Judge: Michael P. Linfield, Case: 21STCV22602, Date: 2022-11-08 Tentative Ruling

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Case Number: 21STCV22602    Hearing Date: November 8, 2022    Dept: 34

SUBJECT:                 Motion for Attorneys’ Fees

Moving Party:          Plaintiff Lillian Jimenez Ortiz      

Resp. Party:            Defendant Kia America, Inc.

Plaintiff Lillian Jimenez Ortiz’s Motion for Attorneys’ Fees is GRANTED in part. The motion is GRANTED in the amounts of $27,736.50 in attorneys’ fees and $1,593.89 in costs, for a total amount of $29,330.39.

BACKGROUND:

On June 16, 2021, Plaintiff Lillian Jimenez Ortiz filed her Complaint against Defendant Kia America, Inc. on causes of action related to the Song-Beverly Consumer Warranty Act.

On July 29, 2021, Defendant filed its Answer.

On July 6, 2022, the Court granted in part Plaintiff’s Motion to Compel Defendant’s Further Responses to Special Interrogatories (Set One) and Plaintiff’s Motion to Compel Defendant’s Further Responses to Request for Production of Documents (Set One).

On July 21, 2022, Plaintiff filed her Notice of Settlement of Entire Case.

On October 14, 2022, Plaintiff filed her Motion for Attorneys’ Fees, Costs and Expenses Pursuant to Civil Code § 1794(d).

On October 26, 2022, Defendant filed its Opposition to the Motion.

On November 1, 2022, Plaintiff filed her Reply to the Motion.

ANALYSIS:

I.           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).)

II.        Discussion

A.      The Parties’ Arguments

Plaintiff moves the Court to award Plaintiff $42,117.89 in attorneys’ fees, costs, and expenses. (Motion, p. 11:18–19.) The breakdown of this amount is as follows:

1.           $36,840.00 in attorneys’ fees:

a.   79.20 hours of attorneys’ fees, split between a partner and an associate

b.   The partner billed at $495.00 per hour from 2020 to 2021 and at $525.00 per hour in 2022

c.   The associate billed at $375.00 per hour

2.           A multiplier of 1.1 times attorneys’ fees (for a total of $40,524 in attorneys’ fees), and

3.           $1,593.89 in costs:

a.   $1,242.50 in filing fees

b.   $161.39 in jury fees

c.   $190.00 in deposition costs

Plaintiff argues that Plaintiff is entitled to recover reasonable attorneys’ fees, costs and expenses under the Song-Beverly Consumer Warranty Act and the Settlement Agreement of the Parties. (Motion, pp. 4:24–26.)

Defendant argues: (1) that the Court has the authority and obligation to reduce unwarranted fee requests; (2) that Plaintiff’s Counsel artificially increased their fees by billing excessive amounts of time, at inflated hourly rates, to perform routine tasks and generate routine documents (with multiple sub-arguments regarding excessive time for pleadings and other filings, excessive time for routine tasks, excessive time for document review, and excessive time for the fee motions); (3) that the billing rates of Plaintiff’s Counsel are unreasonable in light of the non-complex nature of the case; and (4) that Plaintiff’s Counsel are not entitled to a lodestar multiplier. (Opposition, pp. 2:2–3, 3:12–14, 5:3–4, 12:11–12, 13:8.)

        Plaintiff replies: (1) that the only reason Plaintiff incurred attorneys’ fees and costs was because of Defendant’s failure to comply with its statutory obligations and its delay tactics throughout the litigation; and (2) that the attorneys’ fees, costs, and expenses were all reasonable, with sub-arguments on staffing, rates, and time spent. (Reply, pp. 1:21–24, 3:8–9.)

B.      Prevailing Party

It is undisputed that Plaintiff is the prevailing party. The Court finds that Plaintiff is the prevailing party in this litigation.

C.      Lodestar

1.       Legal Standard

“[T]he lodestar adjustment method, including discretion to award fee enhancements, is well established under California law.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1137.)

“In our view, the Supreme Court clearly has indicated that the court's discretion in awarding attorney fees is, initially (‘absent circumstances rendering the award unjust’), to be exercised so as to fully compensate counsel for the prevailing party for services reasonably provided to his or her client. 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. Then the court must adjust the resulting fee to fulfill the statutory purpose of bringing ‘the financial incentives for attorneys enforcing important constitutional rights . . . into line with incentives they have to undertake claims for which they are paid on a fee-for-service basis.’” (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395, quoting Ketchum, supra, at 1132 and 1133.)

“Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) 

“[T]he items on a verified cost bill are prima facie evidence the costs, expenses and services listed were necessarily incurred, and when they are properly challenged the burden of proof shifts to the party claiming them as costs.” (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.)

“In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” (Premier Medical Management Systems, Inc. v. California Ins. Guarantee Ass’n (2008) 163 Cal.App.4th 550, 564.)

2.       Analysis

Plaintiff’s Counsel charged the following hourly rates:

·        Partner:

o   $495.00 per hour in 2020 and 2021

o   $525.00 per hour in 2022

·        Associate:

o   $375.00 per hour throughout this litigation

Plaintiff’s Counsel listed 79.20 hours spent on this matter. (Motion, Ex. A.) The Partner worked 15.50 hours at $495.00 per hour and 35.20 hours at $525.00 per hour. The Associate worked 28.50 hours at $375.00 per hour.

Defendant argues that the hourly rates are not reasonable and that the actual hours expended are not reasonable. Specifically, Defendant lists a variety of dates and hours that it argues are unreasonable, and Defendant ultimately asks for a reduction of 38.3 hours for a total amount of $16,567.50 in attorneys’ fees. (Opposition, pp. 4:24–28, 5:1–2, 5–12.)

The Court finds that the rates charged by the Partner and the Associate are reasonable. These rates are commensurate with those of comparable experience in this field in this community.

However, after considering Exhibit A of the Motion and considering Defendant’s Opposition, the Court finds that the not all of the 79.20 hours were reasonable. The Court believes that unnecessary time was spent on various items such as discovery, responding to opposing counsel, and reviewing the case file.

The Court adjusts certain hours as follows:

·        The Partner’s hours at $495.00 per hour are reduced by 1 hour.

·        The Partner’s hours at $525.00 per hour are reduced by 15 hours hours.

·        The Associate’s hours at $375.00 per hour are reduced by 10 hours.

D.      Multiplier

1.       Legal Standard

“Under our precedents, the unadorned lodestar reflects the general local hourly rate for a fee-bearing case; it does not include any compensation for contingent risk, extraordinary skill, or any other factors a trial court may consider under Serrano III. The adjustment to the lodestar figure, e.g., to provide a fee enhancement reflecting the risk that the attorney will not receive payment if the suit does not succeed, constitutes earned compensation; unlike a windfall, it is neither unexpected nor fortuitous. Rather, it is intended to approximate market-level compensation for such services, which typically includes a premium for the risk of nonpayment or delay in payment of attorney fees.” (Ketchum, supra, at 1138, emphases in original, citing Serrano v. Priest (1977) 20 Cal.3d 25.)

“Of course, the trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk, exceptional skill, or other factors, although it retains discretion to do so in the appropriate case; moreover, the party seeking a fee enhancement bears the burden of proof. In each case, the trial court should consider whether, and to what extent, the attorney and client have been able to mitigate the risk of nonpayment, e.g., because the client has agreed to pay some portion of the lodestar amount regardless of outcome. It should also consider the degree to which the relevant market compensates for contingency risk, extraordinary skill, or other factors under Serrano III. We emphasize that when determining the appropriate enhancement, a trial court should not consider these factors to the extent they are already encompassed within the lodestar. . . . Thus, a trial court should award a multiplier for exceptional representation only when the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation. Otherwise, the fee award will result in unfair double counting and be unreasonable. Nor should a fee enhancement be imposed for the purpose of punishing the losing party.” (Id. at 1138–39, emphasis in original.)

2.       Discussion

Plaintiff requests a multiplier of 1.1 for this case and argues that it would be appropriate based on the risk of taking the case on a contingency basis and on the outcome achieved by Plaintiff due to the skill of Plaintiff’s Counsel. (Motion, p. 11:10–16.)

Defendant argues that the Court should not apply a multiplier here because: (1) there is no evidence that the market value of attorney services has increased since this lawsuit was filed; (2) there is no evidence of an exceptional effort or an exceptional benefit; (3) this case did not present any novelty or difficulty; (4) there were no particular skills involved in prosecuting the case; and (5) a substantial enhancement would result in improper double counting. (Opposition, p. 14:15–28.)

Plaintiff does not make any further arguments regarding a multiplier in her Reply.

Aside from this case being taken on contingency, the Court does not find that any other factors support the application of a multiplier.

This case was not particularly novel or otherwise requiring special expertise. To the extent such expertise is required, Plaintiff’s Counsel’s fee rates appear to incorporate such expertise into the standard lodestar request.

There has been no evidence presented to show that Plaintiff’s counsel was precluded from taking other employment opportunities because of the nature of this case. Plaintiff’s Counsel discusses in his declaration that he founded a firm that specializes in cases such as this one. (Mizrahi Decl., ¶ 28.) Therefore, taking this contingent fee case did not “preclude[] other employment by the attorneys”.  (Ketchum v. Moses, supra, 24 Cal. 4th at p. 1132.)

Nor does it appear to this Court that the risks of litigation warrant a multiplier. The Court recognizes that “a contingent fee in a case with a 50 percent chance of success should be twice the amount of a non-contingent fee for the same case . . .” (Cezares v. Saenz (1989) 208 Cal.App.3d 279, 288.) And, in certain types of cases – e.g., labor and employment cases – it is reasonable to assume that plaintiffs’ counsel will win approximately half the time, and hence a hence “a multiplier near 2 should, in most cases, be sufficient compensation for the risk associated with contingent fees” in these cases. (Fujiwara v. Sushi Yasuda, Ltd. (S.D.N.Y. 2014) 58 F. Supp. 3d 424, 329.)  

However, that is not true for Lemon Law cases.  It is this Court’s experience that Plaintiffs prevail on virtually all Lemon Law cases. 

Nonetheless, the Court finds that Plaintiffs are 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 15 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. 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.)

        Plaintiffs’ Counsel have been litigating this case since June 2021 without payment.  Defense counsel has been paid monthly in this matter. Plaintiff’s counsel has not received any compensation for 15 months. 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 will award 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.

With the 1.1 multiplier, the Court awards attorney's fees in the amount of $27,736.50 ($25,215.00 x 1.1).

E.       Costs

Plaintiff lists costs in the amount of $1,593.89. (Motion, Ex. B.) Defendant has not disputed these costs. The Court will award costs in the amount of $1,593.89.

III.     Conclusion

Plaintiff Lillian Jimenez Ortiz’s Motion for Attorneys’ Fees is GRANTED in part. The motion is GRANTED in the amounts of $27,736.50 in attorneys’ fees and $1,593.89 in costs, as shown in the chart below, for a total of attorney's fees and costs in the amount of $29,330.39.