Judge: Colin Leis, Case: 21STCV32904, Date: 2023-03-09 Tentative Ruling

Case Number: 21STCV32904    Hearing Date: March 9, 2023    Dept: 74

Superior Court of California

County of Los Angeles – CENTRAL District

Department 74

MOVING PARTY:                Plaintiff Hovik Simonian

RESPONDING PARTY:       Defendant Mercedes-Benz USA, LLC

Motion for Attorney Fees, Costs, and Expenses

The court considered the moving papers, opposition papers, and reply papers filed in connection with this motion.

BACKGROUND

            Plaintiff Hovik Simonian (“Plaintiff”) filed this action on September 7, 2021, against Defendant Mercedes Benz USA, LLC (“Defendant”), alleging the following causes of action: (1) fraud and deceit; (2) breach of written warranty pursuant to the Magnuson-Moss Warranty Act; (3) breach of implied warranty pursuant to the Magnuson-Moss Warranty Act; (4) breach of written warranty pursuant to the Song-Beverly Consumer Warranty Act; (5) breach of implied warranty pursuant to the Song-Beverly Consumer Warranty Act; (6) violation of Business & Professions Code § 17200, et seq.; (7) violation of Business & Professions Code § 17500, et seq; (8) negligence; and (9) strict liability. Plaintiff alleges that he leased a new 2019 Mercedes A220W in August 2019. Soon after Plaintiff took possession of the car, multiple defects surfaced. (Compl. ¶¶ 5-8.) According to Plaintiff’s complaint, Defendant’s authorized repair facilities could not cure the defects despite sufficient opportunities to do so. (Compl. ¶¶ 9-13.) Based on Defendant’s inability to cure the defects, Plaintiff revoked acceptance of the car but Defendant refused to accept the car’s return.  (Compl. ¶ 14-18.)

            In October 2021, the parties arbitrated Plaintiff’s case. In October 2022, the parties filed a notice of conditional settlement. Under the settlement, Plaintiff is entitled as the prevailing party to recover his attorney’s fees, costs, and expenses.

EVIDENTIARY OBJECTIONS

            Defendant objects to various portions of the Declaration of Hovanes Margarian. The court sustains objection no. 1 and overrules objection nos. 2-4.

LEGAL STANDARD

The Song-Beverly Act provides for the award of attorney fees to prevailing plaintiffs as follows:

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.

(Civ. Code § 1794, subd. (d).)

DISCUSSION

            Plaintiff seeks a total attorney fee and cost award of $58,754.52, consisting of: (1) $37,310.00 in attorney fees; (2) a 1.5 lodestar multiplier of $18,655.00; and (3) $2,789.52 in costs and expenses. (See Notice of Motion at pg. 2; Memorandum of Costs.)

A.    Whether Plaintiff’s Request for Attorney Fees is Reasonable

Plaintiff contends that his requested lodestar fee award of $37,310, consisting of 57.40 hours at a legal rate of $650 per hour, is reasonable. (Motion at pg. 10, 12.)

“It is well established that the determination of what constitutes reasonable attorney fees is committed to the discretion of the trial court, whose decision cannot be reversed in the absence of an abuse of discretion.” (Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623.) In exercising its discretion, the court should consider a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in handling the matter, the attention given, the success or failure, and the resulting judgment. (Id.)

The calculation of attorneys’ fees under the Song-Beverly Act is based on the lodestar method, which multiplies the number of hours reasonably expended by a reasonable hourly rate. (Graciano v. Robinson Ford Sales (2006) 144 Cal.App.4th 140, 154; Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 817-819.) “The lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (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. (Graciano, supra, 144 Cal.App.4th at 154.) “The purpose of such adjustment is to fix a fee at the fair market value for the particular action.” (Ibid.) “In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.” (Ibid.)

                                                        i.            Reasonableness of Hourly Rate

An attorney’s time spent and hourly rate are presumed to be reasonable. (Mandel v. Lackner (1979) 92 Cal.App.3d 747, 761.) Plaintiff’s counsel’s hourly rate for contingency cases is $650 per hour. (Margarian Decl. ¶¶ 12, 15.) Counsel Margarian attests that he has litigated consumer protection cases for 16 years and relies on other court decisions that found that his hourly rate was reasonable. (Id. at ¶¶ 13-18.) In addition, Plaintiff argues that the nature and complexity of the litigation and the fact that this case was taken on a contingency basis justifies the hourly rate. (Motion at pp. 13-15.) Defendant disagrees, asserting a reasonable market rate is closer to $250 based on what Defendant’s counsel contends is the market rate for defense firms for warranty defense litigation. Setting aside the thin evidentiary support for counsel’s contention (Bassis Decl. ¶ 2, Exh. C.), Defendant is comparing apples to oranges – defense counsel whose clients (presumably) pay their attorneys win-or-lose versus plaintiffs attorneys who get paid only if they prevail. The court finds an hourly rate of $650 for Plaintiff’s attorney practicing in central Los Angeles County is reasonable.    

                                                      ii.            Reasonableness of Hours Worked

A successful party is entitled to “compensation for all hours reasonably spent” (Serrano v. Unruh (1982) 32 Cal.3d 621, 639.) However, reasonable hourly compensation does not include inefficient or duplicative efforts, aka “padding.” ¿(Graham v. DaimlerChrysler Corp. (2004) 34 Cal. 4th 553, 579-580.) ¿Thus, a fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether. ¿(Serrano, supra, 32 Cal. 3d at 635). ¿As the Supreme Court stated: 

“A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.  ‘If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful ….’ (Citation.)”   (Id.) ¿ 

The value of legal services performed in a case is a matter in which the trial court has its own expertise. ¿(PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1096). ¿The trial court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. ¿(Id.) ¿

Here, Plaintiff has submitted documentation stating Plaintiff’s counsel spent 57.40 hours performing legal work. (Margarian Decl. ¶ 9-10, 30; Exh. A.) Defendant contends, however, 57.40 hours are excessive for several reasons. First, Defendant contends that pre-litigation hours are not recoverable under the Song-Beverly Act. (Opposition at pg. 6, relying on Dominguez v. American Suzuki Motor Corp. (2008) 160 Cal.App.4th 53, 60.) Second, clerical and administrative tasks are not recoverable. (Opposition at pp. 6-7.) Third, time spent drafting a joint report on the status of arbitration is exaggerated. (Opposition at pp. 7-8.) Fourth, 3.5 hours spent breaking down hours expended is not reasonable when billing should been recorded contemporaneously with the tasks. (Opposition at pg. 8.) Fifth, 6.5 hours spent on Plaintiff’s attorney’s fee motion was not reasonable when it appears to Defendant that Plaintiff’s counsel relied on a template to prepare the motion. (Opposition at pg. 8.) Last, 8 anticipated hours to prepare a reply brief and appear at the hearing are not reasonable when they have not actually been incurred. (Opposition at pp. 8-9.)

            The court finds some portions of the claimed hours are not recoverable. First, while Defendant asserts that pre-litigation work is not recoverable, its reliance on Dominguez is unpersuasive because that case is distinguishable from the present action. In Dominguez, the plaintiff was seeking to cover civil penalties and/or attorney fees, not to compel compliance with the Song-Beverly Act. (Dominguez, supra, 160 Cal.App.4th at 59.) The appellate court determined that the lower court erred in denying the defendant’s motion for summary judgment because the evidence suggested the defendant sufficiently complied with the Song-Beverly Act when it offered to repurchase the subject vehicle with a lower offer for the requested attorney fees. (Id. at pp. 55-56, 60.) It is true that the appellate court stated that it was unclear whether “the Legislature intended that every time a manufacturer repurchases or replaces consumer goods, a consumer is entitled to attorney fees, regardless of whether it was pre- or postcommencement of litigation.” (Id. at 60.) However, in this instance, Plaintiff is the prevailing party under Civil Code § 1794(d). Thus, pre-litigation attorney’s fees incurred in connection with the commencement of this action are recoverable.

            The court finds attorney Margarian’s 2.6 hours engaged in clerical tasks is not performing legal services and thus are not recoverable.

            The court finds that Defendant has not presented any evidence to suggest that the time spent on the joint reports was unreasonable. (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal. App. 4th 140, 156.)

The court finds that it would not be reasonable to award Plaintiff for the time spent Counsel Margarian spent accounting for his hours because that is a self-imposed inefficiency when the more reasonable approach is to account for time as expended. Thus, a reduction of 3.5 hours is warranted.

The court reduces from 14.5 hours counsel’s time spent on the motion, reply, and appearing for the hearing to one day of billable hours amounting to 8 hours.

Accordingly, based on the total hours of 44.8 = (57.4 – 2.6 – 3.5 – 6.5) at $650 per hour, the court finds that Plaintiff is entitled to a reduced lodestar fee award of $29,120.

B.     Whether Plaintiff Should be Awarded a Lodestar Multiplier of 1.5

Plaintiff seeks a lodestar multiplier of 1.5 (i.e. $18,655). 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.)

The burden of proof to support a multiplier is on the prevailing party. (Ketchum, supra, 24 Cal.4th at 1138.) The court must not, however, double count to the extent they are already baked into the lodestar calculation the various factors Serrano identifies. (Id. at 1138-1139.) “[A] trial court should award a multiplier for exceptional representation only when the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation. Otherwise, the fee award will result in unfair double counting and be unreasonable.” (Id. at 1139.) 

Plaintiff asserts that a 1.5 lodestar multiplier is warranted based on the complex issues in this case, the outcome achieved, and the contingency risk involved. (Motion at pp. 15-17.) Plaintiff’s assertion does not, however, persuade the court because nothing indicates this case was unusually complicated or risky, and Plaintiff’s $650 hourly rate already accounts for a contingency risk factor. The court thus finds a multiplier is unwarranted here.

C.     Reasonableness of Costs

Plaintiff seeks to recover $2,789.52 in costs and expenses that were incurred in this litigation. (Motion at pg. 18; Margarian Decl., Exh. A; Memorandum of Costs.) Plaintiff claims that he had to incur an expert witness fee of $1,975 because there was no guarantee of a settlement. (Motion at pg. 18.)

In opposition, Defendant argues that the fees associated with the expert witness should be taxed because neither a deposition nor a joint vehicle inspection took place. (Opposition at pg. 11; Bassi Decl. ¶¶ 8-9.) Further, Defendant asserts that the claimed 4.5 hours spent by the expert witness for the purported vehicle inspection is not reasonable based on experience. (Opposition at pg. 11.) Furthermore, Defendant questions the veracity of the claimed vehicle inspection because it was stated to have occurred on September 14, 2022, which was over a month after Plaintiff executed the settlement agreement. (Opposition at pp. 11-12; Bassi Decl. ¶ 7.)

Time entries and the invoice for the expert’s vehicle inspection show an inspection occurred on September 17, 2021, which was nearly a year before the parties entered into their settlement. (Margardian Decl., Exhs. A-B.) Thus, the contention that the expert’s vehicle inspection occurred after the parties agreed to a settlement is unsupported by the evidence, and as a result, these costs were reasonably incurred in connection with the prosecution of this action. (See Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 813.) Moreover, Defendant fails to present any relevant evidence to support the notion that the hours incurred by Plaintiff’s expert was excessive. Instead, Defendant merely references the declaration of its counsel that discusses the hourly rates of warranty defense litigators, which has no bearing here. (See Bassi Decl. ¶ 13.) Furthermore, Defendant’s claim that the inspection was “cursory” is not supported by the evidence. Based on the time entry, an initial inspection was conducted near the time that Plaintiff retained his current counsel.

            Accordingly, Plaintiff is entitled to recover costs in the amount of $2,789.52.

CONCLUSION

Based on the foregoing, the court grants Plaintiff’s motion for attorney fees in the reduced amount of $29,120. The court denies Plaintiff’s request for a lodestar enhancement of 1.5. The court grants Plaintiff’s request to recover costs in the amount of $2,789.52.

The court orders Defendant to pay Plaintiff’s counsel $31,909.52 within 30 days of this order.

Plaintiff is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  March 9, 2023

_____________________________

Colin Leis

Judge of the Superior Court