Judge: Frank M. Tavelman, Case: 23BBCV01139, Date: 2024-02-09 Tentative Ruling

Case Number: 23BBCV01139    Hearing Date: February 9, 2024    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

MOTION FOR ATTORNEY’S FEES

ALLEGATIONS: 

On June 5, 2023, George Godoy Maranan (Plaintiff) filed suit against Tesla Motors, Inc. (Tesla). Plaintiff alleges Tesla violated certain provisions of Civil Code § 1791.2, commonly known as the Song-Beverly Act. The parties have reached an agreement of settlement which provides for attorney’s fees to be determined by motion made to this Court. Plaintiff now brings such a motion and Tesla opposes.   

ANALYSIS: 

I.                    LEGAL STANDARD 

“The Song-Beverly Act. . . includes a fee-shifting provision allowing for prevailing buyers to recover attorney fees under section 1794.” (Reynolds v. Ford Motor Co. (2020) 47 Cal.App.5th 1105, 1111.) California “appellate courts have unanimously concluded the lodestar adjustment method of calculating attorney fees is appropriate” in awarding attorney fees under the Act. (Reynolds supra, 47 Cal.App.5th 1105 at 1112.)

“A trial court assessing attorney fees using the lodestar adjustment method begins with a touchstone or lodestar figure, based on the careful compilation of the time spent and reasonable hourly compensation of each attorney … involved in the presentation of the case.” (Reynolds, supra, at 1112 [internal quotation marks and citations omitted].) “[T]he trial court is . . . tasked under section 1794 . . . with calculating attorney fees based on actual hours expended that were reasonably incurred for the particular litigation.” (Id. at 1113.)  Under the lodestar adjustment methodology, the trial court must initially determine the actual time expended and then ascertain whether under all the circumstances of the case the amount of actual time expended and the monetary charge being made for the time expended are reasonable. (Mikhaeilpoor v. BMW of North America, LLC (2020) 48 Cal.App.5th 240, 247 [internal quotation marks and citations omitted].)

“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.” (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 34.) The party moving for statutory attorney fees or sanctions has the burden of proof. (Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99, 104.)

“[C]ounsels’ time records [should be used] as the starting point for [a court’s] lodestar determination.” (Horsford v. Board of Trustees of CSU (2005) 132 Cal.App.4th 359, 397.) However, “the trial court [is vested] with discretion to decide which of the hours expended by the attorneys were ‘reasonably spent’ on the litigation.” (Meister v. Regents of Univ. of Cal. (1998) 67 Cal.App.4th 437, 449.) “A trial court may not rubberstamp a request for attorney fees but must determine the number of hours reasonably expended.” (Donahue v. Donahue (2010) 182 Cal.App.4th 259, 271 [internal quotation marks and citations omitted].) “In evaluating whether the attorney fee request is reasonable, the trial court should consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.” (Morris, supra, 41 Cal.App.5th at 38 [internal quotation marks and citations omitted].) “Reasonable compensation does not include compensation for padding in the form of inefficient or duplicative efforts.” (Id., [internal quotation marks and citations omitted].)

“Reasonable hourly compensation is based on ‘prevailing hourly rates’ in the community, thereby ‘anchoring the calculation’ to an objective standard. [Citation.]” (Reynolds supra, at 1112.) However, “[i]n making its calculation of a reasonable hourly rate, the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees, the difficulty or complexity of the litigation to which that skill was applied, and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases.” (Morris supra, at 41 [internal quotation marks, citations, and alterations omitted].)

“Once the court has fixed the lodestar, it may increase or decrease that amount by applying a positive or negative ‘multiplier’ to take into account a variety of other factors, including the quality of the representation, the novelty and complexity of the issues, the results obtained, and the contingent risk presented.” (Lealao v. Beneficial Calif., Inc. (2000) 82 Cal.App.4th 19, 26.) In considering whether to apply a multiplier, the Court should not consider factors which are already included in the lodestar amount, such as extraordinary skill and the difficulty of the question involved. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138-1139.) “Thus, 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.” (Id. at 1139.) “Otherwise, the fee award will result in unfair double counting and be unreasonable. Nor should a fee enhancement be imposed for the purpose of punishing the losing party.” (Id.) The party seeking the fee enhancement bears the burden of proof. (Id at 1138.)

II.                 MERITS

As a preliminary matter, it is undisputed that Plaintiff is the prevailing party.

Timeline

On June 5, 2023, Plaintiff filed this action against Tesla. On July 5, 2023, Tesla made an offer to repurchase the vehicle “in exchange for dismissal of any pending action, with prejudice, if any, and execution of a settlement agreement and release, with confidentiality.” (Mot. Exh. E.) Plaintiff’s counsel responded asking for a proposed agreement to evaluate and discuss with Plaintiff, while also mentioning that attorney’s fees and costs would need to be resolved. (Mot. Exh. F.) What followed was a series of back-and-forth emails regarding the language of Tesla’s proposed agreement. (Id.) Plaintiff’s counsel expressed concerns regarding the inclusion of a Civil Code § 1542 waiver, an indemnity clause, and the requirement of contract confidentiality. (Id.) It appears Plaintiff’s counsel worked on several revisions of the agreement but ultimately were unable to come to agreement with Tesla on the terms. (Id.)

On September 6, 2023, in-house counsel for Tesla made Plaintiff a settlement offer pursuant to C.C.P. § 998. (Mot. Exh. J.) This offer was for repurchase of the vehicle at $74,000 and attorney’s fees and costs in the amount of $19,059.30. (Id.) It appears this offer was not accepted. At some point Tesla hired outside counsel to represent them in the matter. On September 8, 2023, outside counsel sent Plaintiff a § 998 offer to repurchase the vehicle at $74,000 and attorney’s fees and costs in the amount of $7,500 or in the alternative to permit the Court to decide fees on a noticed motion. (Mot. Exh. K.) Plaintiff fled the motion to pursue fees, costs, and expenses by motion, which they have clearly elected to do. (Id.)

Outside counsel was officially substituted into the matter on September 12, 2023. A motion to compel arbitration was filed by Tesla a day later. This motion was never opposed and was never heard.

On September 18, 2023, Plaintiff accepted the September 8 § 998 offer. 

Hourly Rate

Plaintiff has provided evidence of the median rates for consumer law attorneys in the form of an “Attorney Fee Survey Report”, showing the average rate for a consumer law attorney in the Long Beach area is $506 per hour. (Rashedi Decl. ¶ 7, Exh. M.) Plaintiff has also shown that his rates have been determined to be reasonable by several other trial courts in Song-Beverly Actions. (See Mot. Decl. Exhs. N, O.)  A review of those exhibits reveal an approved rate of $400 and $450 per hour, respectively.

In opposition Tesla argues that no one would pay $495 an hour for an attorney in a Song-Beverly matter. Tesla argues that Plaintiff has provided no evidence of other clients actually paying this rate and that such a rate would be unreasonable for such a crowded legal field. The Court notes that Tesla provides no evidentiary showings in contravention of those provided by Plaintiff. Tesla’s argument relies on conjecture that an influx of attorneys has lowered market prices. Tesla also relies on their claim that their rates for in-house counsel are far lower. The Court does not find the rate that Tesla chooses to pay its in-house counsel to have bearing on the reasonableness of Plaintiff’s attorney’s fees. Plaintiff’s counsel in Song-Beverly actions bear an entirely different risk than those of in-house counsel for automobile manufacturers and the clientele they serve bear entirely different burdens.

In considering the reasonableness of the attorney’s fees the Court may factor in the complexity of the litigation and the sophistication of the work required. (Morris supra, at 41.) Here, the Court must contrast Plaintiff’s showing of a reasonable hourly fee with the relatively simple nature of the litigation. Considering the nature of the work performed on the file, the Court finds a reasonable rate for the work performed would be $400 an hour; this is consistent with findings of other trial courts in awarding fees to plaintiff’s counsel.

Number of Hours

In determining the reasonable nature of the hours billed in a Song-Beverly matter which has settled, the Court is primarily concerned with when a serious offer of settlement was accepted. Tesla argues that the hours billed after the July 5, 2023 purchase offer was made are unreasonable.  As no settlement was forthcoming for months after the July 5, 2023 offer, the Court disagrees with Tesla’s argument.

As previously stated, Plaintiff accepted the § 998 offer on September 18, 2023. For purposes of a determination on billed hours, the Court finds acceptance of the § 998 offer to be the focal point. However, it appeared events transpired after acceptance which necessitates the involvement of Plaintiff’s counsel.

It appears some back-and-forth occurred throughout early October regarding Tesla and surrender of the vehicle pursuant to the § 998 offer. (Mot. Exh. L.) Plaintiff’s counsel contends that Tesla was required to pay the lender for the vehicle on September 18, 2023, but failed to do so. (Haddad Decl. ¶ 19.) Plaintiff contends this led to additional delays in the filing of the notice of settlement and caused Plaintiff to draft a motion to enforce the settlement. (Id.; see also Mot. Exh. B. p. 5.)

It is unclear from the submissions of the parties when Tesla paid off the lender in fulfillment of its contractual obligations under the § 998 offer. What is clear is that Tesla had 30 days in which to fulfill its obligations pursuant to the settlement, as noted in paragraph two of the agreement. (See Mot. Exh. K ¶ 2.) This means Tesla had until October 18 to pay the lender and negotiate a surrender of the vehicle. It appears from the billing entries that this did not happen.  In other words, Tesla did not comply with the terms and time frame it had agreed upon. (See Mot. Exh. C., Entry for 10/24/23 [“Telephone conversation with client re delay of payment from Tesla and motion to enforce settlement”].)

Given the nature of the communications with Tesla regarding the language of the release and Tesla’s delay in complying with its obligations under the 998 agreement, the Court finds the hours expended on this case were reasonable.

The Court finds an exception exists to the amount of hours billed in connection with the October 18, 2023 case management conference. In the email exchange attached as Exhibit L, it appears that counsel for Plaintiff refused to file a notice of settlement which would have caused the October 18, 2023 hearing to come off calendar. Plaintiff’s counsel argued it was under no legal obligation to file a notice under C.R.C. Rule 3.1385 because, in Plaintiff’s view, the case had not settled until payment was made and the vehicle surrendered. (Mot. Exh. L at p.2.) The Court finds this argument unpersuasive.

C.R.C. Rule 3.1385 makes clear that parties seeking affirmative relief are required to file written notice of settlement without delay. The notice of settlement can be conditional or unconditional.   A Notice of Settlement is not a request for dismissal, and under the Rules of Court, a party may extend the date to file a notice of dismissal if there is good cause, e.g., the defendant has not paid.  Likewise, C.C.P. §664.5 permits dismissals with retained jurisdiction by the Court should a party breach the settlement.  Accordingly, the billing entry associated with attending the case management conference on October 18, 2023 shall be stricken from Plaintiff’s request.

Lodestar Multiplier

Plaintiff does not request a lodestar multiplier therefore one is not awarded.

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 such a multiplier is on the prevailing party. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138.)

Given the routine work done in this case and the results obtained in this lemon law area, a multiplier is not appropriate. The attorney’s fees being awarded under the lodestar calculation appropriately compensate Plaintiff’s attorneys at a reasonable hourly rate for the number of hours spent on this case. Any contingency risk factor is already accounted for in the hourly rates.

Conclusion

The Court awards attorney’s fees at the number of billed hours attested to by Plaintiff’s counsel with the exception of the hour attributed to the October 18, 2023 case management conference. The Court awards these fees at a reduced rate of $400 per hour. In total Plaintiff’s counsel billed 63.6 hours (52.5 billed by attorney Haddad, and 11.9 billed by attorney Rashedi.) This results in attorneys fees in the amount of $25,440.

Tesla’s opposition contains no objection to the expenses asserted in Plaintiff’s motion. As such, the Court awards costs expenses in the requested amount of $711.40.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

George Godoy Maranan’s Motion for Attorney’s Fees came on regularly for hearing on February 9, 2024, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

THE MOTION FOR ATTORNEYS FEES IS GRANTED.

PLAINTIFF IS ENTITLED TO ATTORNEY’S FEES IN THE AMOUNT OF $25,440 AND COSTS IN THE AMOUNT OF $711.40.

UNLESS ALL PARTIES WAIVE NOTICE, PLAINTIFF TO GIVE NOTICE.

IT IS SO ORDERED. 

DATE:  February 9, 2024                            _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles