Judge Michael P. Linfield, Case Number: 22STCV08853, Date: 2023-07-10 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV08853, Date: 2023-07-10 Tentative Ruling

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Plaintiffs’ Motion for Attorney’s Fees, Costs, and Expenses is GRANTED in part.

Attorneys’ fees, costs, and expenses are awarded for Plaintiffs and against Defendants in the total amount of $69,397.39. This consists of a premultiplier lodestar of $52,986.73, a multiplier of 1.05, and costs of $13,761.32.

On March 11, 2022, Plaintiffs Wendy M. Najera Morales and Oscar Najera Rabadan filed their Complaint against Defendants Ford Motor Company and South Bay Ford on causes of action regarding defects with their car.

On August 18, 2022, the Court Denied Defendants Ford Motor Company and South Bay Ford’s Motion to Compel Arbitration.

On June 12, 2023, Plaintiffs filed their Motion for Attorney’s Fees, Costs, and Expenses. Plaintiffs concurrently filed: (1) MC-010, Memorandum of Costs (signed by Counsel Norman F. Taylor); (2) MC-010, Memorandum of Costs (signed by Counsel Richard M. Wirtz); (3) Declaration of Richard M. Wirtz; (4) Declaration of Norman Taylor; (5) Declaration of Amy R. Rotman; and (6) Proof of Service.

On June 26, 2023, Defendants filed their Opposition. Defendants concurrently filed: (1) Objections to the Declaration of Norman Taylor; and (2) Objections to the Declaration of Richard Wirtz.

On June 29, 2023, Plaintiffs filed their Reply. Plaintiffs concurrently filed: (1) Declaration of Amy R. Rotman; (2) Response to Evidentiary Objections to Declaration of Norman Taylor; (3) Response to Evidentiary Objections to Declaration of Richard M. Wirtz; (4) Evidentiary Objections to the Declaration of Jeck Dizon; and (5) Proof of Service.

Defendants filed evidentiary objections to the Declarations of Richard Wirtz and Norman Taylor. The following are the Court’s rulings on these objections.

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED
6		OVERRULED
7		OVERRULED
8		OVERRULED
9		OVERRULED

Objection
1	SUSTAINED
2		OVERRULED

Plaintiffs filed evidentiary objections to the Declaration of Jeck Dizon. The following are the Court’s rulings on these objections.

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4	SUSTAINED
5	SUSTAINED

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

Plaintiffs move the Court to award $139,048.07 in attorneys’ fees, costs, and expenses. (Reply, p. 10:18–21.) This would consist of a lodestar of $83,524.50, a 1.50 multiplier enhancement of $41,762.25, and costs and expenses of $13,761.32. (Id.)

Plaintiffs argue: (1) that Plaintiffs’ Counsel are entitled to fees, costs, and expenses in this action because Plaintiff is the prevailing party; (2) that the hourly rates sought are reasonable; and (3) that a lodestar multiplier should be granted. (Motion, pp. 9:2, 10:10, 13:10.)

Defendants partly oppose the Motion, requesting that the Court award no more than $52,986.73, which would consist of no more than $41,169.75 in attorneys’ fees and no more than $11,816.98 in costs and expenses. (Opposition, p. 17:21–22.)

Defendants argue: (1) that Plaintiffs’ Counsels’ hourly claimed rates are excessive; (2) that Plaintiffs’ Counsels’ claimed hours should be reduced; (3) that no multiplier should be applied; and (4) that Plaintiffs’ Memoranda of Costs seek items not permitted to be recovered as costs. (Opposition, pp. 7:26, 11:14, 14:2, 15:25–26.)

In their Reply, Plaintiffs argue: (1) that the Court should disregard Defendants’ oversized Opposition; (2) that Defendants fail to satisfy their burden of proof; (3) that Defendants misrepresent the scope of the Court’s discretion; (4) that the hours billed are reasonable; (5) that Defendants fail to rebut the reasonableness of the hourly rates; (6) that a positive lodestar multiplier is warranted; and (7) that all costs and expenses must be awarded. (Reply, pp. 1:1, 1:7, 2:13, 3:15, 6:18, 8:5, 9:7.)

In settling this case, Plaintiffs are the prevailing party in this litigation and are entitled to their reasonable attorneys’ fees, costs, and expenses. (Civ. Code, ¶ 1794, subd. (d).)

The Parties do not dispute that the appropriate approach for calculating recovery of attorneys’ fees is the lodestar adjustment method, which involves multiplying the number of hours reasonably expended by the reasonably hourly rate. (Warren v. Kia Motors Am. (2018) 30 Cal.App.5th 24, 36; accord Hanna v. Mercedes-Benz USA, LLC (2019) 36 Cal.App.5th 493, 509–12.) The Court uses the lodestar adjustment method here.

“Under the lodestar adjustment methodology, the trial court must initially determine the actual time expended and then ascertain whether under all the circumstances of the case the amount of actual time expended and the monetary charge being made for the time expended are reasonable. Factors to be considered include, but are not limited to, the complexity of the case and procedural demands, the attorney skill exhibited and the results achieved. The prevailing party and fee applicant bears the burden of showing that the fees incurred were reasonably necessary to the conduct of the litigation, and were reasonable in amount. It follows that if the prevailing party fails to meet this burden, and 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 N. Am., LLC (2020) 48 Cal.App.5th 240, 247 [cleaned up].)

It appears that Plaintiffs initially hired counsel, and Plaintiffs’ counsel associated with a second set of counsel once Plaintiffs were faced with the motion to compel arbitration in this case. (Motion, p. 4:21–27.)

Plaintiffs’ Counsel Norman Taylor declares: (1) that he charges $645.00 per hour; (2) Counsel Mark Anderson charges $575.00 per hour; (3) that Counsel Steven Simons charges $650.00 per hour; (4) that Counsel Scott R. Kaufman charges $600.00 per hour; and (5) that their three paralegals charge $250.00 per hour. (Decl. Taylor, ¶¶ 12–13, 23–25.)

Plaintiffs’ Counsel Richard M. Wirtz declares: (1) that he charges $695.00 per hour; (2) that Counsel Amy R. Rotman charges $500.00 per hour; (3) that Counsel Daniel Z. Inscore charges $500.00 per hour; (4) that Counsel Alana Mellgran charges $400.00 per hour; (5) that Counsel Ommar Chavez charges $400.00 per hour; (6) that Counsel Kelsey Henry charges $400.00 per hour; (7) that Counsel Hickmon Friday III charges $400.00 per hour; (8) that Paralegal Rebecca Evans charges $300.00 per hour; (9) that Paralegal Danielle Viviani charges $250.00 per hour; (10) that Paralegal Florence Goldson charges $250.00 per hour; (11) that Paralegal Andrea Beatty charges $250.00 per hour; (12) that Paralegal Zoe Hildebrand charges $200.00 per hour; (13) that Paralegal Amanda Vitanatchi charges $200.00 per hour; and (14) that Paralegal Andrea Lizarraga charges $200.00 per hour. (Decl. Wirtz, ¶¶ 13, 15–27.)

The Court sustained Defendants’ objections to the use of prior trial court cases for determination of reasonable rates in this case.

Based upon an evaluation of the remaining portions of the declarations submitted and the Court’s assessment of the prevailing rate for attorneys of comparable skill and experience in the relevant community, the Court finds that the hourly rates requested are reasonable.

Defendants argue that the number of hours billed is unreasonable because: (1) Plaintiffs’ Counsel improperly billed tasks such as discovery and this fee motion; (2) Plaintiffs’ Counsel billed 17.6 hours for “client communication,” which is too vague to demonstrate that those hours spent were reasonably necessary; and (3) that Plaintiffs billed 8.0 hours on tasks that have not occurred. (Opposition, p. 11:24–28.)

The Court disagrees with Defendants’ arguments. Plaintiffs’ Counsel is allowed to bill for discovery, this fee motion, client communications, and work that is actually done by the time the Court rules on the Motion — so long as those hours were reasonably incurred.

However, the requested number of hours billed by Plaintiff’s counsel is not reasonable.

While there is no set number of attorneys who are allowed to work on a case, the number of attorneys can be unreasonable. “Plainly, it is appropriate for a trial court to reduce a fee award based on its reasonable determination that a routine, noncomplex case was overstaffed to a degree that significant inefficiencies and inflated fees resulted.” (Morris v. Hyundai Motor Am. (2019) 41 Cal.App.5th 24, 39.) “[J]ust 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.)

This was a simple one owner/one car Lemon Law case. It needed no more than one partner and two associates to adequately staff the case. Instead, Plaintiffs’ counsel chose to have 20 individuals — 10 lawyers and 10 paralegals — billing on this matter. (Decl. Taylor, ¶¶ 12–13, 23–25; Decl. Wirtz, ¶¶ 13, 15–27.) While Plaintiffs’ Counsel may consider this customary, the Court finds this to be unacceptable and egregious padding. The Court finds that Plaintiffs’ Counsel’s use 20 people billing to be unreasonable in this run-of-the-mill lemon law case.

In addition, Plaintiffs’ Counsel claim that they incurred nearly 245 hours of work in this matter. (See Decl. Taylor, Exh. 1, p. 6 [indicating 21.50 hours spent]; see also Decl. Wirtz, Exh. A, pp. 33–34 [indicating 224 hours spent] and Decl. Rotman re Reply, Exh. D, p. 2 [indicating five hours spent on the Reply to the Motion instead of the six hours previously estimated].) That is an excessive number of hours given the issues and procedural history that occurred during the lifetime of this standard lemon law case.

The only motion that was litigated in this case was a standard motion to compel arbitration that has become routine in many Lemon Law cases. (For reasons that remain unclear to the Court, Plaintiffs’ counsel apparently associated in a second law firm to litigate this motion.) There was nothing original in the opposition to the Motion to Compel Arbitration; the Court would not be surprised if Plaintiffs’ counsel has used this same opposition, mutatis mutandis, in numerous other cases.

There was one Informal Discovery Conference, which did not raise any particularly complicated issues.

The Parties notified the Court of their settlement more than six weeks before trial. It does not appear to the Court that trial preparation had begun prior to settlement.

The Court finds that the number of attorneys utilized, the time expended, and the amount charged are not reasonable under the circumstances. (Mikhaeilpoor, supra, 48 Cal.App.5th at p. 247.) Thus, the Court must take these items into account and award attorneys’ fees in a lesser amount.

“When a ‘voluminous fee application’ is made, the court may, as it did here, ‘make across-the-board percentage cuts either in the number of hours claimed or in the final lodestar figure.’ These percentage cuts to large fee requests are, however, ‘subject to heightened scrutiny and the use of percentages, in any case, neither discharges the district court from its responsibility to set forth a ‘concise but clear’ explanation of its reasons for choosing a given percentage reduction nor from its duty to independently review the applicant's fee request.’” (Kerkeles v. City of San Jose (2015) 243 Cal.App.4th 88, 102, quoting Gates v. Deukmejian (9th Cir. 1992) 987 F.2d 1392, 1399.)

Based on the relevant factors here, this Court might consider a reduction of 50% to the number of hours claimed. As Plaintiffs’ Counsel request $83,524.50 in attorneys’ fees, this would bring the lodestar for attorneys’ fees to $41,762.25. (Reply, p. 10:18–21.)

However, Defendants concede that $52,986.73 in attorneys’ fees would be appropriate here. (Opposition, p. 17:21–22.) The Court adopts Defendant’s figure.

There is no objection to these costs. The Court finds that all $890.68 of these costs are reasonable.

Defendants object to $1,944.34 in these costs, arguing: (1) that $149.34 in costs for parking and mileage to court hearings is not a permissible expense; (2) that $1,170.00 in expert witness fees are not recoverable because the Court did not order the expert; and (3) that $625.00 in court reporter fees for the hearing on this Motion is not recoverable because the Court did not order a transcript of the proceeding. (Opposition, pp. 16:26–28, 17:1–19.)

Plaintiffs argue, among other things, that all the costs and expenses are recoverable because: (1) Civil Code section 1794, subdivision (d) controls here, not Code of Civil Procedure section 1033.5; and (2) that Civil Code section 1794, subdivision (d) is broader than Code of Civil Procedure section 1033.5. (Reply, p. 9:16–23.)

“As explained in Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112 [41 Cal. Rptr. 2d 295], in enacting Civil Code section 1794, subdivision (d) the Legislature intended the phrase ‘costs and expenses’ to cover items not included in the detailed statutory definition of ‘costs’ set forth in Code of Civil Procedure section 1033.5.” (Warren, supra, 30 Cal.App.5th at p. 42, quoting Jensen v. BMW of N. Am., Inc., supra, at pp. 137–38.)

These costs are recoverable under the applicable statute, and the Court has not been presented with any evidence that would indicate that they were not all reasonably incurred.

“The amount of attorney fees awarded pursuant to the lodestar adjustment method may be increased or decreased. Such an adjustment is commonly referred to as a fee enhancement or multiplier. The trial court is neither foreclosed from, nor required to, award a multiplier. The Supreme Court has set forth a number of factors the trial court may consider in adjusting the lodestar figure. These include: (1) the novelty and difficulty of the questions involved, and the skill displayed in presenting them; (2) the extent to which the nature of the litigation precluded other employment by the attorneys; and (3) the contingent nature of the fee award, both from the point of view of eventual victory on the merits and the point of view of establishing eligibility for an award.” (Mikhaeilpoor, supra, 48 Cal.App.5th at pp. 247–28 [cleaned up].)

This case was not particularly novel or otherwise requiring special expertise. Further, virtually all lemon law cases are ultimately settled or otherwise won by the plaintiff, meaning there is no real risk that Plaintiffs’ Counsel would not have been paid in this case. To the extent expertise in lemon law litigation was required, Plaintiffs’ Counsels’ fee rates incorporated such expertise into the standard lodestar request. Finally, Plaintiff’s law firms apparently either exclusively or mainly handle only lemon law cases. (See, e.g., https://www.wirtzlaw.com/ (California Lemon Law Lawyers”; https://normantaylor.com/?ppc=true&gad=1&gclid=CjwKCAjwzJmlBhBBEiwAEJyLuzzxf4Yz6oyJ4IhjgPHU0JL2OlgdNQ230wuFOT166JuTNLmzK7cBrBoCt6gQAvD_BwE (“Norman Taylor and His California Lemon Law Attorneys”). Therefore, their taking of this contingency fee case did not preclude the firms from taking other work.

Nonetheless, the Court finds that Plaintiffs’ Counsel are entitled to a multiplier for the delay in payment that occurred.

“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 v. Moses (2001) 24 Cal.4th 1122, 1138; accord Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1217–18 and Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, 1252.)

In contrast to Defense Counsel, who presumably gets paid monthly, Plaintiffs’ Counsel have not been paid for their 16 months of work from the filing of the Complaint to the hearing on this Motion.

Lemon law cases are based on statutes designed to protect the California consumer. If a plaintiff’s attorney is paid no more than the lodestar, “competent counsel will be reluctant to accept fee award cases.” (Ketchum, supra, 24 Cal.4th at p. 1133, quotation and internal quotation marks omitted.)

This Court is also aware that it “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 litigated this case from March 2022 to July 2023 without the payment that they are now being awarded. While it would be unfair and contrary to the purposes of Code of Civil Procedure section 998 to provide a further multiplier for the postoffer period, the Court takes into consideration: (1) this delay; and (2) the fact that the Song-Beverly Consumer Warranty Act was designed by the Legislature to protect the consumer.

The normal interest rate in California is 10%, which is the equivalent of a 1.10 multiplier. Because not all of an attorney’s work occurs at the beginning of any given year, the Court assumes that the work was performed more-or-less evenly throughout the course of any given year. This means a 1.05 multiplier per year is appropriate to compensate Plaintiffs’ Counsel for the time-value of the money that they would have been paid monthly had the case not been contingent.

As this case involved a bit more than one year of work since filing, the Court multiplies the lodestar of $52,986.73 by 1.05. This increases the preoffer lodestar to a total of $55,636.07.

Plaintiffs’ Motion for Attorney’s Fees, Costs, and Expenses is GRANTED in part.