Judge: Mark H. Epstein, Case: 24SMCV02891, Date: 2025-05-27 Tentative Ruling

Case Number: 24SMCV02891    Hearing Date: May 27, 2025    Dept: I

This is a fee motion brought after the parties in this Song-Beverly Act case settled the merits.  Plaintiff seeks $30,410.50 in fees as well as costs.  Defendant believes fees ought to be about $8000. 

Courts are to award a prevailing plaintiff in a Song-Beverly case a reasonable fees, which the court calculates using the lodestar approach.  That means the reasonable hourly rate multiplied by the reasonable number of hours worked.  The court can then apply a multiplier—up or down—to account for other factors.  Although one new to the law might find it counter-intuitive, the fee awarded is not to be based on the actual recovery.  The Legislature has determined that the amounts often at issue in a Song-Beverly case would not be sufficient to attract legal talent, and therefore it is well settled that the lodestar approach is the right one, even if it turns out that the fees exceed the actual recovery (although that is not the case here).  The parties agree that plaintiff prevailed for purposes of the Act.  Accordingly, plaintiff is entitled to fees.  The debate is as to the amount.

Plaintiff makes out its prima facie lodestar case by submitting its billing information setting for the attorney doing the work, the date the work was done, the amount of time spent on that day, a brief description of the work, and the attorneys’ hourly rate.  Plaintiff’s counsel states that the hourly rates charged are consistent with the Laffey Matrix.  The court notes that the billing statements are evidence of the work done, but not as strong as they would be if plaintiff’s counsel actually billed by the hour.  Where bills are actually sent and paid by the client, the court can infer that the bills are reasonable in part because someone actually paid them.  That is not the case here.  The bills were created and the entries made with no expectation that the client would actually pay those amounts.  But having said that, the declarations are submitted under penalty of perjury and the court presumes that the billing entries are contemporaneously created at the time the work was done.  Although without the imprimatur of actual payment, the billing statements remain evidence and the court begins by taking the statements at face value.

Defendant attacks the fee in a variety of ways.  Its first argument is more of a stage-setting argument, and the court does not find it compelling.  The argument is that the business of Lemon Law lawyers is to take a case, work it up until enough hours have been spent to justify the case, and then (but only then) settle the case.  In other words, defendant argues, a plaintiff’s firm will never settle early because it would not generate the fees necessary to justify the case.  The court will not take such a jaundiced view of the Lemon Law plaintiff’s bar.  These lawyers, like all other lawyers, have ethical duties not only to their clients but to the profession and the court.  They violate their duties by refusing to settle until some artificial threshold is met.  Defendant attempts to support its negative view of opposing counsel by noting that defendant tried for a while to get a settlement demand from plaintiff, but to no avail.  Perhaps that is so.  But it is not a problem fully of plaintiff’s making.  Defense counsel well knows what plaintiff paid for the car.  Defendant therefore had the ability to make a settlement offer at any time.  And lest one think that it would just be ignored, counsel could have made the offer in the form of a 998.  Had that been done, and had the ultimate settlement or judgment been for less than the offer, the court would likely have awarded little or no fees—at least for the period after the offer was made.  True, there are disadvantages of a 998.  It sets a floor beneath which plaintiff is unlikely ever to go.  Yet it was a tool defendant had.  The court does not see that defendant made a 998 offer or any offer.  In short, the court will not discount or reduce the fee sought on the theory that plaintiff’s counsel was milking the case or refusing to settle simply to gin up a bill.

But defendant does make other attacks.  One attack—and one which the court finds is appropriate—is the default.  According to the defense, it was trying to get a demand from plaintiff’s counsel, and plaintiff’s counsel kept saying it was working on it.  The time to answer was extended by agreement to a point, but then defendant apparently just assumed that it was being extended although there was no actual agreement.  That led plaintiff to obtain a default.  Plaintiff refused to vacate the default, and defendant ultimately had to bring a motion.  The court agrees with the defense that no fees are recoverable for that time.  The lodestar will award fees that are reasonable and necessary.  The default side-trip was entirely unnecessary.  Plaintiff well knew that Porsche would not default the case.  In fact, plaintiff’s counsel was actively engaged in talks with defense counsel.  If plaintiff’s counsel really believed that the talks were going nowhere and the case needed to be litigated, the professional thing to do is to fire a warning shot across the bow; tell defense counsel that plaintiff expects an answer within, say, 15 days or it will seek a default.  That puts defendant on notice that the time has come, and if defendant lets that elapse without an answer or other contact with plaintiff, then so be it.  Indeed, that is the professional way to handle the situation and it is done in every case the court has seen where the lawyers act professionally.  Plaintiff did not do that here.  Plaintiff suggests that it had to default defendant or plaintiff’s counsel might have been sanctioned.  That is true—in theory.  It is also true that—in theory—the court could win the billion dollar prize in the California Lottery.  But the court is not going to start buying private jets on that assumption.  Plaintiff’s counsel knows that in the real world no court would impose that sanction, at least without setting an OSC.  It is a makeweight argument by plaintiff that ought never have been made.  Plaintiff’s conduct regarding the default was unprofessional and unjustifiable.  The court will not reward plaintiff with fees for it.  Defense counsel quantifies this as $5790, and the court has no reason to second-guess that calculation.

Defendant also claims that some of the work for which plaintiff billed was clerical.  Plaintiff notes that there is nothing wrong with billing for clerical work unless that ought to be part of the overhead.  The court has looked at the work involved and tends to agree that it ought to have been part of the overhead—at least given the hourly rates charged here.  Typically, things like making copies or calendaring is overhead.  That is $615 according to the defense.

Defendant also claims that there is duplicate or unneeded work.  The court does not see that the work is really duplicative in nature for the most part, so that aspect of the fees will not be cut.  However, there do appear to be some situations where two attorneys prepare a relatively routine form.  That amount is $718, and it will be reduced.

Defendants contend that there is padding on the moving papers.  The court does not see that, and the court will not reduce the fees on that theory.  However, the $1890 for future work (returning the car) does seem improper and there will be a reduction for that.

Finally, defendants contend that the hourly rates are too high and that the court should apply a blended rate or just reduce the rates.  The court does not see good evidence to impose a blended rate here.  Much of the work done was not done by the highest rate lawyers, so there is no reason to believe that plaintiff shifted the work to higher hourly rate billers to jack up the fee.  Rather, the division of tasks seems appropriate.  Nor does the court have reason to believe that the lower rates defendant proposes are better.  The court will accept the hourly rates.

That leaves costs.  Defendant does not really challenge the costs other than the default.  The court agrees on the default costs and will not award them.  That is about $170.

The court must also decide whether to apply a multiplier.  Plaintiff’s counsel did not suggest a positive multiplier, which the court appreciates.  On the other hand, the defense suggests a negative multiplier because plaintiff did not provide a settlement demand when requested.  The court has some sympathy for the argument.  And although counsel was not obligated to try and settle early, the refusal to engage might have caused the case to drag on longer than it should have dragged on.  But defendant has just not made out its case in that regard.  Defendant has not shown that it made an early demand that was met with radio silence, let alone a 998 demand.  While the court would have appreciated it had plaintiff engaged earlier (and having done so but being rebuffed may have led to a positive multiplier), the court will not reduce the fee on that basis.  The court notes that it did consider a 10% reduction due to the default conduct but ultimately decided not to impose it.

Accordingly, the court will reduce the requested fee by $9013 and costs by $170.  That leads to a fee award of $21,397.50.  Costs are $869.05.