Judge: Gail Killefer, Case: 20STCV02917, Date: 2022-08-03 Tentative Ruling

Case Number: 20STCV02917    Hearing Date: August 3, 2022    Dept: 37

HEARING DATE:                 August 3, 2022

CASE NUMBER:                  20STCV02917

CASE NAME:                        Artur Altunyan v. Mercedes-Benz USA, LLC, et al.

MOVING PARTY:                Plaintiff, Artur Altunyan

OPPOSING PARTY:             Defendant, Mercedes-Benz USA, LLC  

TRIAL DATE:                        None – Notice of Settlement October 20, 2021

PROOF OF SERVICE:          OK

MOTION:                               Plaintiff’s Motion for Attorney’s Fees  

OPPOSITION:                       June 27, 2022

REPLY:                                  July 1, 2022

TENTATIVE:                         Plaintiff’s motion is granted in part. Plaintiff is awarded $17,960.00 in attorney’s fees.  Plaintiff is to give notice.

Background

This is a lemon law action arising out of Artur Altunyan’s (“Plaintiff”) purchase of a 2015 Mercedes-Benz CLS (the “Vehicle”) manufactured by Mercedes-Benz USA, LLC. (“MBUSA”) Plaintiff alleges that the Vehicle was delivered with defects and nonconformities to warranty, including engine and electrical defects. Further, MBUSA allegedly failed to repair the Vehicle despite Plaintiff allegedly presenting the Vehicle to MBUSA and its authorized representatives for repairs on several occasions, and after several failed attempts to repair all engine issues which allegedly put Plaintiff’s safety at risk.

Plaintiff’s Complaint alleges the following causes of action: (1) violation of the Magnuson-Moss Warranty Act — Breach of Written Warranty; (2) violation of the Magnuson-Moss Warranty Act — Breach of Implied Warranty; (3) violation of the Song-Beverly Act – Breach of Express Warranty; and (4) violation of the Song-Beverly Act – Breach of Implied Warranty.

On October 20, 2021, Plaintiff filed a Notice of Conditional Settlement indicating that a request for dismissal would be filed by January 12, 2022. On October 20, 2021, the court set an Order to Show Cause regarding Dismissal after Settlement for February 24, 2022. The Order to Show cause hearing was continued on the court’s own motion, with the latest continuance setting this hearing for July 11, 2022.

Plaintiff now moves for an award of attorney’s fees and costs. MBUSA opposes the motion.

Evidentiary Objections

Defendant’s Objections to Declaration of Hovanes Margarian

Overruled: 2-5

Sustained: 1

Discussion

Plaintiff requests an award of attorney’s fees in the total amount of $99,167.20, broken down as follows: (1) $49,583.60 lodestar amount; (2) $49,583.60 lodestar enhancement (2); and (3) $3,028.75 costs and expenses.

I.                   Plaintiff’s Entitlement to Attorney’s Fees

Plaintiffs request attorney’s fees as the prevailing party under the Song-Beverly Act, which allows a prevailing buyer to recover “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(d).) 

The court will proceed to analyze the merits of the parties’ arguments.

II.                Reasonable Amount of Attorney’s Fees Award

“A trial court assessing attorney fees 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.”  (Christian Research Inst. v. Alnor (2008) 165 Cal.App.4th 1315, 1321 (Christian).)  The Court “need not simply award the sum requested.  To the contrary, ascertaining the fee amount is left to the trial court’s sound discretion.”  (Ibid.)  “The reasonableness of attorney fees is within the discretion of the trial court, to be determined from a consideration of such factors as the nature of the litigation, the complexity of the issues, the experience and expertise of counsel and the amount of time involved.  The court may also consider whether the amount requested is based upon unnecessary or duplicative work.”  (Wilkerson v. Sullivan (2002) 99 Cal.App.4th 443, 448.)  “The basis for the trial court’s calculation must be the actual hours counsel has devoted to the case, less those that result from inefficient or duplicative use of time.”  (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395 (Horsford).)  “The law is clear, however, that an award of attorney fees may be based on counsel’s declarations, without production of detailed time records.  (Raining Data Corp. v. Barrenechea (2009) 175 Cal.App.4th 1363, 1375.)   

1)      Billing Rates Requested

Plaintiff submits the declaration of Hovanes Margarian (“Margarian”) in support of the rates requested by his attorneys. Margarian attests that he has been practicing law for 15 years. (Margarian Decl. ¶¶ 10,17.) Margarian attests that his usual and customary billing rate is $650 per hour for this matter, and claims that a more reasonable rate for an attorney with his experience is $764.00 per hour (Margarian Decl. ¶¶ 10-11.) Margarian also points to his experience in handling lemon law litigation in contending that his fees “in such matters range from... ($650) to ... ($750) per hour, which is reflective of [his] experience...” (Margarian Decl. ¶¶ 13, 15-16.) Counsel provides no explanation or supporting authority as to why a higher rate is reasonable. Instead, Plaintiff contends the suggested rate “is appropriate given the deferred and contingent nature of counsel’s compensation.” (Motion Memorandum of Points and Authorities (“MPA”), 4-5.) Here, the court notes that Plaintiff’s motion is already premised on the notion that such matters statutorily allow for compensation for legal counsel, but do not support the contention that any increase over an attorney’s reasonable billing rate is justified simply by the nature of their taking any risk.

Margarian further attests that he has “handled over to [sic] 2,500 such cases and presently have over 200 such pending matters. Approximately 85% of my legal practice focuses on consumer rights litigation...” (Margarian Decl. ¶12.)

In opposition, MBUSA first contends that Plaintiff’s motion is untimely as this court’s October 20, 2021 Minute Order instructed the parties to file any and all fee motions before the February 24, 2022 Order to Show Cause Hearing. (Minute Order, October 10, 2021.) However, as the parties have continued the Order to Show Cause Hearing, on the court’s own motion, several times and the parties have conferred regarding a pending attorney fees motion, the court continues with its analysis.

MBUSA also contends that the requested rates are “not only completely unreasonable, but there is also no evidence presented that Plaintiff’s counsel has actually billed any other client.. at these rates.” (Opposition, 10-11.) MBUSA also points to other departments of this court using their discretion to reduce requested hourly rates for attorneys, and asks this court to do so as well claiming “Plaintiff’s counsel claims rates that are triple actual market rates.” (Id.) Accordingly, consistent with the aforementioned decisions and rates MBUSA pays its own counsels, Defendant requests that this Court reduce Margarian’s rates to at most $350 per hour (Id.) Defendant also contends that Margarian fails to distinguish his time from that of his associates and other counsel which have worked on this case. (Id.)

In reply, Plaintiff again points to the inherent risks by asserting “Defendant knows that $200-350/hour is the standard defense rate charged by Defendant’s counsel regardless of the outcome. This is the rate with zero risk and zero advanced costs contrary to the pure contingency terms of Plaintiff’s counsel’s agreement with Plaintiff, advancing all costs at his own risk. Therefore, by offering the average the standard rate the Lemon Law attorney charges for non-contingent cases, Defendant ... blatantly omits the entire risk and reward-based economic model majorly contributing to the Plaintiff’s counsel’s hourly rate.” (Reply, 2-3.) Upon review, the court disagrees. Here, the court notes that the so-called “risk and reward-based economic model” is the entire basis for the statutory provisions allowing for the attorney fees which counsel now requests, and seeking an “additional charge” on the basis of this structure does not seem reasonable.

A trial court has broad discretion to award or reduce the requested rates and amounts in any motion for attorney’s fees. Thus, after reviewing Plaintiff’s evidence presented and the attestations of Margarian, the court exercises its discretion and reduces that the rates Margarian requested to a rate more reasonable for the Los Angeles market of $400 per hour.

2) Hours Requested

Plaintiff requests attorney’s fees in connection with a total of 64.9 hours of attorney time. (Margarian Decl. ¶9.)

In opposition, Defendant contends that the amount requested is unreasonable because Margarian’s billed times “are not actual entries, but are instead random hours assigned to generalized categories, without support.” (Opposition, 6-8.)

Defendant then points to Margarian’s entries of 25 hours for “post-filing/discovery” which “states that there was a formal vehicle inspection — when such an inspection did not take place in this case.” (Id.) Defendant also contends “Plaintiff’s counsel fails to even identify which attorney(s) performed work on the case, and instead attempts to have all tasks billed at his exorbitant rate, despite the fact that other staff and attorneys were involved in the case.” (Id.)

MBUSA then points to discrepancies and irregularities with each of Margarian’s block-billed entries and asks “Plaintiff’s hours should be reduced to at most 12 hours.” (Opposition, 10.)

In reply, Plaintiff contends that time records refute Defendant’s claims and that “representing lay consumers” requires counsel to expend significant time. (Reply, 4-7.) The court has reviewed Plaintiff’s counsel’s billing records, attached in the Margarian Declaration, and agrees with Defendant regarding the potential for double billing and excessive time spent on the itemized tasks.

Upon review of the billing records, the court finds the billing entries to be largely devoid of time and date, and any contemporaneous recordkeeping regarding which tasks were performed. Based on the complexity of issues presented in the instant motion, the court finds that the requested hours for these tasks are excessive and unnecessary. The reply was short and a good portion of it was simply a repeat of the motion briefing.

Based on this finding, the court will deduct a total 20 hours to reflect concerns regarding the block billing as mentioned above as well as anticipated hours dedicated to preparing for trial and to prepare a reply and attend the hearing on this motion.

For these reasons, the court awards attorney fees in connection with 44.9 hours of attorney time, for fees of $17,960.

1)      Multiplier

The court’s objective is to award a fee at the fair market value for the particular action.  (Ketchum, supra, 24 Cal.4th at p. 1132.)  The analysis generally begins with the lodestar figure—i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.  (Id. at pp. 1131-1132.)  The lodestar is the basic fee for comparable legal services in the community.  (Id. at p. 1132.)  The court may then adjust the lodestar to arrive at the fair market value of the legal services provided.  In adjusting the lodestar, the court considers factors including: (1) the contingent nature of the fee award, (2) the novelty and difficulty of the questions involved, (3) the skill displayed in presenting them, and (4) the extent to which the nature of the litigation precluded other employment by the attorneys.  (Ibid.) 

Plaintiff requests a multiplier of 2. (Motion, 7-9.) Specifically, Plaintiff contends that the multiplier is warranted because Plaintiff and his counsel bore substantial risk of not prevailing and suffering a substantial loss of uncompensated fees, and that “this case required considerable time and labor.” (Id.) Plaintiff contends that the multiplier is further warranted given the contingency basis with which counsel works. (Motion, 9.) However, Plaintiff provides insufficient evidence to show how the matters in this case specifically were novel and complex, relative to the lemon law matters that Plaintiff’s counsel routinely engages.

In opposition, MBUSA does not address the multiplier or enhancements. However, while the court recognizes that Plaintiff’s counsel was retained under a contingency agreement, the court does not find that Plaintiff has satisfied the second, third, or fourth Ketchum factors. Accordingly, the court denies Plaintiff’s request for a fee enhancement.

2)      Costs and Expenses

Plaintiff’s verified memorandum of costs, filed May 10, 2022, requests an award of $3,028.75 in costs and expenses. 

Plaintiff’s request, properly made on Judicial Council Form MC-010, will be addressed separately by the Clerk of Court. 

Conclusion

Plaintiff’s motion is granted in part. Plaintiff is awarded $17,960.00 in attorney’s fees.  Plaintiff is to give notice.