Judge: Teresa A. Beaudet, Case: 21STCV33988, Date: 2023-01-18 Tentative Ruling

Case Number: 21STCV33988    Hearing Date: January 18, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background   

Plaintiff Artrese Lashell Boston (“Plaintiff”) filed this action on September 14, 2021 against Defendant Livingston Industries, Inc. (“Defendant”). The Complaint asserts causes of action for (1) fraud and deceit, (2) breach of implied covenant of good faith and fair dealing, (3) negligence, (4) violation of Business & Professions Code § 17200, et seq., (5) violation of Business & Professions Code § 17500, et seq., and (6) violation of the Consumer Legal Remedies Act.

Plaintiff indicates that “[o]n July 13, 2022, Plaintiff executed a Settlement Agreement and Release of All Claims…resolving all claims and agreeing to Plaintiff to file a fee motion to recover its [sic] attorney’s fees and costs.” (Margarian Decl., ¶ 5.)

Plaintiff now moves for an award of attorney’s fees in the total amount of $84,532.50, and costs in the amount of $2,033.91. Defendant opposes.

Evidentiary Objection

Defendant objects to the new evidence Plaintiff submitted in connection with her reply. As noted by Defendant, “[t]he general rule of motion practice … is that new evidence is not permitted with reply papers.” ((Maleti v. Wickers (2022) 82 Cal.App.5th 181, 227 [internal quotations omitted].) “[T]he inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case…and if permitted, the other party should be given the opportunity to respond.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538 (internal quotations omitted).) As discussed below, the billing entries submitted in connection with the motion fail to include any dates indicating when the subject tasks were performed. However, Plaintiff provides additional billing entries in connection with the reply that are dated. The Court overrules Defendant’s objection to the extent it pertains to the dates of Plaintiff’s counsel’s billing entries but sustains the remainder of the objection.   

Discussion

Plaintiff asserts that “[p]ursuant to the Settlement Agreement between the Parties and California Civil Code § 1780(e), Plaintiff is entitled to recover her attorney’s fees, costs, and expenses.” (Mot. at p. 8:22-23.) As set forth above, Plaintiff indicates that “[o]n July 13, 2022, Plaintiff executed a Settlement Agreement and Release of All Claims…resolving all claims and agreeing to Plaintiff to file a fee motion to recover its [sic] attorney’s fees and costs.” (Margarian Decl., ¶ 5.) Plaintiff indicates that per the Settlement Agreement, she recovered her actual and punitive damages. (Margarian Decl., ¶ 6.)

Civil Code section 1780 is contained in the Consumers Legal Remedies Act (“CLRA”).
(Civ. Code, § 1750, et seq.) Plaintiff’s sixth cause of action alleges that Defendant violated the CLRA. Pursuant to Civil Code section 1780, subdivision (e), “[t]he court shall award court costs and attorney’s fees to a prevailing plaintiff in litigation filed pursuant to this section. Reasonable attorney’s fees may be awarded to a prevailing defendant upon a finding by the court that the plaintiff’s prosecution of the action was not in good faith.” In the opposition, Defendant does not dispute that Plaintiff is entitled to attorney’s fees and costs here. 

“[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. … The reasonable hourly rate is that prevailing in the community for similar work. 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.” (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095 [internal citations omitted].)   

The Hourly Rate of Counsel

In this matter, Plaintiff’s counsel Hovanes Margarian of The Margarian Law Firm billed 86.7 hours for services rendered for a total of $56,355.00. (Margarian Decl., ¶¶ 9, 30.)

Mr. Margarian’s requested hourly rate is $650 per hour. (Margarian Decl., ¶ 13.) The Declaration of Mr. Margarian sets forth his background and experience. (Margarian Decl., ¶¶ 12, 16-20.)  

            Defendant asserts that the requested hourly rate of $650 per hour is excessive and not supported by evidence, and requests that the rate be reduced to no more than $450 per hour.

Defendant provides excerpts from the United States Consumer Law Attorney Fee Survey Report for 2017-2018, which indicates that the median attorney rate in Southern California is $425/hour. (Russell Decl., ¶ 10, Ex. 7, p. 58.) The Report also indicates that the average hourly rate for attorneys practicing consumer law for 11-15 years is $406/hour. (Russell Decl., ¶ 10, Ex. 7, p. 59.) In the motion, Mr. Margarian indicates that he has been handling consumer protection cases for 15 years. (Margarian Decl., ¶ 18.) Further, as Defendant notes, although Plaintiff asserts in the motion that “according to the Adjusted Laffey Matrix, the reasonable rate for an attorney 11-19 years out of law school is $764 per hour” (Mot. at p. 12:22-23), no evidence of such matrix was provided in connection with the motion.

            In the reply, Plaintiff asserts that the contingent nature of the instant matter contributes to the requested hourly rate of $650 per hour. Plaintiff also cites to the United States Consumer Law Attorney Fee Survey Report for 2017-2018 and asserts that “granting the hourly rate of $650 to an attorney of a prevailing party is within the range identified in one of such reports.” (Reply at p. 8, fn. 4.) If Plaintiff is referring to the subject United States Consumer Law Attorney Fee Survey Report, Plaintiff does not indicate where the report states that $650 is an appropriate hourly rate for Plaintiff’s services here. As set forth above, Defendant notes that the Report provides that the median attorney rate in Southern California is $425/hour, and the average hourly rate for attorneys practicing consumer law for 11-15 years is $406/hour. (Russell Decl.,   ¶ 10, Ex. 7.) Plaintiff does not appear to dispute that the United States Consumer Law Attorney Fee Survey Report for 2017-2018 may be applicable here, as it is also cited to in Plaintiffs’ reply.

            Based on the foregoing, the Court finds that an hourly rate of $500 per hour is   reasonable and commensurate with rates charged by attorneys with comparable skill and experience.

Lodestar Multiplier

While the lodestar reflects the basic fee for comparable legal services in the community, it may be adjusted based on various factors, including “(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; (3) the contingent nature of the fee award” and (4) the success achieved. (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)

However, the court must not consider extraordinary skill and the other Serrano factors to the extent these are already included within the lodestar. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138-1139.) “[A] trial court should award a multiplier for exceptional representation only when the quality of representation far exceeds the quality of representation that would have been provided by an attorney of comparable skill and experience billing at the hourly rate used in the lodestar calculation. Otherwise, the fee award will result in unfair double counting and be unreasonable.” (Id. at p. 1139.)

Here, Plaintiff argues that a 1.5 lodestar multiplier is appropriate primarily because this is a contingency case. Plaintiff also appear to assert that a multiplier is appropriate due to “the extent to which the nature of the litigation precluded other employment by the attorney.” (Margarian Decl., ¶ 22.) However, other factors do not support the application of a multiplier. There is no indication that this case was complex or presented challenging legal issues, particularly considering that Plaintiff’s counsel specializes in these types of cases. In addition, the Court does not find that Plaintiff has demonstrated that the success achieved by Plaintiff’s counsel is exceptional.

The Court also notes that the hourly rate for Plaintiff’s counsel is reasonable because of counsel’s demonstrated skill and experience. Because the quality of representation and the degree of skill exercised by Plaintiff’s counsel is already factored into the lodestar, it would be unreasonable to award an enhancement. (See Holguin v. Dish Network LLC (2014) 229 Cal.App.4th 1310, 1333 [“Where, as here, the court determines that the lodestar itself constitutes a reasonable fee for the action at issue, no enhancement is warranted.”].)

Accordingly, the Court declines to apply Plaintiff’s requested multiplier to the lodestar amount.

            In the opposition, Defendant asserts that a negative multiplier of 0.5 is appropriate here.

Defendant notes that “[t]he Supreme Court…has approved the trial court’s discretion to use a positive or negative multiplier to adjust the lodestar sum…No established criteria calibrate the precise size and direction of the multiplier, thus implying considerable deference to trial court decisionmaking about attorney fee awards.” (Karton v. Ari Design & Construction, Inc. (2021) 61 Cal.App.5th 734, 745.) In Karton, “Karton sued Ari and won a judgment for $133,792.11 plus postjudgment interest. Karton then sought attorney fees of $271,530, which were later increased to $287,640 in the trial court and now to $292,140 in this court. The trial court awarded $90,000 in attorney fees. [The Court of Appeal] affirm[ed] this award against Karton’s argument that $90,000 is not enough.” (Id. at p. 738.) The Court of Appeal in Karton indicated, inter alia, that “the trial court rightly sought an appropriate relationship between the result achieved and the size of the fee. For a century or more, California courts have considered the success or failure of attorney efforts when evaluating attorney fee requests. The size of a judgment is pertinent to rational evaluation of a requested fee. Rational decisionmaking weighs benefits and costs. The judgment measures the dollar benefit of the litigation. The attorney fee is the cost of obtaining that benefit…Weighing cost and benefit, this trial court concluded a fee much larger than the judgment was not reasonable.” (Id. at pp. 746-747.)

Defendant asserts that here, “[a]pplying the Karton cost/benefit analysis, Plaintiff did not get much benefit for the cost.” (Opp’n at p. 16:25-26.) In the opposition, Defendant asserts that “[t]he fees sought are more than three times the $25,000 settlement paid to Plaintiff.” (Opp’n at p. 5:5-6.) However, the Court notes that Defendant does not appear to have provided any evidence of the $25,000 settlement.

Defendant also asserts that other factors weigh in favor of applying a negative multiplier. Specifically, Defendant asserts that Plaintiff’s claims presented a standard and straightforward case of alleged misrepresentation in the sale of a used vehicle. Next, Defendant notes that Plaintiff’s counsel indicates that he has “handled over to [sic] 2,500 such cases and presently have over 200 such pending matters. Approximately 85% of my legal practice focuses on consumer rights litigation involving fraud and deceit, violations of the Consumer Legal Remedies Act and Business & Professions Code §§ 17200 and 17500, breaches of contract and of the implied covenant of good faith and fair dealing, breaches of written and implied warranty pursuant to the state and federal statutes, negligence, etc. The rest focuses on complex litigation,

primarily consumer class actions.” (Margarian Decl., ¶ 18.)[1] Defendant asserts that Plaintiff’s counsel accordingly seeks excessive hourly rates based on his experience. Plaintiff’s counsel’s requested hourly rate is discussed above. Lastly, Defendant asserts that there is no evidence that counsel was precluded from taking other cases. (Margarian Decl., ¶ 18.)

            The Court does not find that Defendant has demonstrated that a negative multiplier is appropriate here.

Reasonableness of the Requested Fees

“[T]he court’s discretion in awarding attorney fees is … to be exercised so as to fully compensate counsel for the prevailing party for services reasonably provided to his or her client.” (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 395.) The trial court may reduce the award where the fee request appears unreasonably inflated, such as where the attorneys’ efforts are unorganized or duplicative. (Serrano v. Unruh (1982) 32 Cal.3d 621, 635, fn. 21.) “[T]he 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. Bd. of Trustees of California State Univ., supra, at p. 396.)

Here, Plaintiff’s counsel has attached an itemization of his billing in this case. (Margarian Decl., ¶ 31, Ex. A.)

Defendant first asserts that Plaintiff’s time records contain entries for improper secretarial and/or clerical tasks.[2] Of the time entries identified by Defendant, the Court agrees that the following tasks are non-attorney/clerical tasks: (1) “Collected/Organized Intake Documents from Plaintiff” (0.9 Hours); (2) “Created Case Folder for Plaintiff, Including Case Itemization” (0.6 Hours); (3) “Filed the Complaint, CCCS, Addendum, Summons, and Statement of Damages” (0.6 Hours); (4) “General Administrative Tasks (i.e. Calendaring, Notating, Organizing the Folder of the Case, etc.)” (2.5 Hours); and (5) “Delivery of Courtesy Copies to the Court” (0.5 Hours). (Margarian Decl., ¶ 31, Ex. A.) The Court finds that the remaining time entries that Defendant asserts are improper clerical tasks are tasks appropriately conducted by counsel. The Court accordingly deducts 5.1 hours from the requested hours.  

Second, Defendant asserts that Plaintiff’s counsel improperly billed for internal office conferences. Defendant notes that Plaintiff billed 5 hours for “Various Internal Communication with Plaintiff’s Team Re the Case,” as well as 1 hour for providing instructions to an attorney representing Mr. Margarian at certain hearings. (Margarian Decl., ¶ 13, Ex. A, pp. 10:23-25; 12:25-27.) The Court does not agree with Defendant that this requested time is excessive.

            Third, Defendant asserts that many time entries were overbilled. Defendant asserts that it was unreasonable for Plaintiff to have spent almost 11 hours to prepare a default judgment package. The Court agrees that the 2.9 hours requested for preparing a request for entry of default is excessive and deducts 1.4 hours from this requested amount. (Margarian Decl., ¶ 13, Ex. A, p. 12:2-5.) The Court does not find that the remaining hours requested for the preparation of the default judgment package is excessive.

            Next, Defendant asserts that Plaintiff’s counsel billed more than six hours for drafting written discovery that was served while the case was in default. Defendant provides a proof of service indicating that Plaintiff served form interrogatories, special interrogatories, requests for admission and requests for production on Defendant on March 15, 2022. (Russell Decl., ¶ 3, Ex. 2.) Default was entered in this matter against Defendant on November 18, 2021. On May 2, 2022, the Court issued an Order pursuant to the parties’ stipulation setting aside the default entered on November 18, 2021.

As Defendant notes, the billing entries submitted in connection with the motion fail to include any dates indicating when the subject tasks were performed. However, Plaintiff provides additional billing entries in connection with the reply that are dated. Such billing entries indicate that Plaintiff’s counsel spent 6.3 hours drafting and reviewing written discovery in February and March of 2022. (Margarian Reply Decl., ¶ 7, Ex. A.) As set forth above, Defendant was in default at this time. As noted by Defendant, “[t]he entry of a default terminates a defendant’s rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered.” (Devlin v. Kearny Mesa Amc/Jeep/Renault (1984) 155 Cal.App.3d 381, 385.) In the reply, Plaintiff does not address Defendant’s point that Plaintiff served discovery on Defendant when Defendant was in default. Based on the foregoing, the Court finds that it is appropriate to deduct 6.3 hours from the total hours requested.

            Defendant also indicates that on June 29, 2022, Defendant accepted Plaintiff’s latest settlement offer. (Russell Decl., ¶ 7, Ex. 6.) On July 4, 2022, Plaintiff’s counsel sent Defendant’s counsel a draft opposition to Defendant’s motion to compel arbitration and stated in an email, “I had nearly prepared the opposition (draft attached as proof) but I won’t finish it if we have a deal.” (Russell Decl., ¶ 7, Ex. 6, ¶ 12.) Defendant indicates that the metadata for the Word document provided by Plaintiff’s counsel shows that it was last modified on June 30, 2022 at 10:31 p.m., after the parties had settled. (Russell Decl., ¶ 12, Ex. 9.) Defendant thus asserts that Plaintiff’s counsel unnecessarily billed 1.7 hours for reviewing Defendant’s motion to compel arbitration and 2.4 hours for drafting an opposition to the motion. (Margarian Decl., ¶ 31, Ex. A, p. 11:17-19.) In the reply, Plaintiff counters that “[w]hile the Parties were engaged in active settlement discussions, Defendant would not file a notice of withdrawal of the Motion to Compel Arbitration. Plaintiff’s Counsel had no choice but to prepare opposition papers and meet the court deadline for filing. Plaintiff’s Counsel was ready to file it if the settlement did not success [sic].” (Reply at p. 6:11-14.) In addition, the Court notes that Defendant does not indicate that the settlement agreement was finalized and executed as of June 29, 2022. Thus, the Court declines to deduct the 4.1 hours pertaining to Plaintiff’s opposition to Defendant’s motion to compel.

            Next, Defendant indicates that Plaintiff seeks a total of 5 hours in connection with Plaintiff’s counsel’s review of Defendant’s opposition to the instant fee motion, the preparation of a reply, and preparation/appearance at the hearing on the fee motion. (Margarian Decl., ¶ 31, Ex. A, p. 13:21-27.) Defendant notes that such events had not yet taken place at the time the motion was drafted and asserts that such prospective billing is speculative. However, the Court finds that the requested 5 hours of anticipated time is reasonable.

            Lastly, Defendant notes that Plaintiff’s counsel’s declaration provides, “[t]he computation of hours covers the settlement discussions with Defendant, internal discussions

within my office and reviewing the client’s documents to secure a fair and reasonable settlement. I spent 5.5 hours to complete the settlement processes.” (Margarian Decl., ¶ 31, Ex. A, p. 13:8-10.) Defendant contends that this is impermissible block-billing. The Court notes that “[b]lock billing occurs when a block of time [is assigned] to multiple tasks rather than itemizing the time spent on each task.” (Mountjoy v. Bank of America, N.A. (2016) 245 Cal.App.4th 266, 279 [internal quotations omitted].) “Trial courts retain discretion to penalize block billing when the practice prevents them from discerning which tasks are compensable and which are not,” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 1010.) The Court does not find that Defendant has shown that the asserted block-billed entries contain tasks that are not compensable, and finds that the 5.5 hours requested are reasonable.

            Based on the foregoing, the Court deducts 12.8 hours from the requested 86.7 total hours. 73.9 hours multiplied by an hourly rate of $500/hour equals $36,950.00.  

Costs

Lastly, Plaintiff indicates that she has incurred $2,033.91 in costs in litigating this action since the filing of the action. (Margarian Decl., ¶ 33; see also Plaintiff’s Memorandum of Costs filed on August 2, 2022.)

Defendant asserts that Plaintiff’s requested costs are excessive and improper. Specifically, Defendant contends that Plaintiff seeks $1,312.50 in nonrecoverable expert witness fees. (See Plaintiff’s Memorandum of Costs, p. 3, § 8.b(1).) Defendant notes that “Code of Civil Procedure section 1033.5, subdivision (b)(1), provides that the fees of experts not ordered by the court are not allowable as costs unless expressly authorized by law. The statutory provisions dealing with the compensation of experts in general do not provide for the recovery of such expenses in a cost award. The compensation of an expert is, in the first instance, the responsibility of the party who hires the expert. If during discovery proceedings a party designates an expert, then any other party may depose the expert and may require the expert to give testimony before a court, tribunal or arbiter. In that event the party desiring to depose the expert or requiring the expert to testify must pay the expert’s fees for the time required for the deposition and/or testimony. In other respects the compensation of the expert remains the responsibility of the party who hired the expert.” (Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616, 1624 [internal citation omitted].)

Plaintiff does not address this point in the reply or set forth any statute authorizing the recovery of expert witness fees here. Thus, Court deducts $1,312.50 from the requested costs.

Conclusion

For the foregoing reasons, Plaintiff’s motion for attorney’s fees is granted in the amount of $36,950.00. Plaintiff’s request for costs is granted in the amount of $721.41. 

Plaintiff is ordered to give notice of this ruling

DATED:  January 18, 2023                           

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court