Judge Mel Red Recana, Case Number: BC715391, Date: 2024-08-15 Tentative Ruling

The court GRANTS Plaintiff’s motion for attorney’s fees in the reduced amount.

On July 26, 2018, Plaintiff Louis J. Palos (“Palos” or “Plaintiff”) filed the underlying lemon law action against Defendant Kia Motors (“Kia” or “Defendant”) asserting six causes of action for (1) violation of subdivision(d) of the Civil Code Section 1793.2; (2) violation of subdivision(b) of Civil Code section 1793.2; (3) violation of subdivision(a)(3) of civil code section 1793.2; (4) breach of express warranty; (5) breach of implied warranty of merchantability; and (6) fraud by omission.

On November 9, 2018, the Court sustained Defendant Kia’s demurrer as to the causes of action regarding (1) civil code section 1793.2(a)(3); (2) breach of implied warranty of merchantability; and (3) fraud by omission with twenty days for leave to amend. (Bokmuller Decl., ¶ 10.) Plaintiff alleges that on February 26, 2012, he purchased a 2012 Kia Optima (“Subject Vehicle”) for a total purchase price of approximately $35,655.12 which was manufactured and or distributed by Defendant. (See Carvalho Decl., ¶3, Ex. 1.) As a result of the various defects, Plaintiff claims he was forced to take the Vehicle to the dealership at least eight times for repairs, but Kia was unable to conform the Vehicle to warranty or provide Plaintiff with restitution in compliance with its affirmative obligation under the Song-Beverly Act. (Id. at ¶¶6-13.) Thus, Plaintiff initiated the underlying action.

On November 29, 2018, Plaintiff filed his First Amended Complaint (“FAC) which is now the operative complaint. Defendant then filed another demurrer, as to Plaintiff’s third, fifth, and sixth causes of action. (Bokmuller Decl., ¶ 11.) The Court then sustained Defendant’s demurrer as to the fraud by omission claim, without leave to amend.[1] (Id.)

After five years of litigation, Defendant and Plaintiff reached a settlement agreement pursuant to CCP 998 and Defendant Kia agreed to buy back the Vehicle for $99,000.00, plus attorneys’ fees, costs, and expenses by a single motion to the Court. (Carvalho Decl., ¶ 123, Ex. 8.)

Thus, on April 3, 2024, Plaintiff, represented by Successor-In-Interest, Giselle Palos, brought the instant motion. (Plaintiff himself has passed away since commencing the underlying action.) Plaintiff filed the instant motion concurrently with a Request for Judicial Notice, a Proposed Order, an Exhibit List, the Declaration of Plaintiff’s attorney, Tiona Carvalho, (“Carvalho Decl.”), and the Declaration of Plaintiff’s attorney Payam Shahian (“Shahian Decl.”).

On June 18, 2024, Defendant Kia filed an Opposition, Defendant’s Objections, and the Declaration of Tammara N. Bokmuller (“Bokmuller Decl.”).

On June 26, 2024, Plaintiff filed the Amended Motion for Attorneys’ Fees which the Court is treating as the operative motion.

On August 8, 2024, Plaintiff filed the Reply, Evidentiary Objections to Defendant, Plaintiff’s Response to Defendant’s Objections, and the Declaration of one of Plaintiff’s attorneys, Angel M. Baker (“Baker Decl.”).

Plaintiff requests the Court award $155,102.89 in attorneys’ fees. This amount consists of (1) $100,386.00 in attorneys’ fees for Strategic Legal Practices, APC (“SLP”); (2) a 1.35 multiplier enhancement on the attorneys’ fees (or $35,135.10); (3) $16,081.79 in costs and expenses for SLP; and (4) an additional $3,500 for Plaintiff’s counsel to review Defendant’s Opposition, draft the Reply, and attend the hearing on the instant motion.

Plaintiff argues that Counsels’ hourly rates ranging from $385 per hour to $620 per hour is consistent with hourly rates for attorneys in Los Angeles with similar skill and background. In light of numerous factors, including but not limited to the skill demonstrated by Plaintiff’s Counsel, the results obtained, the risk of the contingency fee and non-payment, and the serious 5-year delay in payment, Plaintiff argues the 1.35 multiplier is appropriate.

Defendant requests that pursuant to Evidence Code §§ 451, 452, and/or 453, the Court take Judicial Notice of Exhibits 1-17 which are all attached to the Declaration of Payam Shahian:

Exhibit 1 is an order on attorney’s fees and prejudgment interest in the lemon law matter of Abraham Forouzan v. BMW (United States District Court for the Central District of California Case No. 2:17-cv-03875-DMG-GJS).

Exhibit 2 is an order on attorney’s fees, costs and expenses in the lemon law matter of Joshua Holeman v. FCA (United States District Court for the Central District of California Case No. 2:17- cv-08273-SVW-SK).

Exhibit 3 is an order on attorneys’ fees, costs and expenses in the lemon law matter of Catherine Shepard v. BMW (Los Angeles Superior Court Case No. BC622506).

Exhibit 4 is an order on attorneys’ fees and prejudgment interest in the lemon law matter of Jerry Zomorodian v. BMW (United States District Court for the Central District of California Case No. 2:17-cv-5061-DMG(PLAx)).

Exhibit 5 is an order on attorneys’ fees and prejudgment interest in the lemon law matter of Zargarian v. BMW (United States District Court for the Central District of California Case No. 2:18-cv-04857-RSWL-PLA).

Exhibit 6 is an April 29, 2021 Minute Order granting plaintiff’s Motion for Attorney’s Fees, Costs & Expenses in the lemon law matter of Jose Medina v. KMA (Los Angeles Co. Super. Ct., Civil Case No. 19STCV02985).

Exhibit 7 is a May 10, 2021 Tentative Ruling granting plaintiff’s Motion for Attorney’s Fees, Costs & Expenses in the lemon law matter of Michelle Williams v. KMA (Los Angeles Co. Super. Ct., Civil Case No. BC722351).

Exhibit 8 is an order on attorneys’ fees in Oscar Millan vs. Kia Motors America, Inc., (Los Angeles Co. Super. Ct., Civil Case No. BC710535).

Exhibit 9 is a March 14, 2022 order granting Plaintiff’s’ Motion for Attorney’s Fees, Costs, and Expenses in the Song Beverly matter of Jason J. Arnold, et al.. vs FCA US, LLC. Et al. (Los Angeles Superior Court Case No. 19STCV26274).

Exhibit 10 is an order on Plaintiff’s Motion for Attorneys’ Fees, Costs, and Expenses in the matter of Mo Rahman v. FCA US, LLC et al., (United States District Court for the Central District of California Case No. 2:21-cv-02584).

Exhibit 11 is a June 13, 2022 Minute Order granting Plaintiff’s Motion for Attorneys’ Fees, Costs, and Expenses in the lemon law matter of Klingenberg v. KMA (Los Angeles Co. Super. Ct., Civil Case No. BC709888).

Exhibit 12 is a January 24, 2023, Minute Order granting Plaintiff’s Motion for Attorneys’ Fees, Costs, and Expenses in the lemon law matter of Sandra J. Williams et al v. Ford Motor Company (United States District Court for the Central District of California Case No.: 5:21-cv- 01346-SPG-SHK).

Exhibit 13 is a true and correct copy of the Jul 19, 2021 Order in the matter of Hoyt v. FCA, US LLC Orange Co. Super. Ct., Civil Case No. 30-2019-01066585-CU-BC-CJC).

Exhibit 14 is a April 24, 2023 Minute Order granting Plaintiff’s Motion for Attorneys’ Fees, Costs, and Expenses in the lemon law matter of Sergio Proa v. Kia Motors America Inc. (Los Angeles Co. Super. Ct. Civil Case No. BC716647).

Exhibit 15 is the Francsico Rodriguez and Norma Rodriquez v. Hyundai Motors America. (Los Angeles Co. Super. Ct. Civil Case No. 21STCV01655) July 6, 2023, Minute Order.

Exhibit 16 is the Charles Steven Sedlacek IV v. General Motors, LLC. (Los Angeles Co. Super. Ct. Civil Case No. 21STCV23811) October 16, 2023, Minute Order.

Exhibit 17 is an order on attorneys’ fees in Holcomb v. BMW of N. Am., LLC, Case No. 18CV475JM(BGS) 2020 WL 759285 (S.D. Cal. Feb. 14, 2020).

Defendant makes Objections 1-37 with respect to the Shahian Declaration and attached exhibits which the Court rules on as follows:

Plaintiff argues in response to Defendant’s objections that in the Song-Beverly context, the California Court of Appeal has found that counsel may present evidence/declarations regarding hourly rates that other courts have previously awarded them for comparable cases to demonstrate the prevailing rate in the community for comparable legal services. Goglin v. BMW of N. Am., LLC, 4 Cal. App. 5th 462, 473 (2016) (in Song-Beverly case, court accepted declarations demonstrating hourly rates that “various state and federal courts had previously awarded [plaintiff’s attorney] attorney fees for comparable work at comparable hourly rates” as evidence of reasonableness of rates); See also Heritage Pacific Financial, LLC v. Monroy, 215 Cal.App.4th 972, 1009 (2013) (“Affidavits of the plaintiffs’ attorney and other attorneys regarding prevailing fees in the community, and rate determinations in other cases, particularly those setting a rate for the plaintiffs’ attorney, are satisfactory evidence of the prevailing market rate.”) (emphasis added). Plaintiffs are offering these rulings as evidence of Plaintiffs’ counsels’ reasonable hourly rates in the community, not as binding authority that the Court must follow; these rulings simply shed light on what courts have recognized as the prevailing market rate.

Legal Standard

“As a general rule, the prevailing party may recover certain statutory costs incurred in the litigation up to and including entry of judgment. [Citations.] These costs may include attorney fees, if authorized by contract, statute . . . or law. [Citation.] . . . attorney fees require a separate noticed motion. [Citations.]” (Lucky United Props. Inv., Inc. v. Lee (2010) 185 Cal.App.4th 125, 137.) This motion may be brought: (1) after judgment or dismissal, for fees incurred “up to and including the rendition of judgment in the trial court--including attorney’s fees on an appeal before the rendition of judgment…”; and (2) on an interim basis, upon remittitur of appeal, of only fees incurred on appeal. (CRC, Rule 3.1702(b)-(c).)

In determining what fees are reasonable, California courts apply the “lodestar” approach. (See, e.g., Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (See PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, the “[t]he lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Id.) Relevant factors include: “(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, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

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.

Plaintiff argues that as the prevailing party under the SBA, Plaintiff is entitled to recover all fees, costs, and expenses reasonably incurred in the “commencement and prosecution” of this action. (See Carvalho Decl. ¶¶ 123, Ex. 8.) See Cal. Civ. Code § 1794(d). See Reck v. FCA US LLC, 64 Cal. App. 5th 682, 698 (2022) (Plaintiff is entitled to recovery of all reasonably incurred attorney fees when the ultimate settlement amount exceeded manufacturer’s prior settlement offers).

Here, on July 1, 2019, Defendant offered to buy back the Vehicle for $10,000.00 plus attorneys’ fees, costs, and expenses pursuant to Cal. Civ. Code § 1794(d). (See Carvalho Decl. ¶¶ 48, Ex. 3.) On December 15, 2022, three and half years after the first 998 offer, Defendant served their second 998 Offer, offering to buy back the Vehicle for $34,000.00 plus attorneys’ fees, costs and expenses pursuant to Cal. Civ. Code § 1794(d). (Id. at ¶¶ 95, Ex. 5) On September 14, 2023, Defendant served their third 998 Offer, offering to buy back the Vehicle for $50,000.00 plus attorneys’ fees, costs and expenses pursuant to Cal Civ. Code § 1794(d) by single motion to the Court. (Id. at ¶¶ 116, Ex. 7). On October 3, 2023, Defendant served the fourth 998 Offer, offering to buy back the vehicle for $99,000.00 plus attorneys’ fees, costs and expenses pursuant Cal. Civ. Code § 1794(d). Plaintiff accepted Defendant’s fourth offer. (Id. at ¶¶ 123, Ex. 8.) Thus, under Reck, Plaintiff argues he is entitled to attorneys’ fees, costs, and expenses through the settlement of the case because the fourth 998 Offer of $99,000.00 was for a far greater amount than Defendant’s initial 998 Offer to Compromise.

With respect to the multiplier, Plaintiff argues that an enhancement of 1.35 is reasonable given (1) Plaintiff’s Counsel obtained an excellent outcome in securing a $99,000 settlement; (2) the risks of taking Plaintiff’s case on contingency were high considering Plaintiff’s Counsel went five years without pay and could have never received payment; and (3) there has been a significant five-year delay in payment. The Court notes that Plaintiff does not address the factor regarding novelty and difficulty presented by the case. However, given the five-year delay in payment, the four 998 offers, and the difference between the first 998 offer ($10,000) and the fourth and final 998 offer ($99,000), the Court finds the 1.35 multiplier reasonable and warranted.

Plaintiff argues Counsels’ rate and hours billed are reasonable because the California Appellate Courts have found similar rates reasonable in Song-Beverly cases. Although the Court has judicially noticed Plaintiff’s Exhibits, the Court agrees with Defendant on Opposition that such orders (of other trial courts) are not binding on thus trial court. However, the matters were judicially noticed as to their existence and to provide context. They orders and decisions therein do not govern in this matter. Defendant argues on Opposition that Counsels’ rate ranging from $496 per hour to $620 is unreasonable, given the simplicity of the case. Defendant contends that reducing the rate to $350 would be a more appropriate and reasonable. The Court disagrees and finds Plaintiff’s range of hourly rates reasonable considering the attorneys’ range of experience and qualifications.

Defendant further argues that Plaintiff’s billed hours are unreasonable because Plaintiff’s fee recovery is based on 227.60 hours billed. Plaintiff argues such hours were necessary considering Plaintiff had to litigate the instant matter for five-years because Defendant did not offer a reasonable settlement sooner. Moreover, Plaintiff provides the following work, including but not limited to, warrants the total hours billed: the complaint; Plaintiff’s FAC; defending the deposition of Plaintiff’s Successor-In-Interest, Giselle Palos; attending and conducting the deposition of Defendant’s PMQ, Sandra Beshai; opposing Defendant’s demurrer on both the Complaint and FAC; opposing Defendant’s petition for coordination and motion to stay; numerous discovery motions and responses; opposing and defeating Defendant’s MSJ; and a protective order. On Opposition, Defendant argues that hours billed for Plaintiff’s fraud claim should be deducted considering Plaintiff’s fraud claim was dismissed on demurrer. (Opp., pg. 9.) Specifically, Defendant argues that hours billed for Plaintiff trying to seek leave to amend to bring a second amended complaint primarily to revive the fraud claim should be deducted from the fee award. (Bokmuller Decl., Ex. A.) Defendant argues that Plaintiff incurred $14,137.00 in trying to seek leave to amend. Defendant also argues that by overstaffing the case with seventeen (17) attorneys, Plaintiff’s case was litigated with significant inefficiencies which has resulted in duplicative billing entries. ((Opp., pg. 9-10.)

The Court does not find it problematic that seventeen attorneys were staffed on the case, as it does not change the number of hours billed if the total number of hours expended is reasonable. Except as to the hours spent in reviving the fraud claim, the Court finds it reasonable to bill over 200 hours given the five-year timeframe and number of motions filed, including an MSJ. It is reasonable to deduct the hours spent in an attempt to move the Court for leave to amend a second time when the motion brief evidences the primary purpose of that effort was to revive the fraud claim which Defendant had demurred to. Moreover, the Court sustained that demurrer, with respect to the fraud claim, without leave to amend. Thus, the Court deducts the $14,137.00 incurred.

As such, the reduced amount of attorneys’ fees is for $140,965.89. Additionally, the Court will subtract the enhanced multiplier amount of $5,230.69 for that portion of fees, resulting in the total reduced amount of $135,735.20. Although Defendant requested a significantly greater deduction, the Court finds the public policy related to encouraging settlement in such matters governs: Defendant’s failure to make an acceptable offer earlier in the litigation came at its own risk.

For the foregoing reasons, the court GRANTS Plaintiff’s Motion for Attorneys’ Fees in the reduced amount of $135,735.20.

[1] Defendant claims that thereafter, Plaintiff spent over $14,00 attempting to get the fraud claim back into the case which they did not succeed in doing. Thus, Defendant argues the attorneys’ fees associated with the fraud causes of action should not be recoverable.

LOUIS J. PALOS ; Plaintiff, vs. KIA MOTORS AMERICA, INC., AND DOES 1 through 10, inclusive Defendants.	Case No. BC715391

	Department 45

	[Tentative] Order

	Action Filed: 7/26/2018 FAC Filed: 11/29/2018