Case Number: BC654811 Hearing Date: January 02, 2019 Dept: 34

SUBJECT: (1) Motion for Attorney’s Fees, Costs, and Expenses

(2) Motion for Prejudgment Interest

Moving Party: Plaintiff Brandon Crayton

Responding Party: Defendant FCA US, LLC

The motion fees for attorney’s fees and costs is GRANTED in part and DENIED in part; the Court awards: (1) $18,357.35 in attorney’s fees to Strategic Legal Practices, APC; (2) $5,500.00 in attorney’s fees to Rosner, Barry & Babbitt, LLP; and (3) costs in the amount of $7,220.27.

The motion for prejudgment interest is GRANTED in part and DENIED in part; the Court awards plaintiff prejudgment interest in the amount of $4,613.50.

BACKGROUND:

Plaintiff commenced this action on March 20, 2017 against Defendant for: (1) violation of Civil Code section 1793.2(D); (2) violation of Civil Code section 1793.2(B); (3) violation of Civil Code section 1793.2(A)(3); (4) breach of express written warranty; (5) breach of the implied warranty of merchantability; and (6) violation of the Magnuson-Moss Warranty Act.

The parties resolved most issues by stipulation, but proceeded to a bench trial on June 19, 2018, to resolve a dispute over the proper calculation of damages. After largely adopting Defendant’s position with respect to the calculation of damages, judgment was entered on October 22, 2018, with Plaintiff being awarded $30,255.64 in restitution, minus a $1,271.04 offset for a total of $28,984.60, plus a two-time civil penalty in the amount of $57,969.20, for a total of $86,953.80.

Plaintiff now seeks attorney’s fees and prejudgment interest.

ANALYSIS:

I. Motion for Attorney’s Fees

Plaintiff seeks a total of $152,904.30 in attorney’s fees and costs, representing (1) $56,809.50 in attorney’s fees for Strategic Legal Practices; (2) $48,512.00 in attorney’s fees for Rosner, Barry & Babbit; (3) a 0.35 enhancement of attorney’s fees, equaling an additional $36,862.53; (4) an additional $3,500 in attorney’s fees which Plaintiff anticipates incurring to file a reply in this motion and appear at the hearing; (5) $6,282.27 in costs for Strategic Legal Practices; and (6) $938 in costs for Rosner, Barry & Babbit.

A. Objections to Evidence

The Court OVERRULES Plaintiff’s Evidentiary Objections to the Proudfoot Declaration.

B. Relevant Law

Costs and expenses, including attorney’s fees, may be recovered by a prevailing buyer under the Song-Beverly Act. (See Civ. Code, § 1794(d).) Section 1794 provides:

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 [emphasis added].) Thus, the statute includes a “reasonable attorney’s fees” standard.

The attorney bears the burden of proof as to “reasonableness” of any fee claim. (Code Civ. Proc., § 1033.5(c)(5).) This burden requires competent evidence as to the nature and value of the services rendered. (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” (Martino, 182 Cal.App.3d at 559.)

A plaintiff’s verified billing invoices are prima facie evidence that the costs, expenses, and services listed were necessarily incurred. (See Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.) “In challenging attorney fees as excessive because too many hours of work are claimed, it is the burden of the challenging party to point to the specific items challenged, with a sufficient argument and citations to the evidence. General arguments that fees claimed are excessive, duplicative, or unrelated to not suffice.” (Lunada Biomedical v. Nunez (2014) 230 Cal.App.4th 459, 488, quoting Premier Med. Mgmt. Sys., Inc. v. California Ins. Guarantee Ass’n (2008) 163 Cal.App.4th 550, 564.)

In determining whether the requested attorney’s fees are “reasonable,” the Court’s

“first step involves the lodestar figure—a calculation based on the number of hours reasonably expended multiplied by the lawyer’s hourly rate. The lodestar figure may then be adjusted, based on consideration of facts specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Gorman v. Tassajara Development Corp. (2008) 162 Cal.App.4th 770, 774 [internal citations omitted].)

In determining whether to adjust the lodestar figure, the Court may consider 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 (2008) 162 Cal.App.4th 770, 774; PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

“‘The reasonable market value of the attorney’s services is the measure of a reasonable hourly rate. [Citations.] This standard applies regardless of whether the attorneys claiming fees charge nothing for their services, charge at below-market or discounted rates, represent the client on a straight contingent fee basis, or are in-house counsel. [Citations.]’ ” (Center For Biological Diversity v. County of San Bernardino (2010) 188 Cal.App.4th 603, 619.)

C. Prevailing Party

Defendant does not dispute that Plaintiff is, overall, the prevailing party; after all, judgment was entered in Plaintiff’s favor in the total amount of $86,953.80. Defendant argues, however, that the Court should separate out this action into two periods, and award Plaintiff attorney’s fees only for the first period, given that Plaintiff was almost entirely unsuccessful during the second portion of the suit.

More specifically, Defendant argues Plaintiff should only be entitled for the fees it incurred from the outset of the action to January 2018, which totals just $11,688.00. In January, Defendant and Plaintiff stipulated to the filing of an amended answer, in which Defendant agreed to pay Plaintiff the amount paid-to-date for the vehicle, but excluding the optional residual value and excluding non-manufacturer items. Defendant also agreed to pay a civil penalty equal to two-times the amount of damages. (Proudfoot Decl., Exh. B.) The vast majority of Plaintiff’s fees were thereafter incurred litigating whether Plaintiff was entitled to the residual value or the non-manufacturer items, and following a bench trial (and a continuance, further briefing, and an additional hearing), the Court ruled in favor of Defendant, and concluded Plaintiff was not entitled to damages for either of those amounts.

Based on the foregoing, Defendant argues that, although Plaintiff is the prevailing party overall, Defendant is essentially the prevailing party for the period extending from the filing of the amended answer to the conclusion of the suit, given that the judgment ultimately entered matched the terms proposed by Defendant in the amended answer.

In support of this argument, Defendant cites MacQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th 1036. There, the Court of Appeal held:

“In this case, while MacQuiddy secured repurchase of the car for a stipulated amount of over $68,000, Mercedes-Benz’s liability for a repurchase amount, calculated under the statute, was never contested. Mercedes-Benz admitted liability under the Act in its answer to the complaint. Although the parties did not stipulate as to the amount of restitution until the beginning of trial, the amount was not litigated. The only issue litigated and tried was whether Mercedes-Benz was also liable for a civil penalty. MacQuiddy lost on that issue. Using a pragmatic approach, and being guided by equitable considerations, the trial court could conclude within the confines of the applicable principles of law, that MacQuiddy was not a prevailing party because he did not achieve his main litigation objective — obtaining a civil penalty.” (Id. at 1048.)

In reply, Plaintiff seeks to distinguish MacQuiddy by arguing that Defendant never stipulated to a particular amount of damages. Thus, even though the Court ultimately sided with Defendant on the measurement of calculations, Plaintiff still was required to expend significant time litigating the proper amounts.

While it is true Defendant did not provide a specific calculation, it did stipulate to resolve essentially the same issues that were resolved by stipulation in MacQuiddy. Prior to the bench trial, the parties stipulated to the following:

1. Plaintiff leased the 2016 Dodge Charger at issue in this case on July 15, 2016. The parties stipulate to enter the subject lease agreement into evidence.

2. Plaintiff is entitled to recover his actual damages pursuant to Civil Code section 1793.2(d)(2)(B) and 1794(b).

3. Plaintiff is entitled to recover a civil penalty of two times his actual damages pursuant to Civil Code section 1794(c).

4. The applicable “offset” in this matter will be calculated based on Plaintiff’s first presentment at 4,299 miles.

(See 5/10/18 Stipulation.)

Plaintiff incurred $11,688.50 prior to the parties agreeing to resolve all issues but the proper method of calculations in January 2018. Plaintiff now seeks an additional $93,633 in attorney’s fees for litigating issues that Plaintiff essentially lost at trial. Some amount of fees incurred after January 2018 must be awarded in light of the need to resolve the amount of damages owed once the Court ruled on which calculation method was proper. However, “[u]sing a pragmatic approach, and being guided by equitable considerations” (see MacQuiddy v. Mercedes-Benz USA, LLC, supra, 233 Cal.App.4th at 1048), the Court concludes it would be inequitable to award Plaintiff more than $90,000 in attorney’s fees for arguments he consistently lost. Plaintiff’s position simply is not distinguishable from MacQuiddy, despite Plaintiff’s efforts to argue to the contrary.

The Court notes that both parties cite the court to other trial court rulings regarding the appropriate market rate for attorney’s fees in Los Angeles. The Court does not find these citations to be of help. However, this Court has had ample experience presiding over scores of Lemon Law cases. The Court finds that the requested hourly rates for plaintiff’s counsel are reasonable.

Accordingly, the Court awards Plaintiff $11,688.50 in attorney’s fees, as to Strategic Legal Practices, only (as the sole attorney to incur those fees) for fees incurred prior to the agreement to amend the answer. In addition, the Court awards a further $10,000.00, divided equally between Strategic Legal Practices and Rosner, Barry & Babbit, for fees incurred after the January 2018 agreement to amend the answer, both with respect to the amount of damages owed pursuant to Defendant’s method of calculation, and with respect to bringing the instant motion.

Although not necessary for the Court’s analysis, the Court also notes that the amount of hours billed after January 2018 was not reasonable. For instance, Rosner, Barry & Babbit billed some 54 hours of research time during two weeks in April 2018. (See Exh. A to Rosner Declaration.) The Rosner firm was associated in as co-counsel because of their “extensive” experience. Such an experienced firm should not have needed so much time to research the basic laws applicable to this bench trial.

D. Multiplier to the Lodestar

Plaintiff requests a 0.35 enhancement (which is actually a multiplier of 1.35) because of the “excellent outcome” obtained and because of the risks of litigation. (See Motion, pp. 11-12.) As indicated above, at least as to the post-January 2018 litigation, Plaintiff did not obtain an “excellent outcome”

Nor does it appear to this Court that the risks of litigation warrant a multiplier. The Court recognizes that “a contingent fee in a case with a 50 percent chance of success should be twice the amount of a non-contingent fee for the same case . . .” (Cezares v. Saenz (1989) 208 Cal.App.3d 279, 288.) And, in certain types of cases – e.g., labor and employment cases – it is reasonable to assume that plaintiffs’ counsel will win approximately half the time, and hence a hence “a multiplier near 2 should, in most cases, be sufficient compensation for the risk associated with contingent fees” in these cases. (Fujiwara v. Sushi Yasuda, Ltd. (S.D.N.Y. 2014) 58 F. Supp. 3d 424, 329.)

However, that is not the case for Lemon Law cases. It is this Court’s experience that Plaintiffs prevail on virtually all Lemon Law cases. Plaintiff cites to one particular lemon law case that Strategic Legal Practices lost after two years of litigation, to show that “[t]he risks of non-recovery are more than merely academic.” (Motion, p. 12:9.) This one selective citation proves nothing. If Strategic Legal Practices prevailed in 100 cases during those same two years, and lost one case, it’s odds of prevailing are 99%. If Strategic Legal Practices prevailed in 500 cases during those same two years and lost one, its odds of prevailing are 99.8%. Such odds do not warrant a multiplier for the “risks of litigation.”

Nonetheless, the Court finds that Plaintiffs are entitled to a multiplier for the delay in payment that occurred.

“[T]he unadorned lodestar reflects the general local hourly rate for a fee-bearing case; . . . The adjustment to the lodestar figure . . . is intended to approximate market-level compensation for such services, which typically includes . . . a premium for the . . . delay in payment of attorney fees.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138.)

Defendant’s counsel are paid monthly; plaintiff’s counsel has been litigating this case since March 2017 without payment. The Court finds that this delay in payment is worth a multiplier of 1.1 to compensate for the delay in payment since the filing of this case in March 2017.

The Court therefore awards lodestar attorney’s fees to Strategic Legal Practices of $16,688.50, and a multiplier of 1.1, for a total of $18,357.35. The court awards lodestar attorney’s fees to Rosner, Barry & Babbitt, LLP of $5,000.00 with a multiplier of 1.1, for a total of $5,500.00.

E. Costs

Plaintiff also seeks $7,220.27 in costs. Again, Defendant argues Plaintiff should only be entitled to the $855.37 incurred prior to the amended answer.

Defendant’s argument has been rejected by our courts. In MacQuiddy, the Court of Appeal specifically held that, although there were equitable reasons to reduce attorney’s fees for the post-stipulation period, there was no analogous reason (or legal authority) to permit the trial court to find the plaintiff was not the prevailing party. (See MacQuiddy v. Mercedes-Benz USA, LLC, supra, 233 Cal.App.4th at 1051.) The Court of Appeal therefore held the plaintiff was entitled to its full litigation costs.

For the same reason, Defendant’s objection to costs incurred after the filing of the amended answer is improper.

Alternatively, Defendant argues that $911.26 incurred compelling a deposition was unnecessary; that $1,442.28 incurred retaining Plaintiff’s expert was unnecessary; and that “nearly all of the [other] costs asserted by Plaintiff’s counsel” are “littered with” improper claims for things such as postage, filing fees, and expert fees.

Neither the opposition nor the attached declaration actually provide any explanation as to why the first two costs were improper. Additionally, the final statement, that objects generally to an untold amount of otherwise unidentified costs, provides no concreted means for the Court to identify improper costs. Absent such briefing, the Court concludes Defendant has not sufficiently put any of the claimed costs at issue.

Plaintiff is therefore awarded costs in the requested amount of $7,220.27.

II. Motion for Prejudgment Interest

Plaintiff requests $6,559.16 in prejudgment interest pursuant to Civ. Code § 3287(a), which represents 10% interest for the restitution judgment only (the civil penalties are excluded), calculated from the date of the lease. Alternatively, Plaintiff requests $4,613.50 in prejudgment interest pursuant to Civ. Code § 3287(b), which represents 10% interest for the restitution judgment only calculated from the date the complaint was filed.

A. Relevant Law

Pursuant to Civ. Code § 3287:

“(a) A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state.

“(b) Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.”

Whether a defendant is liable for prejudgment interest under Civil Code §3287(a) depends on whether “defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount.” (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729 [citing Children’s Hosp. v. Bonta (2002) 97 Cal.App.4th 740, 774, emphasis in original].) “The statute . . . does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor. Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate.” (Id. [citations, quotations, and emphasis omitted].)

B. Discussion

1. Civ. Code 3287(a)

To obtain interest under Civ. Code § 3287(a), Plaintiff must show that he was entitled to damages “certain, or capable of being made certain by calculation,” as of “a particular day,” which he identifies as the day he signed the lease for the defective vehicle.

Defendant argues Plaintiff’s damages were not certain, given that the parties were able to stipulate to resolve all issues except the calculation of damages, thereby requiring Court intervention.

As to the primary dispute between the parties — the manner of calculating Plaintiff’s restitution damages — the Court disagrees. As Plaintiff argues in reply, a lack of certainty requires a factual dispute, not a legal dispute.

“Generally, the certainty required of Civil Code section 3287, subdivision (a), is absent when the amounts due turn on disputed facts, but not when the dispute is confined to the rules governing liability. [Citations.] Here, the amount due each member of the plaintiff class . . . was either of two readily calculable amounts: (1) the salary or pension due under section 68203 as it read before the 1976 amendment or (2) that due under the section as amended. The question whether to pay any judge or pensioner under one version of the statute or the other did not depend on any factual uncertainty or dispute but solely on the proper answers to the questions of law ultimately resolved in Olson v. Cory I. Uncertainty over those legal issues did not prevent the amounts due from being “certain or capable of being made certain by calculation” (Civ. Code, § 3287, subd. (a)).” (Olson v. Cory (1983) 35 Cal.3d 390, 402.)

This rule likewise applies here. The dispute turned solely on statutory interpretation, not any underlying facts, and that issue alone therefore does not justify finding damages uncertain.

Two other issues, however, do support finding damages uncertain. First, in addition to the foregoing, the parties also disputed the calculation of the mileage offset and for various other costs, such as insurance premiums, registration renewal, and non-manufacturer items installed by the dealer. At least one case suggests disputes over issues such as these are sufficient to render damages uncertain. (See Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718 [dispute regarding mileage was sufficient to render damages uncertain].)

Second, as one of the cases cited by Plaintiff discusses, Plaintiff’s interest calculation should be prorated based on when payments by Plaintiff were made. In Leaf v. Phil Rauch, Inc., (1975) 47 Cal.App.3d 371, a party in a vehicle breach of warranty action was awarded interest only on payments actually made. (Id. at 377 [“[P]laintiffs are entitled to prejudgment interest from the following dates: interest from the date of rescission (March 4, 1970) on those portions of the sum of $5,012.88 attributable to payments on the contract made prior to rescission . . . and (2) interest from the dates of payment on those portions of the sum of $5,012.88 attributable to contract payments made after rescission.”].) The logic of the Leaf case remains consistent with the policy underlying prejudgment interest, because until Plaintiff actually made each payments to Defendant, Plaintiff could put his funds to other uses. (See, e.g., Lewis C. Nelson & Sons, Inc. v. Clovis Unified School District (2001) 90 Cal.App.4th 64, 71-72 [“The purpose of prejudgment interest is to compensate plaintiff for loss of use of his or her property.”]; Great Western Drywall, Inc. v. Roel Construction Co., Inc. (2008) 166 Cal.App.4th 761, 767-68 [“The policy underlying authorization of an award of prejudgment interest is to compensate the injured party-to make that party whole for the accrual of wealth which could have been produced during the period of loss.”].) Here, Plaintiff signed a lease requiring an upfront payment, following by monthly payments. Assuming damages were otherwise certain, interest should therefore have been calculated based on the dates payments were made, not based on a one-off amount as of the date of the lease. The burden is on Plaintiff to demonstrate her entitlement to interest. (See Latkin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 660-61.) In light of Plaintiff’s failure to do so, the request for interest under Civ. Code § 3287(a) is DENIED.

2. Civ. Code 3287(b)

Separately, Plaintiff argues the Court may, in its discretion, award interest under Civ. Code § 3287(b), from the date the action was filed, March 20, 2017. The principal upon which interest is sought remains the same (the restitution damages) simply from a later date.

Defendant does not address §3287(b) in its opposition. The Court, in its discretion, concludes Plaintiff should be awarded $4,613.50 in interest from the filing of the complaint until judgment, as requested by plaintiff.