Judge Ronald F. Frank, Case Number: 22TRCV00458, Date: 2023-08-30 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV00458, Date: 2023-08-30 Tentative Ruling

Case Number: 22TRCV00458 Hearing Date: September 29, 2023 Dept: 8

Tentative Ruling¿

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HEARING DATE: September 29, 2022¿¿

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CASE NUMBER: 22TRCV00458

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CASE NAME: Ivan Villarreal v. Ford Motor Company, et al.

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MOVING PARTY: Plaintiff, Ivan Villarreal ¿

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RESPONDING PARTY: Defendant, Ford Motor Company ¿¿

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MOTION:¿ (1) Motion for Attorneys’ Fees

Tentative Rulings: (1) Plaintiff’s Motion for Attorneys’ Fees is GRANTED, but the dollar amount must be argued in light of a series of questions the Court has raised below

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I. BACKGROUND¿¿

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A. Factual¿¿

On June 9, 2022, Plaintiff, Ivan Villarreal (“Plaintiff”) filed a Complaint against Defendant, Ford Motor Company, and DOES 1 through 50. The Complaint allegs causes of action for: (1) Violation of Civil Code § 1793.2(d); (2) Violation of Civil Code § 1793.2(b); (3) Violation of Civil Code § 1793.2(a)(3); (4) Breach of Express Written Warranty – Civil Code § 1791.2(a), 1794; and (5) Breach of the Implied Warranty of Merchantability – Civil Code § 1791.1, 1794.

B. Procedural¿¿

On August 7, 2023, Plaintiff filed a Motion for Attorney Fees, Costs, and Expenses. On August 17, 2023, Defendant filed an opposition. On August 23, 2023, Plaintiff filed a reply brief.

This hearing was originally on calendar for August 30, 2023, but tis Court continued the motion and allowed additional declarations by both parties. This Court requested the parties to submit these supplemental declarations detailing the chronology of the settlement discussions in this case to explain the additional fees sought by Plaintiff after the defense believed the matter had been settled.

On September 15, 2023, Plaintiff filed a supplemental declaration in support of the Motion for Attorney’s fees. On September 15, 2023, Defendant also filed a supplemental declaration in opposition to the Motion for Attorneys’ Fees.

II. ANALYSIS¿

A. Legal Standard

Under the Song-Beverly Act, Civil Code section 1794,

“(d) 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.”

The lodestar method of calculating fees is appropriate in motions for attorney’s fees under Civil Code section 1794. (Robertson v. Fleetwood Travel Trailers of California, Inc (2006) 144 Cal.App.4th 785, 818.)

“The determination of what constitutes a reasonable fee generally ‘begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate….’” “[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….” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal. App. 4th 140, 154.)

“The verified time statements of the attorneys, as officers of the court, are entitled to credence in the absence of a clear indication the records are erroneous.” (Horsford v. Board of Trustees of California State University (2005) 132 Cal. App. 4th 359, 396.) If the motion is supported by evidence, the opposing party must respond with specific evidence showing that the fees are unreasonable. (Premier Med. Mgmt. Sys. v. California Ins. Guarantee Ass’n (2008) 163 Cal. App. 4th 550, 560–63.) The Court has discretion to reduce fees that result from inefficient or duplicative use of time. (Horsford, supra, at 395.)

“[T]he contingent and deferred nature of the fee award in a civil rights or other case with statutory attorney fees requires that the fee be adjusted in some manner to reflect the fact that the fair market value of legal services provided on that basis is greater than the equivalent noncontingent hourly rate. (Ketchum v. Moses, supra, 24 Cal.4th at pp. 1132–1133, 104 Cal.Rptr.2d 377, 17 P.3d 735.) “ ‘A lawyer who both bears the risk of not being paid and provides legal services is not receiving the fair market value of his work if he is paid only for the second of these functions. If he is paid no more, competent counsel will be reluctant to accept fee award cases.’ ” (Id. at p. 1133, 104 Cal.Rptr.2d 377, 17 P.3d 735, quoting with approval from Leubsdorf, The Contingency Factor in Attorney Fee Awards (1981) 90 Yale L.J. 473, 480.) The contingency adjustment may be made at the lodestar phase of the court's calculation or by applying a multiplier to the noncontingency lodestar calculation (but not both). (Ketchum v. Moses, supra, 24 Cal.4th at pp. 1133–1134, 104 Cal.Rptr.2d 377, 17 P.3d 735.)” (Horsford v. Board of Trustees of California State University (2005) 132 C.A.4^th 359, 394-395.)

Plaintiffs were designated by the parties in the settlement as the prevailing party. Therefore, attorney fees may be awarded.

B. Discussion

This Court previously requested the parties to submit these supplemental declarations detailing the chronology of the settlement discussions in this case. The supplemental declarations are discussed below:

Plaintiff’s Supplemental Declaration

Plaintiff’s supplemental declaration notes that in the fall of 2022, Plaintiff and Defendant negotiated a tentative settlement at a mediation in which “the undersigned [Julian Moore] and handling attorney” did not participate. Mr. Moore’s supplemental declaration further notes that on February 22, 2023, he informed defense counsel that the settlement could not be based on solely the lease payments or the purchase contract, because the defect presented itself during both periods before the filing. In other words, another lawyer representing the Plaintiff at the mediation agreed to a much lower settlement number than Mr. Moore subsequently determined the Plaintiff was entitled to. By April 2023, Mr. Moore states that it became clear the parties would not be able to resolve the dispute over the dollar amount of the refund to be paid as part of the mediated settlement 6 months earlier, and plaintiff began to litigate the case. Mr. Moore then states that on May 23, 2023, Defendant served its responses to discovery that had been agreed to be suspended 6 months earlier when the parties included this case in a block of mediated cases, and on May 31, Plaintiff accepted Defendant’s 998 offer. But the acceptance of the 998 offer was not for the previously agreed-upon $2,000 fee amount but rather for fees by motion. On August 2, 2023 Plaintiff notes that after continuing the hearing at Defendant’s request, Plaintiff’s counsel provided billing slips in an effort to resolve the issue. However, Plaintiff contends that on August 7, 2023, defense counsel stated they could not resolve the fee component of the settlement so that the parties would need to proceed with the Motion for Attorneys’ Fees.

Defendant’s Supplemental Declaration

Defendant provides a much more detailed declaration as to the chronology of events that ultimately led to the fee motion, which was what the Court had requested from both sides at the earlier hearing on this motion. Defendant notes that September of 2022, the parties started discussing settlement of numerous consumer cases against Ford between the respective firms and reached a settlement. As do many car manufacturers, Ford settles cases in a collective mediation of blocks or groups of cases pending with the same plaintiffs’ law firm. When the mediated settlement of the Villareal case was initially reached, Defendant notes the attorneys fees accrued by Plaintiff’s law firm, per its billing records, were $7,063.74. Defendant contends that as part of the settlement, counsel on both sides had agreed to a continuance of case deadlines and a pause on discovery for the cases included in the block mediation, in order to focus efforts on the settlement process and to conserve both sides’ and the court’s resources. However, Defendant argues that despite this stay, attorney for Plaintiff, Joseph Kowalski billed 4.2 hours at the rate of $350/hour reviewing repair orders and preparing subpoenas for dealership technicians. Defendant argues that between October 2022 and January 2023, there was no activity in this case. On January 13, 2023, Defendant asserts that counsel for Plaintiff confirmed the amount of settlement, repurchase damages and attorneys’ fees as $8,533.74. Unspoken by the defense supplemental declaration is that there was never a signed, enforceable settlement agreement memorializing the terms agreed upon orally at the mediated settlement. No evidence was presented to the Court on this motion of a signed short-form settlement agreement of the sort that professional mediators typically require to be “inked” upon the reaching of agreement

Next, Defendant contends that on February 15, 2023, at the CMC, counsel for Defendant informed this court that the parties reached a resolution and were working toward finalizing the documents and the surrender of the vehicle, and Plaintiff’s counsel did not disagree with that representation. However, on February 22, 2023, Defendant notes Plaintiff’s counsel emailed her stating they would no longer be willing to resolve the case on the previously agreed-upon amounts. Additionally, Defendant contends that on May 4, 2023, while counsel was continuing their resolution efforts, and despite the agreed upon stay, Plaintiff sent a meet and confer letter about Ford’s failure to respond to discovery served eight (8) months earlier. Ford notes it promptly provided responses on May 23, 2023. Defendant points out that a review of the invoice shows that Plaintiff’s counsel billed over $2,200 in May of 2023 related to discovery.

Defendant notes that the damages portion of the case was resolved by May 31, 2023 when Plaintiff accepted Ford’s 998 offer. However, Defendant notes that Plaintiff’s counsel still billed Ford for the work it performed after the date it received, but before it communicated acceptance, of this 998 offer. Defendant notes the 998 offer included an alternative attorney fee term of $2,500 in fees and costs or alternatively, fees to be decided by motion. Instead of this, Defendant notes that on May 31, 2023, Plaintiff’s counsel communicated he would settle Plaintiff’s fees and costs for $13,900, the initially agreed-upon amount of fees and costs in the mediation. But still there was no signed, enforceable settlement agreement nor was there a mutual acceptance of any specific figure for attorneys fees. Defendant contends there was no objection to this settlement. However, despite this pending settlement of the fees and costs, Defendant contends that during the June 8, 2023 CMC, Plaintiff’s counsel informed this Court that fees would be resolved by motion. On July 14, 2023, Defendant notes Plaintiff’s counsel emailed her inquiring about the resolution of attorneys’ fees, but that Defendant’s counsel was out of office, indicated such in an out of office message associated with her email, and that Plaintiff’s counsel left no messages or inquiries. Defendant’s counsel asserts that eleven (11) days later, on July 25, 2023, Plaintiff’s counsel demanded $22,799.70 to resolve fees and costs. Defendant’s counsel also notes that despite still being out of office, she responded requesting he continue the fee motion so that they could discuss when she was back in office.

Defendant’s counsel next notes that Plaintiff’s counsel emailed her on August 1, 2023 regarding a response to his fee demand, but counsel informed Plaintiff’s counsel she was still out of office. Defendant’s counsel notes she contacted Plaintiff’s counsel telephonically on August 4, 2023 after returning to office and Plaintiff’s counsel shared the motion had already been filed.

The Court requires oral argument to clarify the following:

1. Why did Plaintiff’s counsel engage in 4.2 hours of work when the parties agreed to cease discovery during the negotiation process?

2. How and why in the course of Defendant’s counsel’s absence, and after the 998 Offer had been accepted, did the fees and costs amount increase from $13,900 to 22,799.70?

3. Where did the $2,500 fee figure in the defense 998 Offer come from, if the parties had agreed upon the $13,900 figure in mediation?

4. Why do the parties not have a practice of entering into a short-form but signed and enforceable settlement agreement when a resolution is reached in block mediations?