Maciel v. FCA US LLC et al.
Case No: 16CV05051
Hearing Date: Tue Jun 18, 2019 8:30

Nature of Proceedings: Motion: Attorney Fees and Motion: Tax Costs

On November 7, 2016, plaintiffs Cecelia and Antonio Maciel (“plaintiffs”) filed their complaint for violations of the Song-Beverly Act, fraudulent concealment, and negligent repair, against defendants FCA US LLC and Crown Dodge (“defendants”) related to defects in their 2011 Ram 1500.

Trial was set at plaintiffs’ request for January 8, 2018 and continued by request of the parties to allow them an opportunity to complete necessary discovery and due to trial conflicts of defendants’ counsel. Trial was continued to April 2, 2018. Trial was again continued to August 27, 2018 by the parties’ request to allow them to complete a vehicle inspection and due to trial conflicts of plaintiffs’ counsel. The parties again requested a trial continuance because the vehicle inspection was only completed on July 30, 2018, and consequently the expert witnesses had not yet been deposed. In addition, plaintiffs’ counsel again had a conflict in his trial schedule. Trial was continued to September 24, 2018. On September 21, 2018, the parties again requested a trial continuance in order to complete depositions of expert witnesses. The court vacated the trial date and set a CMC for October 22, 2018 for setting. On October 22, 2018, the parties announced they had settled the case pursuant to defendants’ CCP § 998 Offer to Compromise in the amount of $93,000.00.

Defendants also offered “to pay reasonable costs, expenses and attorneys’ fees based on actual time expended pursuant to Civil Code Section 1794(d) as stipulated by the parties or, if the parties cannot agree, upon motion to the Court, having jurisdiction over this action.” (See Defendants FCA US LLC and Crown Dodge’s C.C.P. § 998 Offer to Compromise to Plaintiffs’ Cecelia Maciel and Antonio E. Maciel filed October 19, 2018.)

The parties were unable to agree. A Memorandum of Costs incurred by Knight Law Group in the amount of $6,906.85 was filed on March 8, 2019, as was a Memorandum of Costs incurred by O’Connor Law Group in the amount of $7,615.32. On March 28, 2019, defendants moved to tax costs, setting the hearing on May 14, 2019. On May 3, 2019, plaintiffs’ filed a motion for attorney fees in the amount of $78,485, or $117,727.50 if the requested multiplier is granted, setting the hearing on May 28, 2019. A stipulation and order to consolidate the hearings was submitted and they were set for May 28, 2019. On May 23, 2019, the court reset the hearings to June 18, 2019. Opposition to the Motion for Attorney Fees has been submitted.[1] No opposition to the Motion to Tax Costs has been submitted.

Motion for Attorney Fees

The right to recover costs exists solely by virtue of statute. (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, at p. 989.) Code of Civil Procedure “[s]ection 1032 is the fundamental authority for awarding costs in civil actions. It establishes the general rule that ‘[e]xcept as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.’ ” (Scott Co. v. Blount, Inc. (1999) 20 Cal.4th 1103, 1108.) Code of Civil Procedure section 1033.5 “specifies the ‘items … allowable as costs under Section 1032.’ ” (Scott Co. v. Blount, Inc, supra, at p. 1108.) Costs include “Attorney fees, when authorized by any of the following: [¶] (A) Contract. [¶] (B) Statute. [¶] (C) Law.” (Code Civ. Proc., § 1033.5, subd. (a)(10).)

Here, the applicable attorney fee statute that triggers application of sections 1032 and 1033.5 is Civil Code section 1794, subdivision (d), which states: “If the buyer prevails in an action under this section [Song–Beverly Act], 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 parties agree that plaintiffs are entitled to attorneys’ fees. (See Defendants FCA US LLC and Crown Dodge’s C.C.P. § 998 Offer to Compromise to Plaintiffs’ Cecelia Maciel and Antonio E. Maciel filed October 19, 2018.) The only remaining issue is the amount to be awarded.

As noted above, plaintiffs’ request attorney fees in the amount of $78,485, or $117,727.50 if the requested multiplier is granted. They reach the initial figure by applying the lodestar method, multiplying the attorney rate by time spent. Invoices have been submitted to justify the fees.

Two law firms were involved in plaintiffs’ representation: The O’Connor Law Group and The Knight Law Group. The hourly rates charged range from $225/hour – $650/hour, with almost half of the billing being generated by an associate billing at $225/hour. Defendants do not challenge the rates charged (except when the multiplier is applied) and fail to present any argument regarding the propriety of the specific services rendered by plaintiffs’ counsel. The court declines to undertake this task and finds that actual time expended, the billing rates, and tasks performed were reasonable. The lodestar amount is thus $78,485.

Plaintiffs’ argue that the lodestar should be adjusted in this case. The lodestar may be adjusted based on the following factors: (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. (Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 579.) They ask for a multiplier of 1.5, which would increase the fee request to 117,727.50.

“The purpose of such adjustment is to fix a fee at the fair market value for the particular action.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132; see Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1171–1172.) Adjustment may be made upward or downward depending on the court’s assessment of the fair market value for the particular action at issue. “ ‘[Civil Code section] 1717 provides for the payment of a “reasonable” fee. After the trial court has performed the calculations [of the lodestar], it shall consider whether the total award so calculated under all of the circumstances of the case is more than a reasonable amount and, if so, shall reduce the section 1717 award so that it is a reasonable figure.’ ” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095–1096.) On the other hand, if the trial court finds that the lodestar is less than a reasonable amount, enhancement is justified. (Ketchum, at p. 1132.)

Defendants argue that the cause involved no novelty and no special skill. Paragraph 12 of the O’Connor Declaration recounts the events that occurred during the litigation, none of which appeared to be procedurally unusual in a typical litigation. The motion suggest that Mr. O’Connor is very experienced and skilled in this field, which is undoubtedly true. But that does not mean this case presented any particular matter requiring demonstration of any particular skill and nothing in this record suggests that it did. Nor do plaintiffs identify any novel or difficult question that required resolution. They assert that defendants aggressively defended the case, refused to resolve the matter prelitigation, refused to comply with the Discovery Act, and delayed in complying with the terms of the settlement. None of this suggests that any of the events were novel, or legally difficult. There is no significant showing of the contingent nature of the fee award or the extent to which the nature of the litigation precluded other employment by the attorneys. Based on the present record, the court denies the request to apply a multiplier.

The court similarly denies defendants’ request to apply a negative multiplier. Defendants assert “the relevant factors suggest that the attorney’s fees claimed are far above the fair market value for legal services and should therefore be adjusted downward.” (Opposition, p. 4.) No evidence that this is so was presented. The court again declines to pick up the laboring oar on this point.

The motion for attorney fees is granted in the amount of $78,485.

Motion to Tax Costs

1. § 998 Costs Penalty

As noted above, Knight Law Group reports $6,906.85 in costs and O’Connor Law Group reports $7,615.32 in costs. In total, $14,522.17 in costs is requested, Defendants request that costs be taxed in the total amount of $13,937.17.

Defendants served four offers to compromise as follows:

January 4, 2017 $37,000

December 5, 2017 $80,000

August 23, 2018 $85,545

September 17, 2018 $93,000

Defendants assert that plaintiffs lost the right to recover costs after the CCP § 998 offer of $37,000 was extended on January 4, 2017. If a statutory offer to compromise was rejected before trial or contractual arbitration, and the offeree fails to obtain a “more favorable” judgment or award, costs otherwise allowable under Code of Civil Procedure section 1032 may be withheld. (Code Civ. Proc. § 998.) This argument fails based on the express language of the offer, in which defendants agree to pay “reasonable costs, expenses and attorneys’ fees.” To hold that the court can impose a costs “penalty” after plaintiffs accepted an offer that includes “reasonable costs” would render that term of the offer meaningless. The court declines to do so.

2. Reasonableness of Costs

Code of Civil Procedure section 1033.5 defines items allowable as “costs.” (Code Civ.Proc., § 1033.5.) But Civil Code section 1794, subdivision (d) provides, in relevant part: “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 … determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.” (Emphasis added.)

Thus, section 1794, subdivision (d), permits the prevailing buyer to recover both “costs” and “expenses.” As observed in Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, “it is clear the Legislature intended the word ‘expenses’ to cover items not included in the detailed statutory definition of ‘costs.’” (Jensen v. BMW of North America, Inc., supra, at pp. 137-138; Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 42.) The Jensen court further noted: “An analysis by the Assembly Committee on Labor, Employment, and Consumer Affairs states: ‘Indigent consumers are often discouraged from seeking legal redress due to court costs. The addition of awards of ‘costs and expenses’ by the court to the consumer to cover such out-of-pocket expenses as filing fees, expert witness fees, marshall’s fees, etc., should open the litigation process to everyone.’” (Id.) In Jensen, the court remanded the case for a determination whether the expert fees were “ ‘reasonably incurred by the buyer in connection with the commencement and prosecution of [this] action. (§ 1794, subd. (d).).’ ” (Id.)

Items that are properly objected to are put in issue and the burden of proof to establish it was reasonable necessary is on the party claiming them as costs. (Ladas (1992) 19 Cal.App.4th 761, 774-776.) No opposition to this motion to tax costs was filed. To the extent the items were objected to based on reasonableness, the court thus finds that plaintiffs have failed to so establish. The motion to strike is granted and costs are taxed by a total of $13,937.17.

Pursuant to California Rules of Court, 3.1308 (a)(1) and Santa Barbara County Superior Court Local Rule 1301(b), the court does not require a hearing; oral argument will be permitted only if a party notifies all other parties and the court by 4:00 p.m. (Department 2) the day before the hearing of the party’s intention to appear. This tentative ruling will become the ruling of the court if notice of intent to appear has not been given. If no hearing is held, plaintiff is directed to provide a proposed order and judgment for signature commensurate with this tentative, with appropriate notice to defendant pursuant to California Rules of Court rule 3.1312, which will then be entered by the court.

[1] Opposition to plaintiffs’ Motion for Attorney Fees, Costs and Expenses was untimely filed on May 21, 2019, without explanation for its delay. Plaintiffs request the court disregard the opposition in its entirety. The Court declines to do so.