Judge Jon R. Takasugi, Case Number: 20STCV08464, Date: 2025-01-22 Tentative Ruling

On 3/2/2020, Plaintiff Domingo Loza filed suit against Kia Motors America, Inc. alleging: (1) breach of express warranty; (2) breach of implied warranty; and (3) violation of the Song Beverly Act section 1793.2.

On 12/8/18, Plaintiff purchased a new 2019 Kia Forte from Defendant. After a series of unsuccessful presentations for repairs under warranty, he filed this lawsuit on 3/22/2020.

On 1/20/2022, Kia served an Offer to Compromise, pursuant to Code of Civil Procedure section 998, in which it agreed to repurchase Plaintiff’s vehicle for $40,000.00. The matter did not settle and the case proceeded to jury trial on 8/15/2022.

Sometime between the §998 and trial, Plaintiff’s vehicle was in a collision and was declared a total loss.[1] Plaintiff was paid $18,602.88 by his insurance company. At trial, the jury found in favor of Plaintiff and awarded him $36,414.00 on 8/26/22. On 11/7/22, Kia filed a motion to offset Plaintiff’s award by the amount he had already received which this Court granted on 12/2/22. The Court signed an order reducing Plaintiff’s $36,414 by the $18,602.88 he had already received for a net of $17,811.12 (see, Order signed 1/23/23, wherein the Court left blank the amounts for costs and fees). Plaintiff appealed.

Both sides filed Memorandum of Costs on 2/7/23, and after a CCP §473(b) misstep by Defendant, the Court finalized costs and awarded Plaintiff $4,333.50 in costs, and awarded Kia $4,550.45 in costs. In doing so on 7/10/23, the Court acknowledged the §998 and calculated its limitation on Plaintiff’s recovery of costs.

While Plaintiff’s appeal was pending, the California Supreme Court decided Niedermeier v. FCA US LLC (2024) 15 Cal.5^th 792. This prompted the parties to settle for the original jury award of $36,414 and call it even on the costs. A settlement agreement was executed in August, 2024. (See, Declaration of Roger Kirnos, Exhibit F, filed 11/5/24.)

Plaintiff now moves for $394,613.25 in attorney fees, reflecting a lodestar amount of $263,075.50, plus a lodestar enhancement of 0.5, in the amount of $131,537.75.

The party claiming attorneys’ fees must establish entitlement to such fees and the reasonableness of the fees claimed. (Civic Western Corporation v. Zila Industries, Inc. (1977) 66 Cal.App.3d 1, 16.) “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties[.]” (CCP §1021.)

In determining what constitutes a reasonable compensation for an attorney who has rendered services in connection with a legal proceeding, the court may and should consider the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorneys’ efforts, their learning, their age, and their experience in the particular type of work demanded the intricacies and importance of the litigation, the labor and necessity for skilled legal training and ability in trying the cause, and the time consumed. (Stokus v. Marsh (1990) 217 Cal.App.3d 647, 657.)

In determining the proper amount of fees to award, courts use the lodestar method. The lodestar figure is calculated by multiplying the total number of reasonable hours expended by the reasonable hourly rate. “Fundamental to its determination … [is] a careful compilation of the time spent and reasonable hourly compensation of each attorney … in the presentation of the case.” (Serrano v. Priest (1977) 20 Cal.3d 25, 48 (Serrano III).) A reasonable hourly rate must reflect the skill and experience of the attorney. (Id. at 49.) “Prevailing parties are compensated for hours reasonably spent on fee-related issues. A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 (Serrano IV); see also Weber v. Langholz (1995) 39 Cal.App.4th 1578, 1587 (“The trial court could make its own evaluation of the reasonable worth of the work done in light of the nature of the case, and of the credibility of counsel’s declaration unsubstantiated by time records and billing statements.”)

Reasonable attorney fees should be based on an objective standard of reasonableness, i.e., the market value of services rendered, not on some notion of cost incurred. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1090.) The value of legal services performed in a case is a matter in which the trial court has its own expertise. (Id. at 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.) The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case. (Id.)

Plaintiffs’ counsel claims the following hourly rates for the attorneys who worked on this case:

- Amy Morse: $350/hour for 2020, $400/hour for 2021, $425/hour for 2022 and $450/hour for 2023

Here, Defendant requests that Plaintiff’s fees be limited to the $10,314.00 that Plaintiff’s attorneys had billed as of the date of Kia’s offer to compromise. Given that this figure was calculated based on the rates claimed in Plaintiff’s motion, the Court finds Defendant has implicitly conceded to the reasonableness of those rates at least up until the date of the offer to compromise. As such, the Court does not adjust the rates claimed for the fees awarded.

Plaintiff argues that he recovered $54,225.12 under the Settlement Agreement, whereas Defendant argues that Plaintiff only recovered $36,414 under the Agreement. The distinction is important as CCP section 998, subdivision (c)(1) provides:

If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover his or her postoffer costs and shall pay the defendant's costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.

On 1/20/2022, Kia served an Offer to Compromise, pursuant to Code of Civil Procedure section 998, in which it agreed to repurchase Plaintiff’s vehicle for $40,000.00. As such, if Plaintiff recovered less than the amount offered in the initial §998 offer, Plaintiff is limited to recovering fees and costs incurred as of the date of Kia’s offer (See, Declaration of Roger Kirnos, Exhibit D, filed 11/5/24 for Kia’s §998).

Then, Defendant argues, that on 9/20/2024, the parties settled the case for $36,414.00 and stipulated to the dismissal of the appeals. (Chinery Decl. Exh. 8 [settlement agreement].) At the same time, the parties agreed that the trial Court cost awards of $4,550.45 to Kia and $4,333.50 to Plaintiff would offset, and that neither party would pay the other party the respective amounts the trial Court awarded, but that Plaintiff could seek his attorney fees and appellate costs, subject to all applicable defenses. (Id.)

After review, Plaintiff’s claim of recovering $54,225.12 ($36,414.00 + 17,811.12) in the Settlement Agreement it completely unsupported. The amount of the jury verdict, $36,414, is clearly the only amount being tendered.

After Niedermeier was decided, Plaintiff’s appellate counsel wrote to Kia’s appellate counsel to ask: “In light of Niedermeier, it seems silly to go to the trouble of briefing this appeal. Is there any chance of settlement -- i.e., Kia pays Plaintiff the $18,602.88 offset, and Plaintiff dismisses the appeal.” (Sprangers Decl. ¶ 4 & Exh. C.) Thus, from Plaintiff’s initial offer, the parties understood the settlement to merely reinstate the jury’s verdict, consistent with Plaintiff’s appellate challenge to this court’s reduction of the award by the $18,602.88 that Plaintiff received from his insurance company.

Kia’s appellate counsel responded to the offer by communicating Kia’s understanding that under this proposed settlement, Plaintiff expected Kia to pay (1) the “$17,811.12 judgment principal” before subtracting the amount of Kia’s costs award, (2) the amount of Plaintiff’s costs award, and (3) “an additional $18,602.88 in consideration for Plaintiff’s dismissal of the appeals.” (Id.) Plaintiff’s counsel replied that this proposal was “acceptable to Plaintiff,” but suggested having the parties’ respective costs awards cancel each other out because there was only a “small gap between the two.” (Id.) She added that “the idea is to make sure that the payment to Plaintiff is kept clear: Kia pays Plaintiff the total sum of $36,414.” (Id.) Again, Plaintiff’s own representations show that the settlement was intended to be an all-in payment.

Plaintiff’s counsel then took the lead in reducing the parties’ agreement to writing. (Sprangers Decl. ¶ 5.) In an email, Kia agreed to certain of Plaintiff’s redlined revisions (including deleting “release” language from the settlement agreement) because of “the mutual understanding that this is intended by both sides to be the complete and final end of it.” (Sprangers Decl. ¶ 6 & Exh. E.)

Plaintiff argues that he recovered more than Kia’s $40,000.00 §998 offer because, if he had accepted that offer, he would have surrendered the vehicle. Instead, because he rejected the offer, Plaintiff “got to keep possession of his vehicle. Kelly Blue Book has a value of about $7,000.00.” (Kirnos Decl. ¶ 34.) However, Plaintiff did not get to keep possession of his vehicle. The insurance documents that Plaintiff produced in this action make clear that his insurance company paid him $18,602.88 because he chose not to retain possession of the car. (See, Exhibit 11 to the Declaration of Jacqueline Bruce Chinery [explaining how his insurance company calculated the $18,602.88 payment].) Even if Plaintiff had retained possession of the vehicle, there is no competent evidence or details that the vehicle was worth $7,000.00, especially one Plaintiff wholly admits was a lemon.

After review, the Court finds that §998, subdivision (c)(1) applies. As such, Plaintiff’s recovery is limited to the $10,314.00 that Plaintiff’s attorneys had billed as of the date of Kia’s offer to compromise. This figure was calculated based on the submitted invoice attached as Exhibit A to the Declaration of Roger Kirnos in support of Plaintiff’s motion, which shows that as of January 20, 2022, Knight Law Group, LLP had billed $10,314.00.

The Court declines to award a multiplier. The hourly rates set forth above capture the skill and the contingent nature. Thus, any multiplier would be duplicative of the calculations set forth above. Furthermore, an analysis of the relevant factors do not justify an enhancement award.

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org. If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative. If all parties to a motion submit, the court will adopt this tentative as the final order. If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. For more information, please contact the court clerk at (213) 633-0517.

[1] There was no evidence presented the collision and totaling of Plaintiff’s vehicle was in any way related to the mechanical defects he was having.