Opinion
E063369
07-05-2017
CASEY S. CLAYTON et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Respondent.
The Barry Law Firm, David N. Barry; Rosner, Barry & Babbitt, Hallen D. Rosner, Kendra J. Woods and Shay Dinata-Hanson for Plaintiffs and Appellants. Wilson Turner Kosmo, Robert A. Shields; Dykema Gossett, John M. Thomas and Tamara A. Bush for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. MCC1301049) OPINION APPEAL from the Superior Court of Riverside County. Raquel A. Marquez, Judge. Affirmed. The Barry Law Firm, David N. Barry; Rosner, Barry & Babbitt, Hallen D. Rosner, Kendra J. Woods and Shay Dinata-Hanson for Plaintiffs and Appellants. Wilson Turner Kosmo, Robert A. Shields; Dykema Gossett, John M. Thomas and Tamara A. Bush for Defendant and Respondent.
Plaintiffs and appellants Casey S. Clayton and Ryan R. Gavlik (Plaintiffs) filed a complaint against defendant and respondent Ford Motor Company (Ford) regarding a 2004 Ford F-250 pickup truck with a defective engine (vehicle). The parties reached a settlement. Ford agreed to repurchase the vehicle and Plaintiffs would submit a motion for attorney's fees and costs (Motion). Plaintiffs filed the Motion seeking a "lodestar" amount of $177,840 based on 444.6 hours of work at an hourly rate of $400. In addition, they sought a 2.0 multiplier of the lodestar amount. Plaintiffs sought costs in the amount of $4,903.64. Ford filed opposition and the trial court conducted a hearing. After the hearing, the trial court awarded Plaintiffs $54,727.75 in attorney's fees and $1,864.75 in costs.
Plaintiffs contend on appeal that the trial court abused its discretion by reducing the attorney's fees and costs. Initially, they contend that the trial court record is unclear and remand is required in order for the trial court to provide its calculation of the attorney's fees and costs despite the fact Plaintiffs did not request a statement of decision. Further, Plaintiffs claim the trial court abused its discretion by reducing the hourly attorney fee, by apportioning the fees between the four causes of action, by not applying a multiplier, and by not ruling on Plaintiffs' objections to Ford's evidence. We find the trial court did not abuse its discretion by reducing the amount of attorney's fees and costs and we affirm the judgment.
FACTUAL AND PROCEDURAL HISTORY
A. COMPLAINT, MOTION FOR SUMMARY JUDGMENT AND SETTLEMENT AGREEMENT
Plaintiffs filed their complaint on July 22, 2013. Their first cause of action was for breach of implied 2arranty under the Song-Beverly Warranty Act (Song-Beverly). The second cause of action was for breach of express warranty under Song-Beverly. The third cause of action was for Violation of the Consumer's Legal Remedies Act (CLRA) pursuant to Civil Code section 1750. The fourth cause of action was for a violation of Business and Professions Code section 17200 (commonly, UCL).
The complaint alleged that in 2004, Ford had manufactured and distributed into the stream of commerce the vehicle. Plaintiffs purchased the vehicle on May 29, 2004. With the purchase of the vehicle, Plaintiffs were given several written and implied warranties on the vehicle. The vehicle had been in for service at an authorized repair facility on more than four occasions and each time Plaintiffs were assured the vehicle was fixed. On or about June 7, 2013, Ford offered to buy back the vehicle. The repurchase did not comply with Song-Beverly by failing to specify the amount to be reimbursed. In addition, Ford required Plaintiffs to sign the offer without knowing the terms of the repurchase.
On November 26, 2013, Ford filed a motion for summary judgment. Ford first alleged that all of Plaintiffs claims were expressly barred and res judicata applied because Plaintiffs were subject to a multi-district settlement. All of these issues were part of a class action settlement in In re Navistar Diesel Engine Products Liability Litigation 1:11- cv-o2496 (N.D. Ill.). Plaintiffs did not exclude themselves from the class action. Ford also alleged that the first and second causes of action were time barred. Finally, Ford alleged that the third and fourth causes of action should be dismissed because they relied on the violation of Song-Beverly.
In addition, on November 20, 2013, Ford filed a motion to stay discovery while awaiting a ruling on the summary judgment motion. Plaintiffs filed opposition to the stay of discovery. The motion to stay discovery was denied.
On June 16, 2014, Plaintiffs filed their opposition to the summary judgment motion. They argued Ford treated Plaintiffs as "opted-out separate plaintiffs" from the class action by offering to repurchase the vehicle. They also argued there were triable issues of fact as to whether the issues in this case were different and whether Plaintiffs received notice of the class action settlement. In addition, they argued there were triable issues of fact as to whether the claims were time-barred such as whether the time was tolled due to fraud. Finally, the CLRA and UCL causes of action were not barred as they were based on the improper offer to repurchase the vehicle. Ford believed the Song-Beverly claim was viable and offered to purchase the vehicle but did not comply with the repurchase terms dictated by Song-Beverly.
The trial court granted the summary judgment motion as to causes of action one and two, the warranty claims. The motion was denied as to causes of action three and four, the CLRA/UCL claims.
On December 5, 2014, Plaintiffs and Ford entered into a settlement agreement. Ford agreed to pay Plaintiffs $105,000. The agreement included language that "[s]aid payment represents a repurchase of PLAINTIFFS' vehicle by DEFENDANT, including complete satisfaction of PLAINTIFFS' damages, and out of pocket expenses." Plaintiffs were to surrender the vehicle. Payment of Plaintiffs' attorney's fees and costs would be determined by a fee petition.
B. PLAINTIFFS' MOTION
On February 9, 2015, Plaintiffs filed the Motion. Plaintiffs alleged the purchase of the vehicle in 2004 was for a total cost of $56,000. The settlement agreement was for $105,000, which was three times the purchase price. The vehicle was over 10 years old and had 140,000 miles. Plaintiffs contended they were entitled to a lodestar multiplier of 2.0 based on the exceptional result in the face of vigorous opposition. They requested an award of $177,840 for attorney's fees with a 2.0 multiplier totaling $355,680. In addition, they requested $4,903.64 in costs.
David N. Barry provided a declaration in support of the attorney's fees motion. Barry agreed to represent Plaintiffs on a contingency. He sought $400 per hour for his fee. He declared the time sheets submitted for work performed on the case were true and accurate representations of the time spent on the case. Barry had been practicing law for 14 years and had been practicing consumer law for 9 years. Barry was required to file numerous motions to compel because Ford refused to provide discovery. He provided a list of attorneys who practiced consumer law throughout California. These attorneys practiced in La Crescenta, San Diego, Santa Ana, San Francisco, Laguna Hills, Laguna Beach and Los Angeles. The fees ranged from $350 to $650 an hour. He provided a list of a cases in which an hourly rate of $375 was approved.
The total time spent was 444.6 hours, which included time prior to the motion for summary judgment being granted. A summary of the costs totaling $4,903.64 was also attached.
As additional support of the hourly rate requested, Plaintiffs provided a declaration from Hallen D. Rosner, a partner at Rosner, Barry and Babbitt. His firm specialized in consumer law. Attached was a copy of pages from a United States Consumer Law Attorney Survey detailing the average hourly attorney fees in various areas of the country. The survey was from 2010. For California, the hourly rate was between approximately $362 and $575 per hour. In 2014, Rosner's billing rate was $545 per hour. Rosner provided a list of cases in which his fee was approved. He also provided a list of attorney fee rates, which ranged between $325 and $625 per hour in Northern California, Los Angeles, La Crescenta and San Diego. The hourly rate charged by Rosner was the same for contingency and noncontingency cases.
C. FORD'S OPPOSITION TO PLAINTIFFS' MOTION
On February 10, 2015, Ford filed its opposition to the Motion. Ford argued that the summary judgment motion was granted as to the Song-Beverly claims. Ford argued that the hourly fee of $400 was excessive and not supported by a similar fee in the Riverside area. The appropriate hourly rate was $250 per hour. Plaintiffs had provided no comparable rates in Riverside.
Ford also argued that Plaintiffs should not be able to recover fees for pursuing the Song-Beverly claims. The trial court granted summary judgment as to those claims. The 247 hours spent on the Song-Beverly claims and the $3,593.84 in costs should not be awarded. Further, they were not entitled to fees for pursuing the UCL claim because fees were not awarded for these issues. Thus, the 148.9 hours expended pursuing the CLRA and the UCL claim should be reduced by half. Of the 48.1 general hours noted on the summary bill, which was spent litigating all three matters, one-third should be cut. In addition, Ford requested the bill be reduced by 20 percent because of "padding" of the bills. Finally, Plaintiff argued that no multiplier was warranted.
Ford also requested an offset of fees because there was a $70,000 award beyond the value of the vehicle and counsel likely already received some of that amount. A declaration was submitted by Sotera L. Anderson, who represented Ford. She prepared a detailed response to each of the items billed and whether they involved the Song-Beverly claims, the CLRA claim or the UCL claim.
Ford also filed a request for judicial notice. This included declarations filed in other consumer law cases. These declarations provided an hourly rate for attorneys between $165 to $250. These rates included the areas of Los Angeles, Northern California, Southern California and San Diego.
D. PLAINTIFFS' REPLY TO THE OPPOSITION
Plaintiffs filed a reply to the opposition to the Motion. Plaintiffs argued the fees could not be separated because the issues were intertwined. Further, Ford's hourly rates were not comparable to the instant case because they were noncontingency hourly rates. Plaintiffs insisted they were entitled to a lodestar multiplier because of the exceptional settlement.
Barry submitted another declaration. He did not receive any of the settlement. Plaintiffs also submitted objections to the declaration by Anderson and the exhibits attached, for lack of foundation and personal knowledge. These included the apportionment of fees to the different claims.
E. HEARING ON PLAINTIFFS' MOTION
Prior to the hearing, the trial court issued a tentative ruling awarding $41,252.75 in attorney's fees and $1,280 in costs. It found, "The Song-Beverly claims are distinguishable from the CLRA and UCL claims." The court found support for 148.9 hours spent on the CLRA and UCL claims. A 10 percent reduction in hours was made for the UCL work. In addition, 16 hours was added for general work for a total of 150.01 hours. The trial court further found that Plaintiffs failed to establish they could not obtain local counsel so they were not entitled to "out of town" rates. Further, it was not a complex case. The hourly rate was set at $275 per hour.
At the hearing on the matter conducted on July 10, 2015, the trial court first noted there were a lot of documents filed and that it had spent a "tremendous amount of time" on the case. The trial court assured the parties it had read everything and looked at all of the arguments. The trial court clarified it had granted summary judgment on the Song-Beverly claims.
Plaintiffs argued that the trial court appeared to have struck every entry from the summary bill that Ford claimed was related to a Song-Beverly claim. Plaintiffs argued the Song-Beverly and CLRA claims were so intertwined as to preclude apportionment of the time. Plaintiffs did not see how the trial court could apportion the time in this case. The trial court felt that there were two separate issues: the warranties and the terms of repurchase. Plaintiffs disagreed because the repurchase was void because it did not comply with Song-Beverly. The trial court also noted that the Song-Beverly claim was time-barred.
Plaintiffs also noted that they had objected to the apportionment of time set forth in Ford's opposition as it was speculative and lacked foundation. Anderson, who was present, stated she had been very liberal in addressing the summary bill to determine which entries only applied to the Song-Beverly claims. Ford asked that Barry provide which entries were incorrectly identified as Song-Beverly claims.
The trial court stated, "That would be useful and helpful because I'll take a second look at all of it. I spent a tremendous amount of time on this. The Court did not go to one side or the other. I took a very strong look. I tried to be as really careful as I could and distinguish it. [¶] But in the reply there was really no effort to address the specifics."
Plaintiffs argued that the legal theories for all four causes of action were intertwined and it was impossible to apportion them. The trial court noted, "In other words, if the Court had found and agreed with defense that they were intertwined, then they would have all gone, and it would have been a motion for summary judgment that was granted. But the Court did not find that. The Court explicitly found they were two separate actions, and for that reason allowed the case to move forward on counts three and four."
The trial court indicated its disappointment that neither party included evidence of hourly rates in Riverside and San Bernardino. Plaintiffs argued it was Ford's burden to show that the rate was excessive. Plaintiffs argued that relying on rates in Los Angeles and San Diego was not "too far of a stretch." The trial court disagreed. It stated, "[i]n terms of what this Court sees on a daily basis, there is a big difference." The trial court also noted it had not been shown that Plaintiffs could not find local counsel. Plaintiffs responded Ford never raised that issue and wanted to submit supplemental briefing on the issue. Plaintiffs maintained that competent evidence of the hourly rate had been submitted.
Ford disagreed it was its burden to show the hourly rate was excessive; Plaintiffs had the burden to show the rate was reasonable. Ford felt it had shown that $250 per hour was a reasonable hourly fee.
Lastly, Plaintiffs argued they were entitled to the multiplier. Even if it was conceded it was not a complex matter, it was taken on a contingency and took over two years to complete, and counsel had received an outstanding result. Plaintiffs received over $70,000 in punitive damages. All of the $70,000 went to Plaintiffs. Ford disagreed that the reward was exceptional. Ford was willing to buy back the vehicle even before Plaintiffs filed a lawsuit.
After argument, the trial court stated it was going to take the matter under submission. The trial court stated it was going to review the matter again. Counsel responded that going through the time entries, it was "impractical or downright impossible . . . to allocate out the claims and the time spent." The trial court responded, "I'm not finding it's that difficult. The Court will be allocating it out." The trial court was going to review everything again in order to made sure it got it right. The trial court also assured counsel it would be ruling on the objections.
F. RULING
The final ruling was put at the bottom of the tentative ruling. It provided only "After taking the matter under submission, the Court GRANTS plaintiff[s'] attorney's fees in the amount of 54.727.75 and GRANTS plaintiff[s'] costs in the amount of $1,864.75." No further explanation of the calculation of the fees was given and Plaintiffs did not seek reconsideration of the award.
DISCUSSION
Plaintiffs initially claim that this case must be remanded to the trial court because the record is unclear as to how the court calculated the final amount of attorney's fees and costs, evidencing an abuse of discretion. Plaintiffs additionally argue that if this court does not remand the matter for clarification, the trial court abused its discretion in determining the final amount of attorney's fees and costs by reducing the hourly rate of Plaintiffs' attorney, Barry, from $400 each hour to $275 based on the factually unsupported finding that Plaintiffs could have hired local counsel; the trial court erroneously apportioned the billings of counsel between the Song-Beverly and CLRA/UCL causes of action because the claims were inextricably intertwined; the trial court relied upon inadmissible hearsay in apportioning time between the Song-Beverly and CLRA/UCL claims; and the trial court erred by denying counsel's request for a multiplier on the lodestar when counsel obtained a settlement of $105,000, which was $70,000 in excess of Plaintiffs' actual damages.
A. SUFFICIENCY OF THE TRIAL COURT ORDER
Plaintiffs never requested a statement of decision with specific findings prior to the hearing, at the hearing, or after the hearing. "It is the burden of the party challenging the fee award on appeal to provide an adequate record to assess error." (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295 (Maria P.). A trial court is not required to issue a statement of decision for an attorney fee award. (Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 65 (Gorman).)
In Maria P., the defendants were awarded attorney's fees but there were no findings on the factual issues of attorneys' hours and rates. On appeal, the defendants contended the trial court's fee should be reversed because the court failed to issue a statement of decision and it did not make findings regarding the lodestar figure for attorney's fees based on time spent and reasonable hourly compensation for each attorney. (Maria P., supra, 43 Cal.3d. at pp. 1293-1294.) The California Supreme Court first concluded, "[W]e have discovered no case requiring a statement of decision for an order on a motion for attorney fees." (Id. at p. 1294.) The court then explained that the "trial judge ultimately has discretion to determine the value of the attorney services. 'However, since determination of the lodestar figure is so "[f]undamental" to calculating the amount of the award, the exercise of that discretion must be based on the lodestar adjustment method.'" (Id. at p. 1295.)
The high court then noted that both parties had submitted memorandum of points and authorities on the proper lodestar calculation and arguments regarding the multiplier. "The court's failure to specify in its written order the basis of its calculation of the award, and the absence in the appellate record of a transcript of the fee hearing or a settled statement of that proceeding (Cal. Rules of Court, rule 4(e)) make it impossible for us to determine whether the trial court based its award on the lodestar adjustment method." (Maria P., supra, 43 Cal.3d at p. 1295.) The court concluded, "We find it unnecessary, however, to remand this case to redetermine attorney's fees. It is the burden of the party challenging the fee award on appeal to provide an adequate record to assess error. [Citations.] Here, defendants should have augmented the record with a settled statement of the proceeding. [Citations.] Because they failed to furnish an adequate record of the attorney fee proceedings, defendants' claim must be resolved against them." (Maria P., supra, 43 Cal.3d at pp. 1295-1296.)
Plaintiffs admit that the final ruling did not indicate the bases of the new figures; it was unclear if the court credited trial counsel for hours worked that it did not originally credit, whether it approved a higher rate than the originally indicated $275 per hour, whether it applied a multiplier, or ruled on the objections. Plaintiffs did not request a statement of decision. Although the trial court issued a tentative ruling, it did not state in its final ruling that this was the statement of decision. As such, we must resolve the claim against plaintiffs.
B. ANALYSIS
Even if we were to conclude that the oral hearing and tentative ruling provide an adequate record as to the findings by the trial court, Plaintiffs claims fail. "The absence of an explanation of a ruling may make it more difficult for an appellate court to uphold it as reasonable, but we will not presume error based on such an omission. As reiterated in Ketchum [v. Moses (2001)] 24 Cal.4th 1122 at page 1140 . . . '"All intendments and presumptions are indulged to support [the judgment] on matters as to which the record is silent, and error must be affirmatively shown." [Citation.]' In the absence of evidence to the contrary, we presume that the trial court considered the relevant factors." (Gorman, supra, 178 Cal.App.4th at p. 67.)
"'The record need only show that the attorney fees were awarded according to the "lodestar" or "touchstone" approach.'" (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 254; see also Rebney v. Wells Fargo Bank (1991) 232 Cal.App.3d 1344, 1349.) In order for a Plaintiff to "mount a successful challenge to the substantial reduction" of the fees, he or she must demonstrate "that there was no factual or legal basis for the reduction." (Rebney, at p. 1349.)
"The 'experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate court is convinced that it is clearly wrong.'" (Serrano v. Priest (1977) 20 Cal.3d 25, 49.)
"'The trial court makes its determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.'" (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1096.)
Based on the tentative ruling and oral argument at the hearing, it is reasonable to conclude that the trial court used the lodestar approach in reaching its decision on the amount of attorney's fees and costs to award to Plaintiffs. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 254.) It is clear from the record before this court that the trial court weighed the result Plaintiffs received, the complexity of the case, the proper hourly fee, and the amount of time spent on each of the causes of action in deciding the final award of fees. The trial court was within its discretion to apply an hourly fee that was less than $400 if it determined it was the proper fee based on its own experience; it could reduce the bill if it felt it was excessive or inflated; and a multiplier was not compelled even though it was a contingent case. (See Save Our Uniquely Rural Community Environment v. County of San Bernardino (2015) 235 Cal.App.4th 1179, 1185-1190.) Reversal is not mandated because the record does not indicate that the "trial court considered improper factors or did, indeed, simply snatch its award 'from thin air.'" (Id. at p. 1190.)
Plaintiffs "presume" that the trial court applied the hourly rate of counsel in Riverside and San Bernardino, that it slashed the fees for the Song-Beverly claims, it credited counsel with only one-third of the general work performed; and it reduced the overall award by 10 percent. This infers the trial court made its decision based on the tentative ruling. However, as previously indicated, Plaintiffs never requested a statement of decision, did not seek clarification after the ruling, and the trial court did not indicate the tentative ruling would be considered the statement of decision. As stated, this court need only determine that the trial court applied the lodestar approach in awarding attorney's fees and costs. We have so found and presume the trial court properly considered the relevant factors. (Gorman, supra, 178 Cal.App.4th at p. 67.)
Plaintiffs complain that the trial court never ruled on the objections to the declaration of Anderson and exhibits submitted with the declaration, which contained hearsay as to what fees were expended on the different claims. Although the trial court did not specifically state in its final ruling whether it was accepting the declaration and exhibits, it is clear the trial court did not rely on these calculations in making its final order. At the end of the hearing, Plaintiffs claimed it was "impractical or downright impossible . . . to allocate out the claims and the time spent." The trial court responded, "I'm not finding it's that difficult. The Court will be allocating it out."
The trial court raised the amount of fees in the final order evidencing it did not rely only on the calculations submitted by Ford. Moreover, the trial court can apportion time between causes of action within its discretion "'even where the issues are connected, related or intertwined.'" (Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 443.) The record supports the trial court conducted its own independent review of the summary of time.
At oral argument, plaintiffs criticized this court for not addressing Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140. Graciano does not mandate a different result in this case. It provides that causes of action, which are based on a common core of facts and course of conduct, or are based on related legal theories, need not be apportioned. In addition, apportionment is not required when the issues are so inextricably intertwined that it would be impractical or impossible to separate the attorney's time into compensable and noncompensable units. (Id. at pp. 158-159.) Here, the trial court stated that it believed the causes of action involved different issues, could be separated, and it had no trouble apportioning the fees.
Based on the foregoing, the record supports a finding that the trial court relied on the lodestar approach in reaching its ruling on the attorney's fees. We cannot conclude the award was clearly wrong. (Serrano v. Priest, supra, 20 Cal.3d at p. 49.)
DISPOSITION
The award of attorney's fees and costs is affirmed in its entirety. As the prevailing party, Ford is awarded its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J. We concur: RAMIREZ
P. J. FIELDS
J.