Judge Ronald F. Frank, Case Number: 23TRCV01727, Date: 2023-11-17 Tentative Ruling

Judge: Ronald F. Frank, Case: 23TRCV01727, Date: 2023-11-17 Tentative Ruling

Case Number: 23TRCV01727 Hearing Date: November 17, 2023 Dept: 8

Tentative Ruling¿

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HEARING DATE: November 17, 2022¿¿

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CASE NUMBER: 23TRCV01727

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CASE NAME: Krystal Walton v. Ford Motor Company, et al.

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MOVING PARTY: Plaintiff, Krystal Walton

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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. The Court reduces some of the discovery time entries and disapproves a multiplier but approves the hourly rates and expenses. Net award is $14,715.25.

I. BACKGROUND¿¿

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A. Factual¿¿

On May 31, 2023, Plaintiff, Krystal Walton (“Plaintiff”) filed a Complaint against Defendant, Ford Motor Company, and DOES 1 through 10. The Complaint alleges causes of action for: (1) Violation of Song-Beverly Consumer Warranty Act – Express Warranty; and (2) Violation of Song-Beverly Consumer Warranty Act – Implied Warranty of Merchantability.

Plaintiff notes that the parties reached a settlement when Plaintiff accepted and signed Defendant’s 998 offer on September 25, 2023. In the 998 offer, the parties agreed to have Ford repurchase Plaintiff’s vehicle and have Plaintiff’s attorneys’ fees and costs determined by motion. As such, Plaintiff brings this motion for attorneys’ fees and costs.

B. Procedural¿¿

On October 23, 2023, Plaintiff filed a Motion for Attorney Fees, Costs, and Expenses. On November 3, 2023, Defendant filed an opposition. On November 13, 2023, Plaintiff filed a reply brief.

II. ANALYSIS¿

A. Legal Standard

Under the Song-Beverly Act, Civil Code section 1794, subdivision (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.”

Since the California Supreme Court has held that the lodestar adjustment method is the prevailing rule for statutory attorney fee awards to be applied in the absence of clear legislative intent to the contrary (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1135–1136), 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.) “[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, [and] (4) the contingent nature of the fee award….” (Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal. App. 4th 140, 154.) In making a lodestar calculation of proper hourly rates to apply, “the court may rely on its own knowledge and familiarity with the legal market, as well as the experience, skill, and reputation of the attorney requesting fees (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1009), the difficulty or complexity of the litigation to which that skill was applied (Syers Properties [III, Inc. v. Rankin (2014) 226 Cal.App.4th 691, 700) . . . and affidavits from other attorneys regarding prevailing fees in the community and rate determinations in other cases. (Heritage, at p. 1009.)” (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (2016) 6 Cal.App.5th 426, 437.) The moving party plaintiff bears the burden of showing that the fees incurred were “allowable,” were “reasonably necessary to the conduct of the litigation,” and were “reasonable in amount.” (Morris v. Hyundai Motor America (2019) 41 Cal.App.5th 24, 34; Levy v. Toyota Motor Sales, U.S.A., Inc. (1992) 4 Cal.App.4th 807, 816.) The trial court in Levy found that some submitted charges were duplicative, others were for unnecessary or unsuccessful motions, or for travel time. There was no abuse of discretion in the pruning of the requested hours for such items. (Id.)

“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.) “ ‘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, 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.)” (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4^th 359, 394-395.)

Plaintiff was designated by the parties in the settlement as the prevailing party. Therefore, attorney fees may and will be awarded.

B. Discussion

Here, Plaintiff asks for attorneys fees of $27,330.25 which includes a 50% multiplier and submits the declaration of her counsel, Thomas K. Ledbetter (“Ledbetter Decl.”) in support of her motion. Ledbetter notes that he has practiced extensively in consumer litigation, primarily in automotive lemon law since 2006. (Ledbetter Decl., ¶ 7.) He states he was an associate at several Lemon Law defense firms leading up to his promotion to partner at Ruben & Sjolander LLP in 2012, and founded his own law firm in 2016. (Ledbetter Decl., ¶ 7.) Ledbetter asserts that his hourly rate was $425 up to May 31, 2023 and $450 an hour starting on June 1, 2023. (Ledbetter, ¶ 10.) He also notes his paralegal, Keily Deluis has an hourly billing rate of $200 an hour. (Ledbetter Decl., ¶ 8.) Ledbetter also contends that his firm was working on this case for Plaintiff on a contingency basis. Because of this, Ledbetter contends he and his firm have an incentive to keep the time expended on litigation as low as possible in the even Plaintiff did not prevail. (Ledbetter Decl., ¶ 11.) Ledbetter’s exhibit 2 notes that the firm accrued a total of $18,220.25 in attorneys’ fees and costs, which consisted of filing of this case, responding to Ford’s early answer, and responding to Ford’s written discovery in attorneys’ fees. The billing statement attached to the moving papers included expected future billing amounts for reviewing the Fee Motion Opposition, preparing reply papers, and attending the hearing. Further, Defendant argues this Court should apply a multiplier of .5.

In opposition, Defendant argues that Ledbetter has filed this motion, incurred 9 hours and $4,050 related to this motion without any attempt to resolve the issue informally. Defendant argues that this amount accounts for 23% of the lodestar fees. Next, Defendant argues that Ledbetter ignored Ford’s repurchase offer and instead proceeded to “needlessly” litigate for the sole purpose of inflating attorney’s fees. Defendant notes that the 998 offer was to repurchase the vehicle pursuant to the statutory formula of Song-Beverly, and at the time of this offer, Ledbetter had only served boilerplate written discovery. Also, Defendant argues that on August 28, 2023, it served a repurchase 998, which was accepted on September 25, 2023. Mr. Proudfoot’s declaration indicates Ford never served any discovery in this case, but that statement is clearly mistaken because Mr. Ledbetter in his reply declaration documents Ford’s initial wave of written discovery and that he and his staff worked extensively on responding to Ford’s written discovery, both before and after the Section 998 Offer was served.

With regard to Ledbetter’s hourly rate of $450, Defendant argues that this is an unreasonable amount in a “simple” consumer lemon law case, noting that the prevailing market rates for non-contingent attorneys litigating Song-Beverly claims in this market is between the range of $175 and $200. As both counsel are aware, this Court has very extensive experience of over 25 years as a lawyer (plus 7 years as a civil assignment judge) in Lemon Law litigation and is very aware from other fee motions in other cases what the prevailing hourly rates are for Plaintiff and defense firms in this area. Even in the absence of Mr. Ledbetter’s recitation of fee awards by other trial counsel in Los Angeles County and the published fee rates in numerous cases over the years, this Court has kept abreast of hourly rates not only in Song-Beverly litigation but also in other less and more complicated areas of practice. The Court finds that the hourly rates claimed by Mr. Ledbetter and his paralegal are within the range of reasonableness for experienced and specialized litigation counsel for plaintiffs in the contingency fee consumer warranty arena in 2023, and the hourly rates are approved here as reasonable. The Court takes into account the much lower hourly rates charged by the considerably more experienced Mr. Proudfoot and his firm for the same arena, the Court is aware that occasionally a defense attorney has an unintended contingency aspect of its representation, and the Court is well aware of Mr. Proudfoot’s experience and expertise in this arena over several decades. But the fact that Mr. Proudfoot is considerably undercompensated for his representation in the defense of Lemon Law litigation does not alter the Court’s assessment of the reasonableness of Plaintiff’s counsel’s hourly rates.

Defendant also argues that nearly every document prepared by Ledbetter is a “form” document, and thus, the hours spent on this motion (9) should be reduced because it is unreasonable to spend approximately 23% of the lodestar request on the Fee Motion, and because the motion was filed without any informal attempt to resolve this. The Court’s review of the billing for the Fee Motion is that much of the time expended would have been reasonably incurred even if the parties had conducted a fee negotiation before the motion was filed, and the Court does not see any indication by either counsel that there were any negotiations AFTER the Fee Motion was filed which could have reduced the claimed opposition review, reply preparation, and hearing attendance amounts claimed. Ford initially offered $9,000 in Fees and the lodestar for this Fee Motion was nearly double that amount before any reductions by the Court. Lastly, Defendant argues that the multiplier request should be denied as Ford offered to repurchase the vehicle, and because this case is not novel. As to the multiplier, the Court denies the claimed enhancement. Whether a plaintiff’s counsel exhibits extraordinary skill or demonstrates exceptional expertise, the skill and expertise are difficult to reward with a multiplier where, as here, the defendant offers a full buy-back with an attorney fee offer so early in the litigation. The contingent nature of recovery is already taken into account in the differential hourly rate between Mr. Proudfoot’s rate and Mr. Ledbetter’s, so a multiplier based on the contingent nature of plaintiff’s fees would amount to a duplicate award for the same factor. The novelty of issues or advocacy and the extraordinary result elements of multiplier analysis may be applicable in other cases but are not established on the record presented here.

Next, the Court requests oral argument from Plaintiff with respect to the issue of the June 20, 2023 offer. This is not merely a vague allusion to settlement without any explanation. Defendant offered to repurchase the vehicle, $9,000 in attorneys’ fees, $500 in costs, and an extension on any response while they pursued settlement. (Declaration of Matthew M. Proudfoot (“Proudfoot Decl.”), ¶ 6, Exhibit C.) The Court is confused as to why the reasonable contingencies to the offer incentivized Plaintiff with the advice of her counsel to decline the initial offer. Had Ford fulfilled its statutory obligation to repurchase or replace the vehicle before litigation, would not plaintiff have needed to provide the same information to ensure that Ford’s offer was fully compliant with the law? Plaintiff appears to concede that most of these documents wound up being provided to Ford any way when Plaintiff made her counter offer less than two months later, on August 16, 2023.

As to reductions in claimed amounts, the Court’s tentative ruling is to approve of the hourly rate, expenses, and most of the work done. The Court reduces the May 25, 2023 entry of $170 to prepare the retainer agreement as an unreasonable charge. The Court reduces by one-half the time and amounts incurred in the lodestar for Plaintiff’s preparation of responses to Ford’s discovery on August 16, 2023, August 18, 2023, and on August 29, 2023 totaling $3,150, all of which were all within the 2-week period between Plaintiff’s full penalty demand and receipt of Ford’s 998 offer. Halving that amount results in a net reduction of $1,575. The Court’s reasoning is that the reasonable plaintiff’s attorney who already has a buy-back offer in hand plus an offer of $9,000 in attorney’s fees could have and should have requested an extension of time to respond to Ford’s misguided written discovery requests while negotiating a settlement for more money, but Ford should not benefit from a full reduction in the discovery preparation fees because it should not have sent written discovery pending a response to its buy-back offer. The Court also reduces the post-998 Offer attorney’s fees on September 5, 2023 and September 12, 2023 to finalize Plaintiff’s discovery responses instead of obtaining an open extension of time to complete those responses in light of the Defendant’s Section 998 offer, and those 6 time entries total $1,930. Finishing the plaintiff’s responses to defense discovery -- as distinct from reviewing Ford’s responses to Plaintiff’s discovery so that Mr. Ledbetter could assess the strength or weakness of Plaintiff’s possible pursuit of a civil penalty – were not reasonably incurred on the record presented. The Court finds the time and fees incurred in analyzing the statutory offer and discussing that with the Plaintiff were all reasonably incurred, as were the time entries for accepting and communicating the acceptance of the offer. The Court thus reduces the $17,555 lodestar amount by ($1,575 + $1,930 = $3,505), and awards $14,715.25.