Hanai v. Mercedes-Benz USA, LLC

• Court: District Court, N.D. California
• Decided: March 10, 2022
• Docket: 3:20-cv-06012
• Status: Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8

10 MARTIN HANAI and SHIGERU HANAI, 11 Plaintiffs, No. C 20-6012 WHA

12 v.

13 MERCEDES-BENZ USA, LLC, ORDER RE MOTION FOR ATTORNEY’S FEES 14 Defendant.

15 16 INTRODUCTION 17 In this defective vehicle action, plaintiffs move for attorney’s fees. For 18 the reasons that follow, plaintiffs’ motion is GRANTED IN PART AND DENIED IN 19 PART. 20 STATEMENT 21 Plaintiffs Martin Hanai and Shigeru Hanai purchased a new 2018 Mercedes- 22 Benz GLE 350 from a Mercedes-Benz dealership in San Francisco. Defendant 23 Mercedes-Benz USA, LLC manufactured the vehicle. On two occasions, plaintiffs 24 took the vehicle to authorized Mercedes-Benz repair facilities to address a foul odor 25 coming from the air conditioner. On both occasions, plaintiffs believed the vehicle 26 had been repaired because the service technician represented that the issue had been 27 resolved. But the air conditioner continued to cause a foul odor even after the 1 attempted repairs. Defendant did not replace the vehicle or make restitution to 2 plaintiffs. 3 Plaintiffs brought three claims for relief in state court: one claim for breach 4 of express warranty in violation of the Song-Beverly Act; one claim for breach of 5 implied warranty in violation of the Song-Beverly Act; and one claim for 6 fraudulent concealment. Defendant successfully removed to federal court on the 7 basis of diversity jurisdiction. Defendant then moved to dismiss the third claim for 8 fraudulent concealment and, with it, plaintiffs’ claim for punitive damages. That 9 motion was granted. 10 The parties later entered into a settlement agreement, whereby defendant 11 agreed to repurchase the vehicle for $67,913.01. The agreement provided that 12 defendant shall pay plaintiffs’ “attorneys’ fees, costs, and expenses that have 13 been reasonably incurred to date . . . .” It also stated that plaintiffs “are the 14 prevailing party” for purposes of a motion for attorney’s fees. The parties filed 15 a joint notice voluntarily dismissing the matter. Plaintiffs now move for 16 attorney’s fees in the amount of $29,147.50 and costs in the amount of $862.70. 17 This order follows full briefing and a telephonic hearing. 18 ANALYSIS 19 “In a diversity case, the law of the state in which the district court sits 20 determines whether a party is entitled to attorney fees . . . .” Carnes v. Zamani, 21 488 F.3d 1057, 1059 (9th Cir. 2007). “Except as attorney's fees are specifically 22 provided for by statute, the measure and mode of compensation of attorneys and 23 counselors at law is left to the agreement, express or implied, of the parties; but 24 parties to actions or proceedings are entitled to their costs . . . .” Cal. Civ. 25 Code § 1021. 26 The Song-Beverly Act provides, in part:

27 If the manufacturer or its representative in this state is attempts, the manufacturer shall either promptly replace the new 1 motor vehicle . . . or promptly make restitution to the buyer . . . .

2 * * *

3 If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the 4 judgment a sum equal to the aggregate amount of costs and expenses, including attorney’s fees based on actual time expended, 5 determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of 6 such action. 7 Cal. Civ. Code §§ 1793.2(d)(2), 1794(d). “‘Prevailing party’ includes the party 8 with a net monetary recovery . . . .” Cal. Civ. Code § 1032(a)(4). “[T]he term 9 ‘recovery’ in Section 1032(a)(4) encompasses situations in which a defendant 10 settles with a plaintiff for some or all of the money that the plaintiff sought 11 through litigation.” DeSaulles v. Cmty. Hosp. of Monterey Peninsula, 62 Cal. 12 4th 1140, 1154 (2016). 13 Regarding calculation of fees, the California Supreme Court has stated:

14 [A] court assessing attorney fees begins with a touchstone or lodestar figure, based on the “careful compilation of the time 15 spent and reasonable hourly compensation of each attorney . . . involved in the presentation of the case.” . . . . [T]rial 16 courts must carefully review attorney documentation of hours expended; “padding” in the form of inefficient or duplicative 17 efforts is not subject to compensation.

18 [T]he lodestar is the basic fee for comparable legal services in the community; it may be adjusted by the court based on factors 19 including . . . (1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent 20 to which the nature of the litigation precluded other employment by the attorneys, (4) the contingent nature of the fee 21 award. . . . The “‘experienced trial judge is the best judge of the value of professional services rendered in his court . . . .’” 22 Ketchum v. Moses, 24 Cal. 4th 1122, 1131–32 (2001) (citations omitted). The 23 trial judge must use the “prevailing rate in the community for similar work” to 24 calculate fees. 569 E. Cnty. Boulevard LLC v. Backcountry Against the Dump, 25 Inc., 6 Cal. App. 5th 426, 432 (2016). Generally, the forum district represents 26 the relevant legal community. See Gates v. Deukmejian, 987 F.2d 1392, 1405 27 (9th Cir. 1992). 1 The moving party bears the burden of establishing that the requested fees 2 are reasonable. See City of Colton v. Singletary, 206 Cal. App. 4th 751, 784 3 (2012). “To the extent a trial court is concerned that a particular award is 4 excessive, it has broad discretion to adjust the fee downward or deny an 5 unreasonable fee altogether.” Ketchum, 24 Cal. 4th at 1138. 6 1. REASONABLE HOURLY RATES. 7 “[T]he statutory language of Section 1794, subdivision (d), is reasonably 8 compatible with a lodestar adjustment method of calculating attorney fees, 9 including use of fee multipliers.” Robertson v. Fleetwood Travel Trailers of 10 Cal., Inc., 144 Cal. App. 4th 785, 818 (2006). Thus, the lodestar method 11 applies to this Song-Beverly Act dispute. 12 This order finds the hourly rates plaintiffs’ counsel has requested to be 13 slightly higher than the prevailing rates in the community for similar work, 14 considering the experience of the attorneys involved. A review of several 15 recent decisions in this district reveals hourly rates ranging from $225 to $650 16 for lemon law attorneys. Cox v. FCA US LLC, No. 3:20-CV-03808-WHO, 17 2022 WL 316681 (N.D. Cal. Feb. 2, 2022) (Judge William Orrick); Boyzo v. 18 FCA US LLC, No. 17-CV-04154-JCS, 2020 WL 1914805 (N.D. Cal. Apr. 20, 19 2020) (Judge Joseph Spero); BladeRoom Grp. Ltd. v. Emerson Elec. Co., No. 20 5:15-CV-01370-EJD, 2020 WL 1677328 (N.D. Cal. Apr. 6, 2020) (Judge 21 Edward Davila); Base v. FCA US LLC, No. 17-CV-01532-JCS, 2020 WL 22 363006 (N.D. Cal. Jan. 22, 2020) (Judge Joseph Spero). 23 Here, plaintiffs’ counsel requests that this order apply an hourly rate of 24 $525 to David Barry’s work prior to January 2022 and an hourly rate of $600 to 25 his work thereafter. Similarly, plaintiffs’ counsel requests that this order apply 26 an hourly rate of $250 to Logan Pascal’s work prior to January 2022 and an 27 hourly rate of $300 to his work thereafter. And, as to Otis Hayes III, plaintiffs’ 1 counsel requests an hourly rate of $350 for his work prior to January 2022 and 2 $400 for his work thereafter. 3 Plaintiffs’ counsel submitted declarations that sufficiently state the above 4 attorneys’ experience and qualifications to justify granting fees. But this order 5 finds no reason to deviate from Cox, in which Barry and Pascal represented the 6 plaintiff. 2022 WL 316681, at *1 (arising from violations of vehicle warranties 7 under the Song-Beverly Act). In Cox, Judge Orrick found hourly rates of $525 8 and $250 reasonable for Barry and Pascal, respectively, so this order applies 9 those rates to Barry and Pascal. Id. at *2. 10 Neither does this order find reason to deviate from the $350 hourly rate 11 for Hayes, as three attorneys with similar experience as Hayes received an 12 hourly rate of $350 in Base. 2020 WL 363006, at *5. So this order applies that 13 rate to Hayes. 14 2. SETTLEMENT AGREEMENT. 15 Defendant argues plaintiffs should not recover fees incurred after the date 16 of settlement because the settlement agreement authorizes fees only “to date” 17 (Opp. 4). This order agrees. 18 California appellate courts have cut attorney’s fees based on the settlement 19 offer date. Meister v. Regents of Univ. of Cal., 67 Cal. App. 4th 437, 450 20 (1998). The Second Circuit has stated the same:

21 [W]hen a settlement cuts off a plaintiff's entitlement to attorney's fees on a specific date, a district court may not award a party 22 attorney's fees for work incurred after that cut-off date . . . includ[ing] fees for work performed preparing a fee 23 application submitted to the district court in the event the parties are unable to agree on the attorney's fees to be awarded despite a 24 good faith effort to negotiate. 25 Lilly v. City of N.Y., 934 F.3d 222, 237 (2nd Cir. 2019). Thus, plaintiffs shall 26 not recover the $5,010 in fees and costs incurred after the settlement date of 27 August 31, 2021. 3. FRAUD CLAIM. 1 Defendant argues that plaintiffs should not recover fees associated with 2 litigating their fraud claim. This order agrees. 3 “Attorney fees incurred by a plaintiff in bringing a fraud action are not 4 recoverable.” Bezaire v. Fid. & Deposit Co., 12 Cal. App. 3d 888, 892 (1970). 5 Further, a California appellate court has stated: 6 When a cause of action for which attorney fees are provided by 7 statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the 8 statutory cause of action. . . . When the liability issues are so interrelated that it would have been impossible to separate them 9 into claims for which attorney fees are properly awarded and claims for which they are not, then allocation is not required. 10 Akins v. Enter. Rent-A-Car Co. of San Francisco, 79 Cal. App. 4th 1127, 1133 11 (2000). 12 Here, plaintiffs can recover attorney’s fees for violations of the Song- 13 Beverly Act but not for fraud because it was unreasonable to allege fraud in the 14 first place. A prior order found that plaintiffs “fail[ed] to put forth any facts to 15 support” that defendant had knowledge of the air-conditioning defect, that 16 defendant concealed the defect, or that defendant had an intent to defraud 17 plaintiffs (Dkt. No. 34 at 4). Thus, plaintiffs unreasonably wasted defendant’s 18 time and judicial resources pursuing a meritless claim, which was ultimately 19 dismissed on the pleadings. And the liability issues were not so interrelated that 20 allocation would be impossible — defendant’s motion for judgment on the 21 pleadings discussed only the fraud claim. Thus, plaintiffs shall not recover 22 $4,602.50 for work responding to the motion for judgment on the pleadings, 23 which includes time relating to the hearing on the motion. 24 4. UNFILED MOTION TO REMAND. 25 Plaintiffs have not filed a motion to remand in this case, but plaintiffs have 26 billed for preparing and drafting a motion to remand. It was “inefficient” for 27 plaintiffs’ counsel to prepare the motion and never file it, so the fees incurred 1 amount to unreasonable “‘padding’ . . . not subject to compensation.” Ketchum, 2 24 Cal. 4th at 1132. Further, in their reply brief, plaintiffs “withdraw the time 3 incurred with the Motion to Remand” (Reply Br. 6). Thus, plaintiffs shall not 4 recover the $600 billed for such motion. 5 5. OTHER ADJUSTMENTS. 6 The following further adjustments shall be made, which reduce plaintiffs’ 7 fees by $2,030 in total: 8 • 4/8/21: “Communication: send email to OC re PMK dates” 9 reduced to 0.1 hours (Gallagher Decl., Exh. E (two-sentence 10 email)). Reduces total fees by $35. 11 • 4/9/21: “Communication: telephonic meet and confer re PMK 12 dates” reduced to 0.1 hours based on email showing that four other 13 cases were also discussed during call (Gallagher Decl., Exh. F). 14 Reduces total fees by $140. 15 • 5/17/21: “Communication: Send email recap of telephonic meet 16 and confer” reduced to 0.1 hours (Gallagher Decl., Exh. G). 17 Reduces total fees by $140. 18 • 5/19/21: “Review scheduling order” reduced to 0.1 hours. 19 Reduces total fees by $140. 20 • 5/24/21: “Review and Update File: re status of Beverly Hills PMQ 21 deposition dates” reduced to 0.1 hours. Reduces total fees by $70. 22 • 5/27/21: “Draft IDC Statement re Def discovery responses” 23 reduced to two hours due to inefficiency (Dkt. No. 26 is only 2.5 24 pages). Reduces total fees by $700. 25 • 6/7/21: “Review File: re IDC brief” is eliminated as duplicative of 26 the subsequent entry, “Review and Revise: revise IDC Brief.” 27 Reduces total fees by $175. 1 e Each of eight entries for “Review File” regarding “PMK dates” 2 reduced to 0.1 hours. Reduces total fees by $630. 3 6. DEFENDANT’S OBJECTIONS. 4 Defendant filed separate objections to numerous statements in the 5 Declaration of David Barry (Dkt. No. 45). This order has considered each 6 objection. To the extent this order’s analysis implicates any evidence to which 7 there was an objection, such objection is overruled. 8 CONCLUSION 9 For the foregoing reasons, and to the extent stated herein, plaintiffs’ 10 motion for attorney’s fees is GRANTED IN PART AND DENIED IN PART. 11 Plaintiffs shall recover attorney’s fees in the amount of $16,905. Plaintiffs shall a 12 recover costs in the amount of $862.70 pursuant to Local Rule 54-3(a)

|| (kt. No. 42). 5 14 15 IT IS SO ORDERED. 16

17 || Dated: March 10, 2022. Pee A _ Z 18 LLIAM ALSUP 19 UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28