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Durham v. FCA U.S. LLC

United States District Court, E.D. California

January 16, 2020

FCA U.S. LLC, Defendant.



         Timothy Durham asserts that FCA U.S. LLC is liable for violations of the Song-Beverly act and committed fraudulent inducement under California law. The parties settled the underlying claims, and Plaintiff now seeks an award of attorney fees and costs. (Docs. 108, 109.) For the reasons set forth below, Plaintiff's motion is GRANTED in part, in the modified amount of $32, 068.96.

         I. Background

         Plaintiff purchased a new 2012 Dodge Ram on August 14, 2012 for a cash price of $26, 275.00 - adding taxes, fees and financing charges on a six-year loan, the total purchase price was $46, 097.92. (Doc. 108-1 at 8.) The vehicle was distributed by FCA U.S. LLC, which provided an express written warranty. (Id.)

         According to Plaintiff, after approximately seventeen months and just over 15, 500 miles of ownership, and within the applicable warranty periods, the vehicle began experiencing electrical problems. (Id.) Plaintiff states he delivered the vehicle to an FCA-authorized repair facility because the airbag malfunction warning light was illuminated. (Id.) Plaintiff asserts that the vehicle remained at the repair facility for five days while the repair facility technicians attempted to correct the issue by reinstalling the wires and rerouting the harness. (Id.) Plaintiff reports that the electrical problems continued, later compounded by problems with the engine. (Id.) According to Plaintiff, approximately seventeen months later, Plaintiff again delivered the vehicle to an FCA-authorized repair facility because the electronic throttle control warning light illuminated several times, and the vehicle lost power. (Id.) Plaintiff reports that, in an attempt to correct the issues, the repair facility technicians special ordered parts to replace the defective accelerator pedal assembly and brake pedal switch. (Id.) They also reprogrammed the powertrain control module software. (Id.) Plaintiff states that he then returned the vehicle to the FCA-authorized repair facility approximately one week later, at which time the repair facility technicians replaced the defective accelerator pedal assembly and brake pedal switch per the previous repair visit. (Doc. 108-1 at 8-9.) Plaintiff reports that he repeatedly took the vehicle in for repairs, a total of three times in a period of just over seventeen months, but the serious electrical problems persisted. (Doc. 108-1 at 9.)

         According to Plaintiff, despite the ongoing repairs and continued manifestation of problems, FCA refused to acknowledge the defective nature of Plaintiff's vehicle. (Id.) Plaintiff contends that, at all times, FCA had direct, contemporaneous knowledge of the vehicle's issues, which it records in various databases accessible to its authorized repair facilities and the corporate offices. (Id.) Plaintiff reports that these repair records indicate each time the vehicle was presented for repair during the warranty period, as well as every time the FCA repair facility found a problem attributable to FCA, and billed FCA for the work. (Id.)

         Plaintiff reports that he contacted Dodge customer service directly on August 28, 2015 and requested that FCA repurchase the defective vehicle. (Id.) Plaintiff alleges that despite FCA's affirmative duty under the law to perform an investigation and offer relief, FCA rejected Plaintiff's request that same day. (Id.)

         Plaintiff filed a complaint in this action on November 7, 2016 in the Sacramento County Superior Court. (Doc. 108-1 at 10.) Plaintiff's complaint alleged willful violations of the Song-Beverly Act and fraudulent inducement - concealment for concealing a known TIPM defect, and sought, among other things, civil penalties and punitive damages. (Id.) FCA filed their answer to Plaintiff's complaint, denying all liability and asserting numerous affirmative defenses, on or about December 23, 2016. (Id.)

         On March 30, 2017, FCA filed its notice of removal of action from state to federal court. (Doc. 1.) On June 5, 2017, Plaintiff sought to remand the case to the Superior Court of California where litigation had already begun. (Doc. 11.) After a hearing on the matter, the Court ultimately denied Plaintiff's motion for remand. (Doc. 17.)

         On March 20, 2018, the Court held a settlement conference, and the case was not settled. (Doc. 33.) The Court held a telephonic status conference regarding trial setting on December 11, 2018. (Doc. 47.) On April 22, 2019, the Court held the pretrial conference. (Docs. 54, 55.) Motions in limine were filed on May 13, 2019 (Docs. 61, 62, 63, 64, 65, 67, 68, 69, 70, 71), which were addressed by the Court on June 10, 2019 (Docs. 86, 88). The jury trial was set for October 28, 2019. (Doc. 102.) Thereafter, the parties filed a notice of settlement on October 17, 2019. (Doc. 104.)

         Plaintiff filed a bill of costs on December 13, 2019. (Doc. 107.) On the same date, Plaintiff filed separate motions for attorney's fees for Knight Law Group LLP and Hackler, Daghighian, Martino & Novak, P.C. (Docs. 108, 109.) Defendant's opposition addressed both motions because they largely overlapped. (Doc. 110.) Plaintiff filed his brief in reply on January 6, 2020. (Doc. 113.)

         II. Legal Standard

         “In a diversity case, the law of the state in which the district court sits determines whether a party is entitled to attorney fees, and the procedure for requesting an award of attorney fees is governed by federal law. Carnes v. Zamani, 488 F.3d 1057, 1059 (9th Cir. 2007); see also Mangold v. Cal. Public Utilities Comm'n, 67 F.3d 1470, 1478 (9th Cir. 1995) (noting that in a diversity action, the Ninth Circuit “applied state law in determining not only the right to fees, but also in the method of calculating the fees”).

         As explained by the Supreme Court, “[u]nder the American Rule, ‘the prevailing litigant ordinarily is not entitled to collect a reasonable attorneys' fee from the loser.'” Travelers Casualty & Surety Co. of Am. v. Pacific Gas & Electric Co., 549 U.S. 443, 448 (2007) (quoting Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247 (1975)). However, a statute allocating fees to a prevailing party can overcome this general rule. Id. (citing Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717 (1967)). Under California's Song-Beverly Act, a prevailing buyer is entitled “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.” Cal. Civ. Code § 1794(d).

         The Song-Beverly Act “requires the trial court to make an initial determination of the actual time expended; and then to ascertain whether under all the circumstances of the case the amount of actual time expended and the monetary charge being made for the time expended are reasonable.” Nightingale v. Hyundai Motor America, 31 Cal.App.4th 99, 104 (1994). The court may consider “factors such as the complexity of the case and procedural demands, the skill exhibited and the results achieved.” Id. If the court finds the time expended or fee request “is not reasonable under all the circumstances, then the court must take this into account and award attorney fees in a lesser amount.” Id. “A prevailing buyer has the burden of showing that the fees incurred were ‘allowable,' were ‘reasonably necessary to the conduct of the litigation,' and were ‘reasonable in amount.'” Id. (quoting Levy v. Toyota Motor Sales, U.S.A., Inc., 4 Cal.App.4th 807, 816 (1992)); see also Goglin v. BMW of North America, LLC, 4 Cal.App. 5th 462, 470 (2016) (same).

         If a fee request is opposed, “[g]eneral arguments that fees claimed are excessive, duplicative, or unrelated do not suffice.” Premier Med. Mgmt. Sys. v. Cal. Ins. Guarantee Assoc., 163 Cal.App.4th at 550, 564 (2008). Rather, the opposing party has the burden to demonstrate the hours spent are duplicative or excessive. Id. at 562, 564; see also Gorman v. Tassajara Dev. Corp., 178 Cal.App.4th 44, 101 (2009) (“[t]he party opposing the fee award can be expected to identify the particular charges it considers objectionable”).

         III. Evidentiary Objections

         Both parties object to evidence presented in support of and in opposition to the motion for fees and costs. (Doc. 110-1; Doc. 113-2.) The Court has read and considered each objection made by Defendant and Plaintiff, and to the extent the Court considers any evidence to which there was an objection in its analysis, the objection is overruled.

         IV. Discussion and Analysis

         As a prevailing buyer, Plaintiff is entitled to an award of fees and costs under the Song-Beverly Act. See Cal. Civ. Code § 1794(d); see also Goglin, 4 Cal.App.5th at 470. Knight Law Group seeks: (1) an award of attorneys' fees pursuant to the Song-Beverly Act in the amount of $38, 995.00; (2) a lodestar multiplier of 0.5, in the amount of $19, 497.50; and (3) actual costs and expenses of $20, 248.96. (Doc. 108-1 at 7-8.) Thus, Knight Law Group seeks a total award of $78, 741.46. (Doc. 108-1 at 8.) Hackler Daghighian Martino & Novak, P.C. seeks: (1) for an award of attorney's fees pursuant to Civil Code section 1794(d) under the “lodestar” method in the amount of $22, 532.50; and (2) for a modest, “lodestar” modifier of 0.5 under California law, in the amount of $11, 281.25. (Doc. 109 at 9.) Thus, Hackler Daghighian Martino & Novak, P.C. requests a total of $33, 843.75. (Id.) Defendant acknowledges that “Plaintiff is entitled to recover attorneys' fees, costs, and expenses, ” but argues that the Song-Beverly Act “does not authorize a blank check, ” and the amount requested is unreasonable. (Doc. 110 at 6.)

         A. Fee Request

         Plaintiff seeks lodestars in the amount of $38, 995.00 for the work completed by Knight Law Group and $22, 532.50 for work completed by Hackler Daghighian Martino & Novak, P.C., which was associated into the case as lead trial counsel. (Doc. 108-1 at 8; Doc. 109 at 9.)

         1. Hours worked by counsel

         A fee applicant must provide time records documenting the tasks completed and the amount of time spent. Hensley v. Eckerhart, 461 U.S. 424, 424 (1983); Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 945-46 (9th Cir. 2007). Under California law, a court “must carefully review attorney documentation of hours expended” to determine whether the time reported was reasonable. Ketchum v. Moses, 24 Cal.4th 1122, 1132 (2001) (quoting Serrano v. Priest, 20 Cal.3d 25, 48 (1977)). Thus, evidence provided by the fee applicant “should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended.” Christian Research Inst. v. Alnor, 165 Cal.App.4th 1315, 1320 (2008). The court must exclude “duplicative or excessive” time from its fee award. Graciano v. Robinson Ford Sales, Inc., 144 Cal.App.4th 140, 161 (2006); see also Ketchum, 24 Cal.4th at 1132 (“inefficient or duplicative efforts [are] not subject to compensation”).

         Defendant objects to the hours reported, asserting that “Plaintiff failed to offer any explanation based on admissible evidence for why it took two firms who claim to be experts in their field to handle this routine case.” (Doc. 110 at 7.) Defendant contends that there was inherent duplication of effort in the Plaintiff's litigation management style. (Doc. 110 at 7.) According to Defendant, much of Knight Law Group's collective knowledge was wasted when it handed the case off to Hackler Daghighian Martino & Novak, P.C. for trial purposes. (Doc. 110 at 7-8.) Further, Defendant objects to numerous “billing entries that reflect excessive rates and/or time.” (Doc. 110 at 8.)

         a. Work completed by Knight Law Group

         The billing records submitted by Knight Law Group indicate the attorneys expended 108.2 hours on this action, through the preparation of the motion for fees and costs. (Doc. 108-2 at 20-26.) Defendant objects to the hours reported by Knight Law Group and contends there are numerous “billing entries that reflect excessive rates and/or time.” (Doc. 110 at 8.)

         i. Work related to the motion to remand

         According to Defendant, Plaintiff should not recover fees related to the motion to remand, which challenged this Court's diversity jurisdiction on the grounds that the parties were not diverse and the amount in controversy requirement of $75, 000.00 was not satisfied. The Court rejected both arguments and denied the motion on August 30, 2017. (Doc. 17.) Defendant argues that “[b]ecause the work on this motion was largely duplicative of previous efforts . . . and denied for the same reasons, it is unreasonable to pass these fees onto Defendant.” (Doc. 110 at 8.)

         In reply, Plaintiff asserts that “[t]he mere fact that a party does not prevail on a motion does not make that effort unreasonable.” (Doc. 113 at 10.) Plaintiff argues that “Plaintiff brought the motion in good faith in the regular course of this litigation, and FCA does not offer any basis why such costs would not be recoverable under the Song-Beverly Act.” (Id.)

         Notably, however, Plaintiff fails to address the reasonableness of the time expended by each of the attorneys related to the motion for remand. Plaintiff's counsel reports Alastair Hamblin spent 3.7 hours to draft the motion to remand and related documents, and prepare for and attend the hearing on the motion to remand, and “[d]raft results” on the hearing for multiple cases. (Doc. 108-2 at 21-22.) Kristina Stephenson-Cheang also indicates that she spent 0.1 hour for her review of the Court's notice of time change regarding the motion to remand. (Doc. 108-2 at 22.) Finally, Mr. Mikhov billed 0.2 hours to review the results of the motion to remand. (Id.)

         Significantly, as the billing records acknowledge, Plaintiff's counsel filed motions to remand in “multiple cases” before this Court. (See Doc. 108-2 at 22.) Similar arguments were presented to the Court in each motion challenging diversity jurisdiction.[1] The Court is unable to find the time related to drafting the motion, attending the hearing, or reviewing the opposition-particularly where no reply was filed-was reasonably expended by counsel. In addition, it appears the time reported by counsel was excessive. Because Plaintiff fails to establish the time was reasonably expended in this action, the lodestar calculation below will be reduced by 2.2 hours for Mr. Hamblin. (See Doc. 108-2 at 21-22.)

         ii. Internal communications and review

         As noted above, a fee applicant “should make a good-faith effort to exclude from a fee request hours that are … redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434. The Ninth Circuit has “recognized that ‘the participation of more than one attorney does not necessarily constitute an unnecessary duplication of effort.'” McGrath v. County of Nevada, 67 F.3d 248, 256 (1995) (quoting Kim v. Fujikawa, 871 F.2d 1427, 1435 n.9 (9th Cir. 1989)). However, in general, counsel should not bill for internal communications and communicating with each other, as such time is unnecessary. See, e.g., In re Mullins, 84 F.3d 459, 467 (D.C. Cir. 1996); Robinson v. Plourde, 717 F.Supp.2d 1092, 1099 (D. Haw. 2010).

         This Court previously observed, “many courts have . . . reduced fee awards for time spent in ‘interoffice conferences' or other internal communications.” Gauchat-Hargis v. Forest River, Inc., 2013 WL 4828594 at *3 (E.D. Cal. Sept. 9, 2013) (citing, e.g., Mogck v. Unum Life Ins. Co. of Am., 289 F.Supp.2d 1181, 1194 (S.D. Cal. 2003) [reducing selected time entries because attorneys “billed an inordinate amount of time for interoffice conferences”]; Coles v. City of Oakland, 2007 WL 39304, at *10 (N.D. Cal. Jan. 4, 2007) [“communication between attorneys may indicate unreasonable overstaffing such that a reduction in hours is appropriate”]). Notably, the Court's review of the billing records from Knight Law Group reveals a significant amount of time spent on the preparation of internal memorandums and summaries for co-counsel.

         For example, Alistair Hamblin attended the hearing on the motion to remand and then drafted the “results” of the hearing on August 1, 2017-prior to the Court issuing its written ruling on August 30, 2017-and his summary of the “results” was then reviewed by Steve Mikhov. (Doc. 108-2 at 22; Doc. 17.) Mr. Mikhov also billed for reviewing the “results” summarized and prepared by other attorneys at Knight Law Group following and initial scheduling conference, the pretrial conference hearing, and the motion in limine hearing. (Doc. 108-2 at 21, 25-26.) Likewise attorneys prepared, and reviewed, memorandums and summaries regarding the depositions of Plaintiff, Thomas Lepper, Barbara Luna, and Stan Gozzi. (See Doc. 108-2 at 23-26.) Notably, summaries of the deposition frequently followed memorandums prepared by others. For example, after attending Plaintiff's deposition, Diane Hernandez prepared a memorandum regarding the deposition on March 6, 2018, and the memorandum was subsequently reviewed by Ms. Stephenson-Cheang, who then reviewed the transcript and drafted her own summary on March 21, 2018. (Doc. 108-2 at 23-24.)

         Because the preparation and review of these documents were clearly internal communications and duplicative in nature, the Court will reduce the lodestar by a total of 2.5 hours. See Gauchat-Hargis, 2013 WL 4828594 at *3; In re Durosette, 2012 WL 9123382 at *3 (E.D. Cal. Aug. 23, 2012) (finding a reduction of time appropriate in part due to the amount of time reported for “preparing memos to the lead partner on the case”). This amount includes deductions of 0.6 hour for Mr. Mikhov and 1.9 hours by Ms. Stephenson-Cheang.

         iii. Clerical tasks

         The Supreme Court determined that “purely clerical or secretarial tasks should not be billed at a paralegal or [lawyer's] rate, regardless of who performs them.” Missouri v. Jenkins, 491 U.S. 274, 288 n.10 (1989). As a result, courts have eliminated clerical tasks from fee awards. See, e.g., Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009); see also Harris v. L & L Wings, Inc., 132 F.3d 978, 985 (4th Cir. 1997) (approving the court's elimination of hours spent on secretarial tasks from the lodestar calculation).

         Mr. Mikhov indicates that he spent 0.6 hour on November 19, 2019 to “[r]eview and audit billing” prior to the filing of this motion. (Doc. 108-2 at 26.) Due to the clerical nature of the task, the Court will reduce 0.6 hour from the fee award for Mr. Mikhov.

         iv. ...

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