Judge Bruce G. Iwasaki, Case Number: 21STCV38780, Date: 2024-01-11 Tentative Ruling

Tentative Ruling: The Motion for Attorney’s Fees is granted in part for a total of $27,396.50 in attorney fees.

This is an action under the Song-Beverly Act in which Arman Arakelian and Siranush Arakelian (Plaintiffs) alleged defects in a 2017 Mercedes-Benz Metris (Vehicle). Plaintiffs sued Mercedes-Benz USA, LLC and Mercedes-Benz of Beverly Hills (Defendants or Mercedes) for breach of express and implied warranties.

The parties settled this Song-Beverly matter except as to the issues of attorney fees and costs. Plaintiffs now move for an award of attorneys’ fees.

Plaintiffs argue that, as the prevailing party, they are entitled to fees and costs under Civil Code section 1794, subdivision (d). They seek lodestar attorneys’ fees of $41,596.50, plus a 1.5 multiplier -- in the amount of $20,798.25 -- and costs of $2,340.19. The total requested in attorney fees and costs is $62,394.75.

Defendants filed an opposition, arguing the amounts requested in fees and costs are excessive and unreasonable.

Plaintiffs’ objections to Defendants’ evidence are ruled as follows: No. 1 is overruled and Nos. 2-3 are sustained.

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.)

Plaintiffs seek $41,596.50 in attorneys’ fees for Norman Taylor & Associates (NTA) and Wirtz Law (WL), plus a 1.5 multiplier enhancement, and costs of $2,340.19, for a total $62,394.75.

Defendants Mercedes do not dispute that Plaintiffs are the prevailing party under the settlement agreement. Instead, Defendants argue the that hours incurred to litigate this routine, non-complex case that settled before trial is unreasonable.

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.)

Defendants first contend that Plaintiffs’ 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, Defendants request that the Court reduce all hourly rates to, “at most,” $250. However, Defendants do not submit evidence specifically addressing Plaintiffs’ attorneys’ hourly rates. Instead, Defendants point to several Los Angeles Superior Court cases where attorney hourly rates were reduced. These cases are not controlling on this Court and the objections to this evidence are well taken.

Defendants also cite 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 Defendants.

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 $250 to $750 were reasonable; the rates are supported by substantial evidence under the present circumstances. (Taylor Decl., ¶¶ 6-14, 24 Exs. 2-5; Wirtz Decl., ¶¶ 4-28, Exs. 2-3.)

Based on the Court's familiarity with the current local market, and Plaintiffs’ 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.

Plaintiffs also challenge the hours incurred, arguing that the amounts sought by Plaintiffs are the result of overstaffing, duplicative billing, overbilling, and billing for clerical tasks.

Duplicative Billing: Defendants contend that, as result of overstaffing, Plaintiffs billed for duplicative entries of the same task. However, Defendants’ claim of duplicative billing appears overstated as Defendants have only identified two examples of duplicative billing. In reviewing these examples and as argued in reply, the tasks identified are different and not duplicative.

Excessive Billing: Defendants also argue that the total number of hours claimed in this case of 102.8 hours is excessive. For the reasons discussed below, the Court agrees.

First, Defendants note that Plaintiffs billed a significant number of hours for client communications; specifically, NTA spent 10.1 hours communicating with their client ($5,882.50) and WL spent another 10.5 hours communicating with their client ($3,705) for a total of $9,587.50. While the Court does not wish to discourage client communication, the Court agrees that these hours appear excessive in a straightforward lemon law case such as this one. The Court will reduce the hours by $4,000.

Second, Defendants argue that Plaintiffs’ counsel spent a substantial amount of time on the surrender of the subject vehicle, which did not require Plaintiffs’ counsels’ time because surrenders are usually handled by Plaintiffs. Plaintiffs’ counsel bill 7.6 hours for a total of $2,195 for this task. These fees are excessive where Plaintiffs’ counsel hours were incurred by sending emails regarding the surrender and also to travel with Plaintiffs to “ensure the process was completed correctly.” The Court will reduce these fees by $1,000.

Third, Defendants challenge the amount of time incurred on drafting the motion for attorney fees. According to Plaintiffs’ motion, WL anticipates incurring 10 hours ($5,225) to draft the Motion, review the opposition, draft the reply and attend the hearing. The drafting of these motions and the issues raised are standard; given Plaintiffs’ purported experience with these types of cases and the typical fee motions involved, these fees are excessive. The Court will reduce the fees by $2,000.

Fourth, Defendants take issue with the amount of time NTA incurred in commencing this case (8.1 hours), including drafting the complaint, reviewing Defendants’ answers, and drafting the CMC statement – for a total of $3,763. Similar to the motion for attorney’s fees, this case involved standard legal issues; given counsel’ extensive experience in this area of the law, these fees are excessive. The Court will reduce fees by $1,500.

Fifth, Defendants argue the time incurred by Plaintiffs’ counsel in preparing and responding to discovery was excessive. Plaintiffs seek numerous hours for time incurred on propounding and responding to discovery. According to Plaintiffs, they incurred 21.4 hours preparing Plaintiffs’ request for discovery ($11,982.50) and 2.4 hours responding to Defendants’ requests for discovery ($750).[1] Again, given Plaintiffs’ counsel’s experience in this type of litigation and the simple lemon law issues involved in this case, the Court agrees that the time incurred on such tasks were excessive and unreasonable. The Court will reduce fees by $5,500.

Finally, Defendants note that NTA transferred this matter to WL around March 7, 2023, but generated billing entries for this case on May 3, and May 4, 2023. Plaintiffs’ counsel represents that Plaintiffs contacted them about the case after it had been transferred and counsel responded. These fees do not appear unreasonable or excessive under these circumstances.

Administrative Billing: Defendants challenges Plaintiffs’ paralegals’ billings entries for October 25, 2021, October 27, 2021, February 15, 2022, February 16, 2022, February 24, 2022. These entries involved calendaring and other administrative type tasks. Although Plaintiffs used paralegals (and paralegal hourly rates) for these tasks, the paralegal hourly rates are high (nearly the rate for some attorneys). Thus, assuming the skill and expertise for these paralegals to bill at these rates, the Court finds that the amounts sought are excessive for the task involved. The Court will reduce the fees by $200 to account for an attorney hourly rate used on these administrative tasks.

Erroneous Billing: On NTA’s billing records, NTA billed for an attorney communication regarding a divorce on September 20, 2022. In reply, Plaintiffs state that Attorney Taylor billed to speak with Plaintiff Arakelian’s divorce attorney; Plaintiffs represent that the divorce was material to this case because counsel had to determine how the divorce proceedings would affect this case. The entry was not an error and is not excessive.

Finally, Plaintiffs seek 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., ¶ 30; Wirtz Decl., ¶ 34), 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		$41,596.50

Excessive Billing	Client communications: $4,000 Surrender: $1,000 Motion for attorney fees: $2,000 Commencement: $1,500 Discovery: $5,500 Total:
Administrative Billing	$200

Reduced Lodestar Amount	$14,200	$27,396.50

The Court grants Plaintiff’s motion for attorneys’ fees in the sum of $27,396.50.

Defendants also challenge Plaintiffs’ claimed costs of $2,340.19 on the grounds that Plaintiffs have not submitted any evidence of the reasonableness of the costs incurred. Plaintiffs’ motion, however, clarifies that Plaintiffs are not seeking their costs and expenses by way of this Motion. Instead, Plaintiffs argue that they are already entitled to full recovery of their costs because Defendants did not file any timely challenge to Plaintiffs’ Memorandums of Costs.

Under California Rule of Court, rule 3.1700(b)(1) a motion to strike or tax costs must be served and filed no later than 15 days after service of the memorandum of costs. The failure to file a timely motion to tax costs constitutes a waiver of the right to object. (Douglas v. Willis (1994) 27 Cal.App.4th 287, 289; Jimenez v. City of Oxnard (1982) 134 Cal.App.3d 856, 859 [“By not filing said motion within the period specified in section 1033, plaintiffs waived the right to object to the costs claimed by the city.”].)

Here, Plaintiffs filed two memorandums of costs on October 13, 2023. No motion to tax these costs was filed by Defendants. Defendants only raised an objection to these costs in their opposition to the motion for attorney’s fees, filed on December 28, 2023.

The motion for attorneys’ fees and costs is granted in part. In sum, the Court grants Plaintiffs’ request for attorneys’ fees in the total amount of $27,396.50, which is a reduction of the lodestar amount by $13,200. The request for costs is granted in the amount of $2,340.19.

Defendants Mercedes-Benz USA, LLC and Mercedes-Benz of Beverly Hills are ordered to pay to Plaintiffs’ counsel the sum of $29,736.69 ($27,396.50 + 2,340.19) for attorneys’ fees and costs. This amount shall be paid on or before February 12, 2024.

[1] WL also incurred time on discovery for drafting deposition notices and subpoenas, but the time incurred was minimal.

Department 58