SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

TABITHA LYNN NEWSOM, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

CAVALRY SPV I, LLC, a Delaware limited liability company; and DOES 1 through 10, inclusive,

Defendants.
Case No. 2016-1-CV-299973

TENTATIVE RULING RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT; MOTION FOR ATTORNEYS’ FEES AND COSTS AND APPROVAL OF SERVICE AWARD

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on March 1, 2019, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

This is a putative class action brought by plaintiff Tabitha Newsom (“Plaintiff”) pursuant to the California Fair Debt Buying Practices Act (“CFDBPA”). According to the Complaint, filed on September 15, 2016, Plaintiff is alleged to have incurred a financial obligation in the form of a consumer credit account issued by Citibank, N.A. (Complaint, ¶ 12.) Plaintiff denies any debt is owed. (Ibid.) On June 27, 2016, the alleged debt was sold to defendant Cavalry SPV I, LLC (“Defendant”) for collection purposes. (Id. at ¶ 14.)

Defendant hired Cawley & Bergmann, LLC (“Cawley”) to collect the debt from Plaintiff on Cavalry’s behalf. (Complaint, ¶ 16.) On July 5, 2016, Cawley sent a written communication to Plaintiff on Cavalry’s behalf. (Id at ¶ 18.) The communication failed to include a notice required by the CFDBPA. (Id. at ¶ 20.) The Complaint sets forth a single cause of action for violation of the CFDBPA.

The parties have reached a settlement. On October 12, 2018, the Court granted preliminary approval of the settlement. The parties now move for final approval of the settlement. Plaintiff separately moves for attorneys’ fees, costs, and a service award. Defendant opposes the fee motion.

II. LEGAL STANDARD

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)
In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as “the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

III. DEFENDANT’S REQUEST FOR JUDICIAL NOTICE

Defendant requests judicial notice of the complaint in the action titled Marla Marie Davis v. Cavalry SPV, I, LLC, et al. in the Superior Court of California, County of Santa Clara, Case Number 16CV301730. The request is GRANTED. (Evid. Code, § 452, subd. (d).)

IV. DISCUSSION

The case has been settled on behalf of the following class:

(i) all persons with addresses in California (ii) to whom Cawley & Bergmann, LLP sent, or caused to be sent, an initial written communication in the form of Exhibit “1,” attached to Plaintiff’s Complaint (iii) in an attempt to collect a charged-off consumer debt originally owed to CITIBANK, N.A., (iv) which was sold or resold to CAVALRY on or after January 1, 2014, (v) which were not returned as undeliverable by the U.S. Post Office (vi) during the period one year prior to the date of filing this action through September 23, 2016.

Pursuant to the settlement, Defendant will pay $44,580 to the class ($12 to each class member). Defendant will also pay an incentive award of $3,000 to Plaintiff, in addition to $1,000 pursuant to Civil Code section 1788.62, subdivision (b). Plaintiff also seeks attorneys’ fees and costs in the amount of $74,505.57. No information has been provided to the Court regarding settlement administration costs. This information should be provided to the Court at or prior to the hearing. Settlement checks remaining uncashed after 90 days from the mailing date will be paid to Alexander Community Law Center as a cy pres recipient. (Settlement Agreement, ¶ 4.4.)

On November 15, 2018, notices were mailed to 3,605 class members. (Affidavit of Bailey Hughes, ¶ 7.) As of December 28, 2018, 494 notices have been returned as undeliverable with no forwarding address or further information provided by the U.S. Postal Service. (Id. at ¶ 9.) No objections or requests for exclusion have been received. (Id. at ¶¶ 11-12.)
The Court notes that 494 undeliverable notices is a somewhat high percentage (14%) of the total notices to the class. The parties are ordered to appear at the hearing on this motion to explain to the Court whether there are other options for contacting these class members so they can receive their payment. Nevertheless, the Court previously found that the proposed settlement is fair and the Court continues to make that finding for purposes of final approval.

Plaintiff requests a service award of $3,000 for class representative Tabitha Newsom.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)

The class representative has submitted a declaration in which she states she regularly communicated with class counsel, including answering questions, and reviewing and/or signing documents. (Declaration of Class Representative Tabitha Lynn Newsom in Support of Final Approval of Class Action Settlement and Service Award, ¶¶ 9-10.) The Court finds the service award is warranted.
The Court also has an independent right and responsibility to review the requested attorneys’ fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiff’s counsel brings a motion for attorneys’ fees and costs in the amount of $74,505.57. This is comprised of a lodestar figure for attorneys’ fees of $73,240 and costs of $1,265.57.

Defendant opposes the fee amount. Defendant argues the fees should be reduced for: (1) time expended on Plaintiff’s motion to compel non-party CPS’s compliance with a subpoena, which was denied; (2) issuing a defective subpoena to non-party Cawley & Bergmann; (3) time spent preparing a motion to compel further responses to the request for production of documents, for which Defendant already paid $2,450 in fees; (4) fees for similar work performed in the Davis case, which involved a similar CFDBPA notice violation; and (5) fees for excessive time spent on a task, or where the task is clerical or administrative.

As an initial matter, Plaintiff’s counsel acknowledges the $2,450 in fees already paid and withdraws the request for that amount. Therefore, the fee request at issue is for $70,790.
Recoverable attorneys’ fees ordinarily include compensation for all hours reasonably spent. (Sundance v. Municipal Court (1987) 192 Cal.App.3d 268, 273, quoting Serrano v. Unruh (1982) 32 Cal.3d 621, 639.) “[A]s a practical matter, it is impossible for an attorney to determine before starting work on a potentially meritorious legal theory whether it will or will not be accepted by a court years later following litigation.” (Ibid.) As explained in another case, cited by Plaintiff:

It is only when a plaintiff has achieved limited success or has failed with respect to distinct and unrelated claims, that a reduction from the lodestar is appropriate. However, where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his or her attorney’s fee reduced simply because the trial court did not adopt each contention raised.

(Hogar Dulce Hogar v. Community Development Com. of City of Escondido (2007) 157 Cal.App.4th 1358, 1369, citations, brackets, and quotation marks omitted.)

While Plaintiff’s counsel may not have prevailed on every single argument or motion, this is not a basis to reduce the requested fees where, as here, Plaintiff’s counsel succeeded in obtaining a recovery for the class on the only cause of action in the lawsuit.

Further, “the 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. Board Of Trustees Of California State University (2005) 132 Cal.App.4th 359, 396.) “By and large, the court should defer to the winning lawyer’s professional judgment as to how much time he was required to spend on the case; after all, he won, and might not have, had he been more of a slacker.” (Moreno v. City of Sacramento (9th Cir. 2008) 534 F.3d 1106, 1112.)

The Court has reviewed the time records and there is no specific amount that appears to be unreasonable. With regard to similar work that may have been performed in the Davis case, there is no reason, aside from speculation, to believe Plaintiff’s counsel unnecessarily did the same work twice. In sum, the Court finds the fee request is reasonable and should be granted (with the exception of the $2,450 previously paid).

Plaintiff’s counsel has submitted a supplemental declaration with the reply papers stating an additional 4.5 hours were spent reviewing the opposition and drafting the reply memorandum. (Supplemental Declaration of Raeon R. Roulston in Support of Motion for Attorney Fees and Costs and Approval of Service Award.) Plaintiff’s counsel therefore requests an additional $2,250 in fees ($500/hour x 4.5 hours). The additional fees are reasonable and thus approved.

As stated previously, Plaintiff’s counsel also seeks actual incurred costs of $1,265.57. (Declaration of Fred W. Schwinn in Support of Motion for Attorney Fees and Costs and Approval of Service Award, ¶ 17.) This amount of costs is approved.

The motion for final approval of class action settlement is GRANTED. However, the parties are ordered to appear at the hearing to provide information regarding settlement administration costs and to discuss options for contacting class members who did not receive notice. The motion for attorneys’ fees and costs and approval of service award is GRANTED IN PART, as discussed above.

The Court will prepare the final order if this tentative ruling is not contested. Plaintiff is directed to submit a judgment for the Court’s signature.

The Court will set a compliance hearing for September 20, 2019 at 10:00 A.M. in Department 5. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein, the number and value of any uncashed checks, amounts remitted to Defendant, the status of any unresolved issues, and any other matters appropriate to bring to the court’s attention. Counsel shall also submit an amended judgment as described in Code of Civil Procedure section 384, subdivision (b). Counsel may appear at the compliance hearing telephonically.

NOTICE: The Court does not provide court reporters for proceedings in the complex civil litigation departments. Parties may arrange for a private court reporter to provide services, but those arrangements must be consistent with the local rules and policies posted on the Court’s website.