Judge: Robert S. Draper, Case: BC674549, Date: 2022-12-16 Tentative Ruling

Case Number: BC674549    Hearing Date: December 16, 2022    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Plaintiffs Jason and April Brenenstahl’s Motion for Attorneys’ Fees, Costs and Expenses is GRANTED in the amount of $___________.

FACTUAL BACKGROUND

This is an action for breach of warranty. The Complaint alleges as follows. Plaintiffs Jason and April Brenenstahl (“Plaintiffs”) purchased a new 2012 Dodge Durango vehicle in September 2013 with a warranty issued by Defendant FCA US LLC (“FCA”). (Complaint ¶¶ 5, 9, 12.) FCA concealed a known defect in the vehicle in its totally integrated power module (“TIPM”). (Complaint ¶ 5.) The subject vehicle had a defective TIPM, resulting in multiple and extensive recall issues, multiple electrical issues, and several engine and transmission issues such as loss of headlight function and uncontrolled horn or alarm sounding while driving. (Complaint. ¶¶ 16-17.) FCA failed to repair the defect after delivery for repair to FCA-approved facilities. (Complaint ¶¶ 96–100.)

PROCEDURAL HISTORY

On August 31, 2017, Plaintiffs filed the Complaint asserting three causes of action:

1.    Breach of Express Warranty – Violation of Song-Beverly Act;

2.    Breach of Implied Warranty – Violation of Song-Beverly Act; and,

3.    Fraudulent Inducement – Concealment

On October 30, 2017, Defendants FCA and JRDTSP LLC d/b/a Scott Robinson Chrysler Dodge Jeep (together, “Defendants”) each filed an Answer.

On April 3, 2019, Defendants filed a Motion for Summary Judgment.

On September 19, 2019, the Court denied Defendants’ Motion for Summary Judgment.

On January 2, 2020, the parties filed a Stipulation to Continue Trial.

On March 23, 2020, the Court continued trial due to the COVID-19 pandemic.

On April 27, 2020, the Court again continued trial due to the COVID-19 pandemic.

On June 13, 2022, the parties filed a Notice of Settlement.

On November 22, 2022, Plaintiffs filed the instant Motion for Attorney Fees.

On December 5, 2022, Defendants filed an Opposition.

On December 9, 2022, Plaintiffs filed a Reply.

DISCUSSION

      I.          MOTION FOR ATTORNEYS’ FEES

Plaintiffs seek reasonable attorneys’ fees pursuant to Civil Code section 1794(d).

Section 1794(d) provides a prevailing buyer the right “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.” In enacting section 1794, “the Legislature envisioned an objective, nonarbitrary, and easy to administer calculation of attorney fees based on the ‘lodestar’ method (reasonable hours and rates plus a multiplier) ‘in order to fix the fee at the fair market value for the legal services provided.” (Reynolds v. Ford Motor Co. (2020) 47 Cal.App.5th 1105, 1117.) “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.)  

In awarding fees, “the court's analysis must begin with the ‘actual time expended, determined by the court to have been reasonably incurred.’” (Hanna v. Mercedez-Benz USA, LLC (2019) 36 Cal.App.5th 493, 510.) The “prevailing party has the burden of showing that the fees incurred were reasonably necessary to the conduct of the litigation, and were reasonable in amount.” (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 817-18.) The trial court “must initially determine the actual time expended.” (Mikhaeilpoor v. BMW of North America (2020) 48 Cal.App.5th 240, 247.) The court must 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” relative to the “complexity of the case and procedural demands, the attorney skill exhibited and the results achieved,” among other factors. (Id.)  

After the lodestar amount is fixed, it may be adjusted. An adjustment to the lodestar “is commonly referred to as a ‘fee enhancement’ or ‘multiplier’” and the trial court “is neither foreclosed from, nor required to, award a multiplier.” (Mikhaeilpoor, supra, at 247.) In adjusting the lodestar figure, trial courts may consider: “(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.” (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 322 fn. 12.) “The ‘results obtained’ factor can properly be used to enhance a lodestar calculation where an exceptional effort produced an exceptional benefit.” (Graham v. DaimlerChrysler Corp. (2005) 34 Cal. 4th 553, 582.) 

A.   Initial Lodestar

Here, Plaintiffs seek an initial lodestar amount of $117,234.00 representing 336.2 hours of attorneys’ fees for work performed by Knight Law Group attorneys. These hours were billed at a rate of between $200 and $595 an hour. (Kirnos Decl., Ex. A.)

Additionally, Plaintiffs seek an initial lodestar amount of $33,529.00 for work performed by Co-Counsel Robinson Calcagnie, Inc. (“Calcagnie”), representing 71.4 hours of attorney time. These hours were billed at a rate of between $275 and $595 per hour. (Wilson Decl., Ex. A.)

In Opposition, Defendants make the following arguments.

1.    Early C.C.P. Section 998 Offer

First, Defendants note that on November 19, 2018, Defendants made an early settlement offer pursuant to Code of Civil Procedure section 998. That settlement offer was for $119,000 plus reasonable attorneys’ fees. The parties eventually settled for $121,000 plus reasonable attorneys’ fees in June, 2022. As Defendants note, accounting for inflation, Plaintiffs received less money by waiting four years to settle, while valuable Court time and resources were expended litigating the matter.

While the Court, Plaintiffs, and Defendant were undoubtedly harmed by Plaintiffs’ decision to reject that initial, imminently reasonable offer, it cannot be said that nobody benefitted from the four-year delay. In the four-year period between nearly identical settlement offers, Plaintiffs’ attorneys incurred over $120,000 in attorneys’ fees.

While the Court agrees with Defendants contention that the additional attorneys’ fees incurred during this time were patently unreasonable, the Court of Appeal did recently address this issue, in part, in Reck v. FCA US LLC (2021) 64 Cal.App.5th 682. I

n Reck, defendant served plaintiff with a section 998 offer in the amount of $81,000, plus reasonable costs, expenses, and attorneys’ fees. At that time, Plaintiff’s Counsel, whom the Court notes is also Plaintiffs’ Counsel in the instant case, had incurred $15,000 in legal fees. Plaintiff rejected that offer. Two months later, following a mandatory settlement conference, the case settled for $89,500 plus reasonable costs, expenses, and attorneys’ fees. In the intervening time, Plaintiff’s counsel had managed to incur an additional $100,000 in attorneys’ fees.

The trial court deducted in full and without detailed analysis (“categorically”) the attorneys’ fees incurred between the settlement offers, finding that the meager difference between the settlement offers did not justify such an increase in fees.

The Court of Appeal reversed, finding that it was “an error of law for the trial court to reduce an attorney fee award on the basis of a plaintiff’s failure to settle when the ultimate recovery exceeds the section 998 settlement offer.” (Reck at p. 693.) The Reck Court added that, “although the trial court retains broad discretion to evaluate post-offer attorney fees and costs under a lodestar analysis, and to reduce the recovery in the appropriate circumstance, it may not categorically deny all fees from the date of the offer when the plaintiff’s decision to press forward with litigation has been vindicated by a more favorable judgment or award.” (Id. at p. 697.)[1]

Accordingly, under Reck, this Court cannot categorically deny Plaintiffs attorneys’ fees for the period between the initial and subsequent settlement offers. Which this Court interprets to mean there must be a thoughtful analysis of the individual facts of each case.

2.    Overstaffing

Next, Defendant notes that Knight Law Group had 23 different attorneys work on this Lemon Law case. This does not include the attorneys from Calcagnie, who were brought in as co-counsel after the initial settlement offer.

In its Reply Plaintiff notes that using multiple attorneys is not necessarily an indicator of inflated billing. Additionally, Plaintiff notes that Defendant does not point to any billing that is allegedly inflated due to redundant work, and that attorney “catch up time” is not billed under Plaintiffs’ Counsel’s policy. This issue must be viewed in context.

3.     Client Communication

Next, Defendant notes that, following Plaintiffs’ rejection of the initial 998 offer, Plaintiffs’ Counsel billed for “communication with client” 35 separate times, amounting to $5,076.50 in lodestar fees.

The Court does not view communication with clients as necessarily an unnecessary cost. But in context ere, for the reasons that will be discussed below, this is not a proper charge.

4.    Motion to Compel

Next, Defendant notes that Plaintiffs’ Counsel requests a total of $3,354.00 in lodestar fees for preparation of a Motion to Compel that was filed after the close of discovery. This motion was denied.

The Court concurs that a motion to compel filed after the close of discovery is superfluous, and unreasonable. Accordingly, the Court reduces the lodestar amount by $3,354.00.

5.    Fees Incurred for Preparing the Fee Motion

Finally, Defendant contends that Plaintiff’s request for $5,670.00 in lodestar fees for the filing and defense of the instant motion is excessive. The Court does not find this amount inherently excessive.

B.   Lodestar Multiplier On the Upside

Next, Plaintiffs argue that the Court should apply a .5 Lodestar Multiplier due to the risk inherent in the contingent nature of its contract, and due to the delayed nature of its award. The Court does not agree.

Had Plaintiffs’ Counsel been concerned about Plaintiffs’ chance of victory, or of the downsides of delay in collecting that award, counsel could have accepted on behalf of Plaintiffs the initial settlement offer and collected a sure victory in roughly the same amount, except increased substantially if they had accepted the settlement by the time value of money.

C.   Is There a Downside?

Jessie Choper, one of the world’s leading scholars in constitutional law now, and a long time ago, and the Constitutional Law Professor who the Court was lucky enough to have as my Constitutional Law Professor a long time ago, has a bedrock principle he believes, and the Court believes, is the key to Interpreting any statute, or determining how the statute should be applied: If you want to know how to apply the statute, first ask: What was the legislature purpose when it enacted the statute? And, then, how well does the result a party is requesting achieve that purpose?

In this context, a perhaps useful analogy is Lord Wellington’s method for rewarding his soldiers, or I should say, Lord Wellington’s method for asking the King to reward his soldiers, during the Napoleonic wars between England and France, as portrayed in series of books written by Bernard Cornwell about Richard Sharpe, a fictional soldier in those armies. While this slightly predates this Court’s personal knowledge, the analogy is this.

Sharpe was a commoner during a period of time that officers were “gentlemen” (i.e. from the “higher” classes)(and not “gentlepersons”),nd not commoners. But there was one way that a commoner could become more than a private (to become, like a “NCO,” “Sergeant,” or even an “Officer”). That was to serve as part of a group called the “forlorn hope.”’

Back in the day, the Court reads, but of which the Court does not have personal knowledge, the way Lord Wellington captured a fortress was to have his cannons blast a hole in one wall of the fortress. He would then send a group called the “forlorn hope” charging up to the hole in the wall. Their task was to pour through the hole and capture the fortress and they were in a sense, the ancient equivalent of “first responders.”

Any member of the “forlorn hope” who survived the charge automatically advanced  in rank (from NCO, to Sergeant, to…), Which was presumably the reason they did such a stupid thing. The only problem was, and the reason they were called the “forlorn hope,” is that no one ever survived this charge. That is because the opposing soldiers in the fortress knew exactly the hole the  “forlorn hope” was coming to, and had all of their canons, buses, knives, etc. trained on that hole from the inside.

 Except Sharpe, who started in volume 1 as a commoner, kind of like a private, and ended as of the last volume (25 and counting)’ as a senior officer. But the Court, not having personal knowledge of how he did this, but only knowing what the Court reads, cannot disclose anything further at risk of violating copyright laws.

I know some readers are asking themselves “I know you have a point, but what is it? “The point is the lemon laws were created not to create a source of revenue for lawyers, but to create an ability for ordinary consumers, like, for example, the Court, to have redress when a car they purchase, perhaps from Lord Wellington’s modern-day successors, returns less than satisfactory performance. Without the assistance of able counsel to assist them, like plaintiff’s counsel here, they (I) would be perhaps in even a worse position than the old guys in the forlorn hope. And without fair compensation, independent of the actual ultimate recovery by the client, those able lawyers would not be available because they have partners, wives, husbands, partners, children and, in the case of really old guys and girls, grandchildren they have to feed too.

So the Court feels that the purpose of the lemon law in this case requires fair and adequate compensation for plaintiff’s attorneys for the work they did be up to the first 998 offer. While the Court does not believe that at a percentage kicker is justified, the Court does believe that the hourly rates, number of attorneys, and tasks performed by those attorneys more than justifies what is being requested for these “first responders, even if they are not are not precisely the modern-day parallel to the “forlorn hope” folk.

But what if Lord Wellington submitted to the King, (the Court assumes that that was what was done back then and anyone who suggests that the Court is equating itself to a King should bring their toothbrush), a second bill for a second Army of equal size and equal cost to the first, who simply came along afterwards and made sure that all of the dead enemy soldiers were dead (which the court can disclose, without violating copyright laws, would have been a fairly mundane, low risk venture, since cannonballs had a tendency to be fairly effective). Along with a request for a percentage kicker? Even the less perceptive, to put it bluntly, dumbest King (or actually, in later more advanced times, Queen, would have a giant hissy fit at that. (the ancient, less thoughtful way of a denial of a motion.

In the context of the lemon law, there may well be cases, many cases, where rejecting a first 998 offer is justified by the facts of the case. In those cases the plaintiff’s attorneys will be entitled to full compensation for work thereafter despite the fact that the recovery is not greatly in excess of the original offer. This is not that case.

Looking at the purpose of the statute, it would not further the interests of car buyers in general to have excess costs imposed upon the car manufacturer when those costs are not justified, because eventually those costs are eventually passed on. Whatever the language of the statute, it cannot be seriously argued that fee award must include the full amount of the claimed time spent’ and the only way to reduce this is to point to specific items incurred or object to the percentage of the requested multiplier. If either of these approaches were adopted, no plaintiff’s lawyer in a lemon law case would have any incentive to settle until they had achieved a preordained profit or revenue target.

The Court would like to make clear that it not casting any aspersions on Plaintiffs’ counsel or their motivation in this case. They are fine firm who represent their clients, who need, good representation, very well. Plaintiffs

But it is all to understand the applicable guidelines. ACCORDINGLY,

Plaintiffs,’ Motion for attorneys’ fees is GRANTED in the amount of___________,___ representing the attorneys’ fees incurred up until the time of the 998 offer in this case plus and minus the specific items saddressed above.

D. Costs and Expenses

Finally, Plaintiffs request $27,077.10 in additional costs and expenses. Defendant does not object to this amount, and the Court does not find any of the requested costs and expenses unreasonable.

Accordingly, Plaintiffs’ request for $27,077.10 is GRANTED.

In total, Plaintiffs’ Motion for Attorneys’ Fees, Costs, and Expenses is GRANTED in the amount of ________________

DATED: December 16, 2022

___________________________

Hon. Robert S. Draper

Judge of the Superior Court