Consumer Statutes, Reasonableness Of Fees: Trial Judge Did Not Abuse His Discretion By Awarding $73,864 In Lemon Law Fees Out Of A Requested $191,688.75

Case Settled For $85,000, With Duplicative Efforts Properly Justifying Lower Court Reduction And With 2/7 DCA Panel Disagreeing With Another Court That Particular Reduction Articulation Applied Outside Of Civil Rights Context.

            Morris v. Hyundai Motor America, Case No. B290693 (2d Dist., Div. 7 Sept. 16, 2019) (unpublished) is a situation where the trial judge properly reduced an inflated fee request where there was an indication of unnecessary duplication and stacking of attorney effort.  The record below was also sufficient to show why the reduction was not across-the-board or based on a percentage cut, instead being based on a reasoned analysis of why reductions were in order.

            Here, a lemon law plaintiff and Hyundai settled on the trial date for $85,000, which was a full statutory “buy-back” of the car, incidental/consequential damages, and a civil penalty.  The settlement did reserve the right for the plaintiff to move for reasonable Song-Beverly Act attorney’s fees as the prevailing party.  Plaintiff moved for lodestar fees of $127,792.50, augmented by a 1.5 multiplier for a grand total request of $191,688.75.  Hyundai principally challenged the claimed hourly rates and duplication of effort given that 11 different lawyers at two different firms were involved with very little paralegal time billed for a non-complex case.  The trial court sided with the major part of Hyundai’s objections, lowering hourly rates for some attorneys and excluding duplicative work (cutting entirely the fees for six billing attorneys, just under 30% of the total billed hours).  It awarded $73,864 in fees (but also an additional $13,068,96 in costs, a costs ruling never challenged). 

            Plaintiff appealed, and the 2/7 DCA affirmed.

            Plaintiff’s first argument was that the lower court engaged in an inappropriate proportionality argument by saying fees were unreasonable based on the settlement amount.  However, the record did not support this contention.  Rather, the reduction was based on too many attorneys billing for a fairly mundane case—especially where many of the tasks by higher billing attorneys could have been handled by paralegals.    (See, e.g., Donahue v. Donahue, 182 Cal.App.4^th 259, 271 (2010).) 

            The appellate court also addressed, in a footnote, plaintiff’s contention that a trial judge had to clearly explain a sizeable reduction in a Song-Beverly Act case based upon Warren v. Kia Motors America, Inc., 30 Cal.App.5^th 24, 37 (2018) [with Warren, in turn relying on the logic of a civil rights case reduction, Kerkeles v. City of San Jose, 243 Cal.App.4^th 88, 88 (2015)].  The 2/7 DCA panel expressly disagreed with Warren when it came to the proposition of conferring a heightened review on a Song-Beverly Act fee award versus a federal civil rights award.

            The major issue was to determine if it was reasonable for the trial judge to cut entirely the fees for six billing attorneys.  Based on the record, this lower court’s “haircut” was just fine because it was reducing for a “balanced billing” effort by a lesser number of attorneys as opposed to the inflated billing submission below.

            With respect to hourly rates, the trial judge did cut them down based on the non-complex nature of the case and on the fact that lower-billing attorneys/paralegals could have completed many of the tasks.  This was no abuse of discretion.  (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc., 6 Cal.App.5^th 426, 438-439 (2016).)