Judge: Ralph C. Hofer, Case: 23GDCV02676, Date: 2025-02-21 Tentative Ruling

Case Number: 23GDCV02676    Hearing Date: February 21, 2025    Dept: D

“[T]he fee setting inquiry in California ordinarily begins with the "lodestar," i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate. "California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award."   Margolin v. Regional Planning Com.  (1982) 134 Cal. App. 3d 999, 1004-1005 [185 Cal. Rptr. 145].) The reasonable hourly rate is that prevailing in the community for similar work.  Id. at p. 1004;   Shaffer v. Superior Court (1995) 33 Cal. App. 4th 993, 1002  [39 Cal. Rptr. 2d 506].) The 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. (Serrano v. Priest, supra, 20 Cal. 3d at p. 49 .) Such an approach anchors the trial court's analysis to an objective determination of the value of the attorney's services, ensuring that the amount awarded is not arbitrary. ( Id. at p. 48, fn. 23.)

...After the trial court has performed the calculations of the lodestar, it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure

"It is well established that the determination of what constitutes

reasonable attorney fees is committed to the discretion of the trial court . . .

 [Citations.]   The value of legal services performed in a case is a

matter in which the trial court has its own expertise. [Citation.] The trial

court may make its own determination of the value of the services contrary to, or without the necessity for, expert testimony. [Citations.] The trial court

makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty,  the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case." ( Melnyk v.Robledo (1976) 64 Cal. App. 3d 618, 623-624 [134 Cal. Rptr. 602].)

PLCM, at 1095. (emphasis added).

The court also held that the standard of review with respect to this determination is abuse of discretion:

 “The ‘experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong’-- meaning that it abused its discretion.”

PLCM at 1094, quoting Serrano v. Priest (1977) 20 Cal.3d 25, 49.

            It has been held that in that in connection with attorneys’ fees award under the Song-Beverly Act, as sought here:

“The statute “requires the trial court to make an initial determination of the actual time expended; and then to 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. These circumstances may include, but are not limited to, factors such as the complexity of the case and procedural demands, the skill exhibited and the results achieved. If the time expended or the monetary charge being made for the time expended are not reasonable under all the circumstances, then the court must take this into account and award attorney fees in a lesser amount. A prevailing buyer has the burden of ‘showing that the fees incurred were “allowable,” were “reasonably necessary to the conduct of the litigation,” and were “reasonable in amount.” ’ ”

Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5^th 462, 470, quoting Nightingale v. Hundai Motor America (1994) 31 Cal.App.4^th 99, 104. 

            An award of attorney fees under the Song-Beverly Act is reviewed for abuse of discretion, and the determination of the value of professional services rendered in the trial court “will not be disturbed unless the appellate court is convinced that it is clearly wrong.”   Goglin, at  470-471, quoting Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4^th 967, 998.

            The opposition argues that the billing rates charged are excessive.  The rates plaintiffs seek are $650 per hour for attorney Hovanes Margarian (79.6 hours) and $764 per hour for attorney Patrick Kimball (4.6 hours).  Each attorney submits a declaration explaining their experience and specialized knowledge, and the factors used in setting their billing rates.  [Margarian Decl., paras. 13-18, 27, 28; Kimball Decl., paras. 2-4, 11].   Margarian indicates that Margarian charges at a rate of $550 per hour on all non-contingency cases with a $100 additional charge per hour for contingency work.  [Margarian Decl., para. 12].  Attorney Kimball also indicates that Kimball charges at a rate of $664 on all non-contingency work, with a $100 additional charge per hour for contingency work.  [Kimball Decl., para. 10].

Defendants argue that the court should use the Real Rate Report, which has been relied upon by California courts to determine the reasonable hourly rates in the lemon law field.  Defendants argue that the report contains two data sets that are relevant here, the general liability by city and general liability by firm size, and argue that the court should apply the lowest figures in the categories (first quartile), because the matter was a simple matter.  The opposition argues that the city data first quartile rates are $304 for partners and $287 for associates, and once averaged with the other general liability data sets the billing rates should be $250 for partners and $230 for associates.  A problem with this argument, as pointed out in the reply, is that defendants do not provide the referenced Real Rate Report to the court or to plaintiff, and do not by declaration explain the applicability of such a report to this matter.  In any case, the court finds that the billing rates proposed in the opposition are far below the market rates for similar work in the Los Angeles market.

As discussed above, the moving papers submit evidence justifying the billing rates claimed, describing the experience and expertise of each attorney who billed on this matter, as well as references to other cases in Southern California in which rates in the range now claimed for the attorneys for work performed in lemon law cases were approved as reasonable.  [See Margarian Decl., paras. 17, 18].  The rates conform with what this court would expect to be charged in matters of this nature.

While defendants argue that the testimony of Margarian on this issue is not impartial and should be disregarded, the court finds that such an argument goes to the weight of the evidence, not its admissibility.  The court has reviewed all evidence submitted and is familiar with the customary billing rates in this county and in cases of this nature. Under the circumstances the court finds the billing rates reasonable, and the court does not reduce the rates charged.

The moving papers submit detailed billing records with the Margarian Declaration as Exhibit A.  [Margarian Decl., para. 34, Ex. A].  The opposition argues that the hours billed include fees which should be disallowed due to inefficient, unreasonable and unnecessary billing practices, and improperly include time spent on pre-engagement work, clerical and administrative tasks improperly billed at full attorney rates, and duplicative charges.   It is also argued that the case was a routine lemon law matter involving a single vehicle, which was settled without trial, in which plaintiff did not respond to discovery, produce documents or sit for a deposition, justifying the court to exercise its discretion to reduce plaintiff’s claimed fees, and apply a negative multiplier.

The lodestar claimed in this matter is $55,254.40 in attorney’s fees and assistant fees in the sum of $1,035.00.  This sum provides a total lodestar for fees claimed of $56,289.40, exclusive of costs and expenses and modifiers. 

The opposition argues that specific charges are in the nature of clerical work which should have been performed at a lower billing rate, and not by attorney Margarian at the $650 rate.  Plaintiff in reply argues that these tasks were actually performed by plaintiff’s counsel, and he is eligible for an award, despite a difference of opinion with respect to who should perform such tasks.  The reply indicates that in terms of the tasks that the court would consider as clerical though performed by counsel, counsel agrees to be billed at the rate of $250 per hour. 

Plaintiff in the reply also concedes that one hour of time at $650 per hour on 09/10/2024 was charged for counsel’s attendance at the vehicle inspection, which counsel acknowledges was an oversight.  The fees charged by Margarian accordingly are reduced by the sum of $650.00 

The court has reviewed the billings and the extensive objections and response filed by each side.  The court finds that the following time billed by counsel should have been performed by a paralegal or clerical staff and the rate charged will be reduced: Entries Nos. (from Defendants’ Objections to Evidence):  1 (.9 hours), 2 (.6 hours), 3 (1.6 hours) 5 (reduction of .2 hours only), 8 (.4 hours) 11 (.4 hours), 12 (.4 hours), 13 (reduction of .1 hours), 14 (reduction of .1 hour), 15 (.4 hours), 18 (.1 hour) 19 (.1 hour), 20 (.1 hour), 22 (.3 hours), 24 (.2 hours), 33 (.2 hours), 34 (reduction of .2 hours), 35 (.2 hours), 36 (.1 hours), 37 (.2 hours), 38 (.3 hours), 39 (reduction of .1 hours), 45 (reduction of .2 hours), 48 (reduction of .4 hours), 49 (reduction of .1 hours), 50 (reduction of .2 hours), 54 (reduction of .2 hours), 55 (.1 hours), 72 (reduction of .2 hours), 73 (reduction of .1 hours), 82 (reduction of .1 hours), 85 (.1 hours), 86 (reduction of .1 hours), 87 (reduction of .3 hours), 90 (reduction of .2 hours), 97 (reduction of .1 hours), 105 (.2 hours), 106 (.1 hours), 109 (reduction of .3 hours), 110 (.3 hours), 116 (.1 hours), 117 (reduction of .1 hours), 131 (.1 hours), 141 (.1 hours), 142 (.2 hours), 150 (reduction of .2 hours), 211 (.2 hours).  This analysis results in reduction of 11.5 hours, which will be allowed at a lower billing rate. 

Defendants suggest billing at secretarial rates of $120 per hour and paralegal rates of $150 per hour.  The reply suggests a reduced rate of $250 per hour.  The court will apply a reduced rate of $200 per hour, reducing each entry by $450 per hour, for a total reduction of $5,175.00 from the lodestar amount.  

The court also finds that the following entries, reflecting some of the time spent to draft and serve discovery, is not reasonable given that this matter is subject to case management orders which streamline discovery, and the court file does not show that plaintiff sought or obtained leave of court to pursue discovery beyond the case management order provisions.  The entries are: Entries Nos. 40 (.9 hours), 41 (.7 hours), 42 (.5 hours), 44 (.2 hours), 51 (1.2 hours), 52 (.6 hours), 99 (.1 hours), 100 (.2 hours).  This totals 4.4 hours, at $650 per hour for a total further reduction of $2,860.00. 

The following entries at $150 per hour by the litigation assistant appear duplicative of charges made by the attorney, above:  Entries Nos. 25 (.3 hours),  27 (.2 hours), and 30 (.7 hours).   The total hours reduced are 1.2 hours at $150 per hour for a further reduction of $180.00.

The following charges are not awarded as unnecessary time spent by the litigation assistant on discovery requests, when this case was subject to an order streamlining discovery. Entries Nos. 156 (1.2 hours at $150 per hour), 157 (1 hour at $150 per hour), and 159 (1.6 hours at $150 per hour).  This totals 3.8 hours at $150 per hour, for a further reduction of $570.00. 

 The following charges appear duplicative and will be stricken:  Entry No. 120 (.1 hour at $650 per hour) appears duplicative of 121 for a reduction of $65;  Entry No. 123 (.1 hour at $764) appears duplicative of 122 for a reduction of $76.40; Entry No. 129 (.1 hour at $764) appears partly duplicative of 128 and will result in a reduction of $76.40.   Total reductions due to duplication are $217.80.     

Defendant argues that the court should not award the entire 25.3 hours sought to prepare the motion for attorney’s fees.  This time appears to be quite a large amount of time, spread among two senior attorneys billing at higher billing rates, when evidently Kimball was engaged as counsel for some expertise in filing such motions for fees following settlement.  As pointed out in the opposition, the motion is clearly taken from a template which is regularly filed in Song-Beverly Act cases, and likely required little legal research to prepare.  The court has reviewed the moving papers and recognizes that the reply required some attention given the detail of the opposition.  However, the court finds that the reasonable number of hours to pursue the fees in this matter would more reasonably be approximately 18 hours.  The court accordingly reduces the fees to be awarded by 7.3 hours at the billing rate of $650 per hour, for a further reduction of $4,745.00. 

This leaves the lodestar calculation at $56,289.40 claimed in fees reduced by the sums of $650.00, $5,175.00, $2,860.00, $180.00, $570.00, $217.80 and $4,745.00, for a total lodestar, before costs, of $41,891,60.   

The expenses and costs claimed, in the sum of $4,044.58, will be awarded in full.  This calculation results in a grand total of fees, expenses and costs of $45,936.18.  

This posture leaves the issue with respect to the multipliers requested.  In this case, each side requests a multiplier.  Plaintiff seeks a fee award which would include the sum of $27,627.20, which plaintiff indicates is a 1.5 multiplier enhancement on the attorney’s fees.  The opposition seeks an unspecified negative multiplier.

Plaintiff argues that a lodestar enhancement is appropriate here to adjust the fee award based on the risk factor in lemon law and dealer fraud cases taken on a contingency basis. 

The opposition argues that no multiplier is warranted in this case, as the case is a routine lemon law matter, involving a single vehicle, with the parties reaching settlement without trial or complex litigation.  The opposition argues that plaintiff did not respond to discovery, produce documents, or sit for deposition, and representation in Song-Beverly cases involves limited contingency risk given the statute’s mandatory one-way fee shifting provision. 

It has been held that despite the specific language of Civil Code § 1794(d) that fees must be “based on actual time expended, determined by the Court to have been reasonably incurred by the buyer,” the lodestar adjustment method, including use of a lodestar fee multiplier, is applicable to an award of attorney’s fees under the Song-Beverly Act.   Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4^th 785, 821. 

            The court of appeal in Robertson, although concluding that the use of a multiplier is authorized in such cases, remanded that case to the trial court to recalculate the award, on the ground the trial court had considered some of the same factors in reaching the lodestar amount as it did in applying a multiplier.  Robertson, at 821. 

            In Ketchum v. Moses (2001) 24 Cal.4^th 1122, 1132, the California Supreme Court set forth the factors to be considered by the trial court in determining whether to augment a fee award:

“[T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors including, as relevant herein, (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, (4) the contingent nature of the fee award. (Serrano III, supra, 20 Cal.3d at p. 49, 141 Cal.Rptr. 315, 569 P.2d 1303.) The purpose of such adjustment is to fix a fee at the fair market value for the particular action. In effect, the court determines, retrospectively, whether the litigation involved a contingent risk or required extraordinary legal skill justifying augmentation of the unadorned lodestar in order to approximate the fair market rate for such services.

Ketchum, at 1132.

It appears from the file and the billings that the case did not involve any special issues, there was no motion practice, and evidently the only significant time spent was in having a vehicle inspection by experts.  This situation is also a case, as noted above, in which both attorneys have submitted declarations explaining that they have calculated the fees claimed based on billing rates which are higher than those usually charged on non-contingency fee cases by $100 per hour. [Margarian Decl., para. 12; Kimball Decl., para. 10].

Accordingly, a higher billing rate to account for the contingency arrangement already has been factored into the lodestar, as the court has accepted those higher billing rates, over the protest of defendants.  It would appear that here a multiplier would duplicate the factors considered in setting the lodestar, as was of concern in both Ketchum and Robertson.  See Ketchum, at 1142, Robertson, at 822.

This matter was not a complicated case, and did not involve any novel or difficult issues, and the billing rates take into account the level of recovery expected, and the nature of the representation. Under the circumstances, the contingent nature of the representation, by itself, does not justify the application of a multiplier. The court finds that no multiplier in favor of plaintiff is warranted here.  The court also finds that no negative multiplier is warranted.  The lodestar is not further adjusted. 

RULING:

Plaintiff Kazaros Manukyan’s  Motion for Attorney Fees, Costs, and Expenses is GRANTED.

The Court finds that plaintiff Kazaros Manukyan was a prevailing party in the action, and so is under Civil Code § 1794 (d) allowed by the Court to recover as part of the judgment a sum to cover attorney's fees based on actual time expended, and determined by the Court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of this action.

The Court finds that reasonable attorney’s fees and expenses are:

Lodestar Adjusted= $41,891,60.  

Expenses= $4,044.58

Total Award= $45,936.18.  

The total award of $45,936.18  [$87,961.18 sought] is to be awarded to plaintiff Kazaros Manukyan against defendant Volkswagen Group of America, Inc. (and defendant New Century Autos Inc., jointly and severally?)  and added to the judgment.   

Defendants Volkswagen Group of America, Inc. and New Century Auto Inc’s Objections to Evidence Submitted by Plaintiff in Support of Plaintiffs’ Motion for Attorney’s Fees, Costs, and Expenses are OVERRULED. 

DEPARTMENT D IS CONTINUING TO CONDUCT AND ENCOURAGE

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