaintiff’s First Amended Complaint also added two additional claims for unfair competition law violations. Those claims do provide for attorneys for a prevailing plaintiff as a “private attorney general pursuant to Code of Civil Procedure section 1021.5.” (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1179.) Defendant fails to meet its burden to show how Plaintiff’s work related to the fraud claim may be apportioned out. (Santana v. FCA US, LLC (2020) 56 Cal.App.5th 334, 347 [“‘fees need not be apportioned when incurred for representation on an issue common to both causes of action in which fees are proper and those in which they are not’”].)

[4] Plaintiff’s opposition states that Defendant’s motion to tax costs is untimely. Defendant’s motion to tax costs argues that it never received a copy of the memorandum of costs. Because both sides filed the requisite motion, opposition, and reply, both have waived any procedural defects and there is no prejudice to either party. (See Carlton v. Quint (2000) 77 Cal.App.4th 690, 697.)

[5] Defendant improperly supplements specific arguments as to court reporter fees in its Reply, rather than its motion. The Court will not consider those arguments.

[6] See https://my.lacourt.org/laccwelcome.

Department 58

Background