Judge: Michael P. Linfield, Case: 21STCV21608, Date: 2023-01-25 Tentative Ruling

Case Number: 21STCV21608    Hearing Date: January 25, 2023    Dept: 34

SUBJECT:         Motion for Attorneys’ Fees, Costs, and Expenses

Moving Party:  Plaintiff Isaac Corona-Quiles

Resp. Party:    Defendant Toyota Motor Sales, U.S.A., Inc.

The Court GRANTS in part Plaintiff’s Motion for Attorneys’ Fees in the amount of $59,026.55.

PRELIMINARY COMMENTS:

        As indicated below, the Court found that Plaintiff’s request for attorneys fees was unreasonably inflated. 

        “An attorney fee award should include compensation for all hours reasonably spent.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.) “Reasonably spent” means that “‘padding’ in the form of inefficient or duplicative efforts is not subject to compensation.” (Id.) “A plaintiff is not automatically entitled to all hours claimed in the fee request. Rather, the plaintiff must prove the hours sought were reasonable and necessary.”  (Rey v. Madera Unified School Dist. (2012) 203 Cal.App.4th 1223, 1243–44.)

        “If . . . the Court were required to award a reasonable fee when an outrageously unreasonable one has been asked for, claimants would be encouraged to make unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked in the first place. To discourage such greed, a severer reaction is needful.”  (Serrano v. Unruh (1982) 32 Cal.3d 621, 635 [cleaned up].)   “A fee request that appears unreasonably inflated is a special circumstance permitting the trial court to reduce the award or deny one altogether.” (Chavez v. City of Los Angeles (2010) 47 Cal.4th 970, 990; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137; Serrano v. Unruh (1982) 32 Cal.3d 621, 635.)

        The Court seriously considered denying Plaintiff’s request for attorneys fees because counsel’s fee request was “unreasonably inflated.”  The Court, however, decided not to do so. 

        The Court recognizes that the Song-Beverly Act is a “strongly pro-consumer” law aimed at protecting car buyers. (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 990.)  “Making attorney’s fees available to prevailing buyers . . . is designed to provide injured consumers strong encouragement to seek legal redress in a situation in which a lawsuit might not otherwise have been economically feasible.” (Wohlgemuth v. Caterpiller, Inc. (2012) 207 Cal.App.4th 1252, 1262 [cleaned up]; see also Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 34.)

        However, the Court cautions Plaintiff’s counsel that, in the future, it should ensure that it does not overstaff its cases and that it makes only a reasonable attorneys fees request.

BACKGROUND:

On June 9, 2021, Plaintiff Isaac Corona-Quiles filed his Complaint against Defendant Toyota Motor Sales, U.S.A., Inc. on causes of action involving Civil Code sections 1790, et seq., otherwise known as the Song-Beverly Consumer Warranty Act.

On July 21, 2021, Defendant filed its Answer.

On October 28, 2022, after hearing the evidence and arguments at Trial, the Jury returned the following Special Verdicts in favor of Plaintiff: (1) as to breach of express warranty, finding damages of $28,388 and imposing no penalties; and (2) as to breach of implied warranty, finding entitled restitution in the amount of $28,065. The Jury returned a mixed Special Verdict as to breach of express warranty. The Court ordered Plaintiff to prepare Judgment.

On December 8, 2022, the Court awarded for Plaintiff and against Defendant prejudgment interest in the amount of $3,889.41.

On December 22, 2022, Plaintiff filed his Motion for Attorneys’ Fees, Costs, and Expenses. Plaintiff concurrently filed: (1) Declaration of Christine J. Haw; (2) Declaration of Payam Shahian; (3) Index of Exhibits; (4) Memorandum of Costs; (5) Proposed Order; and (6) Proof of Service.

On December 23, 2022, Plaintiff filed his Amended Motion for Attorneys’ Fees, Costs, and Expenses. Plaintiff concurrently filed a Proof of Service.

On January 5, 2023, Defendant filed his Opposition. Defendant concurrently filed Declaration of Thomas M. Murphy.

On January 9, 2023, Defendant filed his Motion to Strike Plaintiff’s Memorandum of Costs, or, in the Alternative to Tax Costs. The hearing on this motion is scheduled for February 6, 2023.

On January 12, 2023, Plaintiff filed his Reply. Plaintiff concurrently filed: (1) Declaration of Payam Shahian; (2) Evidentiary Objections; and (3) Proof of Service.

ANALYSIS:

I.           Evidentiary Objections

Plaintiff filed Evidentiary Objections against the Declaration of Thomas T. Murphy. The following are the Court’s rulings on the Evidentiary Objections.  

The Court finds most of these objections frivolous. Many of the “objections” are not actually objections; Plaintiff simply disagrees with the declarant’s analysis.  (See, e.g., Plaintiff’s Evidentiary Objections, Objections Nos. 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20.) “This is hardly good advocacy, and it unnecessarily overburdens the trial court.” (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 254, fn. 3.) 

II.        Legal Standard

“Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief.” (Code Civ. Proc., § 1794, subd. (a).)

“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.” (Code Civ. Proc., § 1794, subd. (d).)

III.     Discussion

A.      The Parties’ Arguments

Plaintiff moves the Court to award $238,465.31 in attorneys’ fees, costs, and expenses. (Motion, p. 15:13–14.) Plaintiff argues: (1) that Plaintiff is entitled to all his attorneys’ fees, costs, and expenses as the prevailing party in this litigation; (2) that Defendant’s second 998 offer was invalid, unenforceable, and void; (3) that even assuming the second 998 offer was valid, Plaintiff beat the offer; (4) that Plaintiff’s lodestar fees are reasonable; and (5) that a lodestar multiplier enhancement of 1.35 is warranted. (Id. at pp. 6:14–15, 7:8, 9:26–27, 10:5, 14:3.)

Defendant opposes the Motion, arguing: (1) that Defendant’s 998 offer was valid; (2) that Plaintiff’s post-998 offer fees and costs were unreasonably incurred based on Defendant’s compliance with the statute; (3) that the result achieved at Trial does not support the attorneys’ fees requested; (4) that the hourly rates requested are excessive; (5) that the hours billed are excessive, unreasonable, duplicative, and unrecoverable; and (6) that the only multiplier allowed should be a negative multiplier. (Opposition, pp. 4:24–26, 5:5, 5:18–19, 7:14–15, 8:24, 9:20, 11:13–14, 12:9–10.)

Plaintiff reiterates his arguments in his Reply.

B.      Analysis

Plaintiff is the prevailing party in this litigation. Pursuant to the relevant sections of the Song-Beverly Consumer Warranty Act, Plaintiff is entitled to attorneys’ fees under the lodestar adjustment method. (Ketchum v. The Jury awarded Plaintiff $28,388.00 in total damages. (Minute Order dated October 28, 2022, p. 4.) Plaintiff requests $238,465.31 in attorneys’ fees, costs, and expenses. The Court will consider Defendant’s Motion to Tax Costs separately; that leaves Plaintiff’s request for attorneys’ fees of $215,400.03, which comprises a requested lodestar of $155,481.50, a multiplier of 1.35, and an additional $5,500.00 for the Reply and attendance at hearing. (Decl. Shahian, ¶ 58.)  The billing representing the requested lodestar is indicated below:

a.           Lodestar

The Court agrees with Defendant’s arguments regarding duplicative billing, unreasonable, and excessive billing. Among other concerns:

(1)       While there is no set number of attorneys who are allowed to work on a caseHowever, “it is appropriate for a trial court to reduce a fee award based on its reasonable determination that a routine, non-complex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted.”  (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 39.) “Just as there can be too many cooks in the kitchen, there can be too many lawyers on a case.”  (Id. at p. 38, quoting Donahue v. Donahue (2010) 182 Cal.App.4th 259, 272.) Here, no fewer than 16 attorneys are cited as having worked on this matter. (Decl. Shahian, pp. 6–15.).  This may be Plaintiff’s attorneys firm’s modus operandi; the Court considers this padding.  The Court finds this to be patently unreasonable for a run-of-the-mill lemon law case.

(2)       Plaintiff’s Counsel declares that they have spent 332.5 hours on this matter. (Decl. Shahian, Ex. 1, p. 13.) Even though this case went to trial, such an excessive number of hours is still unreasonable given the issues and procedural history in this matter. Defendant’s Counsel correctly notes that many of the bills are excessive, such as 8.1 hours for a deposition that lasted 2 hours; or the hours are unreasonable, such as 8.9 hours to draft seven form motions in limine that have been used in numerous other Lemon Law cases. (Decl. Murphy, ¶ 14.) After looking at the line-item bill, the Court notes that the billing is rife with these sorts of overbilling entries.

If “the court finds the time expended or amount charged is not reasonable under the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” (Mikhaeilpoor v. BMW of North America, LLC (2020) 48 Cal.App.5th 240, 247.)

The Court makes that finding here.  “When a voluminous fee application is made the court may make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure” (Morris v. Hyundai Motor Am. (2019) 41 Cal.App.5th 24, 40, quoting Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 41 [cleaned up].)

The Court will adopt an “across-the-board percentage cut” here. The Court applies a 2/3^rd across-the-board percentage cut to the lodestar of $160,981.50 that is claimed. It does this to arrive at a reasonable attorneys fees award given the circumstances of this case.  The Court awards a lodestar of $53,660.50.

b.           Multiplier

This case was not particularly novel or otherwise requiring special expertise. To the extent expertise in Lemon Law litigation was required, Plaintiff’s Counsel’s fee rates incorporate such expertise into the standard lodestar request. Further, since Plaintiff’s law firm only handles Lemon Law cases, the taking of this contingent-fee case did not preclude the firm from taking other work.

Nonetheless, the Court finds that Plaintiff’s counsel is entitled to a multiplier for the delay in payment that occurred.  

“[T]he unadorned lodestar reflects the general local hourly rate for a fee-bearing case; . . . The adjustment to the lodestar figure . . . is intended to approximate market-level compensation for such services, which typically includes . . . a premium for the . . . delay in payment of attorney fees.” (Ketchum, supra, at 1138.) 

Further, although Defense Counsel gets paid monthly, Plaintiff’s Counsel has not been paid for the 19 months that this case has been pending. “The contingent fee compensates the lawyer not only for the legal services he renders but for the loan of those services. . . . ’”  (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1217-1218.) 

“The market value of the services provided by [plaintiff’s] counsel in a case of this magnitude must take into consideration that any compensation has been deferred . . . from the time an hourly fee attorney would begin collecting fees from his or her client . . . ” (Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1252.) 

Lemon law cases are based on statutes designed to protect the California consumer.  If a plaintiff’s attorney is paid no more than the loadstar, “competent counsel will be reluctant to accept fee award cases.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133.) This Court recognizes that “courts should not be ‘unduly parsimonious in the calculation of such fees.’” (Etcheson v. FCA US LLC (2018) 30 Cal.App.5th 831, 849, quoting Thayer v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 839.) 

  On the other hand, virtually all Lemon Law cases are ultimately settled or otherwise won by the plaintiff.  Thus, there is no real risk that plaintiff’s counsel will not be paid in these cases.

        The Court also notes that plaintiff’s law firm specializes in Lemon Law cases; in fact, the Court takes judicial notice of the fact that it advertises itself as the “Leading Lemon Law Firm in California.”  (See, https://slpattorney.com/.)  Therefore, taking this contingent fee case did not “preclude[] other employment by the attorneys”.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

Plaintiff’s Counsel have been litigating this case since June 2021 without payment. Plaintiff’s counsel has not received any compensation for 19 months. Defense counsel has presumably been paid monthly in this matter. Taking into consideration (1) this delay and (2) the fact that the statutes under which plaintiff sued were designed by the Legislature to protect the consumer, the Court awards a 1.1 multiplier to the loadstar indicated above. This compensates plaintiff’s counsel for the time-value of the money that they would have been paid monthly had the case not been contingent.

The lodestar amount of $53,660.50, with a multiplier of 1.1, brings the total attorneys’ fee award of $59,026.55.

IV.       Conclusion

The Court GRANTS in part Plaintiff’s Motion for Attorneys’ Fees in the amount of $59,026.55.