Morris v. Hyundai Motor Am.

41 Cal.App.5th 24

253 Cal.Rptr.3d 592

Mary MORRIS, Plaintiff and Appellant,

v.HYUNDAI MOTOR AMERICA, Defendant and Respondent.

B290693

Court of Appeal, Second District, Division 7, California.

Filed September 16, 2019

Rosner, Barry & Babbitt, Hallen D. Rosnerand Arlyn L. Escalante, San Diego, for Plaintiff and Appellant.

Bowman and Brooke, Brian Takahashi, Jimmy Y. Park, Torrance, and Adele V. Karoum ; and SJL Law, Julian G. Senior, for Defendant and Respondent.

STONE, J.^*

Mary Morris appeals from the trial court’s order awarding her attorney fees following the settlement of Morris’s action against Hyundai Motor America (Hyundai) under the Song-Beverly Consumer Warranty Act (the Song-Beverly Act). ( Civ. Code, § 1790 et seq. ) Morris sued Hyundai after she purchased a defective used Hyundai vehicle that Hyundai refused to repurchase. The parties settled the litigation, with Hyundai agreeing to pay Morris $85,000, plus reasonable attorney fees and expenses.

After failing to reach agreement with Hyundai on the attorney fees amount, Morris moved for a fee award using the lodestar method¹ that consisted of a $127,792.50 base amount with a 1.5 multiplier, for a total of $191,688.75. The trial court awarded $73,864 in fees. Morris now contends the court abused its discretion in reducing her attorney fee award. We affirm.

PROCEDURAL HISTORY

1. Morris’s Complaint

On March 3, 2016, Morris filed a complaint against Hyundai asserting causes of action under the Song-Beverly Act and the Magnuson-Moss Warranty Act stemming from Morris’s purchase on June 30, 2014 of a used 2011 Hyundai vehicle for which Hyundai issued a warranty. Morris paid $35,183.60 for the car, including sales tax, fees, interest and other charges. Morris alleged the vehicle’s interior, transmission, engine and electrical system had serious defects. She asserted Hyundai failed to conform her vehicle to its warranties after a number of repair attempts, and Hyundai wrongfully refused to replace her car or make restitution as required under the Song-Beverly Act. Her complaint sought restitution, an award of actual damages, a civil penalty of two times actual damages² and attorney fees and costs.

On April 11, 2017, the date the trial was to commence, the parties agreed to settle the matter for the sum of $85,000, which consisted of a full statutory "buy-back" of Morris’s car, incidental and consequential damages, and a civil penalty. The settlement also provided that Morris would receive reasonable attorney fees and expenses to be determined by the court in the absence of an agreement by the parties.

2. Morris’s Motion for Attorney Fees and Costs

Morris moved for attorney fees and costs pursuant to Civil Code section 1794, subdivision (d). Morris argued her counsel were able to marshal their expertise and significant experience in lemon law cases to litigate Morris’s case efficiently. However, Morris contended that Hyundai’s obstreperous and aggressive positions in the litigation required extensive efforts by Morris’s counsel, the Knight Law Group, including adding the law firm Altman Law Group as co-counsel in May 2016 to assist in the litigation.³

Morris contended Hyundai’s improper objections and evasive responses to discovery requests required extensive "meet and confer" efforts. Further, Morris’s counsel was required to prepare for and defend the depositions of Morris and her expert witness, and to prepare for and take the depositions of several Hyundai employees and Hyundai’s expert witness. Morris’s counsel also attended the inspection of Morris’s vehicle as well as an unsuccessful mediation in February 2017.

Morris’s counsel engaged in extensive preparation in anticipation of the trial set for April 2017, including: drafting 11 motions in limine and oppositions to Hyundai’s 12 motions in limine; preparing witness and exhibit lists, proposed jury instructions, verdict forms, and subpoenas; reviewing deposition testimony; drafting an opening statement and outlines for witness examinations; and preparing Morris and her expert for their trial testimony. On the scheduled trial date, counsel appeared and participated in a settlement conference, which was successful.

Morris argued that lemon law cases such as hers are "rarely simple" and require specialized knowledge of consumer protections, the intricacies of automobiles, and manufacturers’ and dealers’ policies and protocols for repairs and legal compliance. Morris urged the trial court to factor into its analysis of the appropriate fee award the skill, knowledge and experience that led to an excellent result for Morris, namely a settlement figure amounting to nearly two and a half times the vehicle’s purchase price.

Morris requested lodestar attorney fees of $127,792.50, consisting of $50,055 in fees incurred by seven attorneys at the Knight Law Group and $77,737.50 in fees incurred by four attorneys and one paralegal at the Altman Law Group. Morris requested the court apply a 1.5 multiplier to the lodestar figure to compensate her attorneys for the fact that the law firms had taken the matter on contingency and that payment for their work was delayed. She thus sought a total of $191,688.75 in attorney fees for 283.3 hours of work.

Morris’s motion was supported by the declarations of the lead attorneys from each of the law firms, Steve Mikhov from the Knight Law Group and Bryan Altman from the Altman Law Group. Mikhov’s declaration cited numerous consumer rights cases in which California courts awarded attorney fees for time billed by attorneys from Mikhov’s firm and from the Altman Law Group, in most cases at similar rates to those the attorneys billed in the instant case. Altman’s declaration attached an Attorney Fee Survey Report in support of his contention that the hourly rates charged by Morris’s attorneys were reasonable and commensurate with the rates charged by other attorneys with comparable experience in consumer rights law.

3. Hyundai’s Opposition

Hyundai opposed Morris’s attorney fee motion, asserting Morris had failed to meet her burden to establish the reasonableness of the requested fee award for litigating this "very simple case." Hyundai’s opposition was supported by a declaration from its attorney Brian Takahashi, who submitted a spreadsheet with numerous, specific objections to Morris’s attorneys’ billing entries.

Hyundai disputed Morris’s contention that Hyundai dragged out the litigation and was overly aggressive, contending the parties engaged in standard discovery and there were no discovery motions. Hyundai attached examples of discovery responses served by Morris’s counsel to demonstrate that they were stock objections and responses that were virtually identical to those served in all the firms’ other cases. Similarly, Hyundai submitted evidence that Morris’s meet and confer letter was the same stock letter sent by her counsel in every case they litigated.

Further, Hyundai contended the amount sought in lodestar attorney fees was excessive, as much of the billing by Morris’s attorneys was "inefficient, unreasonable, duplicative, exaggerated and/or not actually incurred." Hyundai pointed out that 11 different lawyers at two different firms worked on the case for Morris, with very little paralegal time. Hyundai noted the lack of any explanation in Morris’s motion papers as to why two firms and so many attorneys were necessary to prosecute the case. In addition, Hyundai argued the firms had attorneys billing for work that paralegals should have done, driving up the cost substantially.

Hyundai also asserted that Morris’s counsel appeared to have billed for what they believed the "value" of a task should be, as opposed to the actual time spent. Hyundai asserted this was the case with respect to the drafting of the complaint, discovery requests and responses, declarations, deposition notices, and other pleadings in the case, which varied from the firms’ pleadings in other cases only in their caption, names of the plaintiff, and year, model, and identification number of the vehicle. Hyundai further pointed to examples of duplicative billing among attorneys, specific excessive billing entries, billing in quarter-hour increments by the Altman Law Group instead of one-tenths, and vague billing entries that made it impossible to assess the actual value of the work.

Hyundai further contended Morris’s attorneys had charged excessive hourly rates, considering the lack of complexity of the case. Hyundai noted the lead attorney for Hyundai charged only $245 per hour, while Morris’s lead attorney, Altman, billed his time at $650 per hour. Further, Hyundai asserted that Mikhov unnecessarily billed at his $500 hourly rate to review virtually every pleading in the case. Referencing another lemon law case brought to trial by Mikhov’s and Altman’s firms, Hyundai noted the court limited their billing rates to a range of $175 to $400 per hour, and Hyundai argued the same range should apply in Morris’s case. Hyundai objected to the admission of the Attorney Fee Survey Report attached to Altman’s declaration, alleging it lacked foundation and constituted unreliable hearsay.

4. Morris’s Reply

In her reply, Morris explained that the Altman Law Group was associated in because that firm’s attorneys were trial specialists, and any resulting duplication of work would have been offset by the "gains in trial preparation efficiency." Morris further argued, without any supporting declaration or evidence, that the use of 11 attorneys on her case was reasonable and efficient because each attorney performed tasks in which he or she specialized. According to Morris, "[m]inimal time is spent for each attorney to review the file and learn the relevant facts of the case, while substantial time is saved from having to switch gears to become familiar with procedural rules and specific issues of each phase of the case." Morris asserted that even though her counsel used "form documents" in the case, work was necessary to conform those...