Judge Upinder S. Kalra, Case Number: 23STCV27282, Date: 2024-08-26 Tentative Ruling

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On November 7, 2023, Plaintiff Tina Cheshmaghil (Plaintiff) filed a Complaint against Mercedes-Benz USA, LLC (Defendant) with three causes of action for: (1) Breach of Implied Warranty of Merchantability Under the Song-Beverly Warranty Act; (2) Breach of Express Warranty Obligations Under the Song-Beverly Warranty Act; and (3) Violation of Song-Beverly Warranty Act Section 1793.2.

According to the Complaint, Plaintiff purchased or lease a 2022 Mercedes-Benz C300W (the Vehicle). Plaintiff alleges the Vehicle developed nonconformities that Defendant could not rectify.

On March 4, 2024, Plaintiff filed a Notice of Settlement and an Offer to Compromise and Acceptance Under Code of Civil Procedure Section 998.

On May 23, 2024, Plaintiff filed the instant Motion for Attorney’s Fees and Costs. On July 9, 2024, Defendant filed an opposition. On July 11, 2024, Plaintiff filed a reply.

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.)¿¿¿

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 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.)¿¿

On March 3, 2024, Plaintiff signed Defendant’s CCP § 998 Offer to Compromise. (Kohen Decl., Exhibit 3.) The 998 Offer provides that: “MBUSA will pay Plaintiff’s attorney’s fees, expenses and costs in the amount of $7,500.00 in full satisfaction of any attorney’s fees, expenses and costs owed to Plaintiff in this action. Alternatively, should the $7,500.00 be refused, MBUSA will allow the Court to determine, in a noticed motion filed pursuant to Civil Code Section 1794(d) and/or by Plaintiff’s filing of a memorandum of costs, the attorney’s fees, costs, and expenses recoverable under Civil Code Section 1794(d). There is no admission of liability by this Offer.” (Id. at ¶ 5.)

“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.)¿

Upon reviewing Mr. Kohen’s declaration indicating the experience and training by the two attorneys that worked on this matter, the hourly rates are reasonable. (Kohen Decl. ¶¶ 20-25.) 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. In other words, the court observes that attorneys who bill at these hourly rates should not need to research routine issues of law and should resort to boilerplate when it will serve the client’s purposes. The court considers this fact in addressing the reasonableness of the hours expended, below.

To determine if the requested amount is reasonable, California courts utilize the lodestar method. 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.)¿¿

A verified fee bill is “prima facie evidence the costs, expenses and services listed were necessarily incurred, and when they are properly challenged the burden of proof shifts to the party claiming them as costs.” (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.) Plaintiffs have provided a fee bill.

Here, the hours billed were not reasonable. As noted above, counsel seeks premium hourly rates reflecting 12 years of experience in lemon law matters. The court is hard-pressed to accept that such experience yields 42.5 hours of work on an uncomplicated lemon law case that settled within four months of filing without any motion practice or discovery. Indeed, Defendant’s first appearance is their opposition to this motion. Additionally, counsel include inappropriate billing entries such as the time to endorse and deposit a check, clerical tasks, and anticipated tasks to close their file. (Kohen Decl., Exhibit 1.)

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.

(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.

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, 41 Cal. App. 5th 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 were no motions filed. There was no reasonable need to prepare any discovery.

Even before the first Case Management Conference, the 998 Offer was accepted. To be clear, there were no court hearings before settlement. Still, the Court was presented with a three-page bill requesting $21,622 to review. Plaintiff’s counsel provided no credible explanation why 42.5 hours were needed to staff this unremarkable, garden variety lemon law case.[1] 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.

Which brings us to the task at hand. How does the Court account for these inefficiencies and excesses when it cannot reasonably rely on Plaintiff’s billing entries. Does it conduct a green eye shade line by line audit? Does it arbitrarily select a reduction? The answer to both questions is a resounding, “No.” Rather, 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 Plaintiff’s counsel engaged in a pattern of highly questionable and suspect entries. (Morris, supra, 41 Cal.App.5th 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. Without a doubt, the bill here is one of the most unreasonable bills this Court has ever seen. 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 $9,840 based upon a blended rate of $410 and a total of 24 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 Plaintiffs’ counsel.

The lodestar method looks at the time spent on a matter multiplied by the reasonable hourly rate. (Serrano, supra 20 Cal.3d at 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).¿

The court declines to award any lodestar multiplier to these attorney’s fees based upon the relative non-complexity of this rather routine lemon law case.

“Items on a verified cost bill are prima facie evidence the costs, expenses and services listed were necessarily incurred, and when they are properly challenged the burden of proof shifts to the party claiming them as costs.” (Hadley, supra, 167 Cal.App.3d at 682). Under CCP § 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.”

By way of analogy, the Song-Beverly Act provides for recovery of costs and expenses which are not limited to the cost categories set forth in CCP § 1033.5. (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 137-38.)

Here, Plaintiff provided a cost bill indicating $1,065.88 of costs. (Kohen Decl., Exhibit 1.) Defendants challenged every cost except the first appearance fee. (Opp. 10:1-12, 15:14-16.) Counsel contends that their vigorous work obtained an excellent result for their client. The court is not persuaded that the Mechanical expert consultation fee and the messenger services to deliver courtesy copies of the instant fee motion and reply brief are reasonable. As discussed above, this is a simple lemon law case that settled within four months of filing without any motions or discovery. Additionally, the court does not require courtesy copies of fee motions and there is no local rule the court is aware of requiring such.

[1]Just in comparison: the Court recently accepted a stipulated attorney fees order on a matter that was litigated in court for over a year by a highly experienced lemon law firm in the amount of $9,000.

[2]The hearing was originally scheduled for July 22, 2024, but the Superior Court’s computer system was inoperable on that date.