Judge: Upinder S. Kalra, Case: 22STCV40014, Date: 2024-02-27 Tentative Ruling

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Case Number: 22STCV40014    Hearing Date: February 27, 2024    Dept: 51

Tentative Ruling

Judge Upinder S.
Kalra, Department 51

HEARING DATE:   February
27, 2024                                          

CASE NAME:           Shane
A. Aguilar v. Volkswagen Group of America, Inc.

CASE NO.:                22STCV40014

MOTION
FOR ATTORNEYS’ FEES, COSTS, AND EXPENSES

MOVING PARTY:  Plaintiff
Shane A. Aguilar

RESPONDING PARTY(S): Defendant Volkswagen Group of
America, Inc.

REQUESTED RELIEF:

1.      An
Order awarding attorneys’ fees, costs, and expenses.

TENTATIVE RULING:

1.      Motion
for Attorneys’ Fees is GRANTED in part as follows:

2.      Motion
for Costs is GRANTED in the amount of $3,868.25;

3.      Defendant
is ORDERED to remit payment within 45 days of notice of this ruling.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On December 23, 2022, Plaintiff Shane A. Aguilar (Plaintiff)
filed a Complaint against Defendant Volkswagen Group of America, Inc.
(Defendant) with three causes of action for: (1) Violation of Song-Beverly Act
– Breach of Express Warranty; (2) Violation of Song-Beverly Act – Breach of
Implied Warranty; and (3) Violation of the Song-Beverly Act Section 1793.2.

According to the Complaint, Plaintiff purchased a 2018
Volkswagen Tiguan, VIN No. 3VV1B7AX4M088361. Plaintiff alleges the Subject
Vehicle was delivered with serious defects and nonconformities.

On January 26, 2023, Defendant filed an Answer.

On August 21, 2023, Defendant represented to the court that
the parties reached a settlement.[1]

On December 18, 2023, Plaintiff filed the instant motion. On
February 13, 2024, Defendant timely filed an opposition. On February 20, 2024.
Plaintiff timely filed a reply.

LEGAL STANDARD:

Evidentiary
Objections

First, this court is unaware of any
legal authority which requires a court to rule on evidentiary objections on a
motion, except as to a motion for summary motion/adjudication [CCP § 437c
(q)] or a special motion to strike [CCP § 425.16 (b)(2); see also, Sweetwater Union High School Dist. v.
Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.]  As such,
this court respectfully declines to rule on any of these objections.  This
Court is well aware of the rules of evidence, and to how much weight, if any,
should be given to any of the proposed evidence.

Attorneys Fees
& Costs

A prevailing buyer in an
action under Song-Beverly “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.” 
(Civ. Code, § 1794(d).) By permitting buyers who prevail under Song-Beverly
to recover their attorneys’ fees, “our Legislature has provided injured
consumers strong encouragement to seek legal redress in a situation in which a
lawsuit might not otherwise have been economically feasible.” (Murillo v. Fleetwood Enterprises, Inc.
(1998) 17 Cal.4th 985, 994.)  However, “ ‘[r]easonable compensation does not include
compensation for ‘ “padding” in the form of inefficient or duplicative
efforts....’ [Citations.] ‘A reduced award might be fully justified by a
general observation that an attorney over litigated a case or submitted a
padded bill or that the opposing party has stated valid objections.’ ” (Morris
v. Hyundai Motor America
(2019) 41 Cal.App.5^th 24, 38 (Morris).)

The prevailing party has the
burden of showing that the requested attorney fees are reasonable. (Robertson v. Fleetwood Travel Trailers of
California Inc. (2006) 144 Cal.App.4th 785, 817.) The party seeking
attorney fees “is not necessarily entitled to the compensation of the value of
attorney services according to [his or her] own notion or to the full extent
claimed . . . .”  (Levy v. Toyota Motor Sales, USA, Inc. (1992) 4 Cal.App.4th 807,
816.) If the “time expended or the monetary charge being made for the time
expended are not reasonable under all circumstances, then the court must take
this into account and award fees in a lesser amount.” (Nightingale v. Hyundai Motor America (1994) 31 Cal.App.4th 99,
104.)  “ ‘A trial court may not rubber stamp a
request for attorney fees, but must determine the number of hours reasonably
expended.’ ” (Morris, supra, at p.
38.)

A calculation of attorneys’
fees for a Song-Beverly action begins with the “lodestar” approach, under which
the Court fixes the lodestar at “the number of hours reasonably expended
multiplied by the reasonable hourly rate.” (Margolin
v. Regional Planning Com. (1982) 134 Cal.App.3d 999, 1004-1005.)
“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.” (Ibid.)

“It is appropriate for a
trial court to reduce a fee award based on its reasonable determination that a
routine, non-complex case was overstaffed to a degree that significant
inefficiencies and inflated fees resulted.” 
(Morris v. Hyundai Motor America
(2019) 41 Cal.App.5th 24, 39.) It is also appropriate to reduce a fee award
based on “inefficient or duplicative efforts” in the billing record. (Id. at p. 38.) However, the analysis
must be “reasonably specific” and cannot rely on general notions about the fairness
of the fee award. (Kerkeles v. City of
San Jose (2015) 243 Cal.App.4th 88, 102.) Moreover, in conducting the
analysis, courts are not permitted to tie any reductions in the fee award to
some proportion of the buyer’s damages recovery. (Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24,
39.) 

The lodestar figure may also
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 (1977) 20 Cal.3d 25,
49; PLCM Group, Inc. v. Drexler
(2000) 22 Cal.App.4th 1084, 1095.) The
factors considered in determining the modification of the lodestar include the
nature and difficulty of the litigation, the amount of money involved, the
skill required and employed to handle the case, the attention given, the
success or failure, and other
circumstances in the case. (EnPalm,
LLC v. Teitler Family Trust (2008) 162 Cal. App. 4th 770,
774 (emphasis in original).) A negative modifier was appropriate when
duplicative work had been performed. (Thayer
v. Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819.) 

ANALYSIS:

Plaintiffs’ counsel (Counsel) contends they are entitled to a
total of $49,368.35 representing $39,500.00 in attorney fees, $3,868.35 in
costs, and $6,000.00 to review Defendant’s opposition, prepare a reply, and
attend the hearing on this motion.[2]
Counsel does not include a lodestar multiplier. Defendant argues Counsel is
only entitled to $3,000.00 in fees. Alternatively, Defendant argues that the
court should reduce Counsel’s fees to $5,050.00 representing all of pre-March
15, 2023 Offer billings or from $49,368.35 to $32,903.35.

Prevailing Party

On or around July 21, 2023, Plaintiff accepted Defendant’s
March 15, 2023, offer to repurchase the Subject Vehicle.[3]
(Chu Decl. ¶¶ 6, 9; Exhibits D-1, D-2, and H.) Under the SBA, Plaintiff is the
prevailing party, and thus, fees and costs are mandatory.

Lodestar Fees

The lodestar method looks at the time
spent on a matter multiplied by the reasonable hourly rate. (Serrano,
supra 20 Cal.3d at p. 49).
The two-step process begins with the lodestar method, which is the time
spent on the matter multiple by the hourly rate. After the lodestar method, the
second step is determining whether a multiplier should be applied. The factors
that courts look at to determine if a multiplier is reasonable are: 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.”
(Ketchum v. Moses (2001) 24 Cal.4th
1122, 1132).

Reasonableness
of Hourly Rate

Counsel contends
that the hourly rates for the attorneys on the current matter are reasonable.
The hourly rates range from $350 to $500 per hour.[4]
(Jacobson Decl. ¶¶ 6, 12, 19, and 21.) These rates are appropriate based on the
qualifications of the attorneys and have been previously approved by the
Superior Court, District Court, and other courts throughout California.

Defendant argues
that the rates are excessive. Defendant cites to Mikhaeilpoor v. BMW
of North America, LLC (2020) 48 Cal.App.5th 240, 247-248 (Mikhaeilpoor), where the court
determined an hourly rate of $350 hours would be appropriate for a similar
case. Because there was no trial, vehicle inspection, motions, or complex
issues of law, Defendant argues the hourly fees should be reduced from
$500/$350 per hour to $400/$250 per hour.

“In determining hourly rates, the court must look to the
“prevailing market rates in the relevant community.” (Bell v. Clackamas County (9th Cir.2003) 341 F.3d 858, 868.)
The rates of comparable attorneys in the forum district are usually used.
(See Gates v. Deukmejian (9th
Cir.1992) 987 F.2d 1392, 1405.) In making its calculation, the court should
also consider the experience, skill, and reputation of the attorney requesting
fees.” (Heritage Pacific Financial, LLC
v. Monroy (2013) 215 Cal.App.4th 972, 1009.) The declaration of Kevin
Jacobson provides the experience of each of the attorneys, their schooling
background, year admitted into the bar, as well as previous rates that have
been approved by other courts. (Jacobson Decl. ¶¶ 3 – 10, 11-17, 18-19, and 20-21.) The hourly
rates are reasonable. However,
billing at a high rate comes with the expectation that the attorney also works
in an efficient manner that reflects the premium paid for his or her services.
The court considers this fact in addressing the reasonableness of the hours
expended, below.  

Reasonableness
of Hours Billed

Counsel contends that 105.4 hours (92 hours up to filing
this motion and 13.4 hours preparing a reply) are reasonable. Defendant argues
this is patently unreasonable.

Although a verified fee bill is “prima facie evidence the
costs, expenses and services listed were necessarily incurred,” (Hadley v. Krepel (1985) 167 Cal.App.3d
677, 682), ultimately, Counsel still has the burden to demonstrate the
reasonableness of charges. (Mikhaeilpoor,
supra, 48 Cal.App.5th at p. 247.) The
court has reviewed the fee bill submitted by Counsel and the proposed
reductions by Defendant. As will be shown, Defendant’s contention that the
billings are excessive, duplicative and unreasonable is well taken.

The trial court may reduce a fee award to a car buyer who
prevailed on Song-Beverley Act claims if it finds that it was unreasonable to
have numerous lawyers on a matter that did not present unique or complex
issues, did not involve discovery motions, did not go to trial, and the
attorneys' hourly rates were unreasonably high. (Morris, supra, at p. 37.)

Settlement Dispute

It is clear from the evidence submitted that Plaintiff
wanted to settle this case. The lawsuit was filed on December 23, 2022. Prior
to the initial case management conference, Defendant directly contacted Plaintiff,
with a cc to Counsel, and offered a settlement. 
Plaintiff accepted Defendant’s offer by signing a notarized settlement
agreement on March 20, 2023, apparently without notifying Counsel. When Counsel
learned of Plaintiff’s settlement, Counsel revoked the settlement agreement. (Chu
Decl., Exhibits D-1, D-2, E.)

The Court makes the following observations. Counsel’s
revocation of a settlement initiated by Defendant directly with Plaintiff was
entirely reasonable in the abstract because Plaintiff is entitled to have all
communication via counsel.  However, what
followed draws in to question the reasonableness of subsequent billing
decisions by Counsel.

In July 2023, just four months later, Plaintiff, on his own,
reinitiated settlement discussions
with Defendant and accepted the very same offer that Plaintiff had accepted
months earlier. (Chu Decl., Exhibits, G, and H.) More startling than these turn
of events, however, were the allegations made by Plaintiff, contained within
his communication with Defendant, asserting that his Counsel was not pursuing Plaintiff’s
interest but rather pursuing a more nefarious purpose—billing.  Corroborating Plaintiff’s charges is the
billing record. Counsel is entitled to reasonable attorney fees. The fact that fees
were incurred, however, does not necessarily make the fees reasonable. Context
matters. The context here is quite troubling and points to a host of attorney
fees being incurred that were hardly reasonable or for the benefit of the
client. In fact, as far as the court can surmise, the only change in strategy during
this four-month period is that Counsel pursued a strategy to incurr additional fees. It appears that Counsel was emboldened to over-litigate the
case with little to no benefit to the injured client, but rather to trigger
billable events to pad the bill. Counsel’s conduct demonstrated a lack
of oversight and an absence of judgment to avoid unreasonable billing. It certainly appears that Counsel put their own fee-driven interests ahead of the interests
of their client. Indeed, this strategy delayed resolution and buy back of the
vehicle and cost their client four additional payments totaling $2,520 and
driving a vehicle he did not feel comfortable driving. (Chu Decl.,
Exhibit H.) Moreover, the court is concerned
that Counsel, and not their client, prolonged settlement of this matter. (Cal.
Rules of Prof. Conduct, Rules 1.2(a) [providing that the client holds
settlement authority] and 2-100, comment [providing that parties may
communicate with each other.]) In sum, the court finds it hard to believe
that the fees incurred from March 20, 2023 forward served any purpose other
than to pad Counsel’s bill.[5]

Be that as it may, the parties do not dispute that this
matter settled by July 2023.[6]
(Chu Decl., Exhibits G, H.) As such, Mr. Sogoyan’s 2.2 hours researching
improper settlement with represented party without that party’s attorney and
the subsequent email (billed at 0.1 hours) to Defendant’s counsel to “meet and
confer” about the settlement clearly does not benefit his client. Accordingly, those
fees are not reasonable.

Even so, the court discusses the reasonableness of those
fees as follows:

Pleadings, Motions,
& Discovery

Boilerplate filings serve a useful purpose. They increase
productivity by allowing for simple edits to existing documents. Thus,
utilizing templates is to be commended when it results in efficiency. However,
if templates are employed but attorneys are still billing significant time to
make minor changes, such use of legal resources is unwarranted and any such
bill is unreasonable, particularly if the attorney is billing at a high hourly
rate. (Mikhaeilpoor, supra, at p. 250.) Here, the court found
many instances where the time spent for minor cut and paste edits to templates
was unreasonable.

i.                   
Repair
order summary

On January 5, 2023, Counsel Sogoyan billed for 3. 1 hours at
$500 per hour for preparing a repair order summary. It appears that paragraphs three
through ten of Sogoyan’s Declaration is a copy of this summary which the Court
reviewed. The summary spans just over a page and details four repairs. The summary
appears to be clerical or a junior attorney assignment. The Court questions an
attorney billing $500 an hour was tasked with this assignment. Moreover, if the
attorney is so experienced as to deserve $500 an hour, how could it possibly have
taken the attorney 3. 1 hours to draft the summary? The Court reiterates, billing at a high rate comes with the
expectation that the attorney also works in an efficient manner that reflects
the premium paid for his or her services. The charges here are
clearly unreasonable.

ii.                 
First
Amended Complaint

On July 14, 2023, Counsel billed 1.6 hours at $350.00 per
hour to draft, edit, and finalize a First Amended Complaint. (Jacobson Decl.,
Exhibit 10.) This First Amended Complaint was never filed.

iii.               
Discovery
Requests to Defendant

On February 8, 2023, Counsel billed 3.9 hours at $500.00 per
hour to draft initial discovery requests to Defendant. (Jacobson Decl., Exhibit
10.) The review of these billing entries reveals significant labor inefficiencies
and unreasonable charges. To start, Form Interrogatories are a Judicial Council
form that merely requires checking boxes. (Chu Decl., Exhibit N.) Checking
boxes does not require 0.3 seasoned attorney
hours billed at $500.00 per hour. The remaining discovery requests appear to be
standard Song-Beverly Act discovery questions with minimal edits tailored to
the subject vehicle. (Ibid.) This
hardly warrants 3.6 hours from a seasoned
Lemon Law attorney at $500.00 per hour. Accordingly, these fees are
unreasonable.

iv.                
Discovery
Requests from Defendant

On February 20, 2023, Counsel billed 3.8 hours at $500.00
per hour to review Defendant’s initial discovery requests to Plaintiff.
(Jacobson Decl., Exhibit 10.) Counsel subsequently charged 5.4 hours at $500.00
per hour on February 22, 2023 to draft responses to those discovery requests. (Ibid.) The review of these billing
entries reveals significant labor inefficiencies and unreasonable charges.
First, it is hard to believe that it would take 0.6 seasoned attorney hours to review 10 Form Interrogatories, let
alone 1.10 seasoned attorney hours to
draft responses to those Form Interrogatories – even including No. 17.1 which
were grouped by objection and response. (Chu Decl., Exhibit Q and Exhibit S.) The
court similarly finds it hard to believe that it would take a seasoned attorney 3.2 hours to review
what appears to be standard discovery requests exchanged between firms who deal
with each other often and an additional 5.3 attorney hours to draft responses
to those requests. Accordingly, these fees are unreasonable.

v.                 
Other
Appearances

The court specifically ordered that appearance fees for
attending the August 21, 2023, Order to Show Cause would not be awarded.
(Minute Order.) Nonetheless, Counsel includes 0.7 hours at $350.00 per hour of
fees to prepare for and attend this hearing plus 0.1 hours at $350 hours to
draft a hearing summary. Accordingly, these fees are unreasonable.

vi.               
Current
Motion

Counsel seeks 8.2 hours, billed at $500.00 per hour, in
bringing this motion plus 13.4 hours (at a rate of $525.00 per hour) in
preparing the reply to Defendant’s opposition.

The reason so much time was expanded to defend the fee
motion was, as shown above, was because many of the entries were uncalled for
so Defendant reasonably challenged these charges. Defendant should not have to
pay for Counsel’s decision to defend the entries that are plainly excessive and
unwarranted. Such an approach would reward counsel for preparing and presenting
unreasonable attorneys’ fee motions. As discussed throughout, this was not a
complicated case and this was not a complicated motion. Accordingly, these fees
are unreasonable.

Costs

Counsel requests an award for costs. Defendant did not
directly challenge this request.[7]

Counsel seeks $3,868.35 in costs. (Jacobson Decl., Exhibit
10.) Upon reviewing the memorandum of costs and supporting documentation, these
fees are reasonable.

Accordingly, the court GRANTS Plaintiff’s motion to award
costs.

Summary

Public policy mandates that California consumers are entitled to a strong Plaintiffs’ bar
to prosecute consumer protection laws in civil courts. Our courts
have long recognized the “need to encourage ‘private attorneys general’ willing
to challenge injustices in our society” and that “[a]dequate fee awards are
perhaps the most effective means of achieving this salutary goal.” (Etcheson v. FCA US LLC, (2018) 30
Cal.App.5th 831, 849, quoting Thayer v.
Wells Fargo Bank, N.A. (2001) 92 Cal.App.4th 819, 839.) Thus, fee shifting ensures that consumers are afforded well
compensated, high-quality counsel.

Civil Code § 1794, subdivision (d)
provides:

(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.

(Civ. Code, § 1794, subd. (d)
[emphasis added].)

In other words, the trial
court’s role is to determine what costs and expenses were: (1) “reasonably incurred
(2) by the buyer (3) in connection with the commencement and prosecution of
such action.” To be clear, the fact billing entries were generated, does not
necessarily establish that the cost and expenses were reasonable incurred by the buyer
for prosecution of the action. Furthermore, “ ‘[r]easonable
compensation does not include compensation for ‘ “padding” in the form of
inefficient or duplicative efforts....’ [Citations.] ‘A reduced award might be
fully justified by a general observation that an attorney over litigated a case
or submitted a padded bill or that the opposing party has stated valid
objections.’ ” (Morris., supra, at p. 38.) With these competing policy
instructions in mind, the court makes the following findings. This case was not hotly
contested and was not particularly
complicated in procedure or substance. There was one motion filed which did not
reach formal hearing (two including this pending motion). There was no
reasonable need to prepare extensive discovery.
Defendant was willing to settle within three months of filing the
Complaint, Plaintiff initially accepted that settlement offer, and accepted
that offer again four months later. Still,
Counsel presented the court with a 28-page bill with $45,500 in
charges. Counsel provided no credible explanation why 105.4
hours were needed to staff this unremarkable, garden variety lemon law case. On
the contrary, the court found clear evidence of a pattern of unreasonable and
unnecessary tasks that resulted in inflated billable hours. It appears to the court that this case was over litigated, i.e., that “the
amount of actual time expended” was not reasonable or necessary to a relatively
straightforward lemon law case.

In fulfilling its duty to ensure that the work is reasonable
and necessary, a trial court must necessarily rely on its experience and
consider multiple case specific factors in determining the necessity of work
and the reasonableness of the time expended. 
(PLCM Group, Inc. v. Drexler
(2000) 22 Cal.4th 1084, 1095.) To be sure, “trial courts are not required to identify
each charge they find to be reasonable or unreasonable, necessary or
unnecessary. . . . A reduced award
might be fully justified by a general observation that an attorney overlitigated a case.” (Gorman v. Tassajara Development Corp.
(2009) 178 Cal.App.4th 44, 101.) Moreover, “trial courts
need not, and indeed should not, become green-eyeshade accountants. The
essential goal in shifting fees (to either party) is to do rough justice, not
to achieve auditing perfection. So trial courts may take into account their
overall sense of a suit, and may use estimates in calculating and allocating an
attorney’s time. (Fox v. Vice (2011
563 U.S. 826, 838.)

Accordingly, the court finds that Counsel engaged in a
pattern of highly questionable and suspect entries. (Morris, supra, at p.39.) Every
case is different. Nonetheless, the court has a lot of experience in evaluating
fee bills in lemon law cases and assessing what is reasonable. Therefore, considering this significant amount of
unnecessary and unreasonable charges, the court finds based upon its experience and knowledge of
this type of litigation, the lack of novelty and complexity of this case, and,
to align with the hours that should reasonably
have been incurred, a reasonable lodestar amount is $11,200 based
upon a blended rate of $400 and a total of 28 hours. To be clear,
the court makes this finding based upon its experience and knowledge of this
type of litigation, the lack of novelty and complexity of this case, and the
professed specialization of Counsel.

CONCLUSION:

            For
the foregoing reasons, the Court decides the pending motion as follows:

Motion for Attorneys’ Fees is GRANTED in part as follows:

1.      Attorney
fees in the amount of $11,200;

2.      Motion
for Costs is GRANTED in the amount of $3,868.25;

3.      Defendant
is ORDERED to remit payment within 45 days of notice of this ruling.

Moving party is to give notice.

IT IS SO ORDERED.

Dated:             February 27, 2024                   __________________________________                                                                                                                Upinder
S. Kalra

                                                                                    Judge
of the Superior Court